Financial Audit: Congressional Award Foundation's 1998 and 1997 Financial
Statements (Letter Report, 05/14/99, GAO/AIMD-99-173).

Pursuant to a legislative requirement, GAO reviewed the financial
statements of the Congressional Award Foundation for the fiscal years
ended September 30, 1998 and 1997, focusing on: (1) the Foundation
management's assertions regarding the effectiveness of its internal
controls as of September 30, 1998; and (2) GAO's evaluation of the
Foundation's compliance with selected provisions of laws and regulations
during fiscal year 1998.

GAO noted that: (1) the financial statements were reliable in all
material respects; (2) the Foundation's management fairly stated that
internal controls in place on September 30, 1998, were effective in
safeguarding assets from material loss, assuring material compliance
with relevant laws and regulations, and ensuring that there were no
material misstatements in the financial statements; and (3) there was no
reportable noncompliance with selected provisions of laws and
regulations GAO tested for the fiscal year ended September 30, 1998.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-99-173
     TITLE:  Financial Audit: Congressional Award Foundation's 1998 and
	     1997 Financial Statements
      DATE:  05/14/99
   SUBJECT:  Financial statement audits
	     Internal controls
	     Reporting requirements
	     Financial management
	     Financial records

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO report.  This text was extracted from a PDF file.        **
** Delineations within the text indicating chapter titles,      **
** headings, and bullets have not been preserved, and in some   **
** cases heading text has been incorrectly merged into          **
** body text in the adjacent column.  Graphic images have       **
** not been reproduced, but figure captions are included.       **
** Tables are included, but column deliniations have not been   **
** preserved.                                                   **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
** A printed copy of this report may be obtained from the GAO   **
** Document Distribution Center.  For further details, please   **
** send an e-mail message to:                                   **
**                                                              **
**                                            **
**                                                              **
** with the message 'info' in the body.                         **
******************************************************************
ai99173.boo GAO

United States General Accounting Office

Report to the Congress

May 1999 FINANCIAL AUDIT Congressional Award Foundation's 1998 and
1997 Financial Statements

GAO/AIMD-99-173

United States General Accounting Office Washington, D.C. 20548 Let
te r

Page 1 GAO/AIMD-99-173 Congressional Award Foundation

GAO

Accounting and Information Management Division Letter

B-282179 May 14, 1999 To the President of the Senate and the
Speaker of the House of Representatives

This report presents our opinion on the financial statements of
the Congressional Award Foundation for the fiscal years ended
September 30, 1998 and 1997. These financial statements are the
responsibility of the Congressional Award Foundation. This report
also presents (1) our opinion on Foundation management's assertion
regarding the effectiveness of its internal controls as of
September 30, 1998, and (2) our evaluation of the Foundation's
compliance with selected provisions of laws and regulations during
fiscal year 1998.

We conducted our audit pursuant to section 8 of the Congressional
Award Act, as amended (2 U.S.C. 807), and in accordance with
generally accepted government auditing standards.

We are sending copies of this report to Senator Fred Thompson,
Chairman, and Senator Joseph I. Lieberman, Ranking Minority
Member, Senate Committee on Governmental Affairs; Representative
William Goodling, Chairman, and Representative William Clay,
Ranking Minority Member, House Committee on Education and the
Workforce; Mr. Thomas D. Campbell, Chairman, National Board of
Directors, Congressional Award Program; Mr. James F. Manning,
National Director, Congressional Award Foundation; and other
interested parties.

Robert W. Gramling Director, Corporate Audits

and Standards

Page 2 GAO/AIMD-99-173 Congressional Award Foundation

Contents

Letter 1

Opinion Letter 3

Financial Statements 7 Statements of Financial Position 7
Statements of Activities 8 Statements of Cash Flows 9 Notes to
Financial Statements 10

United States General Accounting Office Washington, D.C. 20548 Let
te r

Page 3 GAO/AIMD-99-173 Congressional Award Foundation

GAO

Accounting and Information Management Division

B-282179 Letter

To the President of the Senate and the Speaker of the House of
Representatives

We have audited the statements of financial position of the
Congressional Award Foundation as of September 30, 1998 and 1997,
and the related statements of activities and of cash flows for the
fiscal years then ended. We found

 the financial statements were reliable in all material respects;
the Congressional Award Foundation's management fairly stated that

internal controls in place on September 30, 1998, were effective
in safeguarding assets from material loss, assuring material
compliance with relevant laws and regulations, and assuring that
there were no material misstatements in the financial statements;
and  no reportable noncompliance with selected provisions of laws
and

regulations we tested for the fiscal year ended September 30,
1998. The following sections provide additional detail concerning
our conclusions and the scope of our audit.

Opinion on Financial Statements

The financial statements and accompanying notes present fairly, in
all material respects, in conformity with generally accepted
accounting principles, the Congressional Award Foundation's
financial position as of September 30, 1998 and 1997, and the
results of its activities and its cash flows for the fiscal years
then ended.

Opinion on Management's Assertion About the Effectiveness of
Internal Controls

We evaluated the Foundation management's assertion about the
effectiveness of its internal controls designed to

 safeguard assets against loss from unauthorized acquisition, use,
or disposition;  assure the execution of transactions in
accordance with management's

authority and with selected provisions of those laws and
regulations that have a direct and material effect on the
financial statements of the Foundation; and  properly record,
process, and summarize transactions to permit the

preparation of reliable financial statements and to maintain
accountability for assets.

B-282179 Page 4 GAO/AIMD-99-173 Congressional Award Foundation

Management of the Congressional Award Foundation fairly stated
that those controls in place on September 30, 1998, provided
reasonable assurance that losses, noncompliance, or misstatements
material in relation to the financial statements would be
prevented or detected on a timely basis. Management made this
assertion based upon criteria established under the Federal
Managers' Financial Integrity Act of 1982 and the Office of
Management and Budget Circular A-123, Management Accountability
and Control .

Although management's assertion regarding the effectiveness of
internal controls is fairly stated in all material respects based
on the control criteria cited earlier, we noted certain matters
involving the Foundation's internal accounting controls and its
operations. These matters, while not significant, will be reported
to management in a separate letter, and copies will be provided to
the appropriate congressional committees.

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 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 Foundation's management is responsible for  preparing the
Foundation's annual financial statements in conformity

with generally accepted accounting principles;  establishing,
maintaining, and assessing the Foundation's internal

controls to provide reasonable assurance that the internal control
objectives mentioned above are met; and  complying with applicable
laws and regulations.

We are responsible for obtaining reasonable assurance that (1) the
financial statements are free of material misstatement and
presented fairly, in all material respects, in conformity with
generally accepted accounting principles and (2) management's
assertion about the effectiveness of internal controls is fairly
stated, in all material respects, based upon the internal control
criteria used by the Foundation's management in making this
assertion. We are also responsible for testing compliance with
selected provisions of laws and regulations.

Let t er

B-282179 Page 5 GAO/AIMD-99-173 Congressional Award Foundation

In order to fulfill these responsibilities, we  examined, on a
test basis, evidence supporting the amounts and

disclosures in the financial statements;  assessed the accounting
principles used and significant estimates made

by the Foundation's management;  evaluated the overall
presentation of the financial statements;  inquired into the
Foundation's efforts to assess, and as necessary

address, the extent to which information systems the Foundation
relies on are vulnerable to the Year 2000 computing problem;
obtained an understanding of the Foundation's internal controls
related

to safeguarding assets, compliance with laws and regulations, and
financial reporting;  tested relevant internal controls over
safeguarding, compliance, and

financial reporting and evaluated management's assertion about the
effectiveness of internal controls; and  tested compliance with
selected provisions of the Congressional Award

Act, as amended. We did not evaluate all internal controls
relevant to operating objectives, such as controls relevant to
ensuring efficient operations. We limited our internal control
testing to those controls necessary to achieve the objectives
outlined in our opinion on management's assertion about the
effectiveness of internal controls. Because of inherent
limitations in any system of internal controls, losses,
noncompliance, or misstatements 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.

We conducted our audit from December 11, 1998 through April 9,
1999. Our audits were conducted in accordance with generally
accepted government auditing standards.

B-282179 Page 6 GAO/AIMD-99-173 Congressional Award Foundation

Foundation Comments and Our Evaluation

We provided a draft of our report to Congressional Award
Foundation officials for their review and comment. Foundation
officials agreed with the contents of our report.

Robert W. Gramling Director, Corporate Audits

and Standards April 9, 1999

Page 9 GAO/AIMD-99-173 Congressional Award Foundation

Financial Statements

Statements of Financial Position

Financial Statements Page 10 GAO/AIMD-99-173 Congressional Award
Foundation

Statements of Activities

Let t er

Financial Statements Page 11 GAO/AIMD-99-173 Congressional Award
Foundation

Statements of Cash Flows

Financial Statements Page 12 GAO/AIMD-99-173 Congressional Award
Foundation

Notes to Financial Statements

Financial Statements Page 13 GAO/AIMD-99-173 Congressional Award
Foundation

Financial Statements Page 14 GAO/AIMD-99-173 Congressional Award
Foundation

Financial Statements Page 15 GAO/AIMD-99-173 Congressional Award
Foundation

Financial Statements Page 16 GAO/AIMD-99-173 Congressional Award
Foundation

Financial Statements Page 17 GAO/AIMD-99-173 Congressional Award
Foundation

Financial Statements Page 18 GAO/AIMD-99-173 Congressional Award
Foundation

Financial Statements Page 19 GAO/AIMD-99-173 Congressional Award
Foundation

Financial Statements Page 20 GAO/AIMD-99-173 Congressional Award
Foundation

Financial Statements Page 21 GAO/AIMD-99-173 Congressional Award
Foundation (917773) Let t er

Ordering Information The first copy of each GAO report and
testimony is free. Additional copies are $2 each. Orders should be
sent to the following address, accompanied by a check or money
order made out to the Superintendent of Documents, when necessary,
VISA and MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address are
discounted 25 percent.

Orders by mail: U.S. General Accounting Office P.O. Box 37050
Washington, DC 20013

or visit: Room 1100 700 4th St. NW (corner of 4th and G Sts. NW)
U.S. General Accounting Office Washington, DC

Orders may also be placed by calling (202) 512-6000 or by using
fax number (202) 512-6061, or TDD (202) 512-2537.

Each day, GAO issues a list of newly available reports and
testimony. To receive facsimile copies of the daily list or any
list from the past 30 days, please call (202) 512-6000 using a
touchtone phone. A recorded menu will provide information on how
to obtain these lists.

For information on how to access GAO reports on the INTERNET, send
an e-mail message with info in the body to:

[email protected] or visit GAO's World Wide Web Home Page at:
http://www.gao.gov

United States General Accounting Office Washington, D.C. 20548-
0001

Official Business Penalty for Private Use $300

Address Correction Requested Bulk Rate

Postage & Fees Paid GAO Permit No. GI00

*** End of document. ***