Office of the Inspector General

Commodity Futures Trading Commission

Semiannual Report to Congress

April 1, 2019 – September 30, 2019 
Commodity ~·u1u.rtt Trading Commiuion 

U.S. COMMODITY FUTURES TRADING COMMISSION 

Office of Inspector General 

Three Lafayette Centre 

1155 21st Str eet, NW, Washington , DC 2058 1 

Telephone: (202) 418-5110 

Facsimile: (202) 41 8-5522 

October 3 1, 2019 

TO: Heath P. Tarbert, Chairman 

Brian Quintenz , Commissioner 

Rostin Behnam, Commissioner 

Dawn Stump, Commissioner 

Dan Berkovitz, Commissioner 

FROM: A.Roy Lavik 

Inspector General 

Q (2_ ~ 

SUBJECT: Semiannual Repo1i of the Office of the Inspector General 

Attached is the Office of the Inspector General 's Semiannual Report for the period from 

Aprill , 201 9, through September 30, 2019. This report is submitted to you in accordance with 

the requirements of Section 5 of the Inspector General Act of 1978, as amended, and summarizes 

issued reports and ongoing proj ects during the reporting period. 

I appreciate your continuing support of this office. 
1

TABLE of CONTENTS 

EXECUTIVE SUMMARY .......................................................................................................... 4

CFTC PROGRAMS and OPERATIONS .................................................................................. 8

CFTC OIG RESPONSIBILITIES, RESOURCES, ORGANIZATION, and 

INDEPENDENCE......................................................................................................................... 8

CFTC OIG RESPONSIBILITIES ..................................................................................................... 8

CFTC OIG RESOURCES ............................................................................................................... 9

OIG INDEPENDENCE .................................................................................................................. 11

REQUIRED STATEMENT REGARDING INFORMATION ACCESS AND ASSISTANCE ......................... 11

Inspector General Pay .......................................................................................................... 11

Delayed Information Access ................................................................................................. 12

AUDIT OPERATIONS .............................................................................................................. 12

COMPLETED AUDITS, INSPECTIONS, EVALUATIONS, AUDIT REVIEWS, AND OTHER AUDIT 

PROJECTS ................................................................................................................................... 12

Review of CFTC’s Data Governance Program .................................................................... 12

Evaluation of Office of Data and Technology (ODT) Contracts .......................................... 13

Briefing Report: Unaccounted Laptops ................................................................................ 14

Council of Inspectors General on Financial Oversight (CIGFO) Evaluation FY 2018 ....... 14

Inspector General’s Assessment of the Most Serious Management Challenges Facing the 

CFTC (2019) ......................................................................................................................... 15

ONGOING AUDITS, INSPECTIONS, EVALUATIONS, AUDIT REVIEWS, AND OTHER AUDIT PROJECTS

................................................................................................................................................... 15

Audit of the CFTC’s FY 2019 Annual Financial Report ...................................................... 15

Audit of the CFTC’s FY 2019 Customer Protection Fund ................................................... 15

Performance Audit: CFTC’s Compliance with the Digital Accountability and Transparency 

Act (DATA Act) of 2014 (FY 2019 Quarter 1) ...................................................................... 15

Federal Information Security Management Act Review: FY 2019 ...................................... 15

Cyber Testing: Market Data Transmission........................................................................... 16

Registrant Cyber Security: Testing and Information Sharing .............................................. 16

Council of Inspectors General on Financial Oversight (CIGFO) Evaluation FY 2019 ....... 16

AUDIT REPORTS AND REVIEWS OVER SIX MONTHS OLD; REQUIRED STATEMENTS .................. 16

Required Statements Regarding Commission Response Exceeding 60 Days, and Regarding 

Management Decisions Not Made ........................................................................................ 16

Required Statements Regarding Revised Management Decisions, and Regarding Inspector 

General Disagreement .......................................................................................................... 16

Required Statements Regarding Significant Recommendations that have not been 

Completed; and Audit Reports for which there are any Outstanding Unimplemented 

Recommendations, Including Aggregate Potential Cost Savings ......................................... 17
2

Table 1: Unimplemented Recommendations ................................................................... 17

Table 2: Detail of Unimplemented Recommendations .................................................... 17

INVESTIGATIVE OPERATIONS ........................................................................................... 18

SUMMARY .................................................................................................................................. 18

CLOSED INVESTIGATIONS .......................................................................................................... 19

CLOSED PRELIMINARY INVESTIGATIONS ................................................................................... 20

ONGOING INVESTIGATIVE MATTERS AND REQUIRED DISCLOSURES .......................................... 20

Table 3: Investigative Statistics for Referrals and Whistleblower Retaliation ................ 21

FOLLOW-UP ON INVESTIGATIVE REPORTS ISSUED IN PRIOR REPORTING PERIODS ..................... 21

INDEPENDENT STUDY ........................................................................................................... 21

Review of Policies and Procedures for Calculating Overhead ............................................ 21

LEGAL AND ECONOMIC REVIEW ..................................................................................... 22

LEGISLATIVE and REGULATORY PROJECTS ................................................................ 22

PEER REVIEWS ........................................................................................................................ 23

Peer Review Report of CFTC OIG Audit Function .............................................................. 23

Peer Review of the National Endowment for the Arts (NEA) OIG Audit Function .............. 23

SUMMARY of FINAL REPORTS NOT MADE PUBLIC..................................................... 24

GAO LIAISON............................................................................................................................ 24

STRATEGIC PLAN for the OFFICE of INSPECTOR GENERAL ..................................... 24

MISSION, VISION, AND VALUES ................................................................................................. 24

STRATEGIC GOALS FOR THE COMING YEAR ............................................................................... 25

STRATEGIC GOAL 1: EVALUATE THE ECONOMIC IMPACT OF CFTC REGULATORY ACTIONS 

THROUGH LEGAL ANALYSIS, WHITE PAPERS, INSPECTIONS AND EVALUATIONS, MANAGEMENT 

REVIEWS, AND OTHER PRODUCTS .............................................................................................. 25

Office of Legal and Economic Review: Legislative, Economic, and Regulatory Review 

Agenda .................................................................................................................................. 25

STRATEGIC GOAL 2: ADDRESS HIGH IMPACT ISSUES IN CFTC ADMINISTRATIVE AND MISSION 

PERFORMANCE ........................................................................................................................... 26

Office of Audits: Audit and Review Agenda .......................................................................... 26

STRATEGIC GOAL 3: ADDRESS EMPLOYEE AND CONTRACTOR MISCONDUCT PROMPTLY,

THOROUGHLY, AND RELIABLY .................................................................................................. 28

Office of Investigations: Investigative Agenda ..................................................................... 28

CONTACTING the OFFICE of the INSPECTOR GENERAL ............................................. 29
3

Appendix 1 – Reports Issued with Questioned Costs .............................................................. 30

Appendix 2 – Reports Issued with Recommendations That Funds Be Put To Better Use .. 31

Appendix 3 - Index of IG Act Reporting Requirements ......................................................... 32
4

EXECUTIVE SUMMARY

This semiannual report (SAR) is issued by the Commodity Futures Trading Commission 

(CFTC) Office of the Inspector General (OIG) pursuant to the Inspector General Act of 1978, as 

amended.1 It summarizes OIG’s activities and accomplishments for the period April 1, 2019, 

through September 31, 2019. During this period, the OIG Office of Audits completed one audit, 

one inspection and evaluation (I&E), one briefing report, one external peer review, and two other 

products. All are posted to our webpage (some with redaction). In addition, we began or 

continued work on five audits, one inter-agency audit, and passed an external peer review of our 

audit function. On the investigations side, we began the reporting period with eight 

investigations and nine preliminary investigations pending. During the reporting period the OIG 

Office of Investigations closed five investigations and six preliminary investigations, and opened 

five new preliminary investigations. We finished the reporting period with three investigations 

and eight preliminary investigations pending. Finally, we began a contracted study of policies 

and procedures for calculating overhead expenses at the CFTC. 

Highlights of all completed and ongoing audits, investigations, Office of Legal and 

Economic Review projects, and other projects follow below: 

AUDIT OPERATIONS

Completed

Information Technology Management and Security 

• Review of CFTC’s Data Governance Program – As an extension of our information 

technology audit efforts, the OIG completed an audit of CFTC’s data governance 

practices. Our audit assessed practices for determining business value and creation, 

protecting stored data, and maximizing reliability of data for business use, focusing on 

the Integrated Surveillance System. We found CFTC’s program exhibited a low maturity 

level, displaying numerous weaknesses, opportunities, and threats; and that CFTC is 

currently working towards an improved Data Governance framework with benchmark 

attributes. We issued five recommendations. 

Financial 

• Evaluation of Management of Select Services Contracts Used by the Office of Data and 

Technology (ODT) – In FY 2017 ODT initiated over $54.6 million in contracts for 

Information Technology (IT) services. Failure to effectively manage these contracts 

could lead to increased costs, as well as delays in delivering core mission services to 

CFTC. We evaluated the management of contracts nearing expiration, as well as 

compliance with tasks enumerated in contracts. We found there may be CFTC-wide risk 

due to expirations. Accordingly, we recommended that CFTC evaluate the extent and 

impact of certain CFTC-wide contract actions that have expiration issues, and that CFTC 

 

1 P.L. 95-452, 92 Stat. 1101 (1978). 
5

explore the procurement life-cycle benefits offered by its current automated procurement 

system to automate workflow communications such as contract expiration notifications. 

• Briefing Report: Unaccounted Laptops – We evaluated controls in place for IT equipment 

accountability (safeguarding assets). Our scope was limited to a CFTC September 2015 

purchase of 425 Dell 7450 laptops and reported losses from that purchase. We concluded 

that CFTC internal controls in place in 2015 would not permit us to determine whether 

laptops were stolen or not, and that a full inventory must be performed to determine 

whether September 2015 laptops identified as unaccounted are in use or storage but not 

properly documented, or lost or stolen. CFTC has begun a full inventory. 

Other

• Council of Inspectors General on Financial Oversight (CIGFO) Audit of Financial 

Stability Oversight Council’s Monitoring of International Financial Regulatory Proposals 

and Developments – The Dodd-Frank Act created the Financial Stability Oversight 

Council (FSOC),2 as well as the Council of Inspectors General on Financial Oversight 

(CIGFO).3 One of the duties established for the FSOC is to monitor domestic and 

international financial regulatory proposals and developments. CIGFO is charged with 

evaluating the effectiveness and internal operations of FSOC. For FY 2018 CIGFO 

assessed FSOC’s monitoring of international financial regulatory proposals and 

developments. In addition, we contributed to the CIGFO publications 2019 CIGFO 

Annual Report and Top Management and Performance Challenges Facing FinancialSector Regulatory Proposals and Developments.

• Inspector General’s Assessment of the Most Serious Management Challenges Facing the 

CFTC (2019) – We identified cybersecurity, information technology modernization, 

stress-testing, management’s ability to enhance its business operations to lower costs, and 

data governance as challenges for FY 2019. We acknowledged CFTC’s efforts during FY 

2019 to operate and enhance business practices within its appropriation, and acknowledge 

the Commission’s leadership changes to improve industry oversight. 

Ongoing

Financial 

• Audit of the CFTC’s FY 2019 Annual Financial Report (AFR) – The objective of this 

Congressionally mandated audit4 is to render an opinion on the agency financial report 

(financial statements) in accordance with Generally Accepted Government Auditing 

Standards (GAGAS). 

 

2 P.L. 111-203, § 111, 124 Stat. 1392 (2010). 3 P.L. 111-203, § 989E, 124 Stat. 1946 (2010). 4 The Accountability of Tax Dollars Act, P.L. 107-289, 116 Stat. 2049 (2002). 
6

• Audit of the CFTC’s FY 2019 Customer Protection Fund (CPF) – The objective of this 

Congressionally mandated audit5 is to render an opinion on customer protection fund 

financial statements in accordance with GAGAS. 

• Performance Audit: CFTC’s Compliance with the Digital Accountability and 

Transparency Act (DATA Act) of 2014 (FY 2019 Quarter 1) – The Digital 

Accountability and Transparency Act 2014 (DATA Act)6 requires Federal agencies to 

report financial and award data in accordance with the established Government-wide 

financial data standards. Agency Inspectors General are required to assess the 

completeness, timeliness, quality, and accuracy of data reported and the agency’s 

compliance with Government-wide financial data standards.

Information Technology Management and Security 

• Federal Information Security Management Act7 Review: FY 2019 – The objective of 

this review is to evaluate CFTC’s information security program and practices as required 

by FISMA. This report is not made public. As part of this audit we are performing: 

• Cyber Testing: Market Data Transmission – We contracted independent 

information security professionals to evaluate CFTC practices for transmitting

sensitive market data. The scope of testing will be limited to FTP servers, email 

servers, mobile devices, and CFTC portal. 

• Registrant Cyber Security: Testing and Information Sharing - We contracted an 

independent public account (IPA) to conduct a performance audit of CFTC’s policies and 

procedures regarding oversight of cyber testing and information sharing undertaken by 

CFTC registrants.

Other

• Council of Inspectors General on Financial Oversight (CIGFO) – The Dodd-Frank Act 

created the Financial Stability Oversight Council (FSOC),8 as well as the Council of 

Inspectors General on Financial Oversight (CIGFO).9 CIGFO is charged with evaluating 

the effectiveness and internal operations of FSOC. For FY 2019 CIGFO is assessing 

FSOC’s compliance with the Cybersecurity Information Sharing Act of 2015. This work 

was ongoing at the close of the reporting period. 

 

5 P.L. 111-203, § 748 124 Stat. 739 (2010)(codified at 7 U.S.C. § 26(g)(5)). 6 P.L. 113-101, 128 Stat. 1146 (2014). 7 P.L. 107-347, 116 Stat. 2946 (2002). 8 See fn. 2. 9 See fn. 3. 
7

INVESTIGATIVE OPERATIONS

We began the reporting period with eight investigations and nine preliminary 

investigations that were open and pending. During the reporting period we opened five 

preliminary investigations, and closed five investigations and six preliminary investigations. We 

therefore finished the reporting period with three investigations and eight preliminary 

investigations. In addition, 33 allegation files were opened during the reporting period, 30 were 

dispensed with through referral or other action; three remained open pending further 

consideration at the close of the reporting period. Details begin on page 18. 

INDEPENDENT STUDY

• Review of Policies and Procedures for Calculating Overhead – We engaged an 

independent organization to conduct a study of CFTC’s overhead calculation policies, 

procedures, and practices, and to identify best practices and opportunities for maximizing 

mission resources. The study will be conducted in accord with I&E standards. 

LEGAL AND ECONOMIC REVIEW

 Due to a staff detail and turnover, there were no completed projects and no new projects 

begun by the OIG Office of Legal and Economic Review. We recently began a recruitment 

process. 

PEER REVIEW

• Peer Review Report of CFTC OIG Audit Function - The Federal Maritime Commission, 

Office of the Inspector General, reviewed the system of quality control for the CFTC 

OIG audit organization in effect for the year ending March 31, 2016. In their opinion, the 

system of quality control for the audit organization of CFTC in effect for the year ending 

March 31, 2019, has been suitably designed and complied with to provide CFTC with 

reasonable assurance of performing and reporting in conformity with applicable 

professional standards in all material respects. CFTC OIG received the highest external 

peer review rating of “pass.” 

• Peer Review Report of National Endowment for the Arts (NEA) OIG Audit Function - 

We reviewed the system of quality control for the NEA OIG audit organization in effect 

for the year ending March 31, 2019. In our opinion, the system of quality control for the 

audit organization of NEA in effect for the year ending March 31, 2019, has been 

suitably designed and complied with to provide NEA with reasonable assurance of 

performing and reporting in conformity with applicable professional standards in all 

material respects. NEA OIG received the highest external peer review rating of “pass.” 
8

CFTC PROGRAMS and OPERATIONS

Congress created the CFTC in 1974 as an independent agency with the mandate to 

regulate commodity futures and options markets in the United States. Congress reauthorized 

and/or expanded the CFTC’s mandate in 1978, 1982, 1986, 1992, and 1995. In December 2000, 

Congress and the President reauthorized the CFTC with its passage of the Commodity Futures 

Modernization Act of 2000 (CFMA). In May of 2008, Congress reauthorized the CFTC through 

FY 2013. On July 21, 2010, the President signed into law the Dodd-Frank Act, which authorized 

the CFTC to regulate swap dealers and increase transparency in the derivatives marketplace. 

 The CFTC is responsible for fostering the economic utility of the markets under its 

jurisdiction by encouraging their competitiveness and efficiency, ensuring their integrity, and 

protecting market participants against manipulation, abusive trade practices, and fraud. Through 

oversight regulation, the CFTC seeks to empower the markets under its jurisdiction to better 

serve their vital function in the nation’s economy—providing a mechanism for price discovery 

and a means of offsetting price risks. 

The Commission consists of five Commissioners appointed by the President, with the 

advice and consent of the Senate, to serve staggered five-year terms. The President designates 

one of the Commissioners to serve as Chairman. No more than three Commissioners at any one 

time may be from the same political party. The CFTC organization consists of the 

Commissioners, the offices of the Chairman, and the agency's operating units (divisions and 

offices). The offices of the Chairman include the Offices of Minority and Women Inclusion, 

Legislative and Intergovernmental Affairs, and Public Affairs. The CFTC operates four 

divisions: Division of Clearing and Risk, Division of Swap Dealer and Intermediary Oversight, 

Division of Enforcement (which includes the CFTC Whistleblower Office), and Division of 

Market Oversight. There are five CFTC offices (not including OIG): Office of the Chief 

Economist, Office of the Executive Director, Office of General Counsel, Office of International 

Affairs, and Office of Data and Technology. 

CFTC OIG RESPONSIBILITIES, RESOURCES, ORGANIZATION, 

and INDEPENDENCE

CFTC OIG RESPONSIBILITIES

The CFTC OIG was created in 1989 in accordance with the 1988 amendments to the 

Inspector General Act of 1978.10 OIG was established as an independent unit to:

• Promote economy, efficiency, and effectiveness in the administration of CFTC programs 

and operations, and detect and prevent fraud, waste, and abuse in such programs and 

operations; 

 

10 Inspector General Act Amendments of 1988, P.L. 100-504, 102 Stat. 2515 (1988). 
9

• Conduct and supervise audits and, where necessary, investigations relating to the 

administration of CFTC programs and operations; 

• Review existing and proposed legislation, regulations, and exchange rules and make 

recommendations concerning their impact on the economy and efficiency of CFTC 

programs and operations or the prevention and detection of fraud and abuse; 

• Recommend policies for, and conduct, supervise, or coordinate other activities carried out 

or financed by such establishment for the purpose of promoting economy and efficiency 

in the administration of, or preventing and detecting fraud and abuse in, its programs and 

operations; and

• Keep the Commission and Congress fully informed about any problems or deficiencies in 

the administration of CFTC programs and operations and provide recommendations for 

correction of these problems or deficiencies.

The IG is appointed by the full Commission in accordance with the applicable laws and 

regulations governing appointments within the CFTC, and may be removed upon the written 

concurrence of a 2/3 majority of the full Commission.11

The IG is a member of the Counsels of Inspectors General on Financial Oversight 

(CIGFO), created under the Dodd-Frank Act to examine the work of the Financial Stability 

Oversight Council (FSOC).

The IG is also member of the Counsel of the Inspectors General on Integrity and 

Efficiency (CIGIE), an independent entity established within the executive branch to address 

integrity, economy and effectiveness issues that transcend individual Government agencies, and 

to aid in the establishment of a professional, well-trained and highly skilled workforce in the 

Offices of Inspectors General. 

OIG conducts audits and attestation engagements in accordance with the 

Generally Accepted Government Auditing Standards (GAGAS) issued by the Government 

Accountability Office (GAO). OIG conducts inspections, evaluations, and other covered 

products in accordance with the Quality Standards for Inspection and Evaluation issued by the 

CIGIE. OIG investigations are performed in accordance with the Quality Standards for 

Investigations issued by the CIGIE. 

CFTC OIG RESOURCES

CFTC OIG maintains an Office of Audits, Office of Investigations, and Office of Legal 

and Economic Review (OLER). At the end of the reporting period, the CFTC OIG consisted of 

8.5 full time equivalents—the Inspector General, Deputy Inspector General/Chief Counsel, 

 

11 5 U.S.C. App. §§ 8G(c), 8G(e)(1). 
10

Assistant Inspector General for Investigations (AIGI) (vacant), Assistant Inspector General for 

Auditing, two Auditors, one Senior Program Analyst, one full-time Attorney/Economist (vacant), 

and one part-time Attorney/Economist serving as a consultant. During this reporting period, our 

AIGI departed on June 8, 2019, to become the first AIGI at AbilityOne OIG. In addition, our 

former full-time Attorney/Economist departed on August 31, 2019, for a position with the 

Consumer Finance Protection Bureau (CFPB; we reported his earlier detail to CFPB in our 

previous SAR). The attorney from the Department of Homeland Security OIG detailed to OIG 

through the CIGIE Fellowship Program departed at the close of the detail. Finally, our contracted 

paralegal departed on July 11 this year (replacement is underway).

 Following the departure of the AIGI, the DIG/Counsel began performing this function, 

and at the close of the reporting period we were in the process of establishing an interagency 

agreement with another OIG Office of Investigations to perform two investigations. 

Our organizational chart follows with OIG staff as of September 30, 2019 (vacant 

positions are noted): 

-------

A. Roy Lavik 

Inspector General 

Judith Ringle 

Deputy Inspector General 

and Chief Counsel 

- -------

O ffi c e of Audits 

Miguel Castillo 

Assistant Inspector 

General 

Office of Legal and 

Economic Review 

---------- -

Tony Baptiste 

Senior Program Analyst 

Mission Audits 

-----------

Branco Garcia 

~ Performance and IT Audits 

---------- -

Timothy Peoples 

Financial and Performance 

Audits 

Robert Sarvis 

Consultant 

- --------- -

Attorney/Economist 

(Vacant) 

Office of Investigations 

Assistant Inspector General 

(Vacant) 
11

We plan to backfill the recently departed OLER Attorney/Economist, and to add an 

additional Attorney/Economist, which will restore OLER to 2017 staffing levels. In addition, we 

hope to hire or procure the services of a data science specialist, dependent on funding. A data 

science specialist will serve all OIG mission functions for technical, analytical, and data 

intelligence. Data Analytics within the Office of Inspector General supports data services and 

analyses, and provides the competency to deliver short-turnaround projects that produce quick, 

valuable successes. 

Our webpage is located at https://www.cftc.gov/About/OfficeoftheInspectorGeneral/index.htm. 

OIG INDEPENDENCE

OIG operates independently of the Agency and has not experienced any interference from 

the CFTC Chairman or Commissioners in connection with the conduct of any investigation, 

inspection, evaluation, review, or audit. Our investigations have been pursued regardless of the 

rank or party affiliation of the target. OIG also has conducted audits, inspections, evaluations, 

and reviews without interference where it has perceived the opportunity to recommend 

improvement to futures regulation efforts, again without regard to the party affiliation of any 

Chairman or Commissioner.12 

REQUIRED STATEMENT REGARDING INFORMATION ACCESS AND ASSISTANCE 

No reports were made to the Agency head under section 6(b)(2) concerning information 

or assistance unreasonably refused or not provided (mandated under section 5(a)(5) of the Act). 

During the semimanual reporting period, there were no direct or intentional attempts by 

CFTC to interfere with Inspector General independence through: 

Type Number Explanation

Budget constraints 0 N/A

Resistance to oversight 0 N/A

Delayed information access 0 N/A

Other 0 N/A

Two situations arose that have the potential to impact OIG independence in the future: 

Inspector General Pay

During this reporting period, staff in the CFTC Office of Human Resources (OHR) 

verbally notified us that, beginning in 2016, the IG’s pay was not calculated in accord with an IG 

 

12 The Inspector General Act of 1978, as amended, states: “[T]he head of the designated Federal entity shall not 

prevent or prohibit the Inspector General from initiating, carrying out, or completing any audit or investigation....” 5 

U.S.C. App. 3 sec. 8G(d)(1). 
12

pay policy established following passage of the IG Reform Act of 2008.13 OHR staff stated that 

the correct pay would be calculated, and stated we would be informed of future developments. 

This issue remained pending at the close of the reporting period. 

Delayed Information Access

In our previous semi-annual reports, we noted that CFTC had been slow to produce 

documents to the Office of Investigations in response to written requests. We did not view this as 

an attempt to interfere with OIG operations, but rather as a consequence of CFTC prioritizing 

other matters in a time of resource constraint. During this reporting period, information access 

for investigations was satisfactory; however, management provided supporting data beyond 

agreed upon timeframes in connection with the yearly Congressionally mandated CFTC financial 

statement audit. We have no indication that CFTC’s delay was done with any intent to impede 

OIG operations. 

AUDIT OPERATIONS 

COMPLETED AUDITS, INSPECTIONS, EVALUATIONS, AUDIT REVIEWS, AND OTHER

AUDIT PROJECTS

Information Technology Management and Security

Review of CFTC’s Data Governance Program

As an extension of information technology audit efforts, the OIG audited CFTC’s data 

governance practices. Data governance is an accountability framework to encourage desirable 

behavior in the valuation, creation, storage, use, archiving and deletion of data. It includes the 

processes, roles, standards and metrics that ensure the effective and efficient use of data for 

CFTC to complete its oversight responsibilities. The scope of our audit was limited to data stored 

 

13 Section 4 of the IG Reform Act of 2008, PL 110-409 (Oct. 14, 2008), sets pay for IGs at the “designated federal 

entities,” including the Commodity Futures Trading Commission, as follows: 

Notwithstanding any other provision of law, the Inspector General of each designated Federal entity (as 

those terms are defined under section 8G of the Inspector General Act of 1978 (5 U.S.C. App.)) shall, for 

pay and all other purposes, be classified at a grade, level, or rank designation, as the case may be, at or 

above those of a majority of the senior level executives of that designated Federal entity (such as a General 

Counsel, Chief Information Officer, Chief Financial Officer, Chief Human Capital Officer, or Chief 

Acquisition Officer). The pay of an Inspector General of a designated Federal entity (as those terms are 

defined under section 8G of the Inspector General Act of 1978 (5 U.S.C. App.)) shall be not less than the 

average total compensation (including bonuses) of the senior level executives of that designated Federal 

entity calculated on an annual basis.

Section 5 of the IG Reform Act removes all authority to award additional compensation to the Inspectors General 

for performance awards and bonuses. 
Evaluation of Office of Data and Technology (ODT) Contracts

13

in the Integrated Surveillance System14 (ISS) to evaluate practices for determining business 

value and creation, protecting stored data, and maximizing reliability for business use. 

We found CFTC’s program exhibited a low maturity level, displaying numerous weaknesses, 

opportunities, and threats. We found that ISS is less useful today than it was twenty years ago. Given 

that ISS was developed in the late 1990s, and that CFTC’s markets have grown exponentially since 

that time, some degree of obsolescence may be expected. However, we believe adherence to an 

effective Data Governance program throughout its lifespan would have guarded against ISS 

obsolescence impacting CFTC operations, as well as the security concerns we noted. 

We made five recommendations to enhance data governance and security concerns noted. 

Management agreed to the five recommendations and planned to:

• Formulate a data governance framework; 

• Address stakeholder business requirements for ISS; 

• Upgrade data transmission standards and enhance ETL (extracting, transferring, and loading 

data) practices; and

• Ensure security compliance for ISS and other legacy systems (responsive to two separate 

recommendations).

Financial 

In FY 2017 ODT initiated over $54.6 million in contracts for Information Technology 

(IT) services. We evaluated management of contracts nearing expiration, as well as compliance 

with tasks enumerated in contracts. Given the temporary loss of contractors supporting IT 

security operations due to corporate acquisition issues and contract expiration issues, we initially 

focused on related service contracts with Phase One Consulting Group, Inc. (Phase One), to 

determine if the events resulted from a systemic contracting weakness or simply an anomalous 

event. 

Given the weakness identified in procurement communications and the number of 

contract actions we identified with expiration issues (52), we concluded that a systemic issue 

existed. During fieldwork, OGC staff opined that certain task order options may be exercised 

after a Federal Supply Schedule (FSS) contract expiration. Given the possibility of differing 

opinions regarding the permissibility of tasked orders tied to expired contracts, we recommended 

that CFTC’s procurement official in collaboration with the General Counsel evaluate the extent 

and impact of CFTC-wide FSS contract actions that have expiration issues in terms of both 

contract and operational risk. Additionally, we recommended the agency explore the 

procurement life-cycle benefits offered by its procurement system to automate workflow 

communications such as contract expiration notifications. 

 

14 This system, developed in the late 1990s, hosts confidential and sensitive market data collected pursuant to CFTC 

regulations; it supports CFTC market surveillance, market research, public reports (including the CFTC 

Commitment of Traders (COT) Reports), and other CFTC mission critical activities.
Briefing Report: Unaccounted Laptops

14

Management did not concur with the first recommendation because, after addressing the 

issue at higher levels, including the General Counsel, they concluded that the referenced contract 

actions were proper. Nevertheless, management will assess contracts to ensure there are no 

expiration issues. Management agreed with the second recommendation to explore system

communication capabilities and also saw value in enhancing instructions to Contract Officer 

Representatives.

Our objective was to evaluate controls in place for IT equipment accountability 

(safeguarding assets). Our scope was limited to a CFTC September 2015 purchase of 425 Dell 

7450 laptops and reported losses from that purchase. We concluded that current CFTC internal 

controls do not permit us to determine whether laptops were stolen or not, and that a full 

inventory must be performed to determine whether September 2015 laptops identified as 

unaccounted are in use or storage but not properly documented, or lost or stolen. In fact, during 

our fieldwork potential irregularities regarding laptop inventory tracking and documentation 

(from other shipments) came to light. Given the present posture, we recommended that CFTC 

prioritize completion of a full inventory, and refer any indications of theft or fraud to OIG. In 

addition, internal controls should be enhanced in design and effectiveness to assure the reliability 

of IT inventory processes in the future. Given CFTC’s reliance on contractors for IT asset 

management support, appropriate contract modifications in concert with policy updates may be 

necessary and were encouraged. Management agreed with the suggestions made.

Other 

Council of Inspectors General on Financial Oversight (CIGFO) Evaluation FY 2018 

The Dodd-Frank Act created the Financial Stability Oversight Council (FSOC),15 as well 

as the Council of Inspectors General on Financial Oversight (CIGFO).16 One of the duties 

established for the Financial Stability Oversight Council (FSOC) is to monitor domestic and 

international financial regulatory proposals and developments, including insurance and 

accounting issues, and to advise Congress and make recommendations. 

During the reporting period, CFTC OIG assisted the CIGFO audit of FSOC’s monitoring 

of FY 2018 international financial regulatory proposals and developments. The audit identified 

no significant concerns with FSOC’s monitoring of international activities and made no 

recommendations. The report did include several suggestions for process enhancement offered 

by FSOC members. FSOC acknowledged the findings and conclusions in the report, and stated it 

will consider the suggestions. 

 

15 See fn. 2. 16 See fn. 3. 
15

Inspector General’s Assessment of the Most Serious Management Challenges Facing the 

CFTC (2019)

We identified as challenges for FY 2019: cybersecurity, information technology 

modernization, data governance, stress-testing, and management’s ability to enhance its business 

operations to lower costs. We acknowledged CFTC’s efforts during FY 2019 to operate and 

enhance business practices within its appropriation, and acknowledged the Commission’s 

leadership changes to improve industry oversight. 

ONGOING AUDITS, INSPECTIONS, EVALUATIONS, AUDIT REVIEWS, AND OTHER

AUDIT PROJECTS

Financial 

Audit of the CFTC’s FY 2019 Annual Financial Report

The objective of this Congressionally mandated audit17 is to render an opinion on the 

agency financial report (financial statements) in accordance with Generally Accepted 

Government Auditing Standards (GAGAS). 

Audit of the CFTC’s FY 2019 Customer Protection Fund 

The objective of this Congressionally mandated audit18 is to render an opinion on 

customer protection fund financial statements in accordance with GAGAS. 

Performance Audit: CFTC’s Compliance with the Digital Accountability and 

Transparency Act (DATA Act) of 2014 (FY 2019 Quarter 1) 

The Digital Accountability and Transparency Act 2014 (DATA Act)19 requires Federal 

agencies to report financial and award data in accordance with the established Government-wide 

financial data standards. Agency Inspectors General are to assess the completeness, timeliness, 

quality, and accuracy of data reported and use of the Government-wide financial data standards.

Information Technology Management and Security 

Federal Information Security Management Act20 Review: FY 2019 

The objective of the review is to evaluate CFTC’s information security program and 

practices as required by FISMA. This report is not made public. As part of this audit we are 

performing: 

 

17 See fn. 4. 18 See fn. 5. 19 See fn. 6. 20 See fn. 7. 
16

Cyber Testing: Market Data Transmission

We contracted independent information security professionals to evaluate CFTC 

practices for transmitting sensitive market data. The scope of testing will be limited to 

FTP servers, email servers, mobile devices, and CFTC portal.

Registrant Cyber Security: Testing and Information Sharing

The CFTC Office of Inspector General (OIG) evaluated the Commission’s policies and 

procedures for reviewing registrants’ cybersecurity policies in 2016. At that time, the CFTC 

Rules on System Safeguards Testing Requirements were not final. While the rule became 

effective on September 19, 2016, the compliance dates were section specific with the last 

compliance date being September 19, 2017. We contracted an independent public accountant 

(IPA) to conduct a performance audit of CFTC’s policies and procedures regarding oversight of 

cyber testing and information sharing undertaken by CFTC registrants. This audit will be 

conducted in accordance with Government Auditing Standards (2018 revision), also known as 

the “Yellow Book.” The scope of this audit will cover the registrants’ practices since the 

issuance of CFTC Rule 39.18. 

Other

Council of Inspectors General on Financial Oversight (CIGFO) Evaluation FY 2019 

CIGFO is charged with evaluating the effectiveness and internal operations of FSOC. For 

FY 2019, CIGFO is assessing FSOC’s compliance with the Cybersecurity Information Sharing 

Act of 2015. Our work on this project was ongoing at the end of the reporting period. 

AUDIT REPORTS AND REVIEWS OVER SIX MONTHS OLD; REQUIRED STATEMENTS

Required Statements Regarding Commission Response Exceeding 60 Days, and Regarding 

Management Decisions Not Made

There were no audit reports issued during the reporting period lacking Commission 

response within 60 days, and no instances of an audit report issued before the commencement of 

the reporting period for which a management decision had not been made by the end of the 

reporting period. 

Required Statements Regarding Revised Management Decisions, and Regarding Inspector 

General Disagreement

No management decisions were revised during the reporting period, and the Inspector 

General did not disagree with any management decisions on OIG audit recommendations during 

the reporting period. 
17

Required Statements Regarding Significant Recommendations that have not been 

Completed; and Audit Reports for which there are any Outstanding Unimplemented 

Recommendations, Including Aggregate Potential Cost Savings 

There were no audit reports over six months old where recommendations for corrective 

action had not been completed by the planned action date; however, there were unimplemented 

recommendations that are not tardy at this point, discussed below. Finally, we note a new 

recommendation stemming from a recent GAO report. 

Table 1: Unimplemented Recommendations 

Fiscal

Year

Number of Reports with 

Unimplemented 

Recommendations 

Number of 

Unimplemented 

Recommendations 

Dollar Value of 

Aggregate 

Potential Cost 

Savings

No Comment 

Returned 

w/in 60 days

2019 1 1 0 0

2018 1 1 0 0

Totals 2 2 0 0

Table 2: Detail of Unimplemented Recommendations 

Fiscal 

Year

Audit Report Unimplemented Recommendations

2019 CFTC Financial Statements 

Audit: Fiscal Year (FY) 2018

• Complete an investigation into a potential 

Antideficiency Act (ADA) violation noted and 

make any required reports.* Target date is 

January 31, 2020.

2018 CFTC Financial Statements 

Audit: Fiscal Year (FY) 2017

• Update CFTC physical inventory records at the 

completion of the annual physical inventory. 

Target date is January 31, 2020.

∗ Specifically, the FY2018 CFTC financial statement audit identified a pending CFTC 

management review that might disclose an ADA violation. In FY2014, CFTC did not 

freeze the pay of certain senior officials pursuant to an FY 2014 government wide 

appropriation provision that has remained in each subsequent appropriation including the

FY 2018 appropriation. Management concurred with the recommendation, and has set a 

target date of January 31, 2020, to address the issue. If an ADA violation is found, CFTC 

must report it to the President and to Congress, while transmitting a copy of the report to 

the Comptroller General. 31 U.S.C. § 1351. 
18

We would also note that, on September 23, 2019, GAO notified the President of the 

Senate and the Speaker of the House of Representatives that CFTC had not reported a previously 

reported ADA violation. 21 GAO previously reported that CFTC office space lease provisions 

could require the agency to pay for uncontrolled liabilities that were not fixed or ascertainable at 

the time of the agreement; such terms are prohibited under the ADA and therefore must be 

reported. CFTC intends to comply. 

GAO and OIG previously reported related ADA issues stemming from CFTC’s reporting 

of its lease obligations.

22 Both noted that, when CFTC entered into multiple-year leases, it failed 

to record an obligation equal to the government’s total liability. CFTC thereafter reported the 

ADA violation as required,

23 and in FY2018 an independent public accounting firm noted that 

CFTC had resolved the prior reporting issues, stating: “The Commission corrected a violation of 

the recording statute in FY 2016 by recording its obligations for all future building lease 

payments in accordance with OMB Circular A-11.”24 We believe the recent GAO report proves 

the complexity of the ADA, as well as the importance of maintaining expertise as necessary to 

recognize ADA issues in advance of GAO, if possible. 

INVESTIGATIVE OPERATIONS

SUMMARY

There were 17 open matters – eight investigations and nine preliminary investigations – 

pending at the start of the reporting period. We received 33 allegations from the OIG email

hotline, telephone hotline, and other sources.

25 The OIG engaged in the following investigative 

activity: 

• Referred 16 allegations to the CFTC Division of Enforcement 

• Referred three allegations to another entity for possible investigation

• Referred four allegations of management issues to be addressed by management 

• Closed two allegations because the employee departed CFTC and the allegations were 

minor 

• Held three allegations open for consideration in FY2020 (pending further study) 

• Converted four allegations to preliminary investigations that remained open at the close 

of the reporting period 

 

21 GAO, B-328450, Commodity Futures Trading Commission—Liabilities Outside of the Government’s Control

(March 6, 2018).

22 GAO, B-327242, Commodity Futures Trading Commission—Recording of Obligations for Multiple-Year Leases 

(February 4, 2016); CFTC OIG, Financial Statement Audit FY 2015 (Independent Auditor’s Report), page 2 

(January 15, 2016). 

23 See, GAO, Antideficiency Act Reports – Fiscal Year 2017, page 11; 24 CFTC OIG, Financial Statement Audit FY 2018 (Independent Auditor’s Report), page 20 (November 15, 2018). 25 The OIG email hotline receives hundreds of messages during any given reporting period; however, because we 

limit spam filters to avoid missing a meritorious allegation, almost all of the email we receive are advertisements or 

other material that do not merit attention. 
19

• Converted one allegation to a preliminary investigation, and closed it during the reporting 

period 

• Closed five of eight investigations that were pending at the start of the reporting period 

(with reports of investigations) 

• Continued work on three investigations pending at the close of the last period that 

remained open at the close of this reporting period 

At the close of the reporting period there remained 14 open matters: three investigations, 

eight preliminary investigations, and three allegations that remain under consideration. 

CLOSED INVESTIGATIONS

We closed five investigations. 

We investigated an alleged purchase of gray market computer equipment by CFTC 

procurement staff. We found CFTC complied with all relevant applicable procurement laws, 

regulations, and procedures; and the resulting purchase of gray market equipment was not the 

fault of CFTC procurement staff. We encouraged CFTC to replace the equipment (following a 

fully compliant procurement process), and the equipment has been replaced. We provided our 

report to the Commission on April 2, 2019. 

We investigated three CFTC employees of alleged impermissible investment holdings 

and transactions, following a referral from OGC ethics staff. Although we found all three 

employees had transacted and held stock in entities registered with the CFTC (or subsidiaries) in 

violation of 7 U.S.C. § 13(c) and CFTC regulations, we recommended no disciplinary action due 

to mitigating factors. All three invested in the prohibited interests prior to registration by the 

entities. Although all three had access to confidential CFTC trade position data, confidential 

information was not used to inform trading. None participated in matters that would give rise to 

conflicts punishable under 18 U.S.C. § 208. All three employees repeatedly self-reported the 

investments on yearly financial disclosure forms. CFTC ethics staff repeatedly certified the 

disclosure forms and in some cases discussed the treatment of the investment on financial 

disclosure forms, following registration, without noting the investment was impermissible. All 

three employees cooperated fully with our investigation. 

For two of the employees, the investments were in a de minimis amount26 and of 

relatively short duration (2012-2015, and 2014-2017). The third employee invested in larger 

amounts over a longer period of time (2010-2018); however, upon learning that the investment 

was impermissible, liquidated in accordance with instruction from CFTC ethics staff. We 

 

26 5 C.F.R. § 2640.202 provides that an employee may participate in any particular matter involving specific parties 

in which a disqualifying financial interest arises from the ownership by the employee, his spouse or minor children 

of securities issued by one or more entities affected by the matter, if the investment is publicly traded and the 

aggregated value (employee, spouse, and minor children) is less than $15,000. This de minimis exception interprets 

a waiver provision for conflicts of interest at 18 U.S.C. § 208(b); CFTC has by regulation (17 CFR § 140.735-2a) 

adopted the 208(b) waiver provision for certain prohibited interests (holdings), but generally not for prohibited 

transactions (17 C.F.R. § 140.735-2). 
20

recommended individualized counseling on appearance issues and conflicts of interests for the 

third employee. 

We noted improvement in the CFTC ethics function regarding employee training and 

monitoring of transactions and holdings, as well as the development of ethics processes to guide 

employees saddled with impermissible investments following registration, all of which took 

place during the period of investment for the three employees (2010-2018), and during the period 

of our investigation (2016-2019). We suggested ethics processes could be further improved by 

requiring supervisors to view employee financial disclosure forms prior to submission to OGC. 

We believe it would permit supervisors to avoid appearance issues and violative conduct when 

assigning work. We provided our consolidated report of the three investigations to the 

Commission on September 12, 2019. 

The fifth investigation involved allegations of transit subsidy fraud. We found minor 

violations which we communicated to the appropriate CFTC official. 

CLOSED PRELIMINARY INVESTIGATIONS

We closed five preliminary investigations without finding evidence sufficient to warrant 

further inquiry. One involved allegations of Hatch Act violations; we concluded the speech was 

protected based on our review of the online speech that was the subject of the allegation. The 

second involved allegations of lax processes for approval of international travel; through 

interviews we learned that the approval process has been altered, and all international travel is 

now coordinated through the Office of International Affairs. We closed a third preliminary 

investigation into time and attendance fraud following departure of the employee. The fourth 

preliminary investigation involved an allegation of intentional or erroneous failure to reimburse a 

CFTC employee under the CFTC parking subsidy program. Following interviews, we concluded 

the employee (now departed) failed properly to request the subsidy prior to departure. The fifth 

preliminary investigation involved an allegation that CFTC Enforcement did not adequately 

address allegations in 2015 of irregularities in connection with NFA actions that took place in 

2014. We interviewed the complainant and others, and reviewed documents, and we concluded 

that CFTC Enforcement adequately considered the 2015 allegation and the 2014 NFA action, 

and that its determination not to act appeared neither improper nor indicative of misconduct on 

the part of CFTC. 

We note that, for all five preliminary investigations, we received no further allegations 

other than the single allegation that motivated each preliminary investigation by OIG. OIG

retains all investigation files and allegation files for a period of 10 years; therefore, if additional 

information or allegations are received in the future, a closed matter can be reopened. 

ONGOING INVESTIGATIVE MATTERS AND REQUIRED DISCLOSURES

The Office of Investigations currently has 14 open matters – three investigations, eight 

preliminary investigations, and three allegations under consideration. All open investigations and 

preliminary investigations are confidential, as are the content of incoming allegations. It is the 
21

policy of CFTC OIG to not disclose details regarding open investigations absent good cause; if 

an ongoing investigation is disclosed to the public it will be listed here.

Table 3: Investigative Statistics for Referrals and Whistleblower Retaliation

April 1, 2019 – September 30, 2019 

A. Completed reports of investigation 5

B. Referrals to prosecuting authorities for criminal prosecution 0 

C. Indictments from prior referrals 0

D. Whistleblower retaliation findings 0

We compiled these statistics from a review of our digital files.

It is our practice to discuss potentially criminal investigations early with an Assistant 

United States Attorney (AUSA) to ensure matters of interest are coordinated from the outset. 

While we engaged with AUSAs during the reporting period, no formal referrals for prosecution 

were made. 

There were no findings of whistleblower retaliation during the reporting period. There 

were no reports of investigation involving a senior Government employee where allegations of 

misconduct were substantiated. 

FOLLOW-UP ON INVESTIGATIVE REPORTS ISSUED IN PRIOR REPORTING PERIODS

In our Semiannual Report for the period ending March 31, 2019, we reported that CFTC 

management had not acted on a report of investigation (ROI) issued in August of 2018. This 

investigation involved a senior Government employee where allegations of misconduct were 

substantiated. During this reporting period CFTC initiated a disciplinary action, and the 

employee left the CFTC. 

INDEPENDENT STUDY

Review of Policies and Procedures for Calculating Overhead 

We engaged an independent organization to conduct a study of CFTC overhead with the 

following objectives: 

• to evaluate CFTC overhead policies, procedures, and practices, and

• to identify best practices and opportunities for maximizing mission resources. 

The study will be conducted in accordance with CIGIE I&E standards. Included in the scope of 

the study will be the CFTC’s overhead calculation methodologies for purposes of budget 

submissions (FY 2015 through FY 2019), a comparison of the calculation methodologies to 

similar federal or private entities (normalized based on budget object class), and best practices 

for managing overhead. 
22

LEGAL AND ECONOMIC REVIEW

There were no Office of Legal and Economic Review projects pending at the start of this 

reporting period. Due to a staff detail and turnover, there were no completed projects and no new 

projects begun. We recently began a recruitment process. We plan not only to replace the 

departing employee, but to add an additional attorney with a background in law and in 

economics, in order to restore OLER legal staff to 2017 levels. 

LEGISLATIVE and REGULATORY PROJECTS

1. Introduction and Summary

As specified in Section 4(a)(2) of the Inspector General Act of 1978,27 the Office of 

Legal and Economic Review within OIG reviews the impact of existing and proposed legislation 

and regulations on CFTC programs and operations and makes recommendations regarding more 

effective or efficient alternatives or protections against fraud and abuse. OIG also reviews

exchange rule proposals circulated to senior staff at the CFTC. 

OIG notifies the responsible Divisions as to any concerns with draft and final documents 

relating to legislation, rules or investigations. Formal comments were not submitted to the 

Commission during this reporting period. 

2. Legislative Activities

OIG reviews legislation impacting programs and operations of the CFTC, and makes 

contact with Congressional staff concerning various Agency and IG issues as appropriate. This 

work is performed by the Office of Legal and Economic Review within OIG. The IG serves on 

the legislation committee for the Council of Inspectors General on Integrity and Efficiency, 

which comments on proposed amendments to the IG Act and other legislation affecting the IG 

community. No formal projects were undertaken during this reporting period. 

 

27 5 USC App. 3 § 4(a)(2).
23

PEER REVIEWS

An important function in each Agency OIG is the peer review process. Government

Auditing Standards (GAS) require that audit organizations conducting audits of Federal agencies 

undergo peer reviews every three years. The IG community has implemented a process to meet 

this requirement and, in accordance with GAS and CIGIE peer review quality control and 

assurance standards, an OIG audit team assesses another OIG’s audit function every 3 years. The 

purpose of the peer review is to determine whether the reviewed audit organization’s internal 

quality control systems are adequate and provide reasonable assurance that applicable auditing

standards, policies and procedures are met. We are required to include in each OIG semiannual 

report: 

• The results of any peer review conducted by another Office of Inspector General during the 

reporting period; or if no peer review was conducted within that reporting period, a statement 

identifying the date of the last peer review conducted by another Office of Inspector General; 

• A list of any outstanding recommendations from any peer review conducted by another 

Office of Inspector General that have not been fully implemented, including a statement 

describing the status of the implementation and why implementation is not complete; and 

• A list of any peer reviews conducted by the Inspector General of another Office of the 

Inspector General during the reporting period, including a list of any outstanding 

recommendations made from any previous peer review (including any peer review conducted 

before the reporting period) that remain outstanding or have not been fully implemented. 

The required information follows: 

Peer Review Report of CFTC OIG Audit Function

The Federal Maritime Commission, Office of the Inspector General, reviewed the system 

of quality control for the CFTC OIG audit organization in effect for the year ending March 31, 

2016. In their opinion, the system of quality control for the audit organization of CFTC in effect 

for the year ending March 31, 2019, has been suitably designed and complied with to provide 

CFTC with reasonable assurance of performing and reporting in conformity with applicable 

professional standards in all material respects. CFTC OIG received the highest external peer 

review rating of “pass.”

Peer Review of the National Endowment for the Arts (NEA) OIG Audit Function

We reviewed the system of quality control for the NEA OIG audit organization in effect 

for the year ending March 31, 2019. In our opinion, the system of quality control for the audit 

organization of NEA in effect for the year ending March 31, 2019, has been suitably designed 

and complied with to provide NEA with reasonable assurance of performing and reporting in 

conformity with applicable professional standards in all material respects. NEA OIG received the 

highest external peer review rating of “pass.”

Similarly, investigative peer reviews are conducted to ensure compliance with the 

requirements of the Quality Standards for Investigations and to determine whether adequate 
24

internal safeguards and management procedures exist. Because it is a Designated Federal Entity

Inspector General, the CFTC OIG is not required to undergo a peer review of its investigative 

function, but does so voluntarily. CFTC OIG passed its last investigative peer review on March 

27, 2013. 

SUMMARY of FINAL REPORTS NOT MADE PUBLIC

 During the reporting period, all audit reports and other audit products were issued in final 

and were made public (some with redaction). Reports of investigation were not made public, but 

are summarized in this report (beginning page 18).

GAO LIAISON

OIG is charged with providing policy direction for, and conducting, supervising, and 

coordinating audits, investigations, and other projects relating to CFTC programs and operations. 

In addition, OIG is required to recommend policies for, and conduct, supervise, and coordinate 

with other federal agencies, state and local governmental agencies, and nongovernmental 

entities, audits, investigations, and evaluations regarding the economy, efficiency, and 

effectiveness of CFTC programs and operations.

GAO also conducts audits of CFTC activities, and OIG plans its audits, inspections, 

evaluations, reviews, and investigations so as not to duplicate GAO's efforts. Moreover, OIG in 

its audit activities identifies the goals of each audit and the methods of reaching the goals so as to 

minimize the requirements placed on CFTC resources. 

STRATEGIC PLAN for the OFFICE of INSPECTOR GENERAL

MISSION, VISION, AND VALUES

Mission

The mission of the OIG is to promote the integrity, efficiency, and effectiveness of the 

critical programs and operations of the CFTC. We accomplish this mission by the following: 

• Communicating timely and useful information that facilitates decision-making and 

measurable gains;

• Conducting independent and objective audits, evaluations, and other reviews of CFTC 

programs and operations; 
25

• Conducting independent and objective investigations of potential criminal, civil, and 

administrative violations that undermine the ability of the CFTC to accomplish its statutory 

mission; 

• Identifying vulnerabilities in and making recommendations to improve CFTC programs and 

operations; 

• Preventing and detecting fraud, waste, and abuse in CFTC programs and operations; and

• Keeping the Commission and Congress currently and fully informed of significant issues and 

developments. 

Vision Statement 

The OIG is an independent, professional organization that contributes to the success of 

the CFTC through audits, investigations, and other activities, and thereby acts as a catalyst for 

positive change in the CFTC’s programs and operations. 

Values Statement

We most value integrity, accuracy, and efficient communication. These values are 

fundamental to the accomplishment of our mission and our daily operations. 

STRATEGIC GOALS FOR THE COMING YEAR

STRATEGIC GOAL 1: EVALUATE THE ECONOMIC IMPACT OF CFTC REGULATORY

ACTIONS THROUGH LEGAL ANALYSIS, WHITE PAPERS, INSPECTIONS AND 

EVALUATIONS, MANAGEMENT REVIEWS, AND OTHER PRODUCTS

Office of Legal and Economic Review: Legislative, Economic, and Regulatory Review

Agenda

OLER plans to continue to identify and explore areas where OIG legal and/or economic 

review might aid the CFTC in improving the economy and efficiency of its programs. OLER 

products may include white papers, management reviews, legal opinion, and other products.

28

These efforts are particularly important since the CFTC is an economic regulatory agency. We 

plan to replace an attorney/economist who departed in August 2019, and to add an attorney; this 

will restore OLER legal staff to 2017 levels. We will continue to seek staff that possesses

exceptional expertise in relevant law and economics. 

 

28 As stated in the Inspector General Act, it is our duty and responsibility to continually review existing and 

proposed legislation and regulations relating to CFTC programs and operations, and to make recommendations 

concerning the impact of such legislation or regulations on the economy and efficiency in the administration of such 

programs. 5 U.S.C. App. 3 § 4 (made applicable to the CFTC at 7 U.S.C. §8G(g)). 
26

STRATEGIC GOAL 2: ADDRESS HIGH IMPACT ISSUES IN CFTC ADMINISTRATIVE 

AND MISSION PERFORMANCE

Office of Audits: Audit and Review Agenda

A. Introduction 

 The primary objectives of OIG’s audit and review agenda are to promote long-term 

efficiency and effectiveness in the administration and operation of the Commission and to 

protect against fraud and abuse. The agenda and priorities for OIG are determined based on the 

following factors: 

• Adequacy of internal control systems as indicated by vulnerability assessments and 

internal control reviews recommended by OMB Circular A-123; 

• Changes in the program conditions or particular vulnerability of the organization, 

program, activity, or function to problems or deficiencies;

• Current and potential dollar magnitude and likely benefits of a review on the efficiency or 

effectiveness of CFTC programs and operations;

• Management priorities and improvements that may be possible; 

• Results of audits of CFTC programs and operations by other federal agencies; and

• Availability of audit resources and the potential opportunity costs to the agency. 

B. Annual Audits. The following required audits are performed on an annual basis. 

Audit of CFTC Financial Statements

 In FY 2002, Congress passed the Accountability of Tax Dollars Act.29 The Act requires 

the CFTC, along with numerous other Federal entities, to have its financial statements audited 

annually. To this end, OIG has engaged a contractor to provide the audit effort required to 

enable the contractor to render an opinion on the Agency’s financial statements for each fiscal 

year in accordance with generally accepted auditing standards, Government Auditing Standards

and OMB Bulletin 19-01. 

 

29 See fn. 4. 
27

Audit of the CFTC Customer Protection Fund 

Section 748 of the Dodd-Frank Act30 requires the Agency to submit to Congress a yearly 

report on the Commission’s whistleblower award program that includes a complete set of audited 

financial statements, including a balance sheet, income statement, and cash flow analysis. To this 

end, OIG has engaged a contractor to perform the audit. 

C. Annual Reviews. OIG will perform the following reviews and evaluations annually. 

Inspector General’s Assessment of the CFTC’s Management Challenges

The Reports Consolidation Act of 200031 requires the Inspector General to summarize the 

most serious management and performance challenges facing the CFTC and to assess the 

Agency’s progress in addressing those challenges.

Review of Compliance with the Federal Managers' Financial Integrity Act, FMFIA32

In support of OMB Circular A-123, the Inspector General will evaluate, provide technical 

assistance and advise the Agency head as to whether the Agency's review and evaluation process 

was conducted in accordance with the circular's requirements.

Evaluation of the CFTC Information Security Management Act, FISMA 

The Federal Information Security Management Act33 requires the Inspector General or 

his designee to perform annual independent evaluations of the information security program and 

practices of the Agency. This compliance may also be performed through an audit. 

D. Other Audits, Reviews, and Audit Projects; Data Analytics

OIG will focus the balance of its resources on the review of CFTC program and 

management operations (giving priority to activities relating to the most serious management 

challenges facing the CFTC), and compliance with Congressional mandates. Toward that end, 

OIG intends to increase the use of data analytics to enable audit operations. Data Analytics 

within the Office of Inspector General supports data services and analyses, and provides the 

competency to deliver short-turnaround projects that produce quick, valuable successes. We 

intend to hire or procure the services of a data science specialist, dependent on funding. A data 

science specialist will serve all OIG mission functions for technical, analytical, and data 

intelligence. Finally, OIG will stand ready to respond to issues and requests as they are received 

from Congress, the Agency, members of the public, or any other source. 

 

30 See fn. 5. 31 P.L. 106-531, 114 Stat. 2537 (2000). 32 P.L. 97-255, 96 Stat. 814 (1982). 33 See fn. 7. 
28

STRATEGIC GOAL 3: ADDRESS EMPLOYEE AND CONTRACTOR MISCONDUCT 

PROMPTLY, THOROUGHLY, AND RELIABLY

As a chain is only as strong as its weakest link, CFTC likewise depends on each and 

every employee and contractor to perform with competence, and to refrain from misconduct. 

CFTC OIG considers and investigates every credible allegation to ensure that CFTC employees 

and contractors uphold the public trust and perform their work with integrity and competence. 

Office of Investigations: Investigative Agenda

The Inspector General Act of 1978, as amended, provides that the Inspector General may 

receive and investigate complaints or information from the Commission's employees concerning 

the possible existence of an activity constituting a violation of law, rules or regulations; or 

mismanagement, gross waste of funds, or abuse of authority; or a substantial and specific danger 

to the public health and safety. 

CFTC is an independent regulator with a mission that does not involve grants, substantial 

contracts, or other benefits to administer, and is therefore less likely than some agencies to 

generate a substantial investigative workload. Historically, OIG has conducted only a reactive 

investigative program, chiefly relying on unsolicited complaints as the source of investigative 

leads. Allegations and complaints are received primarily from CFTC staff and management, 

CFTC ethics officials, the general public, and Congress. We also receive referrals from law 

enforcement officers at other agencies. Should further experience show areas at CFTC on which 

to focus proactively, we will consider establishing an investigative agenda. 

To ensure that employee complaints easily reach OIG, we maintain a 24-hour hotline. 

The hotline phone number is (202) 418-5510. We also maintain an email address, oig@cftc.gov. 

RESOURCES REQUIRED

OIG estimates that approximately four staff years of effort will be devoted over each of 

the next five years to the annual audit, the annual review, and the annual evaluation described 

above. OIG estimates three staff years of effort will be devoted over each of the next five years 

to the investigative, and legal and economic (legislative and regulatory) review functions. OIG 

estimates two staff years for management, administrative, and outreach efforts. Because OIG 

resources can be diverted at any time to an investigation, audit, inspection, evaluation, review, or 

other project that responds to current concerns or allegations, and must be completed in a timely 

fashion in order to be of assistance to the Agency or Congress, it is not possible to forecast with 

complete accuracy how resources will be utilized from year to year. 
29

CONTACTING the OFFICE of the INSPECTOR GENERAL

OIG is located at 1155 21st Street, N.W., Washington, D.C. 20581. Regular business 

hours are between 8:30 AM and 5:00 PM, Monday through Friday, except federal holidays. Our

general telephone number is (202)418-5110. Our facsimile number is (202)418-5522. The 

hotline email is OIG@cftc.gov. The hotline phone number is (202)418-5510. OIG’s web page is 

located at http://www.cftc.gov/About/OfficeoftheInspectorGeneral/index.htm. 
30

Appendix 1 – Reports Issued with Questioned Costs

April 1, 2019 – September 30, 2019 

Dollar Value

Thousands

Number Questioned Unsupported

A. For which no management decision has 

been made by the commencement of the 

reporting period 0 0 0

B. Which were issued during the reporting 

period 0 0 0

Subtotals (A + B) 0 0 0

C. For which a management decision was 

made during the reporting period 0 0 0

( I ) dollar value of 

disallowed costs 0 0 0

( ii ) dollar value of costs not 

disallowed 0 0 0

D. For which no management decision

has been made by the end of the 

reporting period 0 0 0
31

Appendix 2 – Reports Issued with Recommendations That Funds Be

Put To Better Use

April 30, 2019 – September 30, 2019

Dollar Value

Number Thousands

A. For which no management decision has 

been made by the commencement of the 

reporting period 0 0

B. Which were issued during the reporting 

period 0 0

Subtotals (A + B) 0 0

C. For which a management decision was 

made during the reporting period 0 0

( i ) dollar value of 

recommendations that

were agreed to by management

0 0

( ii ) dollar value of 

recommendations that

were not agreed to by 

management 0 0

D. For which no management decision

has been made by the end of the 

reporting period 0 0
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Appendix 3 - Index of IG Act Reporting Requirements

Section 4(a)(2) Review of legislation and regulations..............................................22

Section 5(a)(1) Significant problems, abuses and deficiencies..................................4-7

Section 5(a)(2) Recommendations with respect to significant problems.....................12-16

Section 5(a)(3) Significant recommendations that have not been completed..................17

Section 5(a)(4) Matters referred to prosecutorial authorities....................................21

Section 5(a)(5) Summary of instances where information was refused ........................11

Section 5(a)(6) Completed audit reports..............................................................12

Section 5(a)(7) Significant audit reports............................................................12

Section 5(a)(8) Statistical Table—Questioned Costs.............................................30

Section 5(a)(9) Statistical Table—Funds Recommended for Better Use .....................31

Section 5(a)(10) Audit reports lacking management decision ...................................16

Section 5(a)(10) Audit reports without Commission response after 60 days..................16

Section 5(a)(10) Audit reports for which there are any outstanding unimplemented 

recommendations, including the aggregate potential cost savings .........17

Section 5(a)(11) Significant revised management decisions .....................................16

Section 5(a)(12) Significant management decisions where the IG disagrees..................16

Section 5(a)(13) Information described under § 804(b) of the Federal Financial 

Management Improvement Act of 1996 ....................................N/A 

Section 5(a)(14)-(16) Peer Review information ........................................................23

Section 5(a)(17) Statistical tables for investigations.............................................21

Section 5(a)(18) Description of metrics used to develop the statistical tables for 

investigations......................................................................21

Section 5(a)(19) Report on each investigation involving a senior Government employee 

where allegations of misconduct were substantiated .........................21

Section 5(a)(20) Whistleblower retaliation findings ..............................................21

Section 5(a)(21) Attempts to interfere with OIG independence ................................11 

Section 5(a)(22) Summary of final reports not made public....................................24

Section 6(b)(2) Summary of reports to Chairman where assistance was refused..........11
33