U.S. Securities and Exchange Commission

Management Report to Accompany 

the Office of Inspector General 

Semiannual Report to Congress 

for the period October 1, 2019 through March 31, 2020

May 2020
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U.S. SECURITIES AND EXCHANGE COMMISSION

Management Report to Accompany the 

Office of Inspector General Semiannual Report to Congress

October 1, 2019 – March 31, 2020

Section 5(b) of the Inspector General Act of 1978, as amended, requires the Commission to transmit 

to the appropriate committees or subcommittees of the U.S. Congress a Management Report, 

containing certain statistical tables and any comments deemed appropriate, to accompany the Office 

of Inspector General’s (OIG’s) Semiannual Report. This Management Report presents the required 

information for the reporting period of October 1, 2019 through March 31, 2020. 

I. Overview of SEC Audit Follow-up Activities

The SEC is committed to timely completion of corrective actions on OIG audit recommendations. At 

the commencement of this semiannual reporting period, there were 39 open recommendations and 

eight reports. During the period, management successfully closed 13 recommendations and two

reports with OIG’s concurrence. Management closed 77 percent of these recommendations in less 

than one year. The SEC also received six new OIG reports containing a total of 34 recommendations 

for improvement to the agency’s processes and programs. Thus, at period-end, final action was 

pending on 12 reports. 

II. Reports with Monetary Savings

Sections 5(b)(2) and (3) of the Inspector General Act require the SEC Management Report to include 

statistical tables summarizing the progress that the agency has made in responding to audit, 

inspection, and evaluation reports containing “disallowed costs” and “recommendations that funds 

be put to better use.”

Disallowed Costs. The term “disallowed costs” means a questioned cost that management, in a 

management decision, has sustained or agreed should not be charged to the agency. For OIG reports 

that contain questioned or unsupported costs, SEC management will review the facts and determine 

whether such costs should be sustained or not, and the extent to which those costs should be 

disallowed. If the SEC agrees that such costs should be disallowed, the agency will then evaluate 

whether to attempt to recover such costs. 

No questioned costs were determined to be disallowed during this reporting period. Management 

continues to review the questioned and unsupported costs identified in the OIG Report 554: The SEC 

Can Better Manage Administrative Aspects of the ISS Contract. Management is also reviewing the 

questioned and unsupported costs identified in OIG Report 560: Controls Over the SEC's Travel 

Charge Card Program Could Be Strengthened To More Fully Comply With Requirements and Maximize 

Benefits issued at the end of the reporting period on March 30, 2020. Management expects to make 

a final determination before the end of the next semiannual reporting period on whether the 

questioned and unsupported costs identified in these reports should be disallowed.
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Table 1. Status of Final Action on Audit, Inspection and Evaluation Reports 

with Disallowed Costs

(Reporting Period October 1, 2019 through March 31, 2020) 

Audit, Inspection and Evaluation Reports Number of 

Reports

Dollar Value of 

Disallowed Costs

A. For which final action had not been taken by the beginning of the reporting period 0 $0

B. On which management decisions were made during the reporting period 0 $0

C. For which final action was taken during the reporting period 0 $0

(i) Dollar value of disallowed costs that were recovered through collection, offsets, 

property in lieu of cash, or otherwise $0 

(ii) Dollar value of disallowed costs that were written off by management $0

D. For which no final action has been taken by the end of the period 0 $0

Recommendation that Funds be Put to Better Use. The term “recommendation that funds be put to 

better use” means a recommendation that funds could be used more efficiently if management took 

actions to implement and complete the accompanying recommendation. For OIG reports that 

contain recommendations that funds be put to better use, SEC management will review the facts 

and determine whether to implement such recommendations. 

During the reporting period, OIG issued one report (Report No. 560: Controls Over the SEC's Travel 

Charge Card Program Could Be Strengthened To More Fully Comply With Requirements and Maximize 

Benefits) that contained a recommendation that funds be put to better use. Because management

concurred with the associated recommendations, that report and its associated monetary value are

identified in the table below. Management will update the table in future reporting periods to show 

progress in implementing these recommendations.

Table 2. Status of Final Action on Audit, Inspection and Evaluation Reports 

with Funds Put to Better Use

(Reporting Period October 1, 2019 through March 31, 2020) 

Audit, Inspection and Evaluation Reports Number of 

Reports

Dollar Value of 

Funds Put to 

Better Use

A. For which final action had not been taken by the beginning of the reporting period 0 $0

B. On which management decisions were made during the reporting period

0

$0 

C. For which final action was taken during the reporting period 0 $0

(i) Dollar value of recommendations that were actually completed $0

(ii) Dollar value of recommendations that management has subsequently concluded 

should not or could not be implemented or completed $0 

D. For which no final action has been taken by the end of the reporting period 1 $124,773

III. Reports on Instances of Whistleblower Retaliation

Section 5(b)(4) of the Inspector General Act, as amended, requires the SEC Management Report to 

include a statement with respect to any settlement agreement entered into by the agency with an 

official found by the Inspector General to have engaged in retaliation against a whistleblower. The SEC 

has no such settlement agreements to report. 
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IV. Reports More than One Year Old with Pending Corrective Action

Section 5(b)(5) of the Inspector General Act, as amended, requires the SEC Management

Report to include a statement with respect to audit reports on which management decisions have 

been made but final action has not been taken, other than audit reports on which a management 

decision was made within the preceding year. Table 3 presents the required information. 

Table 3. Audits and Other Reports More than One Year Old 

(Reporting Period October 1, 2019 through March 31, 2020) 

Report No./Title Report Date Funds Put to 

Better Use 

Disallowed 

Costs Status of Final Action

Report 546: Audit of 

SEC's Compliance with 

the Federal 

Information Security 

Modernization Act for 

Fiscal Year 2017 

3/30/2018 $0 $0 10 of the report’s 20 recommendations have been 

closed with OIG’s concurrence. Since the last 

reporting period, the SEC’s Office of Information 

Technology (OIT) reports that it has made 

substantial progress in addressing the remaining 

recommendations, and is currently working to 

finalize revisions to policies and procedures to 

address the remaining elements. OIT anticipates 

closure of the remaining recommendations before 

the end of the next reporting period. 

Report 547: Audit of 

the SEC's Internal 

Controls for Retaining 

External Experts and 

Foreign Counsel for the 

Division of 

Enforcement

6/15/2018 $0 $0 6 of the report’s 7 recommendations have been 

closed with OIG’s concurrence. The SEC continues 

to address the remaining recommendation and 

expects completion before the end of the next 

semiannual reporting period. 

Report 549: The SEC 

Made Progress But 

Work Remains To 

Address Human 

Capital Management 

Challenges and Align 

With the Human 

Capital Framework

9/11/2018 $0 $0 8 of the report’s 9 recommendations have been 

closed with OIG’s concurrence. The SEC continues 

to work on the remaining recommendation, with 

anticipated completion in spring 2021.

Report 550: Evaluation 

of the EDGAR System’s 

Governance and 

Incident Handling 

Processes

9/21/2018 $0 $0 12 of the report’s 14 recommendations have been 

closed with OIG’s concurrence. OIT reports that it 

took actions during the reporting period to address 

the remaining two recommendations, with some 

actions taking longer than anticipated due to the 

need for additional efforts to ensure the 

remediation activity comports with related actions 

occurring for policy revisions and other assessment 

results. OIT anticipates closure of the remaining 

recommendations before the end of the next 

reporting period. 

Report 552: Fiscal Year 

2018 Independent 

Evaluation of SEC’s 

Implementation of the 

Federal Information 

Security 

Modernization Act of 

2014

12/17/2018 $0 $0 2 of the report’s 11 recommendations have been 

closed with OIG’s concurrence. The SEC continues 

to implement the remaining recommendations, 

with anticipated completion of all but one before 

the end of the next semiannual reporting period. 

Due to contracting and technology deployment 

requirements, the anticipated closure for the final 

recommendation is spring 2022.