Detailed Information on the
Enforcement of Commodity Futures and Options Markets Assessment

Work with other similar programs in the government to develop measures that better reflect program effectiveness. The program will consider developing novel ways of measuring results, for instance surveying industry experts.

Develop a measure that quantifies increased efficiencies.

Develop measures and targets for the collections of fines.

Measure: Percent growth in market volume.

Explanation:Percentage change in total number of contracts traded during the fiscal year over the previous fiscal year. This is a proxy measure for market integrity.

Measure: Increase in number of exchanges and clearing houses.

Explanation:The number of new futures exchanges and clearing houses that opened during the fiscal year. This is a proxy measure for market integrity.

Measure: Percentage of SROs and clearing organizations that comply with the requirement to enforce their rules.

Explanation:The CFTC conducts regular audits of the SROs and clearing organizations, and this measure reflects the percentage of these entities that were found to enforce their rules.

Measure: Percent decrease in the number of customers who lost funds.

Explanation:Percentage change in the number of customers who claimed to have lost funds do to misconduct, as reported to the CFTC by Contract Markets and FCMs and non-exempt CTAs, CPOs, and IBs. Exchanges and registrants are required to report lost funds to CFTC by regulation. This is a proxy measure for market integrity and consumer protection.

Measure: Amount of lost funds.

Explanation:The total amount of funds lost by complaining SRO customers, as reported to the CFTC by Contract Markets and FCMs and non-exempt CTAs, CPOs and IBs. Exchanges and registrants are required to report lost funds to CFTC by regulation. This is a proxy measure for market integrity and consumer protection.

Measure: Percent of cases successfully resolved.

Explanation:Percentage of cases closed during the fiscal year that resulted in final sanctions against defendants.

Measure: Number of enforcement actions filed during the fiscal year.

Explanation:The total number of administrative, civil injunctive and statutory disqualification actions filed during a fiscal year.

Measure: Cases filed by other criminal and civil law enforcement authorities that included cooperative assistance from the CFTC.

Explanation:Cases filed by other criminal and civil law enforcement authorities that included cooperative assistance from the CFTC

Measure: Of all investigations closed during the fiscal year, percentage that were closed or resulted in enforcement action within one year of opening.

Explanation:The measure reflects the efficiency of ENF in conducting its investigations by either closing them or initiating enforcement action in a timely manner.

Measure: Number of enforcement investigations opened during the fiscal year.

Explanation:The total number of enforcement investigations opened during a fiscal year.

Measure: Percentage of total number of cases filed during FY that were filed within one year of investigation opening.

Explanation:The measure reflects the efficiency of ENF preparing cases and initiating enforcement action in a tiemly manner.

Measure: Percentage of total number of investigations closed during the FY that were closed within one year of opening.

Explanation:The measure reflects the efficiency of ENF in completing its investigations in a timely manner.

Measure: Amount of civil monetary penalties imposed.

Explanation:The total number of civil monetary penalties imposed in enforcement actions during the FY (in$).

Measure: Amount of civil monetary penalties collected.

Explanation:The total number of civil monatary penaties collected in enforcement actions during the FY (in$).

Measure: Percentage of civil monetary penalties collected of those imposed in FY 2004.

Explanation:The measure reflects collection rate efficiency.

Is the program purpose clear?

Explanation: The mission of the Commodity Futures Trading Commission (CFTC)'s Enforcement program is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of certain commodity interests, including futures and options, and to foster open, competitive and financially sound markets under CFTC's jurisdiction. CFTC's Division of Enforcement (ENF) investigates and prosecutes alleged violations of the Commodity Exchange Act and CFTC regulations.

Evidence: Commodity Exchange Act, as amended, 7 U.S.C. § 1, et seq. (CEA or Act), especially section 3 'Findings and Purpose;' CFTC regulations, 17 C.F.R. § 1, et seq.; CFTC Annual Report 2003; and CFTC FY 2005 President's Budget and FY 2003 Annual Performance Report. ENF performs investigations and, where appropriate, recommends that the CFTC commence enforcement action against those individuals and firms registered with CFTC, and who are engaged in activities that directly or indirectly affect commodity futures and option trading on domestic exchanges, or who improperly market futures and option contracts.

Does the program address a specific and existing problem, interest or need?

Explanation: Futures markets play an important role in the national economy by helping investors manage risk. For these markets to function properly, it is vital that they be free from fraud, manipulation, and abusive practices. The program ensures that the CEA and CFTC's regulations are adhered to, which furthers the pubic interest in protecting investors, market participants and the integrity of the markets. ENF investigates potential violations of regulations. CFTC has authority to commence both civil injunctive enforcement actions in U.S. district courts and administrative enforcement actions before a CFTC Administrative Law Judge. The program became more important with the passage of the Commodity Futures Modernization Act (CFMA) in December 2000. The CFMA moved CFTC from a frontline regulator to an oversight regulator that emphasizes tough enforcement actions against wrongdoers without creating overly burdensome regulations.

Evidence: The futures markets are large and growing. In FY 2003, approximately one billion futures contracts were traded domestically on eleven exchanges, and there were approximately 80,000 Commission registrants. In FY 2003, the ENF opened a total of 172 investigations, and CFTC filed a total of 64 enforcement actions naming a total of 144 respondents/defendants. During this fiscal year, the ENF obtained a record assessment of over $210 million in civil monetary penalties and $105 million in restitution and disgorgement ordered. Sections 3, 6(c), 6(d) and 6c of the Act; CFTC Rules Parts 10 & 11, 17 C.F.R. §§ 10 & 11, et seq.; CFTC Strategic Plan 2004-2009 (February 2004); and CFTC Annual Report 2003.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The program is not redundant or duplicative of any other Federal, state, local, or private effort. CFTC has exclusive jurisdiction with respect to contracts of sale of a commodity for future delivery, options on any contract of sale of a commodity for future delivery, and options on a commodity. CFTC also has exclusive jurisdiction over certain retail transactions involving futures on foreign currency and options on such contracts. To ensure the effective and efficient use of resources, ENF has a cooperative enforcement program element with self-regulatory organizations (SROs) to avoid duplicative expenditure of resources. CFTC has delegated its registration function to the National Futures Association (NFA). ENF coordinates closely with NFA to avoid duplication of efforts. ENF reviews NFA's actions and sanctions. ENF also works cooperatively with Federal criminal authorities in civil enforcement, and with both federal and state law enforcement authorities when matters involve violations in addition to those involving the CEA.

Evidence: In 2003 CFTC opened the Office of Cooperative Enforcement (OCE) whose task is to reach out to financial regulators on the federal and state level, to ensure that they are coordinating investigations and prosecutions of commodities violators, and to ensure that the government addresses misconduct whenever appropriate. Cooperative enforcement enables CFTC to maximize its ability to detect, deter, and impose sanctions against wrongdoers involving U.S. markets, registrants, and customers. The benefits of cooperative enforcement include: 1) the use of resources from other sources to support CFTC enforcement actions; 2) coordination in filing actions with other authorities to further the impact of enforcement efforts; and 3) development of consistent and clear governmental responses and avoidance of redundant efforts by multiple authorities. CEA Section 2; CFTC Annual Reports 2002 & 2003; FY 2005 President's Budget; FY 2005 Budget & Performance Estimate; FY 2004 President's Budget; and FY 2002 and FY 2003 Annual Performance Reports.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: ENF is constantly evaluated for efficiency and effectiveness. ENF recently conducted an internal review and implemented a staff reorganization to ensure that staff have the tools and structure do their jobs efficiently and effectively. ENF solicited staff for ideas to improve communications, enhance the assistance given to investigations and/or litigations, and improve other internal enforcement support. The reorganization also created several specialty areas that focus on efficiency and consistency, namely OCE and the Offices of Budget and Statistics (OBS) and Policy and Review. OBS produces a confidential, monthly Enforcement Results report that tracks performance statistics. External audits of ENF are conducted both by the CFTC's Office of the Inspector General (OIG) and by the United States General Accounting Office (GAO).

Evidence: An example of ENF's efforts to maximize efficiency is its implementation of an 'e-law' program that will increase efficiency by assisting with electronic tasks. An example of an external review of the program is GAO's July 2003 report noting that ENF had implemented procedures for ensuring the timely referral of delinquent monetary penalty collections to Treasury. CFTC Annual Reports 1999-2003; FY 2005 President's Budget/FY 2003 Annual Performance Report; FY 2005 Budget & Performance Estimate; OIG Audit of Civil Monetary Penalty Collections report issued April 27, 2001; and GAO, SEC and CFTC Fines Follow-Up Collection Programs Are Improving, But Further Steps Are Warranted, GAO -03-795 (July 2003).

Is the program effectively targeted, so that resources will reach intended beneficiaries and/or otherwise address the program's purpose directly?

Explanation: The program maximizes its resources at all steps, from case lead generation up through resolution. For example, ENF conducts a limited and focused review of referrals to decide whether the allegations are sufficiently comprehensive to proceed to the investigative stage. Once the team determines that good cause exists to conduct further inquiry under subpoena authority or to commence an enforcement action, a recommendation for authority is made to assigned supervisory staff and then on to the other CFTC divisions for decision by the Commission. In certain cases, the program maximizes its impact through joint actions, such as its filing of several matters in the energy markets and its Internet Sweeps targeting CTA fraud. ENF also enhances the impact of its actions by tying them to customer education initiatives. For example, CFTC recently issued a Spanish-Language Consumer Advisory warning the public to be wary of a number of commodity based scams. Cooperative enforcement is used both as a force multiplier and to ensure non-duplication of efforts.

Evidence: Pending matters are evaluated through quarterly team docket reviews and tracked using the Monthly Status Report System (MSR) system, which tracks preliminary inquiries, investigations, litigations, and cooperative enforcement matter information. In addition, the system tracks staff hours worked on matters and generates various monthly and quarterly statistical reports. ENF also utilizes a specialty document management system to provide location information on documentation (i.e. preliminary inquiries, investigations, and administrative and civil injunctive enforcement actions) received from external sources into ENF. CFTC Advisories and press releases are all available on CFTC's Internet website, and are linked to its 'Customer Protection' webpage: http://www.cftc.gov/cftc/cftccustomer.htm. OMB Budget Hearing Questions (October 2003); CFTC Annual Report 2003; CFTC Advisories, see http://www.cftc.gov/cftc/cftccustomer.htm; CFTC Enforcement Press Releases: http://www.cftc.gov/cftc/cftcpressoffice.htm

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: While the program has a limited number of long-term performance outcome measures, these measures do not fully reflect on the program goals. The measures are intended to reflect the program's impact on market integrity and consumer protection. ENF's salubrious effects are reflected in: 1) the percentage growth in market volume; 2) the increase in number of exchanges and clearing houses; 3) the percentage of SROs and clearing organizations that comply with the requirement to enforce their rules; and 4) the percentage decrease in both the number of customers who lost funds due to alleged wrongdoing and the amount of funds that these customers lost.

Evidence: The first two measures are proxy measures for ENF's goal of protecting market integrity. The fourth measure is a proxy measure for both market integrity and consumer protection and is derived from regulatorily required reports to the CFTC by Contract Markets and futures commission merchants (FCMs) non-exempt Commodity Trading Advisors (CTAs), Commodity Pool Operators (CPOs) and Introducing Brokers (IBs). FY 2003 Annual Performance Report; FY 2005 OMB Budget & Performance Estimate; and CFTC Strategic Plan 2004-2009 (February 2004).

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The long-term measures and targets do not fully reflect the program's purpose. As a baseline for all of its performance measures, ENF reports the actual results it achieved during the preceding fiscal year. ENF strives to set ambitious targets for its performance during the subsequent three fiscal years by taking several factors into consideration: the program's actual results over the past several years, including that during the baseline year; the fiscal year actual and requested level of funding for the program and FTEs; and the types of cases that the program expects that it will be asked to handle based upon an informal evaluation of trends, statutory and regulatory developments, and existing investigations.

Evidence: ENF regularly undertakes analysis of long-term trends in order to predict the type and complexity of future enforcement actions, not just their number. Each enforcement matter is assigned Management Accounting Structure Codes (MASCs) that identify the type of violative conduct suspected (investigations) or charged (litigations). For example, there are separate litigation MASCs for trade practice, manipulation, supervisions and off-exchange fraud charges, among others. ENF generates reports that identify the number of open matters by MASC, and the staff hours worked per MASC. Based on these reports, the types of cases filed, and the nature of pending investigations, ENF makes educated estimates of future trends and the program's resource needs. FY 2003 Annual Performance Report (February 2004); FY 2004 Performance and Accountability Report.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: Included in the annual performance measures the CFTC reports are: 1) percent of cases sucessfully resolved; and 2) percentage of cases filed during FY that were filed within one year of investigation opening, and 3) cases filed by other criminal and civil law enforcement authorities that included cooperative assistance from the CFTC.

Evidence: ENF also sets internal annual staff performance goals and has checks in place to ensure that these goals are met. ENF has a filing requirement of one litigated case per year per staff attorney. In addition, staff are expected to resolve investigations (i.e. determine whether they should be closed or an enforcement action should be filed) within one year of their opening. ENF ensures that staff are meeting these targets through case tracking databases and reports, and quarterly meetings. These quarterly meetings include: 1) work plan reviews requiring senior staff to project their litigation teams' case filings and settlements; and 2) docket reviews in which the litigation team members discuss with senior staff the status of their open investigation and litigation matters. CFTC Annual Report 2003; FY 2003 Annual Performance Report.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: ENF reports as a baseline for all of its performance measures the actual results it achieved during the preceding fiscal year. ENF strives to set ambitious targets for its performance during the subsequent three fiscal years by taking several factors into consideration: the program's actual results over the past several years, including results during the baseline year; the fiscal year actual and requested funding for FTEs; and the types of cases that the program expects that it will be asked to handle based upon an informal evaluation of trends, statutory and regulatory developments, and existing investigations.

Evidence: CFTC Annual Report 2003; FY 2003 Annual Performance Report; and FY 2003 Congressional Questions for the Record.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: The program does not have partners as defined by the question.

Evidence:  

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: ENF is scrutinized on a regular basis by CFTC's Office of Inspector General (OIG), which recommends policies to promote economy, efficiency and effectiveness in CFTC programs and operations. OIG reviews all enforcement recommendations regarding the initiation and conduct of investigations and the commencement of enforcement actions to assure their legal sufficiency and conformance with general CFTC policy and precedent. OIG also conducts additional specific inquiries of the program. For example, in 2003 OIG conducted audits of CFTC employees' use of government-issued purchase and travel cards, and it also completed a comprehensive review of the program's information requirements. In 2001, OIG completed its audit of the CFTC's Civil Monetary Penalties Collection Program. GAO also conducts regular reviews of ENF. For example, in its July 2003 report, GAO noted that the CFTC addressed its recommendation by implementing procedures for the timely referral of monetary penalty payment delinquency cases to the U.S. Treasury.

Evidence: The program, along with the rest of CFTC, is also independently evaluated for financial management pursuant to the Accountability of Tax Dollars Act, which requires CFTC to submit quarterly un-audited financial statements, year-end independently audited financial statements, and a consolidated Performance and Accountability Report. CFTC Annual Reports 2002 & 2003; Annual Performance Plans and Reports; OIG Audit of Civil Monetary Penalty Collections report, issued April 27, 2001. Review of Enforcement Information Requirements completed September 2003; GAO, SEC and CFTC Fines Follow-Up Collection Programs Are Improving, But Further Steps Are Warranted, GAO -03-795 (July 2003); GAO, SEC And CFTC: Most Fines Collected, But Improvements Needed In The Use Of Treasury's Collection Service, GAO-01-900 (July 2001); GAO, Results Act: Observations On CFTC's Annual Performance Plan, GAO/T-GGD-99-10 (October 1998); GAO, Results Act: Observations On CFTC's Strategic Plan, GAO/T-GGD-98-17 (October 1997).

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: As part of CFTC's internal budget process, CFTC's Office of Financial Management (OFM) requires ENF to allocate in writing its requested FTEs by outcome objective for each fiscal year. ENF must also provide a written narrative discussion of how the program's planned performance measures would be affected by: 1) the increase/decrease in total FTEs for ENF in the budget period; and 2) any observed or predicted future demands, risks, uncertainties, events, conditions, and trends.

Evidence: FY 2005 Budget & Performance Estimate; FY 2005 President's Budget.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: CFTC refined its strategic planning in 2003 and 2004 when it revised its performance measures reported in its semi-annual Performance Report/Plan. CFTC sharpened its focus on including performance outcome measures in addition to its output measures. These new measures for ENF are identified in Question 2.1. The effectiveness of ENF in meeting this strategic plan is reflected both in CFTC's Annual Reports and its Annual Performance Reviews.

Evidence: A factor that helps CFTC avoid strategic planning deficiencies is that CFTC is subject to a 'sunset provision" that requires congressional reauthorization every five years. As part of this reauthorization process, CFTC and Congress conduct a comprehensive review of CFTC's operations (including ENF) and its authorizing statute, the CEA. For example, during the last reauthorization, Congress passed the CFMA, which moved CFTC from a frontline to an oversight regulator that emphasizes tough enforcement actions against wrongdoers without creating overly burdensome regulations. CFTC Annual Reports 1999, 2000, 2001, 2002 and 2003; FY 2005 President's Budget/FY 2003 Annual Performance Report; FY 2005 Budget & Performance Estimate; and CFTC Strategic Plan 2004-2009 (February 2004).

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: ENF has numerous mechanisms and procedures to collect timely and credible performance information. Internally, ENF maintains a case tracking system and numerous databases that help managers manage the program and improve its performance. For example, information gathered helps ENF identify investigations that have remained opened for over a year without generating either a recommendation to close or to file an enforcement action. ENF also ensures that it receives timely information from its SROs. For example, CFTC regularly audits designated SROs compliance programs and rules enforcement. In addition, Division staff meet quarterly with staff from SROs to discuss investigations of potential trade practice violations. ENF also relies heavily upon domestic and international cooperative enforcement and meets regularly with other authorities, such as the Consumer Protection Initiatives Committee, Securities and Commodities Fraud Working Group, and International Organization of Securities to gather performance information.

Evidence: CFTC Five-Year Plan For Information Resources Management FY 2000-2004 (March 2000). The MSR monitors preliminary inquiries, investigations, litigations, cooperative enforcement matter information, and staff hours worked. The Enforcement Procedure 3 (EP3) system tracks documents. ENF maintains numerous internal, confidential databases to track domestic cooperative enforcement activities, including all inquiries and referrals received as well as civil and criminal actions filed by other state and federal law enforcement agencies. ENF also closely follows the performance of International Cooperative Enforcement efforts through the use of internal, confidential databases. These databases track the receipt and resolution of requests for assistance ENF both receives from and makes to foreign authorities.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: All Division staff, including managers, are held accountable for cost, schedule, and performance results. Division managers are held accountable through internal processes and review, and by external, independent oversight and auditing by CFTC's Office of Financial Management (OFM) and OIG. All Division staff, including managers, are required to set annual performance goals for themselves, and their performance is formally evaluated on a semi-annual basis. Also, managers are required to justify their performance - including the timeliness of their matters (e.g. whether they were able to complete their investigations, by either closing them or filing an enforcement action, within one year of their opening) - during quarterly docket reviews and work plan meetings. ENF managers are also required to 1) produce annual budgets for ancillary expenses , and 2) review staff travel reports before and after travel to ensure that these, and all other expenditures, are needed for investigations/litigations.

Evidence: Managers' evaluations, promotions and bonuses are directly affected by the degree to which they meet their performance and budget goals. CFTC-Instruction 442; Critical Elements and Successful Standards: Effective Leadership: 'Accomplishes the mission and organizational goals of the work unit. Uses financial, material, and human resources effectively.'

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: CFTC and ENF have in place redundant systems and checks to ensure that funds are obligated in a timely manner and spent for the intended purpose. Each fiscal year, the Commission routinely obligates 99.9% of the available appropriation. In response to the Accountability of Tax Dollars Act and the President's Management Agenda, in FY 2004 the CFTC completed its first submissions of audited financial statements statements, and a consolidated Performance and Accountability Report.

Evidence: End of Year Financial Statements (SF-133); bimonthly Status of Funds Reports; and the FY 2004 Performance and Accountability Report.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: ENF has employed the following procedures, among others, to ensure its efficiency and cost-effectiveness: Competitive Sourcing - ENF competitively sources its nationwide court reporting costs (which account for approximately one quarter of ENF's operating budget), its contract to enhance its internet surveillance capabilities, and its litigation support initiatives, including ENF's 'E-Law' project. In addition, CFTC measures the timeliness of its investigations by tracking the percentage of cases filed during the FY that were filed within one year of investigation opening.

Evidence: FY 2005 President's Budget; FY 2003 Annual performance Report; FY 2005 Budget and Performance Estimate; Internal Division Budget reports; E-law (Requirements Analysis, Technology Assessment, Business Impact Analysis);; Continuity Planning (Business Impact Analysis, Business Continuity plan); Court Reporter Contract (Request for Proposal/Statement of Work); and Internet Surveillance (RFQ-Internet Search Services).

Does the program collaborate and coordinate effectively with related programs?

Explanation: ENF coordinates and collaborates with a number of other criminal and civil law enforcement authorities (including the Department of Justice, Federal Bureau Of Investigation, Securities and Exchange Commission, Federal Energy Regulatory Commission, and various U.S. Attorneys Offices and State Securities Commissions) and inter-agency, domestic and international working groups (including the Corporate Fraud Task Force, U.S. Treasury Department's Bank Secrecy Act Advisory Group, U.S. Treasury Department's USA PATRIOT Act Implementation Working Group, the Financial Action Task Force (FATF), Telemarketing and Internet Fraud Working Group, Consumer Protection Initiatives Committee, Securities and Commodities Fraud Working Group, and the International Organization of Securities Commissions). ENF also coordinates closely with the SROs to enhance enforcement and eliminate duplication of efforts. In addition, ENF participates in several regularly scheduled industry conferences.

Evidence: An illustration of ENF's cooperative enforcement is the central role it played in the 18 month 'Operation Wooden Nickel' undercover investigation into forex and bank fraud conducted by the U.S. Attorney and FBI in the Southern District of New York. On November 19, 2003, the U.S. Attorney filed criminal charges against 47 defendants and arrested many of them. At the same time, CFTC filed six separate federal injunctive actions against 31 persons and entities. As part of the undercover operation, federal criminal agents infiltrated a forex boiler room in the World Financial Center allegedly operated by corrupt sellers of illegal forex futures contracts. The agents captured hundreds of hours of video and audio recordings of defendants allegedly scheming to deceive unsuspecting customers and steal millions of dollars. Operation Wooden Nickel is one of the largest undercover operations in which the CFTC has participated. CFTC Annual Reports 2002 & 2003.

Does the program use strong financial management practices?

Explanation: CFTC underwent its first full financial audit in FY 2004 and received an unqualified opinion for its 2004 balance sheets.

Evidence: In response to the Accountability of Tax Dollars Act and the President's Management Agenda, in FY 2004 CFTC completed its first submission of year-end audited financial statements and a consolidated Performance and Accountability Report. See the FY 2004 Performance and Accountabilty Report.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: ENF was recently reorganized to improve management. In addition to implementing an electronic solution, ENF has also reviewed its business process in order to determine whether management changes are needed. In July 2003, the GAO released a second report on the agency's collection program. The report found that CFTC addressed earlier concerns by implementing procedures for ensuring the timely referral of delinquent monetary penalty payments to FMS.

Evidence: CFTC Annual Reports 1999, 2000, 2001, 2002 and 2003; FY 2005 President's Budget/FY 2003 Annual Performance Report; FY 2005 Budget & Performance Estimate; and GAO, SEC and CFTC Fines Follow-Up Collection Programs Are Improving, But Further Steps Are Warranted, GAO -03-795 (July 2003).

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: ENF recently refined its long-term outcome goals (see response to Question 2.1), and the program's current performance suggests progress toward meeting these goals. However, the outcome-related measures established for the program do not fully reflect progress on meeting the program's overall goals.

Evidence: FY 2005 President's Budget; FY 2003 Annual Performance Report; FY 2005 Budget & Performance Estimate; and FY 2004 President's Budget, FY 2002 Annual Performance Report.

Does the program (including program partners) achieve its annual performance goals?

Explanation: ENF has largely met goals for its performance. For fiscal year 2004, ENF met all of its outcome measures. ENF also came close to meeting all of its output measures, with one exception ' 99% not 100% of actions closed during the year resulted in sanctions.

Evidence: FY 2004's 24% increase in market volume is a positive reflection on ENF'smarket integrity protection performance and exceeds the ambitious goal of 22%. While ENF may not obtain sanctions in one of the enforcement actions it closes during FY 2004, the CFMA's reliance upon vigorous enforcement action requires ENF to pursue not just the easy cases. CFTC Annual Performance Plans 2002-2005; CFTC Annual Performance Reports; CFTC Annual Performance Reports 2001-2003.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: ENF has demonstrated both improved time efficiencies and cost effectiveness in achieving its program goals. Despite a decrease in FTEs from 2003 (146) to 2004 (145), ENF demonstrated improved efficiency in completing investigations as reflected an increase in two statistics: 1) the percentage of cases that were filed within one year of the investigation opening (67% to 72%); and 2) the percentage of investigations that were closed within one year of opening (63% to 72%). ENF's improved effectiveness from 2003 to 2004 is also reflected in the increased number of investigations opened (116 to 193) and cases filed (64 to 83). ENF's case filings in 2004 were, in fact, the highest total of enforcement actions brought in the previous 15 years. ENF also increased its effectiveness through heightened domestic and international cooperative enforcement.

Evidence: FY 2005 President's Budget; FY 2003 Annual performance Report; FY 2005 Budget and Performance Estimate; Internal Division Budget reports; E-law (Requirements Analysis, Technology Assessment, Business Impact Analysis); Continuity Planning (Business Impact Analysis, Business Continuity plan); Court Reporter Contract (Request for Proposal/Statement of Work); and Internet Surveillance (RFQ-Internet Search Services). ENF's efficiency gains were reached through several initiatives including competitive sourcing, targeted IT investment, management reorganization, and development of a business continuity plan. With respect to cooperative enforcement, the creation of the OCE resulted in a significant increase in initiatives, including joint actions filed and assistance provided to sister agencies.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: Comparable programs that target similar types of fraud, such as the SEC, U.S. Attorneys, and SROs, do not use similar performance measures, so it is too difficult to compare program results.

Evidence:  

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: GAO has conducted several evaluations of CFTC and DOE that indicate that they are effective and achieving results. For example, in preparing an August 1998 report, GAO surveyed a judgmentally selected sample of about half of DOE's headquarters and regional staff. GAO found that a substantial majority of those surveyed 'viewed the division as operating effectively and efficiently as well as producing quality work.' Consistent with GAO's suggestions, DOE continued its efforts to further improve its effectiveness and, among other actions, DOE developed: a comprehensive procedures manual that is available to DOE staff via CFTC's intranet; an ongoing series of training programs presented by CFTC experts on key areas of law and litigation practice; and an annual questionnaire for staff to identify the training they believe they need to improve their effectiveness.

Evidence: GAO, Report to Congressional Requestors, CFTC Enforcement, Actions Taken to Strengthen the Division of Enforcement, GAO/GGD-98-193 (August 1998). See also GAO, SEC and CFTC Fines Follow-Up Collection Programs Are Improving, But Further Steps Are Warranted, GAO -03-795 (July 2003); GAO, Results Act: Observations On CFTC's Annual Performance Plan, GAO/T-GGD-99-10 (October 1998); and GAO, Results Act: Observations On CFTC's Strategic Plan, GAO/T-GGD-98-17 (October 1997)