Management	Report	to	

Accompany	the	Office	of	the	

Inspector	General’s	Semiannual	

Report	to	Congress

For the period October 1, 2015 through March 31, 2016                                             

May 2016
Management Report to Accompany the Office of the Inspector General’s Semiannual Report to Congress 1

U.S.	SECURITIES	AND	EXCHANGE	COMMISSION

Management Report to Accompany the  

Office of the Inspector General’s Semiannual  

Report to Congress

October 1, 2015 – March 31, 2016

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,	2015	through	March	31,	2016.	

I. Overview of SEC Audit Follow‐up Activities

The	SEC’s	audit	follow‐up	efforts	continue	to	play	a	significant	role	in	the	effective	management	of	

the	agency’s	operations	and	the	accomplishment	of	its	mission.		The	SEC	began	the	reporting	period	

with	20	open	recommendations	and	successfully	closed	17	recommendations	with	the	OIG’s	

concurrence.		As	of	March	31,	2016,	there	were	7	open	OIG	reports	containing	a	combined	total	of	

20	open	recommendations.						

					

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.	 Whenever	OIG	questions	whether	costs	incurred	by	the	agency	are	 necessary,	

supported	by	adequate	documentation,	or	in	accordance	with	law,	regulation,	or	 contracts	

governing	the	use	of	funds,	SEC	management	will	review	the	facts	and	determine	 whether	such	

costs	should	be	officially	disallowed.	If	the	SEC	agrees	that	such	costs	should	not	 be	charged	to	the	

government,	the	agency	will	then	take	appropriate	action,	such	as	commencing	 collection	efforts	to	

recover	the	disallowed	costs.		The	SEC	ended	the	period	with	no	open	reports	with	disallowed	costs.	

Table 1. Status of Final Action on Audit, Inspection, and Evaluation Reports  

with Disallowed Costs

Audit, Inspection, and Evaluation Reports Number 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 $0

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

D. For which no final action has been taken by the end of the period 0 $0
Management Report to Accompany the Office of the Inspector General’s Semiannual Report to Congress 2

Funds Put to Better Use.		Whenever	OIG	recommends	specific	dollar	amounts	that	it	 believes	can	be	

saved	by	improving	the	efficiency	of	agency	operations,	SEC	management	will	 review	the	facts	and	

determine	whether	to	implement	such	recommendations.	 “Funds	put	to	 better	use”	refers	to	the	

specific	dollar	value	of	cost	savings	that	the	SEC	has	agreed	can	and	 should	be	implemented	through	

appropriate	corrective	action.	

On	September	18,	2015,	the	OIG	issued	a	report	on	the	SEC’s	Contracting	Officer’s	Representative	

(COR)	Program	(Report	#530).		The	OIG	recommended	that	the	SEC	could	put	about	$4,568	

annually	to	better	use	if	CORs	review	and	process	invoices	in	a	timely	manner.		During	the	period,	

management	strengthened	controls	around	invoice	processing	and	closed	the	recommendation	and	

report	with	the	OIG’s	concurrence.		

On	March	31,	2016,	the	OIG	issued	a	report	on	the	SEC’s	Student	Loan	Repayment	Program	(SLRP)	

(Report	#534).		The	OIG	identified	17	individuals	who	left	the	SEC	before	fulfilling	their	service	

agreements	and,	therefore,	owed	the	SEC	about	$216,000	in	SLRP	benefits.		Management	has	

established	repayment	plans	or	is	taking	other	measures	to	recoup	the	SLRP	benefits	paid	to	these	

former	employees.					

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

with Funds Put to Better Use

Audit, Inspection, and Evaluation Reports Number

Dollar Value of

Funds Put to

Better Use

A. For which final action had not been taken by the beginning of the reporting period 1 $4,568

B.   On which management decisions were made during the reporting period 1 $216,000

C. For which final action was taken during the reporting period 1 $4,568

(i) Dollar value of recommendations that were actually completed    $4,568

   (iii) 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 $216,000

III. Reports More than One Year Old with Pending Corrective Action

Section	5(b)(4)	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, 2015 through March 31, 2016)

Report No./Title Report Date Funds Put to

Better Use

Disallowed

Costs Status of Final Action

522, Federal

Information Security

Management Act:

FY2013 Evaluation

3/31/2014   $0 $0

8 of 9 recommendations have been closed. The

Office of Information Technology has completed

various actions to address the remaining

recommendation and is awaiting OIG’s concurrence

that the report is closed.  

523, Audit of SEC’s

Physical Security

Program  

8/1/2014   $0 $0

7 of 9 recommendations have been closed. The

Office of Support Operations continues to improve

the physical security program.  
Management Report to Accompany the Office of the Inspector General’s Semiannual Report to Congress 3

Report No./Title Report Date Funds Put to

Better Use

Disallowed

Costs Status of Final Action

528, Audit of

Representation of

Minorities and

Women in SEC’s

Workforce

11/20/2014   $0 $0

3 of 5 recommendations have been closed. In

addition, management has completed various

actions related to the remaining recommendations,

such as expanding performance metrics for

workforce diversity and other programmatic efforts

and drafting additional policies and procedures.   

529, Federal

Information Security

Management Act:

FY 2014 Evaluation

2/5/2015   $0 $0

5 of 7 recommendations have been closed. Final

action is expected to be completed on the remaining

recommendations in October 2016.