WASHINGTON -- After spending nearly $100 million on failed computer systems, the federal agency supervising the enormous savings and loan cleanup has virtually abandoned efforts in Washington to keep detailed records on thousands of parcels of real estate and other assets it is trying to sell.
Rather than try to rehabilitate its crippled systems, the central headquarters of the Resolution Trust Corp. will maintain only limited in formation on its vast inventory of real estate and loans from failed thrifts. The agency will leave it to local officials, who often depend on handwritten files and improvised computer networks, to keep detailed records on more than $110 billion worth of assets.
The RTC's top managers said they no longer see any reason to develop a comprehensive recordkeeping system. The agency, created by Congress in 1989 to handle the S&L bailout, is in the midst of a rapid drive to sell billions of dollars worth of assets, shut down most of its offices and lay off nearly half its work force of 8,000 people.
"Instead of having a fully operational Cadillac, we can get the job done with a Chevette," said RTC spokesman Stephen Katsanos.
But the abandonment of two central computer systems and the severely restricted use of a third raise questions about the ability of the agency's leadership in Washington to oversee the management and sale of thousands of assets seized from nearly 700 defunct thrifts.
Rep. Bruce F. Vento, D-Minn., a member of the House Banking Committee, warned that the cost of the S&L bailout could balloon by billions of dollars because the RTC does not have good records on which to rely. "You ought to know what you own, who is working for you, what they are doing with the properties," Representative Vento said. "These are fundamental questions."
Congressional investigators and the RTC's inspector general say that there were significant blunders in the development and management of the computer systems.
For example, the cost of a system that IBM developed to track thousands of real estate properties has soared to $52 million from the original contract price of $24 million, according to RTC records and reports. The Department of Housing and Urban Development spends $7 million a year for a computer system that supplies instant data on the 70,000 to 80,000 single-family houses it owns.
The RTC system, called Real Estate Owned Management System, or REOMS, is considered virtually useless, according to reports from the General Accounting Office, the investigative arm of Congress. It frequently takes as long as 15 minutes for REOMS to generate information on a single property, the GAO said.
In addition, the system is riddled with data errors. A modest home in Phoenix, Ariz., with an appraised value of $73,000, is listed by REOMS at $79 million, according to a Los Angeles Times examination of RTC records. Of some 1,660 properties that REOMS lists as having sold for $500,000 or more, 552 entries lacked the property's list price, the appraised value or both.
Although REOMS was designed to supply detailed information about individual S&L assets, the problems have prompted the RTC's top managers to decide that they will rely on the system only for a comparative handful of basic facts about each property.
RTC Chairman Albert V. Casey and his deputy, William Roelle, "feel that the amount of information that the [REOMS] system can accommodate is significant, and they don't need all that information," said Mr. Katsanos, the RTC spokesman.
Another computer system, designed to track loans, has cost the RTC at least $16 million. But in a recent memorandum to field offices, Washington said that the Loans and Other Assets Inventory System, LOAIS, was being scrapped before it could become fully operational.
These moves may render useless the Asset Manager System, designed to keep tabs on more than 100 private companies assigned to handle RTC properties. That system, expected to cost at least $8 million, won't be ready until December. To work properly, it would depend upon detailed information from REOMS and LOAIS.