Hiring ceilings at the Securities and Exchange Commission have reportedly been cut by 10 percent across the board amid facility cost overruns and an anticipated lower budget for fiscal 2006.

The cuts, announced in a May 19 memo from SEC executive director James McConnell to SEC division directors and office heads, mean that SEC managers can't fill openings for non-supervisory positions until the "headcount" in their division or office falls below a new, lower ceiling, according to a report by Dow Jones Newswires.

SEC spokesman Matt Well reportedly told the wire service that, "It's not a staff cut, it's a ceiling cut," and said that the agency still plans to fill about 80 slots before the end of fiscal 2005, bringing it to just under 4,200 positions.

According to the report, McConnell's memo said that the decision was made last month by the SEC's Human Capital Review Board in anticipation of the commission's expected 2006 funding level. The reduction will hit all areas of the SEC equally, including its enforcement and inspections divisions, Dow Jones said.

Following hefty funding increases in recent years, the agency's proposed budget for next year is somewhat smaller than this year's. President Bush's SEC budget request for fiscal 2006, which begins Oct. 1, calls for the SEC to receive $888 million. Outgoing SEC Chairman William Donaldson, who will leave at the end of the month, had requested an increase in FY 2006 funding to $983 million.

The agency received $913 million for fiscal year 2005, an increase of 12.5 percent above its fiscal 2004 level and more than double the roughly $423 million it received back in fiscal 2001, prior to the scandals at Enron and WorldCom.

The regulator is further trimming costs by curtailing all "non-mission-critical'' travel for the rest of this fiscal year, Bloomberg reported.

The cutbacks come amid reports late last month that the SEC underestimated facility costs in Boston, New York and Washington by as much as $48 million. The Government Accountability Office is investigating the budget gap at the request of Rep. Frank Wolf, R-Va., head of the House subcommittee with oversight of the SEC.

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