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    Subject Term: "Financial instruments"

    15 publications with a total of 63 open recommendations including 1 priority recommendation
    Director: Carol C. Harris
    Phone: (202) 512-4456

    25 open recommendations
    Recommendation: The Administrator of General Services should disseminate the 16 agency-focused lessons learned that have not been fully incorporated in GSA guidance to the agencies involved in the current transition. (Recommendation 1)

    Agency: General Services Administration
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Agriculture should ensure that the Department's Chief Information Officer verifies the completeness of its inventory of current telecommunications assets and services and establishes a process for ongoing maintenance of the inventory. (Recommendation 2)

    Agency: Department of Agriculture
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Agriculture should ensure that the Department's Chief Information Officer completes efforts to identify future telecommunications needs and areas for optimization, identifies the costs and benefits of new technology, and aligns USDA's approach with its long-term plans. (Recommendation 3)

    Agency: Department of Agriculture
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Agriculture should ensure that the Department's Chief Information Officer identifies transition-related roles and responsibilities related to the management of assets, human capital, and information security, and legal expertise; develops a transition communications plan; and uses configuration and change-management processes in USDA's transition. (Recommendation 4)

    Agency: Department of Agriculture
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Agriculture should ensure that the Department's Chief Information Officer documents the costs and benefits of transition investments, identifies staff resources needed for the remainder of the transition, and analyzes training needs for staff assisting with the transition. (Recommendation 5)

    Agency: Department of Agriculture
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Agriculture should ensure that the Department's Chief Information Officer demonstrates that the Department's transition goals and measures align with its mission, identifies transition risks related to critical systems and continuity of operations, and identifies mission-critical priorities in USDA's transition timeline. (Recommendation 6)

    Agency: Department of Agriculture
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Labor should ensure that the Department's Chief Information Officer verifies the completeness of DOL's inventory of current telecommunications assets and services and establishes a process for ongoing maintenance of the inventory. (Recommendation 7)

    Agency: Department of Labor
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Labor should ensure that the Department's Chief Information Officer identifies the agency's future telecommunications needs, completes a strategic analysis of the agency's telecommunications requirements, and incorporates the requirements into transition planning. (Recommendation 8)

    Agency: Department of Labor
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Labor should ensure that the Department's Chief Information Officer identifies transition-related roles and responsibilities related to the management of assets, human capital, and information security, and legal expertise; develops a transition communications plan; and uses project, configuration, and change-management processes in DOL's transition (Recommendation 9)

    Agency: Department of Labor
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Labor should ensure that the Department's Chief Information Officer identifies the resources needed for the full transition, develops justifications for the costs of changes to hardware and software, identifies staff resources needed for the remainder of the transition, and analyzes training needs for staff assisting with the transition. (Recommendation 10)

    Agency: Department of Labor
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Labor should ensure that the Department's Chief Information Officer identifies transition risks related to information security, critical systems, and continuity of operations, and identifies mission-critical priorities in DOL's transition timeline. (Recommendation 11)

    Agency: Department of Labor
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Chairman of the Securities and Exchange Commission should ensure that the Commission's Chief Information Officer identifies the agency's future telecommunications needs, areas for optimization, and the costs and benefits of new technology; completes a strategic analysis of the commission's telecommunications requirements; and incorporates the identified requirements into transition planning. (Recommendation 12)

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Chairman of the Securities and Exchange Commission should ensure that the Commission's Chief Information Officer identifies roles and responsibilities related to the management of assets and human capital and legal expertise for the transition; includes key local and regional officials in SEC's transition communications plan; and completes efforts to use configuration and change management processes in the transition. (Recommendation 13)

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Chairman of the Securities and Exchange Commission should ensure that the Commission's Chief Information Officer identifies the resources needed for the full transition, justifies requests for transition resources, identifies staff resources needed for the full transition, and completes efforts to analyze training needs for staff assisting with the transition. (Recommendation 14)

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Chairman of the Securities and Exchange Commission should ensure that the Commission's Chief Information Officer completes efforts to demonstrate that the commission's transition goals and measures align with its mission, identifies transition risks related to critical systems and continuity of operations, and identifies mission-critical priorities in SEC's transition timeline. (Recommendation 15)

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Commissioner of the Social Security Administration should ensure that the Administration's Chief Information Officer verifies the completeness of SSA's inventory of current telecommunications assets and services and establishes a process for ongoing maintenance of the inventory regarding services other than local and long-distance telecommunications. (Recommendation 16)

    Agency: Social Security Administration
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Commissioner of the Social Security Administration should ensure that the Administration's Chief Information Officer completes identification of the agency's future telecommunications needs and aligns its approach with the agency's enterprise architecture. (Recommendation 17)

    Agency: Social Security Administration
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Commissioner of the Social Security Administration should ensure that the Administration's Chief Information Officer uses configuration and change-management processes in its transition. (Recommendation 18)

    Agency: Social Security Administration
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Commissioner of the Social Security Administration should ensure that the Administration's Chief Information Officer identifies the resources needed for the full transition, documents the costs and benefits of transition investments, identifies staff resources needed for the remainder of the transition, and analyzes training needs for all staff working on the transition. (Recommendation 19)

    Agency: Social Security Administration
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Commissioner of the Social Security Administration should ensure that the Administration's Chief Information Officer completes efforts to identify measures of success for the transition, identifies transition risks related to critical systems and continuity of operations, and identifies mission-critical priorities in SSA's transition timeline. (Recommendation 20)

    Agency: Social Security Administration
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Transportation should ensure that the Department's Chief Information Officer verifies the completeness of DOT's inventory of current telecommunications assets and services and establishes a process for ongoing maintenance of the inventory. (Recommendation 21)

    Agency: Department of Transportation
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Transportation should ensure that the Department's Chief Information Officer identifies the agency's future telecommunications needs, areas for optimization, and costs and benefits of new technology; and completes efforts to align DOT's approach with its long-term plans and enterprise architecture. (Recommendation 22)

    Agency: Department of Transportation
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Transportation should ensure that the Department's Chief Information Officer identifies roles and responsibilities related to the management of assets and human capital and legal expertise for the transition; develops a transition communications plan; and fully uses configuration and change-management processes in DOT's transition. (Recommendation 23)

    Agency: Department of Transportation
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Transportation should ensure that the Department's Chief Information Officer fully identifies the resources needed for the full transition, justifies requests for transition resources, identifies staff resources needed for the full transition, and fully analyzes training needs for staff assisting with the transition. (Recommendation 24)

    Agency: Department of Transportation
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Secretary of Transportation should ensure that the Department's Chief Information Officer fully demonstrates that DOT's transition goals and measures align with its mission; completely identifies transition risks related to information security, critical systems, and continuity of operations; and fully identifies mission-critical priorities in the transition timeline. (Recommendation 25)

    Agency: Department of Transportation
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Gregory C. Wilshusen
    Phone: (202) 512-6244

    2 open recommendations
    Recommendation: To effectively manage its information security program, the Chairman of the SEC should maintain up-to-date network diagrams and asset inventories in the system security plans for General Support System and a key financial system to accurately and completely reflect the current operating environment.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To effectively manage its information security program, the Chairman of the SEC should perform continuous monitoring using automated configuration and vulnerability scanning on the operating systems, databases, and network devices.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Michael E. Clements
    Phone: (202) 512-8678

    2 open recommendations
    Recommendation: To help SEC address identified personnel management challenges, the Chair should enhance or expand the responsibilities and authority of the COO or other official or office so they can help ensure that improvements to communication and collaboration across SEC are made. For instance, if the duties of the COO were expanded, the COO could establish liaisons in each mission-critical office and division for SEC employees to contact or develop procedures to help facilitate communication and collaboration among the mission-critical office and divisions.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help SEC address identified personnel management challenges, the Chair should develop and implement training for hiring specialists that is informed by a skills gap analysis.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Lawrance L. Evans, Jr.
    Phone: (202) 512-8678

    1 open recommendations
    Recommendation: To reduce uncertainty and provide FHFA sufficient direction for carrying out its responsibilities as conservator of the enterprises, Congress should consider legislation that establishes objectives for the future federal role in housing finance, including the structure of the enterprises, and a transition plan to a reformed housing finance system that enables the enterprises to exit conservatorship.

    Agency: Congress
    Status: Open

    Comments: As of April 13, 2017, Congress has not taken action on this matter. In its 2017 Oversight Plan, the House Financial Services Committee stated that "the Committee will examine proposals affecting the operations of Fannie Mae and Freddie Mac, including consolidating their business operations, winding down their legacy business commitments, and repealing their statutory charters."
    Director: Kimberly M. Gianopoulos
    Phone: (202) 512-8612

    1 open recommendations
    including 1 priority recommendation
    Recommendation: To improve the effectiveness of the SEC's conflict minerals disclosure rule, the Secretary of Commerce should submit to the appropriate congressional committees a plan outlining steps that Commerce will take, with associated time frames, to (1) assess the accuracy of the independent private sector audits (IPSA) and other due diligence processes described under section 13(p) of the Securities Exchange Act of 1934; (2) develop recommendations for the process used to carry out such audits, including ways to improve the accuracy of the audits and establish standards of best practices for such audits; and (3) acquire the necessary knowledge, skills, and abilities to carry out these responsibilities.

    Agency: Department of Commerce
    Status: Open
    Priority recommendation

    Comments: Commerce agreed with this recommendation. In response to this recommendation, Commerce indicated in an October 25, 2016 letter to GAO that it has developed a three-step approach which parallels the three distinct elements of the recommendation. To fully implement this recommendation, Commerce needs to submit the said three-step plan, including associated timeframes for their completion, to the appropriate congressional committees. Section 1502 of the Dodd-Frank Act defines "appropriate committees" to mean the Committee on Appropriations, the Committee on Foreign Affairs, the Committee on Ways and Means, and the Committee on Financial Services of the House of Representatives; and the Committee on Appropriations, the Committee on Foreign Relations, the Committee on Finance, and the Committee on Banking, Housing, and Urban Affairs of the Senate.
    Director: Lawrance Evans, Jr.
    Phone: (202) 512-8678

    6 open recommendations
    Recommendation: Congress should consider whether additional changes to the financial regulatory structure are needed to reduce or better manage fragmentation and overlap in the oversight of financial institutions and activities to improve (1) the efficiency and effectiveness of oversight; (2) the consistency of consumer and investor protections; and (3) the consistency of financial oversight for similar institutions, products, risks, and services. For example, Congress could consider consolidating the number of federal agencies involved in overseeing the safety and soundness of depository institutions, combining the entities involved in overseeing the securities and derivatives markets, transferring the remaining prudential regulators' consumer protection authorities over large depository institutions to the Consumer Financial Protection Bureau, and the optimal role for the federal government in insurance regulation, among other considerations.

    Agency: Congress
    Status: Open

    Comments: One bill has been introduced in the 115th Congress that would change the financial regulatory structure to address fragmented and overlapping regulatory authorities among agencies, as GAO suggested in February 2016. H.R. 594 was introduced on January 20, 2017, and calls for the functions of the Commodity Futures Trading Commission and the Securities and Exchange Commission to be combined in a single independent regulatory commission. Such an action could help to address fragmentation and overlap between the two agencies, and reduce opportunities for inefficiencies in the regulatory process and inconsistencies in how regulators conduct oversight activities over similar types of institutions, products, and risks.
    Recommendation: Congress should consider whether legislative changes are necessary to align FSOC's authorities with its mission to respond to systemic risks. Congress could do so by making changes to FSOC's mission, its authorities, or both, or to the missions and authorities of one or more of the FSOC member agencies to support a stronger link between the responsibility and capacity to respond to systemic risks. In doing so, Congress could solicit information from FSOC on the effective scope of its collective designation authorities, including any gaps.

    Agency: Congress
    Status: Open

    Comments: No legislative action identified. As of March 1, 2017, no legislation had been introduced that would align FSOC's authorities with its mission to respond to systemic risks, as GAO suggested in February 2016. Without such legislative changes, FSOC may lack the tools it needs to comprehensively address systemic risks that may emerge, and a gap will continue to exist in the post Dodd-Frank Wall Street Reform and Consumer Protection Act mechanisms for the mitigation of systemic risks.
    Recommendation: To help regulators address regulatory fragmentation and improve FSOC's ability to identify emerging systemic risks, as OFR develops and refines its financial stability monitoring tools, it should work with FSOC to determine ways in which to fully and regularly incorporate current and future monitors and assessments into Systemic Risk Committee deliberations, including, where relevant, those that present disaggregated or otherwise confidential supervisory information.

    Agency: Department of the Treasury: Financial Stability Oversight Council: Office of Financial Research
    Status: Open

    Comments: At the FSOC Systemic Risk Committee meeting held in December 2016, Treasury indicated that Office of Financial Research staff presented on the agency's Financial Stability Report. Officials indicated that they provided an assessment on potential financial stability risks, including macroeconomic, market, credit, funding and liquidity, and contagion risks. Systemic Risk Committee meeting attendees were able to compare and contrast these with the results from the Federal Reserve's systemic risk monitoring activities, which were also presented at the meeting. Office of Financial Research officials stated that there was general consensus at the meeting that these discussions were useful and that they should continue. GAO does not believe that this action is consistent with the intent of if February 2016 recommendation to fully and regularly incorporate current and future monitors and assessments into FSOC's Systemic Risk Committee deliberations. While GAO encourages sharing this type of information, the Office of Financial Research's Financial Stability Report is a publicly-available report. The intent of GAO's recommendation was to encourage the agency to fully incorporate all of its monitors into Systemic Risk Committee discussions, including its Financial Stability Monitor--its benchmark tool for assessing risks across the financial system. In addition, in its February 2016 report, GAO encouraged the agency to seek ways in which monitors that present disaggregated or otherwise confidential supervisory information can be incorporated in committee discussions. Without sharing such monitors and information, the Systemic Risk Committee may identify and advance the analysis of only a subset of systemic risks in a timely manner and may identify others too late or miss others altogether. The Financial CHOICE Act of 2016 was introduced in the 114th Congress. The act called for the Office of Financial Research to be eliminated. It was not passed before the end of the 114th Congress.
    Recommendation: To help regulators address regulatory fragmentation and improve FSOC's ability to identify emerging systemic risks, the Federal Reserve should work with FSOC to regularly incorporate the comprehensive results of its systemic risk monitoring activities into Systemic Risk Committee deliberations.

    Agency: Federal Reserve System
    Status: Open

    Comments: As of March 1, 2017, Federal Reserve officials indicated that they provided a presentation to FSOC's Systemic Risk Committee in December 2016, which included comprehensive results from its systemic risk monitoring activities. This action appears to be consistent with GAO's February 2016 recommendation, but the documentation provided by the Federal Reserve did not provide sufficient evidence that the agency has regularly incorporated these results into Systemic Risk Committee meetings. GAO will continue to monitor the Federal Reserve's participation in Systemic Risk Committee meetings to ensure that the agency continues to provide both regular and comprehensive results to the committee. Without better access to systemic risk monitoring tools and other outputs, the Systemic Risk Committee may identify and advance the analysis of only a subset of systemic risks in a timely manner and may identify others too late or miss others altogether.
    Recommendation: To more efficiently and effectively monitor the financial system for systemic risks and reduce the risk of unnecessary duplication, OFR and the Federal Reserve should jointly articulate individual and common goals for their systemic risk monitoring activities, including a plan to monitor progress toward articulated goals, and formalize regular strategic and technical discussions around their activities and outputs to support those goals.

    Agency: Department of the Treasury: Financial Stability Oversight Council: Office of Financial Research
    Status: Open

    Comments: As of March 1, 2017, the Federal Reserve and the Office of Financial Research had coordinated to organize semi-annual meetings to jointly discuss views from their respective monitoring of the financial system for risks; but these meetings had not yet taken place. The first of these meetings is to be held in May 2017 following the agencies' respective systemic risk exercises. Initiating these discussions addresses part of GAO's February 2016 recommendation. GAO plans to review documentation from these meetings in 2017 to further assess if the agencies will use these meetings to jointly articulate individual and common goals, including developing a plan to monitor progress toward the goals. Fully addressing GAO's recommendation could help to ensure comprehensiveness in systemic risk surveillance and reduced risk of duplication. On September 9, 2016, the Financial CHOICE Act of 2016 was introduced. It called for the Office of Financial Research to be eliminated. The legislation did not pass before the 114th Congress ended.
    Recommendation: To more efficiently and effectively monitor the financial system for systemic risks and reduce the risk of unnecessary duplication, OFR and the Federal Reserve should jointly articulate individual and common goals for their systemic risk monitoring activities, including a plan to monitor progress toward articulated goals, and formalize regular strategic and technical discussions around their activities and outputs to support those goals.

    Agency: Federal Reserve System
    Status: Open

    Comments: As of March 1, 2017, the Federal Reserve and the Office of Financial Research had coordinated to organize semi-annual meetings to jointly discuss views from their respective monitoring of the financial system for risks; but these meetings had not yet taken place. The first of these meetings is to be held in May 2017 following the agencies' respective systemic risk exercises. Initiating these discussions addresses part of GAO's February 2016 recommendation. GAO plans to review documentation from these meetings in 2017 to further assess if the agencies will use these meetings to jointly articulate individual and common goals, including developing a plan to monitor progress toward the goals. Fully addressing GAO's recommendation could help to ensure comprehensiveness in systemic risk surveillance and reduced risk of duplication. On September 9, 2016, the Financial CHOICE Act of 2016 was introduced. It called for the Office of Financial Research to be eliminated. The legislation did not pass before the 114th Congress ended.
    Director: Irving, Susan J
    Phone: (202) 512-6806

    2 open recommendations
    Recommendation: To avoid serious disruptions to the Treasury market and to help inform the fiscal policy debate in a timely way, Congress should consider alternative approaches that better link decisions about the debt limit with decisions about spending and revenue at the time those decisions are made such as those described in this report.

    Agency: Congress
    Status: Open

    Comments: The Bipartisan Budget Act of 2015 temporarily suspended the debt limit until March 15, 2017. This allowed the Treasury to continue to borrow to meet the funding needs of the federal government but did not explicitly link decisions about the debt limit to legislation that is expected to increase borrowing needs or debate over specific tax or spending proposal and their effect on debt. We will continue to monitor legislation enacting future debt limit increases to see if it addresses our matter for congressional consideration. As of August 2017 no relevant legislation has been enacted.
    Recommendation: However, if Congress chooses to continue to temporarily suspend the debt limit, it should consider providing Treasury with more flexibility in the level of Treasury's operating cash so that it is based not on the level that it was just prior to a suspension period, but on the federal government's immediate borrowing needs. This would minimize some of the disruptions to Treasury's normal cash management and debt issuance.

    Agency: Congress
    Status: Open

    Comments: The Bipartisan Budget Act of 2015 temporarily suspended the debt limit until March 15, 2017, but did not provide Treasury with more flexibility in the level of Treasury's operating cash at the end of the suspension period. As result, absent future action, Treasury is expected to reduced its cash balance to approximately the level it was at on the date the suspension was enacted as it has following previous debt limit suspensions, regardless of cyclical or other cash management needs. We will continue to monitor legislation enacting future debt limit increases to see if it addresses our matter for congressional consideration. As of August 2017, no relevant legislation has been enacted.
    Director: Mathew J. Scirè
    Phone: (202) 512-8678

    8 open recommendations
    Recommendation: To enhance the effectiveness of its preparations for conducting a retrospective review of its QM regulations, CFPB should complete its plan. The plan should identify what outcomes CFPB will examine to measure the effects of the regulations and the specific metrics, baselines, and analytical methods to be used. Furthermore, to account for and help mitigate the limitations of existing data and the uncertain availability of enhanced datasets, CFPB should include in its plan alternate metrics, baselines, and analytical methods that could be used if data were to remain unavailable.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: In January 2017, CFPB staff noted that the Bureau produced a high-level research plan in November 2016 and organized a research team for the ATR-QM Assessment. CFPB staff stated that they are working to identify the outcomes CFPB will examine to measure the effects of the regulations, including the specific metrics, baselines, and analytical methods to be used. CFPB staff noted that they have also begun analyzing the data the Bureau has on-hand, planning for the collection of additional data, and drafting a Federal Register notice request for information regarding the plan.
    Recommendation: To enhance the effectiveness of its preparations for conducting a retrospective review of its QM regulations, HUD should develop a plan that identifies the metrics, baselines, and analytical methods to be used. Furthermore, to account for and help mitigate the limitations of existing data and the uncertain availability of enhanced datasets, HUD should include in its plan alternate metrics, baselines, and analytical methods that could be used data were to remain unavailable.

    Agency: Department of Housing and Urban Development
    Status: Open

    Comments: In February 2017, HUD noted that it does not currently collect data on the annual percentage rate (APR) for each loan that would allow for a perfect comparison to the average prime offer rate. According to HUD, its Office of Housing has on its long-term list of systems priorities to collect specific information from the Uniform Closing Data that could be used to conduct such a comparison. However, HUD stated that it has not received adequate funding to meet these systems enhancements. According to HUD, it is considering the feasibility and potential utility of alternative data sources or the use of a proxy in an appropriate methodology. For instance, whether it may be possible to approximate the APR based upon the note rate and information on closing costs that is collected in the current data system, or alternatively, whether the APR could be obtained or approximated through matching Home Mortgage Disclosure Act data for FHA loans.
    Recommendation: To enhance the effectiveness of their preparations for conducting a retrospective review of the QRM regulations, the agencies responsible for the QRM regulations--Federal Deposit Insurance Corporation, Federal Housing Finance Agency, Board of Governors of the Federal Reserve System, HUD, Office of the Comptroller of the Currency, and Securities and Exchange Commission--should develop a plan that identifies the metrics, baselines, and analytical methods to be used and specify the roles and responsibilities of each agency in the review process. Furthermore, to account for and help mitigate limitations of existing data and the uncertain availability of enhanced datasets, the six agencies should include in their plan alternate metrics, baselines, and analytical methods that could be used if data were to remain unavailable.

    Agency: Federal Housing Finance Agency
    Status: Open

    Comments: In January 2017, FHFA informed GAO that SEC had shared its draft plan with the other participating agencies and there was an interagency call to discuss the plan on December 20, 2016. FHFA confirmed that there was an interagency call on that date to discuss the QRM review. FHFA noted that it was developing its own plan, and anticipated that the plan would be completed by June 30, 2017. Depending on changes in the structure of the mortgage market, FHFA stated that it will further update the plan as the agency approaches the start of the official QRM definition review in 2019. As with the 2014 final rule, FHFA staff expected that FHFA's participation will focus on the analysis of Fannie Mae and Freddie Mac residential mortgage data.
    Recommendation: To enhance the effectiveness of their preparations for conducting a retrospective review of the QRM regulations, the agencies responsible for the QRM regulations--Federal Deposit Insurance Corporation, Federal Housing Finance Agency, Board of Governors of the Federal Reserve System, HUD, Office of the Comptroller of the Currency, and Securities and Exchange Commission--should develop a plan that identifies the metrics, baselines, and analytical methods to be used and specify the roles and responsibilities of each agency in the review process. Furthermore, to account for and help mitigate limitations of existing data and the uncertain availability of enhanced datasets, the six agencies should include in their plan alternate metrics, baselines, and analytical methods that could be used if data were to remain unavailable.

    Agency: Department of Housing and Urban Development
    Status: Open

    Comments: In February 2017, HUD stated that it has engaged in preliminary discussions both internally and with the other five partner agencies to the 2014 QRM Joint Regulation: OCC, the Federal Reserve Board, FDIC, FHFA and SEC. Based on GAO's recommendations, HUD stated that it has also conducted initial reviews of existing and potential methodologies and data sources that may inform the review. HUD also noted that as a fundamental matter, FHA insured mortgages are only securitized through the Government National Mortgage Association (GNMA). Both FHA and GNMA have extensive underlying requirements regarding both mortgage terms and conditions as well as requirements related to the securitization of those mortgages. According to HUD, its retrospective review of the QRM rule, in terms of any impact on FHA single family insurance programs, will take into account the existing underlying FHA and GNMA statutes and regulations that already govern those programs.
    Recommendation: To enhance the effectiveness of their preparations for conducting a retrospective review of the QRM regulations, the agencies responsible for the QRM regulations--Federal Deposit Insurance Corporation, Federal Housing Finance Agency, Board of Governors of the Federal Reserve System, HUD, Office of the Comptroller of the Currency, and Securities and Exchange Commission--should develop a plan that identifies the metrics, baselines, and analytical methods to be used and specify the roles and responsibilities of each agency in the review process. Furthermore, to account for and help mitigate limitations of existing data and the uncertain availability of enhanced datasets, the six agencies should include in their plan alternate metrics, baselines, and analytical methods that could be used if data were to remain unavailable.

    Agency: Department of the Treasury: Office of the Comptroller of the Currency
    Status: Open

    Comments: In its comment letter on the draft report, OCC indicated that it planned to take GAO's recommendation into account as it monitored mortgage market conditions and prepared for upcoming QRM reviews. OCC stated that it planned to periodically meet with the other agencies to discuss the implications of any trends it observes and coordinate on studies to better focus and support its evaluation of the review factors.
    Recommendation: To enhance the effectiveness of their preparations for conducting a retrospective review of the QRM regulations, the agencies responsible for the QRM regulations--Federal Deposit Insurance Corporation, Federal Housing Finance Agency, Board of Governors of the Federal Reserve System, HUD, Office of the Comptroller of the Currency, and Securities and Exchange Commission--should develop a plan that identifies the metrics, baselines, and analytical methods to be used and specify the roles and responsibilities of each agency in the review process. Furthermore, to account for and help mitigate limitations of existing data and the uncertain availability of enhanced datasets, the six agencies should include in their plan alternate metrics, baselines, and analytical methods that could be used if data were to remain unavailable.

    Agency: Federal Deposit Insurance Corporation
    Status: Open

    Comments: In February 2017, FDIC indicated that it developed a plan that outlines the baseline, data, metrics, and analytical methods that it plans to utilize in the QRM definition review. According to FDIC, the plan also outlines FDIC's commitment to working collaboratively with the other agencies. As a baseline, FDIC plans to use the data, metrics, and analytical methods used in the final rulemaking process as outlined in the Supplementary Information to the credit risk retention (CRR) regulation as well as data and analytical methods that the FDIC currently uses to monitor the mortgage and securitization markets and economy on an ongoing basis. FDIC stated that it continues to plan to coordinate with the other agencies on the QRM definition review by allocating responsibilities based on expertise, data, and other resources within each agency as the agencies did in the CRR rulemaking process.
    Recommendation: To enhance the effectiveness of their preparations for conducting a retrospective review of the QRM regulations, the agencies responsible for the QRM regulations--Federal Deposit Insurance Corporation, Federal Housing Finance Agency, Board of Governors of the Federal Reserve System, HUD, Office of the Comptroller of the Currency, and Securities and Exchange Commission--should develop a plan that identifies the metrics, baselines, and analytical methods to be used and specify the roles and responsibilities of each agency in the review process. Furthermore, to account for and help mitigate limitations of existing data and the uncertain availability of enhanced datasets, the six agencies should include in their plan alternate metrics, baselines, and analytical methods that could be used if data were to remain unavailable.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: In January 2017, the Federal Reserve Board stated that it has an ongoing program to monitor the mortgage and securitization markets as part of its monetary policy, regulatory, and financial stability responsibilities. According to the Federal Reserve, Board staff are continuously researching new data sources, analytical methods, and metrics as part of that program. The Federal Reserve also noted that Board staff with responsibility for implementing this recommendation continue to meet with their counterparts at other agencies.
    Recommendation: To enhance the effectiveness of their preparations for conducting a retrospective review of the QRM regulations, the agencies responsible for the QRM regulations--Federal Deposit Insurance Corporation, Federal Housing Finance Agency, Board of Governors of the Federal Reserve System, HUD, Office of the Comptroller of the Currency, and Securities and Exchange Commission--should develop a plan that identifies the metrics, baselines, and analytical methods to be used and specify the roles and responsibilities of each agency in the review process. Furthermore, to account for and help mitigate limitations of existing data and the uncertain availability of enhanced datasets, the six agencies should include in their plan alternate metrics, baselines, and analytical methods that could be used if data were to remain unavailable.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: In January 2017, SEC staff stated that they had developed a preliminary review plan for the QRM rule in December 2016. SEC staff noted that although the review plan describes several proposed analytical approaches, the precise analytical approach to review the mortgage market conditions and the definition of QRM will depend on future data availability, future mortgage market conditions, and the role of Fannie Mae, Freddie Mac, and other participants in those markets at that time. To prepare for this review, SEC staff noted that they intend to meet on a periodic basis with the staff of the other agencies to share the results of the analyses discussed above, understand the analyses being performed by the other agencies, and discuss what additional data or analyses may be helpful. As part of these discussions, SEC staff stated that the agencies will likely divide responsibilities for conducting the review according to agency expertise and resources, consistent with each agency's statutory authority and role.
    Director: Dalkin, James R
    Phone: (202) 512-3133

    1 open recommendations
    Recommendation: The U.S. Securities and Exchange Commission should direct the COO and CFO to implement controls, such as periodic reviews of asset dispositions, to help reasonably assure that SEC's procedures for the preparation and maintenance of documentation related to the disposition of assets are consistently implemented and that any deviations from established procedures are documented.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: SEC Officials are still working on corrective actions as of the end of fiscal year 2016. We will follow up on this recommendation during our fiscal year 2017 SEC financial statement audit.
    Director: Susan J. Irving
    Phone: (202) 512-6806

    3 open recommendations
    Recommendation: To help minimize Treasury borrowing costs over time by better understanding and managing the risks posed by Treasury floating rate notes and by enhancing demand for Treasury securities, the Secretary of the Treasury should track and report an additional measure of the length of the portfolio that captures the interest rate reset frequency of securities in the portfolio.

    Agency: Department of the Treasury
    Status: Open

    Comments: Treasury agreed with our recommendation but has not yet introduced this additional metric. As of August 2017, the metric had not been introduced.
    Recommendation: To help minimize Treasury borrowing costs over time by better understanding and managing the risks posed by Treasury floating rate notes and by enhancing demand for Treasury securities, the Secretary of the Treasury should examine opportunities for additional new security types, such as FRNs with maturities other than 2 years or ultra-long bonds.

    Agency: Department of the Treasury
    Status: Open

    Comments: Treasury agreed with our recommendation but has not yet taken steps to consider additional securities. We will continue to monitor information released from TBAC conferences and in follow up conversations with Treasury.
    Recommendation: To help minimize Treasury borrowing costs over time by better understanding and managing the risks posed by Treasury floating rate notes and by enhancing demand for Treasury securities, the Secretary of the Treasury should analyze the price effects of the mismatch between the term of the index rate and the reset period.

    Agency: Department of the Treasury
    Status: Open

    Comments: Treasury agreed with our recommendation took introductory steps in 2014 to analyze the price effects of the mismatch by meeting with us to discuss our modeling approach. The results of their analysis was not conclusive and no action was taken at the time. We are seeking documentation of any further action that would allow us to close this recommendation as implemented.
    Director: Clowers, Angela N
    Phone: (202) 512-8678

    5 open recommendations
    Recommendation: To help SEC address identified personnel management challenges, and to enhance SEC's ability to strategically hire and retain the appropriate number of staff with the requisite skill sets for today and in the future, the Chairman of SEC should direct the Office of the Chief Operating Officer (COO) and Office of Human Resources (OHR) to prioritize efforts to expeditiously develop a comprehensive workforce plan, including a succession plan, and establish time frames for implementation and mechanisms to help ensure that the plans are regularly updated.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: In July 2016, SEC created a workforce and succession plan consistent with Office of Personnel Management (OPM) guidance, but they do not include some key components of strategic workforce and succession planning identified by OPM and our previous work. For example, the plan lacks a comprehensive skills gap analysis, does not inform decision making about the structure of the workforce, and is not clearly linkd to its budget formulation.
    Recommendation: To help SEC address identified personnel management challenges, and to enhance SEC's ability to strategically hire and retain the appropriate number of staff with the requisite skill sets for today and in the future, the Chairman of SEC should direct the Office of the COO and OHR to incorporate OPM guidance as it develops its workforce and succession plans, by developing a formal action plan to identify and close competency gaps, and fill supervisory positions; and institute a fair and transparent process for identifying high-potential leaders from within the agency.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: SEC's workforce and succession plan finalized in July 2016 is consistent with some Office of Personnel Management (OPM) guidance, but lacks some key components of strategic workforce and succession planning. SEC's workforce plan is aligned with its strategic plans, references the goals outlined in those plans, and includes performance measures to monitor and evaluate SEC's progress towards its goals. SEC's workforce planing also involves relevant stakeholders, including division and office leadership, SEC University (SEC's lead office for training), and focus groups of SEC employees. However, SEC's workforce plan lacks a comprehensive skills gap analysis. For example, SEC's workforce plan did not include an assessment of the competency of 33 percent of its workforce, including mission-support staff, such as staff in the Office of Human Resources, and supervisors. Further, SEC's workforce plan does not inform decision making about the structure of the workforce and is not clearly linked to budget formulation. For example, the workforce plan does not identify the personnel costs of the current workforce, nor does it identify the number of employees SEC intends to hire and their associated costs. Finally, SEC's succession planning lacks information on workforce attrition and lacks a process for identifying future leaders.
    Recommendation: To help SEC address identified personnel management challenges, and to help enhance the credibility of its performance management system, the Chairman of SEC should direct the COO and OHR to conduct periodic validations (with staff input) of the performance management system and make changes, as appropriate, based on these validations.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: In 2014, SEC decided to redesign its performance management system without formally assessing it. While SEC's policies state that the Office of Human Resources (OHR) is to perform an assessment of the system on an annual basis, OHR officials told us that SEC has not conducted a formal assessment of the performance management system because the agency is in the process of developing a new system. Since our 2013 report (GAO-13-621), SEC has not reviewed the effectiveness of its existing system and has had limited stakeholder involvement in the development of the new performance management system. In developing this new system, SEC did not assess the existing system to understand if the issues raised by employees were related to the system's design or its implementation.
    Recommendation: To help SEC address identified personnel management challenges, and to build on SEC's efforts to enhance intra-agency communication and collaboration, the Chairman should direct the COO to identify and implement incentives for all staff to support an environment of open communication and collaboration, such as setting formal expectations for its supervisors to foster such an environment, and recognizing and awarding exceptional teamwork efforts.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: While SEC has created some incentives to support communication and collaboration across divisions, as of December 2016, barriers to cross-divisional communication and collaboration still remain. For example, SEC has implemented some incentives and procedures for staff to communicate and collaborate, such as an annual agency-wide awards program that recognizes outstanding teams and a tracking system that facilitates collaboration on interdivisional memorandums. In addition, one division (the Division of Economic and Risk Analysis) created an electronic system that allows other divisions to request data it collects and another division (the Division of Enforcement) created formal liaisons that other divisions and offices can contact. However, incentives for staff to support an environment of open communication and collaboration are not present for all staff across SEC. SEC has added performance expectations for 53 percent of supervisors to encourage communication and collaboration, including promoting and maintaining an environment of cooperation and proactively sharing relevant information. But these expectations were not present for the remaining 47 percent of supervisors across divisions and occupations.
    Recommendation: To help SEC address identified personnel management challenges, and to build on SEC's efforts to enhance intra-agency communication and collaboration, the Chairman should direct the COO to explore communication and collaboration best practices and implement those that could benefit SEC.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: As of December 2016, SEC has not demonstrated the use of best practices to improve communication and collaboration within and across SEC divisions and offices. SEC officials told us that they reached out to officials at the Federal Deposit Insurance Corporation (FDIC) to discuss how FDIC had obtained high survey scores related to communication and collaboration. This outreach resulted in the creation of SEC's "All Invested" initiative, which SEC described as an initiative to encourage collaboration and communication to help the agency achieve its mission and make SEC the best place in government to work. However, many of the supervisors and staff we spoke with told us that the "All Invested" initiative was more of a marketing campaign than a substantive change. In addition, SEC has established a number of working groups to improve communication and collaboration, but these working groups are often focused on specific topics and do not provide a means for divisions and offices to collaborate on the full range of their day-to-day work activities.
    Director: Irving, Susan J
    Phone: (202) 512-6806

    1 open recommendations
    Recommendation: Treasury should build the capacity for a buyback program that could be used to respond to potential changes in market conditions during times of deficit. Such a program should allow for broader direct participation beyond the primary dealers. In conducting any buyback operations Treasury should (1) clearly articulate the purpose of the buyback program, (2) conduct the buyback reverse auctions on a regular and predictable schedule consistent with the purpose of the buyback program, and (3) target a few securities in narrow maturity bands at each reverse auction.

    Agency: Department of the Treasury
    Status: Open

    Comments: In October 2014, Treasury conducted a small-scale buyback operation to test the information technology infrastructure to ensure that its buyback functionality remains operational. In the reverse auction operation, Treasury bought back $22 million of a note maturing on 2/29/2016. In November 2014, Treasury announced that the operation was successful. Treasury conducted small-value buyback operations in April 2015, April 2016, November 2016, and April 2017 to ensure operational readiness of its buyback infrastructure. In announcing the buyback operations, Treasury noted that they should not be viewed by market participants as a precursor or signal of any pending policy changes regarding Treasury's use of buybacks. In June 2016, Treasury officials told us that eligibility to participate in buyback operations is limited to primary dealers because of constraints of the current trading systems. They also said that Treasury is continuing to examine the costs and benefits of buybacks as a debt management tool. As of August 2017 we asked Treasury officials for an update on the implementation status of this recommendation and are awaiting their response.
    Director: Brown, Orice Williams
    Phone: (202)512-5837

    4 open recommendations
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff to strengthen procedures in place to guide Reserve Banks' efforts to manage emergency program access for higher-risk borrowers by providing more specific guidance on how Reserve Bank staff should exercise discretion and document decisions to restrict or deny program access for depository institutions and primary dealers that would otherwise be eligible for emergency assistance.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff to document a plan for estimating and tracking losses that could occur under more adverse economic conditions within and across all emergency lending activities and for using this information to inform policy decisions, such as decisions to limit risk exposures through program design or restrictions applied to eligible borrowing institutions.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff, in drafting regulations to establish the policies and procedures governing emergency lending under section 13(3) of the Federal Reserve Act, to set forth the Federal Reserve Board's process for documenting, to the extent not otherwise required by law, its justification for each use of this authority.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff to document the Federal Reserve Board's guidance to Reserve Banks on types of emergency program decisions and risk events that require approval by or consultation with the Board of Governors, the Federal Open Market Committee, or other designated groups or officials at the Federal Reserve Board.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Brown, Orice Williams
    Phone: (202)512-3000

    1 open recommendations
    Recommendation: To help ensure that CFTC and SEC are strategically positioned to implement the joint report's recommendations and address remaining harmonization opportunities, as CFTC and SEC continue to develop the charter for the Joint Advisory Committee, the Chairmen of CFTC and SEC should take steps to establish, with associated time frames, clearer goals for future harmonization efforts and requirements for reporting and evaluating progress toward these goals. Specifically, the agencies could benefit from formalizing a plan to assess implementation of the joint report's recommendations and harmonization opportunities that may not have been fully addressed by the joint report, such as differences in market structure and investor definitions. Such a plan could include goals for future harmonization efforts, such as time frames for implementing the recommendations; assessment of whether remaining differences in statutes and regulations result in inconsistent regulation of similar products and entities that could lead to opportunities for regulatory arbitrage; and periodic reports to Congress on their progress, including the implementation and impact of the recommendations.

    Agency: Commodity Futures Trading Commission
    Status: Open

    Comments: In August 2014, CFTC staff confirmed that CFTC had not taken steps to implement this recommendation. According to CFTC staff, since the issuance of the GAO report in April 2010, CFTC has prioritized implementing Dodd-Frank Act requirements related to harmonization and has not established a plan or specific goals related to harmonization.
    Director: Williams, Orice M
    Phone: (202)512-5837

    1 open recommendations
    Recommendation: To address the current information gap in Regulation SHO for prime brokerage arrangements and mitigate the impact of any unintended consequences caused by SEC rules, as well as ensure consistent implementation of SEC rules by the industry, the Chairman of the Securities and Exchange Commission should finalize, in an expedited manner upon finalization of the temporary rule, the revised 1994 Prime Broker Letter.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: As of 7/18/13, the revised Prime Broker letter has not been finalized.