WASHINGTON (Reuters) - Senate Agriculture Committee Chairman Pat Roberts is turning up the heat on the U.S. derivatives and commodities regulator over an accounting error that could mean it has deficient funds.
Roberts, a Kansas Republican, sent a letter dated Feb. 3 to Timothy Massad, head of the Commodity Futures Trading Commission, calling for answers on the error, according to the committee. The letter included a list of 11 questions for the CFTC to answer and a request for a detailed briefing before Feb. 17.
Pressure has mounted on the agency since last month after Reuters reported that auditing firm KPMG took the extremely rare action of withdrawing nearly a decade of financial opinions about the agency’s accounts when it learned of a significant material error related to leases. The auditor estimated the CFTC had understated liabilities by $194 million in the year to Sept. 30, 2015, and by $212 million the previous year.
Lawmakers are concerned that the CFTC has violated a federal law prohibiting government agencies from obligating or spending federal funds in excess of the amount available. The nonpartisan federal watchdog, the Government Accountability Office, is investigating whether the leasing errors put the CFTC afoul of the anti-deficiency law.
"What I find particularly troubling is in 2011 the U.S. Securities and Exchange Commission faced a similar dilemma concerning its leasing practices and how it accounted for its leases,” Roberts wrote, referring to the top U.S. securities regulator.
"Considering the similarity between the agencies, the similarity of the issues, the public Congressional inquiries and the gravity of errant accounting, I am bewildered as to how CFTC finds itself in this current state of affairs."
The questions Roberts posed revolve around how much guidance KPMG and the White House's Office of Management and Budget provided the CFTC. He also asked about the accounting practices the commission uses and how closely it monitors its books.
