[Final Audit Report on Followup of Recommendations Concerning Bureau of Indian Affairs Accountability and Control Over Artwork and Artifacts Located in the Main and South Interior Buildings]
[From the U.S. Government Printing Office, www.gpo.gov]
Report No. 96-I-1245
Title: Final Audit Report on Followup of Recommendations Concerning Bureau
of Indian Affairs Accountability and Control Over Artwork
and Artifacts Located in the Main and South Interior Buildings
Date: September 30, 1996
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United States Department of the Interior
OFFICE OF THE INSPECTOR GENERAL
MEMORANDUM
TO: The Secretary
FROM: Wilma A. Lewis
Inspector General
SUBJECT SUMMARY: Final Audit Report for Your Information - "Followup of
Recommendations Concerning Bureau of Indian Affairs
Accountability and Control Over Artwork and Artifacts
Located in the Main and South Interior Buildings"
(No. 96-I-1245)
Attached for your information is a copy of the subject final audit report. At the
request of the Bureau of Indian Affairs, we reviewed the actions taken by the Bureau
to implement the recommendations in a prior report to safeguard and account for
its artwork and artifacts.
We concluded that the Bureau had taken actions to implement all of the
recommendations but that not all of the recommendations were implemented
adequately. Specifically, the Bureau had not: (1) adequately documented its physical
inventory of artwork and artifacts or reconciled the inventories taken with the
property records; (2) formally designated an accountable officer and a custodial
officer for the artwork and artifacts in storage; (3) issued property receipts to assign
responsibility for all property in private offices; and (4) corrected all of the
deficiencies regarding the physical storage of artwork and artifacts.
In its response, the Bureau concurred totally or partially with all five of our
recommendations to improve its control over artwork and artifacts. Based on the
response, we considered four recommendations resolved and revised the
recommendation pertaining to physical inventories. The Bureau was requested to
respond to the revised recommendation.
If you have any questions concerning this matter, please contact me at (202)
208-5745 or Mr. Robert J. Williams, Acting Assistant Inspector General for Audits,
at (202) 208-4252.
Attachment
E-IN-BIA-014-95
United States Department of the Interior
OFFICE OF INSPECTOR GENERAL
Washington, D.C. 20240
AUDIT REPORT
Memorandum
To: Assistant Secretary for Indian Affairs
From: Acting Assistant Inspector General for Audits
Subject: Final Audit Report on Followup of Recommendations Concerning
Bureau of Indian Affairs Accountability and Control Over Artwork and
Artifacts Located in the Main and South Interior Buildings (No. 96-I-1245)
INTRODUCTION
This report presents the results of our followup review of recommendations
contained in the audit report entitled "Bureau of Indian Affairs Accountability and
Control Over Artwork and Artifacts Located in the Main and South Interior
Buildings" (No. 91-I-73), issued in October 1990. The followup audit was initiated
at the request of the Bureau of Indian Affairs. The objective of the followup review
was to determine whether the Bureau had implemented the recommendations in the
prior report to adequately safeguard and account for its artwork and artifacts and
whether any new recommendations were warranted.
BACKGROUND
Our October 1990 audit report concluded that the Bureau was not maintaining
adequate accountability, control, and storage of artwork and artifacts within the Main
and South Interior Buildings in Washington, D.C. This occurred because the Bureau
had not: (1) performed a complete physical inventory of all artwork and artifacts
located in the two buildings and reconciled the inventory results with its official
property records; (2) designated officials responsible for property in storage; (3)
assigned responsibility for property in private offices; and (4) established proper
physical storage procedures and facilities. The report concluded that, because of the
reasons cited, the Bureau's artwork and artifacts often were seriously damaged or
deteriorating and were not included in the Bureau's inventory records. Based on the
October 1990 report and the July 1990 Office of Inspector General audit report
entitled "Accountability and Control Over Artwork and Artifacts, Department of the
Interior" (No. 90-83), the Department designated this area as a material weakness
in its Annual Statement and Report to the President and the Congress, required by
the Federal Managers' Financial Integrity Act, for fiscal year 1990. Subsequently,
the Bureau received a total of about $2.3 million during fiscal years 1992 through
1995 to fund corrective actions.
The Department's Semi-Annual Report on Audit Followup dated March 31, 1993,
stated that the Bureau had taken sufficient actions to resolve all five of the
recommendations made in our October 1990 report. On October 7, 1993, the
Bureau submitted a Museum Property Action Plan to the Office of the Assistant
Secretary for Policy, Management and Budget that set forth the goals and
accomplishments of the Museum Property Management Program. The goals
included: (1) ensuring accurate identification of museum property at all Bureau
offices; (2) strengthening curatorial expertise and improving museum property
management policy guidance to the field; (3) establishing accountability for museum
property; and (4) establishing adequate storage and protection for museum property.
According to the Plan, corrective actions are to be completed by the year 2010.
SCOPE OF AUDIT
To accomplish our audit objective, we reviewed documents and records pertaining
to Bureau artwork and artifacts located in the Washington, D.C. area. In addition,
we interviewed Bureau personnel responsible for accounting for and controlling
artwork and artifacts and for implementing the prior audit report's recommendations.
This followup review was conducted at Bureau offices located in the Main and South
Interior Buildings. Our review was made, as applicable, in accordance with the
"Government Auditing Standards," issued by the Comptroller General of the United
States. Accordingly, we included such tests of records and other auditing procedures
that were considered necessary under the circumstances. Because of the limited
scope and objective of our review, internal controls were reviewed only to the extent
that they related to corrective actions taken on the prior recommendations.
We also reviewed the Department of the Interior's Annual Statement and Report
to the President and the Congress for fiscal year 1994. The report concluded that
accountability, control, and protection of artwork and artifacts administered by the
bureaus and offices throughout the Department were inadequate and that
Departmental policies and procedures were inadequate to ensure the preservation
of these objects. Our recommendations, if implemented in a timely manner, should
improve the internal controls in this area.
RESULTS OF AUDIT
We found that of the five recommendations made in our October 1990 report for the
Bureau of Indian Affairs to adequately safeguard and control its artwork and
artifacts, two recommendations were not implemented, two were partially
implemented, and one was implemented. (These prior recommendations are
summarized in Appendix 1.) Specifically, the Bureau had not: (1) adequately
documented its physical inventory of artwork and artifacts or reconciled the
inventories taken with the property record; (2) formally designated an accountable
officer and a custodial officer for the artwork and artifacts in storage; (3) issued
property receipts to assign responsibility for all property in private offices; and (4)
corrected all of the deficiencies regarding the physical storage of artwork and
artifacts.
Status of Prior Recommendations
Recommendation 1. Conduct a complete physical inventory of all artwork and
artifacts and reconcile it with the property records.
Our prior audit found that the inventory listing of artwork and artifacts for the Main
and South Interior Buildings was not complete. For example, 49 of the 50 objects
we reviewed during the prior audit that were stored in the South Interior Building
were not included on the Bureau's property records. The Bureau agreed with our
recommendation, stating that a physical inventory had since been conducted of all
artwork and artifacts located in the Main and South Interior Buildings and that
photographs were taken of all items, which were then labeled with the titles,
descriptions, and artists' names, and filed in an album for reference.
In our followup review, we found that, although the Bureau stated that a physical
inventory had been performed as recently as March 1995, it could not provide
adequate documentation on the results of the review. The Departmental Manual
(411 DM 4.3) states that inventories are to be retained for 3 years and that if
"problems" (for example, "large numbers of losses") are identified in an inventory, the
complete inventory for a particular unit should be "retained until the problem is
corrected." We also found that the inventory listing and property records were still
inaccurate and incomplete. For example:
- Of the 1,137 artwork and artifact items on the Bureau's July 1995 inventory
listing for the Main and South Interior Buildings, 268 items did not have on file
Forms DI-105, "Receipt of Property." (Form DI-105 is used for initial receipt and
control of all accountable Bureau property.) In addition, 91 items for which Forms
DI- 105 were on file were not on the inventory listing.
- Twenty-five of 100 items judgmentally selected from the July 1995 inventory
listing could not be located or otherwise accounted for, and 21 other items were at
locations different from those noted on the inventory. Subsequent to our review, the
Bureau informed us that 19 of the 25 missing items had been located.
- Twenty-four of 81 judgmentally selected items that we observed in Bureau
offices during our review were not labeled with an official property number. We
therefore could not verifiy that the items were included in the property records.
We believe that the lack of adequate controls over the removal and return of
property from the Main and South Interior Buildings contributed to the large
number of missing items. For example, we found that 7 of the 28 property passes
issued during fiscal years 1994 and 1995, accounting for at least 175 items, did not
contain Bureau identification numbers or detailed descriptions of the items removed.
In addition, we could not determine whether all property passes were accounted for
because the forms were not sequentially numbered and a log book on property
passes issued was not maintained.
Because the results of the inventory were not available and a large number of items
could not be located or were not labeled properly, we consider the recommendation
unimplemented. The Bureau should ensure that a complete physical inventory is
taken of all artwork and artifacts located in the Main and South Interior Buildings
and that the results are adequately documented and reconciled with the property
records. In addition, because Form DI-105 is one of the basic documents used to
establish accountability and control over artwork and artifacts, the Bureau should
ensure that the form is completed and filed for each item in the inventory.
Recommendation 2. Hire an art expert to determine the historical and monetary
value of the artwork and artifacts before board-of-survey actions are initiated.
In making this recommendation, our prior report stated, "The Bureau's recorded
value for its artwork and artifacts may be significantly lower than the actual value
because some of the artists have become more prominent since the artwork was
acquired." The prior audit also found that the Bureau had not established values for
artwork and artifacts in storage. The Bureau agreed with the recommendation,
stating that specific guidance would be developed.
Our followup review found that while the files generally contained an adequate
description of the historical value of the items, monetary values had not been
established. However, subsequent to the prior audit, the Federal Accounting
Standards Advisory Board issued draft guidelines ("Statement on Accounting for
Property, Plant, and Equipment") in February 1995 which stated that "no monetary
value be recognized for donated heritage assets" (which included artwork). The
guidelines further stated, "The most relevant information about heritage assets would
generally be their existence and condition." According to Departmental officials, the
bureaus have been encouraged to implement the guidelines even before they are
finalized. Therefore, we consider the recommendation implemented.
Recommendation 3. Formally designate an accountable officer and a custodial
officer for the artwork and artifacts in storage.
Our prior audit found that neither an accountable officer nor a custodial officer was
designated for objects stored in the attic of the South Interior Building. The
accountable officer is responsible for the property records and the annual inventory,
and the custodial officer is responsible for the daily supervision and control of
artwork and artifacts in storage. The Bureau agreed with the recommendation,
stating that a memorandum would be issued designating the responsible officials.
Our followup review found that the Bureau hired a curator in June 1992, who
assumed the role of accountable officer. Because the curator controlled access to
the storage areas, she was, in effect, also the custodial officer. However, while these
actions address the intent of our recommendation, the Bureau did not formally
designate the curator for either position. Also, the Bureau of Indian Affairs
Property Management Manual (43 BIAM Supplement 8, Section 2.8) states that the
duties of accountable officer and custodial officer should not be performed by the
same person. Therefore, we consider this recommendation partially implemented.
Recommendation 4. Issue property receipts to assign responsibility for property in
private offices.
Our prior audit found that, although Bureau officials had inventoried artwork,
property receipts (Form DI-105) indicating custody had not been prepared for these
items, as required by the Departmental Manual. The prior report stated that, in
addition to indicating custody, a property receipt would ensure that responsible
officials were financially liable to the Government if the property was lost, damaged,
or stolen. The Bureau agreed with the recommendation, stating that a memorandum
would be issued to persons with items in their offices to designate them as the
custodial officers and that a signed Form DI- 105 would be maintained for each item.
Our followup review found that the Bureau took actions different than it proposed
in response to our prior audit to improve controls over its artwork and artifacts.
Instead of designating individuals who had property in their own offices as custodial
officers, the Bureau assigned custodial officer responsibility to a smaller number of
individuals who oversaw the property as part of their daily activities. This practice
was in compliance with the Bureau Manual. However, property receipts had not
been prepared for all of the items we reviewed, as discussed in Recommendation 1.
Therefore, we consider this recommendation unimplemented. The Bureau should
ensure that property receipts are obtained for all items assigned to the custodial
officers.
Recommendation 5. Establish appropriate physical storage facilities and implement
procedures to safeguard artwork and artifacts from environmental hazards.
Our prior audit found that the Bureau had not adequately safeguarded its artwork
and artifacts from environmental hazards resulting from improper handling and
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storage and from inadequate climate and lighting controls. For example, we found
that items such as paintings, prints, and pottery were stored improperly in the South
Interior Building attic, where it was "exceedingly hot, humid, dusty and dirty." The
attic had a leaking water pipe, and there was evidence of previous flooding. The
Bureau agreed with the recommendation, stating that procedures would be issued to
adequately protect artwork and artifacts. The Bureau further stated that it would
review Departmental guidance being developed by the Office of the Assistant
Secretary for Policy, Management and Budget for protecting artwork and artifacts
and incorporate, in the Bureau Manual, a section setting forth policies and
responsibilities in this area.
Our followup review found that the Bureau had made significant progress in
correcting the conditions noted in the prior report and had revised the Bureau
Manual to incorporate Departmental guidance on safeguarding artwork and artifacts
from environmental hazards. For example, the Bureau's curator had removed all
items from the attic and had established temporary locked storage areas in the Main
and South Interior Buildings, and items were generally being protected from
potential damage from ultraviolet light and dust. However, we believe that
additional actions are needed to ensure that all artwork and artifacts are adequately
protected. We used the Department of the Interior Checklist for Preservation,
Protection, and Documentation of Museum Property to evaluate the storage areas
located in the Main and South Interior Buildings and identified the following
deficiencies:
- The storage areas did not have sufficient space.
- There were no intrusion alarms.
- The shelving was not stabilized.
- There were no devices to monitor humidity and the presence of pests.
We therefore consider this recommendation partially implemented.
Recommendations
We recommend that the Assistant Secretary for Indian Affairs:
1. Ensure that physical inventories of artwork and artifacts located in the Main
and South Interior Buildings are adequately documented and that the results are
reconciled with the property records.
2. Ensure that Forms DI-105, "Receipt for Property," are prepared for all
artwork and artifacts and that each item is labeled with a property number.
3. Ensure that sequentially numbered property passes are prepared accurately
and completely and issued for all items removed from the Main and South Interior
Buildings.
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4. Formally designate an accountable officer and a custodial officer for the
artwork and artifacts in storage.
5. Obtain and properly equip permanent storage areas to ensure that artwork
and artifacts are protected in accordance with Departmental standards.
Bureau of Indian Affairs Response and Office of Inspector General
Reply
In its March 29, 1996, response (Appendix 2) to the draft report, the Bureau of
Indian Affairs concurred with Recommendations 2, 3, and 4 and partially concurred
with Recommendations 1 and 5. Based on the response, we consider
Recommendations 4 and 5 resolved and implemented and Recommendations 2 and
3 resolved but not implemented. Accordingly, the unimplemented recommendations
will be referred to the Assistant Secretary for Policy, Management and Budget for
tracking of implementation. Based on the response, we revised Recommendation
1 and are requesting that the Bureau respond to the revised recommendation, which
is unresolved (see Appendix 3).
Recommendation 1. Partial concurrence.
Bureau Response. The Bureau stated that it performed a physical inventory of
artwork in the Main and South Interior Buildings in March 1995 in compliance with
annual inventory requirements and that it had "provided a set of the workpapers to
the auditors as evidence." According to the Bureau, as part of the inventory effort,
"some items" were entered into the property records, and a reconciliation of the
inventory and the property records was "partially performed." The Bureau stated
that it will ensure that all items are entered into the system and that the
reconciliation is completed. The Bureau also indicated that it was unable to
specifically comment on some of the examples in our report because we did not
provide listings identifying the items involved.
Office of Inspector General Reply. During our review, the Bureau provided us
with partial documentation that a physical inventory of its artwork and artifacts had
been conducted. However, the documentation covered only a portion of the items
on the Bureau's inventory listing; therefore, we could not determine whether a
complete physical inventory had been performed. Based on the Bureau's comments,
we have revised our report to recognize that inventory work had been performed but
that adequate documentation was not maintained. Accordingly, we have also revised
the recommendation to reflect the need for adequate documentation. Further, we
have provided listings of the items cited to the Bureau to enable it to take corrective
action as appropriate.
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Recommendation 2. Concurrence.
The Bureau stated that it will obtain Forms DI-105 within 3 months after obtaining
the list of items from the audit staff and that it had located 19 of the 25 missing
items and obtained Forms DI-105 for them. The Bureau further stated it will either
locate the remaining six items or convene a board of survey regarding the items'
disposition.
Recommendation 3. Concurrence.
The Bureau stated that although most of the need for property passes would be
alleviated when its offices are consolidated in the Main Interior Building, which was
scheduled to occur in May 1996, the Bureau concurred with the recommendation and
said that it will develop a "list of requirements" for property passes. The
requirements will include sequential numbering and ensure that passes are complete
and accurate.
Recommendation 4. Concurrence.
The Bureau stated that it partially implemented the recommendation when it hired
a curator in June 1992. The Bureau also included in its response copies of March
26, 1996, memoranda designating an accountable officer for personal property in the
Central Office and designating a different individual as the custodial officer for
artwork and artifacts located in designated storage areas in the Central Office.
Recommendation 5. Partial concurrence.
Bureau Response. The Bureau stated that because of the planned renovation of
the Main Interior Building and the Bureau's plans to move to the building, the
current storage area is considered "temporary." The Bureau said, therefore, that it
"does not believe that it would be cost effective to install intrusion alarms, special
lighting and humidity controls or erect permanent shelving" in the current storage
areas. The Bureau further stated that the additional space will be large enough to
hold some items currently in the Main Interior Building and will have adequate
shelving and protection from ultraviolet light. The Bureau also identified actions
that had been taken to improve storage conditions to prevent damage from
ultraviolet light, dust, and pests.
Office of Inspector General Reply. We agree that it would not be cost effective
to correct the conditions in the current storage area at this time. Based on the
Bureau's response, we have revised the report to reflect the improvements made by
the Bureau.
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Additional Comments
Our draft report had included a finding that the Bureau was not adequately
monitoring and accounting for funds received in fiscal years 1994 and 1995 to correct
material weaknesses reported in the Secretary's Annual Statement and Report to the
President and the Congress regarding inadequate controls over artwork and artifacts.
The report recommended that the Assistant Secretary for Indian Affairs ensure that
the Office of Management and Administration accounts for and monitors the use of
the material weakness funds.
In response to the report, the Bureau stated that it "recognize[d]" that it "did not
provide full documentation at the time of the audit review" and requested that the
draft report be revised to reflect the additional information provided with the
response.
Based on our review of the additional information and the fact that the Bureau did
not request or receive any supplemental funds in its fiscal year 1996 budget for
specifically correcting these material weaknesses, we have excluded the finding and
related recommendation from the final report.
In accordance with the Departmental Manual (360 DM 5.3), we are requesting a
written response to this report by December 20, 1996. The response should provide
the information requested in Appendix 3.
The legislation, as amended, creating the Office of Inspector General requires
semiannual reporting to the Congress on all audit reports issued, actions taken to
implement audit recommendations, and identification of each significant
recommendation on which corrective action has not been taken.
We appreciate the cooperation of Bureau officials in the conduct of our audit.
APPENDIX 1
STATUS OF RECOMMENDATIONS FOR AUDIT REPORT
"BUREAU OF INDIAN AFFAIRS ACCOUNTABILITY AND
CONTROL OVER ARTWORK AND ARTIFACTS LOCATED IN
THE MAIN AND SOUTH INTERIOR BUILDINGS"
(No. 91-I-73)
Recommendation Status
1.
2.
3.
Conduct a complete physical Not implemented.
inventory of all artwork and
artifacts and reconcile it
with the property records.
Hire an art expert to determine
the historical and monetary
value of the artwork and
artifacts before board-of-
survey actions are initiated.
Formally designate an accountable
officer and a custodial officer
for the artwork and artifacts
in storage.
4. Issue property receipts to
assign responsibility for
property in private offices.
5. Establish appropriate physical
storage facilities and implement
procedures to safeguard artwork
and artifacts from environmental
hazards.
Implemented.
Partially implemented. The Bureau
had established and filled the
position of museum curator, who is
identified on some records as the
accountable officer. However, the
Bureau had not formally designated
an accountable officer and a
custodial officer for the artwork
and artifacts in storage in the
Main and South Interior Buildings.
Not implemented.
Partially implemented. Although
the Bureau had relocated artwork
and artifacts to more adequate
facilities, the current storage
areas lacked some of the features
required by Departmental museum
property guidelines.
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APPENDIX 2
Page 1 of 6
United States Department of the Interior
OFFICE OF THE SECRETARY
Washington, D.C. 20240
Memorandum
Subject: Draft Audit Report on Followup of Recommendations Concerning Bureau of Indian
Affairs Accountability and Control Over Artwork And Artifacts Located In The Main
And South Interior Buildings, Report No. E-IN-BIA-014-95
We have reviewed the above draft report which contained six findings, five of which were originally
discussed in the previous report, "Bureau of Indian Affairs Accountability and Control Over Artwork
and Artifacts Located in the Main and South Interior Buildings," Report No. 91-I-73. The sixth
finding concerns material weakness funds. The current report indicated that one of the original
findings has been implemented.
Before responding to the remaining five findings, we would like to comment on the following items
contained in the report.
Complete Physical Inventory
The draft report states on page 4 that the Bureau had not conducted an adequate physical inventory
of artwork and artifacts or reconciled the inventories with the property records. On page 5 the report
says, "In our followup review, we found that, although the Bureau stated that a physical inventory
had been performed as recently as March 1995, it could not provide the results of the review." A
physical inventory is a two-step process, performing a physical review and then reconciling it with
the property records. While it is true that the reconciliation between the physical review and the
property records has not been completed, the Bureau did complete a physical review of all artwork
and artifacts in the Main and South Interior Buildings and provided a set of the workpapers to the
auditors as evidence.
On page 6, the report lists three "examples" of inaccurate and incomplete inventory and property
records:
The first example is that 268 items did not have a Form DI-105, "Receipt of
Property," on file.
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APPENDIX 2
Page 2 of 6
Since a copy of the list containing the 268 items was not provided, we are unable to
determine the circumstances or whether a DI-105 is required. If they are
photographs, then they are reprints of historical ethnographic photographs from the
Smithsonian or copies of historical Rinehart photographs from the Haskell Indian
Nations University. Reprints are not considered museum property and do not require
property numbers. The replacement cost is minimal.
The second example is that 25 of 100 items "judgmentally selected' from the July
1995 inventory listing could not be located or otherwise accounted for, and 21 other
items were at locations different from those noted on the inventory.
As stated above, while a complete physical inventory was performed of all artwork
and artifacts, many of the DI-105s had not been entered into the Fixed Assets
Subsystem. As a result, the "July 1995 inventory listing" did not reflect the inventory
in the workpapers and it may have been difficult to locate some of the two sets of
items. Additionally, some of the items on the listing had numbers which are no
longer used as identifiers. The Bureau has the list of the 25 items that could not be
located and is in the process of reconciling them. As noted in the report, 19 have
been reconciled. DI-105s have been obtained.
The third example is that 24 items observed in Bureau offices were not labeled with
an official property number.
A list of those items was not provided, and the Bureau does not know what method
was used to "judgmentally" select those items. Some of those items may belong to
individual BIA employees or maybe photographs which are not museum property and
do not require official property numbers.
In the last paragraph on page 6, the report cites 7 property passes that did not contain
Bureauidentification numbers.
Again, since no list was provided, we do not know if the 7 items which did not have
identification numbers are photographs. If they are, no identification numbers are
required.
Property Receipts
On pages 9 and 10, the report states that as a result of the 1990 audit, the Bureau agreed to issue a
memorandum to persons with items in their offices to designate them as custodial officers but that
during this audit the Bureau could not provide documentation that memoranda were issued. Attached
to this response is a memorandum dated July 22, 1992 which indicates that property custodial officers
were designated and would be provided training on custodial and cognizant employee responsibilities
for artwork.
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APPENDIX 2
Page 3 of 6
We believe the auditors did not accept this memorandum since they assumed that anyone who has
artwork in his or her own individual office should have received a memorandum designating them
as a custodial officer. On the contrary, custodial officers are defined in 43 BIAM Supplement 83.6
and 3.6A as "operating officials" who "shall be responsible for property in an area which can
reasonablely be overseen in the daily use of government property, and in which the misuse and use
for other than official purposes is readily identifiable." This memorandum was intended for the
custodial officers who meet that definition.
Storage Facilities
While the report does give credit on page 11 for some actions taken to improve the storage of
artwork and artifacts, other corrective actions are not acknowledged. Those corrective actions are
as follows:
- To prevent UV light damage, curtains and blinds are closed in the storage room,
- The Department of the Interior Integrated Pest Management is used in the storage room and
throughout offices displaying artwork and artifacts.
- All museum property items in the Main Interior Building storage room is protected from
dust. Additionally, at the time of the fieldwork, baskets were either covered by acid-free
paper or were in acid-free boxes. Sculptures were wrapped in acid-free paper or were
covered with plastic. Textiles were stored in acid-free boxes, and small items were wrapped
in acid free paper. The paintings were stored with acid free dividers in both the Main Interior
Building and the South Interior storage rooms.
Material Weakness Funds
On page 2, the draft report states that ".. the Bureau received a total of about $2.3 million during
fiscal years 1992 through 1995 to fund corrective actions." While the Bureau had requested a total
of $2,794,000, the Congress appropriated $2,150,000 over these four fiscal years.
On page 12, the draft report states that the Division of Property Management "... was not adequately
monitoring the use of these finds," and on page 12 that the Division had no records to account for
and explain how over $1.5 million was used during FY 1994 and FY 1995 to improve the
management and control of the Indian artwork and artifacts. We believe that these findings are
erroneous and resulted from an incomplete review of accounting reports and program management
records. However, we recognize that the Bureau did not provide full documentation at the time of
the audit review. We request, therefore, that this section of the draft report be revised to reflect the
following information and to affirm the adequacy of the Bureau's accountability for financial and
program performance.
The report indicates that $1,895,000 was provided in FY 1994 and FY 1995 to correct material
weaknesses in Indian artwork and artifacts. Because of provisions in the FY 1994 and FY 1995
Appropriations Acts requiring general reductions and procurement savings, only $1,658,000 in
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APPENDIX 2
Page 4 of 6
additional appropriations could redirected toward planned corrective actions. This is the incremental
amount of funds above the Division's base budget level for staff and on-going operations. Of these
additional funds, the Division retained $963,000 for headquarters activities and distributed $695,000
to various area and agency offices, schools and other field locations as indicated in attached Table
1.
The Division obligated its resources largely for personnel compensation, travel to conduct training
and site inventories, and contractual services. It has lead responsibilities for corrective actions on
material weaknesses in Real Property and in Personal Property, which includes, but is not limited to,
Indian art and artifacts located in the Bureau's facilities. The Division also supports corrective actions
on a related material weakness in Acquisition Management through its maintenance of inventory
information on artwork and artifacts in the new automated fixed asset property data system. While
the Bureau separately identified the amounts of finds specifically budgeted for corrective actions on
these material weaknesses, the Division's personnel are not assigned to work exclusively on any one
of these three project areas, except for the museum curator. Furthermore, it is not practical to
expect staff members to maintain internal records on how much of their time is spent on each project
since these material weaknesses are interrelated and corrective activities are integrated into daily
operations.
Summary information on the suballotments, obligations, and the use of these finds at the field
locations is provided in Tables 2 and 3. Most field locations submitted narrative reports on program
plans and accomplishments. While this information is summarized in tabular form for ease of review,
copies of the reports submitted by the the area offices and schools and the year-end reports from the
accounting system are provided.
Recommendations and Response
Recommendation #l:
Ensure that a complete physical inventory is taken of all artwork and artifacts located in the Main and
South Interior Buildings and that the results are reconciled with the property records.
Response:
The Bureau concurs and has partially implemented this recommendation. In March 1995, the Bureau
performed a physical inventory of artwork in the Main and South Interior Buildings in compliance
with 411DM 3.4 (Museum Property Management) and 410DM114.60 (Interior Property
Management Directives) annual inventory requirements. This inventory included all Bureau offices
as well as the Office of the Secretary, the DOI Museum, and other Interior offices with artwork on
loan from the Bureau. At that time, some items were encoded into the Bureau's property system, and
reconciliation between the property records and physical inventory records was partially performed.
Delores Mays, Division of Property Management, will ensure that the items which have not been
encoded into the system will be encoded and that the remainder of the reconciliation will be
completed by July 31, 1996.
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APPENDIX 2
Page 5 of 6
Recommendation #2:
Ensure that a Form DI-105, "Receipt for Property," is prepared for all artwork and artifacts and that
each item is labeled with a property number.
Response:
The Bureau concurs. Prior to the October 1990 Inspector General audit on artwork, the Bureau had
been lax on requiring a DI-105 for artwork and artifacts. Since that audit, emphasis has been placed
on ensuring that custodial responsibilities and accountability be assigned to Bureau personnel by
completing the DI-105. Marian Hansson, Division of Property Management, will obtain the DI-105s
for the remaining items within 3 months from the date the auditing staff provides a copy of the list
containing those items. With respect to the 25 items listed as "missing" on page 11, the Bureau has
located 19 of the 25 items and has obtained DI-105s. Ms. Hansson will also either locate the
remaining six items and prepare any required DI-105s or she will prepare a Report of Survey for
resolution by Board of Survey members to consider as required under 114DM60.802. Delores Mays
will ensure that the Board is appointed and convened. All actions regarding those remaining six
items will be completed by July 15. 1996.
Recommendation #3 :
Ensure that sequentially numbered property passes are prepared accurately and completely and issued
for all items removed from the Main and South Interior Buildings.
Response:
The Bureau recognizes that the property passes are not sequentially numbered and a log book is not
maintained and, therefore, concurs with this recommendation. Also, one property pass was not fully
completed and six others may not have been filly completed. BIA offices in the South Interior
Building will consolidate with the offices in the Main Interior Building in May, 1996, and there will
be a corresponding increase in the Main Interior storage area so that items will not have to be
transferred from one storage area to the other. This will alleviate most of the requirements for
property passes. However, some items will continue to be sent to vendors for repairs and to other
agencies on loan. So that these items will be safeguarded, Deolores Mays will ensure that a list of
requirements for issuance of future property passes is developed. She will also ensure that all
property passes are sequentially numbered and are complete and accurate for all items removed from
the Main and South Interior Buildings. The list of requirements will be developed by May31, 1996
The log and sequentially numbered passes will also be utilized by that date.
Recommendation #4:
Formally designate an accountable officer and a custodial officer for the artwork and artifacts in
storage.
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APPENDIX 2
Page 6 of 6
Response:
The Bureau concurs with this recommendation. As indicated in the audit report, the Bureau has
partially implemented this recommendation by hiring a curator in June 1992 whose duties include
custodial officer for storage. The attached memorandums formally designating the accountable
officer and the custodial officer for storage meets the remaining requirements of this recommendation.
Recommendation #5:
Obtain and properly equip permanent storage areas to ensure that artwork and artifacts are protected
in accordance with Departmental standards.
Response:
The Bureau partially concurs with this recommendation. The Bureau will require additional storage
space to accommodate artwork from the South Interior storage area when it moves to the Main
Interior Building. Additionally, since the Main Interior Building is scheduled for renovation, the
Bureau's storage area may be relocated. Therefore, the Bureau considers the current storage area
as temporary and does not believe that it would be cost effective to install intrusion alarms, special
lighting and humidity controls or erect permanent shelving. Regarding dust covers and pest controls
in the current areas, as stated earlier, acid free paper, dividers and boxes have been obtained to
protect art and artifacts from dust, and the storage area is covered by the Department's Integrated
Pest Management. The additional space will have adequate storage, shelving, acid-free paper and
protection from UV lighting. Also, the additional space will be large enough to accommodate some
items from the current Main Interior storage area which should alleviate the overcrowding in that
space.
Recommendation #6:
Ensure that the Office of Management and Administration accounts for and monitors the use of the
material weakness finds.
Response:
The Bureau does not concur. Based upon the information provided with this response, we consider
current accounting and monitoring practices to be adequate.
Attachments
[NOTE: ATTACHMENTS NOT INCLUDED BY OFFICE OF INSPECTOR GENERAL. ]
16
APPENDIX 3
STATUS OF AUDIT REPORT RECOMMENDATIONS
Finding/Recommendation
Reference Status Action Required
1 Unresolved. Provide a response to the revised
recommendation.
2 and 3 Resolved; not No further response to the Office
implemented. of Inspector General is required.
The recommendations will be
referred to the Assistant
Secretary for Policy, Management
and Budget for tracking of
implementation,
4 and 5
Implemented. No further action is required.
17
SHOULD BE REPORTED TO
THE OFFICE OF INSPECTOR GENERAL BY:
Sending written documents to: Calling:
Within the Continental United States
U.S. Department of the interior Our 24-hour
Office of Inspector General Telephone HOTLINE
1550 Wilson Boulevard 1-800-424-5081 or
Suite 402 (703) 235-9399
Arlington, Virginia 22210
TDD for hearing impaired
(703) 235-9403 or
1-800-354-0996
Outside the Continental United States
Caribbean Region
U.S. Department of the interior (703) 235-9221
0ffice of Inspector General
Eastern Division - Investigations
1550 Wilson Boulevard
Suite 410
Arlington, Virginia 22209
North Pacific Region
U.S. Department of the Interior (700) 550-7279 or
Office of Inspector General
North Pacific Region
238 Archbishop F.C. Flores Street
Suite 807, PDN Building
Agana, Guam 96910
Toll Free Numbers:
1-800-424-5081
TDD 1-800-354-0996
FTS/Commercial Numbers:
(703) 235-9399
TDD (703) 235-9403
1550 Wilson Boulevard
Suite 402
Arlington, Virginia 22210