Financial Audit: Independent and Special Counsel Expenditures for
the Six Months Ended September 30, 2001 (29-MAR-02, GAO-02-443). 
								 
This report describes GAO's audits of expenditures reported by	 
six offices of independent counsel and one office of special	 
counsel for the six months ended September 2001. GAO found the	 
statements of expenditures for the offices of independent	 
counsels and office of special counsel were presented fairly in  
all material respects. There were no material weaknesses in	 
internal control over financial reporting (including safeguarding
of assets) and no reportable noncompliance with the laws and	 
regulations GAO tested. 					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-443 					        
    ACCNO:   A02930						        
  TITLE:     Financial Audit: Independent and Special Counsel	      
Expenditures for the Six Months Ended September 30, 2001	 
     DATE:   03/29/2002 
  SUBJECT:   Financial statement audits 			 
	     Independent counsels				 
	     Internal controls					 
	     Reporting requirements				 
	     Auditing standards 				 
	     Financial management systems			 

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GAO-02-443
     
A

Report to Congressional Committees

March 2002 FINANCIAL AUDIT Independent and Special Counsel Expenditures for
the Six Months Ended September 30, 2001

GAO- 02- 443

Letter 1 Auditor?s Report 3

Background 3 Opinion on Statements of Expenditures 4 Consideration of
Internal Control 5 Compliance with Laws and Regulations 5 Objectives, Scope,
and Methodology 5 Agency Comments 7

Appendixes

Appendix I: Statement of Expenditures for Independent Counsel Barrett 10

Appendix II: Statement of Expenditures for Independent Counsel Bruce 13

Appendix III: Statement of Expenditures for Indendent Counsel Lancaster 16

Appendix IV: Statement of Expenditures for Independent Counsel Pearson 19

Appendix V: Statement of Expenditures for Independent Counsel Ray 22

Appendix VI: Statement of Expenditures for Independent Counsel Smaltz 26

Appendix VII: Statement of Expenditures for Special Counsel Danforth 29

Abbreviations

AOUSC Administrative Office of the U. S. Courts FBI Federal Bureau of
Investigation OIC Office of Independent Counsel OSC Office of Special
Counsel

Abbreviations

AOUSC Administrative Office of the U. S. Courts FBI Federal Bureau of
Investigation OIC Office of Independent Counsel OSC Office of Special
Counsel

Lett er

March 29, 2002 Congressional Committees Enclosed is our report on the
statements of expenditures of six offices of independent counsel and one
office of special counsel for the 6 months ended September 30, 2001. We are
sending copies of this report to the attorney general, the director of the
Administrative Office of the U. S.

Courts, the independent counsels and special counsel included in our audit,
and other interested parties. Copies of this report will be made available
to others upon request. This report will also be available on GAO?s home
page (www. gao. gov).

If you or your staffs have any questions concerning this report, please
contact me at (202) 512- 9406 or Hodge Herry, assistant director, at (202)
512- 9469. You can also reach us by e- mail at franzelj@ gao. gov or

herryh@ gao. gov. Key contributors to this report were Carol Keightley,
Kwabena Ansong, and Theresa Patrizio. Jeanette M. Franzel Acting Director
Financial Management and Assurance

Audi Report t or? s Congressional Committees This report presents the
results of our audits of expenditures 1 reported by six offices of
independent counsel and one office of special counsel for the 6 months ended
September 30, 2001. The Department of Justice and the independent counsels
are required under 28 U. S. C. 594 (d)( 2), (h) and 596 (c)( 1) (1994) to
report on expenditures from a permanent, indefinite appropriation
established within the Department of Justice to fund independent counsel
activities. We are required under 28 U. S. C. 596 (c)( 2) to audit the
statements of expenditures prepared by the independent counsels. We also
audited the statement of expenditures of Special Counsel John C. Danforth,
who is authorized by the Department of Justice

to fund his operations from the permanent, indefinite appropriation. In our
audits covering the 6 months ended September 30, 2001, we found

 the statements of expenditures presented in appendixes I through VII, for
the offices of independent counsel David M. Barrett, Carol Elder Bruce,
Ralph I. Lancaster, Daniel S. Pearson, Robert W. Ray, and Donald C. Smaltz,
and special counsel John C. Danforth, respectively, are presented fairly, in
all material respects, in conformity with the basis

of accounting described in note 1 of each counsel?s statement, which is
principally the cash basis, a comprehensive basis of accounting other than
U. S. generally accepted accounting principles;

 no material weaknesses in internal control over financial reporting
(including safeguarding assets) and compliance with laws and regulations;
and

 no reportable noncompliance with laws and regulations we tested. The
following sections provide background information, outline each conclusion
in more detail, and discuss the scope of our audits.

Background The Ethics in Government Act of 1978 amended title 28 of the
United States Code to authorize the judicial appointment of independent
counsels when the attorney general determines that reasonable grounds exist
to warrant further investigation of high- ranking government officials for
certain alleged crimes. The independent counsel law (28 U. S. C. 591- 599
(1994)) 1 The term expenditures as used in this report generally means cash
disbursed.

was intended to preserve and promote the accountability and integrity of
public officials and of the institutions of the federal government. The
independent counsel law expired on June 30, 1999. Provisions of the law
allow the independent counsels serving at the expiration date to continue
investigating pending matters until they determine that the investigations
of such matters have been completed. Also, the Department of Justice
determined that the appropriation established by Public Law 100- 202 to fund
expenditures by independent counsels appointed pursuant to 28

U. S. C. 591- 599, or other law, is available to fund the expenditures of
John C. Danforth, who was appointed as a Special Counsel within the
Department of Justice by the attorney general.

The independent counsel law directs the Department of Justice to pay all
costs relating to the establishment and operation of independent counsel
offices from the permanent, indefinite appropriation established to fund
independent counsel activities. The independent counsel law also designates
specific responsibilities to the Administrative Office of the U. S. Courts
(AOUSC) for independent counsels? administrative support. The Department of
Justice periodically disburses lump- sum payments to AOUSC for this purpose.

During any 6- month period, there may be other significant costs incurred in
support of the work of the counsels, which are paid from appropriations
other than the permanent, indefinite appropriation established to fund
independent counsel activities. These costs arise when a counsel uses
detailees from other federal agencies, such as the Federal Bureau of
Investigation (FBI). Independent counsels are not required to reflect such
costs in their statements of expenditures and neither the independent
counsels nor special counsel do so. However, to the extent practicable, the

counsels identified and disclosed these costs in the notes to their
statements presented in the appendixes to this report.

Opinion on Statements The statements of expenditures including the
accompanying notes for the of Expenditures

offices of independent counsel David M. Barrett, Carol Elder Bruce, Ralph I.
Lancaster, Daniel S. Pearson, Robert W. Ray, and Donald C. Smaltz, and for
the office of special counsel John C. Danforth, present fairly, in all
material respects, the expenditures of these counsels for the 6 months ended
September 30, 2001, on the basis of accounting described in note 1 to each
office?s statement.

The counsels prepared their statements of expenditures principally on a cash
basis of accounting, which is a comprehensive basis of accounting other than
U. S. generally accepted accounting principles. The bases of accounting are
described in note 1 of each counsel?s statement.

Consideration of In planning and performing our audits, we considered
internal control over

financial reporting and compliance. 2 We did this to determine our Internal
Control procedures for auditing the statements of expenditures, not to
express an

opinion on internal control. Accordingly, we do not express an opinion on
internal control over financial reporting and compliance. However, for the
controls we tested, we found no material weaknesses in internal control

over financial reporting (including safeguarding assets) and compliance for
the 6- month period ended September 30, 2001. A material weakness is a
condition in which the design or operation of one or more of the internal
control components does not reduce to a relatively low level the risk that
errors, fraud, or noncompliance in amounts that would be material to the
statements of expenditures may occur and not be detected promptly by
employees in the normal course of performing their duties. Our internal
control work would not necessarily disclose all material weaknesses.

Compliance with Laws Our tests for compliance with selected provisions of
laws and regulations

and Regulations disclosed no instances of noncompliance that would be
reportable under

U. S. 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 The independent counsels are responsible for
preparing statements of

Methodology expenditures in conformity with the bases of accounting
described in the

accompanying notes. Though not required to do so, the special counsel also
elected to prepare a statement of expenditures. The counsels are also
responsible for establishing, maintaining, and assessing internal control to
provide reasonable assurance that the following internal control objectives
are met and for complying with applicable laws and regulations.

2 The objectives of internal control are to provide reasonable assurance
that management objectives regarding financial reporting (including
safeguarding assets) and compliance with laws and regulations are achieved.

 Financial reporting: Transactions are properly recorded, processed, and
summarized to permit the preparation of the statements of expenditures in
conformity with the bases of accounting described in the notes to their
statements, and assets are safeguarded against loss from

unauthorized acquisition, use, or disposition.

 Compliance with laws and regulations: Transactions are executed in
accordance with laws and regulations that could have a direct and material
effect on the counsels? statements of expenditures. We are responsible for
(1) obtaining reasonable assurance about whether the counsels? statements of
expenditures are presented fairly, in all material respects, in conformity
with the basis of accounting described in the notes accompanying their
statements of expenditures, (2) obtaining a sufficient understanding of
internal control over financial reporting and compliance to plan the audits,
and (3) testing compliance with selected provisions of laws and regulations
that have a direct and material effect on the statements.

In order to fulfill these responsibilities, for each counsel, we (1)
examined, on a test basis, evidence supporting the amounts and disclosures
in the statement of expenditures, except for items indicated as unaudited,
(2) assessed the accounting principles used by management, (3) evaluated the
overall presentation of the statement of expenditures, (4) obtained an
understanding of internal control related to financial reporting (including
safeguarding assets) and compliance with laws and regulations, and (5)
tested compliance with selected provisions of 28 U. S. C. 591- 599 (1994), 5
U. S. C. Chapter 55, and regulations relating to pay administration.

We limited our internal control testing to controls over financial reporting
and compliance. Because of inherent limitations in internal control,
misstatements due to error, fraud, losses, or noncompliance 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. In addition, we caution that our internal
control testing may not be sufficient for other purposes. We did not test
compliance with all laws and regulations applicable to the offices of
independent and special counsel. We limited our tests of compliance to those
laws and regulations that we deemed applicable to the statements of
expenditures. We caution that noncompliance may occur

and not be detected by these tests and that such testing may not be
sufficient for other purposes.

We obtained, but did not audit, information on costs that were paid from
sources other than the permanent, indefinite appropriation, as well as
information on receipts. We obtained information on these costs and receipts
from the independent and special counsel offices and the Department of
Justice, including the FBI. We performed our audits in accordance with U. S.
generally accepted

government auditing standards. Agency Comments We provided drafts of this
report to the six offices of independent counsel, the office of the special
counsel, the Department of Justice, and AOUSC for

review and comment. These entities agreed with the facts and conclusions in
our report.

Jeanette M. Franzel Acting Director Financial Management and Assurance

March 8, 2002

List of Committees

The Honorable Robert C. Byrd Chairman The Honorable Ted Stevens Ranking
Minority Member Committee on Appropriations United States Senate

The Honorable Joseph I. Lieberman Chairman The Honorable Fred Thompson
Ranking Minority Member Committee on Governmental Affairs United States
Senate

The Honorable Patrick J. Leahy Chairman The Honorable Orrin G. Hatch Ranking
Minority Member Committee on the Judiciary United States Senate

The Honorable C. W. Bill Young Chairman The Honorable David R. Obey Ranking
Minority Member Committee on Appropriations House of Representatives

The Honorable Dan Burton Chairman The Honorable Henry A. Waxman Ranking
Minority Member Committee on Government Reform House of Representatives

The Honorable James F. Sensenbrenner Chairman The Honorable John Conyers,
Jr. Ranking Minority Member Committee on the Judiciary House of
Representatives

Appendi xes Statement of Expenditures for Independent

Appendi x I

Counsel Barrett DAVID M. BARRETT Office of Independent Counsel

Statement of Expenditures ( Cash basis)

Six Months Ended September 30, 2001 Personnel compensation and benefits

$ 453, 386 Travel ( note 2)

40, 675 Rent, communications, and utilities ( note 3)

221, 070 Contractual services ( note 4)

309, 109 Acquisition of capital assets

8, 241 Supplies and materials

4,982 Administrative services ( note 5)

_ _ 80, 617

Total expendit res $ 1, 118,080

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ _ _ _ _ _ _ The accompanying notes are an integral part of
this statement.

DAVID M. BARRETT Office of Independent Counsel Notes to Statement of
Expendit res

Note 1 - Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Independent Counsel- David M. Barrett ( OIC
Barrett) for the 6 months ended September 30, 2001. The statement o
expenditures includes only expenditures made from the permanent, indefinite
appropriation for the office of independent counsel that are processed
through the Administrative Office of the U. S. Courts ( AOUSC) and the OIC.
Mr. Barrett was appointed on May 24, 1995, to investigate certain
allegations against the secretary of housing and urban development.

Basis of accounting: The accompanying statement of expenditures was prepared
principally on the cash basis of accounting, which is a comprehensive basis
of accounting other than U. S. generally accepted accounting principles.
Under this method, except for personnel compensation and benefits,
expenditures are recorded when the funds are disbursed by AOUSC or, for
noncash transfers, when charged by AOUSC. Most personnel compensation and
benefits are recorded at the end of the pay period when earned.

Note 2 - Travel

Travel generally includes expenditures or investigation- related travel paid
for OIC- Barrett personnel and witnesses.

Note 3 - Rent, communications, and utilities

Approximately $ 158, 000 in office rent is included in rent, communications,
and utilities.

Note 4 - Contract al services

Contractual services primarily consist of expenditures for investigators,
court reporters, and services of other experts in areas of interest to the
investigation.

Note 5 - Administrative services

AOUSC receives an administrative fee equal to 3 percent of OIC expenditures
for performing disbursement and accounting functions for OIC- Barrett.
Payment of these fees generally occurs in the month following the services.
Also included in administrative services are other costs incurred by AOUSC
in providing administrative guidance and support to independent counsel
offices. These costs were certified by AOUSC, paid from the independent
counsel appropriation, and allocated to the OIC.

Statement of Expenditures for Independent

Appendi x II

Counsel Bruce CAROL ELDER BRUCE Office of Independent Counsel

Statement of Expenditures ( Cash basis)

Six Months Ended September 30, 2001 Personnel compensation and benefits

$ 47, 514 Rent, communications, and utilities

1,843 Contractual services and supplies ( note 2)

4,371 Administrative services ( note 3)

_ 5,985

Total expendit res $ 59, 713

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ _ _ _ _ _ _ The accompanying notes are an integral part of
this statement.

CAROL ELDER BRUCE Office of Independent Counsel Notes to Statement of
Expendit res

Note 1 - Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Independent Counsel- Carol Elder Bruce ( OIC
Bruce) for the 6 months ended September 30, 2001. The statement of
expenditures includes only expenditures made from the permanent, indefinite
appropriation for the office of independent counsel that are processed
through the Administrative Office of the U. S. Courts ( AOUSC) and the OIC.
Ms. Bruce was appointed on March 19, 1998, to investigate whether the
secretary of the interior may have violated federal criminal law in sworn
testimony before a congressional committee. Ms. Bruce submitted her final
report to the Special Division o the U. S. Court o Appeals or the District o
Columbia Circuit on December 30, 1999. Ms. Bruce received the order to
terminate her of ice from the U. S. Court of Appeals for the District of
Columbia Circuit effective March 22, 2001.

Basis of accounting: The accompanying statement of expenditures was prepared
principally on the cash basis of accounting, which is a comprehensive basis
of accounting other than U. S. generally accepted accounting principles.
Under this method, except for personnel compensation and benefits,
expenditures are recorded when the funds are disbursed by AOUSC or, for
noncash transfers, when charged by AOUSC. Most personnel compensation and
benefits are recorded at the end of the pay period when earned.

Note 2 - Contract al services and supplies

Contractual services primarily consist of payments to experts in preparing
independent counsel records for archiving.

Note 3 - Administrative services

AOUSC receives an administrative fee equal to 3 percent of OIC expenditures
for performing disbursement and accounting functions for OIC- Bruce. Payment
of these fees generally occurs in the month following the services. Also
included in administrative services are other costs incurred by AOUSC in
providing administrative guidance and support to independent counsel
offices. These

costs were certified by AOUSC, paid from the independent counsel
appropriation, and allocated to the OIC.

Statement of Expenditures for Indendent

Appendi x I II

Counsel Lancaster RALPH I. LANCASTER Office of Independent Counsel

Statement of Expenditures ( Cash basis)

Six Months Ended September 30, 2001 Personnel compensation and benefits

$ 96, 453 Travel ( note 2)

691 Rent, communications, and utilities ( note 3)

23, 950 Contractual services ( note 4)

44, 608 Supplies and materials

94 Administrative services ( note 5)

_ 13,821

Total expendit res $ 179, 61

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ _ _ _ _ _ _ The accompanying notes are an integral part of
this statement.

RALPH I. LANCASTER Office of Independent Counsel Notes to Statement of
Expendit res

Note 1 - Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Independent Counsel- Ralph I. Lancaster ( OIC
Lancaster) for the 6 months ended September 30, 2001. The statement o
expenditures includes only expenditures made from the permanent, indefinite
appropriation for the office of independent counsel that are processed
through the Administrative Office of the U. S. Courts ( AOUSC) and the OIC.
Mr. Lancaster was appointed on May 26, 1998, to investigate activities of
the secretary of labor regarding a possible undisclosed financial interest
in a company and the solicitation of illegal campaign contributions. Mr.
Lancaster has submitted his final report ( sealed) to the Special Division
of the U. S. Court of Appeals for the District of Columbia. Mr. Lancaster
received the order to terminate his office from the U. S. Court of Appeals
for the District of Columbia effective July 11, 2001.

Basis of accounting: The accompanying statement of expenditures was prepared
principally on the cash basis of accounting, which is a comprehensive basis
of accounting other than U. S. generally accepted accounting principles.
Under this method, except for personnel compensation and benefits,
expenditures are recorded when the funds are disbursed by AOUSC or, for
noncash transfers, when charged by AOUSC. Most personnel compensation and
benefits are recorded at the end of the pay period when earned.

Note 2 - Travel

Travel generally includes expenditures or investigation- related travel paid
for OIC- Lancaster personnel.

Note 3 - Rent, communications, and utilities

Approximately $ 19, 800 in of ice rent is included in rent, communications,
and utilities.

Note 4 - Contract al services

Contractual services represent expenditures or maintenance and repair of
equipment and for services of experts and other specialists in areas of
interest to the investigation.

Note 5 - Administrative services

AOUSC receives an administrative fee equal to 3 percent of OIC expenditures
for performing disbursement and accounting functions for OIC- Lancaster.
Payment of these fees generally occurs in the month following the services.
Also included in administrative services are other costs incurred by AOUSC
in providing administrative guidance and support to independent counsel
offices. These costs were certified by AOUSC, paid from the independent
counsel appropriation, and allocated to the OIC.

Statement of Expenditures for Independent

Appendi x V I Counsel Pearson DANIEL S. PEARSON Office of Independent
Counsel

Statement of Expenditures ( Cash basis)

Six Months Ended September 30, 2001 Personnel compensation and benefits

$ 71, 210 Rent, communications, and utilities ( note 2)

26, 673 Contractual services ( note 3)

4,687 Administrative services ( note 4)

_ 7, 496

Total expendit res $ 110, 066

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ _ _ _ _ _ _ The accompanying notes are an integral part of
this statement.

DANIEL S. PEARSON Office of Independent Counsel Notes to Statement of
Expendit res

Note 1 - Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Independent Counsel- Daniel S. Pearson ( OIC
Pearson) for the 6 months ended September 30, 2001. The statement of
expenditures includes only expenditures made from the permanent, indefinite
appropriation for the office of independent counsel that are processed
through the Administrative Office of the U. S. Courts ( AOUSC) and the OIC.
Mr. Pearson was appointed on July 6, 1995, to investigate certain
allegations against the secretary of commerce. On April 3, 1996, the
secretary was killed in a plane crash. Shortly thereafter, the independent
counsel closed the investigation of the secretary and trans erred the
investigation related to other parties to the Department of Justice.
Expenditures during this period relate to efforts to archive the
investigative records and to respond to issues related to the investigation.

Basis of accounting: The accompanying statement of expenditures was prepared
principally on the cash basis of accounting, which is a comprehensive basis
of accounting other than U. S. generally accepted accounting principles.
Under this method, except for personnel compensation and benefits,
expenditures are recorded when the funds are disbursed by AOUSC or, for
noncash transfers, when charged by AOUSC. Most personnel compensation and
benefits are recorded at the end of the pay period when earned.

Note 2 - Rent, communications, and utilities

Approximately $ 24, 000 in of ice rent is included in rent, communications,
and utilities.

Note 3 - Contract al services

Contractual services primarily consist of payments to experts in preparing
independent counsel records for archiving.

Note 4 - Administrative services

AOUSC receives an administrative fee equal to 3 percent of OIC expenditures
for performing disbursement and accounting functions for OIC- Pearson.
Payment of these fees generally occurs in the month following the services.
Also included in administrative services are other costs incurred by AOUSC
in providing administrative guidance and support to independent counsel
offices. These costs were certified by AOUSC, paid from the independent
counsel appropriation, and allocated to the OIC.

Statement of Expenditures for Independent

Appendi x V

Counsel Ray ROBERT W. RAY Office of Independent Counsel

Statement of Expenditures ( Cash basis)

Six Months Ended September 30, 2001 Personnel compensation and benefits

$ 1, 279,071 Travel ( note 2)

273, 172 Rent, communications, and utilities ( note 3)

518, 718 Contractual services ( note 4)

1,349, 379 Acquisition of capital assets ( note 5)

16, 648 Supplies and materials ( note 6)

37, 737 Administrative services ( note 7)

_ 209, 122

Total expendit res $ 3, 683,84

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ _ _ _ _ _ _ The accompanying notes are an integral part of
this statement.

ROBERT W. RAY Office of Independent Counsel Notes to Statement of Expendit
res

Note 1 - Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Independent Counsel- Robert W. Ray ( OIC- Ray)
for the 6 months ended September 30, 2001. The statement of expenditures
includes only expenditures made from the permanent, indefinite appropriation
for the office of independent counsel that are processed through the
Administrative Office of the U. S. Courts ( AOUSC) and the OIC.

Kenneth W. Starr ( OIC- Starr) was appointed on August 5, 1994, to assume
the investigation of possible violations of federal criminal law in Re:
Madison Guaranty Savings and Loan Association and other entities (
Whitewater) , which was begun by regulatory Independent Counsel Robert B.
Fiske, Jr. The U. S. Court of Appeals subsequently expanded OIC- Starr' s
jurisdiction to include selected White House Travel Office and access- to-
personnel- ile issues on March 22, 1996, and June 21, 1996, respectively. On
October 25, 1996, it further expanded OIC- Starr' s jurisdiction to include
issues related to statements made before the Government Reform and Oversight
Committee, U. S. House of Representatives, on June 26, 1996. On January 16,
1998, the court expanded OIC- Starr' s jurisdiction to include issues
related to whether, in a civil case, certain individuals suborned perjury,
obstructed justice, intimidated witnesses, or otherwise violated federal law
in dealing with witnesses, potential witnesses, attorneys, or others (
commonly referred to as the Lewinsky matter) .

On October 18, 1999, Mr. Starr resigned his appointment, and was succeeded
by Robert W. Ray as independent counsel effective the same date. On March
16, 2000, Mr. Ray submitted to the Special Division of the U. S. Court of
Appeals for the District of Columbia Circuit two inal reports on ( 1) the
access- to- personnel- iles issues and ( 2) the issues related to statements
made before the Government Reform and Oversight Committee. On July 28, 2000,
the court ordered the public release of the two reports. Further, on June
22, 2000, Mr. Ray submitted to the court a final report on the White House
travel matter. On October 18, 2000, the court ordered the public release of
that report. On January 19, 2001, Mr. Ray announced the conclusion of all
current matters before the office of independent counsel.

On August 21, 2001, the Special Division of the U. S. Court of Appeals for
the District of Columbia Circuit, at the request of the independent counsel,
ordered the termination of the investigative functions of the independent
counsel as o September 30, 2001, except to the extent necessary to conclude
any remaining noninvestigative and nonprosecutorial tasks required by
statute. On March 2, 2001, and May 18, 2001, Mr. Ray submitted to the court
the final reports on the Whitewater and Lewinsky matters, respectively. On
March 6, 2002, the court ordered the publication and release of the Lewinsky
report. On March 20, 2002, the court ordered the publication and release of
the Whitewater report.

Basis of accounting: The accompanying statement of expenditures was prepared
principally on the cash basis of accounting, which is a comprehensive basis
of accounting other than U. S. generally accepted accounting principles.
Under this method, except for personnel compensation and benefits,
expenditures are recorded when the funds are disbursed by AOUSC or, for
noncash transfers, when charged by AOUSC. Most personnel compensation and
benefits are recorded at the end of the pay period when earned.

Note 2 - Travel

Travel generally includes expenditures or investigation- related travel paid
for OIC- Ray personnel; detailees rom other federal agencies, such as the
Federal Bureau of Investigation ( FBI) ; contractors; and witnesses.

Note 3 - Rent, communications, and utilities

Approximately $ 396, 200 in office rent is included in rent, communications,
and utilities.

Note 4 - Contract al services

Contractual services primarily consist of expenditures for computer support
and maintenance and investigators and other specialists in areas of interest
to the investigation.

Note 5 - Acquisition of capital assets

The capital assets expenditures are primarily for automated data processing
equipment. These assets will remain the property of the federal government
at the conclusion of the investigation.

Note 6 - Supplies and materials

The supplies and materials expenditures are primarily for office supplies
used in the archiving of records.

Note 7 - Administrative services

AOUSC receives an administrative fee equal to 3 percent of OIC expenditures
for performing disbursement and accounting functions for OIC- Ray. Payment o
these fees generally occurs in the month following the services. Also
included in administrative services are other costs incurred by AOUSC in
providing administrative guidance and support to independent counsel
offices. These costs were certified by AOUSC, paid from the independent
counsel appropriation, and allocated to the OIC.

Note 8 - Other costs ( unaudited)

Certain costs relating to employees assigned to work with the OIC by the FBI
and the Department of Justice were financed through funds appropriated to
these agencies and, accordingly, are not included in the statement o
expenditures. These agencies were not reimbursed for these costs. The
schedule below shows the estimated costs ( unaudited) of the assistance
provided to the OIC during the 6- month period, based on information
provided by of icials of these agencies.

Costs ( unaudited)

FBI $ 85, 930

Other Justice _ _ 284

$ 86, 214

Statement of Expenditures for Independent

Appendi x VI

Counsel Smaltz DONALD C. SMALTZ Office of Independent Counsel

Statement of Expenditures ( Cash basis)

Six Months Ended September 30, 2001 Personnel compensation and benefits

$ 297, 305 Travel ( note 2)

5,113 Rent, communications, and utilities ( note 3)

98, 819 Contractual services ( note 4)

25, 394 Supplies and materials

2,747 Administrative services ( note 5)

_ 39, 707

Total expendit res $ 469, 085

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ _ _ _ _ _ _ The accompanying notes are an integral part of
this statement.

DONALD C. SMALTZ Office of Independent Counsel Notes to Statement of
Expendit res

Note 1 - Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Independent Counsel- Donald C. Smaltz ( OIC
Smaltz) for the 6 months ended September 30, 2001. The statement of
expenditures includes only expenditures made from the permanent, indefinite
appropriation for the office of independent counsel that are processed
through the Administrative Office of the U. S. Courts ( AOUSC) and the OIC.
Mr. Smaltz was appointed on September 9, 1994, to investigate activities of
a former secretary of agriculture. Mr. Smaltz submitted his final report to
the Special Division of the U. S. Court of Appeals for the District of
Columbia Circuit on January 30, 2001. The report was published on October
25, 2001.

Basis of accounting: The accompanying statement of expenditures was prepared
principally on the cash basis of accounting, which is a comprehensive basis
of accounting other than U. S. generally accepted accounting principles.
Under this method, except for personnel compensation and benefits,
expenditures are recorded when the funds are disbursed by AOUSC or, for
noncash trans ers, when charged by AOUSC. Most personnel compensation and
benefits are recorded at the end of the pay period when earned.

Note 2 - Travel

Travel generally includes expenditures or travel paid for OIC- Smaltz
personnel.

Note 3 - Rent, communications, and utilities

Approximately $ 70, 300 in of ice rent is included in rent, communications,
and utilities.

Note 4 - Contract al services

Contractual services primarily consist of expenditures for repair and
maintenance of equipment and for services of experts and other specialists
in areas of interest to the investigation.

Note 5 - Administrative services

AOUSC receives an administrative fee equal to 3 percent of OIC expenditures
or per orming disbursement and accounting functions for OIC Smaltz. Payment
of these fees generally occurs in the month following the services. Also
included in administrative services are other costs incurred by AOUSC in
providing administrative guidance and support to independent counsel
offices. These costs were certified by AOUSC, paid from the independent
counsel appropriation, and allocated to the OIC.

Note 6 - Receipts ( unaudited)

As of September 30, 2001, OIC- Smaltz s convictions and referrals have
resulted in the imposition o $ 11, 803, 082 in criminal ines, civil
penalties, damages, and reimbursement of costs. Approximately $ 10, 905, 536
of that amount has been received and deposited into the U. S. Treasury.

Statement of Expenditures for Special

Appendi x VII

Counsel Danforth JOHN C. DANFORTH Office of Special Counsel Statement of
Expenditures

( Cash basis) Six Months Ended September 30, 2001

Personnel compensation and benefits $ 24, 787

Travel ( note 2) 362

Rent, communications, and utilities ( note 3) 159, 844

Contractual services ( note 4) 505, 829

Supplies and materials 282

Administrative services ( note 5) _ _ 1, 267

Total expendit res $ 692, 371

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ _ _ _ _ _ _ The accompanying notes are an integral part of
this statement.

JOHN C. DANFORTH Office of Special Counsel Notes to Statement of Expendit
res

Note 1 - Accounting policies

Reporting entity: The accompanying statement of expenditures presents the
expenditures of the Office of Special Counsel- John C. Dan orth ( OSC-
Danforth) for the 6 months ended September 30, 2001. The statement of
expenditures includes only expenditures made from the permanent, indefinite
appropriation for OSC- Danforth that are processed through the Department of
Justice. On September 9, 1999, the attorney general appointed John C.
Danforth as a special counsel to investigate the government conduct relative
to events at the Branch Davidian complex near Waco, Texas, on April 19,
1993. Mr. Danforth submitted his inal report to the deputy attorney general
concerning the 1993 confrontation at the Branch Davidian complex on November
8, 2000. Mr. Danforth officially closed his office in March 2001.

Basis of accounting: The accompanying statement of expenditures was prepared
principally on the cash basis of accounting, which is a comprehensive basis
of accounting other than U. S. generally accepted accounting principles.
Under this method, except for personnel compensation and benefits,
expenditures are recorded when the funds are disbursed by the Department of
Justice. Personnel compensation and benefits are recorded at the end of the
pay period when earned.

Note 2 - Travel

Travel generally includes expenditures or investigation- related travel for
OSC- Danforth personnel and detailees rom other components of the Department
of Justice.

Note 3 - Rent, communications, and utilities

Approximately $ 132, 500 in office rent is included in rent, communications,
and utilities. This category also includes rental charges for o fice
furniture.

Note 4 - Contract al services

Contractual services consist primarily of expenditures for contract guard
service, litigation support, automated legal research, and other specialists
in areas of interest to the investigation.

Note 5 - Administrative services

Administrative services represent Department of Justice expenditures for
performing administrative and payroll functions for OSC- Danforth.

(194083)

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a

GAO United States General Accounting Office

Page i GAO- 02- 443 Independent and Special Counsels

Contents

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Appendix I

Appendix I Statement of Expenditures for Independent Counsel Barrett

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Appendix I Statement of Expenditures for Independent Counsel Barrett

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Appendix II

Appendix II Statement of Expenditures for Independent Counsel Bruce

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Appendix II Statement of Expenditures for Independent Counsel Bruce

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Appendix III

Appendix III Statement of Expenditures for Indendent Counsel Lancaster

Page 17 GAO- 02- 443 Independent and Special Counsels

Appendix III Statement of Expenditures for Indendent Counsel Lancaster

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Appendix IV

Appendix IV Statement of Expenditures for Independent Counsel Pearson

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Appendix IV Statement of Expenditures for Independent Counsel Pearson

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Appendix V

Appendix V Statement of Expenditures for Independent Counsel Ray

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Appendix V Statement of Expenditures for Independent Counsel Ray

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Appendix V Statement of Expenditures for Independent Counsel Ray

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Appendix VI

Appendix VI Statement of Expenditures for Independent Counsel Smaltz

Page 27 GAO- 02- 443 Independent and Special Counsels

Appendix VI Statement of Expenditures for Independent Counsel Smaltz

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Appendix VII

Appendix VII Statement of Expenditures for Special Counsel Danforth

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Appendix VII Statement of Expenditures for Special Counsel Danforth

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

Official Business Penalty for Private Use $300

Address Correction Requested Presorted Standard

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