Fannie Mae 2011 Annual Report Download - page 202

Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Quantitative and qualitative disclosure about market risk is set forth in “MD&A—Risk Management—Market
Risk Management, including Interest Rate Risk Management.”
Item 8. Financial Statements and Supplementary Data
Our consolidated financial statements and notes thereto are included elsewhere in this annual report on
Form 10-K as described below in “Exhibits and Financial Statement Schedules.”
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
OVERVIEW
We are required under applicable laws and regulations to maintain controls and procedures, which include
disclosure controls and procedures as well as internal control over financial reporting, as further described below.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Disclosure controls and procedures refer to controls and other procedures designed to provide reasonable
assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the rules and forms of the
SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide
reasonable assurance that information required to be disclosed by us in the reports that we file or submit under
the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and
Chief Financial Officer, as appropriate, to allow timely decisions regarding our required disclosure. In designing
and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance of achieving the desired
control objectives, and management was required to apply its judgment in evaluating and implementing possible
controls and procedures.
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, management has evaluated, with the participation of our
Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures
as in effect as of December 31, 2011, the end of the period covered by this report. As a result of management’s
evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and
procedures were not effective at a reasonable assurance level as of December 31, 2011 or as of the date of filing
this report.
Our disclosure controls and procedures were not effective as of December 31, 2011 or as of the date of filing this
report because they did not adequately ensure the accumulation and communication to management of
information known to FHFA that is needed to meet our disclosure obligations under the federal securities laws.
As a result, we were not able to rely upon the disclosure controls and procedures that were in place as of
December 31, 2011 or as of the date of this filing, and we continue to have a material weakness in our internal
control over financial reporting. This material weakness is described in more detail below under “Description of
Material Weakness.” Based on discussions with FHFA and the structural nature of the weakness in our disclosure
controls and procedures, it is likely that we will not remediate the weakness in our disclosure controls and
procedures relating to information known to FHFA while we are under conservatorship.
- 197 -