Financial Audit

As of March 31, 1992, nine independent counsels appointed since 1985 spent an estimated $43 million on several investigations, but the accuracy and completeness of those expenditures cannot be verified because of poor records and serious internal control weaknesses. The $43 million included pay and benefits, travel, office rent, and other outlays. Five of the nine independent counsels did not provide some of the reports of their expenditures required by law. In addition, GAO discovered that some expenditures were inconsistent with laws and regulations. GAO also noted that independent counsels incur costs, such as for detailees from the Federal Bureau of Investigation, that are not paid from the permanent, indefinite appropriations established to fund independent counsel activities. One independent counsel ran up an estimated $5 million in such costs. There is no requirement to report or audit these costs, and the independent counsels and federal agencies did not separately account for the costs. The reports, as a result, understate the full costs of independent counsel activities. The problems GAO uncovered show a serious breakdown in the accountability over independent counsel administrative operations, with the Department of Justice, the Administrative Office of the U.S. Courts, and the independent counsels disagreeing on their administrative responsibilities. If the independent counsel law is extended, Congress should clearly spell out such responsibilities for these three groups and other government agencies.

GAO found that: (1) the Department of Justice and the independent counsels did not submit all required reports; (2) the independent counsels and the Administrative Office of the United States Courts (AOUSC), which was the disbursing and accounting office for the counsels, had weak internal controls, which caused inaccurate expenditures reports and noncompliance with laws and regulations; (3) Justice was in the best position to develop guidance to set up internal controls for the independent counsels; (4) internal control weaknesses included inadequate AOUSC procedures for appropriately charging expenditures, inadequate segregation of duties of staff who initiated and approved transactions, and noncompliance with laws and regulation regarding pay, travel expenditures and procurement; and (5) independent counsels are not required to include, and therefore do not include, all costs of their activities, such as detailees and office space from other federal agencies, which are paid for by appropriations other than Justice's permanent, indefinite appropriation for independent counsels.