    U.S. Commission on Civil Rights: More Operational and Financial
    Oversight Needed (31-OCT-03, GAO-04-18).

    Over the past 10 years, GAO, the Congress, the Office of
    Personnel Management (OPM), and others have raised numerous
    concerns about the U.S. Commission on Civil Rights. GAO was asked
    to assess (1) the adequacy of the Commission's project management
    procedures, (2) whether the Commission's controls over
    contracting services and managing contracts are sufficient, and
    (3) the extent of recent oversight of the Commission's financial
    activities.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-04-18
        ACCNO:   A08810
      TITLE:     U.S. Commission on Civil Rights: More Operational and
    Financial Oversight Needed
         DATE:   10/31/2003
      SUBJECT:   Civil rights law enforcement
    	     Competitive procurement
    	     Contract administration
    	     Financial management
    	     Financial statement audits
    	     Internal controls
    	     Law enforcement agencies
    	     Procurement practices
    	     Program management

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    GAO-04-18

    United States General Accounting Office

    GAO

    Report to the Chairman, Subcommittee

    on the Constitution, Committee on the Judiciary, House of Representatives

    October 2003

    U.S. COMMISSION ON CIVIL RIGHTS

                    More Operational and Financial Oversight Needed

    GAO-04-18

    Highlights of GAO-04-18, a report to the Chairman, Subcommittee on the
    Constitution, Committee on the Judiciary, House of Representatives

    Over the past 10 years, GAO, the Congress, the Office of Personnel
    Management (OPM), and others have raised numerous concerns about the U.S.
    Commission on Civil Rights. GAO was asked to assess (1) the adequacy of
    the Commission's project management procedures, (2) whether the
    Commission's controls over contracting services and managing contracts are
    sufficient, and (3) the extent of recent oversight of the Commission's
    financial activities.

    GAO recommends, among other things, that the Commission adopt procedures
    that provide for increased commissioner involvement in projects; establish
    greater controls over its contracting activities in order to be in
    compliance with federal regulations; and take steps immediately to meet
    the financial statement preparation and audit requirements of the
    Accountability of Tax Dollars Act of 2002 for fiscal year 2004.

    In commenting on a draft of this report, four of the commissioners agreed
    with GAO's conclusions and recommendations. GAO did not receive comments
    from the remaining four commissioners. In separate comments, the staff
    director indicated he will consider implementing GAO's recommendations but
    took exception with many of GAO's findings of management weaknesses at the
    Commission.

    www.gao.gov/cgi-bin/getrpt?GAO-04-18.

    To view the full product, including the scope and methodology, click on
    the link above. For more information, contact Robert E. Robertson at (202)
    512-7215 or robertsonr@gao.gov.

    October 2003

    U.S. COMMISSION ON CIVIL RIGHTS

    More Operational and Financial Oversight Needed

    The Commission has established a set of project management procedures for
    commissioners and staff to follow when they plan, implement, and report
    the results of approved Commission projects. However, the procedures lack,
    among other things, a requirement for systematic commissioner input
    throughout projects. As a result, commissioners lack the opportunity to
    review many of the reports and other products drafted by Commission staff
    before products are released to the public, which serves to significantly
    reduce the opportunity for commissioners to help shape a report's
    findings, recommendations, and policy implications of civil rights issues.

    The Commission lacks sufficient management control over its contracting
    procedures. The Commission routinely did not follow proper procedures for
    its fiscal year 2002 contracting activities. For the Commission's largest
    dollar contract, key documentation on how the contract was initially
    awarded was missing from contract files. Moreover, Commission officials
    did not follow the legal requirements to obtain competition for its
    subsequent media services contracts. As a result, the Commission did not
    have all of the information it should have had to determine whether its
    contracts provided the best value to the government.

    Little, if any, external oversight of the Commission's financial
    activities has taken place in recent years. An independent accounting firm
    has not audited the Commission's financial statements for the last 12
    years. Although the Accountability of Tax Dollars Act of 2002 requires the
    Commission-along with certain other executive agencies-to have its
    financial statements independently audited annually, the Commission has
    been granted a waiver by the Office of Management and Budget (OMB) from
    compliance with the financial statement preparation and audit requirements
    of the act for the fiscal years 2002 and 2003 audit cycles, which OMB was
    authorized to waive during an initial transition period of up to 2 years.

    Management Reporting Structure, U.S. Commission on Civil Rights

    Source: GAO analysis.

    Contents

      Letter

    Results in Brief
    Background
    Procedures Have Improved, but Lack Some Key Elements of Good

    Project Management Controls Over Commission's Contracting Procedures Are
    Insufficient No Independent Financial Audits Have Been Conducted in Recent

    Years Conclusions Recommendations Agency Comments and Our Evaluation

                                           1

                                          2 4

                                           7

    16

    21 24 25 26

    Appendix I Scope and Methodology

    Appendix II 	Products Issued or Expected to Be Issued after Fiscal Year
    2002

      Appendix III Comments from Four Commissioners

         Appendix IV         Comments from the Commission's Staff Director     40
                                           GAO Comments                        51
          Appendix V          GAO Contacts and Staff Acknowledgments           58
                                           GAO Contacts                        58
                                         Acknowledgments                       58

      Tables

    Table 1: Number of Products Issued by OCRE, OGC, and OSD during Fiscal
    Year 2002, by Type of Product 11 Table 2: OGC, OCRE, and OSD Projects and
    Products, Fiscal Year 2002 30

    Table 3: Number of Products Issued or Expected to Be Issued after Fiscal
    Year 2002 by OCRE and OGC from Projects That Were Ongoing during Fiscal
    Year 2002, by Type of Product

      Figure

    Figure 1: U.S. Commission on Civil Rights, Project Management Reporting
    Structure, Fiscal Year 2002

    Abbreviations

    ASCD Administrative Services and Clearinghouse Division
    FAR Federal Acquisition Regulation
    FPDC Federal Procurement Data Center
    GSA General Services Administration
    NFC National Finance Center
    OCRE Office of Civil Rights Evaluation
    OGC Office of General Counsel
    OMB Office of Management and Budget
    OSD Office of the Staff Director
    RFQ Request for Quotation

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
    work may contain copyrighted images or other material, permission from the
    copyright holder may be necessary if you wish to reproduce this material
    separately.

    United States General Accounting Office Washington, DC 20548

    October 31, 2003

    The Honorable Steve Chabot
    Chairman
    Subcommittee on the Constitution
    Committee on the Judiciary
    House of Representatives

    Dear Mr. Chairman:

    The U.S. Commission on Civil Rights was created as an independent,
    bipartisan, fact-finding agency to protect the civil rights of people in
    the
    United States. The Commission is authorized to undertake projects that
    study the impact of federal civil rights laws and policies and disseminate
    information on its findings through the issuance of reports to the
    Congress
    and the President. In our past work, we recommended to the Commission
    ways to improve how it managed its projects and issued reports.1

    You asked us to assess

    o  the adequacy of the Commission's project management procedures,

    o  	whether the Commission's controls over contracting services and
    managing contracts are sufficient, and

    o  the extent of recent oversight of the Commission's financial
    activities.

    To respond to your request, we reviewed Commission records, applicable
    legislation and regulations, and internal administrative guidance. We
    interviewed all current commissioners, the staff director, key Commission
    officials, and several former Commission officials. We also observed
    several Commission meetings. In addition, we reviewed all projects and all
    contracts that were active during fiscal year 2002.2 Our review focused on

    1See U.S. General Accounting Office, U.S. Commission on Civil Rights:
    Agency Lacks

    Basic Management Controls, GAO/HEHS-97-125, (Washington, D.C.: July 8,
    1997) and U.S.

    Commission on Civil Rights: Update on Its Response to GAO Recommendations,

    GAO/HEHS-98-86R, (Washington, D.C.: Feb. 3, 1998).

    2We did not review the Commission's day-to-day administrative contracts,
    such as those for court reporters, temporary support services, and meeting
    room rentals.

      Results in Brief

    projects undertaken by Commission offices located at headquarters and
    excluded those produced in field office locations.3 Our review also
    focused on whether the Commission maximized competition and followed
    established procedures in purchasing services. See appendix I for a more
    detailed overview of our scope and methodology. We performed our work in
    accordance with generally accepted government auditing standards between
    December 2002 and September 2003.

    The Commission has established a set of project management procedures for
    commissioners and staff to follow when they plan, implement, and report
    the results of approved Commission projects. However, the procedures lack
    certain key elements of good project management that are reflected in
    federal internal control and budget preparation guidance. For example,
    commissioners have not generally received updates about certain project
    cost information. Commissioners, in practice, make many planning decisions
    with little or no discussion of project costs, which can eventually
    contribute to problems such as delayed products and lower-quality products
    if too many projects are undertaken. While some steps are being taken to
    increase the flow of cost information, it remains unclear whether this
    will meet Commission needs. Additionally, Commission procedures do not
    provide for systematic commissioner input throughout projects. As a
    result, commissioners often lack the opportunity to review many of the
    reports and other products drafted by Commission staff before products are
    released to the public, which serves to significantly reduce the
    opportunity for commissioners to help shape a report's findings,
    recommendations, and policy implications of civil rights issues.

    The Commission lacks sufficient management control over its contracting
    procedures. The Commission routinely did not follow proper procedures for
    its fiscal year 2002 contracting activities. For the Commission's largest
    dollar contract-$156,000 for media services-which has been ongoing for
    over 3 years-key documentation on how the contract was initially awarded
    was missing from contract files. Moreover, Commission officials did not
    follow the legal requirements to obtain competition for subsequent media
    services contracts. As a result, the Commission did not have all of the
    information it should have had to determine whether its awards

    3The Commission defines a project as "...a study of civil rights issues
    that culminates in a report, transcript, summary of proceedings, film,
    monograph, or other product for public release...."

    represented the most advantageous offer available to the government. In
    addition, the Commission has inadequate controls over the administration
    of its contracts. For example, information on specific tasks to be
    performed by vendors is communicated orally, not in writing as required by
    the Federal Acquisition Regulation (FAR). As a result, it is difficult for
    the Commission to track vendors' performance against an objective measure
    and ensure that public funds are used in an effective manner.

    Little, if any, external oversight of the Commission's financial
    activities has taken place in recent years. An independent accounting firm
    has not audited the Commission's financial statements for the last 12
    years. Additionally, the Commission is not required by statute to have an
    Office of Inspector General, which can typically conduct regularly
    scheduled or periodic oversight of an agency's financial standing.
    Although the Accountability of Tax Dollars Act of 2002 requires the
    Commission, along with other executive agencies not previously required to
    do so under another statute, to have its financial statements
    independently audited annually, the Commission has been granted a waiver
    by the Office of Management and Budget (OMB) from compliance with the
    financial statement preparation and audit requirements of the act for
    fiscal years 2002 and 2003. During the initial transition period for this
    new requirement, the act permits the OMB Director to waive these
    requirements for up to 2 years.

    This report contains recommendations for improving the Commission's
    project management process and for providing greater transparency and
    control over its contracting and financial management activities. In
    commenting on a draft of this report, four of the commissioners agreed
    with our conclusions and recommendations. We did not receive comments from
    the remaining four commissioners, who include the chairperson and the
    vice-chair. In separate comments, the staff director pointed out that the
    Commission is committed to ensuring that its operations are well
    maintained and will consider implementing whatever recommendations and
    suggestions appear in the final report. However, the staff director
    believed that many of the findings were inaccurate and that aspects of the
    draft report contained errors, unsubstantiated allegations, and
    misinterpretations. After carefully reviewing his concerns, we continue to
    believe that our conclusions and recommendations are well founded. The
    staff director also provided technical comments and clarifications, which
    we incorporated in the report as appropriate. Both sets of comments and
    our detailed responses to the staff director's comments are provided in
    full in appendixes III and IV.

    Background

    The Commission on Civil Rights is a fact-finding federal agency required
    to report on civil rights issues. Established by the Civil Rights Act of
    1957, the Commission is currently directed by eight part-time
    commissioners and employs approximately 70 staff members in fiscal year
    2003. The Commission's annual appropriation has averaged approximately $9
    million since fiscal year 1995. The eight commissioners have a number of
    responsibilities, including investigating claims of voting rights
    violations and studying and disseminating information, often collected
    during specific projects, on the impact of federal civil rights laws and
    policies. Commissioners serve 6-year terms, and they are appointed on a
    staggered basis. Four commissioners are appointed by the President, two by
    the president pro tempore of the Senate, and two by the speaker of the
    House of Representatives. No more than four commissioners can be of the
    same political party.

    The Commission accomplishes its mission by (1) investigating charges of
    citizens being deprived of voting rights because of color, race, religion,
    sex, age, disability, or national origin; (2) collecting and studying
    information concerning legal developments on voting rights; (3) appraising
    federal laws and policies with respect to discrimination or denial of
    equal protection of the laws; (4) serving as a national clearinghouse for
    information; and (5) preparing public service announcements and
    advertising campaigns on civil rights issues. The Commission may hold
    hearings and, within specific guidelines, issue subpoenas to obtain
    certain records and have witnesses appear at hearings.

    The Commission must submit at least one report annually to the President
    and the Congress that monitors federal civil rights enforcement in the
    United States, and such other reports as deemed appropriate by the
    Commission, the President, or the Congress.4 For instance in 2002, the
    Commission issued a report that evaluated the civil rights activities of
    the Departments of Justice, Labor, and Transportation and another on
    election reform. The Commission is also authorized to investigate
    individual allegations of voting rights discrimination. However, because
    it lacks enforcement powers that would enable it to apply remedies in
    individual cases, the Commission refers specific complaints it receives to
    the

    4These reports are termed "statutory" reports. Statutory reports are
    produced in accordance with 42 U.S.C. 1975a(c).

    appropriate federal, state, or local government agency for action.5 A
    staff director, who is appointed by the President with the concurrence of
    a majority of the commissioners, oversees the day-to-day operations of the
    Commission and manages the staff in its six regional offices and
    Washington, D.C., headquarters.

    The Commission also has 51 State Advisory Committees-1 for each state and
    the District of Columbia. Each committee is composed of citizens familiar
    with local and state civil rights issues. The members serve without
    compensation and assist the Commission with its fact-finding,
    investigative, and information dissemination functions.

        Concerns Raised in the Past

    In 1997, we reported that the management of the Commission's operations
    lacked control and coordination.6 Among other findings, we found that
    projects lacked sufficient documentation, project monitoring to detect
    budget delays or overruns was not systematic, and little coordination took
    place among offices within the Commission to approve and disseminate
    reports. Moreover, senior officials were unaware of how Commission funds
    were used and lacked control over key management functions, making the
    Commission's resources vulnerable to misuse. We reported that key records
    had been lost, misplaced, or were nonexistent, leaving insufficient data
    to accurately portray Commission operations. Centralized agency spending
    data resulted in Commission officials being unable to provide costs for
    individual offices or functions. We also found in 1997 that the Commission
    had never requested any audits of its operations, and information
    regarding Commission audits in its fiscal year 1996 report on internal
    controls was misleading.7 The Commission also had not updated
    administrative guidance to reflect a major reorganization that occurred in
    1986. We recommended that the Commission develop and document its policies
    and procedures to assign responsibility for management functions

    5Several agencies have enforcement authority for civil rights issues. For
    example, the Equal Employment Opportunity Commission is charged with
    enforcing specific federal employment antidiscrimination statutes, such as
    Title VII of the Civil Rights Act of 1964, the Americans with Disabilities
    Act of 1990, and the Age Discrimination in Employment Act of 1967. Also,
    the Assistant Attorney General for Civil Rights in the Department of
    Justice is the enforcement authority for civil rights issues for the
    nation.

    6See U.S. General Accounting Office, U.S. Commission on Civil Rights:
    Agency Lacks Basic Management Controls, GAO/HEHS-97-125 (Washington, D.C.:
    July 8, 1997).

    7Federal agencies are required under the Federal Managers' Financial
    Integrity Act of 1982 to report on internal controls annually to the
    President and the Congress.

    to the staff director and other Commission officials and provide
    mechanisms for holding them accountable for proper management of
    Commission operations.

        Federal Regulations Governing Contracting

    Competition Using Simplified Acquisition Procedures

    Awarding a Sole-Source Contract under Simplified Acquisition Procedures

    The FAR, established to codify uniform policies and procedures for
    acquisition by executive agencies, applies to acquisitions of supplies and
    services made by federal executive agencies-including the U.S. Commission
    on Civil Rights-with appropriated funds. The FAR contains procedures for
    awarding both competitive and sole-source contracts and selecting
    contracting officers.8

    The FAR calls for federal agencies to promote competition to the maximum
    extent practicable when making purchases using simplified acquisition
    procedures.9 In 1994, Congress authorized the use of simplified
    acquisition procedures for acquisitions not exceeding $100,000.10 Under
    those procedures, agency officials may, among other things, select
    contractors using expedited evaluation and selection procedures and are
    permitted to keep documentation to a minimum. In 1996, Congress authorized
    a test program that permits federal agencies to use simplified acquisition
    procedures for commercial items not exceeding $5 million.11 The authority
    to issue solicitations under this test program is set to expire on January
    1, 2004.12

    When they award on a sole-source basis,13 contracting officers are
    required by regulations to prepare a written justification explaining the
    absence of competition. The regulations also generally require public
    notices of proposed sole-source awards. Further, contracting officers must
    determine that the price of a sole-source award is reasonable. This
    determination may be based on evidence such as (1) market research,

    8"Contracting officer" means a person with the authority to enter into,
    administer, and/or terminate contracts and make related determinations and
    findings.

    9FAR part 13.

    10Federal Acquisition Streamlining Act of 1994, Pub. L. No. 103-355, 108
    Stat. 3243.

    11Clinger-Cohen Act of 1996, Pub. L. No. 104-106, Divs. D, E, 110 Stat.
    642.

    12FAR subpart 13.500(d).

    13"Sole-source acquisition" means a contract for the purchase of supplies
    or services that is entered into or proposed to be entered into by an
    agency after soliciting and negotiating with only one source.

    Using the Federal Supply Schedule

      Procedures Have Improved, but Lack Some Key Elements of Good Project
      Management

    (2) current price lists or catalogs, (3) a comparison with similar items
    in related industry, or (4) a comparison to an independent government cost
    estimate.

    Under the Federal Supply Schedule, the General Services Administration
    (GSA) awards contracts to several companies supplying comparable products
    and services. These contracts can then be used by any federal agency to
    purchase products and services. As a general rule, the Competition in
    Contracting Act of 1984 requires that orders under the Federal Supply
    Schedule result in the lowest overall cost alternative to meet the needs
    of the agency.14 The FAR and GSA procedures generally require agencies to
    compare schedule offerings of multiple vendors in arriving at an award
    decision.

    The Commission has established a set of project management procedures for
    commissioners and staff to follow when they plan, implement, and report
    the results of approved Commission projects. However, the procedures lack
    certain key elements of good project management that are reflected in
    federal internal control and budget preparation guidance.15 For example,
    commissioners do not generally receive updates about certain project cost
    information. Commissioners, in practice, make many planning decisions with
    little or no discussion of project costs, which can eventually contribute
    to problems such as delayed products and lower-quality products if too
    many projects are undertaken. Additionally, Commission procedures do not
    provide for systematic commissioner input throughout projects. In
    practice, commissioners do not always have the opportunity to review many
    of the reports and other products drafted by Commission staff before
    products are released to the public, which serves

    14If this requirement is met, and the program has been open to all
    responsible sources, the competition requirements of the Competition in
    Contracting Act are satisfied. See 10 U.S.C. S: 2302(2)(C) and 41 U.S.C.
    S: 259(b)(3).

    15We used a combination of OMB, private sector, and our guidance as
    criteria to identify key elements of good project management. These
    criteria included U.S. General Accounting Office, Standards for Internal
    Control in the Federal Government, GAO/AIMD-00-21.3.1 (Washington, D.C.:
    Nov. 1999); Preparation and Submission of Budget Estimates (2002) (OMB
    Circular No. A-11, Part 2); Project Management Scalable Methodology Guide
    ( 1997, James R. Chapman); A Guide to the Project Management Body
    of Knowledge (PMBOKGuide-2000 Edition (The Project Management
    Institute, September 2003); and Project Management-Conventional Project
    Management (Northern Institute of Technology, Hamburg, March 2002). See
    appendix I, for additional details about our criteria.

    to significantly reduce the opportunity for commissioners to help shape a
    report's findings, recommendations, and policy implications of civil
    rights issues.

        Commission Has Updated Its Management Policies and Procedures to Better
        Manage Projects

    The Commission has made a number of improvements in project management
    since our 1997 review. For example, the Commission has revised and
    established policies that clarify the roles of the staff director and
    senior Commission staff such as the assistant staff director of the Office
    of Civil Rights Evaluation (OCRE) and the general counsel in the Office of
    the General Counsel (OGC), both of whom report directly to the staff
    director. These three key Commission officials are responsible for
    carrying out the policies established by the eight commissioners and for
    directly overseeing and managing virtually all headquarters projects that
    result in Commission products.16 See figure 1 for an abbreviated
    organization chart that shows the reporting relationship between
    commissioners, the staff director, and senior Commission staff.

    16At the time of our current review, the general counsel position was
    vacant and the deputy general counsel was overseeing and managing OGC
    projects and products and reporting to the staff director.

    Senior Commission staff and the project team leaders we interviewed were
    also using various project management procedures to meet target deadlines.
    For example, the assistant staff director, OCRE, and the deputy general
    counsel, OGC, were using a combination of techniques to ensure that
    project deadlines were met. These techniques included weekly meetings with
    staff, weekly or monthly reports from staff, and computer-generated
    schedules to monitor large, complex projects and smaller projects.
    Moreover, all project team leaders were routinely monitoring their
    assigned projects to ensure that projects stayed on schedule. Our review
    determined that the Commission's project management procedures allow
    commissioners, the staff director, senior Commission staff, and project
    team leaders to manage long-range projects that take a year or longer to
    complete as well as time-critical projects that take several months or
    weeks to complete.17 The Commission chairperson, who was also chairperson
    in 1997, is of the opinion that Commission projects and products in fiscal
    year 2002 and later were generally timelier than those products discussed
    in our 1997 report and testimony.18

    Table 1 summarizes the number of Commission products issued during fiscal
    year 2002 by Commission office and by type of product.19 Appendix I
    provides details about project names and product titles produced during
    fiscal year 2002 by those offices that generate headquarters Commission
    products that result from commissioner-approved projects: the Office of
    Civil Rights Evaluation, the Office of General Counsel, and the Office of
    the Staff Director (OSD). In addition, some fiscal year 2002 projects will
    generate products in future years. Appendix II lists the number of

    17Commissioners and Commission staff use the term "emerging issues" to
    describe projects that are generally not identified during the
    Commission's annual project planning cycle but which the commissioners
    decide are high-priority projects as they emerge throughout the year.
    Emerging issues projects generally take less calendar time to complete
    than do larger, more complex projects included in the annual planning
    meeting, during which commissioners decide which projects to undertake.

    18In this review, we did not analyze the timeliness of Commission products
    for comparison with the results of our 1997 review. As agreed with our
    requester, our current review focused on the most recent fiscal year.
    Also, we examined during the current review a more expansive number and
    variety of products than what we reported on in 1997, which made
    comparisons between this review and our 1997 report methodologically
    inappropriate.

    19Of the 43 total products that resulted from these projects as of July
    2003, 32 were issued during fiscal year 2002 and were included in the
    scope of our review. We excluded from our scope 3 products issued during
    fiscal year 2001 and 8 products issued or expected to be issued during
    fiscal years 2003 or 2004.

    products, by type of product, issued or expected to be issued after fiscal
    year 2002 from projects that were ongoing during fiscal year 2002.

    Table 1: Number of Products Issued by OCRE, OGC, and OSD during Fiscal
    Year 2002, by Type of Product

                    Type of product                 OCRE    OGC    OSD      Total
                    Background paper                         1
                       Briefing*                     3       4
                     Briefing paper                  3       4
               Clearinghouse publication*            1
                     Correspondence                  2
                   Executive summary                         4
         Hearing, consultation, and conference*              2
                     Miscellaneous*                  1              1
                    OCRE memorandum                  1
                     OSD memorandum                  1
                     Staff report*                   1
            State advisory committee report*         1
             Statutory and interim reports*          2
                         Total                       16      15     1

    Source: U.S. Commission on Civil Rights.

    Note: Product types marked with an asterisk appear in the Commission's
    Catalog of Publications, September 2003. We ascertained other product
    types based on the document title or from information supplied by
    Commission officials.

        Procedures Do Not Ensure the Inclusion of Cost Information

    Commission procedures do not provide for commissioners and senior
    Commission staff to systematically receive project cost information-
    primarily staff time charges-to help commissioners and senior staff plan
    and monitor projects. Commissioners continue to approve the majority of
    projects and products each year without having any specific information on
    how much the project will cost, or how much similar projects have cost in
    past years. Both federal government guidance and private sector project
    management specialists emphasize the importance of top-level reviews of
    actual performance. Feedback about actual project performance, including
    costs, is basic information essential for sound planning and allocation of
    scarce staff and other dollar resources. Without specific estimates of how
    much staff time will be spent and how much the project and its products
    will cost, Commission planning will continue to be conducted without key
    information. Commissioner approval of projects without key cost
    information may contribute to problems such as delayed

    products and lower-quality products if too many projects are undertaken
    for staff to carry out without additional resources.

    The Commission has taken action to limit the number of major projects that
    it will approve during the Commission's annual long-range planning meeting
    at which commissioners decide which projects to undertake. However,
    commissioners continue to approve new projects throughout the year without
    any detailed feedback from the staff director about the amount of time
    that staff is already committed to spend to complete previously approved
    projects. Unless they periodically receive a comprehensive picture of how
    much current projects have cost to date and how much staff time has
    already been committed, commissioners will continue to make decisions
    about how many and which future projects to undertake, or which current
    projects and costs to adjust, without basic information necessary for
    sound project planning.20

    Without downplaying the value of cost information in project management,
    commissioners have been divided over how much project cost information
    they need. During our review, several commissioners expressed concern,
    both to us and publicly at monthly Commission meetings, that commissioners
    were not receiving sufficient information about project costs. However,
    several other commissioners said that they received a sufficient amount of
    information about the status of projects. In March 2003, the commissioners
    did not pass a motion-the vote was tied 4-4-for the staff director to
    provide them with, among other things, quarterly information about project
    costs that commissioners were not receiving at that time. However, the
    commissioners reached a compromise and passed a subsequent motion in April
    2003 to receive that quarterly cost information. Specifically, the motion
    requires commissioners to receive information quarterly on cost by project
    and by office. A category of information that was in the original motion
    that was not included in the motion that passed includes projects' travel
    costs.

    20Our 1997 review also found that commissioners at that time did not
    receive information on the costs of projects or the personnel working on
    projects. After a vote to approve a project, commissioners were not aware
    of (1) those projects the staff director decides to start; (2) when
    projects are actually started; (3) cost adjustments for projects; (4) time
    frame changes; and (5) personnel changes, all of which can affect the
    timeliness and quality of projects. See U.S. General Accounting Office,
    U.S. Commission on Civil Rights: Agency Lacks Basic Management Controls,
    GAO/HEHS-97-125 (Washington, D.C.: July 8, 1997), pp. 17-19.

    Good project management principles dictate that cost information be
    integrated in a timely manner into project management. As applied to the
    Commission, cost information may be most useful if it is provided on a
    monthly basis. During its monthly meetings, the commission discusses
    whether or not to undertake emerging civil rights issues. These decisions
    will be better informed if, for example, data on costs that are already
    being experienced-or expected on other projects-be included in the monthly
    discussions.

    As of September 2003, commissioners had not begun to receive the agreed
    upon information. Once the commissioners begin to receive the cost
    information, it will be important to assess the extent that the
    information is meeting their collective needs and responsibilities.

        Procedures Do Not Ensure Commissioner Input Once Projects Have Been Approved

    Although the Commission has guidance on project management procedures, we
    found that commissioners have limited involvement in the management of
    commission projects once they have been approved. This condition serves to
    significantly reduce the commissioners' ability to lend their expertise to
    the development of Commission products that address civil rights issues.

    On a positive note, the Commission has a set of written instructions that
    outline the procedures that should be followed to manage its projects.21
    The instructions describe the general steps that should be taken in the
    planning, implementation, and product preparation stages of projects
    undertaken by the commission. For example, the instructions address steps
    for planning projects at the front-end as well as legal review prior to
    the publication of reports.

    Nevertheless, the general nature of the written project management
    guidance limits the involvement of commissioners in project management.
    Specifically, the guidance does not specify the role that commissioners
    play in the implementation and report preparation phases, nor does it
    discuss the timing that commissioners should be involved throughout the
    process. It is especially important to have clear guidance on commissioner
    involvement because commissioners serve on a part-time basis and are not
    headquartered in a central building. Clear guidance on the nature and

    21Administrative Manual, Administrative Instruction 1-6, National Office
    Program Development and Implementation, January 24, 2003.

    timing of commissioner involvement can help commissioners prepare
    themselves to make substantive contributions to implement a project and
    sharpen its conclusions and policy recommendations. In addition, clear
    guidance can help commissioners balance their commission duties with other
    professional duties and travel commitments.

    While the guidance addresses the role of commissioners in the last stage
    of the product preparation phase-final revision and approval prior to
    official release-this guidance only covers 2 of the 15 types of products
    produced by the Commission: statutory reports and clearinghouse reports.22
    In fiscal year 2002, 3 of the Commission's 32 products were either a
    statutory or a clearinghouse report. Put another way, the guidance does
    not dictate that commissioners give final review and approval for 29 of
    the 32 products worked on in fiscal year 2002.23 The 13 product types not
    covered by the guidance include, for example, briefings, briefing papers,
    executive summaries, staff reports, and State Advisory Committee
    reports.24 However, these reports address civil rights issues and as such,
    they could benefit from review by commissioners, as appropriate, as they
    are being developed.

    Further evidence pointing to a lack of commissioner involvement in project
    management is the very general nature of the monthly staff reports-the
    main management tool currently used to keep commissioners informed about
    the progress of projects. The monthly staff report is prepared by the
    staff director and sent to commissioners in preparation for the monthly
    Commission meetings. The report highlights the status of selected on-going
    projects (the report may contain a summary of any of the 15 product
    types). The staff director has the discretion to select the

    22Clearinghouse reports are general purpose, informational reports that do
    not include formal findings, conclusions and recommendations.

    23Two of the 29 products were internal memoranda from senior Commission
    staff to the staff director and were not intended for distribution to the
    public. Consequently, those memoranda do not meet the Commission's
    definition of a product intended for public release and would not
    routinely be expected to be subject to commissioner review.

    24The full list of 13 product types not covered by the written guidance
    include background papers; briefings; briefing papers; briefing summaries;
    correspondence; executive summaries; hearing, consultation, and conference
    transcripts (The Commission defines these as "accurate transcripts of
    testimony at hearings" which the Commission periodically holds at
    headquarters and other locations throughout the United States); internal
    Commission staff memorandums; miscellaneous publications; project
    summaries; staff analyses; staff reports; and State Advisory Committee
    reports.

    projects to include in the monthly report. We reviewed the 11 monthly
    reports that the staff director sent to the commissioners during fiscal
    year 2002 in preparation for the monthly Commission meetings and found
    that information in those reports about the two-volume statutory report
    (and other projects and reports) to be issued during the year was limited
    to general descriptions of project status. For example, regarding the
    Commission's statutory report, commissioners were informed via the staff
    director's monthly reports that "progress on the project has slowed" or
    "staff is working on an initial draft of the report" or "staff has nearly
    completed a draft of the report." These updates did not contain
    information about the project's costs or staff day usage to date, nor
    potential findings or conclusions. Likewise, during the 4-month period
    that the one clearinghouse project and report were being developed, only
    one monthly report even mentioned that project, and none of the four
    monthly staff reports made reference to the anticipated product or the
    anticipated date of report issuance.

    During our review, several commissioners told us that they are often
    unaware of the status and the content of many of the written products that
    result from approved projects until they are published or released by the
    Commission to the public. Moreover, some commissioners expressed
    dissatisfaction with the level of detail on project status contained in
    the monthly report.

    Some commissioners are increasingly concerned about their lack of
    opportunity to review reports and other products drafted by Commission
    staff before they are released to the public. These commissioners believe
    that a lack of periodic commissioner input and review undermines the
    opportunity for commissioners to help shape a report's findings,
    recommendations, and policy implications of civil rights issues. In June
    and July 2003, several commissioners expressed their displeasure publicly
    about this lack of involvement by voting against, or abstaining from,
    acceptance of Commission draft products, in part because the commissioners
    had not had the opportunity to provide input to those projects or
    products. Other commissioners voted to accept the draft reports without
    commenting on their opportunity, or lack thereof, to provide input.

      Controls Over Commission's Contracting Procedures Are Insufficient

    The Commission on Civil Rights lacks sufficient management controls over
    its contracting procedures. In fiscal year 2002, the Commission did not
    follow proper procedures in awarding most of its 11 contracts. For
    example, the Commission's largest dollar contract-currently $156,000-is
    for media services and has been ongoing for over 3 years with the same
    vendor. According to Commission officials, key documentation on how the
    contract was initially awarded was missing from contract files. Moreover,
    Commission officials did not follow the legal requirements to obtain
    competition for subsequent media services contracts. As a result, the
    Commission did not have all of the information it should have had to
    determine if the contract pricing was fair and reasonable. The Commission
    also has inadequate controls over the administration of its contracts. For
    example, information on specific tasks to be performed by vendors is
    communicated orally, not in a performance based statement of work as
    required by regulation. As a result, it is difficult for the Commission to
    track vendors' performance against an objective measure and ensure that
    public funds are used in an effective manner.

        Proper Procedures for Awarding Contracts Were Not Followed

    The Commission did not follow federal contracting regulations for any
    contracts initiated in fiscal year 2002 that were over $2,500.25 All but 4
    of its 11 contracts were at or over this amount. When a government agency
    purchases services, the contracting officer must follow certain
    procedures, though these procedures vary slightly depending on the
    contracting method. Using simplified acquisition procedures, the
    contracting officer may select contractors using expedited evaluation and
    selection procedures and is permitted to keep documentation to a minimum.
    The agency still must, for contracts over $2,500, seek competition to the
    maximum practical extent. If circumstances prevent competition, agencies
    may award "sole-source" contracts, but are required to justify them in
    writing.

    A government agency may also issue orders against contracts that GSA
    awards to multiple companies supplying comparable products and services
    under its Federal Supply Schedule. The FAR and GSA procedures require
    agencies to consider comparable products and services of multiple

    25According to the FAR, $2,500 is considered the "micro-purchase
    threshold" with certain few exceptions. Micro-purchases may be awarded
    without soliciting competitive quotations if the contracting officer or
    individual appointed in accordance with FAR 1.603-3(b) considers the price
    to be reasonable.

    vendors prior to issuing an order over $2,500.26 For service orders, the
    agency must send a request for quotes (RFQ) to at least three Federal
    Supply Schedule contractors based on an initial evaluation of catalogs and
    price lists. The agency must evaluate the quotes based on factors
    identified in the RFQ. GSA's ordering procedures also state that the
    office ordering the services is responsible for considering the level of
    effort and mix of labor proposed to perform specific tasks and for making
    a determination that the total price is fair and reasonable.

    In fiscal year 2002, seven of the commission's contracts were for amounts
    over $2,500, and the Commission did not follow proper procedures for any
    of them. For example, in fiscal year 2002, the Commission ordered its
    media services from a contractor listed on the Federal Supply Schedule.
    Instead of requesting quotes from other Schedule vendors, as required by
    GSA's special ordering procedures, the Commission merely selected the same
    contractor to which it had made improper awards in previous years using
    simplified acquisition procedures.

    A factor that likely caused the Commission to not follow proper
    contracting procedures is that the Commission does not have personnel who
    are sufficiently qualified to conduct several of the required actions. The
    Commission has only two officials authorized to enter into contracts: the
    Acting Chief of the Administrative Services and Clearinghouse Division and
    the staff director.27 However, both officials are operating with limited
    awareness of proper federal contracting procedures.

    By not following proper procedures, the Commission did not obtain the
    benefits of competition and did not meet federal standards of conducting
    business fairly and openly. For example, by not competing its media
    services contract, and by using an incremental approach to obtaining media
    services, the Commission did not make clear the fact that it would have a
    recurring need for media services. Initially, in April 2000, the media

    26In July 2000, GSA revised the ordering procedures for services. These
    "special ordering" procedures now apply to an order for services that
    requires a statement of work.

    27The FAR provides that unless specifically prohibited by another
    provision of law, authority and responsibility to contract for authorized
    supplies and services are vested in the agency head. The agency head may
    establish contracting activities and delegate broad authority to manage
    the agency's contracting functions to heads of such contracting
    activities. At the Commission, the staff director, solely by virtue of his
    position as the administrative head of the agency, is a designated
    contracting official who may also award contracts and act as a contracting
    officer.

    services contract was offered with a 90-day/$25,000 maximum. A series of
    90-day, 60-day, and even 30-day contracts followed, none of which were
    competed. The Commission's relationship with this media services vendor
    has evolved into what is now an annual award with a maximum value of
    $156,000.28 The staff director could not document for us whether the
    agency competed its media services contract initially in 2000,29 and told
    us that it did not compete subsequent awards, including the last 2 years
    using the Schedule. In effect, the Commission denied itself the
    opportunity to choose from a potential pool of bidders because other
    vendors were likely unaware of the contract, the contract's potential
    value or both.

        Contract Administration Lacks Sufficient Internal Control

    The Commission lacks sufficient internal control over the administration
    of its contracts. Examples of internal control activities30 include
    maintaining clear and prompt documentation on all transactions and other
    significant events; evaluating contractor performance; and segregating key
    duties and responsibilities among different people to reduce the risk of
    error or fraud. However, these elements of good organizational management
    are not evident in the Commission's administration of its contract
    activities. For example, the Commission has not met federal requirements
    to establish and maintain proper contract files and to report contract
    actions to the Federal Procurement Data Center (FPDC), just a few of the
    numerous contract administration functions listed in the FAR. As a result,
    the Commission is not promoting the transparency necessary

    28In an attempt to downplay the increasing dollar value of the
    Commission's media services contract, the staff director stated in his
    comments on a draft of this report that the fiscal year 2003 total vendor
    fees related to its media services contract were less than $90,000. We
    were not provided documentation to support of this dollar figure. For
    fiscal year 2002, however, according to documentation from the Commission,
    total vendor fees related to its media services contract were
    approximately $131,225 under a contract maximum of $140,000.

    29No officials are currently employed at the Commission who originally
    awarded the initial contract for media services. Current Commission
    officials could not provide us with documentation to ensure that
    procedures had been properly followed in awarding that contract.
    Subsequent contracts for continued media services were awarded to the
    incumbent contractor.

    30Internal control activities are the policies, procedures, techniques,
    and mechanisms that enforce management's directives, such as the process
    of adhering to requirements for budget development and execution. They
    help ensure that actions are taken to address risks and are considered to
    be essential elements of good organizational management. See U.S. General
    Accounting Office, Standards for Internal Control in the Federal
    Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: Nov. 1999).

    Record-keeping and Reporting Standards Not Met

    to keep the Congress and others informed about the Commission's
    contracting activities.

    According to federal regulations, an agency must establish and maintain
    for a period of 5 years a computer file containing unclassified records of
    all procurements exceeding $25,000.31 Agencies must be able to access
    certain information from the computer file for each contract, such as the
    reason why a non-competitive procurement procedure was used, or the number
    of offers received in response to a solicitation. Agencies must transmit
    this information to the FPDC, the government's central repository of
    statistical information on federal contracting that contains detailed
    information on contract actions over $25,000 and summary data on
    procurements of less than $25,000.32

    The Commission has not followed federal regulations or established
    internal control standards with regard to reporting transactions.
    According to the Acting Chief of the Administrative Services and
    Clearinghouse Division, and to officials at the FPDC, the Commission has
    not met federal reporting requirements to the FPDC for at least the last 3
    fiscal years. The Acting Chief said that a lack of resources is the reason
    for its noncompliance with this federal requirement. Moreover, the FPDC
    was unaware that the Commission, which historically had not entered into
    contracts over $25,000, now had contracts above that amount. FPDC
    officials told us that when they contacted the Commission, officials there
    told the FPDC that they were not able to submit the data because, for
    example, of problems with its firewalls. In addition, Commission officials

    31FAR part 4.601.

    32Executive departments and agencies are required to collect and report
    procurement data quarterly to the FPDC. The FPDC provides data for
    Congress, the executive branch, the private sector, and the public. The
    data are used to measure and assess the impact of federal procurement on
    the nation's economy, the extent to which small business firms and small
    disadvantaged business firms are sharing in federal procurement, the
    impact of full and open competition in the acquisition process, and other
    procurement policy purposes.

    Little If Any Performance Monitoring Being Done

    Commissioner Participation in Contract Management Is Minimal

    did not accept FPDC's offer to come to FPDC's offices and key in the
    data.33

    According to federal regulations, agency requirements for service
    contracts should be defined in a clear, concise performance-based
    statement of work that enables the agency to ensure a contractor's work
    against measurable performance standards.34 Despite these regulations and
    principles of good management, the Commission has not established a system
    to monitor contractors' performance, even for its contract that exceeds
    $100,000. The Commission has no records that document its decision-making
    on this contract. Lack of this basic, well-established management control
    makes the Commission vulnerable to resource losses due to waste or abuse.

    An integral component of good organizational management is a strong
    communication network between key decision-makers. To that end, it is
    vital that information on key transactions be communicated among the staff
    director, the commissioners and other key decision-makers. In addition,
    internal control standards dictate that key duties and responsibilities be
    divided or segregated among different people to reduce the risk of error
    or fraud. This includes the separation of the responsibilities for
    authorizing, processing, recording, and reviewing transactions, and
    handling any related assets. No one individual should control all key
    aspects of a transaction or event.

    Due to the nature of the Commission's operating environment, the staff
    director does not provide information on procurements to the
    commissioners. According to the chairperson of the Commission, contracting
    is one of the duties that the Commission has delegated to the staff
    director. In fact, at public Commission meetings, when

    33At the end of our review, the Commission provided us several documents
    that were purportedly submitted to the FPDC. However, the records were not
    consistent with FPDC documents. Specifically, the Commission sent us
    several completed summary contract action reports (standard forms 281,
    used to report data to the FPDC), showing contract data for selected
    quarters of fiscal years 2000-2003. According to the FPDC's Federal
    Procurement Reports for fiscal years 2000-2002, the Commission did not
    report any data in fiscal years 2000 and 2002 and only submitted first
    quarter data for fiscal year 2001. Moreover, the Commission's standard
    forms 281 covering the first three quarters of fiscal year 2003 are all
    dated August 11, 2003. According to FPDC, new data from the Commission
    regarding fiscal years 2002 and 2003 contracting activity were received on
    September 26, 2003.

    34FAR part 37.602.

    commissioners raised questions concerning contracting activities and
    sought information on contract cost and vendor performance, the
    chairperson asserted that contracting is not an area with which
    commissioners should be concerned. Moreover, a recent motion for
    commissioners to, among other things, be provided with cost and status
    information on contracts and other items failed to pass. Commissioners
    reached a compromise and passed a subsequent motion; however, it did not
    include the provision to receive information on contracts. Although the
    commissioners are charged with setting the policy direction of the agency,
    the Chairperson told us that the decision to contract out for a service is
    not a policy decision. She told us that the decision for the Commission to
    receive a certain service is a policy decision, but whether or not to
    perform that function in-house or contract out for it, is not. Since the
    contracting function is delegated to the staff director, it is her
    position that the commissioners need not know any details, unless there is
    an allegation of fraud, waste, or abuse on the staff director's part. For
    the Commission's largest contract, however, only the staff director has
    knowledge of what is being done, why it is being done and how it is being
    done. The Acting Chief of the Administrative Services and Clearinghouse
    Division is not involved because of the dollar limit on her contracting
    authority. Without greater transparency, the current operating environment
    has no mechanism to elevate concerns about contractual impropriety to the
    Commission.

    The Commission's fiscal activities have not been independently audited in
    at least 12 years. As noted in our 1997 report, the Commission is not
    required by statute to have an Inspector General, which could
    independently and objectively perform financial audits within the agency.
    In addition, for the fiscal year 2002 audit cycle, the Commission received
    a waiver from the federal requirement that its financial statements be
    independently audited.35 The Commission submitted a request to have the
    requirement waived for both the fiscal year 2003 and 2004 audit cycles,
    citing a stable budget and high costs incurred through the agency's

    35Prior to November 2002, federal law did not require the Commission on
    Civil Rights to prepare annual financial statements or have them
    independently audited. The Accountability of Tax Dollars Act of 2002 (Pub.
    L. No. 107-289, 116 Stat. 2049) requires the Commission and other
    executive agencies, not previously required to do so by another statute,
    to begin submitting annual audited financial statements to Congress and
    OMB.

      No Independent Financial Audits Have Been Conducted in Recent Years

    conversion to a new accounting system. OMB granted the waiver for fiscal
    year 2003, but denied the request for the fiscal year 2004 cycle.36

    In addition to this lack of independent financial oversight, the
    Commission's current financial situation is not transparent within the
    agency. The majority of the agency's budget-related information is
    centralized, with only the staff director and the chief of the Budget and
    Finance Division having a detailed knowledge of the Commission's financial
    status. However, both the body of the commissioners, which heads the
    organization, and senior Commission officials, who are responsible for
    planning and carrying out Commission projects, only know what is reported
    to them by the staff director. On the basis of our interviews with
    commissioners and other Commission officials, we found that information on
    costs is limited. As a result of the centralized nature of the
    Commission's financial operations, financial oversight is structured in a
    way that precludes appropriate checks and balances.

    Moreover, the Commission has in place a policy that discourages individual
    commissioners and their special assistants from making inquiries of any
    nature to Commission staff and to direct all inquiries to staff through
    the staff director.37 The policy dictates that commissioners not make
    direct contact with staff but work through the staff director to exchange
    information with staff and vice-versa. According to Commission
    documentation, this policy is meant to ensure that requests are carried
    out and to avoid confusion and difficult or embarrassing situations
    between staff and commissioners. One memo we saw even stated that
    violations of this policy could result in appropriate disciplinary action.
    Another stated that circumventing the staff director can only create
    confusion and disorder within the agency. According to some commissioners
    we spoke with, as well as senior Commission managers, this policy stifles
    communication and productivity within the agency and creates an

    36OMB waived the fiscal year 2002 requirement for all covered agencies
    that had not prepared audited financial statements in the past, including
    the Commission, pursuant to a provision allowing the OMB Director to grant
    such a waiver for the first 2 fiscal years after the law's enactment.
    Additionally, the law permits the OMB Director to exempt a covered agency
    from the requirement in any given fiscal year, if its budget in the fiscal
    year does not exceed $25 million and if the Director determines that an
    audited financial statement is not warranted due to an absence of risks
    associated with the agency's operations, demonstrated performance, or
    other relevant factors.

    37This policy likewise discourages Commission staff from contacting
    commissioners or each commissioner's special assistant, instead directing
    all inquiries through the staff director.

    environment of uneasiness.38 In addition, while some commissioners believe
    it is their fiscal duty to oversee the financial activities of the
    Commission and want complete financial information, others do not and cite
    their part-time status as the reason why they do not seek more information
    on financial activities. The commissioners who have the latter view
    believe that the fiscal responsibility of the agency lies with the staff
    director.

    In the absence of independent financial oversight, what is known about the
    Commission's financial status suggests an austere financial picture. The
    staff director has characterized the Commission's financial condition in
    public meetings as "challenging." In fact, although the Commission's
    budget has remained at essentially the same level for about the last 10
    years, it has incurred several new costs associated with operations. For
    example, the Commission recently converted its accounting and payment
    processing system from the National Finance Center (NFC) to the Department
    of Treasury's Bureau of the Public Debt at a cost to the Commission of
    almost $300,000.39 In addition, Commission officials cited an increase of
    more than $130,000 in rent for the Commission's headquarters and field
    offices over the past year. Moreover, the Commission's financial condition
    has affected its operations. For example, the Commission ordered a
    moratorium, citing funding limitations, on all previously authorized and
    new travel by the agency's regional staff or State Advisory Committee
    members between late March 2003 and the end of July 2003. In addition, the
    Commission's financial status has left it unable to reduce its high staff
    vacancy rate, which now stands at 20 percent.40

    38Other commissioners we spoke with, however, believed the policy was
    implemented to allow staff to better manage its work requirements.

    39This figure includes a one-time fee of approximately $93,000. Annual
    costs are nearly $200,000 compared with $54,000 under NFC. Officials at
    the Commission told us that the Commission had to convert its accounting
    and payment processing system as they could no longer use NFC, due to a
    decision by NFC to no longer offer accounting and payment processing
    services to non-USDA agencies.

    40The Commission had no unfilled permanent positions at the end of fiscal
    year 1997 and had two vacancies at the end of fiscal 1998. The Commission
    had 10 unfilled positions at the end of fiscal year 1999, 9 at the end of
    fiscal year 2000, and 18 at the end of fiscal years 2001 and 2002.
    Although the Commission reports 3 vacancies in its Public Affairs Unit,
    Commission officials have outsourced the agency's public affairs function.

    Conclusions

    While the Commission has taken steps in recent years to improve its
    operations, it nevertheless continues to operate in a manner not fully
    consistent with sound management principles. These principles dictate that
    key decision makers receive timely information on project cost and have a
    vehicle throughout the project process to communicate their ideas and
    expertise. We recognize that commissioners should soon be receiving more
    information on project costs than had been previously received. While it
    remains to be decided whether the amount and timing of this information
    will meet the Commission's needs, the challenge now facing commissioners
    is to partner toward the strategic use of cost information. In addition,
    the current level of commissioner involvement in the reporting phase of
    Commission products does not ensure that products are reflecting the full
    and wide-ranging expertise of the commissioners and as such, the potential
    impact of Commission products can be limited. This outcome can undermine
    the important mission of the Commission-to help inform and guide the
    nation on civil rights issues

    The Commission's procurement of services is not being conducted in
    accordance with established internal control standards or federal
    regulations. We have long held that an agency's internal control
    activities are an integral part of its planning, implementing, reviewing,
    and accountability for stewardship of government resources and achieving
    effective results. Without the proper internal controls, there is little
    public assurance that funds are being spent in a proper and effective
    manner. As a result of the Commission's weak contract management
    operations, the Commission does not have all of the information it should
    have to determine that the contracts it is entering into are reasonable
    and offer the best value to the government.

    Although the dollar amount involved in its contracting activities
    represents a small percentage of its overall appropriation, such
    expenditures are growing. But regardless of the amount spent on
    contracting, there is a need for the Commission to take steps now to
    ensure that current and future contract actions are performed in
    compliance with established regulations. If the Commission does not adhere
    to these regulations, then transparency cannot be established and no
    assurance can be given to the public that the Commission's activities are
    leading to the proper and efficient use of public funds.

    The Commission has not had an independent audit of its financial
    statements in recent years. The requirement for the Commission to prepare
    and submit an audited financial statement, included in the Accountability
    of Tax Dollars Act of 2002, is an important step to

    strengthening its financial and performance reporting. However, these
    benefits have yet to be realized. Given the Commission's limited financial
    management controls and current budget situation, the lack of external
    oversightparticularly in terms of financial audits-may make the Commission
    vulnerable to resource losses due to waste, mismanagement or abuse.
    Although funding an independent audit could represent a significant new
    cost to the Commission, these audits are essential to the sound
    stewardship of federal funds. Our longstanding position has been that the
    preparation and audit of financial statements increase accountability and
    transparency and are important tools in the development of reliable,
    timely, and useful financial information for day-to-day management and
    oversight. Preparing audited financial statements also leads to
    improvements in internal control and financial management systems.

                                    Recommendations

    To further the Commission's efforts to better plan and monitor project
    activities, we recommend that the Commission

    o  	monitor the adequacy and timeliness of project cost information that
    the staff director will soon be providing to commissioners and make the
    necessary adjustments, which could include providing information on a
    monthly rather than quarterly basis, as necessary; and

    o  	adopt procedures that provide for increased commissioner involvement
    in project implementation and report preparation. These procedures could
    include giving commissioners a periodic status report and interim review
    of the entire range of Commission draft products so that, where
    appropriate, commissioners may help fashion, refine, and provide input to
    products prior to their release to the public.

    To ensure proper contracting activities at the Commission, we recommend
    that the Commission

    o  	establish greater controls over its contracting activities in order to
    be in compliance with the Federal Acquisition Regulation. These controls
    could include putting in place properly qualified personnel to oversee
    contracting activities, properly collecting and analyzing information
    about capabilities within the market to satisfy the Commission's needs,
    and properly administering activities undertaken by a contractor during
    the time from contract award to contract closeout.

    While the Commission has received waivers from preparing and submitting
    audited financial statements for fiscal years 2002 and 2003, we recommend
    that the Commission

    o  	take steps immediately in order to meet the financial statement
    preparation and audit requirements of the Accountability of Tax Dollars
    Act of 2002 for fiscal year 2004. These steps toward audited fiscal year
    2004 financial statements could include, for example, (1) identifying the
    skills and resources that the Commission needs to prepare its financial
    statements in accordance with generally accepted accounting principles and
    comparing these needs to the skills and resources that the Commission
    presently has available; (2) preparing such financial statements, or at
    least the balance sheet with related note disclosures, for fiscal year
    2003; and (3) ensuring that evidence is available to support the
    information in those financial statements.

                                    Agency Comments
                                   and Our Evaluation

    The U.S. Commission on Civil Rights provided us with two sets of comments
    on a draft of this report. We received comments from four commissioners
    and from the Commission's Office of the Staff Director. Commissioners
    Kirsanow, Redenbaugh, Thernstrom, and Braceras concurred with our
    conclusions and recommendations on the management practices at the
    Commission. Their comments are reproduced in their entirety in appendix
    III. We did not receive comments from the remaining four commissioners,
    who include both the chairperson and the vice-chair of the Commission.

    In comments from the Office of the Staff Director, the staff director
    pointed out that the Commission is committed to ensuring that its
    operations are well maintained and will consider implementing whatever
    recommendations and suggestions that appear in the final report. However,
    the staff director believed that many of the findings were inaccurate and
    that aspects of the draft report contained errors, unsubstantiated
    allegations, and misinterpretations. For example, the staff director
    disagreed with our finding that the Commission lacks sufficient management
    controls over its contracting procedures and concluded the Commission's
    overall fundamental contract practices are sound. Similarly, he disagreed
    with our findings concerning weaknesses in project and financial
    oversight. After carefully reviewing his concerns, we continue to believe
    that our conclusions and recommendations are well founded. The staff
    director's detailed comments and our responses to them are contained in
    appendix IV. Finally, the staff director also provided a

    number of technical comments and clarifications, which we incorporated, as
    appropriate.

    As arranged with your office, unless you announce its contents earlier, we
    plan no further distribution of this report until 30 days after its issue
    date.
    At that time, we will provide copies of this report to interested
    congressional committees. We are also sending copies to the
    commissioners and the staff director, U.S. Commission on Civil Rights. We
    will also make copies available to others upon request. In addition, the
    report will be available at no charge on GAO's Web site at
    http://www.gao.gov.

    Please contact me on (202) 512-7215 or Brett Fallavollita on (202)
    512-8507
    if you or your staff have any questions about this report. Other contact
    and
    staff acknowledgments are listed in appendix V.

    Sincerely yours,

    Robert E. Robertson,
    Director, Education, Workforce, and

    Income Security Issues

                           Appendix I: Scope and Methodology

    During our review of the U.S. Commission on Civil Rights' activities, we
    focused on the management of individual projects, as we had done during
    our 1997 review and examined them in the context of broader management
    issues at the Commission. For example, to analyze the Commission's
    expenditures on projects since 1997 in the context of both the project
    spending discussed in our 1997 report as well as in comparison with the
    Commission's most recent budget request, we reviewed the Commission's
    annual Request for Appropriation for fiscal years 1999 through 2004, which
    provided data on how the Commission actually spent its appropriations for
    fiscal years 1997 through 2002. We noted that the Commission's fiscal year
    2004 Request for Appropriation requests a significant increase in funding,
    from $9 million in fiscal year 2002 to $15 million in fiscal year 2004.
    Consequently, we not only focused on how well the Commission currently
    manages its projects, but also considered the implications of potentially
    significant increases in project and product spending and the human
    resources need to properly manage such increases.

    We used a combination of Office of Management and Budget (OMB), private
    sector, and our own guidance as criteria to identify key elements of good
    project management. These criteria included U.S. General Accounting
    Office, Standards for Internal Control in the Federal Government,
    GAO/AIMD-00-21.3.1 (Washington, D.C.: Nov. 1999); Preparation and
    Submission of Budget Estimates (2002) (OMB Circular No. A-11, Part 2);
    Project Management Scalable Methodology Guide ( 1997, James R.
    Chapman); A Guide to the Project Management Body of Knowledge
    (PMBOK Guide)-2000 Edition (The Project Management Institute,
    Sept. 2003); and Project Management-Conventional Project Management
    (Northern Institute of Technology, Hamburg, Mar. 2002). Our standards for
    internal control list top-level review of actual performance (e.g.,
    commissioner review of actual project cost) as a key control activity. OMB
    Circular No. A-11 emphasizes the importance of managing financial assets.

    To supplement the general guidance on good project management principles
    described in OMB's and our guidance to agencies, we identified several
    private sector principles, practices, and techniques for good project
    management at the individual project level. For example, the Project
    Management Scalable Methodology Guide ( 1997, James R. Chapman)
    and the Project Management Institute's A Guide to the Project Management
    Body of Knowledge (PMBOK Guide)-2000 Edition identify project
    management principles for small, straightforward projects as well as a
    best practices approach for large, complex projects. According

    Appendix I: Scope and Methodology

    to these principles, regardless of project size or degree of risk, sound
    project cost management calls for comparisons between project plans and
    actual project performance-even for projects with minor levels of
    investment and low risk.

    We reviewed the most recent complete fiscal year's project activities at
    the time of our review (fiscal year 2002) and identified 22 projects and
    43 products (briefings, executive summaries, internal memorandums,
    reports, etc.) that resulted from those projects. Of the 43 total products
    that resulted from these projects as of July 2003, we included in our
    review the 32 issued during fiscal year 2002. We excluded 3 products
    issued during fiscal year 2001 and 8 products issued or expected to be
    issued during fiscal years 2003 or 2004.

    Table 2 provides details about project names and product titles produced
    during fiscal year 2002 by those offices that generate headquarters
    Commission products that result from commissioner-approved projects: the
    Office of Civil Rights Evaluation (OCRE), the Office of General Counsel
    (OGC), and the Office of the Staff Director (OSD). The OSD product
    resulted from a project initiated by the staff director rather than from
    the commissioners. Table 2 also includes a State Advisory Committee report
    from Alaska because OCRE staff assisted in preparing the report. The table
    excludes an Arizona State Advisory Committee briefing and State Advisory
    Committee reports from Iowa and Pennsylvania in 2002 because OCRE staff
    were not involved in preparing the briefing or those reports. Some fiscal
    year 2002 projects will generate products in future years. (See app. II.)

                           Appendix I: Scope and Methodology

          Table 2: OGC, OCRE, and OSD Projects and Products, Fiscal Year 2002

    GAO-assigned Products and GAO-assigned product numbers (43 project total
    products, 32 products in FY 2002)

    number Project title (Bold = FY 2002 = within GAO Scope) Project cost OGCa

    Crossing Borders           1. Briefing December 8, 2000            $50,290
                         2. Executive Summary December 8, 2000: "Crossing
                         Borders: An Examination of Civil Rights Issues
                        Raised by Current Immigration Laws, Policies, and
                                           Practices"

    Boundaries of Justice 3. Briefing October 12, 2001

    4. Executive Summary October 12, 2001: "Briefing on Boundaries of Justice:
    Immigration Policies Post-September 11th"

    5. Briefing June 21, 2002

    6. Executive Summary June 21, 2002: "Briefing on Haitian Asylum Seekers
    and U.S. Immigration Policy" (Miami, Florida)

    1 + 2 Crossing Borders/Boundaries of Justice 	7. Project Summary January
    2003: "Crossing Borders: The Administration of Justice and Civil Rights
    Protections in the Immigration and Asylum Context"

    Florida Election Reform           8. Briefing June 2002           $109,329
                               9. Briefing Paper June 13, 2002: "Voting
                                               Rights in
                                         Florida 2002: The Impact of the
                                                     Commission's Report
                                and the Florida Election Reform Act of
                                                 2001"
                                  10. Executive Summary August 2002:
                                                "Voting
                                        Rights in Florida 2002"

    4 Environmental Justice 11. Hearing January 2002

    12. Briefing Paper January 4, 2002: "Environmental Justice Hearing"

    13. Hearing February 2002

    14. Briefing Paper February 8, 2002: "Environmental Justice Hearing"

    5 Education Accountability 	15. Briefing Paper January 30, 2003: "Briefing
    Paper for Education Accountability, February 6, 2003"

    16. Briefing February 6, 2003

    17. Executive Summary June 2003: "Education Accountability and High-Stakes
    Testing in North Carolina"

                                        $234,926

                                        $162,570

    b

    6 Native American Project Health Careb

    Appendix I: Scope and Methodology

    GAO-assigned Products and GAO-assigned product numbers (43 project total
    products, 32 products in FY 2002)

    number Project title (Bold = FY 2002 = within GAO Scope) Project cost OCRE

    7  Racial Privacy Actc             18. Briefing May 17, 2002             c
                              19. Briefing Paper May 2002: "Enforcement Without
                               Evidence? Consequences of Government Race Data
                                      Collection Bans on Civil Rights"
                              20. Executive Summary July 2002: "Briefing on the
                               Consequences of Government Race Data Collection
                                            Bans on Civil Rights"

              USA Patriot Act/Homeland 21. Background Paper July 2002:    $17,864
                              Security "Protecting Civil
    (Revisiting Anti-Terrorism Act) Liberties in the New Homeland
                                       Security Department"
                                       22. Staff Analysis October 2002:
            Supreme Court Review       "Supreme Court                      $6,700
                                       Civil Rights and Related Cases:
                                       The 2001 - 2002
                                                     Term"

    Ten-Year Check-Up Volume 23. Statutory Report September 2002:     $310,542
                              1 "Ten-Year
                                Check-Up: Have Federal Agencies
                                Responded to
                                 Civil Rights Recommendations? Volume I:
                                                             A Blueprint
                                     for Civil Rights Enforcement"

    Ten-Year Check-Up Volume 2	24. Statutory Report September 2002: "Ten-Year
    Check-Up: Have Federal Agencies Responded to Civil Rights Recommendations?
    Volume II: An Evaluation of the Departments of Justice, Labor, and
    Transportation"

    Beyond Percentage Plans 	25. Staff Report November 2002: "Beyond $121, 895
    Percentage Plans: The Challenge of Equal Opportunity in Higher Education"

    Voting Rights Procedures 26. Briefing March 9, 2001: "Voting Rights $9,337
                     Nationwide Overview"
                                27. Staff Report November 2001: "Election
                                Reform:
                                An Analysis of Proposals and the
                                Commission's
                                Recommendations for Improving America's
                                Election
                                                 System"

    Post Terrorism Initiatives  28. OSD Memorandum December 6, 2001:   $15,532
                                   "Recent
                                   Civil Rights Developments Relating to
                                   Anti-Terrorism
                                                  Efforts"
        Post Terrorism Initiatives 29. OCRE Memorandum July 11, 2002:
                            Update "Update on
                                   December 2001 Memorandum on Post-9/11
                                   Civil
                                               Rights Issues"

    16 Bioterrorism 30. Briefing March 8, 2002

    31. Briefing Paper March 8, 2002: "Bioterrorism and Health Care
    Disparities"

    17    The Individuals with       32. Briefing April 12, 2002       $33,294
           Disabilities Education
            Act Reauthorization
                                  33. Briefing Paper April 12, 2002:
                                  "Making A Good
                                  IDEA Better: The Reauthorization of the
                                  Individuals
                                     with Disabilities Education Act"

    Appendix I: Scope and Methodology

    GAO-assigned Products and GAO-assigned product numbers (43 project total
    products, 32 products in FY 2002)

    number Project title (Bold = FY 2002 = within GAO Scope) Project cost

    34. Correspondence May 17, 2002

    35. Correspondence January 8, 2003

    Welfare Reauthorization 36. Briefing July19, 2002

    37. Briefing Paper July 2002: "Comparison and Analysis of the 1996 Welfare
    Reform Bill and 2002 Proposals"

    38. Miscellaneous (A Statement of the U.S. Commission on Civil Rights)
    August 2002: " A New Paradigm for Welfare Reform: The Need for Civil
    Rights Enforcement"

    39. Correspondence August 2002

    d

    Alaska State Advisory Committee Reportd 40. State Advisory Committee
    Report April 2002: "Racism's Frontier: The Untold Story of Discrimination
    and Division in Alaska"

    Funding Civil Rights Enforcement   41. Clearinghouse Publication April   e
                                (2002)e             2002: "Funding
                                           Federal Civil Rights Enforcement:
                                                      2000-2003"
              Federal Funding of Native 42. Report July 2003: "A Quiet Crisis:  f
                               American                 Federal
                                           Funding and Unmet Needs in Indian
                   Programs                            Country"

    OSD

    g

    Anniversary Update on Commission Activities 43. Miscellaneous September
    2002: "Anniversary Related to September 11g Update on Commission
    Activities Related to September 11"

                        Total 22 43 (32 in FY 2002) $1,072,279h

    Source: Commission staff.

    aThis list of OGC products does not reflect that OGC also produces
    internal briefing books for the commissioners in connection with hearings
    and briefings. OGC briefing books include a briefing or background paper;
    briefing or hearing agenda; witness lists with biographical information;
    copies of reports or studies conducted by each witness that are relevant
    to the issues presented; an explanation of the purpose and scope of the
    witness panels; relevant federal and state statutes; and other information
    deemed necessary for understanding the subject matter being presented
    during the hearing or briefing. Briefing books are prepared for
    commissioner use only, may contain privileged material, and are not made
    available to the public.

    bThe Commission originally approved a project titled Native American
    Access to Justice for fiscal year 2001. The project was postponed until
    fiscal year 2002 due to emerging issues and other project work. During
    fiscal year 2002, the project was again postponed due to the Environmental
    Justice and the Education Accountability projects being given higher
    priority and for additional commissioner guidance to staff about the
    nature and scope of further Native American project work. The Commission
    terminated the access to justice project in November 2002, and in January
    2003 changed the focus of the Native American project from administration
    of justice to health care. According to the staff director, there were no
    costs associated with either the access to justice project or the health
    care project during fiscal year 2002.

    Appendix I: Scope and Methodology

    cAccording to the staff director, the work performed for the Racial
    Privacy Act briefing and summary was charged under a general legal code
    and, therefore, there were no specific cost data for this activity. The
    OGC deputy general counsel told us that the practice of using a general
    legal code sometimes occurs when staff perform general or miscellaneous
    legal work of short duration that needs to be completed within brief time
    frames. The deputy explained that legal work associated with most projects
    approved by the Commission is charged to the specific individual code
    established for each project assigned to the General Counsel' s office.

    dAccording to the staff director, the costs associated with OCRE's work on
    the Alaska State Advisory Committee Report were not tracked by office but
    were captured to include all State Advisory Committee expenses associated
    with this project. However, the staff director did not provide us with a
    total cost figure for this project or with the proportion of total costs
    that were spent by headquarters staff and by the region. If the
    Commission's project cost accounting system is to be considered accurate
    and complete, it should be able to account for the total costs associated
    with this type of field-headquarters collaborative effort product.

    eAccording to the staff director, in fiscal year 2002 the Funding Civil
    Rights Enforcement project was tracked by OCRE as a monitoring activity,
    and a separate code for that project has been established since that time.

    fThe Commission approved an OCRE Native American project in December 2001.
    OCRE began work on this project in September 2002.

    gThe project team leader told us that his time associated with the OSD's
    work on the anniversary update project was not charged to a separate code
    established for that report, but rather was charged to a general code that
    includes many similar types of relatively short-term efforts. This project
    was initiated by the staff director rather than by the commissioners.

    hExcludes costs for those projects and products described in notes b
    through g.

    Appendix II: Products Issued or Expected to Be Issued after Fiscal Year 2002

    This appendix lists the number of products, by type of product, issued or
    expected to be issued after fiscal year 2002 from projects that were
    ongoing during fiscal year 2002. (See app. I.)

    Table 3: Number of Products Issued or Expected to Be Issued after Fiscal
    Year 2002 by OCRE and OGC from Projects That Were Ongoing during Fiscal
    Year 2002, by Type of Product

                             Type of product OCRE OGC Total

    Briefinga 1

    b

    Correspondence 1 (January 2003)

                                       Executive

                                        summary

    a

    1

    c

    Hearing 1 (FY 2004)

    Project summary 1 (January 2003)d

                            Report                                   1 (FY 2004)a
                                            1 (July 2003)e           1 (FY 2004)c
                    Staff analysis                              1 (October 2002)f
                      Staff report      1 (November 2002)g
                             Total                       3           7

    Source: Commission staff.

    aEducation Accountability project briefing February 2003, executive
    summary May 2003, and report due fiscal year 2004.

    bThe Individuals with Disabilities Education Act Reauthorization.

    cNative American Project Health Care hearing (or briefing) and report
    projected for fiscal year 2004.

    dCrossing Borders: The Administration of Justice and Civil Rights
    Protections in the Immigration and Asylum Context.

    eA Quiet Crisis: Federal Funding and Unmet Needs in Indian Country.

    fSupreme Court Civil Rights and Related Cases: The 2001 - 2002 Term.

    gBeyond Percentage Plans: The Challenge of Equal Opportunity in Higher
    Education.

    Appendix III: Comments from Four Commissioners

    Appendix III: Comments from Four Commissioners

    Appendix III: Comments from Four Commissioners

    Appendix III: Comments from Four Commissioners

    Appendix III: Comments from Four Commissioners

    Appendix IV: Comments from the Commission's Staff Director

    Note: GAO comments supplementing those in the report text appear at the
    end of this appendix.

               Appendix IV: Comments from the Commission's Staff Director

    See comment 1. See comment 2. See comment 3.

    See comment 4.

               Appendix IV: Comments from the Commission's Staff Director

                                     See comment 5.

                             See comment 6. See comment 7.

                                     See comment 8.

                                     See comment 9.

               Appendix IV: Comments from the Commission's Staff Director

    See comment 10. See comment 11. See comment 12.

               Appendix IV: Comments from the Commission's Staff Director

    See comment 13.

    See comment 14.

    See comment 15. See comment 16. See comment 17.

               Appendix IV: Comments from the Commission's Staff Director

                                    See comment 18.

                                    See comment 19.

               Appendix IV: Comments from the Commission's Staff Director

                                    See comment 20.

                                    See comment 21.

                                    See comment 22.

                                    See comment 23.

                                    See comment 24.

               Appendix IV: Comments from the Commission's Staff Director

                                    See comment 25.

                                    See comment 26.

                                    See comment 27.

               Appendix IV: Comments from the Commission's Staff Director

                                    See comment 28.

                                    See comment 30.

                                    See comment 31.

                                    See comment 32.

                                    See comment 29.

               Appendix IV: Comments from the Commission's Staff Director

                                    See comment 33.

                                    See comment 34.

                                    See comment 35.

    Appendix IV: Comments from the Commission's Staff Director

    Appendix IV: Comments from the Commission's Staff Director

      GAO Comments

    1. 	Our draft report clearly indicates that we found deficiencies in the
    project management practices at the Commission. We focused largely on the
    role of the Commissioners because they comprise the Commission which,
    under the applicable statute, has ultimate responsibility in providing
    reports to Congress and the President, and carrying out other statutory
    responsibilities.

    2. 	We do not concur with the staff director's comment that the Commission
    has rejected the desirability of Commissioners shaping the findings and
    recommendations of Commission projects. Commission staff play an important
    role in running projects and helping produce reports, but their
    involvement does not diminish the important role that commissioners can
    and should play in shaping reports on civil rights issues.

    3. 	We disagree that our draft failed to acknowledge the Commissioners'
    role in helping scope projects. The draft indicates that Commissioners
    have some involvement, albeit limited, in the planning process. Our basic
    point remains: procedures do not provide for systematic commissioner input
    throughout projects and in practice, commissioners do not always have the
    opportunity to review many of the reports and other products drafted by
    the staff before they are released to the public.

    4. 	We believe that the draft report accurately portrays the amount of
    information provided to commissioners and project managers about ongoing
    projects. We based our assessment on the (limited) information that has
    been provided to commissioners and project managers in the recent past.
    Project managers told us that, during fiscal years 2002 and 2003 (as of
    August), they were not regularly receiving project cost data and staff
    hour information. Additionally, the draft recognized that arrangements
    have recently been made to provide additional information to
    commissioners. As we noted in a draft recommendation, the efficacy of this
    action will need to be monitored. For example, the staff director's first
    project cost report on September 30, 2003, in response to the
    commissioners' April 2003 vote for quarterly cost information, was
    incomplete because it did not contain cost information for at least two
    projects that had been regularly reported in monthly staff director
    reports during fiscal year 2003.

    5. 	In our discussions with Commission officials subsequent to the
    December 18, 2002, letter, we discussed in further detail the scope of our
    review. We indicated that our review would primarily focus on current
    management operations and not entail a specific point-by-point

    Appendix IV: Comments from the Commission's Staff Director

    assessment of the Commission's implementation of our past recommendations.
    Nevertheless, during our review, we learned that the Commission had made a
    number of improvements since our 1997 review. Our draft report discusses
    these improvements. However, our review was not intended to evaluate
    either the improvement in timeliness or the quality of Commission products
    since our 1997 review. Notably, Commissioners Kirsanow, Redenbaugh, and
    Thernstrom expressed concern in their written response to our report that
    although we did not include an assessment of the quality of Commission
    products, they found that "reports lack the substantive and methodological
    rigor worthy of the Commission's history and seal." The staff director may
    wish to pursue the commissioners' comments in further detail.

    6. As noted above, our report includes this recent development.

    7. 	The staff director believes that our sentence in the draft stating
    that the report contains recommendations for improving Commission
    operations should be deleted or at least modified to reflect that
    recommendations are directed at commissioners and not staff offices. We do
    not believe that a change is warranted. The implementation of our
    recommendations will clearly involve the commissioners, the staff
    director, and officials throughout the agency.

    8. 	The Commission's responsibilities are described in the applicable
    statute. See 42 U.S.C. 1975a. We have qualified our description of the
    responsibilities we list in our report.

    9. 	Our draft report noted that improvements in certain project management
    procedures have been made.

    10. We believe that the staff director's comment that project milestone
    dates are routinely provided to commissioners in monthly reports from the
    staff director is an overstatement. Our draft report noted that, during
    fiscal year 2002, the staff director's monthly reports to the
    commissioners in preparation for their monthly meetings did not contain a
    comprehensive list of project milestone dates for all ongoing projects.
    Furthermore, fiscal year 2003 staff director reports to the commissioners
    generally did not list all ongoing projects and did not include estimated
    product issuance dates or project completion dates for most projects. This
    information was maintained and routinely updated when warranted by OCRE
    and OGC project managers for project planning, management and monitoring
    purposes but was not reported in the staff director's monthly reports to
    the commissioners.

    Appendix IV: Comments from the Commission's Staff Director

    11. As we note in comment 5, our review was not intended to evaluate the
    quality of Commission products.

    12. We shared a draft of tables 1 and 2 with the staff director and other
    senior staff before we sent the draft report to the Commission. The
    officials indicated that the tables were generally accurate. Nevertheless,
    we made technical corrections, as appropriate, in areas clarified by the
    Commission.

    13. The purpose of the table in which the footnote in question appears is
    to provide details about the projects produced by those offices that
    generate headquarters products. The footnote intends to inform the reader
    about an OGC internal product not contained in the body of the table. The
    footnote is not intended to convey collateral duties. Therefore, we did
    not add the information suggested by the staff director. We note, however,
    the draft report contained a background paragraph which lists the
    activities carried out by the Commission to accomplish its mission,
    including the investigation of charges of citizens being deprived of
    voting rights because of color, race, religion, sex, age, disability, or
    national origin.

    14. The products that the staff director refers to were accurately
    described in our draft report as expected to be issued after fiscal year
    2002, as he acknowledges in his description of expectations regarding each
    product.

    15. We continue to believe that our findings on the extent of financial
    oversight at the Commission are factually correct. Moreover, the
    recommendations we made in the draft report were based on the deficiencies
    we found in the Commission's management practices.

    16. We do not agree that the draft report implied that a flow of financial
    information from the staff director to the commissioners is inappropriate.
    In fact, the concern the draft highlights is that information is
    centralized around the staff director, creating a situation that precludes
    appropriate checks and balances.

    17. We believe that the Commission's internal communication policy was an
    appropriate aspect of Commission operations for us to review. As noted in
    our draft report, some commissioners, as well as senior Commission
    managers, told us they believe that the current policy stifles
    communication and productivity within the agency and creates an
    environment of uneasiness. Moreover, the Commission's policy limiting
    direct commissioner and staff interaction is not consistent with sound
    management principles of highly effective organizations.

    Appendix IV: Comments from the Commission's Staff Director

    Finally, we do not believe the longevity of a policy justifies its
    existence when the need for change becomes apparent.

    18. While it is true that the Commission has several large dollar
    agreements with other agencies, these agreements are not contracts awarded
    pursuant to the FAR, and our review did not extend to them. Our review was
    limited to an examination of how well the Commission used its contracting
    authority for purchases above the micro-purchase threshold. Our review
    focused on the extent to which the Commission complied with regulatory
    requirements applicable to these procurements.

    19. When we requested a list of all contracts for which the Commission
    budgeted or paid funds against in fiscal year 2002, the Commission
    provided us with a list of 11 contracts and orders awarded by the
    Commission. The staff director correctly points out that we requested and
    received information on a 12th contract that was entered into in fiscal
    year 2003. This contract was specifically brought to our attention by our
    requester, but fell outside the timeframe we included in our scope. The
    draft has been corrected to show 11 contracts reported by the Commission
    as ongoing in fiscal year 2002. The change in the number of contracts we
    are reporting on did not affect in any manner our findings or conclusions.

    20. Our draft report has been revised to report 11 as the number of
    contracts that the Commission listed to us that it entered into in fiscal
    year 2002. The Commission noted in a letter accompanying the list,
    however, that its list of contracts did not include the Commission's
    day-to-day administrative contracts, such as those for court reporters,
    temporary support services, and meeting room rentals. In discussions with
    the staff director and the acting chief, Administrative Services and
    Clearinghouse Division, we were told, as the staff director restates here,
    that these administrative contracts were modest and done through small
    scale purchase orders below the micro-purchase threshold. We noted in our
    draft report that we did not include these contracts in our review.

    21. We disagree with the staff director's conclusion, and the logic used
    to reach that conclusion, that the Commission's contracting practices are
    currently sound. We recognize that the Commission has undertaken many
    other contracting actions. We did not include these in our analysis
    because of the reasons stated in comments 18 and 20. Our review of the 11
    contracts provided to us reveals that the Commission did not follow proper
    procedures for the majority of these contracts, that is, all 7 above the
    micro-purchase threshold.

    Appendix IV: Comments from the Commission's Staff Director

    22. We refer the staff director to the list of 11 contracts provided to us
    earlier in our review, 7 of which were of amounts exceeding the
    micro-purchase threshold. The Commission, in addition to lacking
    documentation on whether some contracts were competed, could not provide
    documentation to support that publicity requirements were met for other
    purchases, nor in the absence of such documentation, written
    justifications from contract files that would explain why those
    requirements were not met.

    23. The staff director acknowledges that the Commission could improve its
    recordkeeping and documentation procedures in terms of contract
    maintenance. He indicates that we erroneously state that the Commission
    did not compete its media services contract. In fact, our report states
    that the Commission could not document that it competed the initial media
    services contract. Without such documentation, we cannot ascertain whether
    or not this or certain other contracts at the Commission were, in fact,
    competed. We believe documentation deficiencies constitute a material
    breach of proper contracting activities.

    24. The staff director's comments support our finding that documentation
    deficiencies were found across the contracts we reviewed. To the extent
    that an unfamiliarity with specific requirements contributed to the
    deficiencies, our draft recommendation for greater controls, including the
    need for qualified personnel to oversee contracting activities, becomes
    underscored.

    25. We continue to believe that the Commission did not follow proper
    procedures in awarding any of its contracts over the micro-purchase
    threshold, and that this condition limited the Commission's ability to
    obtain the benefits of competition. Concerning the 2 contracts
    specifically mentioned in the staff director's comments, we found that the
    Commission did in fact send out requests for quotations; however, it could
    not document that it had met other regulatory requirements, such as the
    requirements for publicizing proposed contract actions that serve to
    ensure that the vendor community is made aware of an agency's need for
    services. By not doing so, the Commission limited the potential pool of
    bidders because other vendors were likely unaware of the contract and
    therefore did not have the opportunity to submit bids.

    26. We continue to believe that the manner in which the Commission
    obtained media services from the Federal Supply Schedule was not
    consistent with GSA's established ordering procedures. While it is true
    that the GSA has clarified its regulation language to make clear its

    Appendix IV: Comments from the Commission's Staff Director

    intent that soliciting from three vendors is mandatory, the staff director
    in his comments ignores the requirements in those earlier regulations to
    prepare an RFQ, transmit the request to contractors, and evaluate the
    responses before selecting the contractor to receive the order. We
    maintain that even the earlier version of GSA's regulation was
    sufficiently clear in its requirement to solicit quotes from more than one
    vendor.

    27. For the reasons cited in comments 28 and 30, we do not agree that we
    imposed subjective and arbitrary criteria when assessing the soundness of
    the Commission's contracting activities.

    28. While the Commission's concern for small, traditionally disadvantaged
    and women-owned businesses is laudable, it does not provide a license for
    circumventing established contracting regulations and procedures to
    achieve these ends. We are aware of the Small Business Administration's
    8(a) program. Having elected not to pursue the 8(a) program, however, it
    was incumbent upon the Commission to adhere to procedures governing its
    choice of procurement vehicles. The regulations do not state nor imply
    that agencies promoting small disadvantaged or women-owned businesses in
    government procurement may dispense with the other requirements, such as
    the requirement to solicit multiple bids. Moreover, we note that OMB
    Circular A-76 does not encourage contracting out but merely establishes
    procedures for public-private competition.

    29. We disagree. The Commission's relationship with its media services
    vendor has evolved into a de facto annual award. In addition, for fiscal
    year 2003, the contract had a maximum value of $156,000. We did not
    request records from the Commission in attempt to tally a fiscal year 2003
    total of funds actually spent. We did, however, tally a fiscal year 2002
    total of funds spent on the media services contract and found that
    $131,225 was spent on a "not-to-exceed" limit of $140,000. We have added a
    footnote in the report section to clarify this point.

    30. We disagree with the staff director's belief that our findings are
    subjective and erroneous. We continue to believe that it is important to
    provide written performance-based requirements documents and do not
    believe that simplified acquisition procedures preclude this need.

    31. As our draft report stated, written performance-based requirements
    documents can help ensure contractors' work against measurable standards.

    Appendix IV: Comments from the Commission's Staff Director

    32. For the 7 contracts we reviewed with amounts above the micro-purchase
    threshold, the Commission did not provide contractors in writing with
    specific task orders, instead providing oral information on tasks to be
    performed. For example, for its largest contract (media services), a broad
    statement of work with little detail was written to accompany the order.
    The staff director told us that he meets regularly with the contractor to
    discuss specific tasks under the order. As we state in comment 31, without
    written performance-based requirements documents, contractors' work
    products cannot be successfully evaluated in a transparent manner.

    33. The Commission does not maintain written information on specific work
    tasks communicated to the vendor, expected timeframes for specific tasks
    to be performed, or the definition or description of how tasks were to be
    performed. Rather, the work reports that the staff director refers to
    consisted of several press releases, meant to illustrate activities
    performed by its media services vendor and copies of vendor invoices that
    showed tasks such as, media outreach/story placement, faxing, planning and
    consultation, etc., for which the Commission was billed. We continue to
    believe that the Commission cannot effectively assess contractor
    performance based on the documentation we were provided.

    34. The staff director recognizes that the Commission has experienced
    significant turnover with regard to its contracting personnel. Yet he
    disagrees with our characterization that the Commission's current
    personnel are not sufficiently qualified in certain areas of contracting.
    The problems identified in this report should alert the Commission to the
    necessity of improving its contracting support or to look for outside
    assistance in this area.

    35. To conduct our review, we relied upon the extensive legal and
    technical assistance available within our agency. When issues arose during
    our interviews that required either GAO or Commission officials to conduct
    additional analysis, then a follow-on discussion usually transpired. We
    stand behind the findings reported in the draft report.

    Appendix V: GAO Contacts and Staff Acknowledgments

      GAO Contacts Acknowledgments

    (130222)

    Brett Fallavollita, Assistant Director (202) 512-8507 Monika Gomez,
    Analyst-in-Charge (202) 512-9062

    Dennis Gehley made significant contributions to this report, in all
    aspects of the work throughout the review. In addition, Caterina Pisciotta
    assisted in gathering and analyzing information and in writing a section
    of the report; Lori Rectanus was instrumental in developing our overall
    design and methodology; Corinna Nicolaou assisted in report and message
    development; Julian Klazkin and Robert Ackley provided legal support; and
    Ralph Dawn and H. Kent Bowden provided specialized assistance in the areas
    of contract and financial management.

    Page 58 GAO-04-18 U.S. Commission on Civil Rig

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