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United States Government Accountability Office: GAO: Report to the Chairman of the Board, Congressional Award Foundation: May 2013: Financial Audit: Congressional Award Foundation's Fiscal Years 2012 and 2011 Financial Statements: GAO-13-554: Contents: Letter: Auditor's Report: Opinion on Financial Statements: Consideration of Internal Control: Compliance with Laws and Regulations: Objectives, Scope, and Methodology: Foundation's Comments: Financial Statements: Statements of Financial Position: Statements of Activities: Statements of Cash Flows: Notes to Financial Statements: Appendix I: Comments from the Congressional Award Foundation: [End of section] United States Government Accountability Office: GAO: 441 G St. N.W. Washington, DC 20548: May 15, 2013: Mr. Paxton K. Baker: Chairman of the Board: Congressional Award Foundation: Dear Mr. Baker: This report presents the results of our audits of the financial statements of the Congressional Award Foundation (Foundation) as of and for the fiscal years ending September 30, 2012 and 2011. These financial statements are the responsibility of the Foundation. This report contains our (1) unqualified opinions on the Foundation's financial statements, (2) results of our consideration of the Foundation's internal control over financial reporting, and (3) conclusion that our tests of the Foundation's compliance with selected provisions of laws and regulations disclosed no instances of reportable noncompliance during fiscal year 2012. We conducted our audit pursuant to section 107 of the Congressional Award Act, as amended (2 U.S.C. § 807), and in accordance with U.S. generally accepted government auditing standards. If you or your staff have any questions about this report, please contact me at (202) 512-3406 or malenichj@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report were Peggy Smith (Assistant Director), Emily Matic, Matthew Gardner, and Vincent Gomes. Sincerely yours, Signed by: J. Lawrence Malenich: Director: Financial Management and Assurance: [End of section] United States Government Accountability Office: GAO: 441 G St. N.W. Washington, DC 20548: Independent Auditor's Report: Mr. Paxton K. Baker Chairman of the Board Congressional Award Foundation: In accordance with section 107 of the Congressional Award Act, as amended (2 U.S.C. § 807), we are responsible for conducting audits of the Congressional Award Foundation's (Foundation) financial statements. In our audits of the Foundation's financial statements for fiscal years 2012 and 2011, we found: * the financial statements are presented fairly, in all material respects, in conformity with U.S. generally accepted accounting principles; * no material weaknesses in internal control over financial reporting;[Footnote 1] and: * no reportable noncompliance in fiscal year 2012 with laws and regulations we tested. The following sections discuss in more detail (1) these conclusions; (2) our audit objectives, scope, and methodology; and (3) the Foundation's comments on a draft of this report. Opinion on Financial Statements: The financial statements, including the accompanying notes, present fairly, in all material respects, in conformity with U.S. generally accepted accounting principles, the Foundation's assets, liabilities, and net assets as of September 30, 2012 and 2011, and the results of its activities and its cash flows for the fiscal years then ended. Consideration of Internal Control: In planning and performing our audit of the Foundation's fiscal year 2012 financial statements, we considered the Foundation's internal control over financial reporting for the purpose of determining our procedures for auditing the financial statements, not to express an opinion on the effectiveness of internal control. Accordingly, we do not express an opinion on the Foundation's internal control over financial reporting. However, for the controls we tested, we found no material weaknesses in internal control over financial reporting. Our audit would not necessarily disclose all deficiencies in internal control that might be material weaknesses or significant deficiencies. [Footnote 2] We considered the Foundation's internal control over financial reporting in determining the nature, timing, and extent of our audit procedures on the financial statements and in forming our conclusions. We identified other deficiencies in the Foundation's internal control that we do not consider to be material weaknesses or significant deficiencies, but which nonetheless merit Foundation management's attention and correction. We have communicated these matters to Foundation management. Compliance with Laws and Regulations: Our tests of the Foundation's compliance with selected provisions of laws and regulations for fiscal year 2012 disclosed no instances of noncompliance that would be reportable under U.S. generally accepted government auditing standards. The objective of our audit was not to provide an opinion on overall compliance with laws and regulations. Accordingly, we do not express such an opinion. Objectives, Scope, and Methodology: The Foundation's management is responsible for preparing the annual financial statements in conformity with U.S. generally accepted accounting principles, establishing and maintaining the Foundation's internal control over financial reporting to provide reasonable assurance that the control objectives established in GAO's Standards for Internal Control in the Federal Government are met,[Footnote 3] and complying with applicable laws and regulations. We are responsible for planning and performing the audit to obtain reasonable assurance and provide our opinion about whether the Foundation's financial statements are presented fairly, in all material respects, in conformity with U.S. generally accepted accounting principles. We are also responsible for (1) obtaining a sufficient understanding of internal control over financial reporting to plan the audit and (2) testing compliance with selected provisions of laws and regulations that have a direct and material effect on the financial statements. In order to fulfill these responsibilities, we: * examined, on a test basis, evidence supporting the amounts and disclosures in the financial statements; * assessed the accounting principles used and significant estimates made by Foundation management; * evaluated the overall presentation of the financial statements and notes; * obtained an understanding of the Foundation and its operations, including its internal control over financial reporting; * assessed the risk that a material misstatement exists in the financial statements; * tested relevant internal control over financial reporting for the purposes of planning and performing our other audit procedures; * tested compliance with selected provisions of the Congressional Award Act, as amended; and: * performed such other procedures as we considered necessary in the circumstances. An entity's internal control over financial reporting is a process effected by those charged with governance, management, and other personnel, the objectives of which are to provide reasonable assurance that (1) transactions are properly recorded, processed, and summarized to permit the preparation of financial statements in conformity with U.S. generally accepted accounting principles and assets are safeguarded against loss from unauthorized acquisition, use, or disposition and (2) transactions are executed in accordance with laws and regulations that could have a direct and material effect on the financial statements. We did not evaluate all internal controls relevant to operating objectives, such as controls relevant to ensuring efficient operations. We limited our internal control testing to controls over financial reporting. Because of inherent limitations, internal control may not prevent, or detect and correct, misstatements due to error or fraud, losses, or noncompliance. We also caution that projecting any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. In addition, we caution that our consideration of internal control may not be sufficient for other purposes. We did not test compliance with all laws and regulations applicable to the Foundation. We limited our tests of compliance to those provisions of laws and regulations that have a direct and material effect on the Foundation's financial statements for the fiscal year ended September 30, 2012. We caution that noncompliance may occur and not be detected by these tests and that such testing may not be sufficient for other purposes. We performed our audit in accordance with U.S. generally accepted government auditing standards. We believe our audit provides a reasonable basis for our opinion and other conclusions. Foundation's Comments: In commenting on a draft of this report, the Foundation stated that it has continued its efforts to improve operations and internal control over financial reporting. The Foundation also stated that our audit findings report the positive results of its ongoing efforts. The complete text of the Foundation's comments is reprinted in appendix I. Signed by: J. Lawrence Malenich: Director: Financial Management and Assurance: May 8, 2013: [End of section] Financial Statements: The accompanying notes are an integral part of these financial statements. Statements of Financial Position: The Congressional Award Foundation: Statements of Financial Position: As of September 30, 2012, and 2011: Assets: Cash: 2012: $137,110; 2011: $201,733. Certificate of Deposit (notes 4 & 13): 2012: $20,287; 2011: $20,135. Contributions receivable (note 3): 2012: $162,730; 2011: $95,075. Accounts receivable: 2012: $13,095; 2011: $10,732. Prepaid expense: 2012: $16,342; 2011: $4,864. Equipment, furniture, and fixtures, net (note 5): 2012: $8,721; 2011: $3,058. Total assets: 2012: $358,285; 2011: $335,597. Liabilities and net assets: Accounts payable and accrued expenses: 2012: $8,221; 2011: $6,670. Accrued payroll, related taxes, and leave: 2012: $20,972; 2011: $20,520. Total liabilities: 2012: $29,193; 2011: $27,280. Net assets: Unrestricted: 2012: $314,355; 2011: $291,769. Temporarily restricted (note 7): 2012: $14,737; 2011: $16,548. Total net assets: 2012: $329,092; 2011: $308,317. Total liabilities and net assets: 2012: $358,285; 2011: $336,597. [End of table] Statements of Activities: The Congressional Award Foundation: Statements of Activities: For the Fiscal Years Ended September 30, 2012, and 2011: Changes in unrestricted net assets: Operating revenue and other support: Program and other revenues: 2012: $463,218; 2011: $542,440. Contributions: 2012: $304,987; 2011: $289,711. Contributions - In-kind (note 8): 2012: $84,730; 2011: $58,277. Interest income: 2012: $152; 2011: $135. Net assets released from restrictions (note 7): 2012: $1,811; 2011: $1,002. Total operating revenue and other support: 2012: $854,898; 2011: $891,565. Operating expenses (note 9): Salaries, benefits, and payroll taxes: 2012: $348,476; 2011: $345,795. Costs of direct benefit to donors: 2012: $119,290; 2011: $162,749. Fund-raising expense: 2012: $97,616; 2011: $50,927. Gold Award ceremony: 2012: $95,950; 2011: $64,743. Professional fees: 2012: $68,980; 2011: $68,500. Administrative and other expense: 2012: $65,013; 2011: $70,704. Program, promotion, and travel: 2012: $31,043; 2011: $18,308. Depreciation and amortization: 2012: $3,789; 2011: $5,435. Board of Directors expense: 2012: $2,155; 2011: $1,580. Total operating expenses: 2012: $832,312; 2011: $799,741. Changes in unrestricted net assets: 2012: $22,586; 2011: $91,824. Changes in temporarily restricted net assets: Net assets released from restrictions (note 7): 2012: ($1,811); 2011: ($1,002). Decrease in temporarily restricted net assets: 2012: ($1,811); 2011: ($1,002). Increase in net assets: 2012: $20,775; 2011: $90,822. Net assets at beginning of year: 2012: $308,317; 2011: $217,495. Net assets at end of year: 2012: $329,092; 2011: $308,317. [End of table] Statements of Cash Flows: The Congressional Award Foundation: Statements of Cash Flows: For the Fiscal Years Ended September 30, 2012, and 2011: Cash flows from operating activities: Cash received from donors and registrants 2012: $698,187; 2011: $830,209. Cash paid to vendors 2012: ($468,255); 2011: ($451,252). Cash paid to employees 2012: ($285,103); 2011: ($280,618). Net cash (used) provided by operating activities 2012: ($55,171); 2011: $98,339. Cash flows from investing activities: Purchase of fixed assets: 2012: ($9,452); 2011: 0. Purchase of certificates of deposit: 2012: 0; 2011: ($20,000). Net cash used in investing activities: 2012: ($9,452); 2011: ($20,000). Cash flows from financing activities: Principal payments under capital lease obligation (note 6): 2012: 0; 2011: ($3,113). Net cash used in financing activities: 2012: 0; 2011: ($3,113). Net (decrease) increase in cash: 2012: ($64,623); 2011: $75,226. Cash, beginning of year: 2012: $201,733; 2011: $126,507. Cash, end of year: 2012: $137,110; 2011: $201,733. Reconciliation of change in net assets to net cash (used) provided by operating activities: Cash flows from operating activities: Increase in net assets: 2012: $20,775; 2011: $90,822. Adjustments to reconcile change in net assets to net cash from operating activities: Depreciation and amortization: 2012: $3,789; 2011: $5,435. Accrued interest income: 2012: ($152); 2011: ($135). Change in assets: Contributions receivable: 2012: ($67,655); 2011: ($1,050). Accounts receivable: 2012: ($2,363); 2011: ($892). Prepaid expenses: 2012: ($11,478); 2011: $27,425. Donated auction items: 2012: $0; 2011: $8,743. Change in liabilities: Accounts payable and accrued expenses: 2012: $1,461; 2011: $2,824. Accrued payroll, related taxes, and leave: 2012: $452; 2011: $1,910. Refundable advance: 2012: $0; 2011: ($26,142). Deferred revenue: 2012: $0; 2011: ($10,601). Net cash provided/(used) in operating activities: 2012: ($55,171); 2011: $98,339. [End of table] Notes to Financial Statements: The Congressional Award Foundation: Notes to the Financial Statements: For the Fiscal Years Ended September 30, 2012, and 2011: Note 1. Organization: The Congressional Award Foundation (the Foundation) was formed in 1979 under Public Law 96-114 and is a private, nonprofit, tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code established to promote initiative, achievement, and excellence among young people in the areas of public service, personal development, physical fitness, and expedition. New program participants totaled over 4,000 in fiscal year 2012. During fiscal year 2012, there were approximately 27,620 participants registered in the Foundation’s Award program. Public Law 111-200, enacted on July 7, 2010, reauthorized the Congressional Award Foundation through September 30, 2013. Note 2. Summary of Significant Accounting Policies: A. Basis of Accounting: The financial statements are prepared on the accrual basis of accounting principles generally accepted in the United States applicable to not-for-profit organizations. B. Certificate of Deposit: Certificates of deposit purchased with original maturities greater than three months are stated at face value plus accrued interest. C. Contributions Receivable: Contributions, including unconditional promises to give, are recorded as revenue when the contributions or promises are made. Conditional promises to give are recorded as revenue when the conditions on which the promises have been made are substantially met. Contributions receivable to be collected within less than one year are measured at net realizable value. The Foundation expects to receive all of the contributions receivable within one year. D. Equipment, Furniture, and Fixtures and Related Depreciation: Through December 2010, the Foundation capitalized equipment, furniture, and fixtures with an individual asset acquisition cost of more than $2,500. Assets were stated at historical cost, and depreciation was computed using the straight-line method over estimated useful lives of 5 to 10 years. In January 2011, the Foundation modified its policies to capitalize equipment, furniture, and fixtures with an individual asset acquisition cost of more than $500, over estimated useful lives of 2 to 10 years. Expenditures for major additions and betterments are capitalized and expenditures for maintenance and repairs are charged to expense when incurred. Upon retirement or disposal of assets, the cost and accumulated depreciation are eliminated from the accounts and the resulting gain or loss is included in revenue or expense, as appropriate. Donated equipment is recorded at fair value. E. Classification of Net Assets: The net assets of the Foundation are reported as follows: * Unrestricted net assets represent the portion of expendable funds that are available for the general support of the Foundation. * Temporarily restricted net assets represent amounts that are specifically restricted by donors or grantors for specific programs or future periods. The Foundation has no permanently restricted net assets as of September 30, 2012 and 2011. F. Revenue Recognition: Contribution revenue is recognized when received or promised and recorded as temporarily restricted if the funds are received with donor or grantor stipulations that limit the use of the donated assets to a particular purpose or for specific periods. When a stipulated time restriction ends or purpose of the restriction is met, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Deferred revenue, equal to the fair value of a ticket to a fund- raising event, is recorded for amounts received during the current fiscal year to be used during the next fiscal year. The contribution portion paid, in excess of the fair value of the ticket for the fund- raising event, is recorded as a refundable advance for funds received the fiscal year before the event takes place. After the event takes place, the deferred revenue and refundable advances are recorded as contributions. G. Functional Allocation of Expenses: The costs of providing the various programs and other activities have been summarized on a functional basis as described in note 9 of these financial statements. Accordingly, certain costs have been allocated among the programs and supporting services benefited. H. Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. I. In-kind Contributions: Contributed goods are recognized at fair value when received if the Foundation would have normally purchased them in the normal course of business. Contributed services are recognized at fair market value if the services received (a) create or enhance long-lived assets or (b) require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. Contributions of tangible assets are recognized at fair market value when received. The amounts reflected in the accompanying financial statements as contributions in-kind are offset by like amounts included in expenses or additions to property and equipment. J. Direct Benefit to Donor: Direct benefit to donor includes all costs associated with an event in which the donor received a direct benefit in exchange for participating in the event in which they have made a contribution. These costs include meal, beverages, entertainment, and costs of the venue, services such as green fees and entrance fees, and various other items. In fiscal year 2011, the Foundation made changes to its direct benefit to donor policy to reflect the overall benefits provided to donors for all of the events for the year, versus by the number of individuals attending each event. Note 3. Contributions Receivable: At September 30, 2012 and 2011, contributions or promises to give totaled $162,730 and $95,075, respectively; no promises to give were temporarily restricted by the donors. Allowance for uncollectible pledges is based on historical information regarding prior collectability of pledges and specific identification. Management has determined that no allowance was necessary for the years ending September 30, 2012 and 2011. Note 4. Fair Value Measurements: FASB ASC Topic 820, Fair Value Measurement, provides a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy under FASB ASC Topic 820 are described below: Level 1 — Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Foundation has the ability to access. Level 2 — Inputs to the valuation methodology include: * Quoted prices for similar assets or liabilities in active markets; * Quoted prices for identical or similar assets or liabilities in inactive markets; * Inputs other than quoted prices that are observable for the asset or liability; * Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 — Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The level of an asset’s or liability’s fair value measurement within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The certificate of deposit is valued at face value plus accrued interest, which approximates fair value. The following table sets forth, by level, within the fair value hierarchy, amounts recorded in the Foundation’s financial statements at fair value as of September 30, 2012 and 2011 are as follows: September 30, 2012: Fair Value: Certificate of Deposit; Total: $20,287; (Level 1): $20,287; (Level 2): 0; (Level 3): 0. September 30, 2011: Fair Value: Certificate of Deposit; Total: $20,135; (Level 1): $20,135; (Level 2): 0; (Level 3): 0. Note 5. Equipment, Furniture, and Fixtures, Net: Equipment, furniture, and fixtures as of September 30, 2012, and 2011, are shown in the schedule below: Computer software: 2012: $25,868; 2011: $25,868. Furniture and equipment: 2012: $86,028; 2011: $76,576. Donated equipment: 2012: $15,100; 2011: $15,100. Accumulated depreciation & amortization: 2012: ($118,275); 2011: ($116,599). Furniture, fixtures, equipment, software, net: 2012: $8,721; 2011: $945. Equipment – capital lease: 2012: $20,129; 2011: $20,129. Accumulated amortization – capital lease: 2012: ($20,129); 2011: ($18,016). Equipment – capital lease, net: 2012: 0; 2011: $2,113. Total equipment, furniture, and fixtures, net: 2012: $8,721; 2011: $3,058. Equipment under capital lease was pledged as collateral under the terms of the lease agreements. Note 6. Capital Lease Liability: For fiscal year 2010, the Foundation had an existing capital lease for computer equipment in the amount of $20,129, with the present value of the net minimum lease payments equaling $3,113. In May 2011, the capital lease matured and was paid in full. Note 7. Temporarily Restricted Net Assets: Temporarily restricted net assets as of September 30, 2012, and 2011 were available for the following programs and future periods: Puerto Rico Council development: 2012: $14,737; 2011: $14,893. Nevada Council development: 2012: 0; 2011: $1,655. Total net assets temporarily restricted for use: 2012: $14,737; 2011: $16,548. Net assets released from restrictions during the years ended September 30, 2012, and 2011 were as follows: Puerto Rico Council development: 2012: $156; 2011: 0. Nevada Council development: 2012: $1,655; 2011: $1,002. Total temporarily restricted net assets released for use: 2012: $1,811; 2011: $1,002. Note 8. In-kind Contributions: During fiscal years 2012 and 2011, the Foundation received in-kind (non-cash) contributions from donors. The Foundation received the following contributions in-kind, estimated at fair market value, on the dates of donations, during the years ended September 30, 2012 and 2011. The values of the in-kind contributions recognized were $84,730 and $58,277 for fiscal years 2012 and 2011, respectively. These non-cash contributions are as follows: Professional services: Legal: 2012: $39,720; 2011: $40,000. Accounting – Tax preparation: 2012: 0; 2011: $1,500. Donations relating to fund-raising: 2012: $34,460; 2011: $16,500. Donations relating to program: 2012: $10,550; 2011: $277. Total in-kind contributions: 2012: $84,730; 2011: $58,277. During fiscal years 2012 and 2011, the Foundation employed the services of unpaid interns. However, amounts for the intern services are not included in these financial statements because the value of the services is not readily determinable. In addition, Section 106(e) of the Congressional Award Act, as amended, provides that "the Board may benefit from in-kind and indirect resources provided by the Offices of Members of Congress or the Congress." Resources so provided include use of office space, office furniture, and certain utilities. In addition, Section 102 of the Congressional Award Act, as amended, provides that the United States Mint may charge the United States Mint Public Enterprise Fund for the cost of striking Congressional Award Medals. The costs of these resources cannot be readily determined and, thus, are not included in the financial statements. Note 9. Expenses by Functional Classification: The Foundation has presented its operating expenses by natural classification in the accompanying Statements of Activities for the fiscal years ending September 30, 2012, and 2011. Presented below are the Foundation's expenses by functional classification for the fiscal years ended September 30, 2012, and 2011: Program activities: 2012: $415,680; 2011: $379,875. Fund-raising activities: 2012: $156,889; 2011: $110,028. Costs of direct benefit to donors: 2012: $119,290; 2011: $162,749. Administrative activities: 2012: $140,453; 2011: $147,089. Total: 2012: $832,312; 2011: $799,741. Note 10. Employee Retirement Plan: For the benefit of its employees, the Foundation participates in a voluntary 403(b) tax-deferred annuity plan, which was activated on August 27, 1993. Under the plan, the Foundation may, but is not required to, make employer contributions to the plan. There were no contributions to the plan in fiscal years 2012 and 2011. Note 11. Related Party Activities: The Foundation engaged in transactions with related parties during fiscal years 2012 and 2011. During fiscal years 2012 and 2011, the National Director utilized her credit card to purchase items for the Foundation. All amounts paid by the National Director were reimbursed in fiscal years 2012 and 2011. The following in-kind contributions were made by related parties and are included in note 8: * During fiscal years 2012 and 2011, an ex officio director of the board provided pro bono legal services to the Foundation. The value of the pro bono legal services for fiscal years 2012 and 2011 were $39,720 and $40,000, respectively. * During fiscal year 2011, the controller, through his professional tax business, provided tax preparation services to the Foundation. The value of the tax preparation services for fiscal year 2011 was $1,500. Note 12. Income Taxes: The Foundation is a not-for-profit organization exempt from taxes under the provisions of Section 501(c)(3) of the Internal Revenue Code; therefore, no provision for income taxes has been made in these financial statements. The Foundation has also been classified as an entity that is not a private foundation with the meaning of Section 509(a) and qualifies for deductible contributions as provided in Section 170(b)(1)(A)(vi). The Foundation has adopted the provisions of FASB ASC 740-10, Accounting for Uncertainty in Income Taxes. Under the provisions, an organization must recognize the tax benefit associated with tax positions taken for tax return purposes when it is more-likely-than- not that the position will be sustained. The implementation of the provisions has had no impact on the Foundation’s financial statements. The Foundation does not believe there are any material uncertain tax positions and, accordingly, it will not recognize any liability for unrecognized tax benefits. The Foundation has filed Internal Revenue Service’s Form 990 as required and all other applicable returns where it is required. The Foundation believes that it is no longer subject to tax examinations by tax authorities for fiscal years before 2008. For the year ended September 30, 2012, there were no interest or penalties recorded or included in the Statement of Activities. Note 13. Commitments and Contingencies: In January 2011, the Foundation acquired a corporate credit card for the Foundation’s business use. The credit agreement requires collateral in the form of a certificate of deposit in the amount of $20,000, the same face value as the amount of credit limit authorized on the card. The certificate of deposit and any accrued interest will roll forward each year until the collateral required is removed by the credit card company. Note 14. Subsequent Events: In connection with the preparation of the financial statements, the Foundation has evaluated subsequent events after the date of the statement of financial position of September 30, 2012, through May 8, 2013, the date on which the Foundation’s financial statements were available to be issued. [End of Financial Statements] Appendix I: Comments from the Congressional Award Foundation: Congressional Award: 174 Ford Office Building: Washington, DC 20515: Mailing Address: Post Office Box 77440: Washington, DC 20013: May 8, 2013: Mr. J. Lawrence Malenich: Director, Financial Management and Assurance: U.S. Government Accountability Office: 441 G Street, N.W. Washington, DC 20548: Mr. Malenich, This letter is in response to your audit report of the Congressional Award Foundation's statements of financial position as of September 30, 2012 and 2011. We are extremely pleased that the GAO found the fiscal year 2012 financial statements were presented fairly and in conformity with U.S. generally accepted accounting principles, and found no material weaknesses or reportable instances of noncompliance with laws and regulations. Over the past year the Foundation has continued its efforts to improve operations and internal controls over financial reporting. Your audit findings report the positive results of those ongoing efforts. We appreciate the feedback and assistance of the GAO in strengthening the Foundation and its operations. Sincerely, Signed by: Edward L. Blansitt: Audit Chairman: Signed by: Erica W. Heyse: National Director: [End of section] Footnotes: [1] A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. [2] A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. [3] GAO, Standards for Internal Control in the Federal Government, [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C.: November 1999). [End of section] GAO’s Mission: The Government Accountability Office, the audit, evaluation, and investigative arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. GAO examines the use of public funds; evaluates federal programs and policies; and provides analyses, recommendations, and other assistance to help Congress make informed oversight, policy, and funding decisions. 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