Dodd-Frank News Center

OIG issues audit of CFPB's information security program

This story appeared in Bank Digest.                                   

The Office of Inspector General for the Consumer Financial Protection Bureau and the Federal Reserve Board has issued an audit of the Bureau's information security program, as required by the Federal Information Security Modernization Act of 2014. The OIG evaluated the program's maturity level (from a possible low of 1 to a possible high of 5) across several areas and concluded that the program is operating at level 3 (consistently implemented), with the Bureau performing several activities indicative of a higher maturity level. 

According to the report, the CFPB also has opportunities to mature its program in FISMA domains across all five Cybersecurity Framework security functions--identify, protect, detect, respond, and recover--to ensure that its program is effective. The OIG made four recommendations to strengthen the Bureau's information security program in the areas of configuration management, identity and access management, and data protection and privacy.

OIG says CFPB should strengthen controls over contracting processes

This story appeared in Bank Digest.   

The Office of Inspector General for the Consumer Financial Protection Bureau and the Federal Reserve Board has issued a report assessing the Bureau's compliance with applicable laws, regulations, and internal policies and procedures related to the award and management of its contract with GMMB for advertising and marketing services, which it awarded in August 2013. The OIG found that while the Bureau competitively awarded the GMMB blanket purchase agreement and performed technical and price reasonableness evaluations in compliance with the Federal Acquisition Regulation, it can improve controls to help ensure compliance with other aspects of the FAR and can improve contract management. 

The OIG issued recommendations designed to strengthen the Bureau's controls over its contracting processes. The recommendations included enhancing existing policy and associated training related to contract financing and improving contract management practices.

OIG says FHFA should improve administration of Suspended Counterparty Program

This story appeared in Bank Digest.                                  

The Federal Housing Finance Agency’s Office of Inspector General has issued a report to assess the administration by the FHFA's Office of General Counsel of the agency's Suspended Counterparty Program and determine whether the program is achieving its stated objective. According to the report, the FHFA adopted the SCP in June 2012 to augment counterparty risk management programs of Fannie Mae and Freddie Mac and the Federal Home Loan Banks (the regulated entities) that were designed to protect them from excessive financial loss caused by deterioration in a counterparty's financial condition.                                   

The OIG found deficiencies in OGC's administration of the SCP, the remediation of which could enable the program to effectively limit the regulated entities' exposure to the risks inherent in doing business with counterparties found to have engaged in covered misconduct, according to the report. The OIG recommended that the FHFA establish a plan with a timeline to reduce the backlog of referrals under the SCP and document its reasons for any departures from the suspension periods prescribed in its guidelines.

OIG white paper tracks spending increases by Fannie Mae and Freddie Mac

This story appeared in Bank Digest.

The Federal Housing Finance Agency’s Office of Inspector General has issued a white paper entitled "$1.1 Billion Increase in Expenses for Fannie Mae and Freddie Mac from 2012 through 2015: Where the Money Went." According to the OIG, the white paper tracks FHFA-approved net spending increases of more than $1 billion from 2012 through 2015 by Fannie Mae and Freddie Mac (the Enterprises) and sheds light on where these monies were spent to provide an accounting for stakeholders.

The white paper is a follow-up to a prior report in which the OIG assessed the FHFA's process to review and approve each of the Enterprises' annual operating budgets, beginning with fiscal year 2013. In November 2012, the FHFA had directed the Enterprises to obtain its review and approval of their annual operating budgets, while previously it had delegated to the Enterprises the authority to establish their own annual operating budgets.

The prior report had concluded that the FHFA's budget review and approval process had not achieved the agency's stated purpose for reasserting its approval authority because of late timing, cursory-level analysis, and inadequate resources.

OIG issues report on CFPB headquarters construction costs and controls

This story appeared in Bank Digest.

The Office of Inspector General for the Consumer Financial Protection Bureau and the Federal Reserve Board has issued an audit report entitled "CFPB Headquarters Construction Costs Appear Reasonable and Controls Are Designed Appropriately." The purposes of the report were to evaluate the reasonableness of the overall estimated and proposed costs for the CFPB's headquarters renovation and to assess the effectiveness of the CFPB's processes and controls for approving, managing, and documenting headquarters renovation costs and project decisions.

Among the OIG's findings was that construction costs appear reasonable based on comparisons to an independent cost estimate and the costs of two comparable building renovations. The OIG also found that current controls for approving, managing, and documenting renovation costs and project decisions are designed appropriately, although the agency said that since most construction cost-management control activities had not yet begun, it did not have the opportunity to test the operating effectiveness of those controls.