The GAO report makes clear that the urgency of the crisis has meant that oversight procedures have taken a backseat. It concludes in part:
Because TARP is relatively new, and because the crisis makes immediate action imperative, Treasury is operating on a number of fronts concurrently. It is setting up programs and establishing oversight policies and procedures at the same time. As a result, we are seeing some lag in administrative efforts — for example, internal controls — as the programs proceed.
…Treasury has not yet set up policies and procedures to help ensure that [Capital Purchase Program] funds are being used as intended.
And it recommends that those procedures be set up as soon as practicable.
The report is now available online (pdf).
