U.S. SECURITIES AND EXCHANGE COMMISSION

F i s c a l Y e a r 2 0 1 4

Summary of Performance

and Financial Information
Introduction: The SEC publishes a Summary of 

Performance and Financial Information (SPFI), which is 

a brief overview of financial and performance information, 

that is electronically available at www.sec.gov/about/

secreports.shtml. The SEC also produces the Agency 

Financial Report (AFR), which has a primary focus on 

financial results, and an Annual Performance Report 

(APR), which focuses on strategic goals and performance 

results. The fiscal year (FY) 2014 APR will be included 

in the SEC FY 2016 Congressional Budget Justification 

in February 2015. The AFR is electronically available at 

http://www.sec.gov/about/secafr2014.shtml. To comment 

on the AFR, email SECAFR@sec.gov.

Mission

The mission of the SEC is to protect investors, 

maintain fair, orderly, and efficient markets, 

and facilitate capital formation.

Vision

The SEC strives to promote a market environment that is 

worthy of the public’s trust and characterized by:

• Transparent disclosure to investors of 

the risks of particular investments;

• Oversight of key market participants, including 

exchanges, brokers and dealers, investment 

advisers, and others;

• Focus on strengthening market structure 

and systems;

• Promotion of disclosure of market-related 

information;

• Protection against fraud and abuse; and

• Evaluation, development and maintenance 

of appropriate rules and regulations.

Values

Integrity Excellence Accountability

Effectiveness Teamwork Fairness

About the SEC 

The U.S. Securities and Exchange Commission is an 

independent Federal agency established pursuant to the 

Securities Exchange Act of 1934. The SEC is headed by a 

bipartisan five-member Commission, comprised of the Chair 

and four Commissioners who are appointed by the President 

and confirmed by the Senate. 

The SEC is responsible for overseeing the nation’s securities 

markets and certain key participants, including brokerdealers, investment companies, investment advisers, 

clearing agencies, transfer agents, credit rating agencies, 

and securities exchanges, as well as organizations such as 

the Financial Industry Regulatory Authority (FINRA), Municipal 

Securities Rulemaking Board (MSRB), and Public Company 

Accounting Oversight Board (PCAOB). It also seeks to ensure 

that investors are provided with the material information 

needed to make investment decisions.

Under the Dodd-Frank Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act), the agency’s jurisdiction 

was expanded to include certain participants in the derivatives 

markets, private fund advisers, and municipal advisors, among 

other changes. 

The agency’s responsibilities are organized into five divisions 

and 23 offices, each of which is headquartered in Washington, 

DC. The SEC also has 11 regional offices which are comprised 

primarily of staff from the enforcement and examination 

programs. The SEC employs over 4,100 people.

The Securities and Exchange Commission at a Glance

FY 2014 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION

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Fiscal Year 2014 Performance Highlights

Under the leadership of Chair Mary Jo White, FY 2014 marked 

a year of significant achievement across the SEC. With 

accomplishments ranging from robust and effective rulemaking 

that strengthened our markets and increased protection for 

America’s investors, to aggressive enforcement that employed 

new investigative techniques and the innovative use of data 

to bring actions that spanned the securities industry and 

comprehensive examination of regulated entities designed to 

promote compliance and prevent and detect fraud, this past 

year has been a high water mark for the Commission.

A Focused Rulemaking Agenda

• With the significant efforts of the last fiscal year, the Commission has now completed most of its mandatory rulemaking 

in six of the eight significant areas targeted for SEC action 

by the Dodd-Frank Act. 

• In December 2013, the Commission joined the Federal 

banking agencies and the Commodity Futures Trading 

Commission (CFTC) in adopting a final rule implementing 

Section 619 of the Dodd-Frank Act, known as the “Volcker 

Rule.” This rule generally restricts financial institutions affiliated 

with banks – including broker-dealers and investment advisers 

– from engaging in proprietary trading, sponsoring hedge 

funds and private equity funds, or investing in such funds.

• The Commission adopted fundamental reforms to money 

market funds.

• The Commission worked to improve the supervision of 

clearing agencies and adopted significant rules to enhance 

the governance of credit rating agencies.

• The Commission adopted critical overhauls to the assetbacked securities market.

• The Commission proposed rules in December 2013 intended 

to increase access to capital for smaller companies under 

a Jumpstart Our Business Startups (JOBS) Act mandate. 

The proposal built on Regulation A, an existing exemption 

from Securities Act registration for securities offerings up to 

$5 million within a 12-month period. The updated exemption, 

commonly referred to as “Regulation A+,” would enable 

companies to offer and sell up to $50 million of securities 

within a 12-month period.

Aggressive Enforcement

• The SEC ended FY 2014 with 755 enforcement actions 

and obtained orders for $4.16 billion in penalties and 

disgorgement which was a record year. 

• Some of the notable actions Enforcement brought include 

actions against: exchanges, investment advisers and 

broker-dealers, issuers, auditors and others who serve 

as gatekeepers to our financial system, large international 

corporations, municipal issuers for disclosure failures, and 

an array of insider trading violations.

• Enforcement saw several “firsts,” such as charging violations 

of the market access rule, the first enforcement action to halt 

a fraudulent municipal bond offering, the largest ever penalty 

for net capital rule violations, and the first case applying 

Dodd-Frank Act whistleblower anti-retaliation authority. 

• During FY 2014, Enforcement amplified its focus on market 

structure issues and filed a number of actions against market 

participants who pose a risk to the markets by failing to 

operate within the rules. 

• The SEC brought 52 insider trading actions, which sent a 

strong deterrent message to would be-violators.

• Enforcement took proactive steps to combat microcap fraud 

by more frequently suspending trading in securities that are 

the objects of pump and dumps, targeting repeat players 

who help facilitate these schemes, and building on the 

SEC’s relationships with its regulatory and law enforcement 

counterparts. Efforts in this area included suspending trading 

in 255 dormant shell companies. 

• SEC continued its focus on the municipal securities market, 

bringing significant, novel actions charging the full spectrum 

of market participants. Areas of focus this year included 

conflicts of interest, pay-to-play schemes, and a new 

initiative to encourage self-reporting of certain securities 

law violations by municipal issuers and underwriters.

• Investment advisers and the funds they manage remained 

a key focus of Enforcement during FY 2014. 

• In coordination with the SEC’s Office of International Affairs 

(OIA), Enforcement continued to expand its international 

enforcement efforts.

FY 2014 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION

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Enhanced Review Program

• The Office of Compliance Inspections and Examinations 

(OCIE) continued to promote compliance through a 

multi-level outreach program, and to detect and prevent 

fraud through an increasingly sophisticated examination 

process. 

• OCIE engaged registrants through a wide variety 

of channels ranging from its second annual public 

statement of examination priorities to meetings with senior 

management, heads of control functions and independent 

directors. 

• It significantly expanded the scope of its data collection 

and analysis program.

• In FY 2014, OCIE conducted more than 1,850 formal 

examinations of registrants, an increase over each of 

the prior four fiscal years.

• In FY 2014, OCIE made more than 200 referrals, many 

of which resulted in enforcement investigations and/

or actions.

Increased Outreach to Investors 

• The SEC appointed its first Investor Advocate in the 

agency’s newly-formed Office of the Investor Advocate. 

• The Commission continued to provide educational 

programs and materials, coordinate with foreign 

counterparts, and scrutinize disclosures to ensure that 

investors are getting appropriate information. 

• SEC’s staff are creating and embracing new tools and 

technology, deploying new and innovative strategies to 

protect investors, keep markets safe and encourage 

capital formation – more effectively than ever before. 

• The Office of Investor Education and Advocacy (OIEA) 

posted educational content to Investor.gov. A record 

number of 28 investor alerts and bulletins warning investors of possible fraudulent schemes, including affinity fraud 

and schemes involving virtual currencies, and educating 

them on investment-related matters were published.

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Strategic Goals and Costs

The SEC’s performance data provides a foundation for both 

programmatic and organizational decision-making and is critical 

for gauging the agency’s success in meeting its objectives. The 

SEC is committed to using performance management best 

practices to promote greater accountability. The SEC’s FY 2014 

APR will be issued with the agency’s FY 2016 Congressional 

Budget Justification, and will provide a complete discussion 

of all of the agency’s strategic goals, including a description of 

performance goals and objectives, data sources, performance 

results and trends, and information about internal reviews and 

evaluations. A summary of the SEC’s verification and validation 

of all performance data also will be included in the APR. The 

SEC’s APR is expected to be available in February 2015 at 

www.sec.gov/about/secreports.shtml.

Strategic Goal 1: Establish and maintain an effective 

regulatory environment 

• Strategic Objective 1.1: The SEC establishes and 

maintains a regulatory environment that promotes highquality disclosure, financial reporting and governance, 

and that prevents abusive practices by registrants, 

financial intermediaries and other market participants.

• Strategic Objective 1.2: The SEC promotes capital 

markets that operate in a fair, efficient, transparent and 

competitive manner, fostering capital formation and 

useful innovation.

• Strategic Objective 1.3: The SEC adopts and administers 

regulations and rules that are informed by robust 

economic analysis and public comment and that enable 

market participants to understand clearly their obligations 

under the securities laws.

• Strategic Objective 1.4: The SEC engages with a 

multitude of stakeholders to inform and enhance 

regulatory activities domestically and internationally.

Strategic Goal 2: Foster and enforce compliance with 

the Federal securities laws 

• Strategic Objective 2.1: The SEC fosters compliance 

with the Federal securities laws.

• Strategic Objective 2.2: The SEC promptly detects and 

deters violations of the Federal securities laws.

• Strategic Objective 2.3: The SEC prosecutes violations of 

Federal securities laws and holds violators accountable 

through appropriate sanctions and remedies.

FY 2014 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION
Strategic Goal 3: Facilitate access to the information 

investors need to make informed investment decisions 

• Strategic Objective 3.1: The SEC works to ensure that 

investors have access to high-quality disclosure materials 

that facilitate informed investment decision-making.

• Strategic Objective 3.2: The SEC works to understand 

investor needs and educate investors so they are better 

prepared to make informed investment decisions.

Strategic Goal 4: Enhance the Commission’s performance through effective alignment and management 

of human, information, and financial capital

• Strategic Objective 4.1: The SEC promotes a resultsoriented work environment that attracts, engages, and 

retains a technically proficient and diverse workforce, 

including leaders who provide motivation and strategic 

direction.

• Strategic Objective 4.2: The SEC encourages a 

collaborative environment across divisions and offices 

and leverages technology and data to fulfill its mission 

more effectively and efficiently.

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• Strategic Objective 4.3: The SEC maximizes the use 

of agency resources by continually improving agency 

operations and bolstering internal controls.

Performance Achievements 

The SEC seeks to encourage a strong culture of compliance 

among organizations, to foster ethical behavior and decisionmaking. As part of its efforts to promote compliance within the 

industry, OCIE exceeded its target by conducting 63 outreach 

and education programs during the year, including Compliance 

Outreach seminars, targeted sessions with never before 

examined advisers, and various other outreach initiatives with 

registrants and regulators (Performance Goal 2.1.1). Further, 

the National Examination Program issued two National Risk 

Alerts and participated in a number of other outreach efforts, 

including speaking at more than 240 industry conferences 

and other related engagements that are not reflected in the 

numbers below. The program will continue to expand and 

improve on these efforts during FY 2015 and FY 2016 as these 

are critical elements in fostering and promoting compliance 

with Federal securities laws.

PERFORMANCE GOAL 2.1.1 

Number of industry outreach and education programs targeted to areas identified as raising particular compliance risks

Description: Targeted communication with industry participants on topics shaping the examination program is intended to enhance compliance 

practices and prevent violations before they occur. This metric identifies the number of major outreach efforts conducted including the SEC’s 

national and regional compliance outreach events, published risk alerts, and other educational programs and initiatives.

Fiscal Year FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

FY 2014

Plan

FY 2014 

Actual

FY 2014 

Results

Number of major outreach efforts N/A 6 5 12 15 16 63 Exceeded

Responsible Division/Office: Office of Compliance Inspections and Examinations

Data Source: Internal tracking, although the events noted above are referenced on the SEC’S Website at www.sec.gov/ocie.

While the agency did not meet its targets for the percentage of investment companies examined during the year, the agency 

did exceed its targets for percentage of investment advisers and broker dealers examined during the year (Performance Goal 

2.2.1). In addition, examination resources in FY 2014 were allocated to other efforts intended to improve long-term performance, 

including industry outreach initiatives, rulemaking efforts and other program improvements.

FY 2014 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION
PERFORMANCE GOAL 2.2.1

Percentage of investment advisers, investment companies, and broker-dealers examined during the year

Description: This metric indicates the number of registrants examined by the SEC or an SRO as a percentage of the total number of registrants. 

This metric includes all types of examinations: risk priority examinations, cause inspections to follow up on tips and complaints, limited-scope special 

inspections to probe emerging risk areas, and oversight examinations of broker-dealers to test compliance and the quality of examinations by FINRA.

Fiscal Year FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

FY 2014

Plan

FY 2014 

Actual

FY 2014 

Results

Investment advisers 10% 9% 8% 8% 9% 9% 10% Exceeded

Investment companies 29% 10% 13% 12% 11% 12% 10% Not Met

Broker-Dealers (exams by SEC and SROs) 54% 44% 58% 49% 46% 48% 49% Exceeded

Responsible Division/Office: Office of Compliance Inspections and Examinations

Data Source: Tracking and Reporting Exam National Documentation System (TRENDS), Commission Filings, and SRO Databases (BD SRO Data)

Plan for Improving Program Performance: During FY 2015, staff will continue to implement improved processes and procedures that have been 

identified as part of OCIE’s ongoing improvement process. Significant improvement initiatives in the areas of strategy, people, processes, and 

technology have been completed in the last few years or are currently underway. The agency expects that these improvements, which include 

enhancements to the exam program’s risk assessment processes, will lead to more effective coverage of registered entities. Furthermore, certain 

targeted initiatives aimed at high risk firms and activities have already been implemented and it is anticipated that these efforts will result in 

improved coverage levels in FY 2015.

Filing enforcement actions in a timely manner is an important measure of the Division of Enforcement’s (Enforcement) effectiveness. 

In FY 2014, the average months between opening a matter under inquiry (MUI) or investigation and commencing an enforcement 

action was 21 months, which is the same as the prior fiscal years (Performance Goal 2.3.3). Timely actions have an increased 

deterrent impact. However, many of Enforcement’s cases are complex and can take extended periods of time to develop 

successfully, which will negatively impact the timeliness of actions. 

PERFORMANCE GOAL 2.3.3

Average months between opening a matter under inquiry or an investigation and commencing an enforcement action

Description: This metric captures the average number of months between the opening of an investigation and the filing of the first enforcement 

action arising out of that investigation. If the investigation was preceded by a matter under inquiry, the metric draws on the date of opening of 

the matter under inquiry. In conducting investigations, the enforcement program continually strives to balance the need for complete, effective, 

and fair investigation with the need to file enforcement actions in as timely a manner as possible. While not all investigations result in the filing of 

enforcement actions, this metric provides information concerning the pace of investigations that do lead to such actions.

Fiscal Year FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

FY 2014

Plan

FY 2014 

Actual

FY 2014 

Results

Months N/A N/A 22 21 21 20 21 Not met

Responsible Division/Office: Division of Enforcement

Data Source: HUB case management and tracking system for the Division of Enforcement

Plan for Improving Program Performance: To achieve its goal of 20 months on this metric, Enforcement will continue to look for ways to manage 

investigations effectively in order to promote speed and efficiency while maintaining an appropriate degree of thoroughness and completeness. 

Enforcement will strive to improve through effective management of cases, as well as by leveraging various processes and initiatives designed to 

promote efficiencies in investigations, such as technology, training, and regular case assessments. Enforcement leadership also will encourage 

appropriate use of tools such as subpoena enforcement actions in order to ensure that investigations proceed on an appropriate timeframe.

Providing investors with the information they need to avoid securities fraud and make informed investment decisions remained 

a high priority for the agency in FY 2014. The SEC’s Office of Investor Education and Advocacy (OIEA) continued to support 

the agency’s investor protection mission through the Investor.gov website, which provides key information for citizens to inform 

their investment decisions. Investor.gov attracted over one million new visitors due in part to its growing digital and social media 

presence, and the website’s high customer satisfaction scores significantly exceeded the Federal Government benchmark 

(Performance Goal 3.2.3). 

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FY 2014 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION
In FY 2014, the SEC demonstrated its continued commitment 

to maintaining strong internal controls. Internal control is an 

integral component of effective agency management, providing 

reasonable assurance that the following objectives are being 

achieved: effectiveness and efficiency of operations, reliability of 

financial reporting, and compliance with laws and regulations.

Assurance Statement On Internal Control Over 

Operations: The SEC management is responsible for 

establishing and maintaining effective internal control and 

financial management systems that meet the objectives of the 

Federal Managers’ Financial Integrity Act of 1982 (FMFIA). In 

accordance with OMB Circular A-123, the SEC conducted its 

annual assessment of the effectiveness of internal controls. 

Based on the results of the assessment for the period ending 

September 30, 2014, the SEC is able to provide an unqualified 

statement of assurance that the internal controls and financial 

systems, both for the agency as a whole and for the Investor 

Protection Fund, meet the objectives of the FMFIA. No material 

weaknesses were found in the design or operation of the 

internal controls for the fiscal year ended September 30, 2014.

Assurance Statement On Internal Control Over Financial 

Reporting (ICFR): In accordance with Appendix A of OMB 

Circular A-123, the SEC conducted its assessment of the 

effectiveness of internal control over financial reporting, which 

includes safeguarding of assets and compliance with applicable 

laws and regulations. Based on the results of the assessment, 

the SEC is able to provide reasonable assurance that internal 

control over financial reporting, both for the agency as a whole 

and for the Investor Protection Fund, met the objectives of 

FMFIA and were operating effectively as of September 30, 

2014. No material weaknesses were found in the design or 

operation of controls.

SEC also conducted reviews of its financial management 

systems in accordance with OMB Circular A-123 Appendix D, 

Compliance with the Federal Financial Management Improvement Act of 1996 (FFMIA). Based on the results of these 

reviews, SEC can provide reasonable assurance that its 

financial management systems substantially comply with the 

requirements of the FFMIA as of September 30, 2014.

Summary of Financial Statement Audit

Audit Opinion: Unmodified

Restatement: No

INDEPENDENT AUDITOR’S INTERNAL CONTROL FINDINGS

Category FY 2014 Audit Finding

Material Weaknesses None

Significant Deficiency Accounting for Disgorgement 

and Penalties 

For FY 2014, our independent auditor, the U.S. Government 

Accountability Office (GAO), has issued an unmodified 

opinion on our financial statements and internal controls. In 

addition, the SEC successfully downgraded the severity of 

the one significant deficiency from FY 2013 related to internal 

controls over information technology security. However for 

FY 2014, the SEC had one significant deficiency in the area 

of accounting for disgorgements and penalties. We found 

that judgments and orders were not always getting recorded 

into the accounting records on a timely basis. Therefore, the 

SEC enhanced the controls in this area late in the fiscal year 

to address the timely recording of transactions. The Office of 

Financial Management has begun working more regularly with 

the agency’s case management specialists, who have deep 

institutional knowledge with respect to individual cases. We 

expect the ongoing communication to help ensure proper 

recording of judgments and orders. This will continue to be 

an area of focus for us in FY 2015.

Management Assurances

PERFORMANCE GOAL 3.2.3

Customer satisfaction rating of OIEA’s online investor education resources

Description: This metric gauges the effectiveness, helpfulness, and usability of OIEA’s online investor education resources.

Fiscal Year FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

FY 2014

Plan

FY 2014 

Actual

FY 2014 

Results

Satisfaction index Prior-year data not available 81 73 83 Exceeded

Responsible Division/Office: Office of Investor Education and Advocacy

Data Source: ForeSee results online portal

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FY 2014 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION
Looking Forward FY 2015

In FY 2015, the SEC will continue to promote policies 

and programs to protect investors, maintain fair, orderly, 

and efficient markets, and facilitate capital formation. The 

agency will continue to build upon its robust enforcement 

and examination programs using innovative data analysis and 

cutting-edge technology. The SEC will also continue to make 

progress on important rulemakings – both those mandated by 

Congress and those that cover other mission-critical areas – 

and will push forward on initiatives to strengthen the resiliency 

and operational integrity of our securities markets. In FY 2015, 

the SEC will also strive to enhance its operations, bolster its 

investor outreach and use sophisticated data analytics to 

improve its efficiency and effectiveness.

In the coming fiscal year, the Commission will seek to complete 

the remaining major rulemakings required by the Dodd-Frank 

and JOBS Acts. The SEC will also continue to focus on 

discretionary rulemaking in areas of critical importance for 

investors and other market participants, including equity 

and fixed income market structure, asset management, and 

financial infrastructure.

With over 90 percent of the required rules proposed or 

adopted, the Commission is nearing the completion of its 

Dodd-Frank rulemaking in many key areas. In FY 2015, the 

SEC will strive to advance the final rules by:

• Continuing to implement the comprehensive regulatory 

framework for over-the-counter derivatives market called 

for by the Dodd-Frank Act;

• Accelerating the implementation of the provisions of the 

Dodd-Frank Act related to executive compensation; 

• Seeking to adopt final rules to implement exemptions 

under the Securities Act for securities-based 

crowdfunding offerings and offerings conducted pursuant 

to “Regulation A+”; 

• Considering final amendments to enhance the 

Commission’s ability to evaluate the development of 

market practices in Rule 506 offerings and to address 

concerns that may arise in connection with permitting 

issuers to engage in general solicitation and general 

advertising in such offerings; 

• Continuing to work to implement the changes to the 

thresholds for registration and deregistration under 

Section 12(g) of the Exchange Act, which were effective 

immediately upon enactment of the JOBS Act; and 

• Continuing to provide interpretive guidance to issuers 

and their advisers on the implementation and application 

of the JOBS Act, and review emerging practices in the 

securities market following the implementation of JOBS 

Act rules. 

Beyond these statutory mandates, the SEC will continue to 

develop rules for a dynamic economy that seek to facilitate 

capital formation while protecting investors and maintaining 

fair, orderly, and efficient markets. In particular, in the coming 

fiscal year, the SEC will: 

• Continue to comprehensively review the structure of the 

equity markets to optimize their functioning, including 

through rulemaking; 

• Consider significant enhancements to the risk management practices of the asset management industry; and

• Continue to work toward a stronger financial responsibility 

framework for broker-dealers.

Enforcement and OCIE will continue to build on their very 

strong results from FY 2014 by focusing on current and 

emerging high-priority areas, and on enhancing their use 

of cutting-edge technology and analytics. Enforcement’s 

priorities for the coming year include a continued focus on 

complex financial products, gatekeepers, financial reporting, 

market structure, insider trading, investment advisers and 

private funds, and municipal securities. OCIE will continue 

to invest in and use data analytics that enable preemptive 

detection of risk throughout entire industries and more 

effective identification of fraud in examinations. 

In FY 2015, the SEC will continue to look for new and 

innovative ways to educate investors including: 

• Increasing investor education outreach to target 

audiences, including seniors, millennials, affinity groups, 

and the military to convey key investor education 

messages, including, among others, understanding 

fees, and identifying fraud; 

FY 2014 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION

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Inspector General’s Statement on Management 

and Performance Challenges

• Using research to inform and enhance investor education 

initiatives, including feedback from Investor.gov’s customer 

satisfaction survey; and 

• Educating individuals about the importance of checking 

the registration status of an investment professional before 

investing. 

Since FY 2013, the SEC has been working on a multi-year 

technology transformation plan called “Working Smarter.” 

Under the Working Smarter initiative, the agency has worked 

to standardize enterprise-wide platforms, modernize SEC.gov 

and the EDGAR filer system, develop advanced search and 

discovery capabilities, and build complex, predictive analytical 

capabilities. In FY 2015, the agency will continue to build on 

this initiative in an effort to lower costs, deliver better services 

to both employees and the public, and increase accountability, 

transparency, and security. 

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The SEC is committed to further improving its financial systems, 

processes, and controls. The agency is building a financial data 

mart, as part of a broader SEC-wide Electronic Data Warehouse 

initiative. This data mart is designed to integrate data from a 

variety of SEC systems, facilitating financial decision-making 

by providing comprehensive management and financial 

reporting on a regular basis. The SEC also will continue to 

participate in the Federal government-wide deployment of 

a new travel system, work to replace the system supporting 

budget execution and formulation, and focus on reforming the 

systems related to filing fees and disgorgements and penalties.

The agency will continue to promote its strategic values of 

integrity, accountability, effectiveness, teamwork, fairness and 

a commitment to excellence through improving collaboration 

and coordination among its divisions and offices, employing 

new technology, and supporting the more than 4,000 talented 

men and women who work tirelessly to fulfill the agency’s 

important mission.

The Reports Consolidation Act of 2000 requires the SEC’s 

Office of Inspector General (OIG) to identify and report 

annually on the most serious management challenges that 

the SEC faces. 

The FY 2014 management challenges are: 

• Regulatory Oversight

• Information Security

• Acquisition Management

• Financial Management 

• Human Capital Management

The SEC remains committed to enhancing the financial and 

operational effectiveness of the agency and appreciates the 

OIG’s role in the effort. The SEC has actions—taken and 

planned to be taken—to address each of the challenges 

identified by the OIG.

FY 2014 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION
Fiscal Year 2014 Financial Highlights

SELECTED FINANCIAL DATA FOR FY 2014 AND FY 2013

(DOLLARS IN MILLIONS) FY 2014 FY 2013

Total Assets $ 10,590 $ 9,953

Total Liabilities $ 2,900 $ 2,298

Net Position $ 7,690 $ 7,655

Annual Net Position Change 0% 1%

Total Program Costs $ 1,441 $ 1,331

Revenues $ 1,906 $ 1,764

Net (Income) Cost from Operations $ (465) $ (433)

Total Budgetary Resources $ 1,551 $ 1,402

Actual FTEs at Fiscal Year End 4,150 4,023

Sequestration Order for FY 2014

On March 1, 2013, the President issued the Sequestration 

Order for FY 2013 which reduced FY 2013 budget authority. 

As determined by the Office of Management and Budget 

(OMB), for FY 2014, the sequestration order was applicable 

to mandatory appropriations and spending authority from 

offsetting collections, which included the Reserve Fund and 

the Investor Protection Fund, of the SEC as follows:

Reserve Fund 

The budget authority of $75 million was reduced by 7.2 percent 

or $5.4 million.

Investor Protection Fund

The budget authority of $90 million was reduced by 7.2 percent 

or $6 million.

Reserve Fund

Section 991(e) of the Dodd-Frank Act authorized the creation 

of a Securities and Exchange Commission Reserve Fund 

(Reserve Fund). Funded from filing fee collections, the SEC 

can deposit up to $50 million per fiscal year, and the fund 

cannot hold more than $100 million in total. Excess filing fees 

are deposited to the U.S. Treasury General Fund.

For the fiscal year ended September 30, 2014, filing fee 

revenues were $580 million. Fifty million dollars was deposited 

into the Reserve Fund, of which $25 million was rescinded 

and $5.4 million was sequestered. The excess of $530 million 

was earned on behalf of the U.S. Treasury General Fund.

Filing fees deposited to the Reserve Fund can be used to 

fund the SEC’s operations, create budgetary authority, and are 

reported as a component of Appropriations (Discretionary and 

Mandatory) on the SEC’s Statement of Budgetary Resources. 

Filing fees deposited to the U.S. Treasury General Fund cannot 

be used to fund the SEC’s operations. These amounts do not 

create budgetary authority, and are reported as a component 

of Other Financing Sources: Other on the SEC’s Statement 

of Changes in Net Position.

FY 2014 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION

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Investor Protection Fund

The SEC prepares standalone financial statements for the 

Investor Protection Fund as required by the Dodd-Frank Act. 

The Investor Protection Fund was established in the fourth 

quarter of FY 2010 to provide funding for a Whistleblower 

Award Program and to finance the operations of the SEC 

OIG’s Employee Suggestion Program.

INVESTOR PROTECTION FUND ACTIVITY

FOR THE YEARS ENDED SEPTEMBER 30, 2014 AND 2013

(DOLLARS IN THOUSANDS) FY 2014 FY 2013

Balance of Fund at beginning of fiscal year, 

October 1 $439,197 $453,429

Amount of earnings on investments during 

the fiscal year 579 651

Amount paid from the Fund during the 

fiscal year to whistleblowers (25,069) (14,832)

Amount paid from the Fund during the 

fiscal year for expenses incurred by 

Employee Suggestion Program (47) (51)

Balance of the Fund at the end of the 

reporting period $ 414,660 $ 439,197

Note: Table presented as “Dollars in Thousands” in order to detail 

Investor Protection Fund Activity.

FY 2014 Program Costs 

Total Program Costs were $1.4 billion for the year ended 

September 30, 2014, an increase of $110 million or eight 

percent when compared to the prior year. Salary and Benefit 

Expenses increased more than $91 million, because the SEC 

had higher expenses in the areas of Pay and Benefits as the 

result of increased staffing and compensation. Other Expenses 

remained stable when comparing FY 2014 to FY 2013, with 

the exception of accrued Whistleblower payments from the 

SEC’s Investor Protection Fund, which totaled more than 

$25 million.

The SEC had increased expenses in the areas of personnel 

compensation and benefits which correlates to an increase 

of 127 full-time equivalent employees; information technology 

service contracts and licensing; capitalized and noncapitalized 

information systems software and hardware; and whistleblower 

award payments.

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FY 2014 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION
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U.S. SECURITIES AND EXCHANGE COMMISSION

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