Report: SEC still shows mixed bag on information security

The Securities and Exchange Commission has made some progress on addressing its information security weaknesses, but the lack of a comprehensive agencywide program continues to put its data at risk, according to a Government Accountability Office report released on Monday.

"Information security weaknesses -- both old and new -- continue to impair the commission's ability to ensure the confidentiality, integrity and availability of financial and sensitive information," wrote the report's authors, Gregory C. Wilshusen, director of information security issues, and Nabjyoti Barkakati, acting chief technologist at GAO.

The pair acknowledged that the commission has corrected or mitigated eight of the 20 problems identified during the previous audit, and credited that improvement to senior management.

"Ultimately, what we found is a kind of mixed message," said Barkakati. "While some things are being done well, we found some problems that are critical enough to be a significant deficiency." He said his office ended up making 26 detailed recommendations to SEC Chairman Chris Cox's office on a range of issues, including access controls and configuration management, in a separate memo to the agency not publicly released.

SEC is responsible for enforcing securities laws, regulating financial markets and protecting investors. "To support its demanding financial and mission-related responsibilities, the commission relies extensively on computerized systems," the report said. "In order to protect financial and sensitive information ... it is essential that SEC integrate effective information security controls in a layered control strategy."

An important part of that strategy, according to the report, is the implementation of a comprehensive, enterprise-level information security program. While the commission has made progress in improving its program, auditors noted, it has not yet fully implemented several key activities, such as completing security plans for certain database applications, sufficiently documenting and monitoring information security training for key personnel and performing comprehensive evaluations of all enterprise database applications. "As a result," the report stated, "SEC is at increased risk of unauthorized access to and disclosure, modification, or destruction of its financial information, as well as the inadvertent or deliberate disruption of its financial systems, operations and services."

To combat these and other deficiencies, GAO recommended four actions: ensure security plans are complete; document and monitor employee training activities; test security controls annually; and back up critical data files at workstations used for large accounting programs. Other weaknesses listed in the report included insufficient control of access to information resources, routine authorization of more system access than employees' jobs require, insufficient physical security controls and failure to consistently encrypt sensitive data.

In a response letter attached the report, Cox welcomed GAO's findings as "an opportunity for further improvement," adding that the results "give the agency increased confidence that it is doing the right things in securing the core infrastructure."

SEC fully agreed with the report's four primary recommendations and listed steps being taken to comply. Cox also laid out several steps the agency has taken to improve its information security program since the audit concluded in September 2007, calling it a critical priority.

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