WASHINGTON—A new risk-focused panel headed by Treasury Secretary Timothy Geithner was found lacking in accountability, transparency and collaboration with key financial regulators, a government watchdog said Thursday.

The Government Accountability Office faulted the Financial Stability Oversight Council, a panel of top officials created by the Dodd-Frank financial overhaul to head off the kinds of problems that led to the 2008 financial crisis. The GAO, which is the investigative arm of Congress, also criticized a related smaller entity, the Office of Financial Research, which gathers and analyzes financial and economic data for the FSOC.

“Limits to FSOC’s and OFR’s transparency…contribute to questions about their effectiveness,” the GAO said in a report, which follows criticism from Republican members of Congress.

Both bodies also need to do a better job sharing key financial risk indicators with other regulators, communicating with the public, assigning other agencies responsibility for tracking specific risks, and setting specific performance goals, the GAO said. One suggestion from the GAO: improving their official websites.

Besides Mr. Geithner, the FSOC also includes as voting members officials from the Federal Reserve, Securities and Exchange Commission, Federal Deposit Insurance Corp. and a half-dozen other regulators.

The Treasury Department, in a letter to the GAO, said the FSOC and the OFR are “firmly committed” to openness and transparency for the two “relatively new, start-up organizations.”

“Although both organizations have accomplished much, we recognize that there is still much to do,” Under Secretary for Domestic Finance Mary Miller wrote in a letter to the GAO. Mrs. Miller said Treasury would consider the watchdog’s recommendations but disagreed with some suggestions.

The FSOC faces a major test in deciding what to do with money-market mutual funds, identified by several regulators as a risk to the financial system. The SEC failed to bring new rules for the funds to a vote last month because a majority of commissioners opposed them.“It is therefore critically important that FSOC and OFR operate in a manner that promotes greater congressional and public understanding of their actions,” Reps. Spencer Bachus (R., Ala.) and Randy Neugebauer (R., Texas) said in a letter to Mr. Geithner.

The council has the power to designate firms as “systemically important,” singling them out for greater scrutiny from the Federal Reserve. Long-term funding for the FSOC and OFR comes from levies on certain large banks and other financial institutions.

Write to Jeffrey Sparshott at jeffrey.sparshott@dowjones.com