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Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Friday, April 13, 2012

GAO Finds Continuing Significant Internal Controls Deficiencies at SEC

The GAO released another report on the SEC entitled Improvements Needed in SEC's Internal Controls and Accounting Procedures (GAO-12-424R, Apr 13, 2012).  Here is what it found:

In our audit of SEC’s fiscal years 2011 and 2010 financial statements, we identified four significant deficiencies in internal control as of September 30, 2011. These significant internal control deficiencies represent continuing deficiencies concerning controls over (1) information systems, (2) financial reporting and accounting processes, (3) budgetary resources, and (4) registrant deposits and filing fees. These significant control deficiencies may adversely affect the accuracy and completeness of information used and reported by SEC’s management. We are making a total of 10 new recommendations to address these continuing significant internal control deficiencies.

We also identified other internal control issues that although not considered material weaknesses or significant control deficiencies, nonetheless warrant SEC management’s attention. These issues concern SEC’s controls over:

•payroll monitoring,
•implementation of post-judgment interest accounting procedures,
•accounting for disgorgement and penalty transactions, and
•the government purchase card program.
We are making a total of 9 new recommendations related to these other internal control deficiencies.

We are also providing summary information on the status of SEC’s actions to address the recommendations from our prior audits as of the conclusion of our fiscal year 2011 audit. By the end of our fiscal year 2011 audit, we found that SEC took action to fully address 38 of the 66 recommendations from our prior audits, subsequent to our March 29, 2011, management report.

Lastly, we found that SEC took action to address and resolve all four weaknesses in information systems controls that we identified in public and “Limited Official Use Only” reports issued in 2008 through 2009 that were reported as open at the time of our March 29, 2011, management report.

 

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