The Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC) violated the purpose statute when it awarded a cooperative agreement to a nonprofit entity, according to a decision from the U.S. Government Accountability Office (GAO) announced Aug. 28.
“ASC’s appropriation permitted it to award grants to states and to a particular nonprofit corporation. The cooperator in this case was neither, so it was not eligible to receive funding under the appropriation,” the GAO decision stated. “Because ASC’s appropriation is not legally available for such an assistance arrangement, ASC also violated the Antideficiency Act by entering into and expending funds toward the cooperative agreement.”
ASC awarded a cooperative agreement in March 2021 to the Council on Licensure, Enforcement and Regulation (CLEAR) supporting training efforts.
“In September 2023, ASC determined CLEAR may have been ineligible for the award and directed it to stop work. ASC now ‘acknowledges’ CLEAR was an unauthorized recipient and is pursuing remediation,” the decision stated. “ASC is also revising its procedures to emphasize that only the Appraisal Foundation and state appraiser and AMC regulatory agencies may receive grants.”
For more on the GAO decision and reaction from ASC, see the Tuesday, Sept. 3, Valuation Review news email.