____..__ ---__- ..- --..- --__ -_-- Svpt,c~trrtwr I!b!N FINANCIAL AUDIT Civic Achievement Award Program Financial Statements for September 30, 1989and1988 142325 _l_-l _-..- _.__ -...I.-_-- _.^. -_...-._ -_._--.-- .-_._._. ,._._.._ -- _..-- -l - -.- - - (;AO/AII’MI)-!)O-102 -____---. __---l.-,-ll”--lll.. --- ~- 4 United State6 GAO General Accounting Office Washington, D.C. 20548 Comptroller General of the United States B-236316 September 27,199O To the Speaker of the House of Representatives and the Librarian of Congress This report presents our opinion on the financial statements of the Civic Achievement Award Program in Honor of the Office of Speaker of the House of Representatives for fiscal years 1989 and 1988. Reports on the program’s internal accounting control structure and on its compliance with laws and regulations are also provided. We completed our review on May 24,199O. Public Law loo-168 established the program which is administered by the Close Up Foundation and funded through the Library of Congress. The program was designed to inspire the learning of American history, government, geography, economics, and current events in the fifth through eighth grades and to recognize achievement in civic literacy by students, classes, and schools throughout the nation. We are required to conduct an audit of the program each year under provisions of Public Law 100-168. The Close Up Foundation contracted with an independent certified public accounting firm, KPMG Peat Mar-wick, to perform financial audits of the program’s 1989 and 1988 financial statements, including reports on internal accounting control structure and compliance with laws and regulations. To fulfill our responsibility, we reviewed KPMG Peat Marwick’s approach and plan- ning of audits; reviewed and tested KPMG Peat Marwick’s working papers; and performed other procedures as we deemed necessary. Our examinations were conducted in accordance with generally accepted government auditing standards. In our opinion, and consistent with the opinion of KPMG Peat Marwick, the program’s financial statements present fairly, in all material respects, its financial position as of September 30,1989 and 1988, and the results of its operations for the years then ended in conformity with generally accepted accounting principles. The KPMG Peat Marwick reports to the Board of Directors, Close Up Foundation, on internal accounting control structure and on compliance with laws and regulations did not disclose any material internal control weaknesses or noncompliance with laws and regulations. Page 1 GAO/AFMD-B&102 Civic Achievement Award Program We are sendingcopiesof this report to the President and the Board of Directors of the CloseUp Foundation; the Chairman of the Committee on HouseAdministration; the Chairman of the Subcommitteeon Libraries and Memorials, Committee on HouseAdministration; and the Chairman of the SenateCommittee on Rules and Administration. r Charles A. Bowsher t- Comptroller General of the United States page 2 GAO/AFMD-B@102 Civic Achievement Award Program Page 3 GAO/AFMD-90-102 Civic Achievement Award Program Letter 1 Auditors’ Opinion 6 Auditors’ Report on 7 Internal Accounting Control Structure Auditors’ Report on 9 Compliance With Laws and Regulations Financial Statements 10 Statementsof Assets and Liabilities 10 Statementsof Support and Jkpenses 11 Notes to Financial Statements 12 p-4 GAO/AFMDSO-102 Civic Achievement Award Program Page 6 GAO/AFMD-90-102 Civic Achievement Award Program .,. Auditors’ Opinion M Peat Marwick Certified Public Accounlants 2001 M Street. N W Washtnyton. DC 20036 The Board of Dirsctors CloAe Up Foundation: We hsve AuditAd the Accompanying AtAtementA of aeAetA and liabilitioa of the Civic Achievement AwArd ProgrAm in lionor of the Office of Speakor of the House of RoproAontAtiveA conducted by the Clove Up Foundation AA of Septombor 30, 1989 and 1988, And the relAted stAtementA of support And expsneos for the yeArA then ended. TheAA fitlAtlCiA1 AtAtemOntA Are the reApOnAibility Of the FoundAtion’A managamont. Our reaponribility iA t0 eXpreAA an Opinion on theso financial Atatements based on our Auditr. We conducted our Audits in accordance with generally Accepted Auditing AtAndArdP And GovsrnmantAudifinn iAAued by tho COmptrOller General of the United StAtAA. Thor0 AtAndardA roquiro that wo plan And perform the audit t0 obtain reAAOnAble AAAurAnce About whether tho financial AtAtOmentA are fros of material miAAtatsment And whether management hAA complied with laws And rogulationr. kl Audit in ACCOrdAnCe with theAA AtAndArdA include6 sxamining, on a toet baeir, evidence Aupporting the AmountA And dirclorures in the financial AtatemsntA And compliance with 1awA And regulAtionA. An Audit also inCludeA ASAAASing tho accounting principleA ueed And AignifiCAnt oAt.imates made by management, as well AA evsluating the overall financial statement proaontation. We believe that our AUditA provide A roasonablo basis for our opinion. Am explained in note 1, the financial etatemento being presented Are only for the Civic Achiewmnent Award Program referred to Above And do not include the other a#AotA, IiAbilitieA, fund bAlAnCeA, revMUos. expen~ee and Changes in fund bAlAnCOA of CIoAe Up FoundAtion recorded in itr financial etatWoentA. Accordingly, tho Accompanying financiA1 AtAtsmentA Are not intended to prssont the financial poAition of Clore Up Foundation me of September 30. 1989 and 1988, or ite reAultA of operAtionA for the year8 then ended in conformity with generally Accepted accounting principleA. In our opinion, the financial Atatementr referred to above prermt fairly, in ~11 material raApectA, the financial poeition of the Civic Achievcrmont Award Program in Aonor of the Office of Speaker of tho Roure of Representatives conducted by the Clove Up FoundAtion At Septmber 30, 1989 and 1988, and tho roAultA of itr operationA for tho yearr then ended in conformity with gOnerAlly Accepted ACCOIUIting PrinCiplAA. January 11, 1990 Page 6 GAO/AFMD-f@102 Civic Achievement Award Program . Auditors’ Report on Internal Accounting Control Structure Certified Public Accountants 2001 M Street. NW WashIngton. DC 20036 To the Board of Directors Cloee Up Foundation: We have eudited the financial statements of the Civic Achievement Award Program in Honor of the Office of Speaker of the House of Representatives conducted by the Close Up Foundation for the years ended September 30, 1989 and 1988, and have issued our report thereon dated January 11, 1990. These financial statements are the responsibility of the Foundation’8 management. Our responsibility ie to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards and GovstMlenf issued by the Comptroller General of the United States. Those standards req'uire that we plan and perform the audit to obtain reasonable aaaurance about whether the financial statements are free of material misstatement. In planning and performing our audits of the financial statements of the Foundation for the years ended September 30, 1989 and 1980, we considered its internal control structure in order to determine our auditing procedures for the purpose of expreeeing our opinion on the financial statements and not to provide assurance on the internal control structure. The management of the Foundation is responsible for establishing and maintaining an internal control trtructure. In fulfilling this responsibility, estimates and judgments by management are required to a88es8 the expected benefits and related cost6 of internal control structure policies and procedures. The objectivee of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized we or disposition, and that transactione are executed in accordance with management’s authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limftetions in any internal control structure, errors or irregulerities may neverthelese occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate becauee of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. Page 7 GAO/AF’MD-ml02 Civic Achievement Award Program AudiLora’ Report on Intamnl Accountin# Cc&r01 Stnwture For the purpose of this report, ne have classified the significant internal accounting control structure policies and procedures in the following categories! revenues/receipts and expenses/disbursements. Our consideration of the internal control structure included all of the categories listed above at the boundary, however we did not consider the accounting controls over the proceasind informetion streams because a substantive audit approach is more cost beneficial. Our connideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material wsaknersss under standards established by the American Institute of Certified Public Accountants. A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularitiss in amounts that would be material in relation to the financial statements being audited may occur and not be detacted within a timely period by employees in the normal course of performing their assigned functionr. We noted no matters involving the internal control structure and ite operation that we consider to be material waaknerses as defined nbove. However, we noted certain mattera involving the internal control structure and the operatione of the Close Up Foundation during our June 30, 1989 audit that we reported to management of the Close Up Foundation in a letter dated September 15, 1989. This report is intended solely for the use of the Board of Directors and management. This restriction is not intended to limit the distribution of this report, which, upon acceptance by the Foundation ir a matter of public record. .JMuary 11, 1990 Y Page 8 GAO/AF’MD-ml02 Civic Achievement Award Program Auditors’ Report on ComplianceWith Laws and Regulations Certified Public Accounlant~ 2001 M Street. N.W torn’ Reoort on To the Board of Directors Close Up Foundation: We have audited the financial statements of the Civil Achievement Award Program in Honor of the Office of Speaker of the House of Representatives conducted by the Close Up Foundation a8 of and for the years ended September 30, 1989 and 1988, and have issued our report thereon dated January 11, 1990. These financial atatemente are the responsibility of the Foundation’s management. Our responsibility ia to express an opinion on these financial atatementn baaed on our audita. We conducted our audit6 in accordance with generally accepted auditing standard.9 and Govsrnmsnt issued by the Comptroller General of the United States. Thoee standard8 re&ire that we plan and perform the audit to obtain reasonable a.esurance about whether the financial statements are free of material sirstatement. Compliance with law, regulations, contracts, and grants applicable to the Foundation ir the reeponsibility of the Foundation’s management. As part of obtaining reasonable aa#urance about whether the financial statements are free of material miratatement, we performed tests of the Foundation’s compliance with Public Law 100-158 which provides support for the Civic Achiavement Award Program and the agreement between the Library of Congress and the Close Up Foundation which authorize8 the Library of Congress to make disbursements to the Foundation. However, our objective war not to provide an opinion on overall compliance with such provisions. The result6 of our tests indicate that, with respect to the items tested. the Foundation complied in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caueed u.e to believe that the Foundation had not complied, in all material respectr, with thoae provisions. Thie report ia intended for the information of the Board of Directors and management. This restriction ia not intended to limit the distribution of this report, which is a matter of public record. January 11. 1990 Page 9 GAO/AFMD-W102 Civic Achievement Award Program Financial Statements Statement8 of Assets and Liabilities September 30, 1989 and 1988 Due from Library of Congress $ 100,000 580,734 Prepaid expenses 27.[)29- $Li&w580.734 Obligation for undelivered goods 12,510 Due to Close Up Foundation 127,029 568,224 Comaitmente (note 3) See accompanying notes to financial statements. Page 10 GAO/~SO-102 Civic Achievement Award Program . Finandd Stabawnt8 Statements of Support and Expenres Yeare ended September 30, 1989 and 1988 JLW! Leaa Support - Library of Congre88 $480.000572.919 Expenrer : Salaries and fringe benefit8 298,670 141,553 Telephone, poetage, supplieo and printing 91,055 71,358 Profe88ional rervices 90,355 78,123 Travel 31,088 23,291 Office rent 46,182 26,061 Public information rervicer 8,849 10,366 Capital expenditure8 140,903 Other 8upport 8ervicer 8.920 9.w 575,119 500,916 Indirect co8t8, net (note 2) AQ!hwu22.903 -572.919 Excerr of 8upport over expennre8 $ Lh See accompanying note8 to financial rtatementr. Y Page 11 GAO/AFZiJbW1O2 Civic Achievement Award Program Financial Statements Notes to Financial Statements September 30, 1989 and 1988 Close Up Foundation (Foundation) is a nonprofit, nonstock corporation organized in June 1971 to foster a better understanding and appreciation of government by conducting and sponsoring participation in government-related education programs. The Foundation is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. It is not a private foundation and donations to the Foundation are deductible by a donor as charitable contributions for federal income tax purposes. In 1987, Congress authorized the Foundation to establish and conduct the Civic Achievement Award Program in Honor of the Office of Speaker of the . House of Representatives (CAAP). CAAP has been designed to improve the level of civic literacy of American students in the 5th through 8th grades. CAAP is funded through an annual appropriation from the U.S. Congress with the funds being administered by the Librarian of Congress. (2) Summarv of Q (a) Financial The financial statements being presented are only for the Foundation’s CAAP and do not include the other assets, liabilities, fund balance, revenues, expenses and changes in fund balance of the Foundation. Support to be received from the Library of Congress is recognized at the lesser of the amount appropriated by Congress or allowable expenses incurred. For the years ended September 30, 1989 and 1988 the amount appropriated was $680,000. (Continued) Page 12 GAO/AFMD-W-102 Civic Achievement Award Program 4 . Dua to the cost reimbursement nature of the Congressional appropriation to support CAAP, expens4s at4 recogniz4d as follows: Direct costs of CAAP are recognized as axpensee when an obligation to incur the cost is established, in accordance with instructions received from the budget office of the Librarian of Congress. Obligations for undeliver4d goods amounted to non4 and $12,510 at September 30, 1989 and 1988, respectively. Capital expendituras are expansed rather than capitalized as the goods are not owned by CAAP or the Foundation. Rather, ownarrhip and possession of tha goods is assumed to revert to the U.S. government upon completion of CAAP. Indirect costs allocated to CAAP by the Foundation are based upon the Foundation’s ratio of allowabla indirect costs to direct program costs raduced by the amount that total expenses exceeded support. At September’ 30, 1989 and 1988 this amount was $3,011 and none, respectivaly. Program expsnses are subject to rsviaw by the U.S. government. Therefors, the recorded amounts of direct and indirect expenses, ar well as ths rslat4d racognizad support, are potentially subject to adjustmant. Management believes that no provisions for much adjustments are required in the financial statements. (d) S the Wmuktbn’n Gsnaral The Foundation is reimbursed by the Librarian of Congress upon request for costs incurred in dsveloping and conducting the CAAP. The Foundation financially support8 the activities of CAAP with its general operating funds during the program year until reimbursement is received. The Foundation has leased office space for ths us4 of personnel working on CAAP. The approximate future minimum annual rental commitments for this office space at Saptember 30, 1989 follows: 1990 $ 42,000 1991 (ele7ae) Page 13 GAO/AF’MD-W-102 Civic Achievement Award Program I‘ Y L
Financial Audit: Civic Achievement Award Program Financial Statements for September 30, 1989 and 1988
Published by the Government Accountability Office on 1990-09-27.
Below is a raw (and likely hideous) rendition of the original report. (PDF)