[Senate Report 108-339]
[From the U.S. Government Publishing Office]



108th Congress 
 2d Session                      SENATE                          Report
                                                                108-339
_______________________________________________________________________
 
                                                        Calendar No. 693


               TO REAUTHORIZE THE CONGRESSIONAL AWARD ACT

                               __________

                              R E P O R T

                                 of the

         COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE

                              to accompany

                                S. 2639

               TO REAUTHORIZE THE CONGRESSIONAL AWARD ACT




               September 14, 2004.--Ordered to be printed
                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania          RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois        MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire        FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama           MARK PRYOR, Arkansas

           Michael D. Bopp, Staff Director and Chief Counsel
                    Johanna L. Hardy, Senior Counsel
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                  Lawrence B. Novey, Minority Counsel
                      Amy B. Newhouse, Chief Clerk
                                                       Calendar No. 693
108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-339

======================================================================




               TO REAUTHORIZE THE CONGRESSIONAL AWARD ACT

                                _______
                                

               September 14, 2004.--Ordered to be printed

                                _______
                                

Ms. Collins, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 2639]

    The Committee on Governmental Affairs, to which was 
referred the bill (S. 2639) to reauthorize the Congressional 
Award Act, having considered the same, reports favorably 
thereon and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose & Summary................................................1
 II. Background.......................................................1
III. Legislative History..............................................4
 IV. Section-by-Section Analysis......................................4
  V. Estimated Cost of Legislation....................................5
 VI. Evaluation of Regulatory Impact..................................5
VII. Changes in Existing Law..........................................6

                         I. Purpose and Summary

    S. 2639 reauthorizes the Congressional Award Program for 5 
years, until October 1, 2009. Designed to promote initiative, 
achievement, and excellence among the youth of America, the 
Program arranges for medals to be awarded to young people who 
have satisfied specified standards of achievement. Members of 
Congress are included on the Board that administers the 
program, and they participate in the presentation of awards.

                             II. Background

    The Congressional Award Act, Public Law 96-114, was enacted 
on November 16, 1979, as a bipartisan initiative led by Senator 
Malcolm Wallop (R-WY) and Representative James J. Howard (D-
NJ). Under the Congressional Award Program established by the 
Act, young people between the ages of 14 and 23 earn awards by 
completing a certain number of hours in each of four areas of 
achievement--volunteer public service, personal development, 
physical fitness, and expedition/exploration. The Award is non-
competitive, and participants, with the guidance of adult 
advisors, establish their own goals and work to achieve them. 
Depending on how many hours are completed, participants earn 
Bronze, Silver, and Gold certificates, or Bronze, Silver, and 
Gold medals. Members of the House and Senate recognize their 
constituents who earn Bronze and Silver medals at in-state 
ceremonies, and Gold-medal winners are recognized at an annual 
ceremony in the Capitol presided over by House and Senate 
leadership. The Program is very popular, with more than 16,000 
active participants and more than 10,000 adult mentors involved 
across the Nation.
    Under the Act, the Congressional Award Program is 
administered by a 25-member Board. Twenty-four of the members 
are appointed by Congressional leadership--6 by each of the 
majority leader of the Senate, the minority leader of the 
Senate, the Speaker of the House of Representatives, and the 
minority leader of the House of Representatives. The Director 
of the Board, appointed by a majority vote of the Board, is the 
principal executive of the Program and sits as a non-voting 
member of the Board. By statute, four of the Board members must 
be Members of Congress. At present, Senator Max Baucus, Senator 
Larry E. Craig, Representative Barbara Cabin, and 
Representative Sheila Jackson-Lee serve on the Board.
    The Board operates as a private, nonprofit, tax-exempt 
organization (under section 501(c)(3) of the Internal Revenue 
Code), called the Congressional Award Foundation. Financial 
sponsors of the Program include business corporations, 
charitable foundations, and labor unions. The Foundation 
receives its support from these tax-exempt contributions and, 
under current law, receives no federal appropriation. The 
Foundation does, however, receive a small amount of in-kind 
services from the federal government, including free office 
space in a House Office Building, an annual audit by the 
Government Accountability Office (GAO), and the design and 
striking of award medals by the U.S. Mint.
    The Act has been reauthorized several times since November 
16, 1979, when Public Law 96-114 was enacted, establishing the 
Board for a 6-year period. The Act was first reauthorized, for 
a further 3-year period, by Public Law 99-161, the 
Congressional Award Amendments of 1985. Public Law 100-674, the 
Congressional Award Act Amendments of 1988, reauthorized the 
Act for an additional 2 years, contingent upon the Board's 
complying with the established reporting requirements. Public 
Law 101-525, the Congressional Award Amendments of 1990, 
extended the Act for approximately an additional 2-year period, 
until October 1, 1992. Public Law 102-457, the Congressional 
Award Act Amendments of 1992, extended the Act for a 3-year 
period, and Public Law 104-208 extended the Act for a 4-year 
period. Most recently, Public Law 106-63 extended the Act for 5 
years, until the current expiration date of October 1, 2004.
    The Congressional Award Program is very popular and 
continues to grow rapidly. The number of Program participants 
has doubled over a recent 3-year period, from approximately 
8,000 in 2001 to over 16,000 at the end of the 2003 fiscal 
year. There are also more than 10,000 adult mentors involved in 
the program. By statute, GAO audits the Foundation's financial 
statements annually and has issued generally favorable reports. 
The Committee believes that the Congressional Award Program 
performs a valuable service, encouraging initiative, 
achievement, public service, and personal development in the 
Nation's youth, as well as providing an opportunity for service 
for the adult volunteers, and the Committee therefore supports 
and recommends reauthorization of the Program.
    The Committee has received information, however, indicating 
that the financial condition of the Foundation is 
deteriorating. In the past, the Foundation has sustained itself 
with private donations, but it has faced increasing financial 
difficulty in recent years. The rapid growth of the Program has 
strained the Foundation's resources, and its financial 
situation has been further taxed by the downturn in the 
financial markets and by the general difficulty in maintaining 
charitable giving arising out of the recent recession.\1\ Thus, 
cash contributions decreased from over $1 million in fiscal 
year 1999 to about $550,000 in fiscal year 2003. The Foundation 
responded by cutting its operating expenses, from over 
$1,700,000 in fiscal year 2002 to $725,000 in fiscal year 2003, 
but its overall financial situation is still in decline. In the 
most recent financial audit report for the Foundation, issued 
in May 2003, GAO found no reportable problem with the 
Foundation's financial statements, but reported that the 
Foundation faced a worsening financial condition--raising 
substantial doubt about its ability to continue as an ongoing 
concern.\2\ On May 13, 2004, GAO wrote to Chairman Collins and 
Ranking Minority Member Lieberman, among others, indicating 
that the Foundation continues to experience financial 
difficulties, such that it no longer has the resources to 
prepare financial statements on a timely basis.\3\
---------------------------------------------------------------------------
    \1\ GAO, ``Financial Audit: Congressional Award Foundation's Fiscal 
Years 2002 and 2001 Financial Statements,'' May 2003 (GAO-03-737); 
Statement of Senator Craig, 149 Cong. Rec. S14939 (Nov. 17, 2003) 
(Senator Craig is a member of the Board of the Congressional Award 
Program).
    \2\ GAO, ``Financial Audit: Congressional Award Foundation's Fiscal 
Years 2002 and 2001 Financial Statements,'' May 2003 (GAO-03-737).
    \3\ Letter from Steven J. Sebastian, Director, Financial Management 
and Assurance, GAO, to Senator Collins, Senator Lieberman, Congressman 
Boehner, and Congressman George Miller, Subject: Congressional Award 
Foundation Audit and Reporting Delay, May 13, 2004.
---------------------------------------------------------------------------
    Recognizing the Foundation's deteriorating financial 
situation, the Senate Appropriations Committee stated in its 
July 15, 2004 Report to accompany S. 2666, the Legislative 
Branch FY2005 Appropriations bill--

          The Committee notes that the Congressional Award 
        program was established by Congress in 1979 to 
        recognize initiative, achievement and service in young 
        Americans and encourage volunteer and community 
        service. While the program has been funded entirely by 
        the private sector, a decrease in donations and income 
        has forced cutbacks in the program. The Congressional 
        Award Board is due to be reauthorized later this year. 
        The Committee will consider funding for this program in 
        the future based on reauthorization legislation, but 
        anticipates any such funding will not supplant private 
        donations.\4\
---------------------------------------------------------------------------
    \4\ Senate Committee on Appropriations, Report to accompany S. 
2666, Legislative Branch Appropriations, 2005, S. Rep. 108-307, July 
15, 2004, at pages 44-45.

Senator Craig has advised the Governmental Affairs Committee 
that, when S. 2639 is considered by the Senate, he intends to 
offer an amendment authorizing an appropriation to the Board of 
$750,000 for each fiscal year through 2009, an amount that 
would cover between one-third and one-half of the Foundation's 
anticipated budget.

                        III. Legislative History

    S. 2639 was introduced by Senators Lieberman and Collins on 
July 13, 2004, and was referred to the Committee on 
Governmental Affairs. On July 21, 2004, the Committee 
considered S. 2639 and ordered the bill reported by voice vote 
without amendment. Senators present: Senators Collins, 
Voinovich, Specter, Fitzgerald, Lieberman, Akaka, Durbin, 
Carper, and Lautenberg.

                    IV. Section-by-Section Analysis

    Section 1, the only section of the bill, is entitled 
``Reauthorization of the Congressional Award Act.''
    Subsection (a) amends the Congressional Award Act to extend 
for 5 years the Comptroller General's responsibility to assess 
the fiscal controls and accounting procedures of the 
Congressional Award Program. Under section 104(c)(1) of the Act 
(2 U.S.C. Sec. 804(c)(1)), as amended, the Director of the 
Board is responsible for ensuring that appropriate procedures 
for fiscal control and fund accounting are established for the 
Program, that operations are administered by personnel who are 
expert in accounting and financial management, and that the 
Board's liabilities not exceed its assets for any fiscal year. 
Under section 104(c)(2)(A) of the Act (2 U.S.C. 
Sec. 804(c)(2)(A)), as amended, the Comptroller General must 
determine whether the Director has substantially complied with 
these requirements and must include his findings in annual 
reports to Congress. This subsection extends these 
responsibilities of the Comptroller General through calendar 
year 2009.
    Subsection (b) amends the Congressional Award Act to extend 
for 5 years the existence of the Board. Under section 108 of 
the Act (2 U.S.C. Sec. 808), as amended, the Board is now set 
to expire on October 1, 2004. This subsection extends the 
existence of the Board until October 1, 2009.
    Subsection (c) makes non-substantive technical corrections 
to the Act.

                    V. Estimated Cost of Legislation

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 28, 2004.
Hon. Susan M. Collins,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Madam Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2639, a bill to 
reauthorize the Congressional Award Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                        Elizabeth Robinson,
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

S. 2639--A bill to reauthorize the Congressional Award Act

    S. 2639 would reauthorize the Congressional Award Act for 
fiscal years 2005 through 2009. The Congressional Award Program 
recognizes excellence in public service and personal 
development among young people. The program is overseen by the 
Congressional Award Board, a nonprofit organization that 
receives no federal funding.
    CBO estimates that implementing S. 2639 would cost less 
than $500,000 a year, assuming the availability of appropriated 
funds. In addition, by requiring the U.S. Mint to design and 
strike medals at the request of the Congressional Award Board, 
S. 2639 would increase direct spending by less than $500,000 a 
year.
    Under S. 2639, the Congressional Award Board would continue 
to receive in-kind services from the federal government. Those 
services consist of free office space in the Ford House Office 
Building, including maintenance and utilities, and the 
performance of an annual audit by the Government Accountability 
Office. CBO estimates that the board's continued use of such 
services would cost less than $500,000 a year in appropriated 
funds.
    In addition, young people recognized by the Congressional 
Award Program are awarded medals produced by the U.S. Mint. 
Based on information from the board and the Mint, CBO estimates 
that reauthorizing the program would increase direct spending 
from the U.S. Mint Public Enterprise Fund by less than $500,000 
annually.
    S. 2639 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. This estimate was approved by Peter H. Fontaine, 
Deputy Assistant Director for Budget Analysis.

                  VI. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill. The enactment of 
this legislation will not have a significant regulatory impact.

                      VII. Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic and existing law, in which no 
change is proposed, is shown in roman):

   Congressional Award Act, as amended, Pub. L. 96-114, Nov. 16, 1979


Sections 103, 104, and 108, as codified at 2 U.S.C. Sec. Sec. 803, 804, 
                                and 808


                           UNITED STATES CODE

                         TITLE 2, THE CONGRESS

                CHAPTER 19--CONGRESSIONAL AWARD PROGRAM


               Subchapter I--Congressional Award Program


Sec. 803. Board organization

           *       *       *       *       *       *       *


    (b) Terms of Appointed Members; Reappointment.--
          (1) Appointed members of the Board shall continue to 
        serve at the pleasure of the officer by whom they are 
        appointed, and (unless reappointed under paragraph (3)) 
        shall serve for a term of 4 years.
          (2) For the purpose of adjusting the terms of Board 
        members to allow for staggered appointments, the 
        following distribution of Board terms shall take effect 
        at the first meeting of the Board occurring after 
        November 6, 1990:
                  (A) Those members who have served 10 years or 
                more, as of the date of such meeting, shall 
                have an appointment expiring on a date 2 years 
                from October 1, 1990.
                  (B) Those members who have served for 6 
                months or less, as of the date of such meeting, 
                shall have an appointment expiring on a date 6 
                years from October 11, 1990.
                  (C) All other members shall apportion the 
                remaining Board positions between equal numbers 
                of 2 and 4 year terms (providing that if there 
                are an unequal number of remaining members, 
                there shall be a predominance of 4 year terms), 
                such apportionment to be made by lot.
          (3)(A) Subject to the limitations in subparagraphs 
        (B) and (C) of this paragraph, members of the Board may 
        be reappointed, provided that no member may serve more 
        than 2 consecutive terms.
          (B) Members of the Board covered under paragraph 
        (2)(A) of this [section] subsection shall not be 
        eligible for reappointment to the Board. Members of the 
        Board covered under subparagraphs (B) and (C) of 
        paragraph (2) of this [section] subsection may be 
        reappointed for 1 additional consecutive 4 year term.

           *       *       *       *       *       *       *


Sec. 804. Administration

           *       *       *       *       *       *       *


    (c) Requirements Regarding Financial Operations; 
Noncompliance With Requirements.--
          (1) The Director shall, in consultation with the 
        Board, ensure that appropriate procedures for fiscal 
        control and fund accounting are established for the 
        financial operations of the Congressional Award 
        Program, and that such operations are administered by 
        personnel with expertise in accounting and financial 
        management. Such personnel may be retained under 
        contract. In carrying out this paragraph, the Director 
        shall ensure that the liabilities of the Board do not, 
        for any calendar year, exceed the assets of the Board.
          (2)(A) The Comptroller General of the United States 
        shall determine, for calendar years 1993, 1994, 1995, 
        1996, 1997, 1998, 1998, 1999, 2000, 2001, 2002, 2003, 
        [and 2004] 2004, 2005, 2006, 2007, 2008, and 2009, 
        whether the Director has substantially complied with 
        paragraph (1). * * *

           *       *       *       *       *       *       *


Sec. 808. Termination

    The Board shall terminate [October 1, 2004] October 1, 
2009.

                                  
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