TITLE:   GAO's Authority to Audit Capitol Concerts, B-284610, March 3, 2000
BNUMBER:  B-284610
DATE:  March 3, 2000
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GAO's Authority to Audit Capitol Concerts, B-284610, March 3, 2000

B-284610

March 3, 2000

The Honorable Bob Franks
Chairman

Subcommittee on Economic Development, Public Buildings,
Hazardous Materials and Pipeline Transportation
Committee on Transportation and Infrastructure
House of Representatives

Subject: GAO's Authority to Audit Capitol Concerts

Dear Mr. Chairman:

This responds to your joint January 27, 2000, request [1] for an opinion
concerning the authority of the General Accounting Office (GAO) to audit
private funds used by a private organization in connection with the annual
Capitol concert series. For the reasons discussed below, we believe 40
U.S.C. sect. 193m-1 authorizes GAO to audit the private funds a private
organization uses to perform services or conduct activities on United States
Capitol grounds.

Background

Congress authorizes the National Park Service (NPS) to annually sponsor a
series of National Symphony Orchestra (NSO) concerts on Capitol grounds
under conditions provided by the Architect of the Capitol. H. Cong. Res.
133, May 21, 1981. NPS awards a grant to NSO to perform the concert series,
comprised of the Memorial Day, July 4th, and Labor Day concerts. To televise
the Memorial Day and July 4th concerts, NSO enters into an agreement with a
concert producer, Capital Concerts, Inc. [2] The producer's responsibilities
include television production; engaging the conductor, artists, technical
staff; audio-visual reproduction; and specified logistical arrangements. The
concert series is financed with both appropriated and private funds,
including donations raised and used by the producer.

The Senate Majority and Minority Leaders and the Chairman and Ranking Member
of the Senate Committee on Rules and Administration asked GAO to audit the
costs and related sources of funding for the 1999 Capitol concert series
held on Capitol grounds. Specifically, we were asked to verify the receipt
and use of funds derived from concert-related federal grants and private
fund raising activities to pay for producing, staging, and broadcasting the
three concerts. To satisfy the request, we have begun our review under 40
U.S.C. sect. 193m-1, which authorizes GAO to audit private organizations
performing services or conducting activities on the United States Capitol
grounds.

Discussion

A number of statutes provide GAO with broad audit authority. Our enabling
legislation, the Budget and Accounting Act, 1921, authorizes the Comptroller
General to investigate all matters relating to the receipt, disbursement,
and use of public money. 31 U.S.C. sect. 712. Later, in the most important
budget and accounting legislation since 1921, the Accounting and Auditing
Act of 1950, the Congress specifically authorized GAO to audit the financial
transactions of executive, legislative and judicial agencies. 31 U.S.C. sect.
3523. Subsequently, Congress endorsed GAO's evolving program evaluation work
by passing the Legislative Reorganization Act of 1970, which specifically
authorized the Comptroller General to review and evaluate the results of
government programs. 31 U.S.C. sect. 717.

During the floor debate on the Legislative Reorganization Act of 1970,
Representative Dingell offered an amendment that was adopted and eventually
became section 451, now codified at 40 U.S.C. sect. 193m-1. Section 193m-1
provides that

"[a]ny private organization, except political parties and committees
constituted for election of Federal officials, whether or not organized for
profit and whether or not any of its income inures to the benefit of any
person, which performs services or conducts activities in or on the United
States Capitol Buildings or Grounds, . . ., shall be subject, for each year
in which it performs such services or conducts such activities, to a special
audit of its accounts which shall be conducted by the General Accounting
Office."

The language of section 193m-1 is very broad. It refers to private
organizations without concern over whether the organization is for profit or
generates income for the benefit of a person. Section 193m-1 describes the
covered activity as when a private organization "performs services or
conducts activities in or on the United States Capitol Buildings or Grounds"
without offering any limitations on the type of services or activities
covered. The section then provides that for each year the private
organization performs such services or conducts such activities, the
authorized audit is of the private organization's accounts, not just the
federal funds the organization receives.

Consistent with the broad language of section 193m-1, its legislative
history reflects an objective to provide broad audit coverage of private
organizations performing services or conducting activities on Capitol
grounds that up to that point received no audit, no public scrutiny, and no
overview by any arm of the Congress. 116 Cong. Rec. 32219 (1970) (statement
of Rep. Dingell). "These businesses run all the way from contract businesses
for the providing of services to the Architect of the Capitol to the
construction of very large office buildings. They involve the operation of
services upon the Capitol Grounds like lunchrooms, and they include
concessionaires involving the providing of food services in the other body.
They involve the operation of car washing services and other things in the
garages in the House of Representatives and of the Senate." 116 Cong. Rec.
32218 (1970) (statement of Rep. Dingell). The legislative history reflects a
congressional belief that "these services and businesses on Capitol grounds
should be open to the public" and that Congress "should know who conducts
this business and how, . . . [and] what the expenses are and what the
contracts are and how the contracts are derived, and carried out." 116 Cong.
Rec. 32218 (1970) (statement of Rep. Dingell).

If a statute's language reflects the unambiguously expressed intent of
Congress, it must be given effect. Chevron U.S.A. Inc v. Natural Resources
Defense Council, Inc., 486 U.S. 837, 842 (1984). If, on the other hand, the
statute is ambiguous on a specific issue, deference must be given to the
interpretation made by the agency charged with its administration, Chevron,
486 U.S. at 843-844, particularly when the agency's construction of the
statute was contemporaneous with its passage, Udall v. Tallman, 380 U.S. 1,
16 (1965), and that interpretation has been consistently applied over a long
period of time, United States v. Clark, 454 U.S. 555, 565 (1982). Under
either of these standards of statutory construction, we believe Capitol
Concerts's participation in the two concerts on Capitol grounds falls within
the scope of 40 U.S.C. sect. 193m-1.

Capitol Concerts is a private organization, the type of entity section
193m-1 covers. When Capitol Concerts engages in significant activities in
producing the concerts, including but not limited to staging and
broadcasting the concerts, it "performs services or conducts activities in
or on the United States Capitol Buildings or Grounds." Nothing in the
statute or its legislative history suggests that the private funds raised
and used by Capitol Concerts are outside the audit authorized by section
193m-1. In fact, the very activities discussed in the legislative history
involve private funds. Further, soon after enactment of section 193m-1 and
for many years thereafter, we conducted audits of private organizations and
included private funds in the audit. For example, our audits of the printing
clerks of the House of Representatives were actually audits of incorporated
printing firms the clerks established and covered all the firms' income and
expenses, including those not involving the government or government funds.
E.g., Audit of the Majority Printing Clerk, Fiscal Year Ended August 31,
1971, B-164163, June 6, 1972. Similarly, our audits of the United States
Capitol Historical Society, a nonprofit corporation, covered all the
Society's revenues and expenses, including contributions. E.g., Audit of the
United States Capitol Historical Society For the Year Ended January 31,
1974, B-176631, Nov. 6, 1974. Nor is there anything in section 193m-1 to
suggest that Capitol Concerts is outside the scope of section 193m-1 because
it "performs services or conducts activities in or on the United States
Capitol Buildings or Grounds" by virtue of its agreement with NSO rather
than with a congressional agency. In fact, it would frustrate the purpose of
section 193m-1 to apply it only to the private organization with the most
immediate relationship with Congress since organizations might then be able
to limit, if not escape, audit scrutiny through one or more subcontracts.

By its terms, 40 U.S.C. sect. 193m-1 authorizes GAO to audit "any private
organization which performs services or conducts activities in or on the
United States Capitol Buildings or Grounds." Accordingly, for the reasons
discussed above, section 193m-1 authorizes GAO to audit the Capitol concert
series and to include in that audit the private funds private organizations
receive and use to perform services or conduct activities in or on the
United States Capitol Buildings or Grounds.

We hope this addresses your request. If we may be of further assistance,
please feel free to contact me on (202) 512-5400 or Jeffrey A. Jacobson,
Assistant General Counsel, on (202) 512-8261.

Sincerely yours,

Robert P Murphy
General Counsel

Notes

1. We are also providing this response to Bob Wise, Ranking Democratic
Member of the Subcommittee on Economic Development, Public Buildings,
Hazardous Materials and Pipeline Transportation, who joined you in this
request.

2. Capital Concerts, Inc. is a non-profit corporation incorporated in the
District of Columbia and is exempt from tax under section 501(c)(3) of the
Internal Revenue Code.