OIG: Fannie's hiring process for executive was 'haphazard at best'
According to a new report from the Office of Inspector General for the Federal Housing Finance Agency (FHFA), the chief audit executive chosen for Fannie Mae had little necessary experience and conflicts of interest at the time it hired a chief audit executive.
OIG also reported the FHFA provided insufficient oversight of the hire and inappropriately signed off on the pick.
The report was vague and didn't clarify what prompted the report or mention any problems. It also didn't mentioned John Forlines, current chief audit executive at Fannie Mae, by name or call for his resignation. However, the OIG did call for more oversight of the FHFA.
Forlines was appointed in October 2013 after spending more than 25 years at Fannie Mae. He was chief credit officer for Fannie Mae’s single-family business line before he became CAE.
The Audit Committee, which was not bound by senior management’s Succession Plan, decided on Sept. 19, 2013, that it would limit its search to internal candidates across the government-sponsored enterprises. The committee said it had previous bad experiences with external CAE hires.
OIG said lack of any prior planning by the committee led to a scramble to identify a qualified candidate for the CAE position. After the Sept. 19, 2013, meeting, the committee chair asked Fannie Mae’s CHRO to assemble a list of potential internal CAE candidates, even though the succession plan developed under the leadership of the CEO and CHRO two months earlier found that no internal candidates were “ready now” for the position.
According to the report, within six days, the CHRO identified and presented to the committee a list of nine potential internal candidates across Fannie Mae for the vacancy. That list included Forlines.
Over the following week, two Audit Committee members interviewed some candidates on this list and selected Forlines, even though he had not been identified for the CAE role in senior management’s succession plan; his professional audit experience did not meet the audit qualifications deemed “preferable” in the CAE position description and he was burdened by significant conflicts because of his management responsibilities, according to OIG.
Click here to read the full report. http://www.wsj.com/articles/watchdog-criticizes-hiring-of-senior-fannie-mae-official-1426112395