Certificated Expenditures: FY 1996 Presidential and Vice Presidential
Certificated Expenditures and Related Matters (Letter Report, 10/29/98,
GAO/AIMD-99-26).

Certificated expenditures, which involve expenses for the maintenance
and repair of the executive residence at the White House, entertainment
expenses for the President and the Vice President, and travel expenses
for presidential and vice presidential staff, totaled $8.3 million in
fiscal year 1996. White House records show that 144 reimbursable events
were held at the White House that year and that these events had total
reimbursable costs of about $1.6 million. GAO found that established
procedures were followed for reimbursable activities. The First Family
reimburses the White House for certain personal expenses, including the
cost of food and beverages served to them at their residence. There also
may be other costs, such as housekeeping and utilities, associated with
the First Family's nonofficial guests, especially those who stay
overnight at the White House. GAO was unable to determine the amount of
these unreimbursed incidental costs because the White House does not
maintain, nor is it required to have, a system to keep track of these
costs. The White House publicly released a list of 831 overnight guests
at the executive residence between 1993 and 1996. This material
indicated that 107 overnight guests were not named because they are
relatives (and accompanying guests) of the President and the First Lady
or friends of their daughter. The 938 overnight guests did not include
White House staff who may have stayed overnight at the executive
residence when their duties required them to do so. GAO did not find a
systematic approach at the White House to maintain and report data on
overnight guests and overnight stays. As a result, GAO could not verify
the number of overnight stays. At the same time, GAO did not identify
any notable discrepancies between the names that the White House
publicly disclosed and the materials GAO examined.

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

 REPORTNUM:  AIMD-99-26
     TITLE:  Certificated Expenditures: FY 1996 Presidential and Vice 
             Presidential Certificated Expenditures and Related
             Matters
      DATE:  10/29/98
   SUBJECT:  Residences
             Executive powers
             Right of privacy
             Congressional/executive relations
             Audit authority
             Confidential communication
             Ethical conduct
             Personal property

             
******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO report.  Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved.  Major          **
** divisions and subdivisions of the text, such as Chapters,    **
** Sections, and Appendixes, are identified by double and       **
** single lines.  The numbers on the right end of these lines   **
** indicate the position of each of the subsections in the      **
** document outline.  These numbers do NOT correspond with the  **
** page numbers of the printed product.                         **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** 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.                         **
******************************************************************


Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Treasury, Postal Service, and
General Government, Committee on Appropriations, House of
Representatives

October 1998

CERTIFICATED EXPENDITURES - FY
1996 PRESIDENTIAL AND VICE
PRESIDENTIAL CERTIFICATED
EXPENDITURES AND RELATED MATTERS

GAO/AIMD-99-26

Certificated Expenditures

(911744)


Abbreviations
=============================================================== ABBREV


Letter
=============================================================== LETTER


B-277949

October 29, 1998

The Honorable Jim Kolbe
Chairman
Subcommittee on Treasury, Postal Service,
 and General Government
Committee on Appropriations
House of Representatives

Dear Mr.  Chairman: 

You requested that we audit fiscal year 1996 certificated
expenditures of the President and the Vice President, as authorized
by 3 U.S.C.  sections 105 and 106, respectively.  These sections
authorize the President and the Vice President to expend appropriated
funds for certain specified purposes that may be accounted for solely
on their certificate and as they determine, notwithstanding the
provisions of any other law.  3 U.S.C.  sections 105 and 106 also
authorize us to examine records related to these expenditures and to
report to the Congress with respect to any amounts not expended for
the specified purposes.  We found that fiscal year 1996 certificated
expenditures of the President and the Vice President under
3 U.S.C.  sections 105 and 106, respectively, were proper. 

You also asked us to review the reimbursable activities of the
Executive Residence at the White House.  In fiscal year 1996,
expenses associated with official and nonofficial events held at the
White House were paid from the Executive Residence at the White House
appropriation.\1 For nonofficial and some official events, the White
House billed sponsoring organizations, such as a political party
committee or the Department of State.  We found that the White House
was following long-standing procedures that had been established for
handling reimbursable activities. 

Further, you asked us to provide the number of overnight guests and
overnight stays at the Executive Residence during 1993 through 1996. 
In 1997, the White House publicly disclosed that 938 guests stayed
overnight at the Executive Residence during 1993 through 1996 and
identified 831 of them.  The White House has indicated that the 107
overnight guests who were not identified are relatives (and
accompanying guests) of the President and the First Lady and friends
of their daughter.  We examined materials the White House staff
stated they used to report the names of overnight guests, and we
discussed recordkeeping on overnight guests and overnight stays with
White House officials and others.  We could not verify the number of
overnight guests or determine the number of overnight stays; however,
we did not identify any notable discrepancies between the names the
White House publicly disclosed and the materials we examined. 

These areas are further discussed in the following sections.  Our
review was performed in accordance with generally accepted government
auditing standards.  The scope and methodology of our work is
discussed in appendix I.  We provided a draft of this report to White
House officials for their review and comment.  A Deputy Counsel to
the President advised us that they had no comments on the draft
report. 


--------------------
\1 The Treasury and General Government Appropriations Act, 1998,
Public Law 105-61, 111 Stat.  1272 (1997), appropriation for "The
Executive Residence at the White House--Reimbursable Expenses"
requires (1) each person sponsoring a reimbursable political event to
pay in advance an amount equal to the estimated cost of the event and
(2) the national committee of the political party of the President to
maintain on deposit $25,000 to be available for expenses relating to
reimbursable political events it sponsors. 


   CERTIFICATED EXPENDITURES WERE
   PROPER
------------------------------------------------------------ Letter :1

For fiscal year 1996, certificated expenditures of the President and
the Vice President under 3 U.S.C.  sections 105 and 106,
respectively, totaled about $8.3 million.  These sections authorize
the President and the Vice President to certificate the expenditure
of appropriated funds for the following purposes: 

  -- the operation, maintenance, repair, and improvement of the
     Executive Residence at the White House, and official
     entertainment expenses of the President;

  -- subsistence expenses of persons in the government service while
     they are traveling on official business in connection with the
     President's travel;

  -- subsistence expenses of persons in the government service while
     they are traveling on official business in connection with the
     Vice President's travel; and

  -- official entertainment expenses of the Vice President. 

We reviewed samples of fiscal year 1996 certificated transactions and
found that they were made for purposes authorized under 3 U.S.C. 
sections 105 and 106.  Based on the results, we conclude that fiscal
year 1996 certificated expenditures, as shown in table 1, were
proper. 



                                Table 1
                
                    Certificated Expenditures of the
                  President and the Vice President for
                            Fiscal Year 1996

Category of expense                                             Amount
----------------------------------------------------------  ----------
Operation, maintenance, repair, and improvement of the      $7,826,122
 Executive Residence at the White House, and official
 entertainment expenses of the President
Travel of presidential staff                                   295,476
Travel of vice presidential staff                              156,057
Official entertainment expenses of the Vice President           65,117
======================================================================
Total                                                       $8,342,772
----------------------------------------------------------------------

   ESTABLISHED PROCEDURES WERE
   FOLLOWED FOR REIMBURSABLE
   ACTIVITIES
------------------------------------------------------------ Letter :2

When official and nonofficial reimbursable events were held at the
White House, the related expenses were initially paid from the
Executive Residence at the White House appropriation.  White House
records showed that, in fiscal year 1996, 144 reimbursable events
were held at the White House and that these events had total
reimbursable costs of about $1.6 million. 

The Executive Residence Organization and Procedures Manual describes
key procedures for handling reimbursable activities.  These
procedures are generally consistent with those we observed in our
prior audits of Executive Residence at the White House certificated
expenditures. 

The following outlines the Executive Residence at the White House
procedures for conducting reimbursable activities. 

  -- Generally, the White House Social Secretary advises the Chief
     Usher that an event is to be held at the Executive Residence. 

  -- The Social Secretary designates an event as either reimbursable
     or nonreimbursable.  While specifically defined criteria are not
     used, the nature of an event and the sponsoring organization are
     primary factors in these decisions. 

  -- Expenses for food, flowers, calligraphy, and other items are
     incurred as an event is planned and carried out.  The related
     vendor invoices are received by the Chief Usher's staff.  Tally
     sheets are used to record and compute the cost of Executive
     Residence inventory items used for an event. 

  -- The Chief Usher's administrative office authorizes the National
     Park Service\2

to pay vendor invoices, determines the total reimbursable cost of an
event, and prepares a bill to the sponsoring organization.  The total
reimbursable cost does not include regular time worked by White House
staff but does include the cost of overtime related to an event. 

  -- The Chief Usher's administrative office receives reimbursable
     payments, which are forwarded to the National Park Service for
     deposit to the Treasury of the United States as offsetting
     collections to be credited to the Operating Expenses account of
     the Executive Residence at the White House.  The Chief Usher's
     administrative office is also responsible for ensuring follow-up
     when reimbursements are not received promptly. 

We noted that the Chief Usher's administrative staff inadvertently
used incorrect salary rates to compute overtime and made
computational errors that misstated the amounts billed for fiscal
year 1996.  We brought this matter to the attention of the Chief
Usher and the White House Counsel's staff.  A Deputy Counsel to the
President told us that the White House would address the misstated
billings for fiscal year 1996. 


--------------------
\2 The National Park Service provides accounting services for the
Executive Residence at the White House. 


      REIMBURSEMENT OF COSTS FOR
      THE FIRST FAMILY AND THEIR
      GUESTS
---------------------------------------------------------- Letter :2.1

The First Family reimburses the Executive Residence at the White
House appropriation for certain personal expenses, including the cost
of food and beverages served to them at their residence.  Amounts
reimbursed by the First Family include the cost of food and beverages
consumed at their residence by nonofficial guests. 

There also may be other incidental costs associated with the First
Family's nonofficial guests, especially those who stay overnight at
the Executive Residence.  These costs could include, for example, the
cost of utilities and housekeeping, which are not reimbursed.  We
were unable to determine the amount of these unreimbursed incidental
costs because the White House does not maintain, nor is it required
to have, a system to accumulate these costs. 


   NUMBER OF OVERNIGHT GUESTS AND
   OVERNIGHT STAYS
------------------------------------------------------------ Letter :3

In July 1997, an Associate Counsel to the President sent us the
publicly-released list of 831 overnight guests at the Executive
Residence during 1993 through 1996.  This material indicated that 107
overnight guests were not named because they are relatives (and
accompanying guests) of the President and the First Lady and friends
of their daughter.  We were told that the 938 overnight guests did
not include White House staff and their spouses who may have stayed
overnight at the Executive Residence when their duties required them
to do so. 

At that time, we were not shown the underlying documentation relating
to the number of overnight guests at the Executive Residence.  The
Counsel to the President's staff has said that, until October 1997,
it was their understanding that the objective of our work in this
area was related to the cost of overnight guests and not to the
number of overnight guests or overnight stays.  We have discussed the
cost of overnight guests with White House staff and, as discussed
earlier in this report, we were unable to determine the amount of any
incidental costs associated with overnight guests. 

In October 1997, after several discussions with staff of the Counsel
to the President about our need to examine material on overnight
guests and overnight stays, we wrote to a Deputy Counsel to the
President to formally request that we be given access to all books,
documents, papers, or other records related to the number of
overnight guests at the Executive Residence and the beginning and
ending dates of each guest stay since January 1993.  In an October
1997 letter to us, an Associate Counsel to the President stated that
the underlying documentation relating to the identity of overnight
guests at the Executive Residence included personal and private
materials of the First Family, including their personal and private
correspondence and private notes.  She stated further that none of
these materials would provide support that is reliable from an
auditor's standpoint and that these materials were not prepared or
maintained for recordkeeping purposes.  White House officials have
also said that there is no requirement for a systematic approach to
be in place to maintain and report data on Executive Residence
overnight guests and overnight stays. 

In November 1997, we testified before your subcommittee on the status
of our review of the Executive Residence.\3 We said that, to respond
to the subcommittee's request, we needed access to documents or
systems that would establish the aggregate number of guests and
stays.  We said that, if such documents or systems do not exist, we
needed to ascertain the overnight guests at the Executive Residence
during the period indicated from source documents or systems
maintained by the White House or others. 

In a November 1997 letter, an Associate Counsel to the President
restated their previous understanding that our work related to
measuring costs and the private nature of the underlying
documentation.  She said further, that the White House would work to
determine whether documents that are not personal and private were
available.  Toward this end, she arranged meetings where we asked the
Chief Usher, members of his staff, and the White House Social
Secretary whether alternative records, information, or systems
relating to the number of overnight guests at the Executive Residence
were available that could be used in lieu of personal and private
materials of the First Family.  Based on these discussions, we did
not identify any complete and reliable alternative source of
information for this data. 

Beginning in March 1998, a Deputy Counsel to the President gave us
access to materials maintained by the President's former Director of
Personal Correspondence, which the Deputy Counsel to the President
and the President's former Director of Personal Correspondence stated
were the basis for the publicly-released list of overnight guests and
that also showed the dates on which they stayed in 1993, 1994, 1995,
and 1996.  For each of these years, the materials depicted summary
schedules and other indications of names and dates.  The Deputy
Counsel to the President told us that the materials we examined had
been redacted to exclude information related to the relatives (and
accompanying guests) of the President and the First Lady and friends
of their daughter. 

White House officials said that materials from the files of the
former Director of Personal Correspondence were the most reliable
source of information available on overnight guests because she was
the only individual attempting to track this information, though
White House officials stated that these materials may not be
comprehensive.  In an alternative attempt to verify these materials,
we asked for data on overnight guests that was available from an
automated database maintained by the White House.  The overnight
guest listing we were shown from that database included some dates of
overnight stays that were inconsistent with the materials from the
files of the former Director.  The former Director indicated that she
had not used the database to track overnight guests, and White House
officials stated that the data in the database was not used as a
source because the database was unreliable. 

In addition, we discussed with the U.S.  Secret Service's Assistant
Director for Protective Services whether there were records of
overnight guests and overnight stays at the Executive Residence at
the White House.  He said that the Secret Service does not maintain a
system to keep track of, or that identifies, White House Executive
Residence overnight guests. 

Overall, we did not identify a systematic approach in place to
maintain and report data on Executive Residence overnight guests and
overnight stays.  Therefore, we could not verify the number of
overnight guests or determine the number of overnight stays by
undertaking audit steps such as reviewing policies and procedures and
identifying controls to ensure the completeness and reliability of
underlying data.  However, we did not identify any notable
discrepancies between the names the White House publicly disclosed
and the materials we examined. 


--------------------
\3 The White House:  Status of Review of the Executive Residence
(GAO/T-OGC/AIMD-98-12, November 6, 1997). 


---------------------------------------------------------- Letter :3.1

We are sending copies of this report to the President, the Vice
President, the subcommittee's Ranking Minority Member, and the
Director of the Office of Management and Budget.  Copies will also be
made available to others upon request.  Please contact me at (202)
512-9489 if you or your staff have any questions on this report. 

Sincerely yours,

David L.  Clark
Director, Audit Oversight and Liaison


SCOPE AND METHODOLOGY
=========================================================== Appendix I

To ascertain whether certificated expenditures were for authorized
purposes, we analyzed statistical samples of payroll and other
payment transactions for the Executive Residence at the White House
appropriation.  A sample of transactions cannot provide 100 percent
assurance that each expenditure in the total population was for an
authorized purpose.  However, our samples provided assurance at a
95-percent confidence level that expenditures for unauthorized
purposes did not exceed 1 percent of the total dollar amount of the
transactions in the population.  In addition, we analyzed samples of
other certificated transactions under 3 U.S.C.  sections 105 and 106,
including travel subsistence payments and the Vice President's
official entertainment expenses. 

We did not examine certificated expenditures for the $50,000
presidential official expense allowance and the $100,000 presidential
travel expense allowance because legislation exempts both expense
allowances from the Comptroller General's examination. 

To determine if established procedures were followed for handling
reimbursable events, we identified and reviewed pertinent policies
and procedures and discussed them with White House representatives. 
We also sampled records relating to reimbursable events. 

Regarding the number of Executive Residence overnight guests and
overnight stays, we examined materials showing summary schedules and
other indications of names and dates from the files of the
President's former Director of Personal Correspondence.  The
materials had been redacted to exclude information related to the
relatives (and accompanying guests) of the President and the First
Lady and friends of their daughter.  We discussed these materials
with White House officials.  We also discussed with them whether
alternative records, information, or systems relating to overnight
guests at the Executive Residence were available.  In addition, we
attempted to verify these materials by examining data on overnight
guests and overnight stays from an automated database maintained by
the White House. 

We performed our work from April 1997 through September 1998 at the
Executive Residence, the Office of Administration in the Executive
Office of the President, and the National Park Service accounting
office that performs accounting services for the Executive Residence. 


*** End of document. ***