Financial Audit: American Battle Monuments Commission's Financial
Statements for Fiscal Years 2005 and 2004 (01-MAR-06,
GAO-06-348).
In accordance with 36 U.S.C. 2103, GAO is responsible for
conducting audits of the agencywide financial statements of the
American Battle Monuments Commission (the Commission). GAO
audited the financial statements of the Commission for the fiscal
years ended September 30, 2005, and 2004. The audits were done to
determine whether, in all material respects, (1) the Commission's
financial statements were reliable, and (2) Commission management
maintained effective internal control over financial reporting
and compliance with laws and regulations. Also, GAO tested
Commission management's compliance with selected laws and
regulations. The Commission was created in 1923 to commemorate
the sacrifices and achievements of U.S. Armed Forces where they
have served overseas since April 6, 1917, and at locations within
the United States as directed by Congress. The Commission
designs, administers, operates, and maintains 24 American
military cemeteries on foreign soil and 25 federal memorials,
monuments, and markers, 22 of which are on foreign soil. The
Commission was also responsible for designing and constructing
the national World War II Memorial on the Capitol Mall in
Washington, D.C., and for maintaining six nonfederal memorials
with funds provided by those memorials' sponsors.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-348
ACCNO: A48020
TITLE: Financial Audit: American Battle Monuments Commission's
Financial Statements for Fiscal Years 2005 and 2004
DATE: 03/01/2006
SUBJECT: Accounting standards
Auditing standards
Financial management
Financial records
Financial statement audits
Internal controls
Reporting requirements
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GAO-06-348
* Report to Congressional Committees
* March 2006
* FINANCIAL AUDIT
* American Battle Monuments Commission's Financial Statements for
Fiscal Years 2005 and 2004
* Contents
* Opinion on Financial Statements
* Opinion on Internal Control
* Reportable Conditions
* Deficient Controls over Information Technology Systems
* Improper Recognition of Property and Accounts Payable
* Compliance with Laws and Regulations
* Consistency of Other Information
* Objectives, Scope, and Methodology
* Commission Comments and Our Evaluation
* Annual Financial Report of the American Battle Monuments Commission
United States Government Accountability Office
Report to Congressional Committees
GAO
March 2006
FINANCIAL AUDIT
American Battle Monuments Commission's Financial Statements for Fiscal Years
2005 and 2004
a
FINANCIAL AUDIT
American Battle Monuments Commission's Financial Statements for Fiscal
Years 2005 and 2004
What GAO Found
In GAO's opinion, the financial statements of the American Battle
Monuments Commission as of September 30, 2005, and 2004, and for the
fiscal years then ended, are presented fairly, in all material respects,
in conformity with U.S. generally accepted accounting principles. Also in
GAO's opinion, the Commission maintained effective internal control over
financial reporting (including safeguarding of assets) and compliance with
laws and regulations as of September 30, 2005. In addition, GAO found no
instances of Commission noncompliance in fiscal year 2005 with selected
provisions of laws and regulations GAO tested.
However, GAO's work identified inadequate internal controls as of
September 30, 2005, in two areas of information technology and in
recognition of property and accounts payable that we considered to be
reportable conditions. The Commission recorded audit adjustments to
correct its property and accounts payable at year-end and is working to
improve internal controls in these areas in the future.
For fiscal year 2005, the Commission incurred program costs of $42.7
million to maintain its 24 cemeteries and 25 federal memorials from
appropriated funds. It also incurred program costs of $4.3 million for
construction, dedication, and other costs related to the World War II
Memorial funded by private contributions and investment earnings. On
November 1, 2004, the World War II Memorial was transferred to the
National Park Service, which assumed responsibility for its perpetual
care. Another $0.2 million of program costs were incurred by other trust
funds for grave site flowers and repair and maintenance of nonfederal
memorials funded by private contributions.
World War I St. Mihiel American Cemetery and Memorial, Thiaucourt, France
United States Government Accountability Office
Contents
Letter
Auditor's Report 2
Opinion on Financial Statements 2
Opinion on Internal Control 2
Reportable Conditions 3
Compliance with Laws and Regulations 5
Consistency of Other Information 5
Objectives, Scope, and Methodology 5
Commission Comments and Our Evaluation 8
Appendix
:Annual Financial Report of the American Battle Monuments Commission 9
Annual Financial Report 9
Management's Discussion and Analysis 10
Consolidating Balance Sheet 18
Consolidating Statement of Net Cost and Changes in Net Position 19
Consolidating Statement of Budgetary Resources 20
Consolidating Statement of Financing 21
Notes to the Consolidating and Consolidated Financial Statements 22
Other Information 31
Required Supplementary Information 32
Schedules of Heritage Assets 33
Abbreviations
FMFIA Federal Managers' Financial Integrity Act of 1982
OMB Office of Management and Budget
This is a work of the U.S. government and is not subject to copyright
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separately.
A
United States Government Accountability Office Washington, D.C. 20548
March 1, 2006
The Honorable Larry E. Craig Chairman The Honorable Daniel K. Akaka
Ranking Minority Member Committee on Veterans' Affairs United States
Senate
The Honorable Steve Buyer Chairman The Honorable Lane Evans Ranking
Minority Member Committee on Veterans' Affairs House of Representatives
In accordance with 36 U.S.C. 2103, this report presents the results of our
audits of the American Battle Monuments Commission's (the Commission)
financial statements for the fiscal years ended September 30, 2005, and
2004.
We are sending copies of this report to the Chairmen and Ranking Minority
Members of the Senate Committee on Appropriations and the House Committee
on Appropriations. We are also sending copies to the Secretary of the
Treasury, the Director of the Office of Management and Budget, the
Chairman of the Commission, and other interested parties. In addition,
this report will be available at no charge on the GAO Web site at
http://www.gao.gov.
Should you or your staffs have any questions concerning this report,
please contact me at (202) 512-3406. Key contributors to this engagement
were Roger R. Stoltz, Patricia A. Summers, Bruce E. Cain, Erik S. Huff,
Jesus J. Moreno, Jeremy F. Cockrum, and Brian M. Lanners. Contact points
for our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report.
Steven J. Sebastian Director Financial Management and Assurance
A
United States Government Accountability Office Washington, D.C. 20548
To the Chairman of the American Battle Monuments Commission
In accordance with 36 U.S.C. 2103, we are responsible for conducting
audits of the agencywide financial statements of the American Battle
Monuments Commission (the Commission). In our audits of the Commission's
financial statements for fiscal years 2005 and 2004, we found
o the consolidating financial statements as of and for the fiscal year
ended September 30, 2005, and comparative consolidated totals as of
and for the fiscal year ended September 30, 2004, are presented
fairly, in all material respects, in conformity with U.S. generally
accepted accounting principles;
o although internal controls should be improved, the Commission
maintained effective internal control over financial reporting
(including safeguarding assets) and compliance with laws and
regulations as of September 30, 2005; and
o no reportable noncompliance with laws and regulations we tested.
The following sections discuss in more detail (1) these conclusions and
our conclusions on Management's Discussion and Analysis and other
supplementary information and (2) the objectives, scope, and methodology
of our audit.
Opinion on Financial Statements
The Commission's consolidating balance sheet as of September 30, 2005, and
its related consolidating statements of net cost and changes in net
position; budgetary resources; and financing, with accompanying notes for
the fiscal year then ended, and comparative consolidated totals as of and
for the fiscal year ended September 30, 2004, are presented fairly, in all
material respects, in conformity with U.S. generally accepted accounting
principles.
Opinion on Internal Control
Although certain internal controls should be improved, the Commission
maintained, in all material respects, effective internal control over
financial reporting (including safeguarding assets) and compliance as of
September 30, 2005. Internal control provided reasonable assurance that
misstatements, losses, or noncompliance material in relation to the
consolidating financial statements would be prevented or detected on a
timely basis. Our opinion is based upon criteria established under 31
U.S.C. 3512 (c), (d) [Federal Managers' Financial Integrity Act (FMFIA)],
and Office of Management and Budget (OMB) Circular No. A-123, Management
Accountability and Control (June 21, 1995).
However, our work identified the need to improve certain internal
controls, as described below, that we consider reportable conditions.
Reportable conditions are significant deficiencies in the design or
operation of internal control that, in our judgment, could adversely
affect the Commission's ability to meet internal control objectives or
meet OMB criteria for reporting matters under FMFIA. In addition,
misstatements may occur in other Commission financial information not
included in this report as a result of these reportable conditions.
During our audit, we noted deficiencies in controls over information
Reportable Conditions
technology systems and in recognition of property and accounts payable as
of September 30, 2005. Commission management disclosed these conditions in
its fiscal year 2005 FMFIA report and is working to implement corrections
for all internal control deficiencies.
Deficient Controls over Inadequate controls over information technology
systems were identified in the two following areas.
Information Technology
Systems o User documentation: While the Commission's existing accounting
system, implemented on October 1, 2001, has adequate user documentation,
there continued to be a lack of user documentation to support its older
legacy subsystems that were still used during fiscal year 2005, primarily
for payroll. This condition has existed since our first audit of the
Commission's financial statements in fiscal year 1997 and includes the
Clipper system used by the European Regional Office and the dBase IV
system used by the Mediterranean Regional Office. Commission personnel
have learned how to use these legacy subsystems over the years, primarily
through on-the-job training, and have limited support to explain how
subsystems functions should be performed and to answer questions.
In January 2004, this condition was partially corrected when payroll
processing for the Commission's General Schedule employees was converted
to the General Services Administration, which provided
Improper Recognition of Property and Accounts Payable
sufficient user documentation. During fiscal year 2005, a contractor began
designing and documenting a new payroll system for the Commission's
Foreign Service National employees, which is to be operational by
September 30, 2006. Further efforts to improve user documentation are
ongoing.
o Security program and access controls: During our fiscal year 2005
audit, we continued to identify some security controls over the
Commission's computer system, such as administrative controls over network
configuration, passwords, and access to files, that were not effective at
all Commission locations as of September 30, 2005. This condition may
allow unauthorized parties access to the Commission's computer system and
network resources that could result in damage, deletion, or theft of
computerized data. Since the installation of the Commission's automated
accounting system in fiscal year 2002, we have conducted annual security
and general controls reviews. In separate Limited Official Use reports
issued after our fiscal years 2002 through 2004 audits, we communicated
detailed information and made specific recommendations to strengthen
Commission internal controls in information technology, accounting
procedures, and financial reporting. While the Commission has implemented
many of these recommendations, further efforts are needed.
As of September 30, 2005, the Commission had not recognized almost $1
million of property and accounts payable in its accounting records. Proper
expensing of heritage asset additions, while capitalizing and depreciating
general property additions over accounting policy limits, is necessary for
accountability and proper presentation. Proper cutoff of accrued
liabilities for goods, services, and benefits received in fiscal year
2005, but invoiced and paid in fiscal year 2006, is also necessary for
accountability and proper presentation. We noted that while proper
accounting for property and payables has improved during fiscal year 2005,
year-end adjustments were still needed to correct property balances by
$0.4 million and accounts payable by $0.6 million as of September 30,
2005. Thus, in our view, these two matters continue to represent a
reportable condition.
In an effort to meet Department of the Treasury year-end closing
requirements for fiscal year 2005 by November 15, 2005, Commission
accounting staff did not allow for a thorough review of closing balances
at headquarters. This would include adjustment of obviously incorrect
balances such as a credit balance in a property account that properly has
a debit balance, and a failure to recognize a liability for September 2005
construction costs for the Normandy Interpretive Center. In addition, a
vacant finance officer position at the Commission's European Regional
Office during year-end closing stretched headquarters and regional
accounting resources. Despite these conditions, the Commission has made
significant improvement in reducing its postclosing accounting adjustments
from 45 for fiscal year 2004 to zero for fiscal year 2005. The Commission
subsequently corrected property and accounts payable accounts discussed
above through year-end audit adjustments in order to fairly present its
financial statements for fiscal year 2005 in conformity with
U.S. generally accepted accounting principles.
Our tests of the Commission's compliance with selected provisions of laws
and regulations for fiscal year 2005 disclosed no instances of
noncompliance reportable under U.S. generally accepted government auditing
standards or OMB audit guidance. However, the objective of our audit was
not to provide an opinion on overall compliance with laws and regulations.
Accordingly, we do not express such an opinion.
Compliance with Laws and Regulations
Consistency of Other Information
The Commission's Management Discussion and Analysis and other information
related to heritage assets contain a wide range of data, some of which are
not directly related to the financial statements. We do not express an
opinion on this information. However, we compared this information for
consistency with the financial statements and discussed the methods of
measurement and presentation with officials of the Commission. On the
basis of this limited work, we found no material inconsistencies with the
financial statements or nonconformance with OMB guidance.
Objectives, Scope, and Methodology
Commission management is responsible for (1) preparing the financial
statements in conformity with U.S. generally accepted accounting
principles; (2) establishing, maintaining, and assessing internal control
to provide reasonable assurance that the broad internal control objectives
of FMFIA are met; and (3) complying with applicable laws and regulations.
We are responsible for obtaining reasonable assurance about whether
(1) the Commission's financial statements are presented fairly, in all
material respects, in conformity with U.S. generally accepted accounting
principles, and (2) Commission management maintained effective internal
control that provides reasonable assurance that the following objectives
were met:
o Financial reporting: Transactions are properly recorded, processed,
and summarized to permit the preparation of financial statements and
other information in conformity with U.S. generally accepted
accounting principles, and assets are safeguarded against loss from
unauthorized acquisition, use, or disposition.
o Compliance with applicable laws and regulations: Transactions are
executed in accordance with (1) laws governing the use of budgetary
authority; (2) other laws and regulations that could have a direct and
material effect on the financial statements; and (3) any other laws,
regulations, or governmentwide policies identified by OMB guidance.
We are also responsible for (1) testing compliance with selected
provisions of laws and regulations that have a direct and material effect
on the financial statements and for which OMB guidance requires testing
and
(2) performing limited procedures with respect to certain other
information appearing in the Commission's annual financial report. In
order to fulfill these responsibilities, we
o examined, on a test basis, evidence supporting the amounts and
disclosures in the financial statements;
o assessed the accounting principles used and significant estimates made
by Commission management;
o evaluated the overall presentation of the financial statements;
o obtained an understanding of internal control related to financial
reporting (including safeguarding assets) and compliance with laws and
regulations (including execution of transactions in accordance with budget
authority);
o obtained an understanding of the recording, processing, and summarizing
of performance measures as reported in the Commission's Management's
Discussion and Analysis;
o tested relevant internal controls over financial reporting and
compliance, and evaluated the design and operating effectiveness of
internal control;
o considered the process for evaluating and reporting on internal
control and financial management systems under FMFIA; and
* tested compliance with selected provisions of the following laws
and regulations:
o the Commission's enabling legislation codified in 36 U.S.C.
Chapter 21,
o public laws applicable to the World War II Memorial Fund,
o Departments of Veterans' Affairs and Housing and Urban
Development, and Independent Agencies Appropriations Act,
2005,
o Miscellaneous Appropriations and Offsets Act, 2005,
o Antideficiency Act,
o Pay and Allowance System for Civilian Employees, and
o Prompt Payment Act.
We did not evaluate all internal controls relevant to operating objectives
as broadly defined by FMFIA, such as those controls relevant to preparing
statistical reports and ensuring efficient operations. We limited our
internal control testing to those controls over financial reporting and
compliance. Because of inherent limitations in internal control,
misstatements due to error or fraud, losses, or noncompliance may
nevertheless occur and not be detected. We also caution that projecting
our evaluation to future periods is subject to the risk that controls may
become inadequate because of changes in conditions or that the degree of
compliance with controls may deteriorate.
We did not test compliance with all laws and regulations applicable to the
Commission. We limited our tests of compliance to those required by OMB
audit guidance that we deemed applicable to the Commission's financial
statements for the fiscal year ended September 30, 2005. We caution that
Commission Comments and Our Evaluation
noncompliance may occur and not be detected by these tests and that such
testing may not be sufficient for other purposes.
We performed our work in accordance with U.S. generally accepted
government auditing standards and OMB audit guidance.
Commission management was provided with a draft of this report and
concurred with its facts and conclusions.
Steven J. Sebastian Director Financial Management and Assurance
January 31, 2006 Appendix I
Annual Financial Report of the American Battle Monuments Commission
Annual Financial Report
ANNUAL FINANCIAL REPORT THE AMERICAN BATTLE MONUMENTS COMMISSION FOR THE YEAR
ENDED SEPTEMBER 30, 2005
Management's Discussion and Analysis
AMERICAN BATTLE MONUMENTS COMMISSION
ANNUAL FINANCIAL REPORT
MANAGEMENT'S DISCUSSION AND ANALYSIS (MDA)
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005
Commission Profile
The American Battle Monuments Commission (the Commission)-guardian of
America's overseas commemorative cemeteries and memorials-honors the
service, achievements and sacrifice of United States Armed Forces. Since
1923, the Commission has executed this mission by (1) commemorating the
achievements and sacrifices of United States Armed Forces where they have
served since April 6, 1917, through the erection and maintenance of
suitable memorial shrines; (2) designing, constructing, operating and
maintaining permanent American military burial grounds in foreign
countries; and (3) controlling the design and construction on foreign soil
of U.S. military memorials, monuments, and markers by other U.S. citizens
and organizations, both public and private, and encouraging their
maintenance. Our fiscal year 2005 appropriation supported our continued
commitment to the worldwide responsibilities that flow from this mission.
In performance of its mission, the Commission administers, operates and
maintains 24 permanent American military cemeteries; 25 Federal memorials,
monuments, and markers; and six nonfederal memorials. While three
memorials are located in the United States, the remaining memorials and
all of our cemeteries are located in 14 foreign countries, the U.S.
Commonwealth of the Northern Mariana Islands, and the British dependency
of Gibraltar. These cemeteries and memorials are among the most beautiful
and meticulously maintained shrines in the world. As of September 30,
2005, interred in the cemeteries are 124,917 U.S. War Dead: 30,921 of
World War I, 93,246 of World War II, and 750 of the Mexican American War.
Additionally, 6,133 American Veterans and others are interred in the
Mexico City and Corozal Cemeteries. The Commission's World War I, World
War II, and Mexico City Cemeteries are closed to future burials except for
the remains of
U.S. War Dead found from time to time in the World War I and II battle
areas.
In addition to grave sites, the World War I and II cemeteries, together
with three memorials on U.S. soil, commemorate by name on Tablets of the
Missing the 94,135 U.S. servicemen and women who were Missing in Action or
lost or buried at sea in their general region during the World Wars and
the Korean and Vietnam Wars.
Most of our facilities range in age from 45 to 91 years old with our
Mexico City Cemetery being over 150 years old. The permanent structures
and plantings, which make our facilities among the most beautiful
memorials in the world, are aging and require increased funding to
maintain them at the current standards. Accordingly, we prioritize the use
of our maintenance and engineering funds very carefully to ensure the most
effective utilization of our available resources. All of the plantings,
including the lawns and to some extent the meadows, must be cut and
shaped, fed and treated with insecticides and fungicides at regular
intervals during the growing season. The plantings also must be replaced
when their useful lives are exhausted or they receive major storm damage.
Operations Management
The Commission's fiscal year 2005 funding focused on personnel costs,
service fees, scheduled maintenance and repairs, supplies, materials,
spare parts, replacement of uneconomically repairable equipment, and
capital improvements, as well as funding toward completion of the design
and construction of the Normandy Cemetery Interpretive Center.
The Commission's fiscal year 2005 appropriation of $41,100,000 was
available for salaries and expenses. Of this total, $9,100,000 was
allocated for the design and construction of the Normandy Cemetery
Interpretive Center. A government-wide rescission of 0.80% reduced the
Commission's Salaries and Expenses appropriation by $328,800, causing it
to reduce spending in much needed engineering projects to accommodate this
loss.
Within its fiscal year 2005 appropriation, the Commission targeted $2.0
million to continue an Infrastructure Modernization Program. As previously
noted, our cemeteries and their infrastructure are aging. With the help of
Congress and the Office of Management and Budget over the last six years,
the Commission has worked to eliminate its backlog of deferred maintenance
projects. We must now continue our efforts to upgrade or replace outdated
and deteriorating systems.
The Infrastructure Modernization Program enables us to take a systemic
look at our infrastructure and address areas that will: (1) reduce the
growth of operational and routine maintenance costs and
(2) promote more effective long-term planning and budgeting. The first
phase of this program, conducted during fiscal years 2000 and 2001,
established a baseline assessment of our installations by utilizing
in-depth technical surveys. These surveys, conducted by professional
engineering firms applying current industry standards, regulations, and
technological advances, assessed our electrical and structural systems and
identified what needed to be accomplished at our facilities. A subsequent
study, conducted in fiscal year 2002, examined our diverse water systems
at each facility. The second phase, which began in fiscal year 2002 and
will continue through fiscal year 2007, addresses corrective actions in
electrical and structural systems.
The Productivity Improvement Program continued its investment in projects
and equipment that contributed to Commission operational efficiency and
effectiveness. The largest effort in fiscal year 2005 was in the area of
equipment where the Commission purchased new equipment to replace aging
machines. Special mowers and street sweepers acquired during the year
enabled the Commission to operate more effectively and efficiently, thus
freeing up personnel for additional tasks at cemeteries that they would
not be able to normally perform. The use of larger, more productive
equipment also drives the Commission's need to improve drainage in and
around the cemetery plot areas through core aeration and sanding. The
program further supported the Commission's headstone improvement program
by providing engraving bits and manpower. The program also helped
Commission efforts in the area of automation with a decision to implement
Commission-wide the Trims site management system, as well as the continued
implementation of an improved Information Technology network. In addition,
the program developed new ideas, such as the Netherlands American Cemetery
weather station. This project was designed to reduce overwatering and
mowing requirements within the cemetery, as well as to save funding.
The shrines to America's War Dead entrusted to the Commission's care
require a formidable annual program of maintenance and repair of
facilities, equipment, and grounds. This care includes upkeep of more than
131,000 graves and headstones and 73 memorial structures (within and
external to the cemeteries) on approximately 1,600 acres of land.
Additionally, the Commission maintains 41 residential quarters for
assigned personnel; 24 maintenance facilities; 67 miles of roads and
President's Management Agenda Initiatives
The Commission made significant progress in the implementation of each
item within the President's Management Agenda as follows.
Strategic Management of Human Capital
In fiscal year 2002, we began a worldwide manpower study that outlined our
manpower requirements, position descriptions, workloads, and manpower
distribution. This effort was to ensure that we deploy our workforce so
that we have the right person with the right skills in every position. We
expect to implement the study recommendations into fiscal year 2007.
Competitive Sourcing
We have used competitive sourcing initiatives in a number of ways to
improve performance and save costs. Our fiscal year 2005 budget contained
funding for upgrades, hosting, and 24-hour support of our financial
management system. These funds allowed us to outsource support to
contractors experienced in providing such services and enabled us to
support our worldwide operations without increasing the size of our
financial management staff. The resources devoted to our Infrastructure
Modernization Program and engineering programs largely supported
competitive sourcing of our infrastructure improvement efforts, allowing
our government employees to focus on our daily mission of maintaining our
cemeteries while implementing complex systems and upgrading our physical
plant. Most of our construction and engineering projects were contracted
out, since these projects are usually unique and beyond the capability of
our limited staff.
Improved Financial Performance
Since fiscal year 1997, the Commission has been required to produce
financial statements and the Comptroller General of the United States has
been required to independently audit these statements. Each year, the
Commission has earned an unqualified opinion on its financial statements
from the Government Accountability Office. However, we recognize that
improved financial performance is more than achieving an unqualified audit
opinion. It is about putting useful and timely information in the hands of
Commission management so that they can make informed decisions. The fiscal
year 2005 budget not only supported our daily accounting operations and
proper internal controls, but allowed us to identify additional management
needs and reports to provide the best financial information available.
Expanded E-Government
Over the last several years, the Commission expanded access to valuable
information through the use of online tools. We maintain a Web site that
allows visitors to gather information on our organization and our
cemeteries and memorials with their locations. We will continue our
efforts to enable citizens to make contributions to our flower funds
electronically through the use of credit cards. This will allow greater
ability for citizens to arrange for flowers to commemorate loved ones who
made the ultimate sacrifice for our nation.
Budget and Performance Integration
A key element in linking budget and performance is having timely and
reliable financial data. We achieved that with our integrated financial
system. Another key element is the process by which the Commission ties
performance within the organization to the budget formulation process. In
fiscal year 2005, we implemented a Cemetery Evaluation Review System that
uses existing policies and standards to assess and prioritize both
requirements and resources. Evaluations and reviews form the basis for
future budget requirements.
We are pressing forward in the budget process to ensure that our funding
requests support the objectives of the agency and the President's
Management Agenda.
Selected Performance Goals and Results
During fiscal year 2005, the Commission demonstrated an ability to achieve
performance results through a number of specific projects that tie
directly to its strategic goals as follows.
t of the Missing, which is mounted on
a color lithograph of the cemetery or memorial where a serviceman or
woman is buried or commemorated by name. The Commission also purchases
floral decorations with donor funds and the donor is provided with a
photograph of the headstone or Tablet of the Missing with the
decoration in place.
raphic presentation and improve the visitor's ability to navigate
through the site. In addition, the Commission completed an extensive
review and update of the Korean War Veterans Memorial Honor Roll
database and began work to add to the Web site a database of burials
at our Corozal American Cemetery in Panama.
fiscal year 2005, an estimated two million American and foreign
citizens visited Commission cemeteries. Most visitors paid homage
collectively to the interred Honored War Dead. Many had more personal
reasons for visiting a friend or relative who never returned home from
war. Regardless of the visitors' motivations, Commission employees
dedicated themselves to making each visit gratifying and memorable.
The Commission's overseas commemorative sites are recognized for their
beauty and inspirational qualities, yet few Americans are aware of
their existence; the Commission estimates that 85 percent of its
visitors are foreign citizens. As a result, the Commission embarked on
an effort to increase public awareness of these commemorative sites so
that more Americans add the sites to their itineraries when traveling
overseas.
special events and commemorations including celebrations
for Memorial Day, Independence Day, and Veterans Day. In addition,
military units held ceremonies to honor their fallen comrades, and
local organizations paid tribute to those who died while liberating
their regions. The President of the United States participated in a
ceremony at the Commission's Netherlands American Cemetery on May 8,
2005, to commemorate the 60th anniversary of V-E Day, the ending of
World War II in Europe. Earlier in May, The American Legion sponsored
well attended ceremonies at the Commission's Florence and Sicily-Rome
Cemeteries to commemorate the 60th anniversary of the ending of WWII
hostilities in Italy. All ceremonies reflected a solemn respect for
America's Honored War Dead and appreciation for the sacrifices of all
veterans.
he 16th donated over the years.
k several years of planning to acquire the custom
machine and special tooling, as well as to establish the required
training and procedures for the program to work effectively and
efficiently. The work at Oise-Aisne is expected to be completed in FY
2006. The program will then focus on the next World War I cemetery,
Aisne-Marne American Cemetery.
ntrols, Systems, Compliance, and Challenges
The Commission is cognizant of the importance of, and need for, management
accountability and responsibility as the basis for quality and timeliness
of program performance, mission accomplishment, increased productivity,
cost effectiveness, and compliance with applicable laws. It has taken
measures to ensure that the annual evaluation of these controls is
performed in a conscientious and thorough manner according to OMB
regulations and guidelines and in compliance with 31 U.S.C. 3512 (c), (d),
commonly known as the Federal Managers' Financial Integrity Act (FMFIA).
The Commission's evaluation of its system of internal management practices
and controls during fiscal year 2005 revealed no material weaknesses. The
objectives of the Commission's internal management control policies and
procedures are to provide reasonable assurance that:
ncluded that there is reasonable
assurance that it complies with the provisions of FMFIA. The reasonable
assurance concept recognizes that the cost of internal controls should not
exceed the benefits expected to be derived and that the benefits reduce
the risk of failing to achieve stated objectives.
Future Risks and Reactions
Current foreign currency losses threaten our ability to sustain our
day-to-day operations. In order to insulate the Commission's annual
appropriation against major changes in its purchasing power, Congress
enacted legislation in 1988 (codified in 36 U.S.C. 2109) to establish a
foreign currency fluctuation account in the U.S. Treasury. Due to
unfavorable exchange rates between the U.S. Dollar and the European Euro
in fiscal year 2004, our foreign currency fluctuation account experienced
significant losses that reduced its balance to $0.8 million as of
September 30, 2004.
For fiscal year 2005, Congress appropriated $12.0 million into the
Commission's Foreign Currency Fluctuation Account, less $96,000 for the
0.80% rescission. This appropriation will be used to offset foreign
exchange losses to the U.S. Dollar primarily by the European Euro. It also
reduces the Commission's risk that the funding appropriated for its
operations (in the salaries and expenses appropriation) will be
jeopardized due to vagaries in currency fluctuations. By maintaining close
scrutiny on the Commission's obligation status, as well as monitoring and
distributing the Foreign Currency Fluctuation Account balance, our overall
financial risk to operations is reduced.
On a long-term basis, the Commission expects to face further
government-wide rescissions that will require it to reexamine priorities
and shift funding to maintain essential operations.
Consolidating Balance Sheet
AMERICAN BATTLE MONUMENTS COMMISSION
CONSOLIDATING BALANCE SHEET
As of September 30, 2005
(With Comparative Consolidated Total as of September 30, 2004)
General Fund Trust Funds Total Funds Total Funds
Cemeteries and World War II Other Trust
Memorials Memorial Funds Total 2005 Total 2004
Assets
Intragovernmental:
Fund balance with $37,836,018 $10,194,604 $325,664 $48,356,286 $41,004,822
Treasury (note 2)
Treasury 7,902,162 58,086 7,960,248 5,111,149
investments, net
(note 3)
Total 37,836,018 18,096,766 383,750 56,316,534 46,115,971
Intragovernmental
Cash and foreign 87,181 309 87,490 112,018
accounts (note 4)
Accounts 31,425 31,425
receivable
Contributions
receivable, net 207,040 207,040 733,769
(note 5)
General property
and equipment, net 1,995,704 0 1,995,704 2,481,017
(note 6)
Heritage property 0 0 0
(note 6)
Total Assets $39,950,328 $18,303,806 $384,059 $58,638,193 $49,442,775
Liabilities
Intragovernmental:
Accounts payable $553,403 $3,381,859 $3,935,262 $1,066,453
Accrued salaries 79,845 79,845 389,963
and benefits
Total 633,248 3,381,859 4,015,107 1,456,416
Intragovernmental
Accounts payable 1,584,924 51,091 $15 1,636,030 2,365,860
Other liabilities 3,104,815 50 3,104,865 3,027,696
(note 7)
Total Liabilities 5,322,987 3,433,000 15 8,756,002 6,849,972
Commitments and
contingencies
(note 8)
Net Position
(notes 9, 10)
Unexpended 34,749,909 34,749,909 23,981,588
appropriations
Cumulative results (122,568) 14,870,806 384,044 15,132,282 18,611,215
of operations
(deficit)
Total Net Position 34,627,341 14,870,806 384,044 49,882,191 42,592,803
Total Liabilities
and Net Position $39,950,328 $18,303,806 $384,059 $58,638,193 $49,442,775
The accompanying notes are an integral part of these statements.
Consolidating Statement of Net Cost and Changes in Net Position
AMERICAN BATTLE MONUMENTS COMMISSION CONSOLIDATING STATEMENT OF NET COST AND
CHANGES IN NET POSITION For the Year Ended September 30, 2005 (With Comparative
Consolidated Total for the Year Ended September 30, 2004)
General Fund Trust Funds Total Funds Total Funds
Cemeteries and World War II Other Trust Memorials Memorial Funds Total
2005 Total 2004
PROGRAM COSTS
Intragovernmental program costs: Operations and maintenance $2,784,988
Design and construction
Program costs with the public: Operations and maintenance 29,256,468 Fund
raising Administrative Design and construction Memorial costs Property and
equipment (note 6) 2,232,441 Foreign currency losses, net 8,377,092
$142,964 $2,927,952 $2,610,7492,702,633 2,702,633 25,695,105
$184,058 29,440,526 26,209,00346,644 46,644 2,370,080685,496 685,496
1,712,123653,218 653,218 17,693,52752,738 52,738 111,7082,000 2,234,441
3,594,9908,377,092 8,123,747
Net Cost of Operations $42,650,989 $4,285,693 $184,058 $47,120,740 $88,121,032
CHANGES IN NET POSITION Cumulative Results (Deficit) - Start of Year
($8,034) $18,303,570 $315,679 $18,611,215 $62,355,620 Budgetary Financing
Sources
Appropriations used 41,906,879 41,906,879 39,719,420
Total Budgetary Financing Sources 41,906,879 --41,906,879 39,719,420
Other Financing Sources
Contributions 62,285 Treasury investment earnings Imputed financing
567,291
756,661 252,183 1,071,129 3,412,647 96,268 240 96,508 636,144 567,291
608,416
Total Other Financing Sources 629,576 852,929 252,423 1,734,928 4,657,207
Total Financing Sources 42,536,455 852,929 252,423 43,641,807 44,376,627 Less:
Net Cost of Operations 42,650,989 4,285,693 184,058 47,120,740 88,121,032
Net Increase (Decrease) for the Year (114,534) (3,432,764) 68,365 (3,478,933)
(43,744,405)
Cumulative Results (Deficit) - End of Year (122,568) 14,870,806 384,044
15,132,282 18,611,215 Unexpended Appropriations -Start of Year 23,981,588
--23,981,588 22,804,842 Budgetary Financing Sources
Appropriations received 52,675,200 52,675,200 40,896,166 Appropriations
used (41,906,879) (41,906,879) (39,719,420)
Increase in unexpended appropriations 10,768,321 --10,768,321 1,176,746
Unexpended Appropriations -End of Year 34,749,909 --34,749,909 23,981,588
TOTAL NET POSITION- END OF YEAR $34,627,341 $14,870,806 $384,044 $49,882,191
$42,592,803
The accompanying notes are an integral part of these statements.
Consolidating Statement of Budgetary Resources
AMERICAN BATTLE MONUMENTS COMMISSION
CONSOLIDATING STATEMENT OF BUDGETARY RESOURCES
For the Year Ended September 30, 2005
(With Comparative Consolidated Total for the Year Ended September 30,
2004)
General Fund Trust Funds Total Funds Total Funds
Cemeteries World War II Other Trust
and Memorials Memorial Funds Total 2005 Total 2004
Budgetary Resources
Budgetary Authority:
Appropriations $53,100,000 $53,100,000 $41,300,000
Net transfer
in for net 8,949,331 8,949,331 4,746,681
foreign
exchange loss
Other $1,427,429 $251,702 1,679,131 5,942,021
(contributions
collected)
Less: (424,800) (424,800) (243,670)
Rescinded
Unobligated Balances:
Start of year 16,935,677 15,902,937 309,739 33,148,353 60,001,729
Net transfer (8,949,331) (8,949,331) (4,746,681)
(out) for net
foreign
exchange (loss)
Recoveries of
prior year (411,746) (411,746)
obligations
Total Budgetary $69,199,131 $17,330,366 $561,441 $87,090,938 $107,000,080
Resources
Status of Budgetary Resources
Obligations
incurred - $53,537,275 $3,288,504 $182,213 $57,007,992 $73,851,727
direct
Unobligated
balances 15,661,856 14,041,862 379,228 30,082,946 33,148,353
available
Total Status $69,199,131 $17,330,366 $561,441 $87,090,938 $107,000,080
of Budgetary
Resources
Net Outlays
Obligations $53,537,275 $3,288,504 $182,213 $57,007,992 $73,851,727
incurred
Plus:
Obligated
balances,
start of year:
Undelivered 7,045,911 1,519,594 50,008 8,615,513 22,748,057
orders
Delivered 3,370,582 1,293,690 4,117 4,668,389 6,693,495
orders -
unpaid
Less:
Obligated
balances, end
of year:
Undelivered (19,088,053) (518,122) (48,163) (19,654,338) (8,615,513)
orders
Delivered (3,086,109) (3,432,950) (15) (6,519,074) (4,668,389)
orders -
unpaid
Total Net
Outlays $41,779,606 $2,150,716 $188,160 $44,118,482 $90,009,377
The accompanying notes are an integral part of these statements. Net Cost of
Operations $42,650,989 $4,285,693 $184,058 $47,120,740 $88,121,032
Consolidating Statement of Financing
General Fund Trust Funds AMERICAN BATTLE MONUMENTS
COMMISSION CONSOLIDATING STATEMENT OF FINANCING
For the Year Ended September 30, 2005 (With
Comparative Consolidated Total for the Year Ended
September 30, 2004) Total Funds Total Funds
Cemeteries and World War II Other Trust
Memorials Memorial Funds Total 2005 Total 2004
Resources Used To Finance Activities
Obligations $182,213
incurred -
direct Imputed
retirement and $73,851,727
audit services 608,416
Other $53,537,275 $57,007,992
adjustments 567,291 $3,288,504 567,291
with Treasury (255,478) 8,421 (247,057)
Total Resources 53,849,088 3,296,925 182,213 57,328,226 74,460,143
Used to Finance
Activities
Resources That Do
Not Fund Net Cost
of Operations
General property
capitalized on 86,428 86,428 (1,370,130)
the balance sheet
Decrease in
unfunded annual (12,704) (12,704) (2,046)
leave
Undelivered
orders - start of 7,045,911 1,519,594 50,008 8,615,513 22,748,057
year
Less: Undelivered
orders - end of (19,088,053) (518,122) (48,163) (19,654,338) (8,615,513)
year
Total Resources That Do (11,955,714) 988,768 1,845 (10,965,101) 12,760,368
Not Fund Net Cost of
Operations
Components of Net Cost
of Operations Not
Requiring
Resources in the
Current Period
Components Requiring
Resources in Future
Periods:
Increase in unfunded 980 980 83,574
annual leave
Increase in unfunded
separation pay 67,068 67,068 172,174
liability
Increase in accounts 31,425 31,425
receivable
Components Not
Requiring Resources:
Depreciation 627,282 627,282 572,512
In-kind expenses 30,860 30,860 72,261
Total Costs Not
Requiring Resources in
the Current Period 757,615 - - 757,615 900,521
The accompanying notes are an integral part of these statements.
Notes to the Consolidating and Consolidated Financial Statements
AMERICAN BATTLE MONUMENTS COMMISSION
NOTES TO THE CONSOLIDATING AND CONSOLIDATED FINANCIAL STATEMENTS For the
Fiscal Years Ended September 30, 2005 and 2004
Note 1. Significant Accounting Policies
A. Basis of Presentation
The accompanying consolidating and consolidated financial statements
present the financial position, net cost of operations, changes in net
position, budgetary resources, and financing of the American Battle
Monuments Commission (the Commission) in conformity with U.S. generally
accepted accounting principles as used by the federal government. There
are no intra-entity transactions to be eliminated.
B. Reporting Entity and Funding Sources
The Commission is an independent agency within the executive branch of the
federal government and was created by an Act of March 4, 1923, the current
provisions of which are now codified in 36
U.S.C. Chapter 21. The Commission's mission is to commemorate the
sacrifices and achievements of U.S. Armed Forces where they have served
overseas since April 6, 1917, the date of the United States entry into
World War I, and at locations within the United States when directed by
the Congress. The Commission designs, administers, constructs, operates,
and maintains 24 American military cemeteries and 25 federal memorials,
monuments, and markers (herein collectively referred to as memorials).
Three of the memorials are located in the United States while all of the
cemeteries and the remaining memorials are located on foreign soil in 14
foreign countries, the Marianas, and Gibraltar. The Commission is also
responsible for maintaining 6 nonfederal memorials with funds received
from the memorials' sponsors. The Commission is headquartered in
Arlington, Virginia. Field operations are conducted through regional
offices located near Paris, France; and in Rome, Italy; and cemeteries in
Manila, the Philippines; Mexico City, Mexico; and Panama City, Panama.
The Commission also had responsibility for designing and constructing the
National World War II Memorial located on the Mall in Washington, D.C. In
accordance with 40 U.S.C. 8906 (b), the Commission provided $6.6 million
for deposit in a separate Treasury account to offset the memorial's costs
of perpetual maintenance. On November 1, 2004, the Commission signed an
agreement with the National Park Service to formally transfer the National
World War II Memorial to the Service for its future care and maintenance.
Any remaining funds will reside in a trust fund in the U.S. Treasury to be
used solely to benefit the World War II Memorial.
Commission programs are funded primarily through appropriations available
without fiscal year limitation (no-year). The Commission also administers
several trust funds established to: (1) build memorials authorized by the
Congress, but which are funded primarily by private contributions,
commemorative coin sales proceeds, and investment earnings; (2) decorate
grave sites; and
(3) maintain and repair certain nonfederal war memorials.
C. Basis of Accounting
The Commission's proprietary accounts (assets, liabilities, equity,
revenue, and expenses) are maintained on the accrual basis, where
appropriated funds are accounted for by appropriation year; operating
expenses are recorded as incurred; and depreciation is taken on property,
plant, and equipment not otherwise classified as heritage assets.
Commission budgetary accounts are maintained on a budgetary basis, which
facilitates compliance with legal constraints and statutory funds control
requirements. The functional budget classification is Veterans' Benefits
and Services.
D. Fund Balances with Treasury
The Commission's cash receipts and disbursements are processed by the U.S.
Treasury. Fund balances with Treasury are comprised of appropriated
general funds and trust funds.
E. Investments
In accordance with Public Law 103-32, the Commission is authorized to
invest World War II Memorial Trust Fund receipts in U.S. Treasury
securities. The Commission is also authorized under a modification to its
original legislation to invest receipts from certain nonfederal war
memorial organizations in U.S. Treasury securities. Treasury investments
are recorded at par value plus unamortized premium or less unamortized
discount. Premiums and discounts are amortized using the interest method.
F. Foreign Currency
The Commission's overseas offices maintain accounts of foreign currencies
to be used in making payments in foreign countries. These accounts are
reported at the U.S. dollar equivalent using the Treasury exchange rate in
effect on the last day of the fiscal year.
G. Contributions and Revenue Recognition
The Commission recognizes unrestricted contributions or unconditional
promises to give as revenue in the period of the initial pledge when
sufficient verifiable evidence of the pledge exists. Conditional promises
to give are recorded as revenue when the condition has been met.
Unconditional promises to give may be temporarily restricted or
permanently restricted. Temporarily restricted promises to give are
released from restriction when the conditions have been met. Permanently
restricted promises to give are recorded as revenue in the period donated,
however, donors generally allow only the earned income to be used for
general or specific purposes. In-kind contributions of goods and services
are recognized at fair value by the Commission at the time the goods are
received or the services are performed. Multiyear contributions due over a
period of time are discounted to their present value based upon the short
term Treasury interest rate.
H. OperatingMaterials and Supplies Inventories
The Commission has determined that operating materials and supplies
located at its cemeteries are not significant amounts and that it is more
cost beneficial to record them on the purchase method of accounting
whereby items are expensed as purchased rather than when consumed.
Consequently, the Commission reports no operating materials or supplies
inventories.
I. Property and Equipment
Purchases of general property and equipment of $25,000 or less are
expensed in the year of acquisition. Purchases of personal property
exceeding $25,000 are capitalized and depreciated on a straight-line basis
over 5 years. Expenditures relating to real property exceeding $25,000 are
capitalized and depreciated on a straight-line basis over 30 years.
Heritage assets are assets possessing significant cultural, architectural,
or aesthetic characteristics. The Commission considers its cemeteries, and
federal memorials, monuments, and markers acquired through purchase or
donation to be noncollection heritage assets. Heritage assets are acquired
through purchase or donation, are accounted for in the Commission's
property records, and are not presented in the balance sheet. Withdrawals
of heritage assets are recorded upon formal agreement with recipients.
Additional disclosure on individual heritage asset cemeteries and
memorials are found in the Schedules of Heritage Assets presented as
unaudited other information. Cemetery land is owned by the foreign
countries in which cemeteries are located and is provided to the United
States in perpetuity.
J. Employee Benefits
The Commission's civilian U.S. nationals hired after December 31, 1983 are
covered by the Federal Employees' Retirement System (FERS), which was
implemented on January 1, 1984. The Commission's civilian U.S. nationals
hired on or before December 31, 1983, could elect to transfer to FERS or
remain with the Civil Service Retirement System (CSRS). For FERS
employees, the Commission withholds .80 percent of base pay and as
employer contributes 10.7 percent of base pay to this retirement system.
For Federal Insurance Contribution Act (FICA) tax and Medicare, the
Commission withholds 7.65 percent from FERS employees' earnings, matches
this amount on a dollar-for-dollar basis, and remits the total amount to
the Social Security Administration. The Commission withholds 7.00 percent
of base pay plus 1.45 percent for Medicare from CSRS employees' earnings
and as employer contributes 7.00 percent of base pay plus 1.45 percent for
Medicare. These deductions are then remitted to the Office of Personnel
Management (OPM) and the Social Security Administration. OPM is
responsible for governmentwide reporting of FERS and CSRS assets,
accumulated plan benefits, and unfunded liabilities.
On April 1, 1987, the federal government instituted the Thrift Saving Plan
(TSP), a retirement savings and investment plan for employees covered by
FERS and CSRS. The Commission contributes a minimum of 1 percent of FERS
employees' base pay to TSP. FERS employees have the option of contributing
up to 15 percent of their base pay on a tax-deferred basis to TSP, which
the Commission matches up to 4 percent of base pay. CSRS employees may
contribute up to 10 percent of their base pay to TSP on a tax-deferred
basis and receive no matching contribution from the Commission.
Retirement and other benefits for the Commission's foreign national
employees are paid by the Commission in accordance with the provisions of
10 host nation agreements negotiated by the U.S. Department of State.
Annual leave is accrued as earned, and the resulting unfunded liability is
reduced as leave is taken. Separation pay is provided in certain countries
according to host nation agreements. Separation pay is accrued as earned,
and the resulting unfunded liability is reduced when paid to the foreign
national leaving the employ of the Commission. Each year balances in the
accrued separation pay and annual leave accounts are adjusted to reflect
current pay rates. To the extent that current or prior year appropriations
are not available to fund annual leave and separation pay, funding will be
obtained from future financing resources. Sick leave and other types of
unvested leave are expensed when incurred.
K. Imputed Financing
The Commission imputes financing for retirement and other benefits paid by
OPM, financial audit costs incurred by the Government Accountability
Office (GAO), and a heritage asset musical carillon donated each fiscal
year. The Commission recognized these expenses and related imputed
financing in its financial statements.
L. Use of Estimates
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities, as well as the disclosure of contingent assets and
liabilities at the date of the financial statements, and the amount of
revenues and expenses reported during the reporting period. Actual results
could differ from those estimates.
M. Adoption of New Accounting Standard
The Commission early-adopted FASAB Statement No. 29, Heritage Assets and
Stewardship Land, for fiscal year 2005. The adoption resulted in
additional disclosure with no effect on financial statement amounts or
restatement of prior year's presentation.
N. Reformatting of Prior Year's Presentation
Certain prior year accounts on the Statement of Net Cost and Changes in
Net Position were reformatted to conform to the current year presentation
in accordance with Office of Management and Budget's Circular No. A-136,
Financial Reporting Requirements.
Note 2. Fund Balances with Treasury
All undisbursed account balances with the U.S. Treasury, as reflected in
the Commission's records, as of September 30 are available and were as
follows:
2005 2004
Appropriated Funds Currency Fluctuation WW II Memorial Fund Other Trust
Funds
General Fund
$34,095,973 3,740,045
__________ $37,836,018
Trust Funds
$10,194,604 325,664 $10,520,268
Total
$34,095,973 3,740,045 10,194,604 325,664 $48,356,286
Total
$26,135,129 785,376 13,773,377 310,940 $41,004,822
Note 3. Treasury Investments, Net
As of September 30, the Commission's investments in U.S. Treasury notes,
which are marketable securities due within 2 years were as follows:
Interest FY Cost Interest Rates Net Premium Receivable Net Investment
05 $7,658,000 4.00% to 7.00% $190,755 $111,493 $7,960,248
04 $5,008,000 2.00% to 7.50% $61,626 $41,523 $5,111,149
Amortization is on the interest method, and amortized cost approximated
market as of September 30.
Note 4. Cash and Foreign Accounts
Outside the United States the Commission makes payments in U.S. and
foreign currencies through imprest cash funds and Treasury designated
depository commercial bank accounts, which as of September 30 were as
follows:
2005 2004 Imprest Cash Funds $41,158 $39,042 Foreign Bank Accounts 46,023
72,400 Undeposited Cash 309 576
$87,490 $112,018
Note 5. Contributions Receivable
The Commission has pledges from the private sector to be used for the
World War II Memorial, with substantial pledges by major corporations and
foundations. These pledges are recorded as contributions receivable and
revenue in the fiscal year pledged, and $207,040 is temporarily restricted
until collected. Amounts due in future years are as follows:
Fiscal Year Due
2006 $110,000 2007 100,000 After 2007 175,407 Total amount due 385,407
Less: Present value discount at 1% Treasury rate (178,367) Net Receivable
$207,040
The Commission believes that all contributions receivable are fully
collectible, and therefore no allowance for uncollectible accounts has
been established.
Note 6. General and Heritage Property and Equipment
General property and equipment with an aggregate cost basis of $25,000 or
less and all heritage assets were expensed by the Commission and totaled
$2,232,441 in fiscal year 2005 and $3,592,586 in fiscal year 2004. WWII
Memorial equipment totaling $2,000 in fiscal year 2005 and $2,404 in
fiscal year 2004 was also expensed.
Since the 1960s, the Commission's European regional office near Paris,
France, has occupied a residential structure owned by the United States
government. The Commission is responsible for all utilities, maintenance,
and repairs. While the structure has the characteristics of a heritage
asset, it has been used as general property. However, it is now fully
depreciated, and no value is contained in the Commission's financial
statements.
General property and equipment as of September 30 was as follows:
2005 2004_________
Accumulated Accumulated
Category Cost Depreciation Net Cost Depreciation Net
Buildings $923,461 $42,311 $881,150 $1,015,247 $9,142 $1,006,105
Accounting 1,760,065 1,408,052 352,013 $1,760,065 1,056,039 704,026
System
Equipment 2,167,228 1,404,687 762,541 1,989,014 1,218,128 770,886
$4,850,754 $2,855,050 $1,995,704 $4,764,326 $2,283,309
$2,481,017
Heritage assets are significant to the mission of the Commission to
design, construct, and maintain historical cemeteries and memorials. The
Commission presents its heritage assets in three categories; cemeteries,
federal memorials, and nonfederal memorials. Changes in heritage assets
for fiscal year 2005 were as follows:
Federal Nonfederal
Cemeteries Memorials Memorials Beginning of Year 10-1-04 24 25 4 Number
Acquired, Fiscal Year 2005 0 0 2 Number Withdrawn, Fiscal Year 2005 0 0 0
End of Year 9-30-05 24 25 6
During fiscal year 2005, the Commission assumed responsibility for private
memorials related to the 147th Engineer Battalion and the 507th Parachute
Infantry Regiment. Through September 30, 2005, Commission cemeteries
contain over 131,000 internments. Over 94,000 Honored War Dead, whose
remains were not recovered, are memorialized in the cemeteries and federal
memorials that encompass over 1,600 acres. This land is provided to the
Commission through host agreements with foreign countries for permanent
use as cemeteries and memorials.
Note 7. Other Liabilities
Other liabilities as of September 30 were as follows:
2005 2004
Accrued Salaries and Benefits $867,937 $846,112
Unfunded Separation Pay Liability 1,314,784 1,247,716
Unfunded Annual Leave 922,144 933,868
$3,104,865 $3,027,696
Under a host nation agreement, the Commission's Italian employees earn
separation pay for each year of service with the Commission. The
Commission recognized an unfunded liability for separation pay for these
employees of $1,314,784 as of September 30, 2005, and $1,247,716 as of
September 30, 2004.
A portion of pension and other retirement benefits (ORB) expense is funded
by an imputed financing source to recognize the amount of pension and ORB
unfunded liabilities assumed by OPM. These costs are computed in
accordance with cost factors provided by OPM. For fiscal year 2005, the
Commission incurred $1,047,468 of pension and ORB costs, $287,291 of which
was imputed. For fiscal year 2004, the Commission incurred $1,016,195 of
pension and ORB costs, $303,416 of which was imputed. Total imputed costs
of $567,291 for fiscal year 2005 and $608,416 for fiscal year 2004
included audit services provided by GAO.
Note 8. Lease Agreements
The Commission has no capital leases. The Commission's Arlington,
Virginia, headquarters, including office space for the WWII Memorial
Project, are rented under a 10-year operating lease expiring in July 2007.
The Commission's Mediterranean Regional Office occupies commercial office
space under a 6-year operating lease expiring in May 2007. The
Mediterranean Regional Office Director's living quarters are rented under
a 6-year operating lease expiring in December 2007. Two operating leases
for cemetery superintendent's temporary living quarters expire in March
and June 2006, respectively. Rent expense for fiscal year 2005 operating
leases was $518,929. Future minimum payments due on operating leases as of
September 30, 2005, are as follows:
Fiscal Year 2006 $518,232 2007 407,902 2008 10,353
$936,487
Note 9. Net Position
Net position balances as of September 30, 2005, were as follows:
General Fund Trust Funds Total
WWII Other Unexpended Appropriations:
Unobligated $15,661,8561 $15,661,856
Undelivered Orders 19,088,053 19,088,053
$34,749,909 $ $ - $34,749,909
Cumulative Results of Operations
(deficit):
Unrestricted $(122,568) $14,145,644 $335,881 $14,358,957
Undelivered Orders 518,122 48,163 566,285
Temporarily Restricted 207,040 207,040
Permanently Restricted - - -
$(122,568) $14,870,806 $384,044 $15,132,282
Total Net $34,627,341 $14,870,806 $384,044 $49,882,191
Position
Net position balances as of September 30, 2004, were
as follows:
Trust
General Fund Funds Total
WWII Other
Unexpended Appropriations:
Unobligated $16,935,6772 $16,935,677
Undelivered Orders 7,045,911 7,045,911
$23,981,588 $ $ - $23,981,588
Cumulative Results of Operations
(deficit):
Unrestricted $(8,034) $16,050,207 $265,671 $16,307,844
Undelivered Orders 1,519,594 50,008 1,569,602
Temporarily Restricted 733,769 733,769
Permanently Restricted - -
$(8,034) $18,303,570 $315,679 $18,611,215
Total Net $23,973,554 $18,303,570 $315,679 $42,592,803
Position
1
Includes $10,003,138 for design and construction of the Normandy Interpretive
Center, consisting of $194,029
unobligated from a $5,000,000 no-year appropriation earmark for FY 2002,
$503,577 unobligated (after a $26,000 rescission) from a $4,000,000
no-year appropriation for FY 2003, $285,832 unobligated (after a $53,100
rescission) from a $9,000,000 no-year appropriation for FY 2004, and
$9,019,700 unobligated (after a $72,800 rescission) from a $9,100,000
no-year appropriation for FY 2005.
Includes $13,433,494 for design and construction of the Normandy
Interpretive Center, consisting of $512,594 unobligated from a $5,000,000
no-year appropriation earmark for FY 2002, $3,974,000 unobligated (after a
$26,000 rescission) from a $4,000,000 no-year appropriation for FY 2003,
and $8,946,900 unobligated (after a $53,100 rescission) from a $9,000,000
no-year appropriation for FY 2004.
Note 10. Trust Fund - World War II Memorial Fund Program
Financial progress since the inception of the fund in fiscal year 1993
through fiscal year 2005 is
as follows:
Total
Costs 2005 1993-2005*
Fundraising $46,644 $36,613,902
Administration 685,496 10,244,209
Memorial project costs 52,738 1,972,355
Property and equipment 2,000 266,686
Education - 426,834
Subtotal 786,878 49,523,986
Design and Construction 3,498,815 133,528,804
Net Cost of Operations 4,285,693 183,052,790
Financing Sources
Coin surcharge proceeds 4,797,329
Department of Defense 5,000,000
Sale of titanium 6,000,000
General support 756,661 166,593,217
Contributions 756,661 182,390,546
Investment earnings 96,268 15,533,050
Total Financing Sources 852,929 197,923,596
Net Results of Operations $(3,432,764) $14,870,806
*The amounts for prior fiscal years 1993 through 2003 were audited by GAO
and presented in its reports GAO/AIMD-95-9 for fiscal year 1993;
GAO/AIMD-96-24 for fiscal year 1994; GAO/AIMD-97-68R for fiscal years 1995
and 1996; GAO/AIMD-98-129R for fiscal year 1997; GAO/AIMD-99-74 for fiscal
year 1998; GAO/AIMD-00-85 for fiscal year 1999; GAO-01-375 for fiscal year
2000; GAO-02-390 for fiscal year 2001, GAO-03-444 for fiscal year 2002,
GAO-04-404 for fiscal year 2003, and GAO-05-298 for fiscal year 2004.
Other Information
OTHER INFORMATION
Required Supplementary Information
American Battle Monuments Commission Other Information September 30, 2005
(Unaudited)
Maintenance, Repairs, and Improvements
The following unaudited information is required supplementary information
on deferred maintenance and the condition of real property at Commission
cemeteries and memorials:
Maintenance and repairs performed on real property consisting of land
improvements, buildings, and memorials totaled $4.9 million in fiscal year
2005 and $4.7 million in fiscal year 2004. For fiscal years 1998 through
2002, the Commission received $11.3 million of additional appropriations
from the Congress that enabled it to entirely eliminate its deferred
maintenance backlog as of September 30, 2002. No deferred maintenance
backlogs existed as of September 30, 2004, and 2005.
Condition assessment surveys, using a five-point scale of one (excellent)
to five (very poor), identify needed future maintenance and repair
projects at cemeteries and memorials in order to maintain real property in
an acceptable condition of three (fair) or better. These surveys are
reviewed and updated at least annually by the Commission's engineering
staff. In addition, engineering projects identified improvements in
cemetery irrigation, drainage, roads, parking areas, and buildings. As of
September 30, 2005, the Commission has identified a total of 333
maintenance, repair, and improvement projects, with an estimated cost of
$15.8 million, to be performed in future years, subject to available
funding.
Schedules of Heritage Assets
The following three pages present unaudited other information not required
by U.S. generally accepted accounting principles on the Commission's 24
cemeteries; 25 federal memorials, monuments, and markers; and six
nonfederal memorials as of September 30, 2005.
Schedules of Heritage Assets
American Battle Monuments Commission
Schedule of Heritage Assets
September 30, 2005
(Unaudited)
24 CEMETERIES
Name Location Interred Memorialized Acres War
European Region
Aisne Marne American Belleau
Cemetery (Aisne), 2,289 1,060 42.5 WW I
France
Ardennes American Cemetery Neupre, 5,329 462 90.5 WW II
Belgium
Brittany American Cemetery St. James 4,410 498 7.5 WW II
(Manche),
France
Brookwood American Brookwood, 468 563 4.5 WW I
Cemetery England
Cambridge American Cambridge, 3,812 5,126 30.5 WW II
Cemetery England
Epinal American Cemetery Epinal 5,255 424 48.6 WW II
(Vosges),
France
Flanders Field American Waregem, 368 43 6.2 WW I
Cemetery Belgium
Henri-Chapelle American Cemetery 7,992 450 57.0 WW II
Henri-Chapelle, Belgium
Lorraine American St. Avold 10,489 444 113.5 WW II
Cemetery (Moselle), France
Luxembourg American Luxembourg City, 5,076 371 50.5 WW II
Cemetery Luxembourg
Meuse-Argonne American Cemetery 14,246 954 130.5 WW I
Romagne (Meuse), France
Netherlands Margraten, Holland 8,301 1,723 65.5 WW II
American
Cemetery
Normandy Colleville-sur-Mer, 9,387 1,557 172.5 WW II
American France
Cemetery
Oise-Aisne Fere-en-Tardenois, 6,012 241 36.5 WW I
American France
Cemetery
Somme American Bony (Aisne), France 1,844 333 14.3 WW I
Cemetery
St. Mihiel Thiaucourt, Meurthe, 4,153 284 40.5 WW I
American France
Cemetery
Suresnes Seine, France 1,565 974 7.5 WW
American I/II
Cemetery
Mediterranean Region
Florence American Florence, 4,402 1,409 70.0 WW II
Cemetery Italy
North Africa American Carthage, 2,841 3,724 27.0 WW II
Cemetery Tunisia
Rhone American Draguignan, 861 294 12.5 WW II
Cemetery Var, France
Sicily-Rome American Nettuno, 7,861 3,095 77.0 WW II
Cemetery Italy
Other
Corozal American Panama City,
Cemetery Panama 5,320 16.0 *
Mexico City Mexico City, 1,563 1.0 Mex Am
American Cemetery Mexico
Manila American Luzon, 17,206 36,285 152.0 WW II
Cemetery Phillipines
Subtotal for 131,050 60,314 1,274.1
Cemeteries
*Acquired by Executive Order from the former
Panama Canal Zone.
American Battle Monuments Commission Schedule of Heritage Assets September 30,
2005 (Unaudited)
25 FEDERAL MEMORIALS, MONUMENTS, AND MARKERS
Name Location Interred Memorialized Acres
East Coast Memorial New York City, NY 4,609 0.8
Honolulu Memorial Honolulu, HI 28,800 1.0
West Coast Memorial San Francisco, CA 412 1.3
Audenarde Monument Audenarde, Belgium 0.4
Bellicourt Monument St. Quentin, France 1.8
Brest Naval Monument Brest, France 1.0
Cabanatuan Memorial Luzon, Phillipines
Cantigny Monument Cantigny, France 0.4
Chateau-Thierry Monument Chateau-Thierry, 58.9
France
Chaumont Marker Chaumont, France
Gibraltar Naval Monument Gibraltar 0.1
Guadalcanal Memorial Guadalcanal 0.5
Kemmel Monument Ypres, Belgium 0.2
Marine Monument Belleau Aisne, France 199.6
Wood
Montfaucon Monument Montfaucon, France 9.6
Montsec Monument Thiaucourt, France 47.5
Papua Marker Port Moresby, New
Guinea
Point du Hoc Ranger St. Laurent-sur-Mer, 29.8
Monument France
Saipan Monument Saipan, Northern Mariana
Islands
Santiago Surrender Tree Santiago, Cuba
Sommepy Monument Sommepy, France 15.0
Souilly Marker Souilly, France
Tours Monument Tours, France 0.5
Utah Beach Monument Sainte Marie-du-Mont, France 0.5
Western Naval Task
Force Memorial Casablanca, Morocco
Subtotal for Memorials 0 33,821 368.9
Grand Total 131,050 94,135 1,643.0
War
WW II WW II/Korea/Vietnam WW II WW I WW I WW I WW II WW I WW I WW I WW I WW II
WW I WW I WW I WW I WW II WW II WW II Sp American War WW I WW I WW I WW II
WW II
American Battle Monuments Commission
Schedule of Heritage Assets
September 30, 2005
(Unaudited)
6 NONFEDERAL MEMORIALS
Name Location War
29th Infantry Division Memorial Vierville-sur-Mer, France WW II
30th Infantry Division Memorial Mortain, France WW II
6th Engineering Special Brigade Memorial Vierville-sur-Mer, France WW II
351st Bomb Group Memorial Oundle, England WW II
147th Engineer Battalion Monument Englesqueville-la-Percee, WW II
France
507th Parachute Infantry Regiment Amfreville, France WW II
Memorial
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