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Management Report to Accompany

the Office of Inspector General

Semiannual Report to Congress

for the period April 1, 2022 through September 30, 2022

November 2022

U . S . S E C U R I T I E S A N D E X C HA N G E C O M M I S S I O N

Management Report to Accompany the

Office of Inspector General Semiannual Report to Congress

April 1, 2022 – September 30, 2022

Section 5(b) of the Inspector General Act of 1978, as amended, (Inspector General Act), requires the

Commission to transmit to the appropriate committees or subcommittees of the U.S. Congress a

Management Report, containing certain statistical tables and any comments deemed appropriate, to

accompany the Office of Inspector General’s (OIG’s) Semiannual Report. This Management Report

presents the required information for the reporting period of April 1, 2022 through September 30,

2022.

Overview of SEC Audit Follow-up Activities

The SEC is committed to timely completion of corrective actions on OIG audit recommendations. At

the commencement of this semiannual reporting period, there were 43 open OIG recommendations.

During the period, management succeeded in obtaining OIG concurrence to close 14

recommendations. Of the 14 closed recommendations, management submitted 11 (or 79 percent)

requests for closure in less than one year. The SEC also received 3 new OIG reports during the

reporting period containing a total of 2 recommendations for improvement to the agency’s

processes and programs. At period-end, final action was pending on 31 recommendations from 11

reports. Four of those recommendations were pending OIG concurrence for closure.

II.

Reports with Monetary Savings

Sections 5(b)(2) and (3) of the Inspector General Act require the SEC Management Report to include

statistical tables summarizing the progress that the agency has made in responding to audit,

inspection, and evaluation reports containing “disallowed costs” and “recommendations that funds

be put to better use.”

Disallowed Costs. The term “disallowed costs” means a questioned or unsupported cost that

management, in a management decision, has sustained or agreed should not be charged to the

agency. For OIG reports that contain questioned or unsupported costs, SEC management will review

the facts and determine whether any or all of such costs should be disallowed. If the SEC agrees that

such costs should be disallowed, the agency will then evaluate whether to attempt to recover such

costs.

During the reporting period, OIG did not issue a report that contained any questioned or

unsupported costs. In addition, there are no outstanding management decisions on questioned or

unsupported costs identified in OIG reports from prior reporting periods.

Table 1. Status of Final Action on Audit, Inspection and Evaluation Reports

with Disallowed Costs

(Reporting Period April 1, 2022 through September 30, 2022)

Number of

Reports

Dollar Value of

Disallowed Costs

A. For which final action had not been taken by the beginning of the reporting period

B. On which management decisions were made during the reporting period

C. For which final action was taken during the reporting period

Audit, Inspection and Evaluation Reports

(i) Dollar value of disallowed costs that were recovered through collection, offsets,

property in lieu of cash, or otherwise

(ii) Dollar value of disallowed costs that were written off by management

D. For which no final action has been taken by the end of the period

Recommendation that Funds be Put to Better Use. The term “recommendation that funds be put to

better use” means a recommendation that funds could be used more efficiently if management took

actions to implement and complete the accompanying recommendation. For OIG reports that

contain recommendations that funds be put to better use, SEC management will review the facts

and determine whether to implement such recommendations.

During the reporting period, OIG did not issue a report that contained a recommendation that funds be

put to better use as reflected in Table 2.

Table 2. Status of Final Action on Audit, Inspection and Evaluation Reports

with Funds Put to Better Use

(Reporting Period April 1, 2022 through September 30, 2022)

Number of

Reports

Dollar Value of

Funds Put to

Better Use

A. For which final action had not been taken by the beginning of the reporting period

B. On which management decisions were made during the reporting period

C. For which final action was taken during the reporting period

Audit, Inspection and Evaluation Reports

(i) Dollar value of recommendations that were actually completed

(ii) Dollar value of recommendations that management has subsequently concluded

should not or could not be implemented or completed

D. For which no final action has been taken by the end of the reporting period

III. Reports on Instances of Whistleblower Retaliation

Section 5(b)(4) of the Inspector General Act requires the SEC Management Report to include a

statement with respect to any settlement agreement entered into by the agency with an official found

by the Inspector General to have engaged in retaliation against a whistleblower. The SEC has no such

settlement agreements to report.

IV. Reports More than One Year Old with Pending Corrective Action

Section 5(b)(5) of the Inspector General Act requires the SEC Management Report to include a

statement with respect to audit reports on which management decisions have been made but final

action has not been taken, other than audit reports on which a management decision was made

within the preceding year. Table 3 presents the required information.

Table 3. Audits and Other Reports More than One Year Old

(Reporting Period April 1, 2022 through September 30, 2022)

Report No./Title

Report

Date

Report 546: Audit of SEC's 3/30/2018

Compliance with the

Federal Information

Security Modernization Act

for Fiscal Year 2017

Funds Put

to Better

Use

Disallowed

Costs

Status of Final Action

Eighteen of the report’s 20 recommendations have

been closed with OIG’s concurrence. Corrective

actions on one of the remaining recommendation

were completed in October 2022 and submitted for

OIG review in a formal request for recommendation

closure. Completion of corrective actions on the

remaining recommendation are anticipated in Fall

2023.

Eight of the report’s nine recommendations have

been closed with OIG’s concurrence. The SEC’s Office

of Human Resources continues to work on the

remaining recommendation, with anticipated

completion by the end of calendar year 2022.

Report 549: The SEC Made 9/11/2018

Progress But Work Remains

To Address Human Capital

Management Challenges

and Align With the Human

Capital Framework

12/17/2018

Report 552: Fiscal Year

2018 Independent

Evaluation of SEC’s

Implementation of the

Federal Information

Security Modernization Act

of 2014

2/26/2020

Report 559: The SEC's

Office of Broker-Dealer

Finances Provides Effective

Oversight, But

Opportunities To Improve

Efficiency Exist

Report 562: Opportunities 9/30/2020

Exist To Improve the SEC's

Management of Mobile

Devices and Services

Ten of the report’s 11 recommendations have been

closed with OIG’s concurrence. Corrective actions on

the remaining recommendation were completed in

October 2022 and submitted for OIG review in a

formal request for recommendation closure.

Two of the three recommendations have been closed

with OIG concurrence. The SEC’s Division of Trading

and Markets anticipates completion of corrective

actions by the end of calendar year 2022.

12/21/2020

Report 563: Fiscal Year

2020 Independent

Evaluation of SEC's

Implementation of the

Federal Information

Security Modernization Act

of 2014

9/29/2021

Report 568: Additional

Steps Are Needed For the

SEC To Implement a WellDefined Enterprise

Architecture

Three of the seven recommendations have been

closed with OIG concurrence. Corrective actions

addressing the remaining four recommendations are

in progress, and anticipated completion in Spring

2023.

Five of the seven recommendations have been

closed with OIG concurrence. OIT anticipates

completion of one remaining recommendation by

the end of calendar year 2022 and completion of the

other recommendation by the Spring of 2023.

As of September 30, 2022, three of the report’s

seven recommendations were closed with OIG’s

concurrence. Three additional recommendations

were closed in October 2022. Completion of

corrective actions on the remaining recommendation

is anticipated in the third quarter of fiscal year 2023.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.