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2005 Annual Report Highlights

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I. Management's Discussion and Analysis - The Year in Review

Effective Management of Strategic Resources
To carry out its mission successfully, the FDIC must effectively manage and utilize a number of critical strategic resources particularly its human, financial, and information technology (IT) resources. Major accomplishments in improving the Corporation's operational efficiency and effectiveness are described below. Although the FDIC is not subject to the President's Management Agenda, many of these efforts are consistent with the spirit of that agenda.

Management of Financial Resources
Beginning in 2003, the Corporation separated its investment expenses from its annual operating budget in order to ensure a more rigorous approach to the approval and management of major investment initiatives. The single most significant current initiative is the construction of additional FDIC office and multipurpose buildings adjacent to the existing facilities at Virginia Square. This project will eliminate the need for the Corporation to lease commercial space in downtown Washington, DC, and will substantially reduce future facility costs. Management processes have been implemented to ensure adherence to the project budget and schedule. Once completed and occupied, the new building will provide estimated cost savings of approximately $78 million (net present value) over 20 years, when compared to the projected costs associated with the current headquarters leasing arrangements. Construction has progressed on schedule and under budget. Occupancy began in mid-January 2006 and should be completed prior to the end of the first quarter 2006, as targeted.

Human Capital Management
The FDIC's employees are its most important resource for accomplishing its mission. For that reason, it seeks to continue to be the employer of choice within the financial regulatory community and to operate a human resources program that attracts, develops, evaluates, rewards and retains a high-quality results-oriented workforce. This has been a difficult challenge over the past 13 years because the Corporation has been in a continuous downsizing mode as it completed the residual workload from the banking and thrift crises of the late 1980s and early 1990s.

Although the pace of downsizing has slowed in the past few years, the Corporation continues to adjust both the size and composition of its workforce to meet the changing course of the financial services industry. In 2005, the FDIC implemented a number of strategies identified in the human capital plan developed in 2004 to procure the skill sets needed in this new environment.

Significant Information Technology Initiatives
On May 2, 2005, the FDIC implemented the New Financial Environment (NFE) and its supporting systems. The implementation was the culmination of years of effort by the FDIC to modernize its aging, highly-customized and complex financial systems environment. NFE is a corporate-wide effort focused on implementing an enterprise-wide, integrated software solution to support the current and future financial needs of the FDIC. The NFE also enhances the capability of other significant development efforts such as the Corporate Human Resources Information System Time & Attendance System, and the Legal Integrated Management System and also makes available more robust cost information that provides a basis of improved decision making.

The FDIC continues to collect quality and timely information in 2005 with the use of FDICconnect. FDICconnect is a secure Web site that facilitates electronic communication with FDIC-insured institutions, and became the primary method of delivery for the quarterly deposit insurance assessment invoices through a rule change effective with the March 2005 assessment cycle. In 2005, over 150,000 transactions were completed by financial institutions using FDICconnect.

Transformation of the Information Technology Program
In 2005, the FDIC completed critical steps toward transforming its information technology program – an initiative begun in 2004. Using a roadmap developed with Deloitte Touche over 18 months ago, the FDIC implemented an outsourcing strategy, employee buyout and divisional reorganization that will significantly improve the program’s overall efficiency and effectiveness.

Once completed, the FDIC anticipate benefits of the transformation will include:

  • The greater use of contracting partners for operation and implementation allowing in-house staff to focus on strategic business planning, design and consultation.
  • Reduced costs through improving the efficiency and effectiveness of IT products and services.
  • A targeted long-term plan for personal and technical development of all IT employees resulting from a new skills assessment to be conducted during 2006.

Privacy Program
In 2005, the charter of the Chief Information Officer's Council was expanded to include oversight of Privacy Act responsibilities, and the corporate Privacy Program was enhanced under the guidance of the newly appointed Chief Privacy Officer (CPO). The program's objective is to ensure that the FDIC is taking appropriate steps to protect personally identifiable information from unauthorized use, access, disclosure or sharing, and to protect associated information systems from unauthorized access, modification, disruption or destruction.

One of the first priorities is in the area of employee awareness. The program requires mandatory privacy training so that all FDIC employees and contractors are aware of the requirements for safeguarding sensitive information and know where to obtain privacy-related reference material. Many initiatives were completed in 2005 in support of the newly enhanced Corporate Privacy Program, including mandatory computer-based privacy training and distribution of a Privacy Awareness Package.



Last Updated 04/05/2006 communications@fdic.gov