_______________________________________ 

Securities and Exchange Commission
 

Management Report to Accompany the
 

Semiannual Report of the Inspector
 

General
 

for the period April 1, 2014 through September 30, 2014

November 2014 
 

U.S. SECURITIES AND EXCHANGE COMMISSION 

MANAGEMENT REPORT TO ACCOMPANY THE 

SEMIANNUAL REPORT OF THE INSPECTOR GENERAL 

(April 1, 2014 – September 30, 2014) 

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 April 1, 2014 through 

September 30, 2014. 

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. During the sixmonth period ending September 30, 2014, SEC divisions and offices closed 22 recommendations 

with the OIG’s concurrence. 

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. 

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. 
 

 

 

Table 1 presents the required information on audit, inspection, and evaluation reports 

with disallowed costs or recommendations that funds be put to better use. The SEC began and 

ended the period with no open reports with monetary findings. 

Table 1: Status of Final Action on Audit, Inspection, and 

Evaluation Reports with Disallowed Costs or Funds Put to Better Use 

Audit, Inspection, and Evaluation Reports Number 

Dollar 

Value of 

Disallowed 

Costs 

Dollar Value 

of Funds Put 

to Better Use 

A. For which final action had not been taken by the 

beginning of the reporting period (4/1/14) 

0 $0 $0 

B. On which management decisions were made during 

the reporting period (4/1/14 –9/30/14) 

0 $0 $0 

C. For which final action was taken during the reporting 

period 

0 $0 $0 

(i) Dollar value of disallowed costs that were 

recovered through collection, offsets, property 

in lieu of cash, or otherwise 

0 $0 

$0 

(ii) Dollar value of disallowed costs that were 

written off by management 

0 $0 $0 

(iii) Dollar value of recommendations that 

management has subsequently concluded 

should not or could not be implemented or 

completed 

0 $0 $0 

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

the reporting period (9/30/14) 

0 $0 $0 

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

Section 5(b)(4) of the Inspector General Act 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 2 presents the required information. 

Table 2: Audits and Other Reports More than One Year Old 

(Reporting Period April 1, 2014 through September 30, 2014) 

Report No./Title 

Report 

Date 

Funds Put 

to Better 

Use 

Disallowed 

Costs Status of Final Action 

489, Federal 

Information Security 

Management Act 

(FISMA) 2010 

Assessment 

3/3/11 $0 $0 7 of 8 recommendations from this report 

have been closed. Logical integration of 

HSPD-12 access cards has presented 

challenges government-wide. The SEC 

actively participates with an inter-agency 

task force dedicated to solving the 

associated problems and finding a 

workable solution. The Office of 

Information Technology is actively 

working this project with a pilot 

scheduled to begin in November 2014 

and full agency deployment by calendar 

year-end. 

501, Federal 

Information Security 

Management Act 

(FISMA) 2011 

Assessment 

2/2/12 $0 $0 12 of 13 recommendations have been 

closed. The remaining recommendation 

is a duplicate of the recommendation in 

audit 489 discussed above. 

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