Weak financial management at the Securities and Exchange Commission has led to budget overruns of nearly $50 million in two years, according to a report issued by the Government Accountability Office.
The GAO found "ineffective management controls" at the SEC, and echoed findings from an earlier study released in the spring that pointed to weaknesses in the agency's preparation of financial statements and the security of its information.
In their budget planning for the two fiscal years ending next Oct. 1, SEC officials underestimated by $48.7 million the costs of building the agency's new Washington headquarters and upgrading its regional offices in New York City and Boston, the GAO report said. Due to the overruns, the agency had to freeze hiring and cut back on staff travel.
SEC Chairman Christopher Cox left Congress for the job in August, replacing William Donaldson. Cox said in a letter to GAO investigators that he has devoted resources to completing the building projects soon. He also pointed to project changes that should reduce the cost of the construction and save about $4 million in connection with the Boston office.
The SEC's budget for the 2006 fiscal year is $888 million, unchanged from the previous year. The agency's budget was nearly doubled under the Sarbanes-Oxley Act of 2002.
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