Financial Management:

Audit of the White House Commission on the National Moment of Remembrance for Fiscal Year 2004

GAO-05-791R: Published: Jul 21, 2005. Publicly Released: Jul 21, 2005.

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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's purpose is to sustain the American spirit through acts of remembrance, not only on Memorial Day but also throughout the year, for those who died serving our country. Congress appropriated $1 million to the Commission to fund its operations for fiscal years 2002 through 2004. In fiscal year 2004, the Commission received net appropriations of approximately $249,000, along with cash and in-kind donations of approximately $102,000 from individuals and businesses. In addition, it had approximately $240,000 in unexpended appropriations from prior fiscal years. The Commission expended approximately $257,000 of appropriated funds and funded costs of approximately $102,000 with cash and in-kind donations received during the fiscal year. The act requires us to audit the financial transactions of the Commission, and this report covers our work on its fiscal year 2004 financial transactions.

Our detailed testing of the Commission's fiscal year 2004 financial transactions indicated that most were supported and approved. Nonetheless, we found numerous opportunities for the Commission to improve its internal control over its financial transactions. Specifically, we found that the Commission did not prepare and maintain underlying support in the form of employee-signed time sheets for salary expenditures of about $135,000, nor did it maintain support for its intragovernmental transactions. The Commission also did not routinely reconcile its recorded expenditures and donations to those processed by the Department of Veterans Affairs (VA) on behalf of the Commission, resulting in a difference of approximately $59,000 between the two entities' records. In May 2005, the Commission and VA reconciled their records and made accounting adjustments for the differences. Additionally, the Commission did not code its non-salary-related expenditures by budget object class to properly identify the type of expenditure. The Commission also did not always adhere to federal procurement regulations when procuring goods or services from commercial vendors, and to federal travel regulations for travel by federal civilian employees. Many of these issues are attributable to the small size of the Commission, which makes establishing and maintaining basic internal control problematic. During our audit, we found that the Commission's activities and its distinction from those of No Greater Love, a nonprofit organization founded in 1971 by the Commission's current Executive Director and White House Liaison, could be misperceived by interested parties because of the long-term involvement of the Commission's Executive Director and White House Liaison with No Greater Love for approximately 30 years. For example, the distinction between the two organizations could be misperceived because the business card of the Commission's Executive Director and White House Liaison listed No Greater Love's e-mail address and fax number. We raised this concern in our prior audit of the Commission's fiscal year 2003 and 2002 financial transactions. In our prior audit of the Commission's fiscal years 2003 and 2002 financial transactions, we also found that the Commission had difficulties maintaining its financial records and that it lacked basic internal controls. We acknowledge the efforts the Commission has made to improve its record keeping and internal controls since our prior work. We also recognize the impact that the Commission's size has on its ability to establish and maintain effective internal control, particularly with respect to segregation of duties. Nevertheless our audit of the Commission's fiscal year 2004 financial transactions indicates the need for the Commission to take further actions to improve its internal control.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To improve the Commission's accountability and internal control, the Executive Director and the White House Liaison of the Commission should prepare biweekly time sheets and regularly submit them to VA for approval and processing as evidence of actual hours worked.

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

    Status: Closed - Implemented

    Comments: During fiscal year 2005, The White House Commission on the National Moment of Remembrance (Commission) began preparing biweekly timesheets that were submitted to VA as evidence of hours worked. As a result, the Commission's internal control and accountability have been enhanced.

    Recommendation: To improve the Commission's accountability and internal control, the Executive Director and the White House Liaison of the Commission should strengthen the procedures to ensure that appropriate documentation for all financial transactions--including payroll, payroll-related, and intragovernmental transactions--is maintained and readily available for review.

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

    Status: Closed - Implemented

    Comments: Closed. During fiscal year 2005, the White House Commission on the National Moment of Remembrance began maintaining all appropriate documentation related to payroll-related and intragovernmental transactions.

    Recommendation: To improve the Commission's accountability and internal control, the Executive Director and the White House Liaison of the Commission should assess the cost of VA's services to determine if comparable services may be available from other sources at a lower cost.

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

    Status: Closed - Implemented

    Comments: Closed. As a result of our recommendation, the VA director offered to lower the service fee charged to the White House Commission on the National Moment of Remembrance (Commission) from $35,000 to $25,000. As a result, the Commission's annual fee for financial services was reduced by $10,000, enabling the Commission to use these savings to advance its mission.

    Recommendation: To improve the Commission's accountability and internal control, the Executive Director and the White House Liaison of the Commission should establish procedures to (a) timely reconcile, on a monthly basis, the Commission's financial data to the financial records maintained by its accounting services provider, VA, and (b) communicate all differences to VA as the provider so that the two entities' records can be appropriately reconciled.

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

    Status: Closed - Not Implemented

    Comments: During fiscal year 2006, the White House Commission on the National Moment of Remembrance (Commission) discontinued the services of an outside bookkeeper to maintain its records and is now relying solely on the VA for all bookkeeping and accounting services. Since the Commission no longer maintains a separate set of bookkeeping records to be reconciled to VA's records, this recommendation is no longer applicable.

    Recommendation: To improve the Commission's accountability and internal control, the Executive Director and the White House Liaison of the Commission, while continuing to use VA's services, should code all invoices in accordance with VA guidelines to indicate the type of expenditure prior to submitting them to VA for processing.

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

    Status: Closed - Implemented

    Comments: The White House Commission on the National Moment of Remembrance (Commission) has implemented procedures in which a detailed description is provided 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: To improve the Commission's accountability and internal control, the Executive Director and the White House Liaison of the Commission should solicit offers or quotes from at least three commercial vendors when goods or services are expected to exceed the $2,500 micro-purchase threshold for federal procurements and when otherwise required by the Federal Acquisition Regulations.

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

    Status: Closed - Implemented

    Comments: The White House Commission on the National Moment of Remembrance (Commission) is now soliciting offers from three commercial vendors before purchasing goods or services for an amount expected to exceed $2,500, which may result in financial savings for the Commission.

    Recommendation: To improve the Commission's accountability and internal control, the Executive Director and the White House Liaison of the Commission should strengthen procedures over preparing travel vouchers by (a) adhering to allowable rates in accordance with federal regulations and (b) ensuring that travel-related overcharges and traveler reimbursements are timely collected or offset against amounts due.

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

    Status: Closed - Implemented

    Comments: The White House Commission on the National Moment of Remembrance (Commission)is now adhering to federal travel regulations, which may result in financial savings for the Commission.

    Recommendation: To improve the Commission's accountability and internal control, the Executive Director and the White House Liaison of the Commission should strengthen procedures over cash donations by immediately obtaining and retaining documentation that evidences the purpose and intent of the donation.

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

    Status: Closed - Implemented

    Comments: The White House Commission on the National Moment of Remembrance (Commission) is now retaining copies of all checks received, as well as correspondence accompanying the checks, and is segregating the documentation by donor intent. These new procedures should provide assurance that recorded cash donations are complete and accurate.

    Recommendation: To improve the Commission's accountability and internal control, the Executive Director and the White House Liaison of the Commission should develop procedures to obtain and retain supporting documentation for the estimated value of in-kind donations and require that the financial information be recorded.

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

    Status: Closed - Implemented

    Comments: The White House Commission on the National Moment of Remembrance now requests written documentation from all parties providing in-kind donations. This new procedure should provide assurance that recorded in-kind donations are complete and accurate.

    Recommendation: To improve the Commission's accountability and internal control, the Executive Director and the White House Liaison of the Commission should discontinue listing No Greater Love's e-mail address and fax number on the Commission's business cards to assist in furthering the distinction of the Commission's and No Greater Love's management and activities.

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

    Status: Closed - Implemented

    Comments: The White House Commission on the National Moment of Remembrance has obtained their own contact information and no longer includes the related party's e-mail address and fax number on its business cards.

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