oversight

Financial Audit: Independent Counsel Expenditures for the Six Months Ended September 30, 2002

Published by the Government Accountability Office on 2003-03-31.

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

             United States General Accounting Office

GAO          Report to Congressional Committees




March 2003
             FINANCIAL AUDIT
             Independent Counsel
             Expenditures for the
             Six Months Ended
             September 30, 2002




GAO-03-445
             a
Contents



Letter                                                                                                                  1


Auditor’s Report                                                                                                        3
                             Background                                                                                 3
                             Opinion on Statements of Expenditures                                                      5
                             Consideration of Internal Control                                                          5
                             Compliance with Laws and Regulations                                                       5
                             Objectives, Scope, and Methodology                                                         6
                             Agency Comments                                                                            7


Appendixes
              Appendix I:    Statement of Expenditures for Independent Counsel
                             Barrett                                                                                    10
              Appendix II:   Statement of Expenditures for Independent Counsel
                             Pearson                                                                                    13
             Appendix III:   Statement of Expenditures for Independent Counsel
                             Smaltz                                                                                     16
             Appendix IV:    Statement of Expenditures for Independent Counsel
                             Thomas                                                                                     19




                             Abbreviations

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

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                             Page i                                                   GAO-03-445 Independent Counsel
A
United States General Accounting Office
Washington, D.C. 20548



                                    March 31, 2003                                                                    Leter




                                    Congressional Committees

                                    Enclosed is our report on the statements of expenditures of four offices of
                                    independent counsel for the 6 months ended September 30, 2002. 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 of this report will
                                    be made available to others upon request. This report will also be available
                                    at no charge on GAO’s Web site at www.gao.gov.

                                    If you or your staffs have any questions concerning this report, please
                                    contact me at (202) 512-6906 or Hodge Herry, Assistant Director, at (202)
                                    512-9469. You can also reach us by E-mail at williamsM1@gao.gov or
                                    herryh@gao.gov. Key contributors to this report were Carol Keightley,
                                    Kwabena Ansong, and Heather Dunahoo.




                                    McCoy Williams
                                    Director
                                    Financial Management and Assurance




                                    Page 1                                            GAO-03-445 Independent Counsel
Page 2   GAO-03-445 Independent Counsel
A
United States General Accounting Office
Washington, D.C. 20548



                                    Congressional Committees                                                              Aud
                                                                                                                            tR
                                                                                                                             o
                                                                                                                             sir’eport




                                    This report presents the results of our audits of expenditures1 reported by
                                    four offices of independent counsel for the 6 months ended September 30,
                                    2002. The Department of Justice and the independent counsels are required
                                    under 28 U.S.C. 594 (d)(2), (h) and 596 (c)(1) (2000) to report on
                                    expenditures from a permanent, indefinite appropriation established
                                    within the Department of Justice to fund independent counsel activities.
                                    We are required under 28 U.S.C. 596 (c)(2) to audit the statements of
                                    expenditures prepared by the independent counsels.

                                    In our audits covering the 6 months ended September 30, 2002, we found

                                    • the statements of expenditures presented in appendixes I through IV, for
                                      the offices of independent counsel David M. Barrett, Daniel S. Pearson,
                                      Donald C. Smaltz, and Julie F. Thomas, respectively, are presented fairly,
                                      in all material respects, in conformity with the basis of accounting
                                      described in note 1 of each counsel’s statement, which is principally the
                                      cash basis, a comprehensive basis of accounting other than U.S.
                                      generally accepted accounting principles;

                                    • no material weaknesses in internal control over financial reporting
                                      (including safeguarding assets) and compliance with laws and
                                      regulations; and

                                    • no reportable noncompliance with 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 determines 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 (2000))
                                    was intended to preserve and promote the accountability and integrity of
                                    public officials and of the institutions of the federal government. The


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




                                    Page 3                                                   GAO-03-445 Independent Counsel
independent counsel law expired on June 30, 1999. Provisions of the law
allow the independent counsels serving at the expiration date to continue
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 from the permanent, indefinite appropriation established to fund
independent counsel activities. The independent counsel law also
designates specific responsibilities to the Administrative Office of the U.S.
Courts (AOUSC) for independent counsels’ administrative support. The
Department of Justice periodically disburses lump-sum payments to
AOUSC for this purpose.

During any 6-month period, there may be other significant costs incurred in
support of the work of the counsels. These costs are paid from
appropriations other than the permanent, indefinite appropriation
established to fund independent counsel activities. These costs arise when
a counsel uses detailees from other federal agencies, such as the Federal
Bureau of Investigation (FBI). Independent counsels are not required to
reflect such costs in their statements of expenditures nor do they do so.
However, for the 6 months ended September 30, 2002, there were no costs
reported by other agencies in support of independent counsel activities.

Also, these statements and related notes do not include certain
expenditures related to an investigation by former independent counsel
Carol Elder Bruce. Ms. Bruce’s office officially closed in March 2001, and
accordingly, no longer prepares financial statements. However, in May 2002
(amended in July 2002), a special division of the U.S. Court of Appeals for
the D.C. Circuit awarded reimbursement of $28,763 for attorneys’ fees and
expenses to individuals who had been investigated by Ms. Bruce but not
indicted. The reimbursement was made in September 2002 from the
permanent fund established for the payment of judgments.

Additionally, these statements and related notes do not include certain
expenditures related to the investigation by Special Counsel John C.
Danforth. The investigation by Special Counsel Danforth was officially
terminated when Mr. Danforth closed his office in March 2001. Accordingly,
Special Counsel Danforth no longer prepares financial statements.
However, the Office of Special Counsel Danforth had $33,863 in
expenditures during this period for processing delayed billings for office
supplies and materials and for office rent.



Page 4                                           GAO-03-445 Independent Counsel
Opinion on Statements   The statements of expenditures, including the accompanying notes for the
                        offices of independent counsel David M. Barrett, Daniel S. Pearson,
of Expenditures         Donald C. Smaltz, and Julie F. Thomas, present fairly, in all material
                        respects, the expenditures of these counsels for the 6 months ended
                        September 30, 2002, on the basis of accounting described in note 1 to each
                        office’s statement.

                        The counsels prepared their statements of expenditures principally on a
                        cash basis of accounting, which is a comprehensive basis of accounting
                        other than U.S. generally accepted accounting principles. The basis of
                        accounting is described in note 1 of each counsel’s statement.



Consideration of        In planning and performing our audits, we considered internal control over
                        financial reporting and compliance.2 We did this to determine our
Internal Control        procedures for auditing the statements of expenditures, not to express an
                        opinion on internal control. Accordingly, we do not express an opinion on
                        internal control over financial reporting and compliance. However, for the
                        controls we tested, we found no material weaknesses in internal control
                        over financial reporting (including safeguarding assets) and compliance for
                        the 6-month period ended September 30, 2002. 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
                        errors, fraud, or noncompliance in amounts that would be material to the
                        statements of expenditures may occur and not be detected promptly 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 tests for compliance with selected provisions of laws and regulations
                        disclosed no instances of noncompliance that would be reportable under
and Regulations         U.S. 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.




                        2
                          The objectives of internal control are to provide reasonable assurance that management
                        objectives regarding financial reporting (including safeguarding assets) and compliance
                        with laws and regulations are achieved.




                        Page 5                                                   GAO-03-445 Independent Counsel
Objectives, Scope, and   The independent counsels are responsible for preparing statements of
                         expenditures in conformity with the basis of accounting described in the
Methodology              accompanying notes. The counsels are also responsible for establishing,
                         maintaining, and assessing internal control to provide reasonable
                         assurance that the following internal control objectives are met and for
                         complying with applicable laws and regulations.

                         • Financial reporting: Transactions are properly recorded, processed, and
                           summarized to permit the preparation of the statements of expenditures
                           in conformity with the basis of accounting described in the notes to the
                           statements, and assets are safeguarded against loss from unauthorized
                           acquisition, use, or disposition.

                         • Compliance with laws and regulations: Transactions are executed in
                           accordance with laws and regulations that could have a direct and
                           material effect on the counsels’ statements of expenditures.

                         We are responsible for (1) obtaining reasonable assurance about whether
                         the counsels’ statements of expenditures are presented fairly, in all material
                         respects, in conformity with the basis of accounting described in the notes
                         accompanying their statements of expenditures, (2) obtaining a sufficient
                         understanding of internal control over financial reporting and compliance
                         to plan the audits, and (3) testing compliance with selected provisions of
                         laws and regulations that have a direct and material effect on the
                         statements.

                         In order to fulfill these responsibilities, for each counsel, we (1) examined,
                         on a test basis, evidence supporting the amounts and disclosures in the
                         statement of expenditures, (2) assessed the accounting principles used by
                         management, (3) evaluated the overall presentation of the statement of
                         expenditures, (4) obtained an understanding of internal control related to
                         financial reporting (including safeguarding assets) and compliance with
                         laws and regulations, and (5) tested compliance with selected provisions of
                         28 U.S.C. 591-599 (2000), 5 U.S.C. Chapter 55, and regulations relating to
                         pay administration.

                         We limited our internal control testing to controls over financial reporting
                         and compliance. Because of inherent limitations in internal control,
                         misstatements due to error, fraud, losses, or noncompliance 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



                         Page 6                                           GAO-03-445 Independent Counsel
                  inadequate because of changes in conditions or that the degree of
                  compliance with controls may deteriorate. In addition, we caution that our
                  internal control testing may not be sufficient for other purposes.

                  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
                  laws and regulations that 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 paid from
                  sources other than the permanent, indefinite appropriation. We obtained
                  information on these costs from the independent counsel offices and the
                  Department of Justice, including the FBI.

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



Agency Comments   We provided drafts of this report to the offices of independent counsel, the
                  Department of Justice, and AOUSC for review and comment. These entities
                  agreed with the facts and conclusions in our report.




                  McCoy Williams
                  Director
                  Financial Management and Assurance

                  March 14, 2003




                  Page 7                                           GAO-03-445 Independent Counsel
List of Committees

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

The Honorable Susan M. Collins
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 Tom Davis
Chairman
The Honorable Henry A. Waxman
Ranking Minority Member
Committee on Government Reform
House of Representatives




Page 8                              GAO-03-445 Independent Counsel
The Honorable F. James Sensenbrenner, Jr.
Chairman
The Honorable John Conyers, Jr.
Ranking Minority Member
Committee on the Judiciary
House of Representatives




Page 9                                      GAO-03-445 Independent Counsel
Appendix I

Statement of Expenditures for Independent                                                                   Appendx
                                                                                                                  ies




Counsel Barrett                                                                                              Append
                                                                                                                  x
                                                                                                                  Ii




                                           DAVID M. BARRETT

                                       Office of Independent Counsel

                                        Statement of Expenditures
                                              (Cash basis)

                                 Six Months Ended September 30, 2002


              Personnel compensation and benefits                              $502,696

              Travel (note 2)                                                    18,643

              Rent, communications, and utilities (note 3)                      266,450

              Contractual services (note 4)                                     146,695

              Supplies and materials                                               1,984

              Administrative services (note 5)                                   82,970

              Total expenditures                                              $1,019,438



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




                 Page 10                                                       GAO-03-445 Independent Counsel
   Appendix I
   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 September 30, 2002. The statement of
expenditures includes only expenditures made from the permanent, indefinite
appropriation for the OIC 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. Expenditures during this period were for ongoing
investigative matters.

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 U.S. 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 witnesses.


Note 3 - Rent, communications, and utilities

Approximately $218,000 in office rent is included in rent, communications, and
utilities.


Note 4 - Contractual services

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




   Page 11                                                           GAO-03-445 Independent Counsel
  Appendix I
  Statement of Expenditures for Independent
  Counsel Barrett




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




  Page 12                                                         GAO-03-445 Independent Counsel
Appendix II

Statement of Expenditures for Independent
Counsel Pearson                                                                                             Appendx
                                                                                                                  Ii




                                           DANIEL S. PEARSON

                                       Office of Independent Counsel

                                         Statement of Expenditures
                                               (Cash basis)

                                  Six Months Ended September 30, 2002


               Personnel compensation and benefits (note 2)                     ($522)


               Travel (note 3)                                                    822

               Rent, communications, utilities, and contractual                 5,758
               services (note 4)

               Administrative services (note 5)                                _1,022

               Total expenditures                                              $7,080

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




                  Page 13                                                      GAO-03-445 Independent Counsel
   Appendix II
   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 September 30, 2002. The statement of
expenditures includes only expenditures made from the permanent, indefinite
appropriation for the OIC 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 final efforts to close down the office.

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 U.S. 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 - Personnel compensation and benefits

The credit amount recorded for personnel compensation and benefits results
from the cancellation of a previously paid lump-sum leave payment.


Note 3 - Travel

Travel includes expenditures for the former Deputy Independent Counsel’s travel
to Washington, D.C., to finalize closing of the office.




   Page 14                                                         GAO-03-445 Independent Counsel
  Appendix II
  Statement of Expenditures for Independent
  Counsel Pearson




Note 4 - Rent, communications, utilities, and contractual services

Approximately $4,300 in office rent is included in rent, communications, utilities,
and contractual services.



Note 5 - 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.




  Page 15                                                            GAO-03-445 Independent Counsel
Appendix III

Statement of Expenditures for Independent
Counsel Smaltz                                                                                                Appendx
                                                                                                                    iI




                                             DONALD C. SMALTZ

                                         Office of Independent Counsel

                                          Statement of Expenditures
                                                (Cash basis)

                                   Six Months Ended September 30, 2002


                Personnel compensation and benefits                             $55,630

                Rent, communications, and utilities (note 2)                      2,224

                Contractual services (note 3)                                     4,782

                Supplies and materials                                             697

                Administrative services (note 4)                                  7,394

                Total expenditures                                              $70,727

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




                     Page 16                                                     GAO-03-445 Independent Counsel
     Appendix III
     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 September 30, 2002. The statement of
expenditures includes only expenditures made from the permanent, indefinite
appropriation for the OIC 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.
Mr. Smaltz submitted his final report to the Special Division of the U.S. Court of
Appeals for the District of Columbia Circuit on January 30, 2001. The report
was published on October 25, 2001, and the office was closed on March 31,
2002. The majority of expenditures in this reporting period represent personnel
costs associated with closing the office, such as severance payments to
terminated employees, archiving all documents, canceling office space and
equipment leases, and preparing final financial reports.

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 U.S. 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 $1,200 in office rent is included in rent, communications, and
utilities.


Note 3 - Contractual services

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




     Page 17                                                           GAO-03-445 Independent Counsel
    Appendix III
    Statement of Expenditures for Independent
    Counsel Smaltz




Note 4 - 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 incurred by AOUSC in
providing administrative guidance and support to independent counsel offices.
These costs were certified by AOUSC, paid from the independent counsel
appropriation, and allocated to the OIC.




    Page 18                                                        GAO-03-445 Independent Counsel
Appendix IV

Statement of Expenditures for Independent
Counsel Thomas                                                                                               Appendx
                                                                                                                   iIV




                                               JULIE F. THOMAS

                                      Office of Independent Counsel

                                        Statement of Expenditures
                                              (Cash basis)

                                  Six Months Ended September 30, 2002


               Personnel compensation and benefits                              $623,277

               Travel (note 2)                                                    20,860

               Rent, communications, and utilities (note 3)                      154,438

               Contractual services (note 4)                                     258,981

               Supplies and materials (note 5)                                      7,405

               Administrative services (note 6)                                   76,467

               Total expenditures                                              $1,141,428

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




                 Page 19                                                        GAO-03-445 Independent Counsel
    Appendix IV
    Statement of Expenditures for Independent
    Counsel Thomas




                         JULIE F. THOMAS


                  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-Julie F. Thomas (OIC-
Thomas) for the 6 months ended September 30, 2002. The statement of
expenditures includes only expenditures made from the permanent, indefinite
appropriation for the OIC that are processed through the Administrative Office
of the U.S. Courts (AOUSC) and the OIC.

Kenneth W. Starr (OIC-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 (Whitewater), 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 on June 26, 1996, before the Government Reform and Oversight
Committee, U.S. House of Representatives. 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 (commonly referred to as the Lewinsky matter).

On October 18, 1999, Mr. Starr resigned his appointment, and was succeeded
by Robert W. Ray as independent counsel effective the same date. On
March 16, 2000, Mr. Ray submitted to the Special Division of the U.S. Court of
Appeals for the District of Columbia Circuit two final reports on (1) the access-
to-personnel-files issues and (2) the issues related to statements made before
the Government Reform and Oversight Committee. On July 28, 2000, the court
ordered the public release of the two reports. Further, on June 22, 2000, Mr.
Ray submitted to the court a final report on the White House travel matter. On
October 18, 2000, the court ordered the public release of that report. On
January 19, 2001, Mr. Ray announced the conclusion of all current matters
before the OIC.

On August 21, 2001, the Special Division of the U.S. Court of Appeals for the
District of Columbia Circuit, at the request of the Independent Counsel, ordered
the termination of the investigative functions of the Independent Counsel as of




    Page 20                                                          GAO-03-445 Independent Counsel
      Appendix IV
      Statement of Expenditures for Independent
      Counsel Thomas




March 31, 2002, except to the extent necessary to conclude any remaining
noninvestigative and nonprosecutorial tasks required by statute. On March 2,
2001, and May 18, 2001, Mr. Ray submitted to the court the final reports on the
Whitewater and Lewinsky matters, respectively. On March 6, 2002, the court
ordered the publication and release of the Lewinsky report. On March 20,
2002, the court ordered the publication and release of the Whitewater report.
On March 12, 2002, Mr. Ray resigned his appointment and was succeeded by
Ms. Julie F. Thomas as Independent Counsel effective that same date.
Expenditures during this period were for archiving investigative materials and
reviewing petitions for reimbursement of attorneys’ fees.

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 U.S. 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-Thomas personnel; detailees from other federal agencies, such as the
Federal Bureau of Investigation; contractors; and witnesses.


Note 3 - Rent, communications, and utilities

Approximately $79,300 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, the repair and maintenance of office equipment, expenditures
related to the consolidation of two offices into one, and for specialists in areas
of interest to the investigation.



Note 5 - Supplies and materials

The supplies and materials expenditures are primarily for office supplies used in
the archiving of records.




      Page 21                                                           GAO-03-445 Independent Counsel
                Appendix IV
                Statement of Expenditures for Independent
                Counsel Thomas




           Note 6 - Administrative services

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




(194178)        Page 22                                                        GAO-03-445 Independent Counsel
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