U.S. Securities and Exchange Commission

Management Report to Accompany 

the Office of Inspector General 

Semiannual Report to Congress

for the period October 1, 2020 through March 31, 2021

May 2021
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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, 2020 – March 31, 2021

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, 2020 through March 31, 2021.

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 48 open OIG recommendations.

During the period, management succeeded in obtaining OIG concurrence to close 14

recommendations. Of the 14 closed recommendations, management submitted 4 (or 29 percent) 

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

SEC also received four new OIG reports during the reporting period containing a total of 23 

recommendations for improvement to the agency’s processes and programs. At period-end, final 

action was pending on 55 recommendations from 15 reports and one management letter. Two

recommendations were pending OIG concurrence for closure.

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. For OIG reports 

that contain questioned or unsupported costs, 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.

During the reporting period, OIG did not issue a report that contained any questioned or 

unsupported costs. Management determined that the unsupported costs identified in OIG Report 

562: Opportunities Exist To Improve the SEC's Management of Mobile Devices and Services should not 

be disallowed. Final action on the corrective actions that address the recommendation that 

identified these costs are pending. Management also concluded its review of the questioned and 

unsupported costs identified in OIG report 554: The SEC Can Better Manage Administrative Aspects of 

the ISS Contract and determined that these costs should not be disallowed. Final action on the 

corrective actions that address the recommendations that identified these costs were completed in 

March 2020. 
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Table 1. Status of Final Action on Audit, Inspection and Evaluation Reports 

with Disallowed Costs

(Reporting Period October 1, 2020 through March 31, 2021)

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 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

(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 as reflected in Table 2. 

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

with Funds Put to Better Use

(Reporting Period October 1, 2020 through March 31, 2021)

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 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 recommendations that were actually completed 0 $0

(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.

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 
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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, 2020 through March 31, 2021)

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 13 of the report’s 20 recommendations have been

closed with OIG’s concurrence. Corrective actions 

addressing two additional recommendations are

completed and the closure memos are being 

prepared. Since the last reporting period, the SEC’s 

Office of Information Technology (OIT) reports 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 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 by the end of calendar year 2021.

Report 550: Evaluation 

of the EDGAR System’s 

Governance and 

Incident Handling 

Processes

9/21/2018 $0 $0 Thirteen of the report’s 14 recommendations have 

been closed with OIG’s concurrence. OIT reports it 

took actions during the reporting period to address 

the remaining one recommendation, with some 

actions taking longer than anticipated due to the 

need to ensure the remediation activity aligns with 

other policy revisions and assessment results. OIT 

anticipates completing corrective action on the 

remaining recommendation by summer 2021. 

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 Seven of the report’s 11 recommendations have 

been closed with OIG’s concurrence. Corrective 

actions for two additional recommendation have

been completed and the closure memos are being 

prepared. OIT anticipates completion of corrective 

actions on one recommendation prior to the end 

of the next reporting period. Due to contracting 

and technology deployment requirements, the 

anticipated completion of corrective actions for 

the final open recommendation is the end of the 

calendar year 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 As of the end of this reporting period DERA had 

requested closure on the final open 

recommendation from this report. This report was 

officially closed after the end of the reporting 

period.

Report 555: The SEC 

Has Processes To 

Manage Information 

Technology 

9/19/2019 $0 $0 Four of the five recommendations have been 

closed with OIG concurrence. OIT reports that it is 

currently addressing the remaining 

recommendation through updates to policies and 
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Report No./Title Report Date Funds Put to 

Better Use 

Disallowed 

Costs Status of Final Action

Investments But 

Improvements Are 

Needed

procedures. OIT anticipates completion of 

corrective actions by spring 2021. 

Report 556: The SEC 

Can More Strategically 

and Securely Plan, 

Manage, and 

Implement Cloud 

Computing Services

11/7/2019 $0 $0 One of the 3 recommendations have been closed 

with OIG concurrence. OIT anticipates completion 

of corrective actions by summer 2021.

Final Management 

Letter: Evaluation of 

the U.S. Securities and 

Exchange 

Commission’s 

Delinquent Filings 

Program

12/17/2019 $0 $0 As of the end of this reporting period both of the 

recommendations remained open. In April 2021, 

SEC requested and OIG concurred with the closure 

of both recommendations. This report was 

officially closed after the end of the reporting 

period. 

Report 558: Fiscal Year 

2019 Independent 

Evaluation of SEC's 

Implementation of the 

Federal Information 

Security 

Modernization Act of 

2014

12/18/2019 $0 $0 Five of the nine recommendations have been 

closed with OIG concurrence. Corrective action for 

one additional recommendation has been 

completed and the closure memo is being 

prepared. SEC has also completed corrective 

actions and requested closure for one 

recommendation. OIT anticipates completion of 

corrective actions by fall 2021. 

Report 559: The SEC's 

Office of Broker-Dealer 

Finances Provides 

Effective Oversight, 

But Opportunities To 

Improve Efficiency 

Exist

2/26/2020 $0 $0 Two of the three recommendations have been 

closed with OIG concurrence. TM anticipates 

completion of corrective actions by the end of 

calendar year 2021. 

Report 560: Controls 

Over the SEC's Travel 

Charge Card Program 

Could Be Strengthened 

To More Fully Comply 

With Requirements 

and Maximize Benefits

3/30/2020 $124,773 $209 Eleven of the 15 recommendations have been 

closed with OIG concurrence. OFM anticipates 

completion of corrective actions by summer 2021.