Interim U.S. Treasury assistant secretary for financial stability Neel Kashkari on Wednesday defended actions taken by regulators thus far on the Troubled Asset Relief Program, reiterating that officials were moving as fast as they could to put required oversight and processes in place — and suggesting that the Treasury has been following a defined plan in its administering of the initial round of funds allocated under the program by Congress. Both are issues that lawmakers have been critical of in recent weeks, with the Government Accountability Office saying in a report released Dec. 3 that critical gaps existed in how Treasury officials were managing the program. GAO’s assessment said officials at the Treasury have not yet established how it will ensure that its Capital Purchase Program — where over $150 billion in capital has been given directly to 52 banking institutions thus far — is successful, or how financial firms receiving those billions of dollars comply with limits on executive compensation and dividend payments. In remarks delivered before the House Committee on Financial Services, Kashkari said the Treasury’s efforts are working — even if there are problems that need to be addressed. “People often ask: how do we know our program is working?” Kashkari said. “First, we did not allow the financial system to collapse. That is the most direct, important information.” Not all legislators, however, remain convinced that the nation’s financial system would have collapsed without passing legislation that established TARP. In a 38-page document released by the TARP Congressional Oversight Panel in conjunction with the hearing Wednesday, the panel said that while TARP empowered Treasury, “with these powers goes the responsibility to explain the reasons for the uses made of them.” The oversight panel, chaired by Harvard law professor Elizabeth Warren, is required to update legislators on TARP every 30 days. The oversight committee’s report marks the second such report to criticize management of TARP by Treasury officials in as many weeks, after the earlier GAO summary. House Financial Services Committee chairman Barney Frank (D-MA) has been vocal about attempting to hold Treasury to task for its use of taxpayer funds, and suggesting that not enough is being done to help troubled homeowners. “By rejecting the GAO’s recommendation that measurement is needed and substituting a vague promise to ‘evaluate the overall success of the program,’ Treasury is coming very close to telling the institutions that they will be free to use the funds as they wish,” he said in a statement Monday. “The refusal so far to use the money [to stop foreclosures] has been a violation of the intent [of TARP] and undermines the ability to get the votes from Congress in the future,” Frank said during the hearing Wednesday, referring to the $350 billion installment of bailout funding, which Congress can choose to withhold. Treasury secretary Henry Paulson has waffled in recent days on an earlier statement suggesting he would not seek further funding for TARP prior to the Obama administration’s start. Kashkari also only spoke vaguely about tracking the use of funds given to banks. “Given the number and variety of financial stability actions being put in place by multiple entities, it will be challenging to view the impact of the Capital Purchase Program in isolation and at the institutional level,” Kashkari said — the Plain English translation of his remarks is this: dollars are fungible, people, and once we write the check it’s impossible to know which one went where.  That said, he signaled that they were trying to find a next-best solution, in terms of assessing second-order effects. “We are actively engaged with regulators to determine the best way to monitor CPP investments and bank lending,” his testimony read. “We may utilize a variety of supervisory information for insured depositories, including existing Home Mortgage Disclosure Act (HMDA) data, Community Reinvestment Act (CRA) data, call report data, examination information contained in the CRA Public Evaluations, as well as broader financial conditions.” While sentiment against the bailout seems to be growing, Kashkari remained steadfast in his defense of the program. “We are confident that we are pursuing the right strategy to stabilize the financial system and support the flow of credit to our economy,” he said. Read Kashkari’s complete prepared remarks. Write to Kelly Curran and Paul Jackson at [email protected] and [email protected].