The Securities and Exchange Commission is not the best place to work among federal agencies in Washington, according to a new study by a government watchdog.
The SEC's organizational structure "has not been conducive to motivating and encouraging a high level of performance," concluded the Government Accountability Office in a report released on Thursday.
"Many staff indicated that morale is low and a significant percentage characterize the atmosphere of the agency as one of distrust," the GAO said.
The GAO's report was required by the 2010 Dodd-Frank Wall Street reform law, whose three-year anniversary is this month.
The study was mandated following several high-profile lapses at the SEC during the financial crisis, including its failure to detect Bernard Madoff's massive Ponzi scheme.
An Office of Personnel Management survey of federal employees ranked the SEC 19th of 22 similarly sized agencies based on employee satisfaction.
The GAO laid out several areas in need of improvement, including workforce planning, performance management, communication and personnel management assessment.
While the SEC has taken some steps in most of these areas to improve, the GAO urged the agency to do more.
Some of the findings in the GAO's report are consistent with complaints often lodged by the SEC's Chapter of National Treasury Employees Union.
In addition, the GAO's survey found that many employees still view the culture at the SEC as "siloed" - where one division does not talk to the other.
This was highlighted several years ago by the Madoff and Allen Stanford Ponzi scandals, where examiners and enforcement lawyers failed to properly communicate and may have missed opportunities to detect the schemes.
The GAO said the SEC is actively working to create a comprehensive workforce plan and is trying to close skill gaps to hire people with more financial industry expertise.
Still, the GAO said, the SEC lacks a transparent process for leadership succession and many interviewed did not see "much incentive" to be promoted into management positions.
In a letter responding to the GAO study, SEC Chair Mary Jo White said she recognizes there is still "work to do in these areas" and that she is "committed to ensuring that process continues."
The SEC agreed with the report's recommendations, she said. She added that the SEC is taking steps toward addressing workforce competency gaps and improving intra-agency communication.
She also said the SEC has successfully implemented pay-for-performance for non-bargaining unit employees, and is still in the process of assessing the impact of the new system.
An SEC spokeswoman declined to make any additional comment.
(Reporting by Sarah N. Lynch in Washington; Editing by Phil Berlowitz)