GAO Urges Written Procedures for SEC Reports

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To maintain the Securities and Exchange Commission’s credibility and public confidence in its efforts, the Government Accountability Office has recommended the SEC develop written procedures for generating the SEC Division of Enforcement’s public reports and documenting the implementation of those procedures.

Since 2017, the Enforcement Division has published a stand-alone “Enforcement Annual Report” that provides statistics on its enforcement activities and highlights its priorities for the coming year. For fiscal years 2004-2017 the SEC had published annually the “Select SEC and Market Data Report.” The Annual Report included additional data tables and narratives about enforcement priorities and cases, in order to increase transparency and provide more information than the previous reports.

The GAO was asked to examine the SEC’s reporting of enforcement statistics and they reviewed how the statistics were derived over the past 10 years. They studied the SEC’s internal policies, procedures, and manuals for recording, verifying and reporting data, interviewed SEC officials and considered past SEC reports including enforcement statistics.

The GAO learned that the annual report was developed by SEC officials and staff holding meetings during which they determined which areas and accomplishments to highlight, but they were unable to present documentation that the report preparation process was implemented as intended.

The SEC agreed with the GAO’s recommendation for documenting its procedures for generating public reports.