Treasury Department officials change data they receive from financial institutions that received federal assistance under the Troubled Asset Relief Program, according to a government watchdog.

In a blistering six-page, single-spaced letter Tuesday to Treasury Secretary Jack Lew, Special Inspector General for the Troubled Asset Recovery Program Christy Romero said her investigators were told by a Treasury official that "Treasury modifies some of the data reported by the financial institutions" for an annual report on how TARP funds were spent.

That report is based on Treasury's Use of Capital surveys. The modifications are made when transferring data received from the financial institutions to the UCS.

"The impact of that modification is unclear. However any modification can present a risk of inaccurate reporting," Romero said.

Romero said the Treasury surveys important because they "provide valuable information on the financial stability of TARP recipients" as well as "transparency to the American taxpayer concerning how these institutions use the billions of TARP dollars provided to them."

Treasury officials also told SIGTARP investigators that "there was no oversight concerning whether or not the changes from institutions' data should been made, nor did Treasury follow up with the institutions to ensure the changes reflected accurate data," Romero said.

Treasury officials also made multiple math errors in summarizing the results of the surveys, Romero said.

"Treasury's summaries contain mathematical errors, Treasuries narratives contain inaccuracies and Treasury-converted data for the institutions contains errors and/or emissions," she said.

The $700 billion TARP program was originally proposed by President George W. Bush in the wake of housing market collapse in 2008. President Obama reduced the program to $431 billion.

Romero noted that under a program intended to encourage small business lending institutions receiving funding are required to report annually to the government on how they spend the money.

Despite that requirement, however, "there has never been 100 percent compliance" with it, Romero said, adding that "eight banks and credit unions have never responded to Treasury" on how they spent TARP funds.

Romero said SIGTARP was unable to confirm whether Treasury officials took any kind of disciplinary action on non-reporting TARP recipients.

The summaries of the data received from institutions that do respond are posted on the Treasury website, but Romero said her investigators "found errors that even cursory review should have detected, errors that any member of the public would have encountered."

As an example, Romero pointed to the Treasury website's claim that there are eight categories of use of TARP funds.

"However, only seven are listed and the one that is missing is 'increase lending or reduce lending less than would have otherwise occurred,' arguably the most important use of TARP funds." she said.

In an Aug. 27 response to a draft version of Romero's letter, Deputy Assistant Secretary Timothy Bowler said Treasury has "reformatted the responses before posting them to our website so that the information cannot be manipulated by a third-party once posted online."

Bowler said Treasury Department leadership "generally agrees" with Romero's recommendations and said "we have already begun to implement many of them."

Mark Tapscott is executive editor of the Washington Examiner.