Remember the “Restacking Project,” the poorly-timed, $4 million reshuffling of offices for nearly all of the 2,000-plus employees at the SEC’s 3-year-old DC headquarters that has now been going on for many months? As previously discussed here, the Restacking Project already has its own newsletter (the “Restacker”), hotline number, help desk in Room 3465, and an e-mail address to handle computer or communications problems.

Now the Restacking Project has its own, critical 56-page Inspector General report, as well. In a report dated March 31, 2009, the IG states that:

We initiated this review because of feedback received from numerous staff of the U.S. Securities and Exchange Commission … complaining about the ongoing restacking project and expressing the concern that the restacking project was not properly approved and initiated, did not serve a useful purpose, and was a waste of Commission resources.

After attempting to survey over 2,100 SEC employees, the IG concluded, among other things, that “there are serious questions about whether the restacking project was necessary and whether it had any meaningful impact on communication among or productivity of the staff.”

One of the key survey question posed to the employees elicited some very pointed responses. Question 31 asked, “In your opinion, are the restacking project benefits to your office/division worth the cost and time that it has taken for construction, packing, moving, and unpacking, etc.?” 607 people responded, with 81% saying “No” and just 19% saying “Yes.” The IG states that the following were among the comments made by the employees on this point:

• “It is very expensive and disruptive to move so many people. It is a waste of taxpayer’s money. It also makes the agency look wasteful.”
• “… This appears to me to be nothing more than a land grab by divisions that want better office space. In this period of austerity, it is remarkable to me that the Commission would spend millions of dollars on a completely unnecessary move.”
• “… This has been the biggest waste of American people’s tax dollars. The Commission should be embarrassed with what they have chosen to spend their time and money on.”
• “This is a waste of taxpayers’ money. It would be more beneficial to the staff to have to walk or go up or down a flight of stairs to speak to other members of their Division; we could all use some exercise.”
• “Again, it is appalling how much time and energy are being wasted in this process. I am sure it is a staggering total in terms of the days of productive work lost … all so we can engage in musical chairs as the markets and our institutional reputation sink ….”
• “This project is an absolute waste of time and money. … Just because the previous idea to commingle the Divisions was an error, it does not resolve that error by trying to change it. Two wrongs do not make a right….”
• “Huge and obvious waste of resources in our technological age where people can easily communicate without being seated next to one another - what a tremendous waste!”
• “… This is a total waste of time we should be spending conducting investigations….”
• “I think it is a complete waste of money and time. I interact with a lot of people in my position and I haven’t found one individual that is happy about the restacking.”

OK, so you get the picture.

The IG’s report was promptly followed by a 10-page response memorandum by the SEC’s Executive Director stating, in effect, that the IG’s survey and conclusions were meaningless and generally wrong, respectively. This Executive Director’s response was, of course, then responded to by the IG in yet another 5-page report that declared that the Executive Director’s response was incorrect.

Meanwhile, the SEC keeps right on Restacking — the IG’s report notes that the project completion date has been moved back nine months, from September 2008 to June 2009.

Read the SEC IG’s Review of the Commission’s Restacking Project