Financial Audit
Independent and Special Counsel Expenditures for the Six Months Ended September 30, 2001 Gao ID: GAO-02-443 March 29, 2002This report describes GAO's audits of expenditures reported by six offices of independent counsel and one office of special counsel for the six months ended September 2001. GAO found that the statements of expenditures for the offices of independent counsels and office of special counsel were presented fairly in all material respects. There were no material weaknesses in internal control over financial reporting (including safeguarding of assets) and no reportable noncompliance with the laws and regulations GAO tested.
GAO-02-443, Financial Audit: Independent and Special Counsel Expenditures for the Six Months Ended September 30, 2001
This is the accessible text file for GAO report number GAO-02-443
entitled 'Financial Audit: Independent and Special Counsel
Expenditures for the Six Months Ended September 30, 2001' which was
released on March 29, 2002.
This text file was formatted by the U.S. General Accounting Office
(GAO) to be accessible to users with visual impairments, as part of a
longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the
printed version. The portable document format (PDF) file is an exact
electronic replica of the printed version. We welcome your feedback.
Please E-mail your comments regarding the contents or accessibility
features of this document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
United States General Accounting Office:
GAO:
Report to Congressional Committees:
March 2002:
Financial Audit:
Independent and Special Counsel Expenditures for the Six Months Ended
September 30, 2001:
GAO-02-443:
Contents:
Letter:
Auditor's Report:
Background:
Opinion on Statements of Expenditures:
Consideration of Internal Control:
Compliance with Laws and Regulations:
Objectives, Scope, and Methodology:
Agency Comments:
Appendixes:
Appendix I: Statement of Expenditures for Independent Counsel Barrett:
Appendix II: Statement of Expenditures for Independent Counsel Bruce:
Appendix III: Statement of Expenditures for Independent Counsel
Lancaster:
Appendix IV: Statement of Expenditures for Independent Counsel Pearson:
Appendix V: Statement of Expenditures for Independent Counsel Ray:
Appendix VI: Statement of Expenditures for Independent Counsel Smaltz:
Appendix VII: Statement of Expenditures for Special Counsel Danforth:
Abbreviations:
AOUSC: Administrative Office of the U.S. Courts:
FBI: Federal Bureau of Investigation:
OIC: Office of Independent Counsel:
OSC: Office of Special Counsel:
[End of section]
United States General Accounting Office:
Washington, D.C. 20548:
March 29, 2002:
Congressional Committees:
Enclosed is our report on the statements of expenditures of six
offices of independent counsel and one office of special counsel for
the 6 months ended September 30, 2001. 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 and special
counsel 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 on GAO's home page [hyperlink,
http://www.gao.gov].
If you or your staffs have any questions concerning this report,
please contact me at (202) 512-9406 or Hodge Herry, assistant
director, at (202) 512-9469. You can also reach us by e-mail
franzelj@gao.gov or herryh@gao.gov. Key contributors to this report
were Carol Keightley, Kwabena Ansong, and Theresa Patrizio.
Signed by:
Jeanette M. Franzel:
Acting Director:
Financial Management and Assurance:
[End of letter]
United States General Accounting Office:
Washington, D.C. 20548:
Congressional Committees:
This report presents the results of our audits of expenditures
[Footnote 1] reported by six offices of independent counsel and one
office of special counsel for the 6 months ended September 30, 2001.
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 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. We
also audited the statement of expenditures of Special Counsel John C.
Danforth, who is authorized by the Department of Justice to fund his
operations from the permanent, indefinite appropriation.
In our audits covering the 6 months ended September 30, 2001, we found:
* the statements of expenditures presented in appendixes I through
VII, for the offices of independent counsel David M. Barrett, Carol
Elder Bruce, Ralph I. Lancaster, Daniel S. Pearson, Robert W. Ray, and
Donald C. Smaltz, and special counsel John C. Danforth, 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 (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 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. Also, the Department of Justice
determined that the appropriation established by Public Law 100-202 to
fund expenditures by independent counsels appointed pursuant to 28
U.S.C. 591-599, or other law, is available to fund the expenditures of
John C. Danforth, who was appointed as a Special Counsel within the
Department of Justice by the attorney general.
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, which 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 and
neither the independent counsels nor special counsel do so. However,
to the extent practicable, the counsels identified and disclosed these
costs in the notes to their statements presented in the appendixes to
this report.
Opinion on Statements of Expenditures:
The statements of expenditures including the accompanying notes for
the offices of independent counsel David M. Barrett, Carol Elder Bruce,
Ralph I. Lancaster, Daniel S. Pearson, Robert W. Ray, and Donald C.
Smaltz, and for the office of special counsel John C. Danforth,
present fairly, in all material respects, the expenditures of these
counsels for the 6 months ended September 30, 2001, 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 bases of accounting are described in note 1 of each counsel's
statement.
Consideration of Internal Control:
In planning and performing our audits, we considered internal control
over financial reporting and compliance.[Footnote 2] We did this to
determine our 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, 2001. 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 and Regulations:
Our tests for compliance with selected provisions of laws and
regulations disclosed no instances of noncompliance that would be
reportable under 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.
Objectives, Scope, and Methodology:
The independent counsels are responsible for preparing statements of
expenditures in conformity with the bases of accounting described in
the accompanying notes. Though not required to do so, the special
counsel also elected to prepare a statement of expenditures. 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 bases of accounting described in
the notes to their 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, except for items
indicated as unaudited, (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 (1994), 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 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 and special 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, as
well as information on receipts. We obtained information on these
costs and receipts from the independent and special 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 six offices of independent
counsel, the office of the special counsel, the Department of Justice,
and AOUSC for review and comment. These entities agreed with the facts
and conclusions in our report.
Signed by:
Jeanette M. Franzel:
Acting Director:
Financial Management and Assurance:
March 8, 2002:
List of Committees:
The Honorable Robert C. Byrd:
Chairman:
The Honorable Ted Stevens:
Ranking Minority Member:
Committee on Appropriations:
United States Senate:
The Honorable Joseph I. Lieberman:
Chairman:
The Honorable Fred Thompson:
Ranking Minority Member:
Committee on Governmental Affairs:
United States Senate:
The Honorable Patrick J. Leahy:
Chairman:
The Honorable Orrin G. Hatch:
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:
The Honorable James F. Sensenbrenner:
Chairman:
The Honorable John Conyers, Jr.
Ranking Minority Member:
Committee on the Judiciary:
House of Representatives:
[End of section]
Appendix I: Statement of Expenditures for Independent Counsel Barrett:
David M. Barrett:
Office of Independent Counsel:
Statement of Expenditures (Cash basis):
Six Months Ended September 30, 2001:
Personnel compensation and benefits: $453,386:
Travel (note 2): $40,675:
Rent, communications, and utilities (note 3): $221,070:
Contractual services (note 4): $309,109:
Acquisition of capital assets: $8,241:
Supplies and materials: $4,982:
Administrative services (note 5): $80,617:
Total expenditures: $1,118,080:
The accompanying notes are an integral part of this statement.
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, 2001. 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 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 $158,000 in office rent is included in rent,
communications, and utilities.
Note 4 - Contractual services:
Contractual services primarily consist of expenditures for
investigators, court reporters, and services of other experts 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 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.
[End of section]
Appendix II: Statement of Expenditures for Independent Counsel Bruce:
Carol Elder Bruce:
Office of Independent Counsel:
Statement of Expenditures (Cash basis):
Six Months Ended September 30, 2001:
Personnel compensation and benefits: $47,514:
Rent, communications, and utilities: $1,843:
Contractual services and supplies (note 2): $4,371:
Administrative services (note 3): $5,985:
Total expenditures: $59,713:
The accompanying notes are an integral part of this statement.
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 September 30, 2001. 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. Ms. Bruce submitted her final report to the
Special Division of the U.S. Court of Appeals for the District of
Columbia Circuit on December 30, 1999. Ms. Bruce received the order to
terminate her office from the U.S. Court of Appeals for the District
of Columbia Circuit effective March 22, 2001.
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 - Contractual services and supplies:
Contractual services primarily consist of payments to experts in
preparing independent counsel records for archiving.
Note 3 - 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 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 01C.
[End of section]
Appendix III: Statement of Expenditures for Independent Counsel
Lancaster:
Ralph I. Lancaster:
Office of Independent Counsel:
Statement of Expenditures (Cash basis):
Six Months Ended September 30, 2001:
Personnel compensation and benefits: $96,453:
Travel (note 2): $691:
Rent, communications, and utilities (note 3): $23,950:
Contractual services (note 4): $44,608:
Supplies and materials: $94:
Administrative services (note 5): $13,821:
Total expenditures: $179,617:
The accompanying notes are an integral part of this statement.
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 (0IC-Lancaster) for the 6 months ended September 30, 2001.
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. Mr. Lancaster has
submitted his final report (sealed) to the Special Division of the
U.S. Court of Appeals for the District of Columbia. Mr. Lancaster
received the order to terminate his office from the U.S. Court of
Appeals for the District of Columbia effective July 11, 2001.
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-Lancaster personnel.
Note 3 - Rent, communications, and utilities:
Approximately $19,800 in office rent is included in rent,
communications, and utilities.
Note 4 - Contractual services:
Contractual services represent expenditures for maintenance and repair
of equipment and for services of experts 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-Lancaster. 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.
[End of section]
Appendix IV: Statement of Expenditures for Independent Counsel Pearson:
Daniel S. Pearson:
Office of Independent Counsel:
Statement of Expenditures (Cash basis):
Six Months Ended September 30, 2001:
Personnel compensation and benefits: $71,210:
Rent, communications, and utilities (note 2): $26,673:
Contractual services (note 3): $4,687:
Administrative services (note 4): $7,496:
Total expenditures: $110,066:
The accompanying notes are an integral part of this statement.
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, 2001. 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 respond
to issues related to the investigation.
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 $24,000 in office rent is included in rent,
communications, and utilities.
Note 3 - Contractual services:
Contractual services primarily consist of payments to experts in
preparing independent counsel records for archiving.
Note 4 - 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 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.
Appendix V: Statement of Expenditures for Independent Counsel Ray:
Robert W. Ray:
Office of Independent Counsel:
Statement of Expenditures (Cash basis):
Six Months Ended September 30, 2001:
Personnel compensation and benefits: $1,279,071
Travel (note 2): $273,172
Rent, communications, and utilities (note 3): $518,718:
Contractual services (note 4): $1,349,379:
Acquisition of capital assets (note 5): $16,648:
Supplies and materials (note 6): $37,737:
Administrative services (note 7): $209,122:
Total expenditures: $3,683,847:
The accompanying notes are an integral part of this statement.
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-Robert W. Ray
(OIC-Ray) for the 6 months ended September 30, 2001. 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.
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 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 (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 office of independent counsel.
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 September 30, 2001, 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.
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-Ray personnel; detailees from other federal
agencies, such as the Federal Bureau of Investigation (FBI);
contractors; and witnesses.
Note 3 - Rent, communications, and utilities:
Approximately $396,200 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 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 automated data
processing equipment. These assets will remain the property of the
federal government at the conclusion of the investigation.
Note 6 - Supplies and materials:
The supplies and materials expenditures are primarily for office
supplies used in the archiving of records.
Note 7 - Administrative services:
AOUSC receives an administrative fee equal to 3 percent of OIC
expenditures for performing disbursement and accounting functions for
OIC-Ray. 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.
Note 8 - Other costs (unaudited):
Certain costs relating to employees assigned to work with the OIC by
the 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 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: $85,930;
Other Justice: $284;
Total: $86,214.
[End f section]
Appendix VI: Statement of Expenditures for Independent Counsel Smaltz:
Donald C. Smaltz:
Office of Independent Counsel:
Statement of Expenditures (Cash basis):
Six Months Ended September 30, 2001:
Personnel compensation and benefits: $297,305:
Travel (note 2): $5,113:
Rent, communications, and utilities (note 3): $98,819:
Contractual services (note 4): $25,394:
Supplies and materials: $2,747:
Administrative services (note 5): $39,707:
Total expenditures: $469,085:
The accompanying notes are an integral part of this statement.
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, 2001. 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. 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.
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 travel paid for OIC-Smaltz
personnel.
Note 3 - Rent, communications, and utilities:
Approximately $70,300 in office rent is included in rent,
communications, and utilities.
Note 4 - Contractual services:
Contractual services primarily consist of expenditures for repair and
maintenance of equipment and for services of experts 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-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.
Note 6 - Receipts (unaudited):
As of September 30, 2001, OIC-Smaltz's convictions and referrals have
resulted in the imposition of $11,803,082 in criminal fines, civil
penalties, damages, and reimbursement of costs. Approximately
$10,905,536 of that amount has been received and deposited into the
U.S. Treasury.
[End of section]
Appendix VII: Statement of Expenditures for Special Counsel Danforth:
John C. Danforth:
Office of Special Counsel:
Statement of Expenditures (Cash basis):
Six Months Ended September 30, 2001:
Personnel compensation and benefits: $24,787:
Travel (note 2): $362:
Rent, communications, and utilities (note 3): $159,844:
Contractual services (note 4): $505,829:
Supplies and materials: $282:
Administrative services (note 5): $1,267:
Total expenditures: $692,371:
The accompanying notes are an integral part of this statement.
Notes to Statement of Expenditures:
Note 1 - Accounting policies:
Reporting entity: The accompanying statement of expenditures presents
the expenditures of the Office of Special Counsel-John C. Danforth
(OSC-Danforth) for the 6 months ended September 30, 2001. The
statement of expenditures includes only expenditures made from the
permanent, indefinite appropriation for OSC-Danforth that are
processed through the Department of Justice. On September 9, 1999, the
attorney general appointed John C. Danforth as a special counsel to
investigate the government conduct relative to events at the Branch
Davidian complex near Waco, Texas, on April 19, 1993. Mr. Danforth
submitted his final report to the deputy attorney general concerning
the 1993 confrontation at the Branch Davidian complex on November 8,
2000. Mr. Danforth officially closed his office in March 2001.
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 the Department of Justice. 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 for OSC-Danforth personnel and detailees from other components
of the Department of Justice.
Note 3 - Rent, communications, and utilities:
Approximately $132,500 in office rent is included in rent,
communications, and utilities. This category also includes rental
charges for office furniture.
Note 4 - Contractual services:
Contractual services consist primarily of expenditures for contract
guard service, litigation support, automated legal research, and other
specialists in areas of interest to the investigation.
Note 5 - Administrative services:
Administrative services represent Department of Justice expenditures for
performing administrative and payroll functions for OSC-Danforth.
[End of section]
Footnotes:
[1] The term expenditures as used in this report generally means cash
disbursed.
[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.
[End of section]
GAO‘s Mission:
The General Accounting Office, the investigative arm of Congress,
exists to support Congress in meeting its constitutional
responsibilities and to help improve the performance and accountability
of the federal government for the American people. GAO examines the use
of public funds; evaluates federal programs and policies; and provides
analyses, recommendations, and other assistance to help Congress make
informed oversight, policy, and funding decisions. GAO‘s commitment to
good government is reflected in its core values of accountability,
integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through the Internet. GAO‘s Web site [hyperlink,
http://www.gao.gov] contains abstracts and full text files of current
reports and testimony and an expanding archive of older products. The
Web site features a search engine to help you locate documents using
key words and phrases. You can print these documents in their entirety,
including charts and other graphics.
Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as ’Today‘s Reports,“ on its
Web site daily. The list contains links to the full-text document
files. To have GAO e-mail this list to you every afternoon, go to
[hyperlink, http://www.gao.gov] and select ’Subscribe to daily E-mail
alert for newly released products“ under the GAO Reports heading.
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. General Accounting Office:
441 G Street NW, Room LM:
Washington, D.C. 20548:
To order by Phone:
Voice: (202) 512-6000:
TDD: (202) 512-2537:
Fax: (202) 512-6061:
To Report Fraud, Waste, and Abuse in Federal Programs Contact:
Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]:
E-mail: fraudnet@gao.gov:
Automated answering system: (800) 424-5454 or (202) 512-7470:
Public Affairs:
Jeff Nelligan, managing director, NelliganJ@gao.gov:
(202) 512-4800:
U.S. General Accounting Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548:
