The CFPB Can Improve the Efficiency and Effectiveness of Its Supervisory Activities

Finding 3: The CFPB Did Not Record Examination Milestones in a Timely Manner

CFPB examiners did not consistently document the completion of examination milestones in a timely manner. Although the CFPB has established timeliness requirements for examination reporting milestones, it has not established a policy on the timely recording of these and other milestones in SES. Senior management uses milestones in SES to monitor and track examinations on a weekly basis. If examination milestones are not recorded in a timely manner, senior management’s ability to monitor the agency’s performance against internal reporting requirements is limited.

The CFPB Has Not Set Timeliness Requirements for Recording Examination Milestones

We identified seven milestones in SES related to examination activities that contained information on the actual occurrence date and the date staff members recorded the relevant milestone in SES. Because the CFPB has not established a requirement for the timely recording of examination data, we used seven days as a standard that would allow consideration for logistical impediments to recording examination data immediately but still provide managers with up-to-date and reliable information. Using that standard, we found that examination milestones were not entered in a timely manner in at least one-quarter of the instances for each of the key examination milestones we reviewed. In eight instances, staff recorded examination milestones more than 200 days after their occurrence.

In addition, we found 109 instances in which the agency entered dates before the milestone occurred. This was particularly prevalent with respect to the date that scoping began. According to CFPB officials, staff occasionally use SES as a planning tool to estimate when they expect milestones to occur. In some cases, however, those estimated dates were not updated to reflect the actual date the event occurred. Figure 5 illustrates the timeliness with which examination milestones were recorded in SES.

Figure 5: Timeliness of Recording Examination Milestones in SES

 

Source: OIG analysis of CFPB SES data.

Note: Percentages may not add to 100 due to rounding.

The CFPB’s examination reporting policy includes requirements for drafting and issuing examination products within certain time frames. According to a CFPB official, senior managers meet weekly to discuss the status of outstanding examinations, with a focus on reducing the number of examination reports that have not been issued. To monitor the status of each examination, assess the timeliness of the examination and reporting process, and analyze trends across the regions, CFPB management needs timely and reliable milestone data in SES, the system of record for CFPB examinations.

Despite having issued detailed instructions to staff on the usage of SES, the CFPB has not provided staff with guidance or established a policy that sets requirements for the timeliness with which staff should record the occurrence of examination milestones in SES. SES data that are not recorded in a timely manner may reduce the usefulness and reliability of the information that the CFPB uses to inform weekly meetings, monitor examinations, track performance against timeliness requirements, and forecast examination activities.

Recommendation

We recommend that the Associate Director for SEFL

6. Provide guidance and training to staff on the timeliness of recording examination milestones in SES.

Management's Response

Regarding recommendation 6, the Deputy Director and Associate Director for SEFL stated the following:

The CFPB will establish appropriate guidelines regarding timely data entry by examination staff and will develop appropriate training materials in connection with those guidelines, taking into account as applicable the technological constraints imposed by the CFPB’s existing Supervision and Examination System and other related systems. We note that the CFPB continues to develop and expand these systems in order to maximize the effectiveness of our supervisory work.

Management’s full response is included as appendix B.

OIG Comment

In our opinion, the actions described by the Deputy Director and Associate Director for SEFL appear to be responsive to our recommendation. We plan to follow up on the CFPB’s actions to ensure that the recommendation is fully addressed.