American Battle Monuments Commission: World War II Memorial Fund Audit for Fiscal Years 1995 and 1996

Published by the Government Accountability Office on 1997-03-31.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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

Accounting and Information
Management Division


March 31, 1997

The Honorable Alfonse M. D’Amato
The Honorable Paul S. Sarbanes
Ranking Minority Member
Committee on Banking, Housing, and Urban Affairs
United States Senate

The Honorable James A. Leach
The Honorable Henry B. Gonzalez
Ranking Minority Member
Committee on Banking and Financial Services
House of Representatives

Subject: American Battle Monuments Commission: World War II Memorial Fund
         Audit for Fiscal Years 1995 and 1996

As required by Public Law 102-414, the World War II 50th Anniversary
Commemorative Coins Act, we audited the revenues and expenditures of the
American Battle Monuments Commission’s World War II memorial fund for the
Escai years ended September 30, 1995, and 1996. Public Law 10332, the World
War II Memorial Authorization Act (Memorial Act), authorized the Commission to
construct a memorial on federal land in the District of Columbia to honor
members of the Armed Forces who served in World War II and to commemorate
United States participation in that conflict.

For the fiscal year ended September 30, 1995, we determined that the fund had
revenues of $0.3 m.iIIion and expenditures of $0.5 million. For the fiscal year
ended September 30, 1996, we determined that the fund had revenues of $5.4
million and expenditures of $1.0 milhon. Table 1 shows total revenues and
expenditures for the fund from its inception in Escai year 1993 through EscaI
year 1996.

                                  GAO/AIMD-97-68R W W II Memorial Fund Audit
Table 1: World War II Memorial Fund Revenues and Expenditures for Fiscal
         Years Ended September 30, 1993, Through 1996

Dollars in millions)

                      1993        1994         1995        1996

  Revenues               $3.5       $1.4”        $0.3         $5.4

  Expenditures               $0      $0.1        $0.5         $1 .o

Note: The amounts for fiscal years 1993 and 1994 were repotted in the reports on our audits of
the World War Ii memorial fund for fiscal year 1993 (GAO/AIMD-95-9, October 12, 1994) and
fiscal year 1994 (GAO/AIMD-96-24, December 28, 1995).

7his figure is adjusted from $1.6 million previously reported for $0.2 million of premiums and
accrued interest acquired as part of the purchase price of U.S. Treasury notes.

The fund recognizes revenue when it is received and expenditures when they are
disbursed, except for investment revenue, which (beginning with fiscal year 1995)
is recognized when earned. The memorial fund consists of a Department of
Defense (DOD) contribution,’ surcharge proceeds from the sale of World War II
commemorative coins, private contributions, and investment interest. DOD’s
$5 million contribution, together with coin surcharge proceeds, accounted for
$9.8 million of the $10.6 million in total revenue. Memorial design, personnel
compensation and benefits, and consultant services account for $1.4 million of
the $1.6 million in total expenditures.

In December 1995, we reported’ that the Commission had not established a
separate account in the U.S. Treasury for the memorial fund, as required by the
Memorial Act. A separate account would strengthen the fund’s accountability by
reducing the risk from commingling memorial fund revenue with other

‘Section 382 of the National Defense Authorization.Act for Fiscal Year 1995,
Public Law 103-337, authorized the Secretary of Defense during 1996 to use
appropriated funds to coordinate, support, and facilitate WWII 50th Anniversary
commemoration programs and activities of the federal government.
‘Report on fiscal year 1994 audit of the American Battle Monuments
Commission’s World War II memorial fund (GAO/AIMD-96-24, December 28,

2                                           GAO/AIMD-97-68R WWII Memorial Fund Audit
Commission revenue. At the tie of our prior audit, Commission ofEcids
informed us that they had initiated action to establish a separate Treasury
account for the memorial fund. After subsequent discussion, Commission and
Treasury officials decided, and we concur, that separate accountability has now
been achieved by having ah transactions for the memorial fund and the
Commission’s three other trust accounts contain a suffix code3 in order to be
processed at Treasury. Additionally, the totals for each of the four accounts are
reconciled monthly by the Commission to agree to the amount contained within
its Treasury trust fund.

We also reported in December 1995 that the Commission needed to improve its
computer controls to ensure that access to computer programs and sensitive data
is restricted to prevent unauthorized changes and disclosures. During Escal year
1996, the Commission took steps that improved its computer controls by
(1) restricting physicai access to the Commission’s computers to authorized
personnel, (2) limiting user access to read-only capability, except in areas where
individuals are authorized to work, and (3) requiring staff to sign off the
computer system when away from their desks.

To conduct our audit, we obtained direct conErmations from (1) the U.S. Mint of
the amounts of coin surcharge proceeds transferred to the Commission and
(2) the Treasury for the amount of investments and interest related to the
memorial fund. Further, we reviewed the Commission’s accounting for private
contributions and traced expenditures to source documents and verified that
such expenditures related to the World War II memorial. We also made a limited
review of the Commission’s general computer controls.

Our audit was performed in Washington, D.C., from October 1996 through
February 1997 in accordance with generally accepted government auditing
standards. At the conclusion of our work, we provided a draft of this letter to
Commission ofEcials who agreed with its contents.

We axe sending copies of this letter to the Chairmen and Ranking Minority
Members of the House and Senate Committees on Veterans’ Affairs and other
interested parties. Copies will be made available to others on request,

3A suffix code consists of a letter to identify each of the four trust accounts
within the Commission’s Treasury trust fund.

3                                   GAO/AIMD-97-68R WWII Memorial Fund Audit
Please contact me at (202) 512-9489 or Roger Stoltz, Assistant Director, at (202)
512-9408 if you or your staffs have any questions about this letter.

q-J4!/               gq
David L. Clark
Director, Audit Oversight and


 4                                   GAO/AI&ED-97-68RWWII Memorial F’und Audit
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