WASHINGTON – The Securities and Exchange Commission is about 400 employees short of what it needs to manage its current workload, according to a consultant’s four-month internal review mandated by the Dodd-Frank Act.
The preliminary findings by Boston Consulting Group reinforce arguments by SEC officials that the agency is underfunded and understaffed as it takes on oversight of derivatives, credit-rating firms and municipal bonds, according to a draft copy of the report obtained by Bloomberg News.
“Without sufficient human resources, the agency will be unable to complete the requirements of Dodd-Frank while maintaining its current activities,” the draft said.
The study said staffing levels had declined since 2005 and that SEC employees interviewed consistently complained their departments were understaffed.
The “capacity gap” of 375 to 425 employees identified in the report could be partly offset by shifting managers down to front-line or support roles, it suggested. The SEC could also resort to a large influx of temporary workers, the report said.
SEC Chairman Mary Schapiro said in Feb. 17 testimony to the Senate Banking Committee that her agency has been “fully engaged” with the consultants.
She said she expected its report, which is due today, to “identify additional efficiencies for SEC operations.” The chairman has said her agency needs a larger budget and eventually 800 more workers to implement the regulatory demands of Dodd-Frank, the law signed by President Obama in July.
House Republicans have proposed cutting federal spending back to 2008 levels for the rest of the current fiscal year to help reduce the nation’s budget deficit.
A major spending increase for the SEC “would further the mindset that our nation’s problems can be solved with more spending, not more efficiency,” Rep. Scott Garrett, R-N.J., chairman of the House subcommittee that oversees the SEC, said in a January statement.
The Boston Consulting study said every SEC division is failing to get to some “potentially high-impact activities” because of budget constraints.
