Audit of the SEC’s Student Loan

Repayment Program

March 31, 2016

Report No. 534
 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 OFFICE OF

INSPECTOR GENERAL M E M O R A N D U M

March 31, 2016

TO: Jeffery Heslop, Chief Operating Officer

FROM: Carl W. Hoecker, Inspector General

SUBJECT: Audit of the SEC’s Student Loan Repayment Program, Report No. 534

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) student loan repayment program. 

The report contains nine recommendations for corrective action that, if fully implemented, 

should strengthen the program. 

On March 11, 2016, we provided management with a draft of our report for review and 

comment. In its March 25, 2016, response, management concurred with our

recommendations. We have included management’s response as Appendix II 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 the Office of Human Resources 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.

Attachment

cc: Mary Jo White, Chair 

Andrew Donohue, Chief of Staff, Office of the Chair

Michael Liftik, Deputy Chief of Staff, Office of the Chair

Nathaniel Stankard, Deputy Chief of Staff, Office of the Chair

Michael S. Piwowar, Commissioner

Jaime 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

Timothy Henseler, Director, Office of Legislative and Intergovernmental Affairs

John J. Nester, Director, Office of Public Affairs

Lacey Dingman, Chief Human Capital Officer, Office of Human Resources

Kenneth Johnson, Chief Financial Officer, Office of Financial Management

Darlene Pryor, Management and Program Analyst, Office of the Chief Operating Officer
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

i 

Executive Summary Audit of the SEC’s Student Loan 

Repayment Program 

Report No. 534 

March 31, 2016 

Why We Did This Audit 

Federal agencies may repay employees’ 

qualifying student loans for the purpose 

of recruiting or retaining highly qualified 

personnel. According to annual reports 

to Congress, between July 2003 and 

December 2014, the U.S. Securities 

and Exchange Commission (SEC or

agency) provided over $47 million in 

student loan repayment benefits, 

making the SEC one of the Federal 

agencies that consistently uses student 

loan repayments the most. Specifically, 

during those 12 years, the SEC 

provided an annual average of about 

$3.9 million in student loan repayment 

benefits to an annual average of about 

473 employees. If internal controls over 

the SEC’s student loan repayment 

program (SLRP) are not designed or 

are not operating effectively, benefits 

may be improperly awarded to 

employees and the SEC may not 

identify or collect former employee 

debts.

What We Recommended

To improve the SEC’s management of 

its SLRP, we made nine 

recommendations for corrective action. 

The recommendations included 

maintaining complete and accurate 

records of SLRP participants, improving

controls to reduce the likelihood that 

ineligible employees receive SLRP 

benefits and to identify and collect 

former employee debts, updating the 

SEC’s SLRP policies, and addressing

issues raised in prior reviews. We also 

determined that the SEC could improve 

its SLRP Loan Data Verification Form, 

and reported this matter to management 

for consideration. Management 

concurred with the recommendations, 

which will be closed upon completion 

and verification of corrective action.

What We Found

The SLRP Program Office in the SEC’s Office of Human Resources (OHR) 

administers the agency’s SLRP. In 2014 and 2015, OHR implemented 

significant changes to the program, including migrating to an automated 

application processing system, a rolling application period, and immediate 

eligibility for new employees. We did not identify SLRP benefits awarded 

to employees who failed to meet minimum performance standards during 

the period reviewed. However, we identified internal controls weaknesses 

impacting the SLRP Program Office’s ability to effectively manage the 

program. Although OHR provided SLRP benefits to retain SEC 

employees, Program Office personnel did not (1) maintain complete and 

accurate participant information, (2) implement or enforce effective 

approval and verification controls, or (3) update the SEC’s SLRP policy 

and ensure the policy complied with certain Federal requirements. A prior 

Office of Inspector General audit, an Office of Personnel Management 

evaluation, and an internal OHR assessment identified similar issues.

First, we determined that SLRP Program Office personnel could not 

completely and accurately identify in a timely manner all employees who 

received SLRP benefits and the amount paid to each between July 2003 

and June 2015. As a result, we were not able to determine whether the 

SEC always complied with statutory annual and lifetime SLRP limits 

($10,000 and $60,000, respectively). Furthermore, Program Office 

personnel did not maintain a list of those employees who did not fulfill their

service agreements and may be required to repay benefits received. 

Although we verified that the SEC either collected or was collecting 

repayments from 95 former employees, Program Office personnel were

unaware of 17 other individuals who left the SEC and Federal service 

between January 2007 and June 2015 before fulfilling their service 

agreements. Those 17 individuals owed the SEC a total of about 

$216,000. 

In addition, SLRP Program Office personnel did not always implement or 

enforce effective approval and verification controls. Specifically, we noted 

inconsistencies in some applicants’ loan account numbers, loan 

verification documents, and loan balances. In many instances, there was 

no evidence that Program Office personnel resolved these inconsistencies 

before approving payments. Consequently, in some cases, we could not 

determine whether the Program Office erroneously approved SLRP 

payments. Furthermore, SLRP Program Office personnel did not enforce 

the SEC’s requirement that employees confirm that loan holders received 

SLRP payments and properly applied them to employees’ accounts. 

Finally, we determined that the SEC’s SLRP policy (dated September 

2009) does not reflect the agency’s current program or include certain 

Federal requirements. Although between April and July 2015 OHR

published various guides and administrative notices announcing changes 

in the SEC’s SLRP, the agency’s SLRP policy conflicts with these 

documents and provides inaccurate and unreliable information to SEC 

employees and their supervisors. During our audit, OHR drafted, but did 

not issue, a revised SLRP policy. 

For additional information, contact the Office of Inspector General at 

(202) 551-6061 or http://www.sec.gov/oig.
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 ii MARCH 31, 2016

TABLE OF CONTENTS 

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

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

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

Objectives ....................................................................................................................5

Results ........................................................................................................................6

Finding 1: SLRP Program Office Did Not Maintain Complete and Accurate 

Participant Information............................................................................................6

Recommendations, Management’s Response, and Evaluation of 

Management’s Response .....................................................................................13

Finding 2: SLRP Program Office Did Not Always Implement or Enforce Effective 

Approval and Verification Controls........................................................................16

Recommendations, Management’s Response, and Evaluation of 

Management’s Response .....................................................................................18

Finding 3: SEC SLRP Policy Needs Improvement.....................................................20

Recommendations, Management’s Response, and Evaluation of 

Management’s Response.....................................................................................22

Other Matter of Interest.............................................................................................24

Figures and Tables 

Figure 1. SEC SLRP Total Benefits Paid and Total Number of Participants, 

Annually, Between 2003 and 2014 ......................................................................2

Table 1. Differences in SLRP Information Reported to OPM and Provided to OIG .....7

Table 2. Summary of SEC SLRP Participants Who Did Not Fulfill Their Service

Agreements Between January 1, 2007, and June 30, 2015..................................10

Table 3. Key SLRP Internal Controls Tested and Corresponding Sample Sizes........30

Appendices 

Appendix I. Scope and Methodology .........................................................................25

Appendix II. Management Comments........................................................................31
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 iii MARCH 31, 2016

ABBREVIATIONS 

CBA Collective Bargaining Agreement

C.F.R. Code of Federal Regulations

CY calendar year

EPP Exit Process Portal

FPPS Federal Personnel Payroll System

GAO U.S. Government Accountability Office

NTEU National Treasury Employees Union

OCOO Office of the Chief Operating Officer

OFM Office of Financial Management

OHR Office of Human Resources

OIG Office of Inspector General

OPM Office of Personnel Management

SEC or agency U.S. Securities and Exchange Commission

SLRP student loan repayment program

U.S.C. United States Code

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

REPORT NO. 534 1 MARCH 31, 2016

Background and Objectives

Background 

Title V of the U.S. Code (U.S.C.) authorizes Federal agencies to establish student 

loan repayment programs (SLRP) to recruit or retain highly qualified personnel.1 

Implementing regulations – established in 5 Code of Federal Regulations (C.F.R.)

Part 537 – state that agencies may use SLRP benefits to fill positions they would 

otherwise encounter difficulty filling with highly qualified individuals. Agencies may 

also use SLRP benefits to retain current employees who are (1) otherwise likely to 

leave for employment outside the Federal service, and (2) are essential based on their 

high or unique qualifications or a special need of the agency.2 Subject to budgetary 

considerations, agencies may repay all or part of qualifying outstanding employee 

student loans3 for employees in approved appointment types,

4 but agencies cannot 

exceed statutory annual and lifetime limits of $10,000 and $60,000, respectively. 

Employees receiving SLRP benefits must sign a service agreement to remain in the 

service of the paying agency for a period of at least 3 years. Unless the agency

waives reimbursement, employees who do not fulfill their service agreements must 

reimburse the paying agency for all benefits received. Finally, employees must 

maintain an acceptable level of performance to continue to receive SLRP benefits. 

Article 25 of the U. S. Securities and Exchange Commission’s (SEC or agency)

Collective Bargaining Agreement (CBA) with the National Treasury Employees Union 

(NTEU) states that, subject to the availability of funds, the SEC will establish a SLRP 

in accordance with the C.F.R. and other applicable rules and regulations. The SEC 

established its SLRP in July 2003. The SLRP Program Office in the SEC’s Office of 

Human Resources (OHR) administers the agency’s SLRP. Figure 1 shows the total 

benefits paid and total number of SLRP participants, annually, between July 2003 and 

December 2014. During those 12 years, the SEC provided employees a total of about 

$47.1 million in student loan repayment benefits.5

 Consequently, the SEC is 

consistently among the Federal agencies that make the most extensive use of student 

loan repayments. According to the Office of Personnel Management’s (OPM)

calendar year (CY) 2014 report to Congress, more than 79 percent of the total cost of

 1 5 U.S.C. § 5379, Student loan repayments.

2 5 C.F.R. § 537.105(a)(1) – (a)(2)(ii)

3 Loans eligible for payment are those made, insured, or guaranteed under parts B, D, or E of title IV of 

the Higher Education Act of 1965 or a health education assistance loan made or insured under part A of 

title VII or part E of title VIII of the Public Health Service Act.

4 Any employee (as defined in 5 U.S.C. § 2105) is eligible, except those occupying a position excepted 

from the competitive civil service because of their confidential, policy-determining, policy-making, or 

policy-advocating nature (for example, Schedule C appointees).

5 Between 2003 and 2014, the SEC provided an annual average of about $3.9 million in student loan 

repayment benefits to an annual average of about 473 employees. 
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 2 MARCH 31, 2016

all CY 2014 Federal student loan repayment benefits was provided by the Department 

of Justice ($12.9 million), the Department of Defense ($12.1 million), the Department 

of State ($11.1 million), the Department of Veterans Affairs ($4.1 million), and the SEC

($6.2 million).

6

 As in the past, the SEC made the vast majority (almost 75 percent) of 

its CY 2014 student loan repayments on behalf of employees in its mission critical 

occupations of attorney-advisor, accountant, and securities compliance examiner. 

Article 25 of the CBA further states that the SEC will reserve at least 20 percent of the 

funds allocated to the SLRP in any fiscal year for student loan repayment benefits for 

eligible employees in nonprofessional job series positions.7

Figure 1. SEC SLRP Total Benefits Paid and Total Number of Participants,

Annually, Between 2003 and 20148

Source: OIG-generated based on OPM annual reports to Congress. 

According to the SEC’s Student Loan Repayment Program Policy (SEC’s SLRP policy), 

dated September 2009, the SEC uses student loan repayment benefits only for 

retention purposes and does not use the program to recruit employees. Furthermore, 

the SEC does not require separating employees who did not fulfill their service 

agreements to repay SLRP benefits if (1) the employees leave the SEC for employment 

 6 U.S. Office of Personnel Management, Federal Student Loan Repayment Program Calendar Year 2014, 

September 2015.

7 OHR officials told us that they generally do not track the percentage of SLRP participants who occupy 

nonprofessional job series positions unless there are insufficient funds to provide all approved employees 

the maximum yearly limit or maximum amount for which they are eligible each year. 

8 According to OHR, the total number of SEC employees increased about 36 percent (from 

3,052 employees to 4,150 employees) between 2003 and 2014. Based on OPM’s annual reports to 

Congress, we determined that the SEC’s total annual number of SLRP participants and the total annual 

amount of SEC SLRP benefits paid also increased about 163 percent and 322 percent, respectively, 

during the same period (from 257 participants to 675 participants, and from $1,462,450 paid to 

$6,170,627 paid). 

0

100

200

300

400

500

600

700

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Number of SLRP Participants

Benefits Paid

SLRP Benefits Paid SLRP Participants
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 3 MARCH 31, 2016

at another Federal agency, (2) the employees are involuntarily separated for reasons 

other than conduct or performance, or (3) the SEC provides a waiver. 

SLRP Automated Application System. Beginning in 2015, SEC employees must 

apply for SLRP benefits using an automated system. When applying, employees must 

(1) indicate whether they are on a performance improvement plan; (2) enter lender 

payment information, including the type and category of loan and whether the loan is in 

default; (3) provide a written justification that demonstrates the employee’s unusually 

high or unique qualifications; and (4) sign the application. A recommending official 

reviews the application, provides a justification statement, and indicates the employee is 

performing at or above the “Meets Expectations” or “Acceptable” level and, moreover,

the employee's retention is essential as his/her departure would significantly impact 

office operations.

A reviewing official, typically a second line supervisor, reviews the employee’s 

application. If the reviewing official approves the application, the SLRP automated 

application system generates a lender verification form. The employee sends the 

verification form to the lender. The lender verifies the employee’s loan information and 

returns the verification form to the SLRP Program Office. SLRP Program Office 

personnel then review the application and loan verification form to ensure the loan 

qualifies under 5 U.S.C. § 5379. Additionally, Program Office personnel review the 

documentation to ensure (1) the requested SLRP payment does not exceed the loan’s 

principal balance; (2) the applicant (that is, the SEC employee) is the primary borrower; 

and (3) the loan is not in default status. Finally, the SLRP automated application 

system routes the approved application to the OHR Director for approval. If the OHR 

Director approves the application, the SLRP automated application system generates a 

service agreement for the employee. The service agreement specifies, among other 

things, the amount of the SLRP benefit and the length of service to which the employee 

is committing.

Prior Audit and Assessments. In 2008, the Office of Inspector General (OIG)

identified opportunities for improvement in the SEC’s SLRP internal controls.9

 

Specifically, an OIG audit identified weaknesses in internal controls relating to 

approvals; a lack of documentation; and deficiencies in controls over independent 

verifications, records management, safeguarding of personal information, and 

separation of duties. In addition, the OIG reported “serious concerns with the [SEC]'s 

process to identify and collect debts from employees who leave the [SEC] without 

completing their employment service agreement.” The audit identified 12 individuals

who left the agency without repaying a total of $129,336 in SLRP benefits owed.10

 9 U.S. Securities and Exchange Commission, Office of Inspector General, Report No. 439, Audit of the 

Student Loan Program; March 27, 2008. The report can be accessed at: 

https://www.sec.gov/about/offices/oig/reports/audits/2008/439final.pdf. 

10 According to OHR officials, two individuals were provided waivers and one individual was referred to 

the U.S. Department of the Treasury for debt collection. The remaining nine individuals have repaid all 

SLRP benefits owed.
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 4 MARCH 31, 2016

In addition, OPM conducted an evaluation of the SEC’s talent management and human 

capital framework.

11 In 2014, OPM reported that the SEC did not require a written 

determination that employees were likely to leave Federal service if they did not 

receive SLRP benefits, as required by 5 C.F.R. § 537.105. In its report, OPM 

recommended that the SEC (1) develop a student loan repayment plan covering nonbargaining as well as bargaining unit employees, and (2) provide stronger written 

justifications that support employees' intent to leave the agency if the SLRP Program 

Office did not authorize student loan repayment benefits. The SEC’s September 23, 

2014, response to OPM’s recommendations stated: 

Changes are being made to the Student Loan Repayment program and 

are anticipated to take effect in January 2015. This requirement [for 

written justifications] will be discussed in our annual meeting with the 

Student Loan Repayment Program committee that includes members of 

NTEU and SEC management. The Office of Human Resources (OHR) 

will propose new guidance that the justification should support the 

employee's intent to leave the agency if a student loan repayment is not 

authorized. This change would require negotiation with NTEU. 

OPM closed its recommendations; however, as of the date of this report, OHR had not 

finalized its guidance to require written determinations supporting employees’ intent to 

leave the SEC and Federal service. 

Finally, a 2015 OHR internal assessment identified weaknesses in internal controls 

over program documentation (specifically, the SLRP application; Loan Data Verification 

Form, SEC-2499; and service agreement) and assessments of written justifications

supporting SLRP applications.

12 

In 2014 and 2015, OHR implemented significant changes to the program. These 

changes included, but were not limited to, migrating from (1) a paper-based processing 

system to an automated processing system, (2) a defined application period to a rolling 

application period, and (3) a one-year ineligibility period for new employees to 

immediate eligibility. According to OHR officials, the automated system helps speed 

the application and approval process and provides for the correct processing of 

hundreds of transactions. Furthermore, the rolling application period provides the 

ability to offer the retention incentive on an on-going basis rather than only once per 

year.

 11 U.S. Office of Personnel Management, Evaluation of SEC Adherence to Merit System Principles, Laws, 

and Regulations and Assessment of the Efficiency and Effectiveness in Administering Human Resources 

Programs under the Talent Management System of the Human Capital Framework; July 14, 2014.

12 U.S. Securities and Exchange Commission, Office of Human Resources, Human Capital Strategy 

Group, Student Loan Repayment Program Evaluation Final Report: 2015-SLRP-01; October 20, 2015.
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 5 MARCH 31, 2016

Objectives

Our objective was to determine whether the SEC’s SLRP policies and procedures 

comply with Federal requirements and whether controls are adequate to ensure 

compliance with those policies and procedures. Specifically, we sought to:

• determine whether OHR developed and implemented SLRP policies and 

procedures that comply with applicable laws and regulations, including applicable 

sections of the U.S.C., the C.F.R., and the SEC’s CBA;

• evaluate the operating effectiveness of SLRP internal controls designed and 

implemented by OHR to ensure compliance with applicable laws and regulations; 

and

• determine whether OHR has implemented or effectively addressed 

recommendations from prior SLRP audits and reviews.

To address our audit objectives, we tested SLRP payments approved between July 

2003 and June 2015 and related debt collection processing. We also remained abreast 

of information relevant to the SEC’s SLRP throughout our audit. We reviewed (1) SEC

SLRP participant and benefit data; (2) OHR’s efforts to report SLRP participants and 

payments to OPM, as required; and (3) prior SLRP audits, evaluations, and internal 

assessments. In addition, we interviewed management and staff from OHR, the Office 

of Financial Management (OFM), and the Office of the Chief Operating Officer (OCOO),

and assessed their responsibilities in SLRP approval, payment, and debt collection 

processes. Finally, we assessed the design, implementation, and operating 

effectiveness of SLRP internal controls.

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

internal controls, prior audit coverage, applicable Federal laws, regulations, and 

guidance, and SEC policies and procedures.
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 6 MARCH 31, 2016

Results

Finding 1: SLRP Program Office Did Not Maintain Complete 

and Accurate Participant Information 

The SEC’s SLRP Program Office is responsible for administering the 

agency’s SLRP, including maintaining and reporting annually to OPM 

information on the number of participants and the amount of benefits paid. 

Program Office personnel must also identify separating SLRP participants 

and, where applicable, determine whether such participants repaid SLRP 

benefits. We determined that SLRP Program Office personnel could not 

completely and accurately identify in a timely manner13 all employees who 

received SLRP benefits and the amount paid to each between July 2003 

and June 2015. Furthermore, although we verified that the SEC either 

collected or was collecting repayments from 95 former employees, 

Program Office personnel did not maintain a list of participants who left the

SEC before fulfilling their service agreements. As a result, SLRP Program 

Office personnel were unaware of 17 individuals who owed the SEC a 

total of about $216,000.

14 In addition, we could not determine whether the 

SEC always complied with statutory annual or lifetime limits or secured 

repayment from employees who did not meet their service agreement 

terms before leaving the agency and Federal service. The OIG’s 2008 

Audit of the Student Loan Program resulted in 19 recommendations for 

corrective action. Although those recommendations are closed, many of 

the issues we observed are repeat findings. 

SLRP Program Office Could Not Completely and Accurately Identify 

SLRP Participants and Benefit Amounts in a Timely Manner

According to 5 C.F.R. § 537.110, Federal agencies that administer SLRPs must provide 

OPM with an annual written report that includes the number of SLRP recipients, their 

job classifications, and associated program costs for the previous calendar year. 

5 C.F.R. § 537.103 further states that agencies must establish a student loan 

repayment plan that includes, among other things, “[d]ocumentation and recordkeeping 

requirements sufficient to allow reconstruction of each action to approve a student loan 

repayment benefit.” According to the SEC’s SLRP policy, “OHR will process a 

personnel action for each employee who receives benefits under the program in 

accordance with the OPM’s reporting requirements and a copy of the [Standard Form]-

50 will be maintained on the temporary side of the [Official Personnel Folder] until the 

 13 We performed fieldwork between June 2015 and March 2016. One of our first tasks was to request 

listings of SEC SLRP participants and amounts paid during the period under review.

14 This amount is an estimate that could increase due to interest or decrease due to payroll withholdings 

that were applied to the benefit amount received. 
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 7 MARCH 31, 2016

employee leaves the agency.” Finally, the U.S. Government Accountability Office’s 

(GAO) Standards for Internal Control in the Federal Government15 states that 

documentation is a necessary part of an effective internal control system and it provides 

a means to retain organizational knowledge, mitigate the risk of having that knowledge 

limited to a few personnel, and communicate that knowledge to external parties, such 

as external auditors. The document further states that common control activities include 

promptly, completely, and accurately recording all transactions, and clearly 

documenting transactions and other significant events “in a manner that allows the 

documentation to be readily available for examination [emphasis added].”

SLRP Program Office personnel provided us listings of participants and benefits 

awarded since the inception of the SEC’s program in 2003. However, the information 

did not reconcile to amounts reported to OPM and was incomplete and inaccurate. 

SLRP Program Office Information Did Not Reconcile to OPM Reports. SLRP 

Program Office personnel provided us the number of SEC SLRP participants and the 

amount of benefits paid each year between 2007 and June 2015. However, as Table 1

shows, this information did not reconcile to information the SEC previously reported to 

OPM.16 We requested an explanation for the differences in the information provided to 

us and reported to OPM. OHR personnel were unable to reconcile the information.

Table 1. Differences in SLRP Information Reported to OPM and Provided to OIG

SEC SLRP Information 

Reported to OPM

SEC SLRP Information 

Provided to OIG Difference

Year Participants Cost Participants Cost Participants Cost

2007 369 $3,390,076 369 $3,393,862 0 ($3,786)

2008 408 $3,701,771 406 $3,667,653 2 $34,118

2009 546 $3,991,316 496 $3,588,031 50 $403,285 

2010 525 $3,880,198 510 $3,773,444 15 $106,754 

2011 575 $3,900,801 575 $3,900,802 0 ($1)

2012 517 $4,563,338 517 $4,558,556 0 $4,782 

2013 645 $5,794,070 643 $5,774,071 2 $19,999 

2014 675 $6,170,627 674 $6,159,061 1 $11,566 

Total 4,260 $35,392,197 4,190 $34,815,480 70 $576,717 

Source: OIG-generated based on OPM annual reports to Congress and data provided by OHR.

 15 U.S. Government Accountability Office, Standards for Internal Control in the Federal Government

(GAO/AIMD-00-21.3.1, November 1999). In September 2014, GAO issued revised standards (GAO-14-

704G, September 2014). The revised standards were not effective until fiscal year 2016, although 

agency management could have adopted them earlier.

16 U.S. Office of Personnel Management Report to Congress, Federal Student Loan Repayment Program 

for fiscal year 2007 and CYs 2008 through 2014. As of the date of this report, OPM’s CY 2015 report was 

not available. 
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 8 MARCH 31, 2016

SLRP Program Office Did Not Maintain a Complete and Accurate Listing of All 

SLRP Participants and Payments. We also found discrepancies in the data provided 

by SLRP Program Office personnel. For example, we noted that some payments 

exceeded the annual or lifetime limits, or both, and amounts reported for some

participants varied between data files. These discrepancies raised concerns about the 

reliability of the SLRP Program Office’s data.

We discussed our concerns with SLRP Program Office personnel and the OHR 

Director. We requested that OHR reconcile the data, explain the differences between 

various documents, and provide a consolidated listing of SLRP participants, benefits 

paid, and, where applicable, participant repayments. The OHR Director provided us 

three spreadsheets to identify annual and lifetime payments. The three spreadsheets 

were titled “Transaction File Data,” “TFD – Corrections,” and “Labor Cost File Data.” 

The spreadsheet titled “Transaction File Data” included personnel actions since 2004

but did not contain manual payments. According to OHR personnel, they had to 

remove certain notice of action code entries from the “Transaction File Data,” otherwise 

these entries would appear to be duplicate payments. This led them to create the 

spreadsheet titled “TFD – Corrections.” The spreadsheet titled “Labor Cost File Data” 

contained manual payments, but only from 2006. 

We also determined that SLRP Program Office personnel did not independently track 

participant and payment history and instead relied on the Federal Personnel Payroll 

System (FPPS) to document this information.17 However, the FPPS is required to retain 

documents only for 6 years and 6 months and, therefore, is not a reliable source for 

lifetime SLRP payment information. Furthermore, the SLRP Program Office did not 

have a customized report or query within FPPS to capture information necessary to 

manage the SEC’s SLRP, including manual payments, participant debt repayments, 

and adjustments. 

Although OHR provided some data on SLRP participants, OHR is responsible for 

maintaining complete, accurate, and timely information to comply with the U.S.C., the 

C.F.R., and the Standards for Internal Control in the Federal Government. Because 

SLRP Program Office personnel could not completely and accurately identify in a timely 

manner all employees who received SLRP benefits and the amount paid to each, we 

were not able to determine whether the SEC always complied with statutory annual and 

lifetime SLRP limits. The OHR Director indicated that the timeframe of our audit (from 

2003 through 2015) exceeded normal record retention requirements. However, 

5 U.S.C. § 5379 (b)(2) requires the SEC to ensure lifetime limits are not exceeded and 

5 C.F.R. § 537.103 requires the SEC to establish a student loan repayment plan that 

includes, “[d]ocumentation and recordkeeping requirements sufficient to allow 

reconstruction of each action to approve a student loan repayment benefit.” 

 17 FPPS is a Department of Interior system that processes SEC personnel actions, payroll actions, and 

time and attendance records. The Department of Interior is the SEC’s payroll service provider.
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 9 MARCH 31, 2016

The OHR Director stated that, in the future, the Entellitrak system will be used to track 

the SEC’s SLRP participants and program information related to participants. Entellitrak 

is the platform OHR uses to manage several processes including employee work 

schedules, award submissions, dues reimbursements, and outside employment 

activities. The SEC’s new SLRP automated application system is already on the 

Entellitrak platform.

SLRP Program Office Did Not Maintain Complete and Accurate 

Records of SLRP Participants Who Did Not Fulfill Service Agreements 

According to 5 U.S.C. § 5379 and 5 C.F.R. § 537.109, an employee participating in a 

SLRP is required to remain employed at the paying agency for the period specified in 

the employee’s service agreement. If the employee does not fulfill the service period, 

the employee is required to repay SLRP benefits received in full unless one of the 

following conditions applies: (1) the employee leaves for another Federal agency,

(2) the employee involuntarily separates for reasons other than conduct or performance,

or (3) the agency provides a waiver.18 

We determined that SLRP Program Office personnel did not maintain a complete and 

accurate list of SLRP participants who separated from the SEC before fulfilling their 

service agreements. Specifically, Program Office personnel (1) could not provide a 

complete list of SLRP participants, (2) did not always track employees who transferred 

to other Federal agencies, and (3) did not identify 17 individuals who left the SEC and 

Federal service between January 2007 and June 2015 before fulfilling their SLRP 

service agreements. 

The SEC’s Exit Process Portal (EPP) May Not Always Effectively Identify 

Separating Employees. We requested a listing of all SLRP participants who did not 

fulfill their service agreements between January 2007 and June 2015. SLRP Program 

Office personnel stated that they did not maintain a consolidated listing of all SLRP 

participants who did not fulfill their service agreements. Furthermore, SLRP Program 

Office personnel stated that they relied on notification from the SEC’s EPP to identify 

separating employees.19 However, the EPP may not always effectively identify 

separating employees – particularly, SEC regional office employees – and inform the 

SLRP Program Office. In addition, Program Office personnel stated that EPP includes 

information only from December 2012 to present, although they were able to provide 

some information from years before 2012.

 18 According to 5 U.S.C. § 5379(c)(3), agency heads may waive, in whole or in part, a right of recovery if it 

is shown that recovery would be against equity and good conscience or against the public interest.

19 The EPP is a workflow-based SharePoint application used to address the timely termination of logical 

and physical access and accountability for government furnished equipment. EPP allows departing staff 

and their supervisors to remove access to systems, physical assets, and facilities, and to account for all 

Government-furnished equipment. 
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 10 MARCH 31, 2016

Because SLRP Program Office personnel could not provide a consolidated listing of 

SLRP participants who separated from the SEC before fulfilling their service 

agreements, we developed a listing of individuals who appeared to meet this criterion. 

We compiled our listing by comparing OHR’s information about SLRP participants and a 

listing of individuals who left the SEC between January 1, 2007, and June 30, 2015.20 

Our actions resulted in a list of 165 individuals. We requested that SLRP Program 

Office personnel determine whether these 165 individuals were required to repay SLRP 

benefits. As a result, we identified 17 individuals who left the SEC and Federal service 

between January 2007 and June 2015 before fulfilling their service agreements and, 

therefore, owed the SEC a total of about $216,000. Table 2 summarizes the results of 

our analysis.

Table 2. Summary of SEC SLRP Participants Who Did Not Fulfill Their Service 

Agreements Between January 1, 2007, and June 30, 2015

No. Individuals Not Required to Repay SLRP Benefits 

5 OHR demonstrated that these individuals involuntarily separated for reasons other than 

performance or conduct and, therefore, were not required to repay SLRP benefits.

9

OHR granted waivers to these individuals, including one individual who had died. OHR granted 

a retroactive waiver to one of these individuals, stating that the employee had since returned to 

the SEC and had completed a term greater than the time remaining on her unfulfilled service 

agreement. The individual had owed the SEC $18,275. 

37 OHR determined that these individuals left the SEC for other Federal agencies. 

Subtotal: 51

No. Individuals Required to Repay SLRP Benefits

8

OHR and OFM demonstrated that these individuals repaid their SLRP benefits. Three 

individuals repaid by forfeiting leave or their last payroll check, and the remaining five 

individuals repaid with lump sum payments.

17

We identified 16 individuals who left the SEC before fulfilling their service agreements and who 

did not have a repayment plan in place. OHR believed that an additional individual left the SEC 

for another Federal agency. However, we determined that the person actually left for private 

sector employment. Therefore, in total, we identified 17 individuals who owed the SEC about 

$216,000 in SLRP benefits. As a result of our audit, OHR and OFM initiated debt collection for 

16 of these 17 individuals and OHR is planning to initiate action on the remaining individual.

89

OFM provided documentation supporting the completed or ongoing collection of SLRP 

repayments for 87 of these 89 individuals. For one of the remaining individuals, OFM 

personnel could not locate supporting documentation and stated that it may be part of a prior 

accounting system. For the remaining individual, OFM did not have any documentation and 

deferred to OHR. 

Subtotal: 114

Total: 165

Source: OIG-generated based on data and documentation provided by OHR and OFM.

 20Although the OHR’s listings of SLRP participants were not complete or accurate, the listings were the 

best information to identify employees who may not have fulfilled their SLRP service agreements and 

may have owed a debt to the SEC. 
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 11 MARCH 31, 2016

Based on our analysis, SLRP Program Office personnel should better identify SLRP 

participants who did not fulfill their service agreements, and document whether those 

individuals are required to repay benefits and, if so, the amounts owed. If Program 

Office personnel determine that separating employees are not required to repay SLRP 

benefits, personnel should document the reason(s). Additionally, for those participants 

not required to repay SLRP benefits, OHR should ensure that it consistently grants 

requests for waivers, where applicable, and obtains evidence that participants are

leaving for another Federal agency, where applicable. For participants who are 

required to repay SLRP benefits, OHR should monitor the repayment process, maintain 

documentation, and improve coordination with OFM.

OHR Should Ensure It Consistently Grants Requests for Waivers. As previously 

stated, 5 C.F.R. § 537.103 states that agencies that administer SLRPs must establish a 

student loan repayment plan. That plan must include, among other things, “The 

provisions for recovering any amount outstanding from an employee who fails to satisfy 

a service agreement and conditions for waiving an employee's obligation to reimburse 

the agency.” SLRP Program Office personnel and the OHR Director maintain a list of 

past waiver requests for comparative purposes and use by the OHR Director when 

considering whether to approve or deny a request for a waiver. We found that approved 

waiver requests generally reflected medical reasons, significant financial hardship, 

and/or fewer than 2 months left on the service agreement. However, we determined

that OHR did not always grant waivers consistently.

For example, one participant received a retroactive waiver, whereas none of the other 

waivers OHR granted were retroactive. The participant left the SEC on July 15, 2011, 

and would have been required to repay the SEC SLRP benefits totaling $18,275. OHR 

was unaware that this individual was required to repay benefits until our audit. Instead 

of initiating repayment processes, on December 11, 2015, OHR granted a retroactive 

waiver. In the waiver, OHR documented that the employee had since returned to the 

SEC and had completed a term greater than the time remaining on her unfulfilled 

service agreement. 

According to the SEC’s SLRP policy, service agreements cannot be reinstated. The 

policy states, “If a former employee with a debt to the SEC returns to the SEC, he/she 

continues to be obligated to repay the debt. The SEC will implement collection 

procedures upon the employee’s return. Furthermore, the employee will not be eligible 

to receive SLRP benefits until the debt is fully satisfied.” Although the C.F.R. provides

broad waiver authority, it is important to grant waivers in a manner that is consistent and 

equitable for all participants. In this instance, the waiver was inconsistent as it (1) was 

retroactive, (2) disregarded the agency’s SLRP policy, and (3) waived a debt that OHR 

would most likely have collected had OHR identified the individual as owing a debt 

when she left the SEC in 2011. 

OHR Should Obtain Evidence That Participants Leave for Continued Federal 

Service. We determined that SLRP Program Office personnel did not require departing 

employees who had not fulfilled their SLRP service agreements to provide evidence that 

they were leaving for another Federal agency and, therefore, were not required to repay 
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 12 MARCH 31, 2016

SLRP benefits. During our audit, SLRP Program Office personnel stated that they 

believed one former SEC employee who had not fulfilled his SLRP service agreement 

had left the SEC for another Federal agency. We determined that the individual (who 

owed the SEC about $30,000 in SLRP benefits) left the SEC for private sector 

employment. OHR should ensure it complies with 5 U.S.C. § 5379 and 5 C.F.R.

§ 537.109 by obtaining and maintaining evidence that departing SLRP participants who 

have not fulfilled their service agreements leave the SEC for other Federal service. 

OHR Should Monitor the Repayment Process, Maintain Documentation, and 

Improve Coordination With OFM. We determined that SLRP Program Office 

personnel did not effectively coordinate with OFM to ensure former employees who 

must repay SLRP benefits had a signed repayment plan and paid the amounts due. As 

stated previously, we determined that 17 individuals left the SEC and Federal service 

before completing their service agreement; however, SLRP Program Office personnel 

did not coordinate with OFM to initiate debt collection of about $216,000 in SLRP 

repayments until our audit. Additionally, keeping track of repayments is important to 

monitoring the lifetime payment limits for individual participants. 

Repeat Findings From Prior OIG Audit

The OIG’s 2008 Audit of the Student Loan Program resulted in 19 recommendations for 

corrective action.21 Although those recommendations are closed, many of the issues 

we observed are repeat findings. Specifically, the prior audit recommended that OHR 

have an automated process to ensure that employees do not exceed maximum lifetime 

award limits. Although OHR began using FPPS to automate the process of monitoring 

lifetime limits, as previously discussed, FPPS cannot provide complete and accurate 

records to monitor lifetime SLRP payments. 

In addition, the OIG 2008 audit report recommended that OHR work with OFM to do the 

following:

• identify all former employees in program records;

• ensure program records clearly indicate the amounts awarded, amounts repaid, 

amounts waived, and balance due for each former employee; 

• promptly record relevant information such as separation date and status of 

collection efforts; and 

• establish an adequate audit trail. 

 21 U.S. Securities and Exchange Commission, Office of Inspector General, Report No. 439, Audit of the 

Student Loan Program; March 27, 2008. The report can be accessed at: 

https://www.sec.gov/about/offices/oig/reports/audits/2008/439final.pdf. 
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 13 MARCH 31, 2016

The prior audit also identified 12 individuals who left the SEC before completing their 

service agreements. Those 12 individuals owed the SEC about $129,336. The results 

of our audit indicate that OHR continues to have difficulty (1) identifying former 

employees who participated in the SEC’s SLRP and who owe the SEC funds, 

(2) identifying the amounts owed, and (3) maintaining the necessary documentation to 

provide a meaningful audit trail. To effectively manage the SEC’s SLRP and comply 

with Federal requirements, the SLRP Program Office should develop a system to

identify all SLRP participants and those participants who do not fulfill their service 

agreements; and determine and document whether participants are required to repay 

benefits. Furthermore, SLRP Program Office personnel should coordinate with OFM 

personnel to ensure former employees required to repay benefits have a repayment 

plan and are repaying SLRP benefits, as required. Finally, SLRP Program Office

personnel should obtain and maintain documentation to ensure the SEC recoups all 

owed SLRP benefits. 

Recommendations, Management’s Response, and Evaluation of 

Management’s Response

To improve the SEC’s SLRP internal controls and compliance with Federal laws and 

regulations and SEC policies and procedures, and to address the repeat findings we 

observed, we recommend the Office of Human Resources:

Recommendation 1: Develop a system to maintain complete and accurate information 

about student loan repayment program participants and benefits paid to ensure the 

agency (a) does not exceed annual and lifetime limits, and (b) reports accurate annual 

participation data to the Office of Personnel Management, as required.

Management’s Response. The Office of Human Resources concurred with the 

recommendation. Beginning in 2015, the Office of Human Resources is now able to 

reconcile current information between the automated work flow and Federal 

Personnel Payroll System records. The Office of Human Resources will develop 

and implement a solution for accumulating payment histories and retaining historical 

records of payments issued prior to the 2015 cycle by December 31, 2016.

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

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

verification of the action taken.

Recommendation 2: Develop a system to (a) identify student loan repayment 

program participants who do not fulfill their service agreements; (b) identify participants 

who left the agency for employment outside the Federal service; (c) determine whether

participants are required to repay student loan repayment benefits and, if so, the 

amounts to be repaid; and (d) monitor the debt collection process by coordinating with 

the Office of Financial Management to receive regular reports of repayments by former 

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

REPORT NO. 534 14 MARCH 31, 2016

Management’s Response. The Office of Human Resources concurred with the 

recommendation and indicated that the Exit Portal Process is now used to exit all 

employees, triggering the Student Loan Repayment Program Office to review 

records pertaining to student loan repayment program participants. The Office of 

Human Resources will develop service level agreements and standard operating 

procedures to document the exit process for student loan repayment program 

participants. Final guidance will include confirmation of the separation and 

notification to the Office of Financial Management for employees required to repay 

benefits.

OIG’s Evaluation of Management’s Response. Management’s response indicates 

that the Office of Human Resources will continue to rely on the Exit Portal Process to 

identify exiting employees who are participating in the agency’s student loan 

repayment program. However, as noted in our report, the Exit Portal Process may 

not always effectively identify separating employees and inform the Student Loan 

Repayment Program Office. New service level agreements and standard operating 

procedures may address these concerns. Once finalized, we will review the new 

agreements and procedures to ensure that any additional controls established meet 

the intent of the recommendation. We also noted that, in response to 

Recommendation 4, the Office of Financial Management will provide the Office of 

Human Resources with monthly status reports of repayment information. 

Consistently providing such reports for all participants required to repay benefits will, 

in part, address the recommendation. Therefore, management’s proposed actions 

are responsive and the recommendation is resolved and will be closed upon 

verification of the action taken. 

Recommendation 3: Develop a system to maintain a current and accurate list of 

student loan repayment program participants who received a waiver and the reason for 

the waiver to ensure that management grants waivers in a manner that is consistent 

and equitable for all participants.

Management’s Response. The Office of Human Resources concurred with the 

recommendation and will implement procedures to maintain a spreadsheet of waiver 

requests, maintain supporting documentation, and review documentation quarterly to 

measure consistency of waiver decisions by June 30, 2016.

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

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

verification of the action taken.

Recommendation 4: Establish repayment plans or other evidence that the agency is 

recouping student loan repayment benefits paid to the 17 former employees we 

identified as owing the agency about $216,000. 

Management’s Response. The Office of Human Resources and Office of Financial 

Management concurred with the recommendation. The Office of Financial 

Management established repayment plans or is taking other measures to recoup 
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 15 MARCH 31, 2016

student loan repayment program benefits paid to the 17 former employees. The 

Office of Financial Management will provide the Office of Human Resources with 

monthly status reports of repayment information, and the Office of Human 

Resources will monitor and track the debt collection process.

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

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

verification of the action taken.
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 16 MARCH 31, 2016

Finding 2: SLRP Program Office Did Not Always Implement 

or Enforce Effective Approval and Verification Controls 

The SEC’s SLRP Program Office is responsible for ensuring that SLRP 

internal controls are designed, implemented, and operating effectively. 

However, we determined that Program Office personnel did not always 

effectively review and approve SLRP benefits, as required. Specifically, 

we reviewed documents associated with 50 of the 163 SLRP approvals 

made between January 1 and June 30, 2015, and noted inconsistencies in 

some applicants’ loan account numbers, loan verification documents, and 

outstanding loan balances. In many instances, there was no evidence 

that SLRP Program Office personnel followed up on or resolved the 

inconsistencies before approving payments. Furthermore, SLRP Program 

Office personnel did not enforce the SEC’s requirement that employees 

confirm that loan holders received SLRP payments and applied them to 

employees’ accounts. Consequently, in some cases, we could not 

determine whether the Program Office erroneously approved SLRP 

payments, and we could not ensure that lenders received and properly

applied SLRP benefits.

SLRP Program Office Risks Improper Approvals Because of

Ineffective Follow-up or Inadequate Documentation

As previously stated, according to 5 C.F.R. § 537.103, agencies must establish a 

student loan repayment plan before providing student loan repayment benefits. The 

C.F.R. states that plan must include, among other things, documentation and 

recordkeeping requirements sufficient to allow reconstruction of each action to approve 

a student loan repayment benefit. In addition, 5 C.F.R. § 537.106(b) requires agencies 

to verify with loan holders (1) that employees applying for SLRP benefits have an 

outstanding student loan that qualifies for repayment, and (2) the remaining loan 

balances to ensure that loans are not overpaid. 

The 2008 OIG audit of the SEC’s SLRP recommended that OHR implement methods to 

mitigate the risk that employees could submit fraudulent documentation when applying 

for SLRP benefits. During our audit, we judgmentally selected 50 of the 163 SLRP 

approvals made between January 1 and June 30, 2015, and determined that SLRP 

Program Office personnel did not always thoroughly perform and document effective or 

required approval and verification controls. Specifically, we observed the following:

• For one application, we could not substantiate that the lender verified that the 

employee had a balance equal to or greater than the approved SLRP benefit 

amount ($10,000). SLRP Program Office personnel provided the first page of a 

loan verification form and the second page of two loan verifications. It is not 

clear which, if either, of these two pages belonged with the first page. OHR also 

obtained a Loan Servicing – Integrated Account Summary from the employee. 

However, the additional documentation did not provide independent verification 
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 17 MARCH 31, 2016

of the employee's outstanding loan amount. Furthermore, an OHR internal

assessment – performed by its Human Capital Strategy Group – reported in 

October 2015 that use of the Integrated Account Summary was a risk, stating, 

“This second option creates a situation where the validity and reliability of the 

document could be compromised.”22

• For two applications, loan account numbers provided by employees applying for 

SLRP benefits were either different or truncated when compared to the loan 

account numbers verified by the lenders. SLRP Program Office personnel were

unable to provide evidence that they verified the correct loan account numbers.

• For four applications, the current outstanding principal balance was greater than

the original loan amount. There was no indication of follow-up to inquire why the 

outstanding balance was larger and whether it possibly included amounts that did 

not qualify for SLRP benefits.

• For nine applications, we identified inconsistencies between the “How Many 

Loans are Part of this Request” response on the application and the number of 

loan verification forms provided.

We were unable to determine the validity of the SLRP payments associated with the 

above applications because SLRP Program Office personnel could not demonstrate the 

rationale for approving the applications. Moreover, there was no evidence that Program 

Office personnel followed up on or resolved the inconsistencies we observed before 

approving the payments. 

The questionable information we identified does not necessarily indicate improper 

approvals or fraud. However, it does indicate that (1) the SEC’s internal controls are not 

operating effectively, and (2) the SEC’s SLRP may have an increased risk for improper 

approvals. The ineffective approval controls are due, in part, to the SLRP Program 

Office’s lack of standard operating procedures for reviewing and approving SLRP 

applications. 

SLRP Program Office Did Not Enforce Agency Payment Verification 

Requirement 

The SEC’s SLRP policy and application require that employees receiving SLRP benefits 

prove that their lenders received the SEC’s payments and credited the employees’ 

accounts. Specifically, the policy states, “Employees must provide OHR with 

confirmation of receipt of payment to the loan holder after such payments have been 

credited to the employee’s [sic] account.” Furthermore, SLRP participants are required 

to acknowledge that failure to provide the required documentation may affect their ability 

to receive future SLRP benefits.

 22 U.S. Securities and Exchange Commission, Office of Human Resources, Human Capital Strategy 

Group, Student Loan Repayment Program Evaluation Final Report: 2015-SLRP-01; October 20, 2015.
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 18 MARCH 31, 2016

We judgmentally selected 50 of the 163 SLRP approvals made between January 1 and 

June 30, 2015, and determined that only 4 of 50 employees (or 8 percent) provided the 

SLRP Program Office with the required payment verification information. OHR’s 

internal assessment also reported in October 2015 that SLRP Program Office personnel 

were not enforcing the SEC’s payment verification requirement.23

When asked, SLRP Program Office personnel acknowledged they were not enforcing 

the payment verification requirement. According to OHR officials, the newly 

implemented SLRP automated application system includes a control to require 

employees to verify that their loan institution received SLRP payments; however, OHR 

had not turned this control on. As of December 2015, OHR had turned on the control in 

the automated application system and, therefore, the issue should be resolved.

Recommendations, Management’s Response, and Evaluation of 

Management’s Response

To improve the SEC’s SLRP approval and verification controls, we recommend that the 

Office of Human Resources:

Recommendation 5: Develop policies and procedures that define the objectives and 

responsibilities for the review of student loan repayment program documents, including 

what is acceptable information, when to require additional documentation, and how to 

document assessments so that an independent observer can reconstruct each action 

to approve a student loan repayment benefit, in accordance with the Code of Federal 

Regulations.

Management’s Response. The Office of Human Resources concurred with the 

recommendation. The Office of Human Resources drafted a student loan repayment 

program policy that is currently under review and is developing service level 

agreements and standard operating procedures. These documents will have 

traceable steps to meet Code of Federal Regulations requirements for reconstructing 

actions. Future internal accountability program reviews will measure the 

effectiveness of adherence to the policy, service level agreements, and standard 

operating procedures.

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

are responsive; therefore, the recommendation is resolved. Once finalized, we will 

review the new policy, service level agreements, and standard operating procedures 

to ensure that any additional controls established meet the intent of the 

recommendation. The recommendation will be closed upon verification of action 

taken.

 23 U.S. Securities and Exchange Commission, Office of Human Resources, Human Capital Strategy 

Group, Student Loan Repayment Program Evaluation Final Report: 2015-SLRP-01; October 20, 2015.
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 19 MARCH 31, 2016

Recommendation 6: Remind personnel managing the student loan repayment 

program of the importance of their role in ensuring that benefits are awarded only to 

eligible participants for qualifying loans.

Management’s Response. The Office of Human Resources concurred with the 

recommendation. The student loan repayment program policy, service level 

agreements, and standard operating procedures that are under development will

serve to reinforce the program management roles and responsibilities within the 

Office of Human Resources.

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

are responsive; therefore, the recommendation is resolved. Once finalized, we will 

review the new policy, service level agreements, and standard operating procedures 

to ensure that any additional controls established meet the intent of the 

recommendation. The recommendation will be closed upon verification of action 

taken. 

Recommendation 7: Obtain evidence from the agency’s calendar year 2015 student 

loan repayment program participants that their lenders received the agency’s payments 

and properly credited the employees’ accounts. For participants who do not provide 

such evidence, the Office of Human Resources should document that the participant is 

ineligible to receive future student loan repayment benefits until the participant provides 

the requested information. 

Management’s Response. The Office of Human Resources concurred with the 

recommendation and is contacting participants who did not provide evidence to 

remind them of this requirement. The Office of Human Resources is maintaining 

documentation, and a participant will be deemed ineligible for a new student loan 

repayment benefit until the requirement is met.

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

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

verification of the action taken.
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 20 MARCH 31, 2016

Finding 3. SEC SLRP Policy Needs Improvement

GAO’s Standards for Internal Control in the Federal Government states 

that management should implement control activities through policies. 

The document further states, “Effective information and communication 

are vital for an entity to achieve its objectives.” An objective of the SEC’s 

SLRP is to comply with 5 C.F.R. § 537. However, we determined that the 

SEC’s SLRP policy (dated September 2009) does not reflect the agency’s 

current program or include certain eligibility requirements specified by the 

U.S.C. and the C.F.R. Between April and July 2015 OHR published 

various guides and administrative notices announcing changes in the 

SEC’s SLRP. However, the agency’s SLRP policy conflicts with these 

documents and provides inaccurate and unreliable information to SEC 

employees and their supervisors. In addition, in July 2014 and October 

2015, OPM and the OHR Human Capital Strategy Group recommended 

that OHR issue additional, interim guidance to comply with the C.F.R. As 

of the date of this report, OHR had drafted, but not issued, a revised SLRP 

policy. 

SEC SLRP Policy Does Not Reflect the Current Program 

According to the Standards for Internal Control in the Federal Government, 

management documents in policies the internal control responsibilities of the 

organization and communicates to personnel the policies and procedures so that 

personnel can implement the control activities for their assigned responsibilities. The 

document further states that management periodically reviews policies, procedures, and 

related control activities for continued relevance and effectiveness in achieving 

objectives or addressing related risks. In accordance with these principles, if an entity’s 

process significantly changes, management should review the process “in a timely 

manner after the change to determine that the control activities are designed and 

implemented appropriately.” 

OHR significantly revised the SEC’s SLRP in 2014 and 2015. Between April and July 

2015, OHR published the following: 

• two administrative notices titled Student Loan Repayment Program Update, 

• a Student Loan Repayment Program Guide and Frequently Asked Questions, 

• Student Loan Repayment Program Guidance for Supervisory Justifications, and 

• a Student Loan Repayment Program (SLRP) Update for Employees Receiving 

Monthly or Bi-weekly Payments. 

OHR also offered training sessions on the changes to the agency’s SLRP. However, 

the Program Office did not update the SEC’s SLRP policy. We identified the following 

inaccuracies in the SEC’s SLRP policy:
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 21 MARCH 31, 2016

• The policy states that SEC employees must complete at least 1 year of 

employment at the SEC before employees are eligible for SLRP participation. 

However, beginning in June 2014, new employees are immediately eligible for 

SLRP participation.

• The policy states that payments are lump sums for the authorized gross benefit 

amount, less any applicable employment taxes. However, beginning in June 

2015, participants can spread out payments to lenders over a specified period.

• The policy states that open enrollment for SLRP benefits occurs only once per 

year. However, beginning in June 2015, employees may apply for SLRP benefits 

at any time. 

Out-of-date or conflicting policy provides inaccurate and unreliable information to SEC 

employees and their supervisors. As a result, qualified personnel may not apply for 

benefits, and employees who do not meet applicable criteria may receive benefits. 

OHR officials stated that they planned to update the SEC’s SLRP policy after assessing 

how the program operated in 2015, including the rollout of the new automated 

application system. During our audit, OHR drafted, but did not issue, a revised SLRP 

policy. 

SEC SLRP Policy Does Not Include Certain Federal Eligibility 

Requirements 

According to 5 C.F.R. § 537.105, if an agency’s SLRP is administered for retention 

purposes (as the SEC’s SLRP is), the agency must make a written determination that 

(1) an employee applying for SLRP benefits is otherwise likely to leave the agency for 

employment outside of the Federal service, and (2) it is essential to retain the employee 

based on the their high or unique qualifications or a special need of the agency. In 

addition, 5 U.S.C. § 5379 states that an employee will be ineligible for student loan 

repayment benefits if the employee does not maintain an acceptable level of 

performance. According to 5 C.F.R. § 537.108(b), an acceptable level of performance 

is one that is equivalent to an annual performance rating of Level 3 (“Fully Successful” 

or equivalent) or higher. 

SEC SLRP Awards May Not Meet Eligibility Conditions. According to the SEC’s 

SLRP policy, the agency uses its program for retention purposes. However, SLRP 

Program Office personnel did not enforce the C.F.R. requirement that the SEC make a 

written determination that, without SLRP benefits, employees were likely to leave the 

agency for employment outside of the Federal service. A July 2014 OPM evaluation

and an October 2015 OHR internal assessment also identified this issue. In response 

to the OPM evaluation, the OHR Director stated that the SEC would propose new 

guidance to require written determinations and negotiate the issue with the NTEU, 

because the November 2013 CBA does not include this requirement. GAO’s Standards 

for Internal Control in the Federal Government states that, “Management should 

remediate identified internal control deficiencies on a timely basis.” As of the date of 

this report, OHR had not issued new guidance to require written determinations.
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 22 MARCH 31, 2016

SEC SLRP Policy Does Not Define “Acceptable Level of Performance.” The SEC’s 

nonbargaining unit employees participate in the agency’s SLRP and receive numerical 

performance ratings consistent with the definition from 5 C.F.R. § 537.108(b).24 The 

SEC’s SLRP policy states that employees selected for benefits must have maintained 

“an acceptable level of performance.” However, the policy does not define “acceptable 

level of performance” or specify that nonbargaining unit employees must maintain at 

least an annual performance rating of Level 3 (“Meets Expectations”) to be eligible for 

SLRP participation. 

OHR officials stated that the SEC Administrative Regulation on Performance 

Management25 specifies the requirements of the “Meets Expectation” rating. In 

addition, OHR’s June 2015 Student Loan Repayment Program Questions and Answers 

Guide states that SLRP participants must continue performance at least at the "Meets 

Expectations" or "Acceptable" level to be eligible to apply for additional SLRP benefits. 

However, the SEC’s SLRP policy does not refer to the Administrative Regulation and 

pre-dates the Student Loan Repayment Program Questions and Answers Guide. 

Recommendations, Management’s Response, and Evaluation of 

Management’s Response

To improve the SEC’s SLRP internal controls and compliance with Federal laws and 

regulations, we recommend that the Office of Human Resources:

Recommendation 8: Address recommendations from the 2014 Office of Personnel 

Management evaluation and the 2015 Office of Human Resources, Human Capital 

Strategy Group internal assessment by requiring written justifications to support that an 

employee is likely to leave the U.S. Securities and Exchange Commission for 

employment outside of the Federal service if student loan repayment benefits are not 

approved before approving such benefits.

Management’s Response. The Office of Human Resources concurred with the 

recommendation and will update guidance for written justifications and inform 

managers of these requirements by September 30, 2016.

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

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

verification of the action taken.

 24 Non-bargaining unit employee performance rating levels are “Greatly Exceeds Expectations” (Level 5), 

“Exceeds Expectations” (Level 4), “Meets Expectations” (Level 3), “Needs Improvement” (Level 2), and 

“Unacceptable” (Level 1). For bargaining unit employees, the rating official assesses individual 

performance objectives on a numerical rating of 1 through 5. However, the final summary rating is either 

“Acceptable” or “Unacceptable.”

25 SECR 6-44, SEC Administrative Regulation, Performance Management (for Non-Bargaining Unit 

Employees); February 27, 2015.
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REPORT NO. 534 23 MARCH 31, 2016

Recommendation 9: Update policies and procedures to reflect the agency’s current 

student loan repayment program and address eligibility requirements by defining

“acceptable level of performance” for all employees.

Management’s Response. The Office of Human Resources concurred with the 

recommendation and drafted a policy for the student loan repayment program. The 

final version will include comprehensive definitions for program eligibility.

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

are responsive; therefore, the recommendation is resolved. Once finalized, we will 

review the new policy to ensure that any additional controls established meet the 

intent of the recommendation. The recommendation will be closed upon verification 

of the action taken.
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 24 MARCH 31, 2016

Other Matter of Interest

During the course of our audit, we identified a matter that did not warrant 

recommendations. We discussed this matter with OHR management for consideration. 

The matter, management’s response, and our evaluation of management’s response 

are described below.

OHR Could Improve the SEC’s SLRP Loan Data Verification Form. The SEC’s 

SLRP Loan Data Verification Form, SEC-2499, serves a critical function in the SLRP 

approval and payment process. SEC management uses the form to verify: 

• whether the employee/applicant has qualifying loan(s),

• whether the employee/applicant provided the correct account number(s),

• the current balance(s) of the loan(s), and 

• whether the loan(s) are in default status.

The form includes an “applicant/borrower” certification statement that cites possible civil 

penalties for knowingly including or omitting material information that would render the 

“...statement false, fictitious, or fraudulent....” However, the form does not cite possible 

criminal penalties. Citing possible criminal penalties for knowingly providing false 

information on the SLRP Loan Data Verification Form may serve as another effective 

deterrent.

Management’s Response. The Office of Human Resources concurred and stated 

that revisions to SEC-Form 2499, “SLRP Loan Data Verification Form,” will include 

language pertaining to criminal penalties for knowingly providing false information. 

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

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

REPORT NO. 534 25 MARCH 31, 2016

Appendix I. Scope and Methodology

We conducted this performance audit from June 2015 through March 2016 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. To address our audit objectives, we tested SLRP payments approved between 

July 2003 and June 2015 and related debt collection processing. We also remained 

abreast of information relevant to the SEC’s SLRP throughout our audit. Our objective 

was to determine whether the SEC’s SLRP policies and procedures comply with 

Federal requirements and whether controls are adequate to ensure compliance with 

those policies and procedures. Specifically, we sought to:

• determine whether OHR developed and implemented SLRP policies and 

procedures that comply with applicable laws and regulations, including applicable 

sections of the U.S.C., the C.F.R., and the SEC’s CBA;

• evaluate the operating effectiveness of SLRP internal controls designed and 

implemented by OHR to ensure compliance with applicable laws and regulations; 

and

• determine whether OHR has implemented or effectively addressed 

recommendations from prior SLRP audits and reviews.

We performed fieldwork at the SEC’s Headquarters in Washington, DC. We focused on 

OHR but also considered OFM’s debt collection process, the exit process managed by 

the OCOO, and how OHR incorporated these processes into its management of the 

SEC’s SLRP.

Methodology. We interviewed management and staff from OHR, OFM, and the OCOO 

to gain an understanding of their responsibilities in SLRP approval, payment, and debt 

collection processes. We obtained OHR’s 2014 and 2015 management assurance 

statements and the 2014 OHR Risk and Control Matrix to review management’s 

assessment of OHR’s internal controls and any material weaknesses relevant to our 

audit objectives. In addition, we reviewed relevant prior audits, evaluations, and 

internal assessments, and documentation supporting closure of prior recommendations

for corrective action.

We also reviewed OHR’s procedures to evaluate the operating effectiveness of internal 

controls over the SEC’s SLRP. With SLRP Program Office and OFM personnel, we 

identified and discussed inherent risks to the SLRP and mitigating internal controls. We 

assessed the design and implementation of internal controls, and identified and tested 

key internal controls. Specifically, we tested SLRP approval, payment, and debt 
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 26 MARCH 31, 2016

collection processes by reviewing (1) SEC SLRP participant and benefit data from July 

2003 to June 2015; (2) OPM’s annual reports to Congress on agencies' use of the 

Federal SLRP from 2003 to 2014; (3) select SEC SLRP applications, loan verifications;

and service agreements from 2015; and (4) select former employee repayment plans.

We also interviewed the current and former SLRP Program Managers, the OHR 

Director, and personnel from OFM and the OCOO to determine whether OHR has 

developed and implemented policies and procedures that are in accordance with 

Federal laws and regulations. Additionally, we gained an understanding of the SLRP 

Program Office, its policies and procedures, and overall management style. We 

conducted a crosswalk of SEC and OHR policies and procedures to the relevant 

Federal laws and regulations to determine whether the SEC has incorporated all 

required aspects of these Federal laws and regulations into its agency-wide policies and 

procedures, including Article 25 of the CBA. 

The Federal laws, regulations, and guidance and the SEC policies and procedures we 

reviewed included:

Federal Laws, Regulations, and Guidance:

• 5 U.S.C. § 5379 – Student Loan Repayments.

• 5 C.F.R. § 537 – Repayment of Student Loans.

• Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1, 

Government Accountability Office (November 1999) and updated Standards for 

Internal Control in the Federal Government, GAO-14-704G, Government 

Accountability Office (September 2014). 

• Investor and Capital Markets Fee Relief Act (Pub. L. 107-123, 115 Stat. 2390 

(2002)).

• Improper Payments Elimination and Recovery Improvement Act of 2012 (Pub. L. 

112-248, 126 Stat. 2390 (2013)).

SEC Policies and Procedures:

• Student Loan Repayment Program Policy; September 2009.

• Student Loan Repayment Program Update, Administrative Notice; April 2015.

• Student Loan Repayment Program Update, Administrative Notice; June 2015.

• Student Loan Repayment Program Guide and Frequently Asked Questions; June 

2015.

• Student Loan Repayment Program Guidance for Supervisory Justifications; July

2015.
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REPORT NO. 534 27 MARCH 31, 2016

• Student Loan Repayment Program (SLRP) Update for Employees Receiving 

Monthly or Bi-weekly Payments; July 2015.

• Article 25 of the Collective Bargaining Agreement between the U.S. Securities 

and Exchange Commission and the National Treasury Employees Union;

November 2013.

• Form SEC 2499 (1/15), SEC Student Loan Repayment Program Loan Data

Verification.

Internal Controls. We obtained an understanding of OHR’s oversight of the SEC’s 

SLRP and identified key internal controls. We obtained a copy of OHR’s fiscal year

2014 and 2015 management assurance statement and noted that management found 

no material weaknesses in internal controls related to the SLRP. The 2014 OHR 

management assurance statement identified two recommendations from the 2014 OPM

Evaluation of SEC Adherence to Merit System Principles, Laws, and Regulations and 

Assessment of the Efficiency and Effectiveness in Administering Human Resources 

Programs under the Talent Management System of the Human Capital Framework. 

OPM recommended that SEC (1) develop a student loan repayment plan to include 

bargaining and non-bargaining unit employees, and (2) provide stronger written 

justifications that support employees' intent to leave the agency if SLRP Program Office 

personnel did not authorize student loan repayment benefits. According to OHR, those 

recommendations are closed. Although OHR identified other areas for improvement, 

those areas did not create the risk of a material weakness, and OHR is working to 

address them.

During our audit, we assessed OHR’s internal controls related to SLRP approval, 

payment, and debt collection processes in accordance with the GAO’s Standards for 

Internal Control in the Federal Government. We did not identify SLRP benefits awarded 

to employees who failed to meet minimum performance standards during the period 

reviewed. However, as discussed in this report, we identified internal control 

weaknesses that affected the SLRP Program Office’s ability to manage the program 

effectively. Namely, Program Office personnel did not (1) maintain complete and 

accurate participant information, (2) implement or enforce effective approval and 

verification controls, and (3) update the SEC’s SLRP policy and ensure the policy 

complied with certain Federal requirements. Our recommendations, if implemented, 

should correct the weaknesses we identified. 

Computer-processed Data. The GAO’s Assessing the Reliability of ComputerProcessed Data (GAO-09-680G, 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,” “accuracy,” and “completeness” as follows: 

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

intended purposes, and are not subject to inappropriate alteration. 
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 28 MARCH 31, 2016

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

information. 

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

fields in each record are appropriately populated. 

The computer-processed data that had a material impact on our findings, conclusions, 

and recommendations were the data in the SLRP automated application system, FPPS, 

and Delphi.

SLRP Automated Application System. We conducted interviews with SLRP 

Program Office personnel to understand how applicants and reviewers use the 

SLRP automated application process. We conducted a walkthrough of the system 

to learn about the system’s automated controls and reporting capabilities. We also 

performed limited testing of the system’s automated controls. We determined that 

the SLRP automated application system was sufficiently reliable for the purposes of 

the audit. 

FPPS. This computer-processed data consisted of FPPS data used by OHR to 

document SLRP payments. A prior OIG audit assessed the reliability of FPPS 

data.26 The auditors interviewed relevant SEC personnel, performed electronic 

testing of FPPS data, and traced a sample of FPPS data to source documentation. 

Additionally, according to a 2014 independent audit of the controls related to FPPS, 

the controls that were tested were operating with sufficient effectiveness to provide 

reasonable, but not absolute, assurance that the control objectives were achieved.27 

Consequently, we determined that the FPPS data was sufficiently reliable for the 

purposes of this audit. However, FPPS retains records only for 6 years and 

6 months and, therefore, does not contain complete data for monitoring aspects of 

the SEC’s SLRP (namely, lifetime payment limits). Furthermore, the SLRP Program 

Office does not have a customized FPPS SLRP report or query to capture 

information necessary to manage aspects of the SEC’s SLRP, such as manual 

payments, debt repayments from participants, and adjustments. 

Delphi. On April 1, 2012, the SEC implemented Delphi as its financial system of 

record. Delphi tracks the agency's budget, obligations, expenditures and balances. 

The Department of Transportation runs and manages Delphi (Oracle Federal 

Financials) for the SEC. We performed limited testing of Delphi data. Specifically, 

we traced a sample of Delphi data to source documentation. Based on our limited 

testing, we determined that the Delphi data was sufficiently reliable for the purposes 

of this audit. 

 26 U.S. Securities and Exchange Commission, Office of Inspector General, Report No. 528, Audit of the 

Representation of Minorities and Women in the SEC’s Workforce; November 20, 2014. The report can 

be accessed at: https://www.sec.gov/about/offices/oig/reports/audits/2014/528.pdf. 

27 KPMG Report on the U.S. Department of the Interior’s Description of its Federal Personnel and Payroll 

System and the Suitability of the Design and Operating Effectiveness of Its Controls (SSAE 16 – Type 2 

Report) for the Period July 1, 2013 to June 30, 2014.
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REPORT NO. 534 29 MARCH 31, 2016

Prior Coverage. During the last 8 years, the SEC OIG and OPM issued reports of 

particular relevance to this audit. Additionally, during fiscal year 2015, OHR performed 

an assessment of the SLRP. Unrestricted SEC OIG reports can be accessed at:

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

SEC OIG:

• Audit of the Student Loan Program, Report No. 439; March 27, 2008.

OPM:

28

• OPM Evaluation of SEC Adherence to Merit System Principles, Laws, and 

Regulations and Assessment of the Efficiency and Effectiveness in Administering 

Human Resources Programs under the Talent Management System of the 

Human Capital Framework; July 14, 2014.

OHR, Human Capital Strategy Group:

• Student Loan Repayment Program Evaluation Final Report: 2015-SLRP-01; 

October 20, 2015.

Sampling. Our analysis focused on SLRP operations between January 1 and June 30, 

2015, because OHR revised the SEC’s SLRP during 2014 and 2015. However, to 

determine adherence to lifetime limits, we reviewed data from July 2003 (when the SEC 

established its SLRP) to June 2015. To determine whether the SEC collected debts 

owed by former employees who did not fulfill their service agreements, we reviewed

data from January 2007 through June 2015 (the period since the last OIG audit of the 

SEC’s SLRP). We also judgmentally selected and tested certain participant data to 

assess the effectiveness of key SLRP internal controls. Table 3 shows the key internal 

controls tested and the corresponding sample sizes.

 28 The SEC annually reports to OPM the number of SLRP participants and benefits paid. Those reports 

can be accessed at: https://www.opm.gov/policy-data-oversight/pay-leave/student-loan-repayment/. 
U.S. SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL

REPORT NO. 534 30 MARCH 31, 2016

Table 3. Key SLRP Internal Controls Tested and Corresponding Sample Sizes

Control Tested Sample Size

Annual and lifetime limits.

100 percent of SLRP 

participants from inception of 

SEC program in July 2003 

through June 2015 (5,843 in 

total, including duplicates).

Reviewing officials verify that participants are not on a 

performance improvement plan.

100 percent of SLRP 

participants between 

January 1, 2015, and June 30, 

2015 (163 in total).

Reviewing officials verify that SLRP applications include 

consistent employee and recommending official 

justifications.

SLRP Program Office personnel verify (1) loan eligibility, 

(2) that amounts requested do not exceed loan amounts, 

(3) that primary borrowers are SEC employees, (4) that 

loans are not in default, and (5) that participants signed and 

accepted service agreements.

SLRP participants provide proof of payment to the SLRP 

Program Office within 45 days of the loan payment to the 

lending institution.

50 of 163 SLRP participants 

between January 1, 2015, and 

June 30, 2015 (or 31 percent).

SLRP Program Office personnel verify that amounts paid to 

loan holders match amounts approved by SLRP.

25 of 163 SLRP participants 

between January 1, 2015, and 

June 30, 2015 (or 15 percent).

SLRP Program Office personnel monitor participants who 

leave the SEC before fulfilling their service agreements, and 

identify why participants are leaving.

50 of 165 separated SLRP 

participants between 

January 1, 2007, and June 30, 

2015 (or 30 percent).

The SLRP Program Office and/or OFM Accounts Branch 

identifies SLRP participants who are required to repay SLRP 

benefits, collects repayments, and follows-up on any 

participants who did not make the required repayments.

100 percent of separated 

SLRP participants between 

January 1, 2007, and June 30, 

2015 (165 in total).

Source: OIG-generated.

.
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Appendix II. Management Comments
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Major Contributors to the Report 

Carrie Fleming, Audit Manager

Steve Encomienda, Lead Auditor

Lee Richardson Jr., Auditor

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

Web: www.reportlineweb.com/sec_oig

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

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.