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August 16, 2016 

A. Roy Lavik 


Inspector General 


U.S. Commodity Futures Trading Commission 


Office of Inspector General 


1155 21 51 Street, N.W. 


Washington, DC 20581 


Subject: External Peer Review Report on the U.S. Commodity Futures Trading Commission 

Office oflnspector General Audit Organization OIG Repo1t A-2016-05 

Dear Mr. Lavik: 

Attached is the External Peer Review Report ofthe U.S. Commodity Futures Trading 

Commission Office of Inspector General audit organization conducted in accordance with 

Government Auditing Standards and the Council of the Inspectors General on Integrity and 

Efficiency Guide for Conducting Peer Reviews ofthe Audit Organizations ofFederal Offices 

ofInspector General. Your response to the draft repo1t is included as Enclosure 3 with 

excerpts and our position incorporated into the relevant sections of the report. 

We appreciate the cooperation and courtesies extended to our staff during the review. 

Ifyou have any questions, please contact me at 202.593.0260 or kmulshin@aoc.gov. 

Sincerely,

I 

Kevin Mulshine 


Inspector General 


Enclosures 
Enclosure 1 

System Review Report 


A-2016-05 


August 15, 2016 

To: Mr. A. Roy Lavik, Inspector General 

U.S Commodity Futures Trading Commission 

We have reviewed the system ofquality control for the audit organization ofthe U.S Commodity 

Futures Trading Commission (CFTC) Office ofthe Inspector General (OIG) in effect for the year 

ending March 31, 2016. A system of quality control encompasses CFTC's OIG organizational 

structure and the policies adopted and procedures established to provide it with reasonable 

assurance ofconforming with Government Auditing Standards. The elements ofquality control 

are described in Government Auditing Standards. CFTC OIG is responsible for establishing and 

maintaining a system ofquality control that is designed to provide CFTC OIG with reasonable 

assurance that the organization and its personnel comply with professional standards and 

applicable legal and regulatory requirements in all material respects. Our responsibility is to 

express an opinion on the design of the system of quality control and CFTC OIG's compliance 

therewith based on our review. 

Our review was conducted in accordance with Government Auditing Standards and the Council 

ofthe Inspectors General on Integrity and Efficiency (CIGIE) Guide for Conducting Peer 

Reviews ofthe Audit Organizations ofFederal Offices ofInspector General. During our review, 

we interviewed CFTC OIG personnel and obtained an understanding ofthe nature of the CFTC 

OIG audit organization, and the design ofCFTC OIG's system of quality control sufficient to 

assess the risks implicit in its audit function. Based on our assessments, we selected audits and 

attestation engagements, collectively referred to as "audits", and administrative files to test for 

conformity with professional standards and compliance with CFTC OIG's system of quality 

control. The audits selected represented a reasonable cross-section ofCFTC OIG's audit 

organization, with emphasis on higher-risk audits. Prior to concluding the peer review, we 

reassessed the adequacy ofthe scope ofthe peer review procedures and met with CFTC OIG 

management to discuss the results ofour review. We believe that the procedures we performed 

provide a reasonable basis for our opinion. 

In performing our review, we obtained an understanding ofthe system ofquality control for the 

CFTC OIG audit organization. In addition, we tested compliance with CFTC OIG's quality 

control policies and procedures to the extent we considered appropriate. These tests covered the 

application of CFTC OIG's policies and procedures on selected audits. Our review was based on 

selected tests; therefore, it would not necessarily detect all weaknesses in the system ofquality 

control or all instances of noncompliance with it. 

There are inherent limitations in the effectiveness of any system of quality control, and, 

therefore, noncompliance with the system ofquality control may occur and not be detected. 

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Projection of any evaluation of a system of quality control to future periods is subject to the risk 

that the system ofquality control may become inadequate because ofchanges in conditions, or 

because the degree of compliance with the policies or procedures may deteriorate. Enclosure 1 to 

this report identifies CFTC 010 offices that we visited and the audits that we reviewed. 

In our opinion, the system of quality control for the audit organization of CFTC OIG in effect for 

the year ending March 31, 2016, has been suitably designed and complied with to provide CFTC 

OIG with reasonable assurance ofperforming and reporting in conformity with applicable 

professional standards in all material respects. Audit organizations can receive a rating ofpass, 

pass with deficiencies, orfail. CFTC OIG has received an External Peer Review rating ofpass. 

In addition to reviewing its system of quality control to ensure adherence with Government 

Auditing Standards, we applied certain limited procedures in accordance with guidance 

established by the CIGIE related to CFTC OIG's monitoring ofaudits performed by Independent 

Public Accountants (IPAs) under contract where the IPA served as the auditor. It should be noted 

that monitoring of audits performed by IPAs is not an audit and, therefore, is not subject to the 

requirements of Government Auditing Standards. The purpose of our limited procedures was to 

determine whether CFTC 010 had controls to ensure IPAs performed contracted work in 

accordance with professional standards. However, our objective was not to express an opinion 

and accordingly, we do not express an opinion, on CFTC OIG's monitoring ofwork performed 

by IPAs. 

Kevin Mulshine 

Inspector General 

Enclosures 

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Enclosure 2 

Scope and Methodology 

We tested compliance with the CFTC OIG audit organization's system of quality control to the 

extent we considered appropriate. These tests included a review of three of seven audit reports 

issued during the period April 1, 2015, through March 31, 2016. We also reviewed the internal 

quality control reviews performed by CFTC OIG. 

In addition, we reviewed CFTC OIG's monitoring of audits performed by IPAs where the IPA 

served as the auditor during the period April 1, 2015, through March 31, 2016. During the 

period, CFTC OIG contracted for the audit of its agency's fiscal year 2015 financial statements. 

CFTC OIG also contracted for certain other audits that were to be performed in accordance with 

Government Auditing Standards. 

We visited the CFTC OIG.office located in Washington, DC. 

Reviewed Audits Performed by CFTC OIO 

Report Date 

9/24/2015 

Report Title 

Audit of CFTC "Pension Prizers" 

Reviewed Monitoring Files of CFTC OIO for Contracted Audits 

Report Date 

7/14/2015 

Report Title 

FY 2014 FISMA Follow-up Management Review 

(Modernization Act) ­ Classified 

8/5/2015 Performance Audit ofthe Division ofMarket Oversight's 

Rule Enforcement Reviews (RER) 

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U.S. COMMODITY FUTURES TRADING COMMISSION 

Three Lafayette Centre 


1155 21st Street, NW, Washington, DC 20581 


Telephone: (202) 418-5110 


TO: Ashton Coleman, Jr., Assistant Inspector General for Audit, 

Office of the Inspector General, Architect ofthe Capitol 

FROM: Miguel A. Castillo, Assistant Inspector General for Auditing, 

Office of the Inspector General, U.S. CFfC 

DATE: August 12, 2016 

SUBJECT: Management Response to External Peer Review Report on U.S. CFfC OIG 

Audit Organization 

The U.S. CFfC Office of the Inspector General appreciates the independent peer review 

conducted your office. A rating of"pass" confirms that our audit redesign undertaken in 

November 2014 is improving the quality of audits conducted by our office. We will post 

your report in its entirety on our website and present a synopsis in our September 2016 

Semiannual Report to Congress. Please call me with any questions at 202 4 18 -5084. 

cc: 	 A. Roy Lavik, Inspector General 

Judith A. Ringle, Deputy Inspector General