U.S. Securities and Exchange Commission

Management Report to Accompany 

the Office of Inspector General 

Semiannual Report to Congress

for the period April 1, 2020 through September 30, 2020

November 2020
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U.S. SECURITIES AND EXCHANGE COMMISSION

Management Report to Accompany the 

Office of Inspector General Semiannual Report to Congress

April 1, 2020 – September 30, 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 April 1, 2020 through September30, 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 60open OIG recommendations.

During the period, management succeeded in obtaining OIG concurrence to close 22

recommendations. Of the 22 closed recommendations, management submitted 17(or 77 percent) 

completed corrective actions to OIG for review and concurrence to close in less than one year. The 

SEC also received three new OIG reports (including one Management Implication Report) during the 

reporting period containing a total of 10 recommendations for improvement to the agency’s 

processes and programs. At period-end, final action was pending on 48 recommendations from 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. ForOIG reports 

that contain questioned or unsupportedcosts, 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.

The questionedcosts 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

were determined to be disallowed during this reporting period. Management determined that the 

unsupported costs identified in this report should not be disallowed. Management continues to 

review the unsupported costs identified in the OIG Report 562: Opportunities Exist To Improve the 

SEC's Management of Mobile Devices and Servicesissuedat the end of the reporting period on 

September 30, 2020. Management also continues to review the questioned and unsupported costs 

identified in the OIG Report 554: SEC Can Better Manage Administrative Aspects of the ISS Contract. 

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, Inspectionand Evaluation Reports 

with Disallowed Costs

(Reporting Period April 1, 2020 through September 30, 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 1 $209

B. On which management decisions were made during the reporting period 1 $209

C. For which final action was taken during the reporting period 1 $209

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

property in lieu of cash, or otherwise $209

(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 did not issue a report that contained a recommendation that funds be 

put to better use. During the previous 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. 

Final action has been taken on this recommendation and as reflected in Table 2.

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

with Funds Put to Better Use

(Reporting Period April 1, 2020 through September 30, 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 1 $124,773

B. On which management decisions were made during the reporting period 1 $124,773

C. For which final action was taken during the reporting period 1 $124,773

(i) Dollar value of recommendations that were actually completed 1 $124, 773

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

should not or could not be implemented or completed 0 $0

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

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 April 1, 2020 through September 30, 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 11 of the report’s 20 recommendations have been

closed with OIG’s concurrence and one additional 

recommendation has been submitted to OIG for 

closure. 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 completing corrective actions on all but 

one of the remaining recommendations before the 

end of the next 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 Eight of the report’s nine recommendations have 

been closed with OIG’s concurrence. The SEC’s 

Office of Human Resources 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 aligns with related actions 

occurring for policy revisions and other assessment 

results. OIT anticipates completing corrective 

action on 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 Five of the report’s 11 recommendations have 

been closed with OIG’s concurrence. OIT

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 deploymentrequirements, the 

anticipated completion of corrective actions for 

the final recommendation is spring 2022. 

Report 553: Although 

Highly Valued by End 

Users, DERA Could 

Improve Its Analytics 

Support by Formally 

Measuring Impact, 

Where Possible

4/29/2019 $0 $0 Two of the 3 recommendations have been closed 

with OIG concurrence. The SEC’s Division of 

Economic Risk and Analysis continues to work on 

the remaining recommendation with anticipated 

completion of corrective actions in the winter of 

2021
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Report No./Title Report Date Funds Put to 

Better Use 

Disallowed 

Costs Status of Final Action

Report 555: The SEC 

Has Processes To 

Manage Information 

Technology 

Investments But 

Improvements Are 

Needed

9/19/2019 $0 $0 Three of the 5 recommendations have been closed 

with OIG concurrence. One additional 

recommendation has been submitted to OIG for 

closure. OIT reports that it is addressing the 

remaining recommendation and is currently 

updating policies and procedures to address the 

remaining elements. OIT anticipates completion of 

corrective actions before the end of the next 

reporting period.