Kennedy Center:

Audit Duplication Can Be Prevented

GGD-97-161: Published: Aug 19, 1997. Publicly Released: Aug 19, 1997.

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Bernard L. Ungar
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Pursuant to a legislative requirement, GAO examined the potential for duplication of effort arising from multiple audit requirements involving the John F. Kennedy Center for the Performing Arts' appropriated funds, focusing on whether: (1) the Center's contracted auditor planned and carried out an audit that complied with the standards set forth in the Government Auditing Standards; and (2) GAO should continue the work necessary to plan and do its own audit. GAO did not perform a detailed review of all of the documentation contained in the auditor's files supporting its audit of appropriated funds nor reperform tests conducted by the auditor.

GAO noted that: (1) the information and documentation GAO obtained from the Center and the auditor and the auditor's records GAO reviewed demonstrated that GAO's audit, if implemented, would duplicate those portions of the auditor's work involving the understanding of internal controls, sampling of expenditures, and testing for compliance with the limitation on the use of the appropriated funds; (2) further, the auditor planned and executed the audit under the Government Auditing Standards, which governs GAO audit work as well; (3) in the future, according to Center officials, the Center plans to continue to annually contract with a public accounting firm for a financial statement audit that will include the use of appropriated funds and require that its auditor's work be subject to the Government Auditing Standards; (4) further, at GAO's suggestion, Center officials revised the contract with the auditor, beginning with the fiscal year 1997 audit, to require that the auditor's report specifically state the tests undertaken for compliance with the limitation on the use of appropriated funds and the results of those tests; (5) on the basis of the information GAO developed, GAO believes that efficient use of its audit resources would best be achieved by the continuation of a single annual audit of the Center's financial statements by its auditor that is subject to Government Auditing Standards and includes both the use of the appropriated funds and compliance with limitations on the use of those funds; and (6) therefore, GAO is seeking legislative relief from the requirement for it to periodically audit the Center's use of appropriated funds.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Public Law 105-226, the John F. Kennedy Center for the Performing Arts Authorization Act of 1998, was signed by the President on August 12, 1998. The law repeals the GAO audit requirement.

    Matter: Congress should consider, in reauthorizing the appropriations for the maintenance, repair, and security, and capital projects at the Center, deleting the requirement that the Comptroller General audit the funds appropriated. To statutorily ensure continued audits of those funds, Congress may wish to consider including, in the reauthorization legislation, a requirement that the Center continue contracting for annual financial statement audits, subject to the Government Auditing Standards, to ensure that appropriated funds are properly obligated and expended in compliance with statutory authorities and limitations.


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