Securities and Exchange Commission:

Effective Development of the EDGAR System Requires Top Management Attention

IMTEC-92-85: Published: Sep 30, 1992. Publicly Released: Oct 20, 1992.

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Pursuant to a congressional request, GAO discussed the status of the Securities and Exchange Commission's (SEC) efforts to develop the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.

GAO found that: (1) SEC efforts to develop the EDGAR system have been marked by significant cost overruns and schedule delays; (2) the developing contractor's description of the system's user requirements was incomplete; (3) SEC has no active top management mechanism for overseeing EDGAR, including controlling the growth of EDGAR system requirements; and (4) SEC is establishing a high-level committee to oversee EDGAR development.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: SEC has implemented all three parts of this recommendation. A formal process for approving system requirements has been developed. An EDGAR Requirements Subcommittee has been meeting biweekly to identify user needs and system requirements. The End-User Advisory Committee has been meeting monthly to evaluate user requests and determine which system requirements to recommend to the EDGAR Executive Steering Committee. The Steering Committee has been meeting regularly to approve or disapprove system change requests and to set milestones and priorities for implementation. In addition, SEC has developed a report to track, monitor, and resolve system problems.

    Recommendation: To help ensure that the Executive Director's actions will be effective in controlling EDGAR development, the Chairman, SEC, should require the Executive Director to: (1) obtain and prioritize users' needs and system requirements; (2) set realistic project schedules and decision milestones; and (3) establish problem tracking and resolution methods.

    Agency Affected: United States Securities and Exchange Commission

  2. Status: Closed - Implemented

    Comments: The Executive Director has created and chairs an EDGAR Executive Steering Committee and has expanded its membership to include key top management and technical officials. He has also created an End User Advisory Committee and an EDGAR Requirements Subcommittee. All of these committees have charters defining responsibilities and authority and have met on a regular basis since September 1992.

    Recommendation: The Chairman, SEC, should consider use of a top management steering committee chaired by the SEC Chairman or the Executive Director, and composed of key top management and technical officials involved in EDGAR. If used, such a committee should have a charter defining responsibility and authority and meet on a regular basis until the phase-in of mandatory filers is complete. The Chairman might consider modifying the change control board to incorporate the characteristics of a top management steering committee.

    Agency Affected: United States Securities and Exchange Commission

  3. Status: Closed - Implemented

    Comments: Chairman Dingell sent a second letter to the SEC Chairman on January 6, 1993, discussing the GAO recommendations in the September 30, 1992, GAO report. The SEC Chairman responded on February 22, 1993, and stated that SEC would resume sending status reports to Congress on the EDGAR system twice a year beginning in March 1993.

    Recommendation: SEC should resume sending biannual reports on the status of EDGAR to the appropriate congressional committees until EDGAR is implemented.

    Agency Affected: United States Securities and Exchange Commission

  4. Status: Closed - Implemented

    Comments: The SEC Chairman's February 22, 1993, response to Chairman Dingell also stated that the Executive Director was authorized to sign future status reports, making them more timely and eliminating review by each Commissioner. The reports will be issued in March and September for the periods July to December and January to June, respectively.

    Recommendation: The Chairman, SEC, should require an internal review of the SEC process for approving the EDGAR status reports to determine how to expedite report submission to Congress.

    Agency Affected: United States Securities and Exchange Commission

 

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