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U.S. COMMODITY FUTURES TRADING COMMISSION

OFFICE OF INSPECTOR GENERAL

Three Lafayette Centre

1155 21st Street, NW, Washington, DC 20581

TO: Heath P. Tarbert, Chairman

Brian D. Quintenz, Commissioner

Rostin Behnam, Commissioner

Dawn Stump, Commissioner

Dan M. Berkovitz, Commissioner 

FROM: A. Roy Lavik, Inspector General

DATE: August 19, 2019 

SUBJECT: Inspector General’s Assessment of the Most Serious 

Management and Performance Challenges Facing the 

Commodity Futures Trading Commission

The Reports Consolidation Act of 2000 (RCA) requires the Inspector General to 

summarize the “most serious management and performance challenges facing

the agency” and briefly assess the Agency’s progress in addressing those 

challenges.1 The Government Performance and Results Modernization Act of 

2010 defines major management challenges as “programs or management 

functions, within or across agencies, that have greater vulnerability to waste, 

fraud, abuse, and mismanagement (such as issues identified by the Government 

Accountability Office as high risk or issues identified by an Inspector General) 

where failure to perform well could seriously affect the ability of an agency to 

achieve its mission or goals.”2

To complete our assessment we relied on data contained in the CFTC financial 

statement audit and Agency Financial Report, representations by agency 

management, and our knowledge of industry trends and CFTC operations. This 

memorandum fulfills our duties under the RCA.

 1 P.L. 106-531, § 3, 114 STAT. 2537 (Nov. 22, 2000), codified at 31 USC § 3516(a). 

2 P.L. 111-352, § 3, 124 STAT. 3870 (Jan. 4, 2011), codified at 31 U.S.C. § 1115(h)(5). 
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CFTC’s Progress on Last Year’s Management and Performance 

Challenges

For FY2018, we identified management and performance challenges in the 

areas of cybersecurity, information technology (IT) modernization, stresstesting, and management’s ability to enhance its business operations to lower 

cost. We acknowledge 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. In this 

regard, we recognize that CFTC has taken steps to sharpen market intelligence 

and risk surveillance through enhanced quantitative data analytical 

capabilities. Particularly noteworthy are CFTC’s recent efforts to ingest order 

book data,3 and its aspiration to use machine learning to monitor the market.4

Fiscal Year 2019 Management and Performance Challenges

We reiterate our FY 2018 challenges for FY2019 and add data governance as 

an emerging challenge for FY 2019.5 During this year, we issued Review of 

CFTC’s Data Governance Program: Integrated Surveillance System (June 7, 

2019), which reported that CFTC’s Data Governance program could be 

improved, specifically with regard to confidential trade information. CFTC is 

already taking positive steps regarding data governance; we acknowledge the 

Commission’s recently proposed Data Protection Initiative with approval. In 

addition, while we recognize that CFTC is migrating parts of its network to 

cloud-based solutions, it has yet to formalize a mature enterprise architecture

project plan for capital investment planning and execution for IT 

transformation (as previously recommended). My office will continue to 

undertake work that addresses these challenges. 

 

3 See, CFTC Market Intelligence Branch, Division of Market Oversight staff report, Updated 

Report Agricultural Block Trade Analysis, October 2018. 

4 See, Keynote Address of Chairman Giancarlo, Quantitative Regulation: Effective Market 

Regulation in a Digital Era, November 7, 2018; Remarks of Daniel Gorfine, Director of 

LABCFTC, LABCFTC: Developments and Discoveries, June 11, 2019.

5 With regard to IT modernization, President Trump has called for agencies, including CFTC, to 

modernize legacy technology infrastructures to reduce costs, mitigate cybersecurity risks, and 

deliver improved services to the American people. (May 15, 2018).
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Cc: Anthony Thompson, Executive Director

Jaime Klima, Chief of Staff 

Kevin S. Webb, Chief of Staff

John Dunfee, Chief of Staff

Daniel J. Bucsa, Chief of Staff

Erik F. Remmler, Chief of Staff