Summary

An internal review of the Commodity Futures Trading Commission's (CFTC) Division of Enforcement, completed in March 1995, found weaknesses in the division's overall management. This report discusses the changes that CFTC made in response to the internal review and whether these changes had their intended effect. Because CFTC lacked data that could be used to assess the impact of the changes, GAO (1) provides information on the changes made to the division, including the views of enforcement staff on areas in which such changes were made; (2) identifies further opportunities for improvement in these areas; and (3) provides other available information that might indicate CFTC's commitment to its enforcement program.

GAO noted that: (1) following the completion of CFTC's internal review, the Division of Enforcement made numerous organizational, operational, and other changes related to the review findings; (2) these changes included reorganizing headquarters and two of its three regional offices, providing additional training, expanding written guidance on investigations and litigation, revising the review process for recommendations made to the Commission, increasing communication between management and staff, emphasizing the importance of equal employment opportunity, and modernizing recordkeeping systems; (3) its survey of a judgmentally selected sample of about half of the division's headquarters and regional office professional staff showed that, in areas where changes were made, the surveyed staff viewed the division's current organization and operations more positively than negatively; (4) however, the views of headquarters staff were consistently more positive than those of regional office staff; (5) while GAO could not assess whether the division's changes had their intended effect, further opportunities exist to strengthen the division in two areas where changes were made; (6) although the division has provided additional training to staff, it does not have a mechanism to ensure that staff training needs are systematically assessed and addressed; (7) the division does not have a formal training plan for identifying the areas in which training is needed, providing such training, and tracking the training staff receive; (8) the division has reviewed and updated its procedures manual, but the manual does not address all of the major policies and procedures related to the division's investigation and litigation process; (9) in addition to the division's changes, available information indicates that CFTC is committed to its enforcement program; (10) industry officials contacted view the agency as taking a more aggressive stance against violators of the Commodity Exchange Act; and (11) a substantial majority of the surveyed enforcement staff viewed the division as operating effectively and efficiently as well as producing quality work.