Corporation for Public Broadcasting:

Congressional Guidance Needed on Administrative Expenses

HRD-90-5: Published: Jan 22, 1990. Publicly Released: Jan 22, 1990.

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Linda G. Morra
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Pursuant to a congressional request, GAO reviewed the Corporation for Public Broadcasting's (CPB) financial activities for the fiscal year ended September 30, 1988, focusing on: (1) the nature of CPB administrative expenses and whether they were within legislative limits; (2) whether CPB used program funds for administrative purposes; and (3) the nature and amounts of CPB consultant expenses.

GAO found that: (1) the enabling legislation limited to 5 percent the amount of appropriated funds that CPB could spend on administrative expenses, but did not define such expenses; (2) CPB categorized its expenditures into two groups, administrative expenses and program services expenses; (3) under CPB policy, it recorded such expenses as program services against travel expenses when it incurred the expenses in the course of carrying out activities that supported the public broadcasting industry and as administrative expenses when they supported CPB as an organization; (4) CPB consistently applied its policy definitions in recording its expenditures; (5) CPB reported administrative expenses of $9.5 million, about $1.2 million less than its 5-percent cap; (6) although CPB reported administrative-type expenses on its program services expenses and included depreciation as an administrative expense, adding these amounts to the reported administrative expenses would result in a total of $10.56 million, which was still about $140,000 less than the cap; and (7) two providers' services accounted for most of the $827,300 in consultant costs and realty firm accounted for most of the nonlegal costs, while production of a series of presidential campaign radio broadcasts accounted for most nonlegal costs.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: As a matter for consideration, it appears that the relevant subcommittee and CPB are trying to resolve their differences informally. No legislative action is anticipated to address the issue.

    Matter: If Congress finds that the current CPB practice of recording administrative expenses is inappropriate, it should consider providing further guidance to CPB. In so doing, Congress should consider the potential impact of any changes on CPB operations, taking into account the new cap.


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