WASHINGTON, D.C. – U.S. Senator Pat Roberts, R-Kan., Chairman of the Senate Committee on Agriculture, Nutrition and Forestry, sent a letter to Timothy Massad, Chairman of the Commodity Futures Trading Commission (CFTC), calling for answers regarding CFTC’s misguided accounting practices.
“I am concerned these accounting practices are revealing either incompetence at best or willful negligence on the part of the CFTC, especially following the revelation of the same transgressions by the Securities and Exchange Commission for very similar problems back in 2011,” Roberts said. “Why has this taken five years to come to light?”
Last month, the CFTC Office of the Inspector General (OIG) released an audit report of the CFTC’s financial statements showing multiple transgressions and raising serious questions about CFTC’s leasing and accounting practices.
The CFTC’s OIG contracted with KPMG, which performed audits of CFTC financial statements for the years 2005-2008 and 2010-2014. Specifically, KPMG identifies “material weaknesses in internal control over financial reporting and non-compliance with applicable laws and regulations.” KPMG finds that CFTC’s FY 2015 and 2014 financial statements contain misstatements relating to the understatement of obligations by hundreds of millions of dollars. CFTC does not concur with this finding and is awaiting the Government Accountability Office’s (GAO) legal opinion to determine if their practices were improper and in violation of the Anti-Deficiency Act.
In 2011, the U.S. Securities and Exchange Commission (SEC) faced a similar dilemma when SEC OIG issued a report and GAO issued a legal opinion in October 2011.
Click here to read the letter, dated February 2, 2016.
The Agriculture Committee, with jurisdiction over the exchange of commodity futures, held a CFTC hearing with Chairman Massad in May 2015. The Committee will soon take up legislation reauthorizing the Commodity Exchange Act which provides the regulatory authority for the CFTC.