Congress asked us to provide a briefing on the facilities management and budgeting issues of the U.S. Securities and Exchange Commission (SEC) that SEC disclosed to Congress in May 2005, which resulted in SEC's requesting a reprogramming of approximately $48 million of 2005 and 2006 funds. The reprogramming was requested to cover unbudgeted costs related to the construction of new facilities in Washington, D.C., and the improvement of new leased facilities in New York City and Boston. Specifically, our objectives were to provide information on (1) the amount of funding for these projects that was not planned; (2) the reasons for the change in budgeted amounts; (3) the related actions taken by SEC since this budgeting issue was uncovered; and (4) any corrective actions to prevent this issue from recurring.
Recommendations for Executive Action
|United States Securities and Exchange Commission||1. The Chairman of the SEC should direct the Executive Director to establish accountability at both the staff and management levels for the reasonableness of budget estimates submitted during the budget formulation process.|
|United States Securities and Exchange Commission||2. The Chairman of the SEC should direct the Executive Director to establish regular reporting and review procedures related to the three construction projects, and any future projects, to ensure that management is promptly informed when changes or problems occur with estimates.|
|United States Securities and Exchange Commission||3. The Chairman of the SEC should direct the Executive Director to improve communication and consultation with operating units and staff regarding space and property needs.|
|United States Securities and Exchange Commission||4. The Chairman of the SEC should direct the Executive Director to evaluate options for budget and facilities management activities in terms of number of staff and expertise needed.|
|United States Securities and Exchange Commission||5. The Chairman of the SEC should direct the Executive Director to complete hiring for new positions in the Office of Administrative Services and Office of Financial Management.|