An audit found FSLIC ended 1986 with a deficit.

Officials at the General Accounting Office confirmed earlier reports that the Federal Savings and Loan Insurance Corp., managed by the Federal Home Loan Bank Board, was insolvent. The finding contradicts the bank board’s reports that it had reserves of $1.9 billion at the end of 1986. The reserves are used to handle liabilities arising from the closure of insolvent thrifts. One estimate had the fund between $6 billion and $8 billion in the red in 1986, according to the earlier reports. The difference between the GAO’s and the bank board’s final figures was largely due to the different accounting treatment for contingent liabilities of 60 ailing thrifts, which were being propped up by the fund.