Financial Audit

This report presents the results of GAO's audits of expenditures by three active independent counsels for various periods ending in March 1993. For the periods GAO audited, the three independent counsels--Arlin M. Adams, Lawrence E. Walsh, and Joseph E. diGenova--reported expenditures of $6.4 million. GAO found the reported expenditures to be reliable in all material respects. In earlier reports on independent counsel audits, GAO identified a number of serious internal control weaknesses, including inadequate internal control procedures designed to ensure that expenditures were properly charged and inadequate segregation of duties. GAO also identified instances of noncompliance with laws and regulations, including improper pay and travel expenses. In response to the problems GAO flagged, the independent counsels and the Administrative Office of the U.S. Courts, which does disbursing and accounting for the independent counsels, have begun to strengthen controls and ensure compliance with laws and regulations. In future audits, GAO plans to evaluate the extent to which these efforts have resolved the problems GAO identified.

GAO found that: (1) the three independent counsels reported expenditures of $6.4 million for the audit periods; (2) the counsels' statements of expenditures presented fairly, in all material respects, the expenditures of their offices; (3) one independent counsel's statement included only personnel compensation and benefits costs because he does not yet have office space and complete administrative support, and his and other law firms paid all other costs; (4) although they have established procedures and strengthened controls, two independent counsels continued to experience certain internal control weaknesses involving the improper charging of expenditures, inadequate segregation of duties, and improper pay and travel expenditures; (5) two independent counsels continued to charge for travel between their residences and place of work, but pending bills will address this issue by establishing time limits for such reimbursement; (6) one independent counsel paid an employee more than the maximum allowed for four pay periods; and (7) there were no other material instances of noncompliance for the periods ended March 31, 1993.