Enforcement Administrative Functions

This document is an HTML formatted version of a printed document. The printed document may contain agency comments, charts, photographs, appendices, footnotes and page numbers which may not be reproduced in this electronic version. If you require a printed version of this document contact the United States Securities and Exchange Commission, Office of Inspector General, Mail Stop 11-7, 450 Fifth Street N.W., Washington, D.C. 20549 or call (202) 942-4460.

Enforcement Administrative Functions

Audit Report No. 233
May 15, 1996

SUMMARY

Our review of the Division of Enforcement's administrative controls found that the controls appeared to provide reasonable assurance that assets were safeguarded and operations were in compliance with policies and procedures.

We are making several recommendations to enhance Enforcement's administrative controls. These include requiring staff to sign in sequentially by time; reconciling Enforcement's blotter records with records of the Office of the Comptroller; providing additional training to the support staff; and improving document storage.

The Division of Enforcement and the Offices of Administrative and Personnel Management and the Comptroller generally concurred with our recommendations. Their comments are attached.

OBJECTIVE AND SCOPE

The objective of the review was to determine if Enforcement's administrative controls were functioning properly and in compliance with regulations. It covered controls relating to accounting, time and attendance, travel, property, and training. During the review, we interviewed Enforcement's administrative staff and conducted tests of controls.

We did not include procurement within our audit scope. The audit was performed in accordance with generally accepted government auditing procedures between July 1995 and January 1996.

BACKGROUND

The Division of Enforcement, like other offices and divisions, performs several administrative functions, including maintaining time and attendance and blotter records, authorizing travel expenditures, and helping maintain a property inventory. The Division's administrative staff includes a senior program analyst; administrative assistants; and numerous clerical and secretarial staff.

AUDIT RESULTS

Generally, Enforcement's administrative controls appeared to provide reasonable assurance that assets were safeguarded adequately, and operations were conducted economically, efficiently, and in compliance with policies and procedures. Also, its administrative staff appeared competent and conscientious.

As discussed below, we are recommending several enhancements to the administrative controls.

Sequential Sign-In

In January 1996, the Division implemented sign-in procedures for employees working an altered schedule, as required by Commission regulations. However, employees are not recording their arrival and departure sequentially by time, which weakens the effectiveness of this control procedure and is contrary to regulations (see SECHDBK 15-3, page 3). For example, we noted three employees who by 10:00 a.m. on February 14, 1996 had already signed in and out. They were able to do this because the log consisted of loose sheets of paper containing three columns. One column required the person to sign their name and the other two were for them to enter the time they arrived and departed.

Recommendation A

The Division of Enforcement should require its employees to sign in and out sequentially in a serial log.

Overtime Documentation

We reviewed overtime documentation for selected 1995 pay periods for 24 Enforcement employees. We found that the date and time the overtime was worked was not recorded in all cases on the overtime approval form (SEC-1749). This information would allow supervisors to verify overtime (by consulting sign in logs maintained by the office or division and by the guards), and thus would help prevent and detect abuse.

Recommendation B

The Division of Enforcement should require its employees to document the date and time of overtime worked on the overtime approval form (SEC-1749).

Reconciliation

The Division is not reconciling its blotter records with the Comptroller's accounting records, as required by Commission regulations (SECR 14-1). For example, we noted one blotter account, object code 2530, which had a negative balance ($4,459.08) in fiscal year 1995 and unrecorded expenses.

Reconciliation helps ensure that financial records are accurate, prevents over-obligation of funds, and helps managers plan future funding needs.

Recommendation C

The Division of Enforcement should reconcile its blotter records with the Comptroller's records.

Training

A number of attorneys told us that the support staff could benefit from paralegal and automation training. Also, several support staff expressed an interest in this training, and uncertainty over the basis for training decisions (that is, who receives training).

Recommendation D

In consultation with the Office of Administrative and Personnel Management, the Division of Enforcement should provide additional paralegal and automation training to its support staff. It should also clarify the basis for allocating training to its staff.

Software Training

The Office of Administrative and Personnel Management recently acquired training materials for users of Commission software. It has not yet developed procedures for providing these materials to employees. This software would enable Enforcement to enhance the staff's abilities. Enforcement's staff cannot always attend training courses because of sudden changes in their workload. Enforcement should obtain the training software from OAPM. If the staff was permitted to use the software they would need to spend only a few hours a day on training, instead of several days, as required by most of OAPM sponsored training courses.

Recommendation E

The Office of Administrative and Personnel Management should develop and publicize procedures covering use of its automation training materials.

Document Storage

Based on our observations and interviews, the Division's document storage could be improved. Several offices did not have file cabinets. Documents were kept in boxes instead. We noted 15 boxes, some of which were broken, on the floor outside one office. The documents were not currently needed, according to the staff, and could have been sent to a temporary storage facility maintained by a Division contractor. Boxes in the halls constitute a safety hazard, and should be removed as soon as possible.

Recommendation F

The Division of Enforcement should improve its document storage, for example, by obtaining additional file cabinets and reminding staff to promptly send unneeded documents to permanent storage.

Per Diem Changes

The Division uses a software package for travel known as Travel Manager. The Office of the Comptroller updates this software with per diem changes authorized by the General Services Administration.

The Office of the Comptroller received changes for January 1995 after the month had begun. Consequently, early travel vouchers for cities with changed per diem rates (for example, San Francisco, California) used incorrect rates.

Recommendation G

The Office of the Comptroller should notify travel coordinators when updates to Travel Manager are not timely, and indicate which per diem rates have changed.