Reply #5: US SEC expects to fill $48-mln budget hole in 2006

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http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-16T030244Z_01_N15532705_RTRIDST_0_FINANCIAL-SEC-BUDGET.XML

WASHINGTON, Nov 15 (Reuters) - The U.S. Securities and Exchange Commission said on Tuesday it plans this year to plug a massive hole in its budget caused by recent cost overruns in building new agency offices in three cities.

SEC Chairman Christopher Cox said the investor protection and market regulatory agency's fiscal 2006 budget will cover "the entirety of the $48.7 million in unbudgeted obligations by year end, which will limit the impact of these errors."

In the SEC's 2005 annual report, Cox -- who took over the SEC in August from William Donaldson -- said fixing the budget problem was "of vital importance," while he also pledged swift action to fix other SEC shortcomings.

As part of the annual report, the Government Accountability Office (GAO) for the second straight year found fault with the internal financial controls of the SEC, an agency responsible for ensuring that thousands of U.S.-listed corporations have adequate internal controls.

The SEC in fiscal 2005, which ended Sept. 30, "did not have effective internal control over financial reporting," but did comply with applicable laws and obligations, said the GAO, the investigative arm of Congress.

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The shortfall stemmed from mishandling of facilities budgets for SEC offices in Boston and New York, as well as budgets for a sleek, new glass-and-steel headquarters in Washington that the SEC has since moved into, officials said.

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