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entitled 'Financial Audit: Congressional Award Foundationís Fiscal 
Years 2001 and 2000 Financial Statements' which was released on 
May 15, 2002. 

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United States General Accounting Office: 
GAO: 

Report to the Congress: 

May 2002: 

Financial Audit: 

Congressional Award Foundationís Fiscal Years 2001 and 2000 
Financial Statements: 

GAO-02-672: 

Contents: 

Letter: 

Auditorís Report: 

Opinion on Financial Statements: 

Opinion on Internal Control: 

Compliance With Laws and Regulations: 

Objectives, Scope, and Methodology: 

Foundationís Comments: 

Financial Statements: 

Statements of Financial Position: 

Statements of Activities: 

Statements of Cash Flows: 

Notes to Financial Statements: 

[End of section] 

United States General Accounting Office: 
Washington, D.C. 20548: 

May 15, 2002: 

To the President of the Senate and the Speaker of the House 
of Representatives: 

This report presents our opinion on the financial statements of the
Congressional Award Foundation for the fiscal years ended September 30,
2001, and 2000. These financial statements are the responsibility of the
Congressional Award Foundation. This report also presents (1) our
opinion on the effectiveness of the Foundationís related internal control 
as of September 30, 2001, and (2) our conclusion on the Foundationís 
compliance in fiscal year 2001 with selected provisions of laws and 
regulations we tested. We conducted our audit pursuant to section 8 of 
the Congressional Award Act, as amended (2 U.S.C. 807), and in accordance 
with U.S. generally accepted government auditing standards. 

We are sending copies of this report to Senator Joseph I. Lieberman,
Chairman, and Senator Fred Thompson, Ranking Minority Member, Senate
Committee on Governmental Affairs; Representative Dan Burton, Chairman, 
and Representative Henry A. Waxman, Ranking Minority Member, House 
Committee on Government Reform; Representative John Boehner, Chairman, 
and Representative George Miller, Ranking Minority Member, House 
Committee on Education and the Workforce; Thomas D. Campbell, Chairman, 
National Board of Directors, Congressional Award Program; William E. 
Kelley, National Director, Congressional Award Foundation; and other 
interested parties. 

If you or your staff have any questions concerning this report, please
contact me at (202) 512-9406 or Julie T. Phillips, Assistant Director, 
at (202) 512-5121. You can also reach us by e-mail at franzelj@gao.gov 
or phillipsj@gao.gov. Key contributors to this report were Greg Ziombra 
and Doug Delacruz. 

Signed by: 

Jeanette M. Franzel: 
Acting Director: 
Financial Management and Assurance: 

[End of section] 

United States General Accounting Office: 
Washington, D.C. 20548: 

To the President of the Senate and the Speaker of the House of 
Representatives: 

We have audited the statements of financial position of the Congressional 
Award Foundation (the Foundation) as of September 30, 2001, and 2000, and 
the related statements of activities and statements of cash flows for the 
fiscal years then ended. We found: 

* the financial statements are presented fairly, in all material respects, 
in conformity with U.S. generally accepted accounting principles; 

* the Foundation had effective internal control over financial reporting
(including safeguarding assets) and compliance with laws and
regulations; and; 

* no reportable noncompliance with the provisions of laws and
regulations we tested. 

The following sections provide additional detail about our conclusions and 
the scope of our audit. 

Opinion on Financial Statements: 

The financial statements and accompanying notes present fairly, in all
material respects, in conformity with U.S. generally accepted accounting
principles, the Foundationís financial position as of September 30, 2001, 
and 2000, and the results of its activities and its cash flows for the 
fiscal years then ended. 

Opinion on Internal Control: 

The Foundation maintained, in all material respects, effective internal
control over financial reporting (including safeguarding assets) and
compliance as of September 30, 2001, that provided reasonable assurance
that misstatements, losses, or noncompliance material in relation to the
financial statements would be prevented or detected on a timely basis. 
Our opinion is based on criteria established in our Standards for Internal 
Control in the Federal Government.[Footnote 1] We found matters involving 
internal control that we do not consider to be reportable conditions.
[Footnote 2] We will communicate these matters separately to the 
Foundation's management, along with our suggestions for improvement. 

Compliance With Laws and Regulations: 

Our tests for compliance with selected provisions of laws and regulations 
disclosed no instances of noncompliance that would be reportable under 
U.S. generally accepted government auditing standards. However, 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 Foundationís management is responsible for: 

* preparing the annual financial statements in conformity with U.S.
generally accepted accounting principles; 

* establishing, maintaining, and assessing the Foundationís internal
control to provide reasonable assurance that the Foundationís control
objectives are met; and; 

* complying with applicable laws and regulations. 

We are responsible for obtaining reasonable assurance about whether (1)
the financial statements are presented fairly, in all material respects, 
in conformity with U.S. generally accepted accounting principles and (2) 
management maintained effective related internal control, the objectives 
of which are the following: 

* financial reporting Ė 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; 

* compliance with laws and regulations Ė transactions are executed in
accordance with laws and regulations that could have a direct and
material effect on the financial statements. 

We are also responsible for 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 the Foundationís management; 

* evaluated the overall presentation of the financial statements and notes; 

* obtained an understanding of the Foundationís internal control related
to financial reporting (including safeguarding assets) and compliance
with laws and regulations; 

* tested relevant internal control over financial reporting (including
safeguarding of assets) and compliance and evaluated the design and
operating effectiveness of internal control; and; 

* tested compliance with selected provisions of the Congressional Award
Act, as amended. 

We did not evaluate 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 and compliance. 
Because of inherent limitations in internal control, misstatements due to 
error or fraud, losses, or noncompliance may nevertheless occur and not be 
detected. We also caution that projecting the results of our tests of internal 
control 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 controls may deteriorate. 

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 we deemed to have a direct and material effect on the 
financial statements for the fiscal year ended September 30, 2001. We caution 
that noncompliance may occur and not be detected by our tests and that such 
testing may not be sufficient for other purposes. 

We performed our work in accordance with U.S. generally accepted
government auditing standards. 

Foundationís Comments: 

We provided a draft of our report to Congressional Award Foundation
officials for their review and comment. Foundation officials agreed with
the contents of our report. 

Signed by: 

Jeanette M. Franzel: 
Acting Director: 
Financial Management and Assurance: 

April 12, 2002: 

[End of section] 

Financial Statements: 

Statements of Financial Position: 

The Congressional Award Foundation: 
Statements of Financial Position: 

As of September 30, 2001 and 2000: 

Assets: 

Cash and cash equivalents (note 3): 
2001: ($7,629); 
2000: $288,177. 

Contributions receivable, net (note 4): 
2001: $205,000; 
2000: [Empty]. 

Prepaid expense: 
2001: $4,441; 
2000: $4,392. 

Congressional Award Fellowship Trust (note 5): 
2001: $356,934; 
2000: $662,864. 

Equipment, furniture, and fixtures, net (note 2): 
2001: $65,245; 
2000: $69,509. 

Escrowed funds from councils, net: 
2001: [Empty]; 
2000: $5,145. 

Other assets 
2001: [Empty]; 
2000: $170. 

Total assets: 
2001: $623,991; 
2000: $1,030,257. 

Liabilities and net assets: 

Accounts payable: 
2001: $39,068; 
2000: [Empty]. 

Accrued payroll, related taxes, and leave: 
2001: $31,721; 
2000: $25,176. 

Obligation under capital lease: 
2001: $6,364; 
2000: $9,136. 

Escrowed funds due councils, net: 
2001: [Empty]; 
2000: $5,145. 

Total liabilities: 
2001: $77,153; 
2000: $39,457. 

Net assets: 

Unrestricted: 
2001: $30,047; 
2000: $650,121. 

Temporarily restricted: 
2001: $252,334; 
2000: $76,222. 

Permanently restricted: 
2001: $264,457; 
2000: $264,457. 

Total net assets: 
2001: $546,838; 
2000: $990,800. 

Total liabilities and net assets: 
2001: $623,991; 
2000: $1,030,257. 

The accompanying notes are an integral part of these financial statements. 

[End of table] 

Statements of Activities: 

The Congressional Award Foundation: 
Statements of Activities: 
For the Fiscal Years Ended September 30, 2001, and 2000" 

Changes in unrestricted net assets: 

Operating revenue and other support: 

Contributions: 
2001: $519,041; 
2000: $834,828. 

Contributions - In-kind (note 6): 
2001: $74,642; 
2000: $82,794. 

Program and other revenues: 
2001: $53,464; 
2000: $43,381. 

Interest and dividends applied to current operations: 
2001: $7,778; 
2000: $17,678. 

Net assets released from restrictions (note 7): 
2001: $125,939; 
2000: $33,714. 

Total operating revenue and other support: 
2001: $780,864; 
2000: $1,012,395. 

Operating expenses (note 12): 

Salaries, benefits, and payroll taxes: 
2001: $482,485; 
2000: $446,512. 

Program, promotion, and travel: 
2001: $163,525; 
2000: $152,515. 

Fund-raising expense: 
2001: $131,761; 
2000: $147,428. 

Gold Award ceremony: 
2001: $34,541; 
2000: $41,706. 

Professional fees: 
2001: $181,087; 
2000: $127,139. 

Depreciation: 
2001: $18,601; 
2000: $15,049. 

Board of Directors expense: 
2001: $12,136; 
2000: $11,467. 

Administrative and other expense: 
2001: $70,611; 
2000: $45,695. 

Bad debt expense: 
2001: [Empty]; 
2000: $2,052. 

Total operating expenses: 
2001: $1,094,747; 
2000: $989,563. 

Other changes: 

Investment earnings (losses) not applied to current operations: 
2001: ($306,190); 
2000: $135,547. 

Increase (decrease) in unrestricted net assets: 
2001: ($620,073); 
2000: $158,379. 

Changes in temporarily restricted net assets: 

Contributions (note 8): 
2001: $302,050; 
2000: $5,000. 

Net assets released from restrictions (note 7): 
2001: ($125,939); 
2000: ($33,714). 

Increase (decrease) in temporarily restricted net assets: 
2001: $176,111; 
2000: ($28,714). 

Changes in permanently restricted net assets: 

Contributions: 
2001: [Empty]; 
2000: $350. 

Increase in permanently restricted net assets: 
2001: $0; 
2000: $350. 

Increase (decrease) in net assets: 
2001: ($443,962); 
2000: $130,015. 

Net assets at beginning of year: 
2001: $990,800; 
2000: $860,785. 

Net assets at end of year: 
2001: $546,838; 
2000: $990,800. 

The accompanying notes are an integral part of these financial statements. 

[End of table] 

Statements of Cash Flows: 

The Congressional Award Foundation: 
Statements of Cash Flows: 
For the Fiscal Years Ended September 30, 2001, and 2000: 

Cash flows from operating activities: 

Contributions received: 
2001: $616,091; 
2000: $917,629. 

Cash received from councils and independents: 
2001: $53,464; 
2000: $45,804. 

Interest and dividends received: 
2001: $7,778; 
2000: $17,678. 

Cash paid to employees: 
2001: ($373,359); 
2000: ($326,674). 

Cash paid to vendors: 
2001: ($582,411); 
2000: ($600,069). 

Net cash (used)/provided from operating activities: 
2001: ($278,437); 
2000: $54,368. 

Cash flows from investing activities: 

Purchase of equipment: 
2001: ($14,337); 
2000: ($6,090). 

Proceeds from sales of assets: 
2001: ($260); 
2000: [Empty]. 

Purchases of investments: 
2001: [Empty]; 
2000: ($500,661). 

Proceeds from sale of investments: 
2001: [Empty]; 
2000: $399,525. 

Net cash (used)/provided in investing activities: 
2001: ($14,597); 
2000: ($107,226). 

Cash flows from financing activities: 

Payments on capital lease: 
2001: ($2,772); 
2000: ($2,749). 

Net cash used in financing activities: 
2001: ($2,772); 
2000: ($2,749). 

Net increase (decrease) in cash: 
2001: ($295,806); 
2000: ($55,607). 

Cash at beginning of the year: 
2001: $288,177; 
2000: $343,784. 

Cash at end of year: 
2001: ($7,629); 
2000: $288,177. 

Reconciliation of change in net assets to net cash (used)/provided 
from operating activities: 

Change in net assets: 
2001: ($443,962); 
2000: $130,015. 

Adjustments to reconcile change in net assets to net cash used/provided 
from operating activities: 

Investment (earnings) losses not applied to operations: 
2001: $306,190; 
2000: ($135,547). 

Depreciation expense: 
2001: $18,601; 
2000: $15,049. 

Bad debt expense: 
2001: [Empty]; 
2000: $2,052. 

Restricted trust fund contributions: 
2001: [Empty]; 
2000: ($350). 

Decrease (increase) in contributions receivable: 
2001: ($205,000); 
2000: $77,800. 

Decrease (increase) in other accounts receivable: 
2001: [Empty]; 
2000: $2,423. 

Decrease (increase) in prepaid expense: 
2001: ($49); 
2000: ($43). 

Decrease (increase) in other assets: 
2001: $170; 
2000: ($170). 

Increase (decrease) in accounts payable: 
2001: $39,068; 
2000: ($47,558). 

Increase (decrease) in accrued payroll, related taxes and leave: 
2001: $6,545; 
2000: $10,697. 

Net cash (used)/provided from operating activities: 
2001: ($278,437); 
2000: $54,368. 

The accompanying notes are an integral part of these financial statements. 

[End of table] 

Notes to Financial Statements: 

The Congressional Award Foundation: 

Notes to Financial Statements: 
For the Fiscal Years Ended September 30, 2001, and 2000: 

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 Service 
code established to promote initiative, achievement, and excellence 
among youth in the areas of public service, personal development, 
physical fitness, and expedition. New program participants totaled 
2,390 in fiscal year 2001, an increase of 12 percent over fiscal year 
2000. As of September 30, 2001, there were approximately 8,000 active 
participants in the program. In October 1999, the president signed 
Public Law 106-63, Section 1(d) of which reauthorized the Congressional 
Award Foundation through September 30, 2004. 

Note 2.	Summary of Significant Accounting Policies: 

A. Basis of Accounting: 

The financial statements are prepared on the accrual basis of accounting 
in conformity with U.S. generally accepted accounting principles applicable 
to not-for-profit organizations. 

B. Cash Equivalents: 

The Foundation considers funds held in savings accounts and all highly 
liquid investments with an original maturity of 3 months or less to be 
cash equivalents. Money market funds held in the Foundation's Congressional 
Award Fellowship Trust (the Trust) are not considered cash equivalents. 

C. Equipment, Furniture and Fixtures, and Related Depreciation: 

Equipment, furniture, and fixtures are stated at cost. Depreciation of 
furniture and equipment is computed using the straight-line method over 
estimated useful lives of 5 to 7 years. Leasehold improvements are 
amortized over the lesser of their estimated useful lives or the remaining 
life of the lease. Expenditures for major additions and betterments are 
capitalized; 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. 

D. Investments: 

Investments are carried at fair value and consist of investments in money 
market funds and equity and debt securities, held for long-term purposes. 

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. 

* Permanently restricted net assets result from donor-imposed restrictions 
stipulating that the resources donated be maintained permanently. The 
Foundation's permanently restricted net assets consist of contributions 
designated for deposit into the Foundation's Congressional Award Fellowship 
Trust Fund (see note 5). 

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 
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. 

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 12. Accordingly, 
certain costs have been allocated among the programs and supporting services 
benefited. 

During the year ended September 30, 2001, the Foundation adopted the 
provisions of Statement of Position 98-2, "Accounting for Costs of Activities 
of Not-for-Profit Organizations and State and Local Governmental Entities that 
Include Fund Raising," and allocated joint costs related to the annual gala 
between program and fundraising activities. In 2000 the Foundation did not 
allocate joint costs associated with the annual gala because the amounts were 
not considered significant. 

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. 

Note 3.	Cash: 

The Foundation has received contributions restricted by donors for specific 
purposes or to be held in escrow. Accordingly, a portion of the cash held by 
the Foundation is restricted. At September 30, 2001, and 2000 the amount of 
cash restricted for specific purposes by donors or held in escrow and the 
amount of cash available for unrestricted purposes was as follows: 

Temporarily restricted:	
2001: $52,334; 
2000: $76,222. 

Cash held in escrow: 
2001: $0; 
2000: ($5,145). 

Unrestricted: 
2001: ($59,963); 
2000: $217,100. 
		
Total cash: 
2001: ($7,629); 
2000: $288,177. 

[End of table] 

As shown above, the Foundation's Statement of Financial Position had a 
negative cash balance of ($7,629) at September 30, 2001. The balance on 
the Foundation's bank statement, however, was positive on that date. 
The difference at September 30, 2001 resulted from a timing difference 
between the Foundation's records and the bank's records. 

Note 4.	Contributions Receivable: 

At September 30, 2001, promises to give totaled $205,000, of which 
the donors temporarily restricted $200,000. Within 1 year, $105,000 
is due and the remaining $100,000 is due within 2 years. All amounts 
are considered fully collectible. The promise to give was a result of 
the new "Charter for Youth" fundraising initiative. Charter for Youth 
benefactors are requested to contribute a minimum of $100,000 per year 
for 3 consecutive years for the direct support of The Congressional 
Award and its initiatives for participant recruitment and awardee 
recognition. Charter for Youth members have the opportunity to participate 
in Congressional Award events, and receive recognition as benefactors at 
the international, national, and regional events and meetings. 

Note 5.	Congressional Award Fellowship Trust: 

Established in 1990, the Congressional Award Fellowship Trust (the Trust 
Fund) was created to benefit the charitable and educational purposes of 
the Foundation. The Foundation receives contributions intended for the 
Trust Fund from supporters of the Congressional Award Program, including 
members of the World Fellowship--an organization established to promote 
similar programs throughout the world. 

Deposits to the Trust Fund are invested in money market funds, and equity 
and debt securities. Investments are carried at fair value and classified, 
based on their nature, as either permanently restricted or unrestricted. 
The Foundation's permanently restricted net assets represent the value of 
all permanently restricted donor contributions received from the Trust 
Fund's inception in 1990. As of September 30, 2001, and 2000, permanently 
restricted contributions totaled $264,457. 

In accordance with the terms of the Trust Declaration (agreement), the 
Foundation is permitted to use all Trust Fund income for the benefit of 
the charitable and educational purposes of the Foundation. Trust Fund 
income represents the value of the Trust Fund's assets (including interest 
and dividends earned and realized and unrealized gains and losses on Trust 
Fund investments) in excess of the aggregate amount received as endowment 
donations. The agreement describes endowment donations as the aggregate 
fair market value (as of the contribution date) of all donations to the 
Trust Fund. As defined by the agreement, this represents the amount of the 
Trust Fund's assets that the Foundation cannot use or distribute. 

As a matter of policy, the Foundation's Board further limits the use of 
Trust Fund investments to support current operations to the interest and 
dividends earned on Trust Fund investments. In the absence of donor-imposed 
restrictions limiting the availability of realized and unrealized gains on 
donated assets, all realized and unrealized gains on Trust Fund investments 
are considered unrestricted assets and reported in the Statements of 
Activities as investment earnings not applied to current operations. Realized 
and unrealized gains (losses) on Trust Fund's investments for the fiscal years 
ended September 30, 2001, and 2000 were $(306,190) and $135,547, respectively. 
Interest and dividends earned on Trust Fund investments for fiscal years ended 
September 30, 2001, and 2000 were $4,779 and $9,879, respectively. 

A reconciliation of investment earnings (returns) and contributions received 
to changes in the restricted and unrestricted portions of Trust Fund 
investments for fiscal years 2001 and 2000 is as follows. 

Unrestricted trust accounts: 
	
Investment earnings, net: 

Dividends and interest: 
September 30, 2001: $4,779; 
September 30, 2000: $9,879. 

Realized and unrealized gains (losses): 
September 30, 2001: ($306,190); 
September 30, 2000: $135,547. 

Total investment earnings: 
September 30, 2001: ($301,411); 
September 30, 2000: $145,426. 

Investment earnings applied to current operations: 
September 30, 2001: ($4,519); 
September 30, 2000: ($9,879). 

Gifts available for investment: 
September 30, 2001: [Empty]; 
September 30, 2000: $99,081. 
	
Net change in trust investments: 
September 30, 2001: ($305,930); 
September 30, 2000: $234,628. 

Unrestricted trust assets at beginning of the year: 
September 30, 2001: $398,407; 
September 30, 2000: $163,779. 
	
Unrestricted trust assets at end of the year: 
September 30, 2001: $92,477; 
September 30, 2000: $398,407. 

Permanently restricted trust assets: 

Additions: 
September 30, 2001: [Empty]; 
September 30, 2000: $350. 

Restricted trust assets at beginning of the year: 
September 30, 2001: $264,457; 
September 30, 2000: $264,457. 
	
Restricted trust assets at the end of year: 
September 30, 2001: $264,457; 
September 30, 2000: $264,457. 

Total unrestricted and restricted trust fund assets at end of year: 
September 30, 2001: $356,934; 
September 30, 2000: $662,864. 
	
At September 30, 2001, and 2000, the investments in the Trust consisted of 
the following: 
	
Description: 
		
Money market funds: 
Market value at September 30, 2001: $56,010; 
Market value at September 30, 2000: $4,307. 

Equity and debt securities: 
Market value at September 30, 2001: $300,924; 
Market value at September 30, 2000: $658,557. 
		
Total: 
Market value at September 30, 2001: $356,934; 
Market value at September 30, 2000: $662,864. 

[End of table] 

Note 6.	In-kind Contributions: 

During fiscal years 2001 and 2000, the Foundation received in-kind (noncash) 
contributions from donors, which are accounted for as contribution revenue 
and either as current period operating expenses or additions to capital 
assets. These noncash contributions are as follows.
		
Professional services (legal and web hosting): 
2001: $37,712; 
2000: $37,000. 

Supplies for fund-raising gala: 
2001: $26,300; 
2000: $11,280. 

Airline Tickets: 
2001: $10,000; 
2000: [Empty]. 

Promotional support: 
2001: $630; 
2000: $13,506. 

Other support--Foundation sponsored events: 
2001: [Empty]; 
2000: $21,008. 
		
Total in-kind contributions: 
2001: $74,642; 
2000: $82,794. 

[End of table] 

In addition, Section 7(c) of Public Law 101-525, the Congressional Award 
Amendments of 1990, provided 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 3 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 7. Release of Net Assets: 

Net assets released from donor restrictions result from either incurring 
expenses that satisfy the donor-imposed restriction or the occurrence of 
other donor-specified events such as the passage of time. As of September 
30, 2001, and 2000, net assets released from restriction were as follows: 
		
Contributions restricted for use in fiscal year 2001: 
2001: $100,000; 
2000: [Empty]. 	
		
Mississippi Council development: 
2001: $15,708; 
2000: $7,540 

Nevada Council development: 
2001: $5,067; 
2000: $2,175. 

D.C. Council development: 
2001: $2,631; 
2000: $870. 

Oklahoma Council development: 
2001: $2,154; 
2000: $290. 

South Bronx/New York Project: 
2001: $379; 
2000: $8,990. 

General fund: 
2001: [Empty]; 
2000: $11,500. 

Pennsylvania Council development: 
2001: [Empty]; 
2000: $9,349. 

Total: 
2001: $125,939; 
2000: $33,714. 

[End of table] 

Note 8. Temporarily Restricted Contributions: 

During fiscal years 2001 and 2000, the following temporarily restricted 
contributions were received: 

Contributions restricted for use in fiscal years 2001, 2002, and 2003: 
2001: $300,000; 
2000: [Empty]. 
 
D.C. Council development: 
2001: $2,050; 
2000: [Empty]. 

South Bronx/New York Project: 
2001: [Empty];
2000: $5,000. 

Total: 
2001: $302,050; 
2000: $5,000. 

[End of table] 

Note 9. Employee Retirement Plan: 

For the benefit of its employees, the Foundation participates in a voluntary 
403B 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. For 2001 and 2000, the Board voted to make 
matching contributions to qualified employees of up to 6 percent, which 
amounted to $8,610 and $7,156 in 2001 and 2000, respectively. 

Note 10. Related Party Activities: 

During fiscal year 2001, an ex-officio director of the board provided pro 
bono legal services to the Foundation. The value of legal services has been 
included in the in-kind contributions and professional fees line items 
(see note 6). 

In addition, a director of the board served as portfolio manager with the 
brokerage firm responsible for managing the Congressional Award Fellowship 
Trust account during fiscal years 2001 and 2000. An investment committee 
of the Board establishes investment guidelines and monitors the portfolio's 
performance. 

Note 11: Concentration of Credit Risk. 

At September 30, 2001, and 2000, the Foundation maintained its cash balance 
at a single financial institution. At September 30, 2000, the Foundation's 
bank balance exceeded the Federal Deposit Insurance Corporation's insured 
amount of $100,000 by $218,931. The Foundation has not experienced any 
losses in such accounts and believes it is not exposed to any significant 
credit risk on cash and cash equivalents. 

Note 12. Expenses by Functional Classification: 

As permitted by SFAS No. 117, the Foundation has presented its operating 
expenses by natural classification in the accompanying Statements of 
Activities for the fiscal years ending September 30, 2001, and 2000. 

Presented below are the Foundation's expenses by functional classification 
for the fiscal years ended September 30, 2001, and 2000. 

Fiscal Years 2001 and 2000 Expenses by Functional Classification: 
		
Program activities: 
2001 Amount: $619,178; 
Restated 2000 Amount: $517,434. 

Fund-raising activities: 
2001 Amount: $278,392; 
Restated 2000 Amount: $321,595. 

Administrative activities: 
2001 Amount: $197,176; 
Restated 2000 Amount: $150,534. 
	
Total: 
2001 Amount: v1,094,746; 
Restated 2000 Amount: $989,563. 

[End of table] 

For the year ended September 30, 2001, the Foundation incurred joint costs 
of $64,100 related to the annual gala, of which $32,050 and $32,050 were 
allocated to program and fundraising, respectively. 

For comparative purposes the Foundation has restated its previously reported 
program and fundraising expenses for the year ended September 30, 2000, to 
reflect the allocation of joint costs related to the 2000 annual gala 
totaling $52,200, of which $26,100 and $26,100 were allocated to program and 
fundraising expenses, respectively. 

In addition, total direct benefits provided to donors at the annual gala of 
$29,945 and $27,500 are included in program expense for the years ended 
September 30, 2001, and 2000, respectively. 

Note 13. Subsequent Events: 

At the beginning of fiscal year 2002, the board of directors authorized the 
distribution of $130,000 from the Trust Fund to the Foundation to be used 
for operating expenses. The board designated that this distribution be 
treated as a loan, with the intent to pay back the distribution to the Trust 
Fund. After the distribution, the balance in the Trust Fund was $282,000, 
which included the permanently restricted fund amount of $264,000. As of 
March 28, 2002, the balance in the Trust Fund dropped to $251,000 due to 
adverse market conditions. Therefore, the balance as of March 28, 2002, 
was below the permanently restricted level of $264,000. However, at the 
time the distributions were made, they were made from Trust Fund income 
as defined by the Trust agreement and did not use permanently restricted 
amounts. 

In January 2002 the Foundation received the second payment of $100,000 
from the initial Charter for Youth member and secured another Charter 
for Youth member in December 2001. In addition, the Foundation received 
an additional $100,000 from an individual donor in April 2002. 

[End of section] 

Footnotes: 

[1] Standards for Internal Control in the Federal Government 
(GAO/AIMD-00-21.3.1, November 1999). 

[2] Reportable conditions are matters coming to our attention that, in our 
judgment, should be communicated because they represent significant 
deficiencies in the design or operation of internal control that could 
adversely affect an organization's ability to meet the objectives of
reliable financial reporting and compliance with applicable laws and 
regulations. 

[End of section] 

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