SEC Enforcement Program:

Information on Productivity Statements and Cases Closed Without Action

GGD-86-106BR: Published: Aug 26, 1986. Publicly Released: Oct 28, 1986.

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In response to a congressional request, GAO examined the Securities and Exchange Commission's (SEC) Enforcement Program to determine whether the securities market's continued growth and the decline of SEC staff have reduced assurance of market integrity.

GAO found that, to demonstrate its continued ability to manage growing securities markets with fewer staff, SEC maintained that it increased the productivity of its enforcement program; however, the numbers it used were not statistically valid since they did not conform to the Bureau of Labor Statistics' (BLS) productivity measurement criteria of homogeneity, which required that output measures consist of relatively equal units with respect to labor requirements. Because of variations in subjects, investigative techniques, and the amount of time and resources spent on each enforcement action, GAO believes that the productivity figures are limited in their ability to show that SEC maintained an effective enforcement activity level.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: SEC does not believe better productivity measurement is needed. In the 31 U.S.C. 720 response, officials stated they would take no action.

    Recommendation: If the Chairman, SEC, wants to use productivity measurement to determine the sufficiency of the enforcement program resources, he should, in consultation with BLS, develop a measurement approach that would conform with the homogeneity criteria. In deciding if it should adopt a new measurement system, SEC should consider the cost in relation to the new system's ability to provide accurate data for use in analyzing and appraising the need for additional resources during the budget process.

    Agency Affected: United States Securities and Exchange Commission


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