San Francisco District Office

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.

SAN FRANCISCO DISTRICT OFFICE

Audit No. 374

Limited Audit of Financial and Administrative Controls

INTRODUCTION

The Office of Inspector General conducted a limited audit of the financial and administrative controls of the San Francisco District Office (SFDO). The audit procedures were limited to interviewing SFDO staff, reviewing supporting documentation, and conducting limited tests of transactions. The purpose of the audit was to provide the Commission with negative assurance that the internal controls were adequate and implemented economically, efficiently, and in compliance with Commission policies and procedures.1 The audit was performed in accordance with generally accepted government auditing standards during May 2003.

BACKGROUND

The San Francisco District Office assists the Pacific Regional Office in administering Commission programs. In carrying out its responsibilities, the SFDO exercises a broad range of financial and administrative functions, including maintaining time and attendance records; procuring supplies and services; arranging for staff travel; maintaining an inventory of property; and recording budgeted and actual expenditures of the office.

AUDIT RESULTS

Our limited review indicated that the SFDO's controls were generally adequate and implemented economically, efficiently, and in compliance with Commission policies and procedures. A previous OIG audit of SFDO (Audit No. 278, dated March 30, 1998) identified a material weakness, related to purchases of court reporter services. SFDO implemented procedures to address this weakness. However, it needs to take additional steps. Also, we discussed some non-material findings and informal recommendations with SFDO's management.

PURCHASES OF TRANSCRIPTS

The previous OIG audit found that SFDO staff without contracting authority or approved contracts obtained transcripts. The staff then submitted the transcript providers' invoices that were approved and paid.

In response to the previous audit recommendation, SFDO arranged to buy transcript services with its government credit card. However, in some instances, SFDO staff without contracting authority continued to obtain transcripts and then submitted invoices for approval and payment (e.g., when the provider did not accept credit cards).

The Commission's Office of Administrative and Personnel Management (OAPM) can provide limited delegated purchasing authority. This authority would allow the staff to buy transcript services without credit cards.

Recommendation A

    The SFDO should contact OAPM to request, as appropriate, delegation of limited contracting authority to allow SFDO staff to contract for court reporter services. Also, OAPM should tell all the Commission regional and district offices that this delegation of purchasing authority is available.

Management's Response

SFDO indicated that it would ask OAPM to give limited delegated contracting authority to certain staff. Also, SFDO will buy transcript services with its government credit card when the provider will accept it.

1 Negative assurance means that no material internal control weaknesses came to our attention during our limited audit.