SEC faulted on record-keeping performance

The Securities and Exchange Commission lacks clear policies and proper training in records management, according to a recent audit.

Jon Rymer, the interim SEC inspector general, surveyed and interviewed employees to determine whether the agency’s Office of Records Management Services had thoroughly complied with President Obama’s November 2011 memorandum on improving records management. The agency’s policies on financial document destruction became the focus of a whistleblower controversy last year.

SEC documents include confidential treatment requests files, correspondence, investigation records, records of matters under inquiry, transcripts, working papers, consumer complaint files, congressional and chairman files, administrative proceedings files, self-regulatory files and bankruptcy files.

“The SEC does not have an active staff assistance program, and periodic agency-wide staff assistance visits were not conducted by [the records management office] or its predecessors,” the audit concluded. Although the central records office “provided assistance to SEC offices and divisions to identify their records and has scheduled records for disposition, it has not conducted staff assistance visits of all 36 SEC offices and divisions. Therefore, confusion exists,” the audit said, “regarding their records management responsibilities.”

The audit, dated Sept. 30, also highlighted inadequate training specific to records management and faulted some offices for not responding to requests within required deadlines. The absence of a “timely review of commission records eligible for destruction” has left a 10-year backlog of documents that have not been properly destroyed,” the report said. Up to 40 percent of SEC employees responding to the IG survey had not disposed of any records, as privacy policy requires.

In 2011, a whistleblower made national headlines by accusing the SEC of destroying as many as 9,000 documents related to preliminary investigations involving companies that played active roles in the 2008 financial meltdown.

The IG made 12 recommendations, including increasing the number of visits to offices by records management specialists, improved internal controls of documents as well as policy training in records retention.

SEC management agreed with all the recommendations. The IG has called for an action plan to implement them within 45 days.

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