U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

i

Audit of the SEC’s Contracting Officers’ 

Representative Program

September 18, 2015

Report No. 530
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

WASHINGTON, D.C. 20549 

OFFICE OF 

INSPECTOR GENERAL 

M E M O R A N D U M 

September 18, 2015 

TO: Jeffery Heslop, Chief Operating Officer 

Shira Pavis Minton, Ethics Counsel and Designated Agency Ethics Official 

FROM: Carl W. Hoecker, Inspector General 

SUBJECT: Audit of the SEC’s Contracting Officer’s Representative Program, Report No. 530 

Attached is the Office of Inspector General’s (OIG) final report detailing the results of our 

audit of the U.S. Securities and Exchange Commission’s (SEC’s) Contacting Officer’s 

Representative Program. The report contains six recommendations for corrective action 

that, if fully implemented, should improve the SEC’s COR Program and should help ensure 

that CORs perform their duties consistently and as required. Implementation of the 

recommendations should also help the agency avoid Prompt Payment Act interest penalties 

and put about $4,568 annually to better use. 

On August 28, 2015, we provided management with a draft of our report for review and 

comment. In its September 11, 2015, response, management concurred with our 

recommendations. We have included the response as Appendix V in the final report. 

Within the next 45 days, please provide the OIG with a written corrective action plan that 

addresses the recommendations. The corrective action plan should include information 

such as the responsible official/point of contact, timeframe for completing required 

actions, and milestones identifying how your offices will address the recommendations. 

We appreciate the courtesies and cooperation extended to us during the audit. If you have 

questions, please contact me or Rebecca L. Sharek, Deputy Inspector General for Audits, 

Evaluations, and Special Projects, Office of Inspector General. 

Attachment 

cc:	 Mary Jo White, Chair 

Andrew Donahue, Chief of Staff, Office of the Chair 

Erica Y. Williams, Deputy Chief of Staff, Office of the Chair 

Luis A. Aguilar, Commissioner 

Paul Gumagay, Counsel, Office of Commissioner Aguilar 

Daniel M. Gallagher, Commissioner 

Michael C. Pawluk, Counsel, Office of Commissioner Gallagher 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mr. Heslop and Ms. Pavis Minton 

September 18, 2015 

Page 2 

Michael S. Piwowar, Commissioner 

Jamie Klima, Counsel, Office of Commissioner Piwowar 

Kara M. Stein, Commissioner 

Robert Peak, Advisor to the Commissioner, Office of Commissioner Stein 

Anne K. Small, General Counsel, Office of the General Counsel 

Timothy Henseler, Director, Office of Legislative and Intergovernmental Affairs 

John J. Nester, Director, Office of Public Affairs 

Vance Cathell, Director, Office of Acquisitions 

Judith Blake, Branch Chief, Business Management Office, Office of Acquisitions 

Kenneth A. Johnson, Chief Financial Officer, Office of Financial Management 

Eric I. Bustillo, Regional Director, Office of the Regional Director, Miami Regional Office 

Sharon Binger, Regional Director, Office of the Regional Director, Philadelphia 

Regional Office 

Darlene L. Pryor, Management and Program Analyst, Office of the Chief Operating 

Officer 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

Executive Summary Audit of the SEC’s Contracting Officer’s 

Representative Program 

Report No. 530 

September 18, 2015 

Why We Did This Audit 

Between 2012 and 2014, the U.S. 

Securities and Exchange Commission 

(SEC or agency) awarded 

1,959 contracts valued at more than 

$2 billion. Through these awards, the 

SEC purchased goods and services 

ranging from legal support services to 

operational support for the agency’s

computer network. The SEC’s Office of 

Acquisitions (OA) is responsible for 

contracting within the SEC. OA’s

Contracting Officers (COs) rely on 

Contracting Officer’s Representatives

(CORs) to provide contract oversight and 

ensure that the Government’s best 

interests are served. CORs’ effective 

contract monitoring is essential to proper, 

cost-effective, and efficient contracting 

within the SEC, thereby ensuring that the 

agency receives the goods and services 

it needs to meet its mission. 

What We Recommended 

To improve the SEC’s COR Program and 

help ensure that CORs perform their 

duties consistently and as required, we 

are making six recommendations for 

corrective action. Implementation of 

these recommendations will help the 

agency avoid Prompt Payment Act 

interest penalties and put about 

$4,568 annually to better use. 

Additionally, we recommend 

improvements to reduce the likelihood 

that CORs receive appointments to 

monitor contractors with whom they have 

a conflict. Management concurred with 

the recommendations, which will be 

closed upon completion and verification 

of corrective action. In addition, 

management agreed with and plans to 

implement our suggestions for 

improvements to the COR 

Nomination/Appointment Form. 

What We Found 

We reviewed COR contract files, COR nomination/appointment forms, 

and other evidence of contract monitoring activities for a judgmentally 

selected sample of 68 of the SEC’s 1,959 contracts awarded between 

2012 and 2014. Sampled contracts included a variety of contract types 

and amounts monitored by 32 CORs from 3 different SEC locations: 

the SEC’s Headquarters, the Philadelphia Regional Office, and the

Miami Regional Office. We found that the SEC’s COR Program has

aided OA’s contract management and includes internal controls to 

facilitate compliance with Federal requirements and SEC policies and 

procedures. In addition, CORs generally maintained adequate records 

and complied with training-related requirements. 

However, CORs did not always perform contract monitoring duties 

consistently and as required. Specifically, CORs did not always 

(1) review and process contractor invoices in a timely manner, 

(2) evaluate contractor performance within the prescribed timeframe, 

or (3) use the SEC’s Contractor Time Management System to track

certain contractor labor hours. This occurred, in part, because CORs 

did not always comply with applicable requirements and COs and COR 

supervisors did not consistently ensure CORs’ compliance. Other 

contributing factors include excessive COR workload and untimely 

communication between CORs and program managers. 

Due, in part, to untimely invoice processing, the SEC incurred Prompt 

Payment Act interest penalties of $9,136 in 2013 and 2014. In 

addition, contractor performance evaluations were not available in a 

timely manner for use by the SEC and other Federal agencies when 

making contracting decisions. Finally, failure to use the Contractor 

Time Management System when required reduces the SEC’s contract 

oversight and increases its risk of making improper payments to 

contractors. 

We also found that 151 SEC CORs who filed required financial 

disclosure reports in 2012, 2013, and 2014 filed the reports late. In 

addition, a small number of CORs did not file the reports each year. 

Additionally, some CORs monitored SEC contracts without first 

disclosing their financial interests. This occurred because nominating 

officials and COs did not obtain or receive information about CORs’

financial disclosure reports before appointing CORs. We did not 

identify any actual financial conflicts. However, the lack of coordination 

between nominating officials, OA, and the Office of the Ethics Counsel 

to ensure CORs complied with financial disclosure and ethics 

requirements could result in CORs monitoring contractors with whom 

CORs have a potential conflict. 

Finally, we determined OA could better assess and document COR 

suitability for effectively monitoring contracts by collecting additional 

information on the COR Nomination/Appointment Form. 

For additional information, contact the Office of Inspector General at 

(202) 551-6061 or www.sec.gov/about/offices/inspector_general.shtml. 

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U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

TABLE OF CONTENTS
 

Executive Summary .....................................................................................................i
 

Background and Objectives.......................................................................................1
 

Background .................................................................................................................1
 

Objectives ....................................................................................................................4
 

Results ........................................................................................................................5 

Finding 1: CORs Did Not Always Perform Duties Consistently and as Required .........5 

Recommendations, Management’s Response, and Evaluation of Management’s 

Response ..........................................................................................................10
 

Finding 2: CORs Monitoring SEC Contracts Did Not Always Comply With Financial 

Disclosure and Ethics Requirements ....................................................................13 

Recommendations, Management’s Response, and Evaluation of Management’s 

Response ..........................................................................................................15 

Other Matter of Interest.............................................................................................17
 

Tables 

Table 1. Invoices Not Timely Reviewed and Processed by CORs ...............................8
 

Table 2. COR Timeliness in Filing OGE Form 450.....................................................14
 

Table 3. Contracts Sampled by SEC Office ...............................................................21
 

Table 4. Recommendations That Funds Be Put to Better Use...................................24
 

Appendices 

Appendix I. Scope and Methodology .........................................................................18 

Appendix II. Federal Laws, Regulations, and Guidance and SEC Administrative 

Regulations, Policies, and Procedures..................................................................22
 

Appendix III. Funds Recommended Be Put to Better Use..........................................24
 

Appendix IV. Management Comments ......................................................................25
 

Appendix V. OIG’s Response to Management Comments.........................................28
 

ABBREVIATIONS
 

C.F.R. Code of Federal Regulations 

CO Contracting Officer 

COR Contracting Officer’s Representative 

CPARS Contractor Performance Assessment Reporting System 

CTMS Contractor Time Management System 

FAC-COR Federal Acquisition Certification–Contracting Officer’s 

Representatives 

FAITAS Federal Acquisition Institute Training Application System 

REPORT NO. 530 ii SEPTEMBER 18, 2015 
 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

FAR Federal Acquisition Regulation 

Federal requirements Federal laws, regulations, and guidance 

GAO Government Accountability Office 

OA Office of Acquisitions 

OEC Office of the Ethics Counsel 

OFM Office of Financial Management 

OFPP Office of Federal Procurement Policy 

OGE Form 450 or financial Office of Government Ethics Form 450 – Confidential 

disclosure report Financial Disclosure Report 

OIG Office of Inspector General 

OP Operating Procedure 

PRISM Portable Reusable Integrated Software Module 

SEC or agency U.S. Securities and Exchange Commission 

SECR SEC Administrative Regulation 

SEC policies and procedures SEC administrative regulations, policies, and procedures 

REPORT NO. 530 iii SEPTEMBER 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

Background and Objectives
 

Background 

The U.S. Securities and Exchange Commission’s (SEC or agency) Office of 

Acquisitions (OA) is responsible for contracting within the SEC. OA develops 

procurement and contract administration programs and training for the agency’s 

acquisition workforce, which includes Contracting Officers (COs), Contract Specialists, 

and Contracting Officer’s Representatives (CORs). According to the Federal 

Acquisition Regulation (FAR), COs are responsible for “ensuring performance of all 

necessary actions for effective contracting, ensuring compliance with the terms of the 

contract, and safeguarding the interests of the United States in its contractual 

relationships.”

1 Moreover, COs “shall [d]esignate and authorize, in writing and in 

accordance with agency procedures, a [COR] on all contracts and orders . . . unless 

the [CO] retains and executes the COR duties.”

2 CORs – employed in SEC program 

offices – are required to have the technical knowledge and understanding necessary to 

monitor contract requirements and oversee day-to-day contract administration. COR 

responsibilities and duties include: 

 on-boarding and off-boarding contractors, 

 accepting contract deliverables in accordance with the terms of the contract, 

 reviewing and approving contractor invoices, 

 maintaining adequate records relating to the contract, and 

 keeping the CO fully informed of problems so that the CO can resolve issues. 

COR supervisors are responsible for supporting their employees in meeting the 

demands of the COR position, familiarizing themselves with CORs’ responsibilities and

duties, and considering CORs’ performance as a part of CORs’ annual performance 

appraisals.3 

The Office of Federal Procurement Policy (OFPP) – a part of the Office of Management 

and Budget – requires that CORs be trained and have a Federal Acquisition 

Certification for CORs (FAC-COR), and that their certification be maintained through 

continuous learning.4 In addition, the Code of Federal Regulations (C.F.R.) requires 

1 FAR, Part 1—Federal Acquisition Regulations System, Subpart 1.6, § 1.602-2 (FAR § 1.602-2). 

2 FAR § 1.602-2. For the purposes of this report, the term “COR” refers to CORs and alternate CORs.

3 OA’s Instructions for CORs and their Supervisors, (February 1, 2009; revised May 24, 2012). 

4 OFPP, Developing and Managing the Acquisition Workforce, Policy Letter 05-01, April 15, 2005; and 

Revisions to the Federal Acquisition Certification for Contracting Representatives (FAC-COR), 

September 6, 2011. 

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U.S. SECURITIES AND EXCHANGE COMMISSION	 OFFICE OF INSPECTOR GENERAL 

confidential filers, including CORs, to file confidential financial disclosure reports. As 

such, CORs must submit to their Administrative Contact an Office of Government 

Ethics Form 450 – Confidential Financial Disclosure Report (OGE Form 450 or 

financial disclosure report) within 30 days of receiving FAC-COR certification (if the 

employee is not already an annual filer) and annually thereafter.5 

As of December 31, 2014, SEC employees trained and certified as CORs totaled 389;6 

359 CORs (or about 92 percent) were located at the SEC’s Headquarters. The 

remaining 30 CORs were at the SEC’s 11 regional offices. In 2014, the SEC’s CORs 

monitored 803 contracts7 valued at more than $1 billion. Through these contracts, the 

SEC obtained essential goods and services including: 

	 legal support services such as the services of accounting technicians, financial 

analysts, paralegals, law clerks, and fraud analysts; 

	 market data collection and analysis software that allows SEC staff to collect, 

monitor, and analyze equity and equity option data disseminated by the various 

national securities exchanges; and 

	 data center services that sustain operational support of the SEC’s computer 

network. 

Federal Laws, Regulations, and Guidance. Federal laws, regulations, and guidance 

(Federal requirements) establish uniform policies and procedures for acquisitions by all 

executive agencies, to include requirements for COs and CORs. The Federal 

Acquisition Regulations System consists of the FAR, which is the primary regulation, 

and agency acquisition regulations that implement or supplement the FAR. FAR Part 1, 

Subpart 1.6, “Career Development, Contracting Authority, and Responsibilities,”

establishes CO and COR authority and responsibilities. In addition, OFPP established 

the Governmentwide framework to create a Federal acquisition workforce and issued 

several relevant policies. These policies include Developing and Managing the 

Acquisition Workforce (Policy Letter 05-01; April 15, 2005) and Revisions to the Federal 

Acquisition Certification for Contracting Officer’s Representatives (FAC-COR) 

(September 6, 2011). Finally, the Prompt Payment Act requires Federal agencies to 

5 5 C.F.R. § 2634.903 (2015) - General requirements, filing dates and extensions and 5 C.F.R. § 

2634.904 (2015) - Confidential filer defined. Certain executive branch employees report their financial 

interests using OGE Form 450. 

6 Compliance with training and certification requirements does not necessarily mean all 389 CORs were 

actively monitoring contracts. Rather, they were eligible for nomination to monitor contracts. 

7 The SEC awarded various types of contracts and agreements during the period reviewed including, but 

not limited to, time-and-materials contracts, purchase orders, blanket purchase agreements, indefinite 

delivery/indefinite quantity contracts, delivery/task orders, firm fixed price contracts, and interagency 

agreements. For the purposes of this report, we refer to all types of contracts and agreements 

collectively as “contracts.”

REPORT NO. 530	 2 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION	 OFFICE OF INSPECTOR GENERAL 

pay their bills, including contractor invoices, on a timely basis and to pay interest 

penalties when payments are late.8 

SEC Administrative Regulations, Policies, and Procedures. OA has established 

SEC administrative regulations, policies, and procedures (SEC policies and 

procedures) for contract management, including requirements for COs, CORs, and 

COR supervisors. On August 12, 2009, OA issued SEC Administrative Regulations 

(SECR) 10-15, Acquisitions Contract Administration Positions: Contracting Officer’s 

Technical Representative (COTR), Inspection and Acceptance Official (IAO), and Point 

of Contact (POC), Rev. 1. On February 11, 2015, OA issued a revised regulation and 

retitled it Contracting Officer’s Representative (COR) Requirements (SECR 10-15). 

SECR 10-15 is the agency’s primary policy for COR duties and responsibilities and 

establishes uniform procedures for the training, nomination, appointment, and 

termination of CORs. The document states that (1) OA is responsible for the 

certification and appointment of CORs, and (2) COs ensure that CORs manage 

contracts appropriately and, if not, take action, which may include terminating a COR’s 

appointment. According to SECR 10-15, supervisors should not nominate the same 

COR to oversee “more than a few contracts.” Furthermore, it is the CO’s responsibility 

to “check the number of contracts or [Contractor Personnel] a COR has prior to 

approving the nomination. In addition, a COR should not be responsible for more than 

50 [Contractor Personnel] without additional staff to support.” Consequently, COR 

supervisors must work with COs to determine whether alternate CORs are needed 

based on workload, contract complexity, and the availability of the primary COR 

because, according to SECR 10-15, “It is impossible for one person to oversee more 

than a few contracts and do a good job.”

9 

Additional SEC administrative regulations affecting CORs include: 

	 SECR 10-14, Contract Administration, July 19, 2011; 

	 SECR 10-17, Time-and-Materials and Labor-Hour Contracts, February 18, 2011; 

and 

	 SECR 10-24, Management and Administration of Service Contracts, Rev. 1, 

July 25, 2013. 

8 Pub. L. 97-177, 96 Stat. 85 (1982)(codified as amended at 31 U.S.C. §§ 3901-3905). 

9 SECR 10-15, Section 9, “Oversight of CORs and the FAC-COR Program.”

REPORT NO. 530	 3 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION	 OFFICE OF INSPECTOR GENERAL 

OA also issued Instructions for CORs and their Supervisors, (February 1, 2009; revised 

May 24, 2012) (OA’s Instructions); a Contract Administration Guide (December 2013, 

Version 1); and several SEC administrative operating procedures (OP).10 

Objectives 

The overall objectives of the audit were to: 

	 determine whether SEC CORs complied with applicable Federal requirements 

and SEC policies and procedures; and 

	 evaluate the effectiveness and consistency of COR contract monitoring activities 

across the SEC, as well as OA’s oversight of CORs, during the period reviewed. 

To gain an understanding of the SEC’s COR Program, we interviewed COs, CORs, 

COR supervisors, and staff from OA, the Office of the Ethics Counsel (OEC), and the 

Office of Financial Management (OFM). We also reviewed COR contract files and other 

evidence of contract monitoring activities for a sample of 68 of the SEC’s 

1,959 contracts awarded between January 1, 2012, and December 31, 2014. We 

sampled contracts monitored by 32 CORs at the SEC’s Headquarters and 2 regional 

offices (the Philadelphia Regional Office and the Miami Regional Office). 

Appendix I includes additional information on our scope and methodology, review of 

internal controls, and prior audit coverage. Appendix II includes a listing of the Federal 

requirements and SEC policies and procedures we reviewed. 

10 We noted that OA had not updated some policies and procedures in a timely manner to reflect 

revisions to Federal requirements. Specifically, on September 6, 2011, OFPP issued Revisions to the 

Federal Acquisition Certification for Contracting Representatives (FAC-COR). The revisions included: 

(1) establishing a three-tiered FAC-COR certification program, and (2) changing the name of the position 

from “Contracting Officer’s Technical Representative” to “Contracting Officer’s Representative.” OA did 

not update SECR 10-15 until almost 3 and a half years later, in February 2015. However, OA was aware 

of the revisions to the Federal requirements and had changed its processes accordingly. In addition, OA 

officials told us they are updating SECR 10-14 and SECR 10-17 to reflect current Federal requirements, 

and are determining whether to update other policies. 

REPORT NO. 530	 4 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

Results
 

Finding 1: CORs Did Not Always Perform Duties Consistently 

and as Required 

We found that CORs did not always perform contract monitoring duties 

consistently and as required. Specifically, CORs did not always (1) review and 

process contractor invoices in a timely manner, (2) complete Contractor 

Performance Assessment Reporting System (CPARS) evaluations of contractor 

performance within the prescribed timeframe, or (3) use the SEC’s Contractor 

Time Management System (CTMS) to track certain contractor labor hours. This 

occurred, in part, because CORs did not always comply with applicable Federal 

requirements and SEC policies and procedures and COs and COR supervisors 

did not always ensure CORs were knowledgeable of and complied with 

applicable requirements. Excessive COR workload, untimely communication 

between CORs and program managers, and the prioritizing of CORs’ other 

duties were also contributing factors. Due, in part, to untimely invoice 

processing, the SEC incurred Prompt Payment Act interest penalties totaling 

$9,136 in 2013 and 2014: funds the agency could have put to better use. In 

addition, CPARS evaluations were not available in a timely manner for use by the 

SEC and other Federal agencies when making contracting decisions based on 

contractor performance. Finally, failure to use CTMS when required reduces the 

SEC’s contract oversight and increases its risk of making improper payments to 

contractors. 

Requirements for Processing Invoices, Completing CPARS 

Evaluations, and Using CTMS 

As described below, Federal requirements and SEC policies and procedures establish 

specific COR duties and responsibilities, which include processing invoices, completing 

CPARS evaluations, and using CTMS. Serious or repeated infractions of these 

regulations, policies, and procedures could negatively affect the SEC and its contract 

management. Moreover, SECR 10-15 and OA’s Instructions require COR supervisors 

to consider a COR’s performance as part of the COR’s annual performance appraisal 

process. Also, COs must ensure that CORs effectively administer contracts and may 

take action including, but not limited to, temporarily suspending or terminating a COR’s

appointment if the COR fails to perform contract monitoring duties as required. 

Requirements for Processing Invoices. The Prompt Payment Act requires agencies 

to pay invoices within 30 days of receipt, unless otherwise stipulated in the contract, to 

avoid incurring interest penalties. According to OA’s Contract Administration Guide, 

CORs are responsible for ensuring contractor invoices receive prompt attention. SECR 

10-15 and OA’s Instructions further require CORs to “[r]eview and process all invoices 

and vouchers...within five days.” Moreover, OFM monitors the agency’s payment 

REPORT NO. 530 5 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

processes to include invoice approvals.11 According to the OFM Reference Guide, if an 

invoice is not approved after 7 days, OFM will send an e-mail to the invoice approver 

(that is, the COR). After 14 days, OFM may send an additional notice to the COR and 

the COR’s supervisor.12 An OFM official told us that OFM continues sending reminder 

e-mails until delinquent CORs process outstanding invoices for payment. 

Requirements for Completing CPARS Evaluations. FAR Subpart 42.1502(a) states 

that contractor “past performance evaluations shall be prepared at least annually and at 

the time the work under a contract is completed. Past performance evaluations are 

required . . . and shall be entered into CPARS, the Governmentwide evaluation 

reporting tool for past performance reports on contracts and orders.” CPARS transmits 

reports to the Past Performance Information Retrieval System, which provides timely 

and relevant information on contractor performance for use by agencies in source 

selection. 

According to Guidance for the Contractor Performance Assessment Reporting System 

(CPARS) dated July 2014, “[r]esponsibility for completing quality CPARS evaluations in 

a timely manner rests with the Assessing Official (AO) who will be designated in 

accordance with Agency policy.” The AO is responsible for completing the evaluation 

no later than 120 calendar days after the end of the contract performance period. 

Contractor Per[f]ormance Assessment Reporting System (CPARS), SEC OP 10-27, 

June 18, 2013 (SEC OP 10-27) designates COs as the SEC’s Assessing Officials and 

CORs as the SEC’s Assessing Official Representatives. As such, CORs prepare 

CPARS evaluations, which the COs input in the system. 

SEC OP 10-27, which applies to all SEC contracts and orders greater than or equal to 

$150,000, except contracts and orders for expert witnesses, states that CORs are 

required to provide timely, accurate, quality, and complete evaluations of contractor 

performance. COs ensure that CPARS evaluations prepared by CORs are timely and 

accurate. SEC OP 10-27 also states that OA’s Procurement Operations and Acquisition 

Policy Branch Chief (now referred to as the Policy, Oversight and Acquisition Programs 

Branch Chief) is responsible for notifying a COR’s supervisor when evaluations are 

more than 30 calendar days overdue. 

Requirements for Using CTMS. According to FAR Subpart 16.601(c)(1), “A time-andmaterials contract provides no positive profit incentive to the contractor for cost control 

or labor efficiency. Therefore, appropriate Government surveillance of contractor 

performance is required to give reasonable assurance that efficient methods and 

effective cost controls are being used.” Furthermore, pursuant to OA’s Acquisition 

11 OFM has enlisted the U.S. Department of Transportation’s Enterprise Service Center to act as its

Financial Shared Service Provider. The Enterprise Service Center hosts the SEC’s core financial 

management system and is responsible for the data entry of all SEC invoices. When describing the 

monitoring of invoice approvals, we refer to the actions of both the Enterprise Service Center and OFM as 

“OFM.” 

12 OFM Reference Guide, Chapter 40.04, “Fund Balance with Treasury: Invoice Processing;” Section 6, 

“Monitoring of Invoice Approvals.”

REPORT NO. 530 6 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

Newsflash, N-13-22, dated May 2, 2013, and additional guidance from September 2014, 

COs are required to insert contract clause 6010.05 – Contractor Time Keeping (May 1, 

2013) (contract clause 6010.05), in all SEC time-and-materials contracts and orders for 

services that require contractors to perform work on-site. The clause requires 

contractor employees who work on-site to track their daily work, including entry and exit 

work hours, in CTMS. CTMS does not replace the contractor’s timekeeping process, 

but includes administrative functions and report capabilities that allow CORs to view 

labor hours for a specific contract, and to verify contractor invoices. 

CORs Did Not Always Process Invoices, Complete CPARS 

Evaluations, or Use CTMS Consistently and as Required 

We verified that CORs completed required training, which addressed applicable Federal 

requirements and SEC policies and procedures. However, we found that CORs did not 

always process invoices, complete CPARS evaluations, or use CTMS consistently and 

as required. This occurred, in part, because COs and COR supervisors did not ensure 

that CORs were knowledgeable of and complied with applicable Federal requirements 

and SEC policies and procedures. Excessive COR workload, untimely communication 

between CORs and program managers, and the prioritizing of CORs’ other duties were 

also contributing factors. As a result, the SEC incurred Prompt Payment Act interest 

penalties, CPARS evaluations were not available in a timely manner for use by the SEC 

and other Federal agencies, and the SEC was at increased risk for making improper 

payments to contractors. 

CORs Did Not Always Timely Approve Invoices. Although the CORs included in our 

sample verified contract deliverables, they did not always comply with Federal 

requirements and SEC policies and procedures to review and process contractor 

invoices in a timely manner. Based on the dates shown in Table 1, CORs did not 

review a total of 913 invoices (or about 19 percent of all 4,797 invoices paid during the 

period) within 5 days of receipt, as required by SECR 10-15. CORs generally 

processed these outstanding invoices between 6 and 30 days of receipt. However, 

13 CORs failed to review and process 15 of these invoices within 30 days of receipt, in 

violation of the Prompt Payment Act. The SEC paid these 15 invoices between 32 and 

70 days after receipt. 

Two CORs who repeatedly processed invoices late told us that, before processing 

invoices, they solicited approval from the respective program managers. The CORs 

indicated that they were sometimes unable to meet the 5-day requirement because the 

program managers did not always respond timely. 

A third COR, who was responsible for 116 of the outstanding invoices shown in Table 1, 

told us that she was often unable to meet the 5-day requirement because of excessive 

workload. Functioning as a COR is generally a collateral duty. In addition, although 

SECR 10-15 and OA’s Instructions state that a COR should not be assigned to “more 

than a few contracts,” we found that CORs often oversaw many contracts. For 

example, one COR from our sample monitored 21 contracts at one time during 2014. 

Another COR from our sample monitored 40 contracts at one time during 2014. 

REPORT NO. 530 7 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

Notably, the COR responsible for 116 of the outstanding invoices shown in Table 1 did 

not have an alternate COR to provide back-up support and to assume COR 

responsibilities when needed. Similarly, another COR was assigned to monitor 

86 contracts during 2014 and did not have an alternate COR. COR supervisors must 

work with COs to determine where alternate CORs are needed based on workload, 

contract complexity, and the availability of the primary COR because, according to 

SECR 10-15, “It is impossible for one person to oversee more than a few contracts and 

do a good job.”

Table 1. Invoices Not Timely Reviewed and Processed by CORs 

Date No. of Outstanding Invoices 

(between 6 and 30 days of receipt) 

No. of Outstanding Invoices 

(in excess of 30 days of receipt) 

July 1, 2014 120 1 

August 1, 2014 104 0 

September 2, 2014 104 4 

October 1, 2014 96 0 

November 3, 2014 147 2 

December 1, 2014 157 3 

January 5, 2015 170 5 

Total

a 898 15 

Source: Office of Inspector General (OIG)-generated based on information obtained from OFM. 

a OFM processed a total of 4,797 invoices during this period. 

According to OFM, violations of the Prompt Payment Act resulted in the SEC incurring 

interest penalties totaling $9,136 in 2013 and 2014. The agency could have put these 

funds to better use if effective controls had existed to ensure that CORs timely reviewed 

and processed invoices. Appendix III includes additional information about Prompt 

Payment Act interest penalties and our estimate of funds recommended for better use. 

CORs Did Not Always Timely Complete CPARS Evaluations. Although we did not 

identify untimely CPARS evaluations based on our sample, OA’s CPARS system 

administrator informed us that other CPARS evaluations not included in our sample 

were delinquent. According to the CPARS system administrator, OA management 

tasked her with monitoring the submission of evaluations and following-up with CORs 

who failed to complete timely evaluations. The system administrator e-mails COs 

weekly and CORs monthly to remind them of CPARS evaluations that are approaching 

the due date, are due, or are overdue. Beginning in 2015, OA management also 

receives copies of the e-mails. 

The system administrator provided us an e-mail she sent to CORs on April 2, 2015, 

identifying 92 evaluations not yet initiated in CPARS. Of the 92 evaluations, 68 were 

overdue, 5 were granted an extension because of a change in the contract period of 

performance, 8 were due at the time, and 11 were due within 30 days. We obtained the 

system administrator’s report from August 3, 2015 – 4 months later – and determined 

REPORT NO. 530 8 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

that it included 116 evaluations that were due or overdue and required action by CORs. 

Of those 116 evaluations, 35 were due and 81 were overdue. 

As previously discussed, CORs told us that their workload contributed to their inability to 

effectively perform COR duties, including completing CPARS evaluations, within 

prescribed timeframes. OP 10-27 requires OA’s Policy, Oversight and Acquisition 

Programs Branch Chief, who functions as the agency’s “CPARS Focal Point,” to notify 

COR supervisors when CPARS evaluations are more than 30 calendar days overdue. 

The Branch Chief delegated this responsibility to the CPARS system administrator. The 

CPARS system administrator stated that she did not report delinquent CORs to their 

supervisors because she did not know who the supervisors were. We determined that 

COR supervisors’ names are recorded on COR automated nomination forms issued 

beginning in March 2014 and retained on OA’s SharePoint site.

COs and CORs did not consistently comply with SEC policies and procedures for timely 

completing CPARS evaluations, and OA management did not notify CORs’ supervisors 

to address the deficiencies. As a result, evaluations of contractor performance were not 

always available in a timely manner for use by the SEC and other Federal agencies 

when making contracting decisions based on contractor performance. 

CORs Did Not Always Use CTMS. We found that CORs did not always use CTMS to 

track contract employee labor-hours for invoicing purposes as required. Specifically, 

CORs from the SEC’s Miami and Philadelphia regional offices, who managed four timeand-materials task orders from one blanket purchase agreement in our sample, did not 

use the system. OA awarded the four task orders after it issued Acquisition Newsflash 

N-13-22 in May 2013. The Newsflash required COs to insert contract clause 6010.05 in 

all SEC time-and-materials contracts and orders for services that require contractors to 

perform work on-site, thereby requiring use of CTMS. Although the task orders did not 

include the contract clause, the blanket purchase agreement did. 

With respect to the sampled contracts, the COR from the Miami Regional Office stated 

that she was unaware of the requirement to use CTMS and tracked contractor time and 

attendance using the Mass System – the Miami Regional Office’s internal time-keeping 

system. The COR from the Philadelphia Regional Office stated that he assumed CTMS 

was not required because the task order did not include the CTMS requirement. 

Although we did not identify any inaccuracies in contractor labor hours associated with 

these four task orders, failure to use CTMS when required reduces the SEC’s contract 

oversight and increases its risk of making improper payments to contractors. 

REPORT NO. 530 9 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

Recommendations, Management’s Response, and Evaluation of 

Management’s Response 

To improve the SEC’s COR Program and ensure CORs perform designated and 

authorized duties consistently and as required, we recommend that: 

Recommendation 1: The Office of Acquisitions, in coordination with Contracting 

Officer’s Representatives’ (COR) supervisors, should: 

(a) assess current CORs’ workload to determine whether it impedes effective 

contract monitoring activities including, but not limited to, timely processing of 

invoices and completion of Contractor Performance Assessment Reporting 

System evaluations; 

(b) identify active contracts that do not have an alternate COR, and, based on the 

complexity of the contract and the primary COR’s workload, appoint an alternate 

COR; and 

(c) require that future assessments of COR workload and contract complexity be 

documented before a COR’s appointment to monitor a contract.

Management’s Response. The Office of Acquisitions concurred with the 

recommendation and will coordinate with COR supervisors during contract 

administration. For current CORs, the Office of Acquisitions will assess the number 

of contracts assigned, and work with the COR’s supervisor to recommend the

appointment of an alternate COR based on workload and the contract type and 

complexity. For active contracts that do not have an alternate COR and, based on 

the complexity of the contract and primary COR workload, the Office of Acquisitions 

will request an alternate COR. Finally, prior to COR appointment, the Office of 

Acquisitions will document that the Contracting Officer has determined a COR’s 

contract workload to be reasonable based on contract type and complexity. 

OIG’s Evaluation of Management’s Response. Management’s proposed actions

are responsive; therefore, the recommendation is resolved and will be closed upon 

completion and verification of the actions taken. 

Recommendation 2: The Office of Financial Management (OFM) should revise the 

OFM Reference Guide to require notification of Contracting Officers and earlier 

notification of Contracting Officer’s Representatives’ (COR) supervisors when CORs fail 

to process invoices within the required timeframe. 

Management’s Response. The Office of Financial Management concurred with the 

recommendation and will update its policies and procedures accordingly. 

OIG’s Evaluation of Management’s Response. Management’s proposed actions

are responsive; therefore, the recommendation is resolved and will be closed upon 

completion and verification of the actions taken. 

REPORT NO. 530 10 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

Recommendation 3: The Office of Acquisitions should develop a procedure to 

implement the requirement established in Contractor Per[f]ormance Assessment 

Reporting System (CPARS), SEC OP 10-27, June 18, 2013, to notify Contracting 

Officer’s Representatives’ supervisors when Contractor Performance Assessment 

Reporting System evaluations are more than 30 calendar days overdue. 

Management’s Response. The Office of Acquisitions concurred with the 

recommendation and will implement a procedure to notify Contracting Officer’s 

Representatives and their supervisors when Contractor Performance Assessment 

Reporting System evaluations are more than 30 calendar days overdue. In addition, 

the Office of Acquisitions will implement a procedure to notify Contracting Officers 

and their supervisors when Contractor Performance Assessment Reporting System 

evaluations are overdue. 

OIG’s Evaluation of Management’s Response. Management’s proposed actions

are responsive; therefore, the recommendation is resolved and will be closed upon 

completion and verification of the actions taken. 

Recommendation 4: The Office of Acquisitions should provide to all Contracting 

Officer’s Representatives and Contracting Officers refresher training on the Federal 

requirements and SEC policies and procedures for: 

(a) approving contractor invoices within the required timeframe; 

(b) completing Contractor Performance Assessment Reporting System evaluations 

in a timely manner; and 

(c) using the SEC’s Contractor Time Management System for monitoring on-site 

contractor time and attendance when required by the contract. 

Management’s Response. The Office of Acquisitions concurred with the 

recommendation and will provide refresher training to Contracting Officer’s 

Representatives and Contracting Officers. The training will include timely approval 

of contractor invoices and use of the Contractor Time Management System to 

track and monitor contractor labor hours to validate invoices for on-site contractors 

when required by the contract. 

OIG’s Evaluation of Management’s Response. Management’s proposed

actions are responsive; therefore, the recommendation is resolved and will be 

closed upon completion and verification of the actions taken. 

Recommendation 5: The Office of Acquisitions should provide to Contracting Officer’s 

Representatives’ (CORs) supervisors training on the Federal requirements and SEC 

policies and procedures for: 

(a) the required timeframes for CORs to review and process contractor invoices, and 

complete Contractor Performance Assessment Reporting System evaluations; 

and 

REPORT NO. 530 11 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

(b) effective contract monitoring by CORs, including responsibilities for using the 

SEC’s Contractor Time Management System for monitoring on-site contractor 

time and attendance when required by the contract. 

Management’s Response. The Office of Acquisitions concurred with the 

recommendation and will provide training to Contracting Officer’s Representatives’

(CORs) on required timeframes for CORs to review and process contractor 

invoices and Contractor Performance Assessment Reporting System evaluations, 

and the use of the Contractor Time Management System when required. 

OIG’s Evaluation of Management’s Response. Management’s proposed

actions are responsive; therefore, the recommendation is resolved will be closed 

upon completion and verification of the actions taken. 

REPORT NO. 530 12 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

Finding 2: CORs Monitoring SEC Contracts Did Not Always 

Comply With Financial Disclosure and Ethics Requirements 

As Federal employees involved in the procurement and acquisition process, 

CORs must ensure that they do not have financial conflicts of interest with the 

contractors they oversee. To identify and report potential conflicts, CORs must 

submit to their Administrative Contact an OGE Form 450 within 30 days of 

receiving FAC-COR certification (if the employee is not already an annual OGE 

Form 450 filer) and annually thereafter. However, we found that 151 of the SEC 

CORs who filed OGE Form 450 in 2012, 2013, and 2014 filed the form late. In 

addition, a small number of CORs did not file OGE Form 450 as required each 

year. Some CORs who did not timely file financial disclosure reports monitored 

SEC contracts without first disclosing their financial interests. This occurred 

because CORs did not comply with agency policies and procedures. Moreover, 

nominating officials13 selected, and COs appointed, CORs without ensuring the 

CORs had complied with financial disclosure and ethics requirements. 

Specifically, nominating officials and COs did not always verify that CORs had 

filed an OGE Form 450 and that a potential conflict of interest with the contractor 

did not exist. We did not identify any actual financial conflicts based on our 

review of sampled CORs. However, the lack of coordination between nominating 

officials, OA, and OEC to ensure that CORs complied with financial disclosure 

and ethics requirements could result in CORs monitoring contractors with whom 

CORs have a conflict. 

Financial Disclosure Requirements for CORs 

Federal employees, including CORs, are prohibited by criminal statute – 18 U.S.C. 

§ 208 – from participating in any matter in which they, or any person whose interests 

are imputed to them,14 have a financial interest if the matter could have a direct and 

predictable effect on that financial interest.15 Certain executive branch employees use 

OGE Form 450 to report their financial interests. SECR 10-15 requires CORs, at the 

time of nomination, to comply with OEC requirements that include having an OGE Form 

450 on file. New CORs not previously required to file annually must file OGE Form 450 

13 For the purposes of this report, the term “nominating officials” includes COR supervisors and program

officials who nominate CORs to monitor SEC contracts. SECR 10-15 defines “program officials” as “SEC 

managers and supervisors with responsibility over the products or services being procured through 

contracts and, in most cases, CORs managing them.” Section 9, Oversight of CORs and the FAC-COR 

Program, of the document indicates that both program officials and COR supervisors can nominate 

CORs. 

14 The financial interests of an employee’s spouse, minor child, or general partner disqualify an employee 

to the same extent as if they were the employee's own interests. Similarly, the financial interests of (1) an 

organization or entity which the employee serves as officer, director, trustee, general partner or 

employee; and (2) a person with whom the employee is negotiating for or has an arrangement concerning 

prospective employment disqualify an employee. 5 C.F.R. § 2635.402, Disqualifying financial interests. 

15 18 U.S.C. § 208(a); 5 C.F.R. §§ 2635.401 et seq. 

REPORT NO. 530 13 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

with their Administrative Contact within 30 days of obtaining the FAC-COR certification. 

In addition, according to OA’s Instructions “[CORs] must abide by the SEC Ethics 

Office’s financial disclosure and ethics requirements including filing and maintaining an 

updated OGE Form 450 for as long as [they] have the FAC-COR” certification. 

CORs Did Not Always File or Timely File OGE Form 450 

Although SEC CORs must file and maintain an updated OGE Form 450, we found that 

151 of the SEC CORs who filed OGE Form 450 in 2012, 2013, and 2014 filed the form 

late. In addition, a small number of CORs did not file OGE Form 450 as required each 

year. Table 2 shows the number of CORs who filed OGE Form 450 each year, as well 

as the number who filed late or did not file. 

Table 2. COR Timeliness in Filing OGE Form 450 

2012 2013 2014 

No. of CORs who filed OGE Form 450 286 337 396 

No. of CORs who filed latea 70 59 59 

Percentage of late filings 24.48% 17.51% 14.90% 

No. of CORs who did not file 1 2 4 

Source: OIG-generated based on information obtained from OEC.
 a

Some CORs filed late in more than one year.
 

Moreover, we found that some of these CORs monitored SEC contracts without first 

disclosing their financial interests. For example, a COR’s annual OGE Form 450 was 

due February 15, 2013. He filed it late on March 27, 2013. Despite this, on March 3, 

2013, he received an appointment to oversee a contract. In addition, a new COR who 

obtained the FAC-COR certification in April 2014 and was not an annual filer did not file 

an OGE Form 450 until 10 months later in February 2015. Nevertheless, in August 

2014, she received an appointment to oversee an SEC contract. Another new COR 

who obtained the FAC-COR certification in April 2014 and was not an annual filer 

received an appointment to oversee an SEC contract in June 2014, despite not filing an 

OGE Form 450 until 3 months later in September 2014. Lastly, a new COR who 

obtained the FAC-COR certification on October 28, 2014, was appointed in November 

2014 to oversee three contracts before filing his OGE Form 450 on December 3, 2014. 

Although we did not identify any financial conflicts of interest relating to the contracts we 

reviewed, the OIG previously investigated a possible conflict of interest on the part of a 

COR. As reported in the OIG’s Semi-Annual Report to Congress for the period 

October 1, 2014, to March 31, 2015, the investigation found that an SEC employee 

served as a COR while holding stock in the vendor he oversaw. The employee 

disclosed the stock holdings on his OGE Form 450. Although the OIG determined that 

the stock holdings fell within the de minimis monetary exemption to the financial conflict 

REPORT NO. 530 14 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

of interest prohibition in 5 C.F.R. § 2640.202, the employee failed to notify his 

supervisor or the CO of the potential financial interest. 

We recognize that CORs are responsible for complying with Governmentwide and 

agency ethics requirements, including filing accurate, complete, and timely financial 

disclosure reports and advising their supervisors and COs of any financial or other 

conflict of interest that may arise. However, nominating officials are responsible for 

nominating CORs who can effectively monitor contracts, and for working with COs to 

determine the appropriate COR to select for the assignment. Finally, OA is responsible 

for managing the SEC’s COR Program. In that regard, “COs are responsible for 

ensuring performance of all necessary actions for effective contracting, and 

safeguarding the interests of the United States in its contractual relationships.”

16 

Consistent with COs’ responsibilities, SEC policy states that, for serious or repeated 

infractions of the rules (including noncompliance with financial disclosure requirements), 

COs may take certain actions, including suspending or terminating a COR’s

appointment. OA’s oversight of the SEC’s COR Program and COs’ ability to safeguard 

the Government’s interests could be improved if nominating officials, OA, and OEC 

coordinated their efforts to ensure CORs comply with financial disclosure requirements 

and do not monitor SEC contracts until CORs comply with those requirements. In 

addition, CORs should certify that (1) they do not have any potential conflicts with the 

contractor they will oversee prior to appointment, and (2) they understand their 

responsibility to report to their supervisor and the Contracting Officer any potential 

conflicts that arise during their tenure as an appointed COR. This would provide OA 

with additional assurance that the best interests of the Government are served. 

Recommendations, Management’s Response, and Evaluation of 

Management’s Response 

To improve the SEC’s COR Program and reduce the likelihood that CORs receive 

appointments to monitor contracts with which they have a conflict and without complying 

with financial disclosure and ethics requirements, we recommend that: 

Recommendation 6: The Office of Acquisitions should work with nominating officials 

and the Office of the Ethics Counsel to develop a process to: 

(a) regularly identify CORs who have not submitted or timely submitted required 

financial disclosure reports and follow up with these CORs to ensure they 

comply with ethics requirements; 

(b) require CORs to self-certify, before appointment, that they do not have any 

conflicts with the contractors they will oversee, and that CORs understand they 

have a continuing responsibility to report to their supervisors and the 

Contracting Officers any potential conflicts that arise during their tenure as an 

appointed COR; and 

16 SECR 10-15, Section 5.4. 

REPORT NO. 530 15 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

(c) coordinate with CORs’ supervisors to take appropriate action, up to and 

including suspending or terminating CORs’ appointments, until the COR 

corrects deficiencies in financial disclosure reporting. 

Management’s Response. The Office of Acquisitions concurred with the 

recommendation and will coordinate with the Office of the Ethics Counsel and 

implement a formal procedure to regularly identify Contacting Officer’s 

Representatives (CORs) who have not submitted or timely submitted required 

financial disclosure reports, and follow up to ensure compliance. In addition, the 

Office of Acquisitions will change the COR Nomination/Appointment Form to 

require CORs and alternate CORs to self-certify that they do not have any 

conflicts with the contractor they will oversee, and self-certify that they will notify 

their supervisor, Contracting Officer, and the Office of the Ethics Counsel of any 

circumstances that may create an actual or apparent conflict of interest while 

serving as a COR or alternate COR. Finally, the Office of Acquisitions will 

implement internal procedures to take appropriate action, up to and including 

suspending or terminating an employee’s COR certification and the COR’s work 

on an active contacts until financial disclosure reporting is completed. 

OIG’s Evaluation of Management’s Response. Management’s proposed

actions are responsive; therefore, the recommendation is resolved and will be 

closed upon completion and verification of the action taken. 

REPORT NO. 530 16 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION	 OFFICE OF INSPECTOR GENERAL 

Other Matter of Interest
 

SEC COR Nomination/Appointment Form Could Be Improved 

The SEC COR Nomination/Appointment Form, SEC-2572, (“nomination form”) 

documents the nomination and approval of a COR to monitor a contract. Once 

approved by the CO, the nomination form becomes the COR’s official appointment 

letter. The form includes information such as the requisition number; contract number; 

the COR’s name, office, and certification level; and a description of the procurement. 

However, OA could better assess and document whether a COR is suitable to 

effectively monitor a contract by collecting additional information on the nomination 

form. Although we are not making a formal recommendation, we encourage OA to 

consider improving the nomination form by including: 

	 the contractor’s name, and 

	 a self-certification that the CO and nominating official have assessed the COR’s 

workload and considered whether an alternate COR is needed based on 

workload, contract complexity, and/or the availability of the primary COR, in 

accordance with SEC policies and procedures. 

By including this information on the nomination form, OA would have additional 

documented assurance that CORs effectively fulfill their critical role and comply with 

Federal and agency requirements for ensuring that SEC contractors meet their contract 

commitments. 

REPORT NO. 530	 17 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION	 OFFICE OF INSPECTOR GENERAL 

Appendix I. Scope and Methodology
 

We conducted this performance audit from December 2014 through September 2015 in 

accordance with generally accepted government auditing standards. Those standards 

require that we plan and perform the audit to obtain sufficient, appropriate evidence to 

provide a reasonable basis for our findings and conclusions based on our audit 

objectives. We believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives. 

Scope. The audit covered calendar years 2012 through 2014. We performed fieldwork 

at the SEC’s Headquarters in Washington, D.C., and at the Philadelphia and Miami 

regional offices. 

Methodology. To address the audit objectives, we interviewed CORs, COs, and COR 

supervisors, and reviewed: 

	 Federal requirements and SEC policies and procedures for contract 

management (see Appendix II); 

	 CPARS and CTMS processes and compliance; 

	 Contractor Personnel List processes and procedures; and 

	 data from the SEC’s contract management system – the Enterprise Service 

Center’s Portable Reusable Integrated Software Module (PRISM),17 – and the 

Federal Acquisition Institute Training Application System (FAITAS).18 

We considered OA, OEC, and OFM processes and the incorporation of those 

processes in the SEC’s COR Program. We also reviewed COR nomination forms, 

contract files, and evidence of contract monitoring activities for a sample of contracts. 

In addition, we assessed COR compliance with the requirement to file an OGE 

Form 450 during the period reviewed. As part of our review of contract files, we 

reviewed CORs’ OGE Form 450s (maintained by the SEC’s OEC) for 2011,19 2012, 

2013, and 2014, and determined whether the reports indicated potential conflicts of 

interest with the contractors whom CORs oversaw. Finally, using information provided 

17 According to SECR 10-15, PRISM is a “web-based contract writing system that provides the tools 

needed to effectively support the complete acquisition management lifecycle from initial planning and 

acquisition through award and closeout.”

18 FAITAS is a learning management system managed by the Federal Acquisition Institute for all civilian 

Government agencies to provide and track training and certification for acquisition workforce members. 

19 Employees are required to report prior year financial interests on OGE Form 450 filed in February of 

the current year. Although our audit scope was 2012 through 2014, to assess whether annual filers 

appointed as CORs in January 2012 had an OGE Form 450 on file for the previous year, we reviewed 

OGE Form 450s from 2011. 

REPORT NO. 530	 18 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

by OA and from FAITAS, we verified compliance with CORs’ annual training 

requirements in 2012, 2013, and 2014. 

Internal Controls. We obtained an understanding of the internal controls over the 

SEC’s COR Program and assessed those controls in accordance with Standards for 

Internal Control in the Federal Government.

20 For our review of internal controls, we 

considered the following: 

Control Environment – We evaluated the SEC’s control environment related to the COR 

Program. We noted that, although OA had not timely updated the SEC’s primary policy 

for CORs, OA had recognized and implemented the changes in Federal requirements. 

OA also established a Policy, Oversight and Acquisition Programs Branch, headed by a 

Branch Chief, with responsibility for updating COR-related policies and procedures. 

Risk Assessment – We assessed risks identified in our internal control review. Those 

risks related to COR policies and procedures, certification and training, and 

performance and oversight of contract monitoring duties. We evaluated each risk as 

low, medium, or high, and identified the control procedures and activities in place (or 

lacking) to diminish the risk. We used our assessment of risk to determine auditing 

procedures and to mitigate our overall audit risk to an acceptable level. In addition, we 

reviewed OA’s annual self-assessments for 2012, 2013, and 2014 and determined that, 

each year, OA identified risks for the COR Program and implemented internal controls 

to address the risks. 

Control Activities – We reviewed the SEC’s control activities to ensure adequate and 

effective contract monitoring by CORs. We noted that COs can designate Contract 

Specialists as contract administrators to assist CORs with contract oversight. In 

addition, OA not only monitors COR training and certification but also maintains an 

updated list of eligible CORs who have satisfied training and certification requirements. 

Information and Communication – We noted that OA had established policies and 

procedures for the COR Program and is in the process of reviewing and updating them. 

In addition, OA provided supplemental written guidance and training for new and 

experienced CORs. Also, in monitoring COR invoice processing, OFM informs COR 

supervisors of unprocessed invoices and prepares a monthly analysis for management 

to highlight payment deficiencies. 

Monitoring – We assessed relevant monitoring activities and determined that COs 

oversee COR activities and provide ongoing consultation and guidance. In addition, 

OFM monitors the processing and payment of contractor invoices and e-mails 

reminders to deficient CORs. 

As discussed in this report, we found that some internal controls need strengthening. 

Implementation of our recommendations should address the weaknesses we identified. 

20 Standards for Internal Control in the Federal Government, GAO-14-704G, dated September 2014, 

issued by the Comptroller General of the United States, United States Government Accountability Office. 

REPORT NO. 530 19 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION	 OFFICE OF INSPECTOR GENERAL 

Computer-processed Data. The Government Accountability Office’s (GAO) Assessing 

the Reliability of Computer-Processed Data (GAO-09-680G, July 2009) states that “data 

reliability refers to the accuracy and completeness of computer-processed data, given 

the uses they are intended for. Computer-processed data may be data (1) entered into 

a computer system or (2) resulting from computer processing.” Furthermore, GAO-09-

680G defines “reliability,” “completeness,” and “accuracy” as follows: 

 “Reliability” means that data are reasonably complete and accurate, meet your 

intended purposes, and are not subject to inappropriate alteration. 

 “Completeness” refers to the extent that relevant records are present and the

fields in each record are appropriately populated 

	 “Accuracy” refers to the extent that recorded data reflect the actual underlying 

information. 

To establish the population of SEC contracts and select a sample of contracts for 

review, we relied on a list of contracts for calendar years 2012 through 2014 generated 

from PRISM by OA staff. We verified the reliability of this data through interviews with 

CORs and reviews of source documents such as contract files and COR nomination 

forms. Based on these steps, we determined that the PRISM data were sufficiently 

reliable for the purposes of the audit. Similarly, we used data from FAITAS to review 

COR training and certification. Supported by interviews with CORs and information 

provided by OA, we determined that the FAITAS data were sufficiently reliable for the 

purposes of the audit. 

Sampling. We judgmentally sampled 68 of the SEC’s 1,959 contracts awarded 

between January 1, 2012, and December 31, 2014.21 As shown in Table 3, our sample 

consisted of 36 contracts from the SEC’s Headquarters (about 2 percent of all 

Headquarters contracts), 12 contracts from the SEC’s Philadelphia Regional Office, and 

20 contracts from the Miami Regional Office awarded during the period under review. 

We judgmentally selected these locations and contracts to ensure that we reviewed a 

variety of contracts, contract types, and contract amounts. Our sample allowed us to 

review the activities of 32 CORs (or 8 percent of the SEC’s 389 CORs as of 

December 31, 2014).22 

21 We selected for review both open and closed SEC contracts awarded between January 1, 2012, and 

December 31, 2014, but excluded contract modifications. 

22 The CORs included in our audit represented 11 of the agency’s 27 divisions and offices, including 

2 regional offices (the Philadelphia Regional Office and the Miami Regional Office). The divisions and 

offices included in the sample were the Division of Economic and Risk Analysis, the Division of 

Enforcement, the Office of Compliance Inspections and Examinations, the Office of Equal Employment 

Opportunity, the Office of Financial Management, the Office of the General Counsel, the Office of Human 

Resources, the Office of Information Technology, the Office of Minority and Women Inclusion, the Office 

of the Secretary, and the Office of Security Operations. 

REPORT NO. 530	 20 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION	 OFFICE OF INSPECTOR GENERAL 

Table 3. Contracts Sampled by SEC Office 

SEC Office Total No. of 

Contractsa 

Sample 

Sizeb 

No. of CORs Appointed 

to Sampled Contracts 

Headquarters 1,541 36 29 

Philadelphia 

Regional Office 16 12 1 

Miami 

Regional Office 21 20 2 

All Other 

SEC Locations 381 N/A N/A 

Total 1,959 68 32 

Source: OIG-generated based on data from PRISM. 

a Awarded between January 1, 2012, and December 31, 2014.
 b We reviewed 100 percent of the contracts from the Philadelphia and Miami regional offices. However, 

some contracts included multiple awards under one contract number, which we combined into one
 

sample item.
 

Prior Coverage. During the last 5 years, the SEC OIG issued two reports of particular 

relevance to this audit. Unrestricted reports are located on the Internet at 

http://www.sec.gov/about/offices/oig/inspector_general_audits_reports.shtml. 

	 Audit of SEC’s Controls over Support Service, Expert and Consulting Service 

Contracts, Report No. 513 (March 29, 2013); and 

	 Review of Select Time-and-Materials and Labor-Hour Contracts, Report No. 487 

(December 22, 2010). 

In addition, as reported in the OIG’s Semi-Annual Report to Congress for the period 

October 1, 2014, to March 31, 2015, the OIG investigated a possible conflict of interest 

regarding an SEC employee who served as a COR and owned securities in the vendor 

that the employee oversaw. The semi-annual report is located on the Internet at 

http://www.sec.gov/oig/reportspubs/office-of-inspector-general-semiannual-reportspring-2015.pdf. 

REPORT NO. 530	 21 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION	 OFFICE OF INSPECTOR GENERAL 

Appendix II. Federal Laws, Regulations, and 

Guidance and SEC Administrative Regulations, 

Policies, and Procedures
 

The Federal requirements and SEC policies and procedures we reviewed included: 

Federal Laws, Regulations, and Guidance: 

	 Office of Federal Procurement Policy Act (Pub. L. 93-400, 88 Stat. 796 (1974) 

(codified as amended at 41 U.S.C. 1101-7313 (2012))). 

	 Prompt Payment Act (Pub. L. 97-177, 96 Stat. 85 (1982) (codified as amended at 

31 U.S.C. §§ 3901-3905)). 

 5 C.F.R. § 2634.903 (2015) - General requirements, filing dates and extensions 

 5 C.F.R. § 2634.904 (2015) - Confidential filer defined 

 5 C.F.R. Part 2635, Subpart D - Conflicting Financial Interests (2015) § 2635.401 

 18 U.S.C. § 208 (2012): Acts affecting a personal financial interest 

 Federal Acquisition Regulation 1, 2, 4, 8, 12, 13, 16, 17, and 42 (selected Parts 

and Subparts). 

 OFPP Policy Letter 05-01, Developing and Managing the Acquisition Workforce, 

April 15, 2005. 

	 OFPP Memorandum, Revisions to the Federal Acquisition Certification for 

Contracting Officer’s Representatives (FAC-COR), September 6, 2011.
 

	 OFPP Memorandum, Improving the Collection and Use of Information about 

Contractor Performance and Integrity, March 6, 2013. 

	 OFPP Memorandum, Revisions to the Federal Acquisition Certification in
 

Contracting (FAC-C), May 7, 2014.
 

	 United States Government Accountability Office, Standards for Internal Control in 

the Federal Government, GAO-14-704G, September 2014. 

	 United States Government Accountability Office, Assessing the Reliability of 

Computer-Processed Data, GAO-09-680G, July 2009. 

	 Guidance for the Contractor Performance Assessment Reporting System
 

(CPARS), July 2014.
 

REPORT NO. 530	 22 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION	 OFFICE OF INSPECTOR GENERAL 

SEC Administrative Regulations, Policies, and Procedures: 

 SECR 10-2 (Rev. 3), SEC Contracting Authority, February 7, 2013. 

 SECR 10-14 (Change 4), Contract Administration, July 19, 2011. 

 SECR 10-15 (Rev. 1), Acquisitions Contract Administration Positions: 

Contracting Officer’s Technical Representative (COTR), Inspection and 

Acceptance Official (IAO), and Point of Contact (POC), August 12, 2009. 

 SECR 10-15 (Rev. 2), Contracting Officer’s Representative (COR) 

Requirements, February 11, 2015. 

 SECR 10-17, Time-and-Materials and Labor-Hour Contracts, February 18, 2011. 

 SECR 10-24 (Rev. 1), Management and Administration of Service Contracts, 

July 25, 2013. 

 SECR 10-29 (Rev. 1), Federal Acquisition Certification for Program and Project 

Managers (FAC-P/PM) Program, January 6, 2015. 

 Instructions for CORs and their Supervisors, (February 1, 2009; revised May 24, 

2012). 

 U.S. Securities and Exchange Commission, Office of Financial Management, 

OFM Reference Guide, Chapter 40.04, “Fund Balance with Treasury: Invoice 

Processing,” September 26, 2012. 

	 Operating Procedures: 

o	 SEC Operating Procedure Contractor Personnel (CP) List, OP 10-15.1 

(Rev. 1), February 11, 2015. 

o	 SEC Interagency Agreements Operating Procedure, OP 10-20, 

February 24, 2011. 

o	 Contractor Personnel (CP) Entry and Exit, OP 10-22 (Rev. 2), August 1, 

2014. 

o	 Management and Administration of Service Contracts, SEC OP 10-24, 

Rev. 1, July 25, 2013. 

o	 Acquisitions Information Collection and Reporting Systems, SEC OP 

10-25, November 21, 2012. 

o	 Contractor Per[f]ormance Assessment Reporting System (CPARS), SEC 

OP 10-27, June 18, 2013. 

REPORT NO. 530	 23 September 18, 2015 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

Appendix III. Funds Recommended Be Put
 

to Better Use
 

According to OFM, the SEC paid a total of $43,115.98 in Prompt Payment Act interest 

penalties between 2012 and 2014. Specifically, the agency incurred $33,979.71 in 

2012, $1,567.98 in 2013, and $7,568.29 in 2014. OFM officials stated that the SEC 

implemented a new financial management system in 2012, which affected the agency’s 

ability to pay invoices promptly for a period and resulted in some of the $33,979.71 in 

Prompt Payment Act interest penalties incurred that year. Therefore, when estimating 

the annual funds that could be put to better use if CORs review and process invoices in 

timely manner, we used the amount of Prompt Payment Act interest penalties incurred 

in 2013 and 2014 only (or $9,136.27). As shown in Table 4, we estimate that the SEC 

could put about $4,568 to better use each year if management implements our 

recommendations. 

Table 4. Recommendations That Funds Be Put to Better Use23 

Recommendations Explanation of Benefit Total Amount 

1, 2, 4, and 5 

Avoid Prompt Payment Act interest 

penalties by ensuring CORs review and 

process contractor invoices in a timely 

manner. 

$4,568 annually 

Source: OFM provided the total amount of Prompt Payment Act interest penalties paid in 2012, 2013,
 

and 2014. We relied on information provided by OFM and did not perform detailed tests to verify the
 

information or assess other contributing factors that could have caused interest penalties.
 

23 The term “recommendation that funds be put to better use” means a recommendation by the OIG that 

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

recommendation. The Inspector General Act defines this term, which includes, among other things, 

reductions in future outlays; de-obligation of funds from programs or operations; costs not incurred in the 

future by implementing recommended improvements related to the operations of the establishment, a 

contractor, or grantee; and any other savings specifically identified. 

REPORT NO. 530 24 September 18, 2015 
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 530 25 September 18, 2015

Appendix IV. Management Comments

MEMORANDUM

September 11, 2015

To: Rebecca Sharek

Deputy Inspector General for Audits, Evaluations and Special Projects Office

of Inspector General 

From: Jeffery Heslop

ChiefOperating

Subject: Draft Report No. 530, "Audit of the SEC's Contracting Officer's Representative Program"

This memorandum is in response to the Office of Inspector General's (OIG) draft report, "Audit of the SEC's

Contracting Officer's Representative Program." Thank you for the opportunity to review and respond to the

recommendations in the report.

We are pleased that the OIG found that the Contracting Officer's Representative (COR) Program has aided the

Office of Acquisitions' (OA) contract management and includes internal controls to facilitate compliance with

federal requirements as well as SECpolicies and procedures. Further, we are pleased that the OIG found the

CORs generally maintained adequate records and complied with training-related requirements.

We welcome your recommendations on improvements to our COR Program. OA is committed to ensuring

CORs perform their required duties consistently in accordance with federal and SEC requirements.

Recommendation 1: The Office of Acquisitions, in coordination with Contracting Officer's Representatives'

(COR) supervisors, should:

(a) assess current CORs' workload to determine whether it impedes effective contract monitoring

activities including, but not limited to, timely processing of invoices and completion of Contractor

Performance Assessment Reporting Systemevaluations;

(b) identify active contracts that do not have an alternate COR, and, based on the complexity of the 

contract and the primary COR's workload, appoint an alternate COR; and

(c) require that future assessments of COR workload and contract complexity be fully documented before

a COR's appointment to monitor a contract.

Management Response: OA concurs. OA agrees that control of an employee's workload rests with the

employee's supervisor. It would be appropriate for OA to coordinate with COR supervisors during contract

administration.

(a) For current CORs, OA will assess the number of contracts assigned, and work with the COR's

supervisor to recommend the appointment of an alternate COR (ACOR) based on workload and the

contract type and complexity. OA will add language for the COR supervisor on the COR

Nomination/Appointment Form which will document the COR's supervisor has assessed the
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 530 26 September 18, 2015

Subject: OIG Draft Report No 530, "Audit of the SEC's Contracting Officer's Representative 

Program"

employee's workload prior to nominating the employee to serve as a COR, and will monitor on a

continuing basis during the COR's performance on the contract.

(b) OA will identify active contracts that do not have an ACOR and, based on the complexity of the

contract and the number of contracts the primary COR is working, will request that the program

office nominate an ACOR.

(c) Prior to COR appointment, OA will document that the CO has determined a COR's contract

workload to be reasonable based on the contract type and complexity. The COR supervisor's

attestation on the COR Nomination/Appointment Form will be used as documentation that the

COR's supervisor has assessed the COR's overall workload.

Recommendation 2: The Office of Financial Management (OFM) should revise the OFM Reference

Guide to require notification of Contracting Officers and earlier notification of Contracting Officer's

Representatives ' (COR) supervisors when CORs fail to process invoices within the required timeframe.

Management Response: OFM concurs and will update its policies and procedures accordingly.

Recommendation 3: The Office of Acquisitions should develop a procedure to implement the 

requirement established inContractor Performance Assessment Reporting System (CPARS), SEC OP 10-

27, June 18, 2013, to notify Contracting Officer's Representatives' supervisors when Contractor

Performance Assessment Reporting System evaluations more than 30 calendar days overdue.

Management Response: OA concurs. OA will implement a procedure to notify CORs and COR

supervisors when CPARS evaluations are more than 30 calendar days overdue. OA will also add a

procedure to notify COs and CO supervisors when CPARS evaluations are overdue.

Recommendation 4: The Office of Acquisitions should provide to all Contracting Officer's

Representatives and Contracting Officersrefresher training on the federal requirements and SECpolicies

and procedures for:

(a) approving contractor invoices within required timeframe;

(b) completing Contractor Performance Assessment Reporting System evaluations in a timely

manner; and

(c) using the agency's Contractor Time Management System for monitoring on-site contractor time

and attendance when required by the contract.

Management Response: OA concurs. OA will provide refresher training that includes timely approval

of contractor invoices. (Please note that OA provided CPARS refresher training to Contracting Officers

on April 1, 2015, May 2, 2015, and June 4, 2015, and to CORs on May 12, 2015, June 10, 2015, and July

8, 2015.) Training will be provided to CORs and COs about using the CTMS to track and monitor

contractor labor hours for the purpose of validating invoices for on-site contractors when required by the

contract.

Recommendation 5: The Office of Acquisitions should provide to Contracting Officer's

Representatives' (CORs) supervisors training on the federal requirements and SEC policies and

procedures for:

(a) the required timeframes for CORs to review and process contractor invoices, and complete

Contractor Performance Assessment Reporting System evaluations; and

 2
REPORT No. 530 27 September 18, 2015

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

Subject: OIG Draft Report No 530, "Audit of the SEC's Contracting Officer's Representative 

Program"

(b) effective contract monitoring by CORs, including responsibilities for using the SEC's Contractor Time

Management System for monitoring on-site contractor time and attendance when required by the

contract.

Management Response: OA concurs. OA will provide training to CORs' supervisors on the required

timeframes for CORs to review and process contractor invoices and CPARs. In addition, OA will provide

training to CORs'supervisors on effective contract monitoring by CORs, including responsibilities for using

the CTMS when required by the contract.

Recommendation 6: The Office of Acquisitions should work with nominating officials and the Office of Ethics

Counsel to develop a process to:

(a) regularly identify CORs who have not submitted ortimely submitted required financial disclosure

reports and follow up with these CORsto ensure they comply with ethicsrequirements;

(b) require CORs to self-certify, before appointment, that they do not have any conflicts with the

contractors they will oversee, and that CORs understand they have a continuing responsibility to report

to their supervisors and the Contracting Officers any potential conflicts that arise during their tenure as

an appointed COR; and

(c) coordinate with CORs' supervisors to take appropriate action, up to and including suspending or

terminating CORs' appointments, until deficiencies in financial disclosure reporting are corrected.

Management Response: OA concurs. OA will coordinate with OEC and implement a formal procedure to

regularly identify CORS who have not submitted ortimely submitted required financial disclosure reports and

follow up to assure compliance.

OA is working to implement changes to the COR Nomination/ Appointment form which will require a

CORIACOR to self-certify that they do not have any conflicts with the contractor they will oversee. It will also

require them to self-certify that they will at any time during the acquisition lifecycle immediately notify their

supervisor, CO, and the OEC of any circumstance that may create an actual or apparent conflict of interest while

serving as CORIACOR on a contract.

OA will implement internal procedures to take appropriate action, up to and including suspending or

terminating an employee's FAC-COR and the COR's work on any active contracts until financial disclosure

reporting is completed.

Other Matter of Interest: In this report, the OIG suggested that improvements could be made to the

nomination form by including:

• the contractor's name, and

• a self-certification that the CO and nominating official have assessed the COR's workload and

considered whether an alternate COR is needed based on workload, contract complexity, and/or the

availability of the primary COR, in accordance with SEC policies and procedures.

Management Response: OA agrees and will implement changes to the COR Nomination/Appointment form

to achieve improvements as suggested.

 3
 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL 

Appendix V. OIG’s Response to Management 

Comments
 

We are pleased that SEC management concurred with all six recommendations for 

corrective action and agrees with our suggested improvements to the COR 

Nomination/Appointment Form. Management’s proposed actions are responsive to the 

recommendations; therefore, the recommendations are resolved and will be closed 

upon completion and verification of appropriate corrective action. Full implementation of 

our recommendations should improve the SEC’s COR Program, and help ensure CORs 

perform their duties consistently and as required. 

REPORT NO. 530 28 September 18, 2015 
 

 

 

 

 

 

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION	 OFFICE OF INSPECTOR GENERAL 

Major Contributors to the Report 

Kelli Brown-Barnes, Audit Manager 

Steve Kaffen, Lead Auditor 

Andrea Holmes, Auditor 

To Report Fraud, Waste, or Abuse, Please Contact: 

Web:	 www.reportlineweb.com/sec_oig 

E-mail:	 oig@sec.gov 

Telephone:	 (877) 442-0854 

Fax:	 (202) 772-9265 

Address:	 U.S. Securities and Exchange Commission
 

Office of Inspector General
 

100 F Street, N.E.
 

Washington, DC 20549-2736
 

Comments and Suggestions 

If you wish to comment on the quality or usefulness of this report or suggest ideas for 

future audits, please contact Rebecca Sharek, Deputy Inspector General for Audits, 

Evaluations, and Special Projects at sharekr@sec.gov or call (202) 551-6061. 

Comments, suggestions, and requests can also be mailed to the attention of the Deputy 

Inspector General for Audits, Evaluations, and Special Projects at the address listed 

above. 

REPORT NO. 530	 29 September 18, 2015