The Government Accountability Office says in a new report that banks that have repaid the Treasury Department's TARP bailout program did so with funds they received from other federal rescue programs.

The GAO's finding undercuts the Treasury's prior statements that effectively assert the Troubled Asset Relief Program has earned a profit for taxpayers. Specifically, the GAO says that, according to its new review, “as of January 31, 2012, 341 institutions had exited,” TARP, almost half by repaying...with funds from other federal programs.” For more, click here. 

The GAO also finds that banks continue to stream out of TARP, but the number that are reneging or missing their required dividend and interest payments back to the Treasury program has risen.

Treasury did not return email requests for comment.

The GAO adds that this issue of round-tripping federal bailout money arises with small banks, as the government essentially replaced their TARP funding with the new federal Small Business Lending Fund enacted in 2010, which GOP Congressmen have “TARP 2.0.”

FOX Business has reported that a GAO review of Treasury statements and press releases on TARP may bury the bad news about potential losses in the program, notably from bailouts of General Motors, AIG, and Ally Financial. The GAO has urged Treasury to improve disclosures on potential future losses, not just income expected from TARP bailouts.   

Under what's called TARP's “capital purchase program,” where Treasury invests in bank securities, Treasury invested “almost $205 billion in 707 eligible financial institutions between 2008 and December 2009,” the GAO says.

Specifically, the GAO says that, as of January 31, 2012, the Treasury had received $211.5 billion from its TARP investments, exceeding the $204.9 billion it had disbursed.

Of that amount, $16.7 billion remains outstanding, and most of these investments were concentrated in a relatively small number of institutions.

But the GAO adds that, as of November 30, 2011, Treasury estimated that the capital purchase program, which involves TARP investments in banks, “would have a lifetime income of $13.5 billion after all institutions exited the program.”

The GAO adds that, as of November 30, 2011, the number of banks and companies “that had missed their quarterly payments rose to 158, a marked increase from 8 in February 2009,” even though the TARP program “had fewer participants.”

And the GAO found that the number of companies in the program “designated as problem banks - that is, demonstrating financial, operational, or managerial weaknesses that threatened their continued financial viability - also rose from 47 in December 2009 to 130 in December 2011.”

The GAO warns: “Institutions that continue to miss payments and problem institutions may have difficulty ever fully repaying their CPP investments.”