United States General Accounting Office
GAO Report to the Congress
May 1997
FINANCIAL AUDIT
Congressional Award
Foundation’s 1996 and
1995 Financial
Statements
GAO/AIMD-97-87
United States
GAO General Accounting Office
Washington, D.C. 20548
Comptroller General
of the United States
B-275453
May 15, 1997
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,
1996 and 1995. These financial statements are the responsibility of the
Congressional Award Foundation. This report also presents (1) our
opinion on the Foundation management’s assertions regarding the
effectiveness of its internal controls as of September 30, 1996, and (2) our
evaluation of the Foundation’s compliance with laws and regulations
during fiscal year 1996.
We conducted our audits pursuant to section 8 of the Congressional
Award Act, as amended (2 U.S.C. 807), and in accordance with generally
accepted government auditing standards.
We are sending copies of this report to the Chairman of the National Board
of Directors, Congressional Award Program; the National Director,
Congressional Award Foundation; the Chairmen and Ranking Minority
Members of the Senate Committee on Governmental Affairs and the House
Committee on Education and the Workforce; and other interested parties.
This report was prepared under the direction of Robert W. Gramling,
Director, Corporate Audits and Standards.
James F. Hinchman
Acting Comptroller General
of the United States
Page 1 GAO/AIMD-97-87 Congressional Award Foundation
Contents
Letter 1
Opinion Letter 4
Financial Statements 8
Statements of Financial Position 8
Statements of Activities 9
Statements of Cash Flows 10
Notes to the Financial Statements 11
Page 2 GAO/AIMD-97-87 Congressional Award Foundation
Page 3 GAO/AIMD-97-87 Congressional Award Foundation
United States
GAO General Accounting Office
Washington, D.C. 20548
Accounting and Information
Management Division
B-275453
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 as of September 30, 1996 and 1995, and the related
statements of activities and statements of cash flows for the fiscal years
then ended. We found
• the financial statements were reliable in all material respects;
• the Congressional Award Foundation’s management fairly stated that
internal controls in place on September 30, 1996, were effective in
safeguarding assets from material loss, assuring material compliance with
relevant laws and regulations, and assuring that there were no material
misstatements in the financial statements; and
• no reportable noncompliance with laws and regulations we tested for the
fiscal year ended September 30, 1996.
The following sections provide additional detail concerning our
conclusions and the scope of our audit.
The financial statements and accompanying notes present fairly, in all
Opinion on Financial material respects, in conformity with generally accepted accounting
Statements principles, the Congressional Award Foundation’s financial position as of
September 30, 1996 and 1995, and the results of its activities and its cash
flows for the fiscal years then ended.
We evaluated the Foundation management’s assertions about the
Opinion on effectiveness of its internal controls designed to
Management’s
Assertions About the • safeguard assets against loss from unauthorized acquisition, use, or
disposition;
Effectiveness of • assure the execution of transactions in accordance with management’s
Internal Controls authority and with selected provisions of those laws and regulations that
have a direct and material effect on the financial statements of the
Foundation; and
• properly record, process, and summarize transactions to permit the
preparation of reliable financial statements and to maintain accountability
for assets.
Page 4 GAO/AIMD-97-87 Congressional Award Foundation
B-275453
Management of the Congressional Award Foundation fairly stated that
those controls in place on September 30, 1996, provided reasonable
assurance that losses, noncompliance, or misstatements material in
relation to the financial statements would be prevented or detected on a
timely basis. Management made this assertion based upon criteria
established under the Federal Managers’ Financial Integrity Act of 1982
and the Office of Management and Budget Circular A-123, Management
Accountability and Control.
Although management’s assertion regarding the effectiveness of internal
controls is fairly stated in all material respects based on the control
criteria cited above, we noted certain matters involving the Foundation’s
internal accounting controls and its operations. These matters, while not
significant, will be reported to management separately, and copies will be
provided to the appropriate congressional committees.
Our tests for compliance with selected provisions of laws and regulations
Compliance With disclosed no instances of noncompliance that would be reportable under
Laws and Regulations 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.
The Foundation’s management is responsible for
Objectives, Scope,
and Methodology • preparing the Foundation’s annual financial statements in conformity with
generally accepted accounting principles;
• establishing, maintaining, and assessing the Foundation’s internal control
to provide reasonable assurance that the internal control objectives
mentioned above are met; and
• complying with applicable laws and regulations.
We are responsible for obtaining reasonable assurance about whether
(1) the financial statements are free of material misstatement and
presented fairly, in all material respects, in conformity with generally
accepted accounting principles and (2) management’s assertion about the
effectiveness of internal controls is fairly stated, in all material respects,
based upon the internal control criteria used by the Foundation’s
management in making this assertion. We are also responsible for testing
compliance with selected provisions of laws and regulations.
Page 5 GAO/AIMD-97-87 Congressional Award Foundation
B-275453
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 Foundation’s management;
• evaluated the overall presentation of the financial statements;
• obtained an understanding of the Foundation’s internal controls related to
safeguarding assets, compliance with laws and regulations, and financial
reporting;
• tested relevant internal controls over safeguarding, compliance, and
financial reporting and evaluated management’s assertion about the
effectiveness of internal controls; and
• tested compliance with selected provisions of the Congressional Award
Act, as amended.
We did not evaluate all internal controls relevant to operating objectives,
such as controls relevant to ensuring efficient operations. We limited our
internal control testing to those controls necessary to achieve the
objectives outlined in our opinion on management’s assertion about the
effectiveness of internal controls. Because of inherent limitations in any
internal control, losses, noncompliance, or misstatements may
nevertheless occur and not be detected. We also caution that projecting
our evaluation 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 conducted our audits from November 5, 1996, to April 11, 1997. Our
audits were conducted in accordance with generally accepted government
auditing standards.
Page 6 GAO/AIMD-97-87 Congressional Award Foundation
B-275453
We provided a draft of our report to Congressional Award Foundation
Foundation officials for their review and comment. The Foundation officials agreed
Comments and Our with the contents of our report.
Evaluation
Jeffrey C. Steinhoff
Director of Planning and
Reporting
April 11, 1997
Page 7 GAO/AIMD-97-87 Congressional Award Foundation
Financial Statements
Statements of Financial Position
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Financial Statements
Statements of Activities
Page 9 GAO/AIMD-97-87 Congressional Award Foundation
Financial Statements
Statements of Cash Flows
Page 10 GAO/AIMD-97-87 Congressional Award Foundation
Financial Statements
Notes to the Financial Statements
Page 11 GAO/AIMD-97-87 Congressional Award Foundation
Financial Statements
Page 12 GAO/AIMD-97-87 Congressional Award Foundation
Financial Statements
Page 13 GAO/AIMD-97-87 Congressional Award Foundation
Financial Statements
(917771) Page 14 GAO/AIMD-97-87 Congressional Award Foundation
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Address Correction Requested
Financial Audit: Congressional Award Foundation's 1996 and 1995 Financial Statements
Published by the Government Accountability Office on 1997-05-15.
Below is a raw (and likely hideous) rendition of the original report. (PDF)