GAO: SEC cybersecurity program is incomplete

Lack of an adequate information security program results in weaknesses in SEC's network security

The Securities and Exchange Commission has corrected some weaknesses identified in its information security controls in the past two years, but the lack of a comprehensive information security program has let weaknesses accumulate faster than they have been resolved, according to the Government Accountability Office.

“In our report on SEC’s financial statements for fiscal years 2008 and 2007, we concluded that weaknesses in information security controls constitute a significant deficiency in internal controls over the information systems and data used for financial reporting,” GAO auditors wrote in a recently released report.

SEC has corrected or mitigated 18 of 34 weaknesses reported in a 2008 audit, GAO said. But in addition to the 16 problems not yet addressed, GAO identified 23 new ones. “A key reason for these weaknesses was that SEC did not fully implement key activities of its information security program,” the report states.

Among the missing components of SEC's security program:

  • The commission has not filled the senior information security officer position.
  • SEC did not keep senior managers fully apprised of risks.
  • System security tests were not always sufficient.
  • A key intermediary subsystem was not certified and accredited.
SEC Chairwoman Mary Schapiro agreed with GAO’s recommendation that the commission fully implement the information security program and said officials are taking steps to address concerns. She added that SEC’s security has improved in recent years.

“Because in previous years the SEC had addressed many of the more common information security weaknesses, auditors have increasingly focused their reviews on a narrower set of relatively lower-level controls,” she wrote in response to the report. “Since the conclusion of the audit in November 2008, we have made additional progress in resolving outstanding issues and further strengthening our information security program.”

SEC is not unique in its shortcomings. GAO has designated information security as a governmentwide high-risk area since 1997. Like much of the rest of the federal government, SEC relies heavily on information technology to accomplish its mission and make information available to the public. The primary database applications it uses are Momentum, for recording accounting transactions and maintaining the general ledger; Phoenix, for processing data on penalties assessed by SEC; and the Electronic Data Gathering, Analysis and Retrieval system — the public face of SEC — for automatically collecting and forwarding required filings.

To correct previously identified problems, SEC has:

  • Adequately validated electronic certificates from connections to its network.
  • Physically secured the perimeter of the operations center.
  • Monitored unusual and suspicious activities at the operations center.
  • Removed network system accounts and data center access rights from employees when they leave the commission.
Uncorrected security problems at SEC fell into two categories.

Control weaknesses:

  • SEC did not sufficiently control access to information resources.
  • Controls for identifying and authenticating users were not consistently enforced.
  • User access to systems was not sufficiently restricted.
  • Network services were not always encrypted.
  • Auditing and monitoring of security-related events on databases were inadequate.
  • Weaknesses in physical security controls reduced their effectiveness.
Weaknesses in other information system controls:
  • Incompatible duties and functions were not adequately segregated.
  • Configuration management controls were not adequately implemented.

About the Author

William Jackson is a Maryland-based freelance writer.

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