oversight

Financial Audit: Independent Counsel Expenditures for the Six Months Ended March 31, 1999

Published by the Government Accountability Office on 1999-09-30.

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

                  United States General Accounting Office

GAO               Report to Congressional Committees




September 1999
                  FINANCIAL AUDIT

                  Independent Counsel
                  Expenditures for the
                  Six Months Ended
                  March 31, 1999




GAO/AIMD-99-292
Contents



Letter                                                                                     3


Opinion Letter                                                                             5


Appendixes       Appendix I:  Statement of Expenditures for Independent
                   Counsel Adams/Thompson                                                 12
                 Appendix II: Statement of Expenditures for Independent
                   Counsel Barrett                                                        15
                 Appendix III: Statement of Expenditures for Independent
                   Counsel Bruce                                                          18
                 Appendix IV: Statement of Expenditures for Independent
                   Counsel Lancaster                                                      21
                 Appendix V: Statement of Expenditures for Independent
                   Counsel Pearson                                                        24
                 Appendix VI: Statement of Expenditures for Independent
                   Counsel Smaltz                                                         26
                 Appendix VII: Statement of Expenditures for Independent
                   Counsel Starr                                                          29
                 Appendix VIII: Statement of Expenditures for Independent
                   Counsel von Kann                                                       32




                 Abbreviations

                 AOUSC      Administrative Office of the U.S. Courts
                 FBI        Federal Bureau of Investigation
                 IRS        Internal Revenue Service
                 OIC        Office of Independent Counsel




                 Page 1                                   GAO/AIMD-99-292 Independent Counsel
Page 2   GAO/AIMD-99-292 Independent Counsel
United States General Accounting Office                                             Accounting and Information
Washington, D.C. 20548                                                                   Management Division



           B-283592                                                                                                  Leter




           September 30, 1999

           Congressional Committees

           Enclosed is our opinion on the statements of expenditures of eight offices of independent counsel for
           the 6 months ended March 31, 1999. This audit was required by 28 U.S.C. 596(c)(2) (1994) and Public
           Law 100-202.

           We are sending copies of this report to the Attorney General, the Director of the Administrative Office
           of the U.S. Courts, the independent counsels included in our audit, and other interested parties.
           Copies will be made available to others upon request.




           David L. Clark
           Director, Audit Oversight and Liaison




                                     Page 3                                      GAO/AIMD-99-292 Independent Counsel
Page 4   GAO/AIMD-99-292 Independent Counsel
United States General Accounting Office                                                    Accounting and Information
Washington, D.C. 20548                                                                          Management Division



                                    B-283592                                                                             Op
                                                                                                                          no
                                                                                                                           iin
                                                                                                                             Leter




                                    Congressional Committees

                                    This report presents the results of our audits of expenditures1 reported by
                                    eight offices of independent counsel (OIC) for the 6 months ended
                                    March 31, 1999. The Department of Justice and the independent counsels
                                    are required under 28 U.S.C. 594(d)(2),(h), and 596(c)(1) (1994) to report
                                    on expenditures from a permanent, indefinite appropriation established
                                    within Justice to fund independent counsel activities. To satisfy the
                                    requirements of 28 U.S.C. 596(c)(2) and Public Law 100-202, we audit the
                                    statements of expenditures prepared by the independent counsels.

                                    We found that the statements of expenditures presented in appendixes I
                                    through VIII, for the offices of independent counsel Arlin M. Adams/
                                    Larry D. Thompson, David M. Barrett, Carol Elder Bruce, Ralph I.
                                    Lancaster, Daniel S. Pearson, Donald C. Smaltz, Kenneth W. Starr, and
                                    Curtis E. von Kann, respectively, were fairly presented in all material
                                    respects. Our consideration of internal controls, which was limited for the
                                    purpose of determining our procedures for auditing the statements of
                                    expenditures, disclosed no material weaknesses. Further, our audits
                                    included limited tests of compliance with laws and regulations that
                                    disclosed no reportable instances of noncompliance with the laws and
                                    regulations we tested.

                                    The following sections provide background information, outline each
                                    conclusion in more detail, and discuss the scope of our audits.



Background                          The Ethics in Government Act of 1978 amended title 28 of the United States
                                    Code to authorize the judicial appointment of independent counsels when
                                    the Attorney General determined that reasonable grounds exist to warrant
                                    further investigation of high-ranking government officials for certain
                                    alleged crimes. The independent counsel law (28 U.S.C. 591-599 (1994))
                                    was intended to preserve and promote the accountability and integrity of
                                    public officials and of the institutions of the federal government. The
                                    independent counsel law expired on June 30, 1999. Provisions of the law
                                    allow independent counsels serving at the expiration date to continue


                                    1
                                     The term expenditures as used in this report generally means cash disbursed.




                                    Page 5                                             GAO/AIMD-99-292 Independent Counsel
                        B-283592




                        investigating pending matters until they determine that the investigations
                        of such matters have been completed.

                        The independent counsel law directs the Department of Justice to pay all
                        costs relating to the establishment and operation of independent counsel
                        offices and designates specific responsibilities to the Administrative Office
                        of the U.S. Courts (AOUSC) for independent counsels' administrative
                        support. Justice periodically disburses lump-sum payments to AOUSC for
                        this purpose.

                        In 1987, Public Law 100-202 established a permanent, indefinite
                        appropriation within Justice to fund expenditures by independent
                        counsels. Independent counsels are required to report their expenditures
                        from the appropriation for each 6-month period in which they have
                        operations. We are required to audit expenditures from the permanent,
                        indefinite appropriation and to report our findings to appropriate
                        congressional committees.

                        During any 6-month period, other significant costs incurred in support of
                        the work of independent counsels are paid from appropriations other than
                        the permanent, indefinite appropriation established to fund independent
                        counsel activities. These costs arise when an independent counsel uses
                        detailees from other federal agencies, such as the Federal Bureau of
                        Investigation (FBI). Independent counsels are not required to and do not
                        reflect such costs in their statements of expenditures. However, these
                        unaudited costs are identified and discussed in the notes to the statements
                        presented in the appendixes to this report.



Opinion on Statements   Independent counsels prepare their statements of expenditures principally
                        on a cash basis of accounting, which is a comprehensive basis of
of Expenditures         accounting other than generally accepted accounting principles. The bases
                        of accounting are described in note 1 of each counsel's statement.

                        In our opinion, the statements of expenditures for the offices of
                        independent counsel Arlin M. Adams/Larry D. Thompson, David M. Barrett,
                        Carol Elder Bruce, Ralph I. Lancaster, Daniel S. Pearson, Donald C. Smaltz,
                        Kenneth W. Starr, and Curtis E. von Kann present fairly, in all material
                        respects, the expenditures of these counsels for the 6 months ended
                        March 31, 1999, on the basis of accounting described in note 1 to each
                        office's statement.




                        Page 6                                     GAO/AIMD-99-292 Independent Counsel
                         B-283592




Consideration of         We gained an understanding of internal controls whose objectives are to

Internal Control         • safeguard assets against loss from unauthorized acquisition, use, or
Structure                  disposition;
                         • assure the execution of transactions in accordance with laws governing
                           the use of budget authority and with other laws and regulations that
                           have a direct and material effect on the statements of expenditures; and
                         • properly record, process, and summarize transactions to permit the
                           preparation of reliable statements of expenditures and to maintain
                           accountability for assets.

                         The purpose of our consideration of internal controls was to determine our
                         procedures for auditing the statements of expenditures and, accordingly,
                         we do not express an opinion on internal controls. However, for the
                         controls we tested, we found no material weaknesses in the internal
                         control structure and its operations for the 6-month period ended
                         March 31, 1999. A material weakness is a condition in which the design or
                         operation of one or more of the internal control components does not
                         reduce to a relatively low level the risk that misstatements caused by error
                         or fraud in amounts that would be material in relation to the financial
                         statements being audited may occur and not be detected within a timely
                         period by employees in the normal course of performing their duties. Our
                         internal control work would not necessarily disclose all material
                         weaknesses.



Compliance With Laws     Our audit tests for compliance with selected provisions of laws and
                         regulations disclosed no instances of noncompliance that would be
and Regulations          reportable under 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.



Objectives, Scope, and   In order to carry out their financial operations and to ensure accountability,
                         independent counsels are responsible for
Methodology
                         • preparing statements of expenditures in conformity with the basis of
                           accounting described in the accompanying notes,




                         Page 7                                      GAO/AIMD-99-292 Independent Counsel
B-283592




• establishing and maintaining an internal control structure to provide
  reasonable assurance that the internal control objectives previously
  mentioned are met, and
• complying with applicable laws and regulations.

We are responsible for obtaining reasonable assurance about whether the
statements of expenditures reported by independent counsels are reliable
(free of material misstatement and presented fairly, in all material respects,
in conformity with the basis of accounting described in the accompanying
notes). Also, we are responsible for obtaining a sufficient understanding of
internal controls to plan the audits and for testing compliance with selected
provisions of laws and regulations.

In order to fulfill these responsibilities, for each independent counsel, we

• examined, on a test basis, evidence supporting the amounts and
  disclosures in the statement of expenditures and notes thereto, except
  items indicated as unaudited;
• assessed the accounting principles used by management;
• evaluated the overall presentation of the statement of expenditures;
• obtained an understanding of the internal control structure related to
  safeguarding assets, compliance with laws and regulations (including
  execution of transactions in accordance with budget authority), and
  financial reporting;
• tested relevant internal controls over safeguarding assets, compliance,
  and financial reporting; and
• tested compliance with certain aspects of selected provisions of the
  independent counsel provisions of 28 U.S.C. 591-599 (1994), 5 U.S.C.
  Chapter 55, and implementing regulations relating to pay
  administration.

We limited our internal control testing to those controls necessary to
achieve the objectives outlined in our statement on internal controls.
Because of inherent limitations in any internal control structure, 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 did not test compliance with all laws and regulations applicable to the
offices of independent counsel. We limited our tests of compliance to those



Page 8                                      GAO/AIMD-99-292 Independent Counsel
B-283592




which we deemed applicable to the statements of expenditures. We caution
that noncompliance may occur and not be detected by these tests and that
such testing may not be sufficient for other purposes.

We obtained, but did not audit, information on costs that were not paid
from the permanent, indefinite appropriation established to fund
independent counsel activities. We obtained information on these costs
from the independent counsel offices; the Department of Justice, including
the FBI; the Internal Revenue Service; the Department of the Treasury; and
the Office of Inspector General for the Department of Agriculture.

We discussed the results of our work with representatives of the eight
offices of independent counsel and AOUSC and have incorporated their
comments where appropriate.

We performed our audits in accordance with generally accepted
government auditing standards.




David L. Clark
Director, Audit Oversight and Liaison

September 9, 1999




Page 9                                    GAO/AIMD-99-292 Independent Counsel
B-283592




List of Committees

The Honorable Ted Stevens
Chairman
The Honorable Robert C. Byrd
Ranking Minority Member
Committee on Appropriations
United States Senate

The Honorable Fred Thompson
Chairman
The Honorable Joseph I. Lieberman
Ranking Minority Member
Committee on Governmental Affairs
United States Senate

The Honorable Orrin G. Hatch
Chairman
The Honorable Patrick J. Leahy
Ranking Minority Member
Committee on the Judiciary
United States Senate

The Honorable C. W. Bill Young
Chairman
The Honorable David R. Obey
Ranking Minority Member
Committee on Appropriations
House of Representatives

The Honorable Dan Burton
Chairman
The Honorable Henry A. Waxman
Ranking Minority Member
Committee on Government Reform
House of Representatives




Page 10                             GAO/AIMD-99-292 Independent Counsel
B-283592




The Honorable Henry J. Hyde
Chairman
The Honorable John Conyers, Jr.
Ranking Minority Member
Committee on the Judiciary
House of Representatives




Page 11                           GAO/AIMD-99-292 Independent Counsel
Appendix I

Statement of Expenditures for Independent                                                                        Appendx
                                                                                                                       ies




Counsel Adams/Thompson                                                                                            Appendx
                                                                                                                        Ii




                                ARLIN M. ADAMS/LARRY D. THOMPSON

                                        Office of Independent Counsel

                                          Statement of Expenditures
                                                (Cash basis)

                                       Six Months Ended March 31, 1999


              Personnel compensation and benefits                             $100,205

              Travel                                                             1,335

              Rent, communications, and utilities (note 2)                     160,638

              Contractual services (note 3)                                     95,984

              Supplies and materials                                             1,360

              Administrative services (note 4)                                  16,627

              Total expenditures                                              $376,149

             ____________________________________________________
             The accompanying notes are an integral part of this statement.




                            Page 12                                            GAO/AIMD-99-292 Independent Counsel
                Appendix I
                Statement of Expenditures for Independent
                Counsel Adams/Thompson




                  ARLIN M. ADAMS/LARRY D. THOMPSON

                        Office of Independent Counsel

                    Notes to Statement of Expenditures


Note 1 - Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Independent Counsel-Arlin M. Adams/Larry D.
Thompson (OIC-Adams/Thompson) for the 6 months ended March 31, 1999. The
statement of expenditures includes only expenditures made from the permanent,
indefinite appropriation for the office of independent counsel that are processed
through the Administrative Office of the U.S. Courts (AOUSC) and the OIC. Mr.
Adams was appointed on March 1, 1990, to investigate the administration of
various programs of the Department of Housing and Urban Development from
1983 to 1989. On May 15, 1995, Mr. Adams resigned his appointment, effective
July 3, 1995, at which time he was succeeded by Larry D. Thompson as
independent counsel.

Basis of accounting: The accompanying statement of expenditures was prepared
principally on the cash basis of accounting, which is a comprehensive basis of
accounting other than generally accepted accounting principles. Under this
method, except for personnel compensation and benefits, expenditures are
recorded when the funds are disbursed by AOUSC or, for noncash transfers,
when charged by AOUSC. Most personnel compensation and benefits are
recorded at the end of the pay period when earned.

Note 2 - Rent, communications, and utilities

Approximately $136,000 in office rent is included in rent, communications, and
utilities.

Note 3 - Contractual services

Contractual services consist primarily of payments to experts for assistance in
preparing the evaluations of attorneys’ fee petitions filed with the Special
Division and other administrative proceedings, and to litigation support
personnel for assistance in preparing the OIC’s records for disposition, as
required by the governing legislation.

Note 4 - Administrative services

AOUSC receives an administrative fee equal to 3 percent of OIC expenditures for
performing disbursement and accounting functions for OIC-Adams/Thompson.
Payment of these fees generally occurs in the month following the services. Also




                Page 13                                                 GAO/AIMD-99-292 Independent Counsel
                Appendix I
                Statement of Expenditures for Independent
                Counsel Adams/Thompson




included in administrative services are other costs, amounting to $5,894, incurred
by AOUSC and the Department of Justice in providing administrative guidance
and support to independent counsel offices. These costs were certified by
AOUSC or Justice, paid from the independent counsel appropriation, and
allocated to the OIC.




                Page 14                                                 GAO/AIMD-99-292 Independent Counsel
Appendix II

Statement of Expenditures for Independent
Counsel Barrett                                                                                                     Appendx
                                                                                                                          iI




                                               DAVID M. BARRETT

                                         Office of Independent Counsel

                                           Statement of Expenditures
                                                 (Cash basis)

                                        Six Months Ended March 31, 1999


               Personnel compensation and benefits                               $913,903

               Travel (note 2)                                                     79,361

               Rent, communications, and utilities (note 3)                       234,248

               Contractual services (note 4)                                      244,757

               Acquisition of capital assets                                       10,921

               Supplies and materials                                               6,092

               Administrative services (note 5)                                    90,221

               Total expenditures                                              $1,579,503

              ____________________________________________________
              The accompanying notes are an integral part of this statement.




                              Page 15                                             GAO/AIMD-99-292 Independent Counsel
                Appendix II
                Statement of Expenditures for Independent
                Counsel Barrett




                             DAVID M. BARRETT

                        Office of Independent Counsel

                     Notes to Statement of Expenditures


Note 1 - Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Independent Counsel-David M. Barrett (OIC-
Barrett) for the 6 months ended March 31, 1999. The statement of expenditures
includes only expenditures made from the permanent, indefinite appropriation
for the office of independent counsel that are processed through the
Administrative Office of the U.S. Courts (AOUSC) and the OIC. Mr. Barrett was
appointed on May 24, 1995, to investigate certain allegations against the Secretary
of Housing and Urban Development.

Basis of accounting: The accompanying statement of expenditures was prepared
principally on the cash basis of accounting, which is a comprehensive basis of
accounting other than generally accepted accounting principles. Under this
method, except for personnel compensation and benefits, expenditures are
recorded when the funds are disbursed by AOUSC or, for noncash transfers,
when charged by AOUSC. Most personnel compensation and benefits are
recorded at the end of the pay period when earned.

Note 2 - Travel

Travel generally includes expenditures for investigation-related travel paid for
OIC-Barrett personnel and detailees from other federal agencies, such as the FBI.

Note 3 - Rent, communications, and utilities

Approximately $200,000 in office rent is included in rent, communications, and
utilities.

Note 4 - Contractual services

Contractual services primarily consist of expenditures for investigators and other
specialists in areas of interest to the investigation.

Note 5 - Administrative services

AOUSC receives an administrative fee equal to 3 percent of OIC expenditures for
performing disbursement and accounting functions for OIC-Barrett. Payment of
these fees generally occurs in the month following the services. Also included in
administrative services are other costs, amounting to $43,056, incurred by




                Page 16                                                 GAO/AIMD-99-292 Independent Counsel
               Appendix II
               Statement of Expenditures for Independent
               Counsel Barrett




AOUSC and the Department of Justice in providing administrative guidance and
support to independent counsel offices. These costs were certified by AOUSC or
Justice, paid from the independent counsel appropriation, and allocated to the
OIC.

Note 6 - Other costs (unaudited)

Certain costs relating to employees assigned to work with the OIC by the Federal
Bureau of Investigation (FBI) were financed through funds appropriated to the
FBI and, accordingly, are not included in the statement of expenditures. The FBI
was not reimbursed for these costs. The estimated costs (unaudited) of the
assistance provided to the OIC during the 6-month period, based on information
provided by officials of the Department of Justice, were $63,302.




               Page 17                                                GAO/AIMD-99-292 Independent Counsel
Appendix III

Statement of Expenditures for Independent
Counsel Bruce                                                                                                         Appendx
                                                                                                                            Ii




                                             CAROL ELDER BRUCE

                                          Office of Independent Counsel

                                            Statement of Expenditures
                                                  (Cash basis)

                                         Six Months Ended March 31, 1999


                Personnel compensation and benefits                               $936,843

                Travel (note 2)                                                    198,860

                Rent, communications, and utilities (note 3)                       436,718

                Contractual services (note 4)                                      328,679

                Acquisition of capital assets (note 5)                              10,312

                Supplies and materials                                              22,631

                Administrative services (note 6)                                   120,560

                Total expenditures                                              $2,054,603

               ____________________________________________________
               The accompanying notes are an integral part of this statement.




                               Page 18                                              GAO/AIMD-99-292 Independent Counsel
                Appendix III
                Statement of Expenditures for Independent
                Counsel Bruce




                      CAROL ELDER BRUCE

                  Office of Independent Counsel

               Notes to Statement of Expenditures


Note 1 – Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Independent Counsel-Carol Elder Bruce (OIC-
Bruce) for the 6 months ended March 31, 1999. The statement of expenditures
includes only expenditures made from the permanent, indefinite appropriation
for the office of independent counsel that are processed through the
Administrative Office of the U.S. Courts (AOUSC) and the OIC. Ms. Bruce was
appointed on March 19, 1998, to investigate whether the Secretary of the Interior
may have violated federal criminal law in sworn testimony before a congressional
committee.

Basis of accounting: The accompanying statement of expenditures was prepared
principally on the cash basis of accounting, which is a comprehensive basis of
accounting other than generally accepted accounting principles. Under this
method, expenditures are recorded when the funds are disbursed by AOUSC or,
for noncash transfers, when charged by AOUSC. Most personnel compensation
and benefits are recorded at the end of the pay period when earned.

Note 2 – Travel

Travel generally includes expenditures for investigation-related travel paid for
OIC-Bruce personnel, detailees from other federal agencies, such as the FBI, and
witnesses.

Note 3 – Rent, communications, and utilities

Approximately $353,000 in office rent is included in rent, communications, and
utilities.

Note 4 – Contractual services

Contractual services primarily consist of payments for investigators, office
alterations and repairs, and computer services.

Note 5 – Acquisition of capital assets

The capital asset expenditures are for the purchase of telephone systems, office
equipment and furniture, and computers. These assets will remain the property
of the federal government at the conclusion of the investigation.




                Page 19                                                 GAO/AIMD-99-292 Independent Counsel
               Appendix III
               Statement of Expenditures for Independent
               Counsel Bruce




Note 6 – Administrative services

AOUSC receives an administrative fee equal to 3 percent of OIC expenditures for
performing disbursement and accounting functions for OIC-Bruce. Payment of
these fees generally occurs in the month following the services. Also included in
administrative services are other costs, amounting to $63,627, incurred by
AOUSC and the Department of Justice in providing administrative guidance and
support to independent counsel offices. These costs were certified by AOUSC or
Justice, paid from the independent counsel appropriation, and allocated to the
OIC.

Note 7 - Other costs (unaudited)

Certain costs relating to employees assigned to work with the OIC by the Federal
Bureau of Investigation (FBI) and the Department of Justice were financed
through funds appropriated to these agencies and, accordingly, are not included
in the statement of expenditures. These agencies are not reimbursed for these
costs. The schedule below shows the estimated costs (unaudited) of the
assistance provided to the OIC during the 6-month period, based on information
provided by officials of these agencies.



                                             Costs
                                        (unaudited)
                FBI                        $408,407
                Other Justice                 3,500
                                           $411,907




               Page 20                                                 GAO/AIMD-99-292 Independent Counsel
Appendix IV

Statement of Expenditures for Independent
Counsel Lancaster                                                                                                    Appendx
                                                                                                                           i
                                                                                                                           IV




                                              RALPH I. LANCASTER

                                          Office of Independent Counsel

                                           Statement of Expenditures
                                                 (Cash basis)

                                       Six Months Ended March 31, 1999


              Personnel compensation and benefits                              $488,310

              Travel (note 2)                                                   138,948

              Rent, communications, and utilities (note 3)                       38,826

              Contractual services (note 4)                                      40,084

              Acquisition of capital assets (note 5)                            199,107

              Supplies and materials                                             14,647

              Administrative services (note 6)                                   62,487

              Total expenditures                                               $982,409

              ____________________________________________________
              The accompanying notes are an integral part of this statement.




                                Page 21                                            GAO/AIMD-99-292 Independent Counsel
                Appendix IV
                Statement of Expenditures for Independent
                Counsel Lancaster




                       RALPH I. LANCASTER

                  Office of Independent Counsel

               Notes to Statement of Expenditures


Note 1 - Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Independent Counsel-Ralph I. Lancaster (OIC-
Lancaster) for the 6 months ended March 31, 1999. The statement of
expenditures includes only expenditures made from the permanent, indefinite
appropriation for the office of independent counsel that are processed through
the Administrative Office of the U.S. Courts (AOUSC) and the OIC. Mr. Lancaster
was appointed on May 26, 1998, to investigate activities of the Secretary of Labor
regarding a possible undisclosed financial interest in a company and the
solicitation of illegal campaign contributions.

Basis of accounting: The accompanying statement of expenditures was prepared
principally on the cash basis of accounting, which is a comprehensive basis of
accounting other than generally accepted accounting principles. Under this
method, except for personnel compensation and benefits, expenditures are
recorded when the funds are disbursed by AOUSC or, for noncash transfers,
when charged by AOUSC. Most personnel compensation and benefits are
recorded at the end of the pay period when earned.

Note 2 - Travel

Travel generally includes expenditures for investigation-related travel paid for
OIC-Lancaster personnel, detailees from other federal agencies, such as the FBI,
and witnesses.

Note 3 - Rent, communications, and utilities

OIC-Lancaster paid no rent during this period.

Note 4 - Contractual services

Contractual services represent expenditures for services including those of
experts and other specialists in areas of interest to the investigation.

Note 5 - Acquisition of capital assets

The capital assets expenditures are principally for computers and office furniture
and equipment. These items will remain the property of the federal government
at the conclusion of the investigation.




                Page 22                                                 GAO/AIMD-99-292 Independent Counsel
               Appendix IV
               Statement of Expenditures for Independent
               Counsel Lancaster




Note 6 - Administrative services

AOUSC receives an administrative fee equal to 3 percent of OIC expenditures for
performing disbursement and accounting functions for OIC-Lancaster. Payment
of these fees generally occurs in the month following the services. Also included
in administrative services are other costs, amounting to $34,489, incurred by
AOUSC and the Department of Justice in providing administrative guidance and
support to independent counsel offices. These costs were certified by AOUSC or
Justice, paid from the independent counsel appropriation, and allocated to the
OIC.

Note 7 - Other costs (unaudited)

Certain costs relating to employees assigned to work with the OIC by the Federal
Bureau of Investigation and the Department of Justice were financed through
funds appropriated to these agencies and, accordingly, are not included in the
statement of expenditures. These agencies were not reimbursed for these costs.
The schedule below shows the estimated costs (unaudited) of the assistance
provided to the OIC during the 6-month period, based on information provided by
officials of these agencies.


                                          Costs
                                     (unaudited)
                FBI                      $183,861
                Other Justice               1,838
                                         $185,699




               Page 23                                                 GAO/AIMD-99-292 Independent Counsel
Appendix V

Statement of Expenditures for Independent
Counsel Pearson                                                                                                   Appendx
                                                                                                                        i
                                                                                                                        V




                                            DANIEL S. PEARSON

                                        Office of Independent Counsel

                                          Statement of Expenditures
                                                (Cash basis)

                                       Six Months Ended March 31, 1999


              Personnel compensation and benefits                             $29,939

              Travel                                                              573

              Rent, communications, and utilities (note 2)                      1,664

              Contractual services                                                161

              Supplies and materials                                               96

              Administrative services (note 3)                                  5,329

              Total expenditures                                              $37,762

             ____________________________________________________
             The accompanying notes are an integral part of this statement.




                            Page 24                                             GAO/AIMD-99-292 Independent Counsel
                Appendix V
                Statement of Expenditures for Independent
                Counsel Pearson




                        DANIEL S. PEARSON

                  Office of Independent Counsel

               Notes to Statement of Expenditures


Note 1 - Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Independent Counsel-Daniel S. Pearson (OIC-
Pearson) for the 6 months ended March 31, 1999. The statement of expenditures
includes only expenditures made from the permanent, indefinite appropriation
for the office of independent counsel that are processed through the
Administrative Office of the U.S. Courts (AOUSC) and the OIC. Mr. Pearson was
appointed on July 6, 1995, to investigate certain allegations against the Secretary
of Commerce. On April 3, 1996, the Secretary was killed in a plane crash. Shortly
thereafter, the independent counsel closed the investigation of the Secretary and
transferred the investigation related to other parties to the Department of Justice.
Expenditures during this period relate to efforts to archive the investigative
records and to evaluate petitions for attorneys’ fees filed by individuals
investigated but not indicted.

Basis of accounting: The accompanying statement of expenditures was prepared
principally on the cash basis of accounting, which is a comprehensive basis of
accounting other than generally accepted accounting principles. Under this
method, except for personnel compensation and benefits, expenditures are
recorded when the funds are disbursed by AOUSC or, for noncash transfers,
when charged by AOUSC. Most personnel compensation and benefits are
recorded at the end of the pay period when earned.

Note 2 – Rent, communications, and utilities

OIC-Pearson paid no rent during this period.

Note 3 - Administrative services

AOUSC receives an administrative fee equal to 3 percent of OIC expenditures for
performing disbursement and accounting functions for OIC-Pearson. Payment of
these fees generally occurs in the month following the services. Also included in
administrative services are other costs, amounting to $4,619, incurred by AOUSC
and the Department of Justice in providing administrative guidance and support
to independent counsel offices. These costs were certified by AOUSC or Justice,
paid from the independent counsel appropriation, and allocated to the OIC.




                Page 25                                                  GAO/AIMD-99-292 Independent Counsel
Appendix VI

Statement of Expenditures for Independent
Counsel Smaltz                                                                                                        Appendx
                                                                                                                            iI
                                                                                                                            V




                                             DONALD C. SMALTZ

                                         Office of Independent Counsel

                                           Statement of Expenditures
                                                 (Cash basis)

                                        Six Months Ended March 31, 1999


               Personnel compensation and benefits                               $934,947

               Travel (note 2)                                                    181,986

               Rent, communications, and utilities (note 3)                       237,603

               Contractual services (note 4)                                      186,029

               Acquisition of capital assets (note 5)                              10,793

               Supplies and materials                                              14,753

               Administrative services (note 6)                                   104,023

               Total expenditures                                              $1,670,134

              ____________________________________________________
              The accompanying notes are an integral part of this statement.




                              Page 26                                               GAO/AIMD-99-292 Independent Counsel
                Appendix VI
                Statement of Expenditures for Independent
                Counsel Smaltz




                        DONALD C. SMALTZ

                  Office of Independent Counsel

               Notes to Statement of Expenditures


Note 1 - Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Independent Counsel-Donald C. Smaltz (OIC-
Smaltz) for the 6 months ended March 31, 1999. The statement of expenditures
includes only expenditures made from the permanent, indefinite appropriation
for the office of independent counsel that are processed through the
Administrative Office of the U.S. Courts (AOUSC) and the OIC. Mr. Smaltz was
appointed on September 9, 1994, to investigate activities of a former Secretary of
Agriculture.

Basis of accounting: The accompanying statement of expenditures was prepared
principally on the cash basis of accounting, which is a comprehensive basis of
accounting other than generally accepted accounting principles. Under this
method, except for personnel compensation and benefits, expenditures are
recorded when the funds are disbursed by AOUSC or, for noncash transfers,
when charged by AOUSC. Most personnel compensation and benefits are
recorded at the end of the pay period when earned.

Note 2 - Travel

Travel generally includes expenditures for investigation and trial-related travel
paid for OIC-Smaltz personnel and detailees from other federal agencies, such as
the Department of Agriculture.

Note 3 - Rent, communications, and utilities

Approximately $119,000 in office rent is included in rent, communications, and
utilities.

Note 4 - Contractual services

Contractual services represent expenditures for transcripts and for services
including those of experts and other specialists in areas of interest to the
investigation.




                Page 27                                                 GAO/AIMD-99-292 Independent Counsel
               Appendix VI
               Statement of Expenditures for Independent
               Counsel Smaltz




Note 5 - Acquisition of capital assets

The capital assets expenditures are principally for office automation equipment
and law books. These materials remain the property of the federal government at
the conclusion of the investigation.

Note 6 - Administrative services

AOUSC receives an administrative fee equal to 3 percent of OIC expenditures for
performing disbursement and accounting functions for OIC-Smaltz. Payment of
these fees generally occurs in the month following the services. Also included in
administrative services are other costs, amounting to $54,411, incurred by
AOUSC and the Department of Justice in providing administrative guidance and
support to independent counsel offices. These costs were certified by AOUSC or
Justice, paid from the independent counsel appropriation, and allocated to the
OIC.

Note 7 - Other costs (unaudited)

Certain costs relating to employees assigned to work with the OIC by the Federal
Bureau of Investigation, the Department of Justice, and the Inspector General of
the Department of Agriculture were financed through funds appropriated to these
agencies and, accordingly, are not included in the statement of expenditures.
These agencies were not reimbursed for these costs. The schedule below shows
the estimated costs (unaudited) of the assistance provided to the OIC during the
6-month period, based on information provided by officials of these agencies.


                                             Costs
                                        (unaudited)
                Agriculture IG             $ 97,446
                FBI                          44,207
                Other Justice                   477
                                           $142,130


Note 8 - Receipts (unaudited)

The federal government has received payments resulting from court ordered
fines, penalties, and judgments against defendants and respondents as a result of
litigation and referral actions initiated by OIC-Smaltz. As a result of actions
initiated by OIC-Smaltz, the federal government received about $685,000, that had
not been previously reported, from defendants and respondents.




               Page 28                                                 GAO/AIMD-99-292 Independent Counsel
Appendix VII

Statement of Expenditures for Independent
Counsel Starr                                                                                                         Appendx
                                                                                                                            iI
                                                                                                                            V




                                             KENNETH W. STARR

                                         Office of Independent Counsel

                                          Statement of Expenditures
                                                (Cash basis)

                                     Six Months Ended March 31, 1999


                Personnel compensation and benefits                              $2,912,284

                Travel (note 2)                                                    647,155

                Rent, communications, and utilities (note 3)                       711,208

                Contractual services (note 4)                                      979,124

                Acquisition of capital assets (note 5)                              53,224

                Supplies and materials                                              63,261

                Administrative services (note 6)                                   318,058

                Total expenditures                                              $5,684,314

               ____________________________________________________
               The accompanying notes are an integral part of this statement.




                               Page 29                                              GAO/AIMD-99-292 Independent Counsel
                Appendix VII
                Statement of Expenditures for Independent
                Counsel Starr




                      KENNETH W. STARR

                  Office of Independent Counsel

             Notes to Statement of Expenditures


Note 1 - Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Independent Counsel-Kenneth W. Starr (OIC-
Starr) for the 6 months ended March 31, 1999. The statement of expenditures
includes only expenditures made from the permanent, indefinite
appropriation for the office of independent counsel that are processed
through the Administrative Office of the U.S. Courts (AOUSC) and the OIC.
Mr. Starr was appointed on August 5, 1994, to assume the investigation of
possible violations of federal criminal law in Re: Madison Guaranty Savings
and Loan Association and other entities, which was begun by regulatory
Independent Counsel Robert B. Fiske, Jr. The U.S. Court of Appeals
subsequently expanded OIC-Starr's jurisdiction to include selected White
House Travel Office and access-to-personnel-file issues on March 22, 1996,
and June 21, 1996, respectively. On October 25, 1996, it further expanded
OIC-Starr's jurisdiction to include issues related to statements made before
the Government Reform and Oversight Committee, U.S. House of
Representatives, on June 26, 1996. On January 16, 1998, the Court expanded
OIC-Starr's jurisdiction to include issues related to whether, in a civil case,
certain individuals suborned perjury, obstructed justice, intimidated
witnesses, or otherwise violated federal law in dealing with witnesses,
potential witnesses, attorneys, or others.

Basis of accounting: The accompanying statement of expenditures was
prepared principally on the cash basis of accounting, which is a
comprehensive basis of accounting other than generally accepted accounting
principles. Under this method, except for personnel compensation and
benefits, expenditures are recorded when the funds are disbursed by AOUSC
or, for noncash transfers, when charged by AOUSC. Most personnel
compensation and benefits are recorded at the end of the pay period when
earned.

Note 2 - Travel

Travel generally includes expenditures for investigation-related travel paid for
OIC-Starr personnel, detailees from other federal agencies, such as the
Federal Bureau of Investigation, contractors, and witnesses.




                Page 30                                                  GAO/AIMD-99-292 Independent Counsel
               Appendix VII
               Statement of Expenditures for Independent
               Counsel Starr




Note 3 - Rent, communications, and utilities

Approximately $439,000 in office rent is included in rent, communications,
and utilities.

Note 4 - Contractual services

Contractual services primarily consist of expenditures for computer support
and maintenance, legal services, and investigators and other specialists in
areas of interest to the investigation.

Note 5 - Acquisition of capital assets

The capital assets expenditures are primarily for office furniture and
equipment and telephone systems. These assets will remain the property of
the federal government at the conclusion of the investigation.

Note 6 - Administrative services

AOUSC receives an administrative fee equal to 3 percent of OIC expenditures
for performing disbursement and accounting functions for OIC-Starr.
Payment of these fees generally occurs in the month following the services.
Also included in administrative services are other costs, amounting to
$150,843, incurred by AOUSC and the Department of Justice in providing
administrative guidance and support to independent counsel offices. These
costs were certified by AOUSC or Justice, paid from the independent counsel
appropriation, and allocated to the OIC.

Note 7 - Other costs (unaudited)

Certain costs relating to employees assigned to work with the OIC by the
Federal Bureau of Investigation (FBI), the U.S. Marshals Service, the
Department of Justice, and the Internal Revenue Service (IRS) were financed
through funds appropriated to these agencies and, accordingly, are not
included in the statement of expenditures. These agencies are not reimbursed
for these costs. The schedule below shows the estimated costs (unaudited) of
the assistance provided to the OIC during the 6-month period, based on
information provided by officials of these agencies.

                                           Costs
                                      (unaudited)
                Marshals Service        $1,168,000
                FBI                        372,162
                Other Justice                5,896
                IRS                         15,723
                                        $1,561,781




               Page 31                                                 GAO/AIMD-99-292 Independent Counsel
Appendix VIII

Statement of Expenditures for Independent
Counsel von Kann                                                                                                             Appendx
                                                                                                                                   iVI




                                           CURTIS E. VON KANN
                                (formerly Independent Counsel Sealed-1996)

                                          Office of Independent Counsel

                                           Statement of Expenditures
                                                 (Cash basis)

                                        Six Months Ended March 31, 1999


                 Personnel compensation and benefits                             $17,376

                 Rent, communications, and utilities (note 2)                      1,800

                 Contractual services                                                99

                 Supplies and materials                                             518

                 Administrative services (note 3)                                  2,839

                 Total expenditures                                          $22,632


                ____________________________________________________
                The accompanying notes are an integral part of this statement.




                               Page 32                                                     GAO/AIMD-99-292 Independent Counsel
                Appendix VIII
                Statement of Expenditures for Independent
                Counsel von Kann




                   CURTIS E. VON KANN
        (formerly Independent Counsel Sealed-1996)

                Office of Independent Counsel

             Notes to Statement of Expenditures


Note 1 - Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Independent Counsel-Curtis E. von Kann (OIC-
von Kann) (formerly Independent Counsel Sealed-1996) for the 6 months
ended March 31, 1999. The statement of expenditures includes only
expenditures made from the permanent, indefinite appropriation for the office
of independent counsel that are processed through the Administrative Office
of the U.S. Courts (AOUSC) and the OIC. The independent counsel was
appointed on November 27, 1996, to investigate whether the former Chief
Executive Officer of the Corporation for National and Community Service
may have violated federal conflict of interest laws in creating and operating
the Partnership for National Service, a nonprofit organization incorporated in
the District of Columbia. Judge von Kann submitted his final report to the
Special Division of the U.S. Court of Appeals for the District of Columbia
Circuit on August 21, 1997. On December 19, 1997, the report was released to
the public. On December 11, 1998, based on consideration of information
submitted by the independent counsel, the Court ordered the termination of
OIC-von Kann, effective November 30, 1998.

Basis of accounting: The accompanying statement of expenditures was
prepared principally on the cash basis of accounting, which is a
comprehensive basis of accounting other than generally accepted accounting
principles. Under this method, except for personnel compensation and
benefits, expenditures are recorded when the funds are disbursed by AOUSC
or, for noncash transfers, when charged by AOUSC. Most personnel
compensation and benefits are recorded at the end of the pay period when
earned.

Note 2 - Rent, communications, and utilities

OIC-von Kann paid no rent during this period.

Note 3 - Administrative services

AOUSC receives an administrative fee equal to 3 percent of OIC expenditures
for performing disbursement and accounting functions for OIC-von Kann.
Payment of these fees generally occurs in the month following the services.
Also included in administrative services are other costs, amounting to $1,937,




                Page 33                                                 GAO/AIMD-99-292 Independent Counsel
                                  Appendix VIII
                                  Statement of Expenditures for Independent
                                  Counsel von Kann




                   incurred by AOUSC and the Department of Justice in providing administrative
                   guidance and support to independent counsel offices. These costs were
                   certified by AOUSC or Justice, paid from the independent counsel
                   appropriation, and allocated to the OIC.

                   Note 4 - Other costs (unaudited)

                   In August 1998, a special division of the U.S. Court of Appeals for the D.C.
                   Circuit awarded reimbursements of $7,864 for attorneys’ fees and expenses to
                   an individual who had been investigated by OIC-von Kann but not indicted.
                   The reimbursements were made in October 1998 from the permanent fund
                   established for the payment of judgments.




(911939)   Leter                  Page 34                                               GAO/AIMD-99-292 Independent Counsel
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