Financial Audit: U.S. Commission on Improving the Effectiveness of the
United Nations (Letter Report, 03/03/95, GAO/AIMD-95-75).
GAO audited the statement of cash receipts and disbursements of the U.S.
Commission on Improving the Effectiveness of the United Nations from its
inception in June 1992 to its cessation in November 1993. The
Commission's goals were (1) to examine United Nations operations and to
identify and evaluate its strengths and weaknesses and (2) to submit to
the President and Congress recommendations on ways to improve the
effectiveness of the United Nations. GAO found that the statement of
cash recipients and disbursements was reliable in all material respects.
GAO also found no material or other reportable conditions in the
internal control structure and its operations and no material
noncompliance with laws and regulations.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: AIMD-95-75
TITLE: Financial Audit: U.S. Commission on Improving the
Effectiveness of the United Nations
DATE: 03/03/95
SUBJECT: Financial statement audits
Audit authority
Internal controls
Auditing standards
Assets
Financial records
Cash basis accounting
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Cover
================================================================ COVER
Report to the Honorable
James A. Leach, House of Representatives
March 1995
FINANCIAL AUDIT - U.S. COMMISSION
ON IMPROVING THE EFFECTIVENESS OF
THE UNITED NATIONS
GAO/AIMD-95-75
Commission on Improving the United Nations
(911692)
Abbreviations
=============================================================== ABBREV
Letter
=============================================================== LETTER
B-260027
March 3, 1995
The Honorable James A. Leach
House of Representatives
Dear Mr. Leach:
As you requested and in accordance with authority granted by Public
Law 100-204, dated December 22, 1987, we audited the statement of
cash receipts and disbursements of the United States Commission on
Improving the Effectiveness of the United Nations from its inception
(June 22, 1992), to cessation (November 19, 1993). We found the
statement of cash receipts and disbursements was reliable in all
material respects.
Our audit also included limited tests of internal controls and
compliance with laws and regulations that disclosed, for the period
ending November 19, 1993,
-- no material or other reportable conditions in the internal
control structure and its operations and
-- no material noncompliance with laws and regulations we tested.
BACKGROUND
------------------------------------------------------------ Letter :1
The Commission was established by the Foreign Relations Authorization
Act, Fiscal Years 1988 and 1989 (Public Law 100-204). The
Commission's purposes were to (1) examine the United Nations
operations and identify and evaluate its strengths and weaknesses and
(2) prepare and submit to the President and the Congress
recommendations on ways to improve the effectiveness of the United
Nations system, including the feasibility of and means for
implementing such recommendations. While the Commission was
established March 1, 1989, the appointments of its 16 members were
not completed until March 19, 1992. The Commission held its first
meeting on June 22, 1992.
The enabling legislation authorized the Commission to accept and use
contributions from private U.S. sources and prohibited the use of
federal funds. To facilitate private fund-raising, the Commission
incorporated in Pennsylvania and obtained a federal income tax
exemption from the Internal Revenue Service under section 501(a) of
the Internal Revenue Code as an organization described in section
501(c)(3). The Commission directly solicited and received $254,306
in private contributions. In addition, the Commission used volunteer
groups in regional locations to sponsor and organize field hearings.
We did not audit these volunteer activities, but they are disclosed
in the notes to the statements.
The law required the Commission to hold a minimum of five public
hearings. The Commission held six public hearings between October
1992 and May 1993. Five of these were regional hearings in
Philadelphia, Los Angeles, San Francisco, Atlanta, and Chicago, and
one was a fact-finding hearing in New York City, where testimony was
given by United Nations officials. At the regional hearings, the
Commission sought testimony from each area's leading experts in
United Nations affairs and American foreign policy, and time was also
allowed for any group or citizen that wished to testify before the
Commission.
The enabling legislation required the Commission to cease to exist 60
days after submitting its report to the President and the Congress.
The Commission issued its report on September 10, 1993, but continued
operations until November 19, 1993, or 9 days after the 60-day
requirement, in order to conclude its affairs, including the payment
of all liabilities. The Co-Chairman of the Commission informed the
Speaker of the House of Representatives and us of this possible delay
on November 4, 1993.
OPINION ON STATEMENT OF CASH
RECEIPTS AND DISBURSEMENTS
------------------------------------------------------------ Letter :2
We found that the statement of cash receipts and disbursements was
fairly stated in all material respects, in accordance with the cash
basis of accounting, which is a comprehensive basis of accounting
other than generally accepted accounting principles.
The Commission's records and reports show that from inception (June
22, 1992) to cessation of activities (November 19, 1993), cash
receipts totalled $255,441, and disbursements totalled $255,441. Of
the total disbursements, $188,800 was allocated to personnel and
travel activities and $66,641 to administrative support.
CONSIDERATION OF INTERNAL
CONTROL STRUCTURE
------------------------------------------------------------ Letter :3
The internal controls we considered were those designed to
-- safeguard assets against loss from unauthorized use or
disposition;
-- assure the execution of transactions in accordance with
management authority and with laws and regulations; and
-- properly record, process, and summarize transactions to permit
the preparation of financial reports and to maintain
accountability for assets.
We are not expressing an opinion on internal controls because of the
limited scope of our work. However, for the controls we tested, we
found no reportable conditions in the internal control structure and
its operations for the period ending on November 19, 1993.
Reportable conditions involve matters, including material weaknesses,
coming to our attention related to significant deficiencies in the
design or operation of the internal control structure that, in our
judgement, could adversely affect the Commission's ability to
implement its statutory mandate. Because of the limitations
mentioned above, our consideration of the internal control structure
would not necessarily disclose all reportable conditions.
COMPLIANCE WITH LAWS AND
REGULATIONS
------------------------------------------------------------ Letter :4
Our tests for compliance with selected provisions of laws and
regulations disclosed no material instances of noncompliance. Also,
nothing came to our attention in the course of our other work to
indicate that material noncompliance with such provisions occurred.
OBJECTIVES, SCOPE, AND
METHODOLOGY
------------------------------------------------------------ Letter :5
As agreed with your office, we audited the cash receipts and
disbursements of the Commission from its inception (June 22, 1992) to
its cessation (November 19, 1993). We performed our work in
accordance with generally accepted government auditing standards. We
directed our work to accounting and other controls necessary to
support reported cash receipts and disbursements and did not evaluate
the efficiency or effectiveness of the Commission's operations.
Because the General Services Administration could not close out its
accounting for the Commission until the end of fiscal year 1994, our
work was not completed until November 28, 1994.
Specifically, we
-- evaluated and tested relevant internal controls encompassing
financial reporting,
contributions,
payroll,
travel, and
procurement of goods and services;
-- examined, on a test basis, evidence supporting the amounts and
disclosures in the statement of cash receipts and disbursements
and notes thereto, except items indicated as unaudited; and
-- tested compliance with the following provisions of Public Law
100-204:
section 727 regarding funds for the Commission and limitations on
contributions and obligations and expenditures;
sections 723 and 725 regarding compensation and travel expenses for
members and staff; and
section 727 (d) regarding periodic reports to the Congress.
We obtained, but did not audit, information on the volunteer groups'
receipts and disbursements that were not processed through the
Commission's accounting system. We obtained information from the
Commission and volunteer groups on these receipts and disbursements.
We interviewed officials at the Commission regarding their operations
and officials at the General Services Administration regarding the
accounting services provided to the Commission.
---------------------------------------------------------- Letter :5.1
We are sending copies of this report to the Chairmen and Ranking
Minority Members of the Senate Committee on Foreign Relations and the
House Committee on International Relations, and other interested
parties. Copies will be made available to others upon request.
Sincerely yours,
David L. Clark
Director, Legislative Reviews
and Audit Oversight
FINANCIAL STATEMENT
=========================================================== Appendix 0
Statement of Cash Receipts and
Disbursements
(See figure in printed
edition.)
Notes to Statement of Cash
Receipts and Disbursements
(See figure in printed
edition.)
*** End of document. ***