U.S. Securities and Exchange Commission

Management Report to Accompany 

the Office of Inspector General 

Semiannual Report to Congress

For the period October 1, 2022 through March 31, 2023

May 2023
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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, 2022 – March 31, 2023

Section 5(b) of the Inspector General Act of 1978, as amended, (Inspector General Act), 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.1 This Management Report 

presents the required information for the reporting period of October 1, 2022 through March 31, 

2023. 

I. Overview of SEC Audit Follow-up Activities 

The SEC is committed to timely completion of corrective actions on OIG audit, inspection, and 

evaluation recommendations. At the commencement of this semiannual reporting period, there 

were 31 open OIG recommendations. During the period, management succeeded in obtaining OIG 

concurrence to close 18 recommendations. Of the 18 closed recommendations, management 

submitted 11 (or 61 percent) requests for closure in less than one year. The SEC also received 4 

new OIG reports during the reporting period containing a total of 32 recommendations for 

improving the agency’s processes and programs. At period-end, final action was pending on 45

recommendations from 10 reports. One of those recommendations was pending OIG concurrence 

for closure.

II. Reports on Instances of Whistleblower Retaliation

Section 5(b)(3) of the Inspector General Act 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. 

III. Reports with Monetary Savings

Section 5(b)(2) of the Inspector General Act requires the SEC Management Report to include 

statistical information regarding any management decision or final action taken on each audit, 

inspection, or evaluation report on which final action had not been taken before the reporting 

period. The information required to be reported includes the dollar value of any “disallowed cost” 

or “recommendation that funds be put to better use.”

The Inspector General Act defines a “disallowed cost” as a cost questioned by the OIG that agency 

management has decided should not be charged to the agency. The Inspector General Act defines 

“recommendation that funds be put to better use” to mean an OIG recommendation that funds 

could be used more efficiently if management took actions to implement and complete the 

accompanying recommendation. During the reporting period, OIG did not issue a report that 

 

1 The SEC’s Management Response is based on the requirements of Section 5 of the Inspector General Act as 

amended by the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023, Pub. L. No. 117-263, 

§ 5273, Dec. 23, 2022, 136 Stat. 2395, 3241.
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contained any questioned costs or any recommendations that funds be put to better use. In 

addition, there are no outstanding management decisions on questioned costs or recommendations 

that funds be put to better use identified in OIG reports from prior reporting periods. 

Additional information regarding management decisions and final actions taken during the 

reporting period for reports on which final action had not been taken before the reporting period 

began is included below in the next section and Table 1.

IV. Reports 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 each audit, inspection, and evaluation report on which a management 

decision has been made but final action has not been taken. Table 1 presents the required 

information.

Table 1. Reports Pending Final Action at Start of Reporting Period 

(Reporting Period October 1, 2022 through March 31, 2023) 

Report No./Title for the 11 Reports with 

Pending Final Action at Start of Period

Report 

Date

Status of Final Action

Final Action Completed: 5 Reports/ Pending at End of Period: 6 

Reports

Report 546: Audit of SEC's Compliance 

with the Federal Information Security 

Modernization Act for Fiscal Year 2017

3/30/2018 Nineteen of the report’s 20 recommendations have been closed 

with OIG’s concurrence. Completion of corrective actions on the 

remaining recommendation is anticipated in fall 2023.

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 Final action taken during 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 Final action taken during reporting period.

Report 559: The SEC's Office of BrokerDealer Finances Provides Effective 

Oversight, But Opportunities To Improve 

Efficiency Exist

2/26/2020 Two of the three recommendations have been closed with OIG 

concurrence. The SEC’s Division of Trading and Markets has 

completed corrective action on the remaining recommendation 

and anticipates closure by the end of summer 2023. 

Report 562: Opportunities Exist To 

Improve the SEC's Management of Mobile 

Devices and Services

9/30/2020 Three of the seven recommendations have been closed with 

OIG concurrence. Corrective actions addressing the remaining 

four recommendations are in progress, with anticipated

completion by the end of calendar year 2023.

Report 563: Fiscal Year 2020 Independent 

Evaluation of SEC's Implementation of the 

Federal Information Security 

Modernization Act of 2014

12/21/2020 Five of the seven recommendations have been closed with OIG 

concurrence. OIT anticipates completion of the two remaining 

recommendations in fall 2023.

Report 568: Additional Steps Are Needed 

For the SEC To Implement a Well-Defined 

Enterprise Architecture

9/29/2021 Final action taken during reporting period.
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Report No./Title for the 11 Reports with 

Pending Final Action at Start of Period

Report 

Date

Status of Final Action

Final Action Completed: 5 Reports/ Pending at End of Period: 6 

Reports

Report 570: Fiscal Year 2021 Independent 

Evaluation of SEC's Implementation of the 

Federal Information Security 

Modernization Act of 2014

9/29/2021 Four of the report’s eight recommendations have been closed 

with OIG’s concurrence. As of May 1, 2023, corrective actions 

addressing three recommendations have been completed, two 

of which are being prepared for submission for OIG review in a 

formal request for recommendation closure. One 

recommendation was under OIG review for closure. Corrective 

actions addressing the remaining recommendation are in 

progress, with anticipated completion in summer 2023.

Report 571: Registered Investment 

Adviser Examinations: EXAMS Has Made 

Progress To Assess Risk and Optimize 

Limited Resources, But Could Further 

Improve Controls Over Some Processes

1/25/2022 Final action taken during reporting period.

Report 572: The SEC Can Improve in 

Several Areas Related to Hiring

2/28/2022 As of May 1, 2023, ten of the report’s eleven recommendations 

were closed with OIG’s concurrence. Corrective actions on the 

remaining recommendation have been completed and 

submitted for OIG review in a formal request for 

recommendation closure.

Report 573: OASB Complied With 

Statutory Requirements But Can Improve 

As It Matures

8/30/2022 Final action taken during reporting period.

All management decisions for the listed reports were made during prior reporting periods. For the 

5 reports listed in Table 1 for which final action was taken during the reporting period, none of the 

reports involved any questioned costs or recommendations that funds be put to better use.

Section 5(b)(4)(A) of the Inspector General Act states that a report may be excluded from the list of 

reports pending final action if (i) a management decision was made on that report within the 

preceding year or (ii) the report is under formal administrative or judicial appeal or management 

has decided to pursue a legislative solution. In this report, the SEC did not exclude any such reports 

from this list.