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 				 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
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 [email protected].

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

  GAO's Mission

Obtaining Copies of GAO Reports and Testimony

The General Accounting Office, the audit, evaluation and investigative arm
of Congress, exists to support Congress in meeting its constitutional
responsibilities and to help improve the performance and accountability of
the federal government for the American people. GAO examines the use of
public funds; evaluates federal programs and policies; and provides
analyses, recommendations, and other assistance to help Congress make
informed oversight, policy, and funding decisions. GAO's commitment to
good government is reflected in its core values of accountability,
integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no cost
is through the Internet. GAO's Web site (www.gao.gov) contains abstracts
and full-text files of current reports and testimony and an expanding
archive of older products. The Web site features a search engine to help
you locate documents using key words and phrases. You can print these
documents in their entirety, including charts and other graphics.

Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as "Today's Reports," on its
Web site daily. The list contains links to the full-text document files.
To have GAO e-mail this list to you every afternoon, go to www.gao.gov and
select "Subscribe to e-mail alerts" under the "Order GAO Products"
heading.

Order by Mail or Phone 	The first copy of each printed report is free.
Additional copies are $2 each. A check or money order should be made out
to the Superintendent of Documents. GAO also accepts VISA and Mastercard.
Orders for 100 or more copies mailed to a single address are discounted 25
percent. Orders should be sent to:

U.S. General Accounting Office 441 G Street NW, Room LM Washington, D.C.
20548

To order by Phone: 	Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061

Contact:

To Report Fraud, Web site: www.gao.gov/fraudnet/fraudnet.htm

  Waste, and Abuse in E-mail: [email protected]

Federal Programs Automated answering system: (800) 424-5454 or (202)
512-7470

Jeff Nelligan, Managing Director, [email protected] (202) 512-4800

Public Affairs 	U.S. General Accounting Office, 441 G Street NW, Room 7149
Washington, D.C. 20548
*** End of document. ***