Financial Management:

Audit of the White House Commission on the National Moment of Remembrance for Fiscal Years 2003 and 2002

GAO-04-497R: Published: May 20, 2004. Publicly Released: May 20, 2004.

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The White House Commission on the National Moment of Remembrance (Commission) was created on December 28, 2000, by the National Moment of Remembrance Act (Act). The Commission received appropriated funds in fiscal years 2003 and 2002. Its purpose is to sustain the American spirit through acts of remembrance for those who died serving their country, not only on Memorial Day, but also throughout the year. We are required by the Act to audit the financial transactions of the Commission, and this report covers our work on its fiscal years 2003 and 2002 financial transactions.

We found that the Commission's financial records for fiscal years 2003 and 2002 were incomplete and that its financial record keeping lacked basic internal controls. As a result, we were unable to audit the Commission's financial transactions, and the Commission does not have reasonable assurance that its records are accurate, that it has adequate information for decision making, or that its funds are being spent as intended. The Commission's records of financial transactions for fiscal years 2003 and 2002, including receipts and expenditures, were incomplete and not regularly reconciled to the statements produced by the Department of Veterans Affairs (VA) or General Services Administration (GSA), agencies that provided the Commission with administrative and financial processing services. In addition, significant amounts of the Commission's expenditures for fiscal years 2003 and 2002 were not supported by documentation. Without such basic internal controls as documentation to support transactions and the reconciliation of transactions recorded by the Commission to the actual receipts and expenditures processed by VA and GSA, the Commission does not have reasonable assurance that its financial information is complete and accurate, that its funds are being spent as intended, and that financial and programmatic decisions are based on complete and accurate information. The Commission's difficulties in financial record keeping and internal controls result, in part, from the Commission's lack of staffing and financial expertise. When the Commission received its initial appropriations in 2002, the Commission assumed several program activities of No Greater Love, a nonprofit organization founded in 1971. The Commission also shares office space, services, and personnel with No Greater Love. Although the Act allows the Commission to enter into cooperative agreements with private entities in carrying out its duties, the respective program sponsorship costs borne by the Commission and No Greater Love have not been accounted for and documented clearly. Without clear accountability and transparency of activities and related costs for each entity, donors and Congress are at risk of not knowing which programs they are supporting.

Matter for Congressional Consideration

  1. Status: Open

    Comments: Congress has not yet taken action to amend the Commission's enabling legislation to establish it as an independent entity within the Veterans Administration.

    Matter: Congress may wish to consider amending the National Moment of Remembrance Act to make the Commission an independent entity within VA. Retaining the Act's current provisions regarding the Commission's duties and powers, but placing the Commission within VA, would require VA to assume responsibility for the Commission's administrative functions. This would include maintaining the Commission's accounting records, processing the Commission's transactions, and performing personnel and payroll services. The Commission currently has an interagency agreement with VA for administrative services, but making the Commission an entity within VA could streamline this arrangement and make it more efficient. In addition, the Commission's mission of remembering those who have served the country is related to that of VA, and the two organizations could achieve synergy by working together on their complementary missions.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: During our audit of the Commission's fiscal year 2004 financial transactions we found that reconciliations with VA pertaining to receipts and expenses were not routinely performed. During FY 2005, the Commission hired a Bookkeeper who recorded the Commission's transactions in "Quickbooks." When we reviewed the Commissions FY 2005 year-end trial balance out of Quickbooks, it did not reconcile to the financial statements prepared by VA. In fiscal year 2006, the Commission and VA Financial Services established new procedures where VA now performs all accounting services for the Commission, including the preparation of the trial balance, as well as preparation of their financial statements. Since the Commission so longer records transactions in "QuickBooks," there is no reconciliation that needs to be prepared. These actions to implement procedures whereby VA is responsible for performing accounting services on behalf of the Commission, if fully and effectively implemented, should address the deficiency noted in our earlier audit and is consistent with the intent of our recommendation.

    Recommendation: If Congress chooses not to act on the matter for congressional consideration, then in order to achieve basic accountability for, and internal control over, its transactions and properly account for related-party activities, the White House Liaison and Executive Director of the Commission should reconcile, at least monthly, the Commission's financial records or logs to the statements showing obligations and expenditures that were actually processed.

    Agency Affected: White House Commission on the National Moment of Remembrance

  2. Status: Closed - Implemented

    Comments: During our audit of the Commission's fiscal year 2004 financial transactions, we found that documentation for payroll, benefits, and VA payments was not readily available for review. As a result, the Commission did not have complete assurance that its financial decisions were based on complete and accurate information. We recommended the Commission strengthen procedures to ensure that appropriate documentation for all financial transactions - including payroll-related and intragovernmental transactions - is maintained and readily available for review. In response, during fiscal year 2005, the Commission began maintaining all appropriate documentation related to payroll-related and intragovernmental transactions. As a result, the Commission's internal control and accountability have been enhanced.

    Recommendation: If Congress chooses not to act on the matter for congressional consideration, then in order to achieve basic accountability for, and internal control over, its transactions and properly account for related-party activities, the White House Liaison and Executive Director of the Commission should develop procedures to ensure that all transactions are supported by appropriate documentation.

    Agency Affected: White House Commission on the National Moment of Remembrance

  3. Status: Closed - Implemented

    Comments: During our audit of the Commission's fiscal year 2004 financial transactions, we noted transactions that were not properly coded in accordance with guidelines provided by the financial services provider (Department of Veterans Affairs - VA). As a result, certain costs had to be classified by VA without full knowledge of the type of expenditure being made. Because it did not code expenditures in accordance with VA guidelines, the Commission lacked accurate information on how its financial resources were used. We recommended that the Commission code all invoices in accordance with VA guidelines to indicate the type of expenditure prior to submitting them to VA for processing. In response, the Commission has implemented procedures in which it now provides detailed descriptions to VA for all transactions and the VA assigns account coding based on those descriptions. As a result of these new procedures, recorded expenditures and costs for the Commission should be more complete and accurate.

    Recommendation: If Congress chooses not to act on the matter for congressional consideration, then in order to achieve basic accountability for, and internal control over, its transactions and properly account for related-party activities, the White House Liaison and Executive Director of the Commission should require that all invoices are properly coded to indicate type of expense on a timely basis.

    Agency Affected: White House Commission on the National Moment of Remembrance

  4. Status: Closed - Implemented

    Comments: During our audit of the fiscal year 2005 financial transactions of the White House Commission on the National Moment of Remembrance, we found evidence that the Commission implemented procedures to properly approve all invoices prior to payment. With such management approvals, the Commission has reasonable assurance that its financial information is complete and accurate, and its funds are being spent as intended. As a result, the Commission's internal control and accountability have been enhanced.

    Recommendation: If Congress chooses not to act on the matter for congressional consideration, then in order to achieve basic accountability for, and internal control over, its transactions and properly account for related-party activities, the White House Liaison and Executive Director of the Commission should develop and implement procedures to properly approve all invoices prior to payment.

    Agency Affected: White House Commission on the National Moment of Remembrance

  5. Status: Closed - Implemented

    Comments: In 2004, the Commission began maintaining a record or log of Commission financial transactions, including appropriations, donations, and non-salary expenditures.

    Recommendation: If Congress chooses not to act on the matter for congressional consideration, then in order to achieve basic accountability for, and internal control over, its transactions and properly account for related-party activities, the White House Liaison and Executive Director of the Commission should maintain a complete record or log of Commission financial transactions, including all appropriations, donations, revenues, obligations, and expenditures.

    Agency Affected: White House Commission on the National Moment of Remembrance

  6. Status: Closed - Implemented

    Comments: In 2004, the Commission hired a local bookkeeper on a part-time basis to maintain a log of financial transactions and produce year-end summaries.

    Recommendation: If Congress chooses not to act on the matter for congressional consideration, then in order to achieve basic accountability for, and internal control over, its transactions and properly account for related-party activities, the White House Liaison and Executive Director of the Commission should consider hiring a bookkeeping service on a part-time basis to help maintain the Commission's financial records, including producing year-end summaries and reconciliations.

    Agency Affected: White House Commission on the National Moment of Remembrance

  7. Status: Closed - Implemented

    Comments: During our audit of the Commission's FY 2004 financial transactions, we found that the Commission was providing the e-mail address and fax number of a related party, No Greater Love, on the Commission's business cards. We recommended that the Commission discontinue using the related party's contact information on its business cards in order to assist in furthering the distinction between the two entities. In response, the Commission took action to provide only its own contact information (excluding the related party's e-mail address and fax number) on its business cards.

    Recommendation: If Congress chooses not to act on the matter for congressional consideration, then in order to achieve basic accountability for, and internal control over, its transactions and properly account for related-party activities, the White House Liaison and Executive Director of the Commission should develop a clear accountability for expenditures related to the Commission's operations, including transactions with No Greater Love.

    Agency Affected: White House Commission on the National Moment of Remembrance

 

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