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Executive Direction & Support

Table Of Contents
Executive Direction Budget and FTEs
  Budget FTEs
Total Budget $39,237,000 150
Total Change $3,476,000 9
Figure 38: Executive Direction Percentage
of Total Budget Dollars
Program Activity Percentage
Executive Direction 24%
All Other Programs 76%
Figure 39: Executive Direction Percentage
of Total Budget FTEs
Program Activity Percentage
Executive Direction 25%
All Other Programs 75%

Justification of the FY 2010 President’s Budget & Performance Plan

Background and Context. The fulfillment of the Commission’s mission and the achievement of our goals are tied to a foundation of sound management and organizational excellence. This foundation is essential to support the work of the Commission in the Washington D.C. headquarters and three regional offices in New York, Chicago, and Kansas City. The Commission is committed to maintaining a well-qualified workforce supported by a modern support infrastructure that enables the Commission to achieve its programmatic goals. Building this foundation will require significant investment in people, Management Initiatives systems and facilities.

Agency Direction. The Office of the Chairman and the Commissioners provide executive direction and leadership to the Commission—specifically as it develops and adopts agency policy that implements and enforces the CEA and amendments to that Act including the CFMA. This policy is designed to foster the financial integrity and economic utility of commodity futures and option markets for hedging and price discovery, to conduct market and financial surveillance, and to protect the public and market participants against manipulation, fraud, and other abuses. Executive leadership, in this regard, is the responsibility of the Chairman and Commissioners and includes the offices of the Chairman: the Office of External Affairs; the Secretariat; the Office of Inspector General; the Office of International Affairs; and the Office of Equal Employment Opportunity.

The Commission continues to implement the CFMA passed by Congress and signed by the President in December 2000. Specifically, the CFMA: 1) repealed the ban on single-stock futures and implemented a regulatory framework for these instruments based on the agreement between the Commission and SEC; 2) enacted the principal provisions of the Commission’s new regulatory framework; 3) brought legal certainty to bilateral and multilateral trading in over-the-counter financial markets; 4) confirmed the Commission’s jurisdiction over certain aspects of the retail market in foreign currency trading; and 5) gave the Commission authority to regulate clearing organizations.

This past year, Congress enacted the CFTC Reauthorization Act of 2008 (CRA) as part of the Food, Conservation, and Energy Act of 2008 (Farm Bill), making critical improvements to the CEA and the Commission’s authority. Specifically, the new legislation reauthorized the Commission through FY 2013, closed the so-called "Enron Loophole" by allowing enhanced Commission oversight of ECMs that trade contracts linked to regulated U.S. futures contracts, increased CFTC penalties for manipulation, clarified CFTC anti-fraud authority for off-exchange principal-to-principal energy trades, and clarified CFTC retail foreign currency fraud authority.

In FY 2010, the Agency Direction program requests a total of 46 FTEs, an increase of three over the FY 2009 level. One additional FTE is allocated to the Office of International Affairs in recognition of the burgeoning growth issues related to global market integration, the increased international coordination responsibilities contemplated by Congress with regard to trading in energy contracts through foreign boards of trade, the development of international standards and best practices, and the need for enhanced cooperation and coordination with foreign market authorities for supervisory and enforcement purposes. Two additional FTE are allocated to the Office of the Chairman to ensure that the Commission responds in a timely manner to Congress, the Administration, media, and the public.

Administrative Management and Support. Administrative Management and Support is provided by the Office of the Executive Director (OED), which is responsible for policy development and implementation of the management and administrative functions of the Commission. Administrative Management and Support is administered by the Chief of Staff and Executive Director and includes the following offices of the Executive Director: 1) Human Resources (OHR); 2) Financial Management (OFM); 3) Information and Technology Services (OITS); 4) Management Operations; and 5) the Library. OED staff:

In addition, the staffs of OED and subordinate offices oversee Commission-wide compliance with Federal requirements enacted by Congress and imposed by the Office of Management and Budget (OMB), the U.S. Treasury, the Government Accountability Office (GAO), and the Office of Personnel Management.

In FY 2010, the Administrative Management and Support subprogram requests a total of 104 FTEs, an increase of six FTE over the FY 2009 level. This includes an increase of three FTEs for the Office of Information Technology Services; an increase of one FTE for the Office of Management Operations; and increase of two FTEs for the Office Human Resources.

Financial Management. Improved accountability for performance, together with unquestionable fiscal integrity, serve as key mission delivery cornerstones. Effective financial management systems and services facilitate Commission performance, and earning unqualified audit opinions demonstrates financial accountability. Department of Transportation systems and services used by CFTC ensure that the financial resources entrusted to the Commission are well managed and judiciously deployed. The Budget and the Performance and Accountability Report permit the public to see how well programs perform, and the cost incurred to achieve that performance.

Office of Information and Technology Services. The Commission’s ability to fulfill its mission successfully depends on the collection, analysis, communication and presentation of information in forms useful to Commission employees and other interested parties, such as, the industry it regulates, as well as other Federal and state, and international agencies with which we cooperate, the Congress and the American public. A secure modern information technology infrastructure is a vital tool that enables the Commission to serve these stakeholders effectively. The Commission is making a concerted effort to use commercial best practices developing and maintaining its IT systems, applications and infrastructure, deploying a modern messaging, archiving and document management system.

With the growth of trade and order volumes, the amount of reported trade and order data has grown considerably. Alongside that data growth, the Commission is frequently engaged in more complex and time sensitive information analysis efforts. These developments have led to a key technology initiative — the development of an information management architecture that transforms a growing data stream and a growing data analysis requirement into a Commission data environment. The initiative will examine current capabilities, emerging data needs, data governance, data organization, data privileges, and software capabilities to provide an information architecture roadmap in support of current mission requirements. The resulting solution will provide the CFTC with more effective information analysis capability by modernizing the Commission existing data management environment.

The Commission is also in the process of fully implementing the TSS, which is used for trade practice surveillance on the new and emerging electronic exchanges. This new system uses state-of-the-art commercially available software to enhance trade surveillance capability over the innovative and ever-expanding electronic trading platforms. The new TSS will ultimately replace the current legacy surveillance systems that have limited capability in the newer dynamic marketplace where new trading techniques, such as inter-exchange trading, are commonplace practices.

Another significant project is the implementation of a Document Management System to modernize, centralize and automate the management of the Commission’s information resources. The Commission’s ability to fulfill its mission depends on the collection, analysis, communication and presentation of information in forms useful to Commission employees, the regulated industry, other Federal, state, and international agencies, the Congress, and the American public. When complete, the Document Management System will improve the Commission’s document management practices, technical solutions, and business process.

A net increase of three FTEs is requested to address the need to design and implement information architecture and associated software tools. The three additional FTE would be deployed to this corporate need, developing an enterprise data repository, developing technical solutions to facilitate data analysis, ensuring data quality requirement, and providing data governance support.

Office of Management Operations. The Office of Management Operations (OMO) provides support to Commission staff by ensuring the timely delivery of products and services, and operations and maintenance of the facilities at Headquarters and in the regional offices. Many improvements in critical administrative service areas have occurred during the last few years, including the implementation of a property management system for all property, capitalized, non-capitalized, sensitive items, and development and maintaining the space matrix to track staff and available space for facilities planning. OMO will continue the furniture replacement project over the next three to four years, depending on funding availability. OMO will also lead the expansion and possible renovation of space at headquarters and in the regions to accommodate new staff.

One additional Administrative position will be allocated for the regional office in Kansas City. The additional OMO staff member in Kansas City will free other staff to focus on programmatic and IT support functions.

Office of Human Resources. The Commission performs a vital role in protecting the integrity of the futures and option markets—one of America’s most innovative and competitive financial services industries. To maintain the U.S. role as the world leader in setting the standard for ensuring market integrity and protection for market users, the Commission must have sufficient resources to attract, train, promote and retain a professional workforce with the capacity to meet this evolving mission.

The Commission continually refines its strategic human resource initiatives. A governance committee of senior managers draws on frequent employee input to develop programs that will support long-term mission goals with knowledgeable, diverse and productive human capital. The goal of this continual program review is an equally flexible workforce, one that reacts and adapts quickly in terms of size, skills and composition to meet changes in the industry, technology and/or statutory or regulatory developments. The process produced our new merit pay system, which supports our performance culture. This ongoing strategic management of human capital initiative commits the agency to improving its ability to: 1) plan for anticipated change in workforce composition; 2) target and recruit employees to fill critical skill deficiencies; 3) support employee development; 4) identify and justify staff resources needed to perform statutory mandates; and 5) implement the Title V-exempt CT pay plan as mandated by Section 10702 of Public Law 107-171, the FSRIA of 2002.

Two FTEs will be allocated to continue rebuilding after retirement losses in the following critical functions: 1) classification and staffing; 2) employee relations; 3) security; 4) suitability; and 5) training. These positions are essential to successful management of the new pay for performance system, continued implementation of eGov initiatives, and overall delivery of strategic human capital planning and accountability programs that serves agency goals. These positions also support delivery of data-driven workforce/succession planning, enabling continued good stewardship of the agency pay parity authority that provides access to needed talent through effective, efficient compensation programs.

Consequence of Not Receiving Requested Level of Resources

Agency Direction. Without the requested level of resources, the Offices of the Commissioners and Chairman will suffer a diminution in the administrative and regulatory responsiveness of the Commission. For example, public outreach, and responsiveness to Congress, other government agencies, the futures industry, and other public inquiries may be slower, or administrative and technical review of Commission memoranda, correspondence, or official actions, such as responding to Freedom of Information Act requests, may take longer.

U.S. futures markets and firms operate globally, which increasingly necessitates that the Commission coordinates with foreign market authorities for supervisory and enforcement purposes. The global financial crisis has resulted in intense regulatory development work by the G20 and the International Organization of Securities Commissions. Additional FTEs are needed in order to adequately staff the various work groups that have been called for by those organizations. Additional FTEs are also needed to address the accelerating pace of global market integration, the need to take forward recommendations for enhancing commodity market transparency, the increasing requests to the Commission to participate in U.S. government financial services initiatives and to provide technical assistance, and the need to coordinate closely with foreign regulatory counterparts in light of global market volatility and global regulatory changes affecting the U.S. futures industry. Finally, recent Congressional action will require enhanced CFTC due diligence and international coordination with regard the trading of energy contracts through foreign boards of trade. Any diminution in resources will severely affect the ability of the Commission to continue its existing international cooperation and coordination program. Cutbacks would require the Commission to reduce its participation in working groups formed to respond to the financial crisis and in standard-setting international organizations, restrict its ability to engage in bilateral meetings with foreign regulatory authorities that are increasingly necessary to address important cross-border issues (e.g., electronic markets, energy trading coordination, cross-border mergers and cooperative surveillance arrangements), and restrict our ability to respond positively to requests by the U.S. Treasury to participate in international dialogues where Commission contributions are requested (e.g., U.S.-China dialogue). Limits on staff capacity will also restrict the Commission’s ability to respond to increasing requests for technical assistance from developing market jurisdictions.

Administrative Management and Support. Without the requested level of resources, the Administrative Management and Support subprogram will impair its ability to manage the: 1) new pay for performance system and other strategic initiatives so they deliver increased accountability for agency goals; 2) continued stewardship of agency pay parity authority to assure access to needed talent with effective and efficient compensation programs; 3) support of data-driven workforce/succession planning that prepares the agency to act in advance on issues such as the ability of 41 percent of managers on board at the start of FY 2008 to retire by the end of FY 2010; 4) increased regulatory and administrative responsibilities imposed by GAO, General Services Administration (GAO), OMB, the U.S. Treasury and legislative mandates such as the Government Performance and Results Act, Information Security Act, Federal Managers’ Financial Integrity Act, and the Tax Accountability Act; 5) in-house expertise needed to assist major programs in the monitoring, audit, and investigation of increasingly sophisticated and technologically driven markets; 6) coordination and implementation of the agency asset management initiative as identified in the financial audit statement as an internal control weakness; and 7) preparedness and readiness of the Commission and staff in the event of an emergency.

Office of Information and Technology Services. The consequence for the Office of Information and Technology Services not receiving additional resources will curtail the Commission’s ability to keep pace with the industry data growth and the need for more effective and complex information analysis. The three new IT positions requested will provide database analysis and a software engineering services in support of all the Commission’s mission areas. Work on trade practice surveillance, trader account identification, large trader reporting, economic analysis, and litigation support will all benefit from the work products expected of staff in these positions. At present, the Commission has a limited number of contractor staff engaged in these efforts, but there is not government staff engaged in the initiative beyond the inherently governmental project management functions, creating a high dependence on external resources for technical work. OITS would ideally have a more blended workforce to reduce contractor dependence for business results and technical output, increase the Commission technical knowledge of highly-complex mission requirements, and increase the service delivery on efforts of mission importance. Without the staff level requested the Commission will be impaired to maximize the use of information to support important mission objectives.

Table 36: Executive Direction & Support Request by Subprogram
($ in thousands)
Subprogram FY 2009 FY 2010 Change
FTE Budget
FTE Budget
Agency Direction1 $11,075 43.00 $12,218 46.00 $1,143 3.00
Administrative Management and Support 24,686 98.00 27,019 104.00 2,333 6.00
Total $35,761 141.00 $39,237 150.00 $3,476 9.00

1Agency Direction includes the office of the Inspector General.

Office of the Inspector General Request
($ in thousands)
FY 2009 FY 2010 Change
FTE Budget
FTE Budget
$1,043 4.00 $1,076 4.00 $33 0.00

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Figure 40: Executive Direction & Support FY 2010 Budget by Subprogram
Subprogram Percentage
Agency Direction 31%
Administrative Management and Support 69%
Table 37: Executive Direction & Support Request by Goal
($ in thousands)
Outcomes FY 2009 FY 2010 Change
FTE Budget
FTE Budget
GOAL ONE: Protect the economic functions of the commodity futures and option markets.
1.1 Futures and option markets that accurately reflect the forces of supply and demand for the underlying commodity and are free of disruptive activity. $781 3.10 $806 3.10 $25 0.00
1.2 Markets that can be monitored to ensure early warning of potential problems or issues that could adversely affect their economic vitality. 1,272 5.05 1,312 5.05 40 0.00
Subtotal Goal One $2,053 8.15 $2,118 8.15 $65 0.00
GOAL TWO: Protect market users and the public.
2.1 Violations of Federal commodities laws are detected and prevented. $1,801 7.15 $1,934 7.45 $133 0.30
2.3 Customer complaints against persons or firms falling within the jurisdiction of the Commodity Exchange Act are handled effectively and expeditiously. 390 1.55 455 1.75 65 0.20
Subtotal Goal Two $2,191 8.70 $2,389 9.20 $198 0.50
GOAL THREE: Foster open, competitive, and financially sound markets.
3.1 Clearing organizations and firms holding customer funds have sound financial practices. $403 1.60 $416 1.60 $13 0.00
3.2 Commodity futures and option markets are effectively self-regulated. 126 0.50 130 0.50 4 0.00
3.4 Regulatory environment responsive to evolving market conditions. 2,318 9.00 2,656 10.00 338 1.00
Subtotal Goal Three $2,847 11.10 $3,202 12.10 $355 1.00
GOAL FOUR: Organizational and Management Excellence.
4.1 A productive, technically competent, competitively compensated, and diverse workforce that takes into account current and future technical and professional needs of the Commission. $3,778 15.00 $3,897 15.00 $119 0.00
4.2 A modern and secure information system that reflect the strategic priorities of the Commission.1 7,750 30.05 8,456 32.55 886 2.50
4.3 An organizational infrastructure that efficiently and effectively responds to and anticipates both the routine and emergency business needs of the Commission. 3,778 15.00 3,897 15.00 119 0.00
4.4 Financial resources are allocated, managed and accounted for in accordance with the strategic priorities of the Commission. 3,778 15.00 4,157 16.00 379 1.00
4.5 The Commission’s mission is fulfilled and goals are achieved through sound management and organizational excellence provided by executive leadership. 9,766 38.00 11,121 42.00 1,355 4.00
Subtotal Goal Four 28,670 113.05 31,528 120.55 2,858 7.50
Total $35,761 141.00 $39,237 150.00 $3,476 9.00
1Represents Office of Information Technology Services dollars and staff resources not otherwise allocated to Goals 1, 2, or 3. (back to text)
Figure 41: Executive Direction & Support FY 2010 Budget by Goal
Goal Percentage
Goal One 5%
Goal Two 6%
Goal Three 8%
Goal Four 80%
Last Updated: September 23, 2009