According to an external audit of the SEC Office of Administrative Services’ Office of Acquisitions (OA), there exists “significant risk areas” that could affect operation and lead to improper accounting of federal resources. OA is responsible for the SEC’s contracting and procurement functions.
Shortfalls revealed included:
• Failure to submit accurate information in the Federal Procurement Data System • Failure to keep accurate information and records about contracting and procurement • Failure to engage in contract close-out procedures that are in accordance with Federal Acquisition Regulation and SEC regulations.
• Failure to properly manage and supervise personnel training and contract activities at regional offices
Per the report, shortfalls appear to have occurred due to a number of issues, including insufficient data for properly managing operations, poorly trained employees, and operational procedures that are not consistent.
Also, after checking the SEC’s Office of Financial Management records, the Audit found $13 million in contracts that were not identified in OA’s consolidated spreadsheet. In certain cases, OA had marked certain contracts as closed when OFM still noted them as open.
Following the audit, 10 recommendations were issued, including establishing new internal review processes, revising recordkeeping procedures, modifying operational processes, and coming up with a training plan for contracting obligations and personnel performing procurement duties.
SEC Inspector General H. David Kotz also issued a separate audit which found problems within the SEC’s Office of Freedom of Information. His audit found that the SEC had compliance issues with the Freedom of Information Act, which outlines procedures that have to by abided by when members of the public ask the federal agency for information.
Deficiencies included a lack of written procedures and policies for handling such requests, improper or inadequate procedures for disclosing documents that are not in compliance, failing to properly manage certain information, discriminating against certain entities asking for data, the improper processing of certain request, and failure to comply by rules requiring that an information request receives a response within 20 days.
Related Web Resources:
Watchdog:Flaws In SEC Acquisitions,Freedom Of Information Offices, Dow Jones, September 25, 2009
SEC Office of Administrative Services’ Office of Acquisitions
SEC FOIA/PA Program, The Freedom of Information & Privacy Act Office, SEC.gov
Our stockbroker fraud law firm represents individual and institutional clients throughout the US that have securities fraud claims against broker-dealers. Contact one of our investment fraud lawyers today.