SEC Needs to Improve Controls over Financial Systems and Data – GAO Report

Highlights from a GAO report released yesterday:

Although the Securities and Exchange Commission (SEC) had implemented and made progress in strengthening information security controls, weaknesses limited their effectiveness in protecting the confidentiality, integrity, and availability of a key financial system. For this system’s network, servers, applications, and databases, weaknesses in several controls were found, as the following examples illustrate:

Access controls: SEC did not consistently protect its system boundary from possible intrusions; identify and authenticate users; authorize access to resources; encrypt sensitive data; audit and monitor actions taken on the commission’s networks, systems, and databases; and restrict physical access to sensitive assets.

Configuration and patch management: SEC did not securely configure the system at its new data center according to its configuration baseline requirements. In addition, it did not consistently apply software patches intended to fix vulnerabilities to servers and databases in a timely manner.

Segregation of duties: SEC did not adequately segregate its development and production computing environments. For example, development user accounts were active on the system’s production servers.

Contingency and disaster recovery planning: Although SEC had developed contingency and disaster recovery plans, it did not ensure redundancy of a critical server.

The information security weaknesses existed, in part, because SEC did not effectively oversee and manage the implementation of information security controls during the migration of this key financial system to a new location. Specifically, during the migration, SEC did not (1) consistently oversee the information security-related work performed by the contractor and (2) effectively manage risk.

Until SEC mitigates control deficiencies and strengthens the implementation of its security program, its financial information and systems may be exposed to unauthorized disclosure, modification, use, and disruption. These weaknesses, considered collectively, contributed to GAO’s determination that SEC had a significant deficiency in internal control over financial reporting for fiscal year 2013.

Full report:
INFORMATION SECURITY: SEC Needs to Improve Controls over Financial Systems and Data
GAO-14-419 (pdf, 25 pp.)

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