NATIONAL ENDOWMENT FOR THE HUMANITIES
					WASHINGTON, D.C. 20506

					OFFICE OF INSPECTOR GENERAL

					    SEMIANNUAL REPORT
					OF THE INSPECTOR GENERAL
					    TO THE CONGRESS

				    OCTOBER 1, 1994 TO MARCH 31, 1995

					    REPORT NUMBER 12

			"Democracy demands wisdom and vision in its citizens"
			- National Foundation on the Arts and the Humanities Act of 	1965

			NATIONAL ENDOWMENT FOR THE HUMANITIES
				MISSION STATEMENT

As a leader in the nation's cultural and intellectual life, the National Endowment for the 
Humanities promotes knowledge of human history, thought, and culture and enhances the role of 
the humanities throughout the nation.

The Endowment, an independent federal agency,

  supports significant and innovative scholarship in all humanities disciplines;

  fosters effective teaching and life-long learning in the humanities;

  encourages thoughtful public participation in and enjoyment of the humanities;

  preserves cultural and intellectual resources essential to the people of the United States.

			OIG MISSION STATEMENT

The Office of Inspector General provides professional audit, review, investigative, inspection, 
and advisory services to the National Endowment for the Humanities, its community of grant 
recipients, other federal agencies and the Congress.

These services engage the agency in a continual process of enhancing the quality and 
effectiveness of its grant programs and operations.

			OIG VISION STATEMENT

The Office of Inspector General aspires to maintain a reputation for professional competence, 
leadership, and integrity.

We strive to achieve our goal through self-examination and a teamwork environment that fosters 
professional development, open communication, and creativity.

			OIG VALUE STATEMENT

We have a commitment to independence and excellence in the quality of our services.  This 
commitment is characterized by integrity, fairness, cooperation, creativity and respect both 
within and outside the OIG.

	April 28, 1995

The Honorable Sheldon Hackney
Chairman
National Endowment for the Humanities
Washington, DC  20506

Dear Chairman Hackney:

I am pleased to submit the twelfth Semiannual Report on the activities of the Endowment's Office 
of Inspector General (OIG) for the six-month period ending March 31, 1995.  Submission of the 
report is in accordance with section 5 of the Inspector General Act of 1978 (Public Law 95-452), 
as amended.  The Act requires that you transmit the report, along with any comments you may wish 
to make, to the appropriate congressional committees and subcommittees within thirty days from 
receipt of this letter.

In keeping with the governmentwide streamlining and reinvention principles of the National 
Performance Review, we have reviewed the OIG operations concerning desk reviews of OMB Circular 
A-133 CPA prepared reports.  Based on the review, we will now only look at state humanities 
council audit reports, media grantees and other non-profits receiving over $500,000 per year 
from NEH.  This is the most cost-effective approach.  Policies and procedures in OIG operations 
are constantly being refined.

My staff and I appreciate your support and the cooperation of NEH staff.  I look forward to this 
joint commitment to make the Endowment's programs more efficient and effective for the American 
public.  The retirement of one of our auditors will cause our work plan to change during the next
 reporting period.  I am especially thankful that you have allowed the OIG to advertise to fill 
the vacancy.

		Sincerely,

		Sheldon L. Bernstein
		Inspector General

Enclosure	

				TABLE OF CONTENTS

LETTER TO THE CHAIRMAN

EXECUTIVE SUMMARY	  						1

REPORTING REQUIREMENTS OF THE SEMIANNUAL REPORT
OF THE OFFICE OF INSPECTOR GENERAL	 				3

AUDITS AND SURVEYS	  						5

SIGNIFICANT PROBLEMS, ABUSES, AND DEFICIENCIES	  			5

SUMMARY OF AUDIT REPORTS	 					5

OTHER AUDIT ACTIVITY	  						9
	OMB Circular A-133 Desk Reviews	  				9
	Cognizant Audit Agency Reviews	  				9
	Indirect Cost Rate Negotiations/Reviews	 			10
	Audit Resolution and Follow-up	 				10
	State Humanities Councils	 				11

INVESTIGATIONS	 							12

OTHER ACTIVITIES	 						15
	Peer Review	 						15
	Strategic Planning for the OIG	 				15
	Cooperation With Management	 				15
	Participation on the Executive Council on 
	   Integrity and Efficiency	 				16
	Regulatory and Legislative Reviews	 			16
	Training	 						16

REPORTS WITH OUTSTANDING MANAGEMENT DECISIONS	 			17

SIGNIFICANT RECOMMENDATIONS FROM 
   PREVIOUS SEMIANNUAL REPORTS	 					17

AGENCY REFUSAL TO PROVIDE INFORMATION OR ASSISTANCE	 		17

SIGNIFICANT REVISED MANAGEMENT DECISIONS 	 			18

INSPECTOR GENERAL'S DISAGREEMENT WITH
   SIGNIFICANT MANAGEMENT DECISIONS	 				18

LIST OF AUDIT REPORTS	 						19
	External Audit/Survey Reports Issued	 			19
	Internal Audit/Survey or Inspection Reports Issued	 	20
	Indirect Cost Rate Desk Review Reports Issued	 		20
	Desk Review of Nonprofit Grantees' 
	   A-133 Audit Reports						21
	Cognizant Audit Agency Review Reports Issued	 		22

TABLE I - INSPECTOR GENERAL-ISSUED REPORTS
   WITH QUESTIONED COSTS						28

TABLE II - INSPECTOR GENERAL-ISSUED REPORTS WITH
   RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE	 		28

GLOSSARY OF AUDIT TERMINOLOGY	 					29

APPENDIX 1 - OVERVIEW OF THE NATIONAL ENDOWMENT
   FOR THE HUMANITIES	 						30

APPENDIX 2 - THE ENDOWMENT'S ORGANIZATION CHART	 			32

APPENDIX 3 - ESTABLISHMENT OF THE 
   OFFICE OF INSPECTOR GENERAL	 					33

				EXECUTIVE SUMMARY

This is the twelfth semiannual report issued by the Office of Inspector General (OIG) of the 
National Endowment for the Humanities (NEH) pursuant to the Inspector General Act of 1978, as 
amended.  The report summarizes the major activities and accomplishments of the office from 
October 1, 1994 to March 31, 1995.

INTERNAL AUDITS/INSPECTIONS

We issued five internal reports this period.  We reviewed the Endowment's Intergovernmental 
Personnel Act (IPA) Program; the Endowment's internal controls applicable to Lobbying Activity 
Certifications; the Endowment's internal controls applicable to Drug-Free Workplace Certifications;
performed a follow-up review of the Endowment's AWS Program; and reviewed work done throughout 
the agency as it pertains to the Federal Managers' Financial Integrity Act.

EXTERNAL/GRANTEE AUDITS/SURVEYS

We visited the four Pacific Rim state humanities councils and issued an interim report for 
Endowment management.  Limited audits were performed at the Hawaii Committee for the Humanities;
the Guam Humanities Council; and the CNMI Council for the Humanities (Northern Marianas).  We 
also went to the American Samoa Humanities Council, the newest state council and provided them 
with technical accounting assistance.  A complete report for each council will be issued in the 
next reporting period.  During this period we issued an interim report for NEH management.

INVESTIGATION ACTIVITY

During this period fourteen matters were brought to our attention.  We made two internal 
investigations and provided reports to management.  Most matters concerned personnel issues.  
We closed all of the files that were open at the beginning of the period.  One investigative 
matter remains open as of March 31, 1995.

			REPORTING REQUIREMENTS OF THE SEMIANNUAL REPORT
			     OF THE OFFICE OF INSPECTOR GENERAL

Indexed below are the specific reporting requirements prescribed by the Inspector General Act 
of 1978, as amended (Public Law 100-504).

Section 4(a)(2) -- Review of legislation and 
  regulations	 						Page 16

Section 5(a)(1) -- Significant problems, abuses, 
  and deficiencies	 					Page 5 

Section 5(a)(2) -- Recommendations with respect to 
  significant problems, abuses, and deficiencies	 	Page 5 
Section 5(a)(3) -- Prior significant recommendations
  not yet implemented	 					Page 17
Section 5(a)(4) -- Matters referred to prosecutive
  authorities	   						*

Section 5(a)(5) and 6(b)(2) -- Summary of instances where 
  information was refused	 				Page 17

Section 5(a)(6) -- Listing of audit reports showing number
  of reports and dollar value of questioned 
  costs	 							Page 19

Section 5(a)(7) -- Summary of each particularly 
  significant report	 					Page 5 
Section 5(a)(8) -- Statistical table showing number of 
  reports and dollar value of questioned costs	 		Page 28

Section 5(a)(9) -- Statistical table showing number of
  reports and dollar value of recommendations that
  funds be put to better use	 				Page 28

Section 5(a)(10) -- Summary of each audit issued before
  this reporting period for which no management decision
  was made by end of the reporting period	 		Page 17

Section 5(a)(11) -- Significant revised management 
  decisions	 						Page 18

Section 5(a)(12) -- Significant management decisions with
  which the Inspector General disagrees	 			Page 18

             
*	None.

				AUDITS AND SURVEYS

			SIGNIFICANT PROBLEMS, ABUSES, AND DEFICIENCIES

No reports were issued this period that disclosed significant problems.

				SUMMARY OF AUDIT REPORTS

				    INTERNAL ACTIVITY

Review of the Endowment's Intergovernmental Personnel Act (IPA) Program [95-01 (R)]

The Office of Inspector General (OIG) recently conducted a review of the NEH's administration 
of the federal Intergovernmental Personnel Act, commonly referred to as the IPA program.  This 
review was not part of the OIG's original workplan for FY94, but resulted from information 
received from a confidential source through the OIG's "Hotline Program."  The primary objectives 
of the review were to determine 1) if the agency's management controls (selection and approval 
process) in the program are adequate and effective, and 2) if the agency's evaluation process 
(were IPAs successful in meeting their objectives and goals, and whether benefits were derived 
from the program to the agency and other institutions) is satisfactory.  We made several 
recommendations to enhance the program.  Management determined that most of the recommendations
were not necessary because the use of IPAs would be limited.

Follow-up Review of AWS Program [95-01 (I)]
This is a follow-up review of our Report OIG-94-01 (Internal), entitled "Inspection of the 
Endowment's Alternate Work Schedule (AWS) Program, issued on November 10, 1993.  The major 
finding in that report was that five offices and divisions failed to maintain the required 
"Sign-in/sign-out" control sheets for recording the work hours of employees on AWS.  In this 
review, we found many instances of poor recordkeeping by the NEH employees who are on AWS.  A 
number of employees were not always signing-in or signing-out.  Also, there are some offices 
where AWS employees do sign-in in the sequential order that they arrived for work.  We have made 
suggested enhancements to the control sheets currently used by the offices and divisions 
throughout the agency.

Federal Managers' Financial Integrity Act [95-02 (IR)]	
We performed a limited review of the information submitted by each office head/division director 
and the chairman's letter sent to President Clinton.  This review covered fiscal year ending 
September 30, 1994.  We found that the agency generally complied with the Act.  To the deputy 
chairman, we made several suggestions on what needs to be followed-up with concerning the office 
heads and division directors' reports.

Survey of Internal Controls Applicable to Lobbying Activity Certifications
Disclosures [95-03 (IS)]
We recently performed a survey of the internal controls established to ensure the filing of 
lobbying activity certifications and appropriate disclosure of lobbying activities by Endowment 
grantees and contractors.  Each year, the Inspector General is required to submit to the 
Congress, with the budget justification for the agency, an evaluation of the Endowment's 
compliance with requirements of Section 1352 of title 31, United States Code (U.S.C.) entitled, 
"Limitation on the Use of Appropriated Funds to Influence Certain Federal Contracting and 
Financial Transactions."  The survey was for fiscal year 1994.

Based on the results of our survey and our previous inspection [OIG-94-03 (Inspection)], we 
conclude that internal controls established in the Grants Office and the Administrative Services 
Office are adequate to ensure compliance with Section 1352 of title 31 U.S.C.  Therefore, an 
audit was not performed.

Survey of Internal Controls Applicable to Drug-Free Workplace 
Certifications [95-04 (IS)]

The survey was made to determine the adequacy of the internal controls to ensure compliance with 
the requirements of the Drug-Free Workplace Act of 1988 (The Act).  The survey was for fiscal 
year 1994.  The Act requires contractors and grantee organizations to provide and certify to a 
drug-free workplace for their employees.  Individual recipients of a federal contract or grant 
must certify that they will not engage in drug-related activities during the performance of the 
contract or grant.  Based on the results of our survey and our previous inspection [OIG-94-04 
(Inspection)], we conclude that internal controls established in the Grants Office and the 
Administrative Services Office are adequate to ensure compliance with the requirements of the 
Drug-Free Workplace Act of 1988.  Therefore, an audit will not be performed.

				EXTERNAL ACTIVITY

Limited Scope Audit of Contract Awarded to the Association of American Colleges and Universities 
[95-01 (EA)]

We performed a limited scope audit of NEH contract OP-20240-91 with AACU to determine the 
allowability of costs charged to the contract on the contractor's books of account.  The cost 
paid directly by the University of Pennsylvania's Institute for Research on Higher Education are 
subject to audit under OMB Circular A-133, and therefore were not audited by us.  
The contractors claimed cumulative costs of $556,048 were found to be allowable.  We made a 
recommendation to the Endowment's contract office concerning application of indirect/overhead 
costs.

Interim Report on Limited Audits of Hawaii Committee for the Humanities, Guam Humanities Council,
CNMI Council for the Humanities and Visit to American Samoa Humanities Council [95-02 (EA)]

Overall, our audits of the three councils did not disclose major problems.  In the area of gifts 
and matching only one council, Guam, certified gifts of $3,277 that we determined to be 
ineligible.  Councils need to improve the 1) monitoring of their regrant programs and 
2) documentation supporting the financial information reported to NEH on the Financial Status 
Reports.  They also need to revise their regrant policies and procedures to be in compliance 
with the general grant provisions and OMB Circular A-110.  CNMI charged $81 for interest and 
penalties.

				OTHER AUDIT ACTIVITY

			OMB CIRCULAR A-133 DESK REVIEWS

During this period we performed thirty-two desk reviews on audit reports prepared by certified 
public accountants for grantees for whom we are the oversight agency.  We have modified for use 
on A-133 audits the President's Council on Integrity and Efficiency Standards Subcommittee's 
"Uniform Desk Review Guide for A-128 Single Audits."  We  reviewed our data-base and have 
determined that we will only review audit reports only if the grantee received over $300,000 in 
Endowment funds during the audit period, or if the grantee is a state humanities council or a 
media grantee.  Based on our analysis, these are high-risk areas of concern. 

			COGNIZANT AUDIT AGENCY REVIEWS

We receive audit reports on NEH grantee organizations from other federal agencies, state and 
local government auditors, and independent public accountants.  These reports generally are the 
result of A-128 or A-133 audits.  In most instances, the cognizant agency is the Department of 
Health and Human Services, the federal agency with the predominant financial interest.  The 
reports are reviewed by the OIG staff and the results of the review are submitted to NEH 
management for action, if needed, or for information purposes.  During this period we reviewed 
218 reports.

			INDIRECT COST RATE NEGOTIATIONS/REVIEWS

Grantees are entitled to recover for total project costs, both direct and indirect.  Indirect 
costs are those costs of an organization or institution that are not readily identifiable with a 
particular project or activity but are nevertheless necessary to the general operation of the 
organization or institution and the conduct of the activities it performs.

The cost of office supplies, general telephone, postage, accounting, and administrative salaries 
are types of expenses usually considered as indirect costs.  In theory, all such costs might be 
charged directly; practical difficulties, however, preclude such an approach.  Therefore, they 
are usually grouped into a common pool(s) and distributed to those organizational or 
institutional activities that benefit from them through the expedient of an indirect cost rate(s).

Cognizant federal agencies approve the rates after reviewing cost allocation plans submitted by 
grantees.  The approved rate will generally be recognized by other federal agencies.

During this period, we negotiated indirect cost rates with thirteen grantees.

			AUDIT RESOLUTION AND FOLLOW-UP

When the former audit office became part of the OIG, resolution and follow-up duties of the 
audit office stayed in the OIG.  NEH management was reluctant to transfer these duties to 
another office because many of the auditors' recommendations concern accounting system 
improvements at the grantee level.  The OIG auditors are the only staff in the agency qualified 
to review and reply to grantees.  While we have requested that these functions be transferred, a 
positive response has not been received.  During the current period, we have made a concerted 
effort to resolve these open audit/survey reports.  We are very pleased to report that all prior 
periods reports are now closed.  (See page 17.)

			STATE HUMANITIES COUNCILS

We performed desk reviews of twenty-four audit reports prepared by certified public accountants 
according to OMB Circular A-133 (see page 21).  In addition, we visited four councils 
(see page 18).

				INVESTIGATIONS

The Inspector General Act of 1978, as amended, provides that the Inspector General may receive 
and investigate complaints or information concerning the possible existence of an activity 
constituting a violation of law, rules, or regulations; mismanagement; gross waste of funds; or 
abuse of authority.  The OIG does not employ special investigators.  Should the need arise, 
either the matter would be referred to the Federal Bureau of Investigation or assistance would 
be contracted with another federal Office of Inspector General.  The results of investigations 
may be referred to the appropriate federal, state, or local prosecutive authorities for action.

As of October 1, 1994 we had five files open; all have been closed administratively as of 
March 31, 1995.

During the just completed six-month period October 1, 1994 to March 31, 1995, we received 
fourteen investigative contacts.  Ten were personnel issues concerning NEH employees, one 
involved a state humanities council, one a rejected applicant and the others were administrative 
issues.

Seven of the NEH staff personnel issues were referred to other NEH offices for action; we 
informed the employees that they could revisit our office if it were necessary.  Concerning two 
of the personnel issues, we conducted investigations and provided reports to appropriate 
Endowment officials; these two matters are now closed.  The other matters were closed 
administratively with no action needed.

As of March 31, 1995, one case remains open.

			HOTLINE AND PREVENTION ACTIVITIES

We reviewed the feasibility of maintaining our 800 number and local hotline numbers and a rented 
post office box that we have had since January 1993.  Based on recent activity, we decided to 
keep them for another year.  We obtained all three to provide additional confidentiality for 
those persons bringing matters to the attention of the OIG.

We issued two memorandums through the agency E-mail system.  One addressed the problem of using 
government property for personal reasons.  The second addressed what violations of laws or 
regulations that should be reported to the OIG.  We are currently completing a brochure entitled 
"What An Investigation Means To You" for E-mail circulation.  It will be issued on the agency 
E-mail system.

We provided all offices and divisions with copies of two brochures published by the Software 
Publishers Association.  One is "Is It Okay To Copy My Colleague's Software?" and the other is 
"Software Use And The Law - A Guide For Individuals, Businesses, Educational Groups and User 
Groups."

				Summary of Investigations

Investigative Workload

Pending at beginning of period	   			 	 5
Matters brought to the OIG					14	
        Total Investigative contacts				19		 

Closed or referred during reporting period			18 	  
Pending at end of period					 1

		INVESTIGATION FOR THE INSTITUTE OF MUSEUM SERVICES (IMS)

The OIG has an agreement to perform audit and investigative services for IMS on an as-needed 
basis.  During this period we had one investigative contact.  We are currently working on the 
matter.

				OTHER ACTIVITIES

				  PEER REVIEW

The Inspectors General Act of 1978, as amended, requires all OIGs to have a peer review every 
three years.  The Executive Council on INTEGRITY and EFFICIENCY's (ECIE) committee on Peer
Review assigned the NEH OIG the responsibility of conducting a review of the Farm Credit 
Administration.  We also will be scheduling to have a Peer Review of our operations.  This will 
be performed by the National Archives and Record Administration's OIG.

			STRATEGIC PLANNING FOR THE OIG

During the last reporting period we developed a strategic plan following guidelines established 
by the United States General Accounting Office (GAO).  This is an on-going effort and the plan 
is being further reviewed.

			COOPERATION WITH MANAGEMENT

The National Performance Review (NPR) report recommended that Inspectors General change its 
method of operation.  The report states OIG should do more in the area of management control and 
less compliance work.

During June 1992 the Endowment became involved in total quality management, and the IG was a 
working partner in the agency's strategic planning effort from the beginning.  Members of the 
OIG staff participate in several NEH management improvement activities.  The Inspector General 
and the Deputy attend weekly meetings of the Endowment's Management Steering Committee.  This 
group is led by the Endowment's Deputy Chairman, Juan Mestas, and consists of all office and 
division heads and their deputies or assistants.

The IG is on the Quality Enhancement Committee and a project focus team (FPT) concerning the 
agency's training program.  The deputy is on a standing committee for Technology in the 
Humanities.  An auditor is on a FPT for incentive awards.

			PARTICIPATION ON THE EXECUTIVE COUNCIL ON 
			        INTEGRITY AND EFFICIENCY

The Executive Council on Integrity and Efficiency (ECIE) was established by the President in 1992
to coordinate and implement governmentwide activities to combat fraud and waste in federal 
programs and operations.  The IG is a member of the Law Enforcement Committee and attends the 
Grants Agency Committee.

			REGULATORY AND LEGISLATIVE REVIEWS

The Inspector General Act of 1978, as amended, requires the Office of Inspector General to 
review proposed legislation and regulations.  The reviews are made to assess whether the 
proposed legislation or regulation (1) impacts on the economy and efficiency of Endowment programs
and operations, and (2) contains adequate internal controls to prevent and detect fraud and 
abuse.  During this period we provided comments to the Endowment's Grants Office on their 
revised Gifts and Matching Guidelines for State Humanities Councils.

					TRAINING

The OIG is complying with the continuing education requirements of the General Accounting 
Office's Government Auditing Standards.  For the year ended December 31, 1994, all auditors 
received at least forty hours of training as required. 

			REPORTS WITH OUTSTANDING MANAGEMENT DECISIONS

Section 5(a)(3) of the Inspector General Act, as amended, requires an identification of audit 
recommendations disclosed in previous semiannual reports on which corrective actions are still 
in process.  All reports have final management decisions and have been closed out.

				SIGNIFICANT RECOMMENDATIONS FROM
			  	  PREVIOUS SEMIANNUAL REPORTS

All significant recommendations from previous semiannual reports have been resolved.

				AGENCY REFUSAL TO PROVIDE
				INFORMATION OR ASSISTANCE

There were no reports made to the Chairman of the National Endowment for the Humanities where 
information or assistance, requested under section 6(b)(2) of the Inspector General Act of 1978, 
as amended, was unreasonably refused or not provided.

				SIGNIFICANT REVISED 
				MANAGEMENT DECISIONS 

No significant management decisions were revised during this reporting period.

				INSPECTOR GENERAL'S DISAGREEMENT WITH
				SIGNIFICANT MANAGEMENT DECISIONS

The Inspector General has no disagreement with significant management decisions made during the
reporting period.

				LIST OF AUDIT REPORTS
The following is a list of audit/survey reports issued by the OIG during the reporting period.  
For each audit report where applicable the total dollar value of questioned costs (including a 
separate category for the dollar value of unsupported costs) is provided.  The Act also requires 
us to report on "the dollar value of recommendations that funds be put to better use."  We have 
no amounts to report and therefore have omitted the column.

				EXTERNAL AUDIT/SURVEY REPORTS ISSUED

				Report		Date   		Questioned Unsupported
				Number		Issued     	Cost          Cost

Limited Scope Audit at	   		 			$         $
   the Association of
   American Colleges
   and Universities		95-01(EA)	02-21-95     	   -0-       -0-

Interim Report on Limited
   Audits of
   Hawaii Committee for
      the Humanities
   Guam Humanities Council					3,277     3,277
   CNMI Council for the
      Humanities			   			   81        81
   Visit to the American
      Samoa Humanities
      Council			95-02(EA)	03-29-95	      	       
TOTALS		         					$3,358     $3,358

			INTERNAL AUDIT/SURVEY OR INSPECTION REPORTS ISSUED
					Report		Date   Questioned Unsupported
					Number		Issued     Cost      Cost

Review of the Endowment's
   Intergovernmental
   Personnel Act (IPA)
   Program				95-01(R)	11-14-94
Follow-up Review of 
   AWS Program				95-01(I)	11-18-94
Federal Managers' Financial 
   Integrity Act			95-02(IR)	11-30-94
Survey of Internal Controls
   Applicable to Lobbying 
   Activity Certifications
   Disclosures				95-03(IS)	02-10-95
Survey of Internal Controls
   Applicable to Drug-Free	
   Workplace Certifications 		95-04(IS)	02-10-95

			INDIRECT COST RATE DESK REVIEW REPORTS ISSUED

					Report		Date   Questioned Unsupported
Grantee					Number		Issued     Cost      Cost
Virginia Historical Society		95-01(IDC)	10-11-94
College of St. Catherine		95-02(IDC)	10-18-94
Bostonian Society			95-03(IDC)	10-18-94
Illinois State Historical 
   Society				95-04(IDC)	11-10-94
John Nicholas Brown Center		95-05(IDC)	11-14-94
Museum of American Textile
   History				95-06(IDC)	11-17-94
Southeastern Library
   Network, Inc.			95-07(IDC)	11-17-94
Rochester Museum & Science
   Center				95-08(IDC)	11-29-94
Society for the Preservation
   of New England Antiquities		95-09(IDC)	12-20-94
Queens Museum of Art			95-10(IDC)	01-24-95
Marlboro College			95-11(IDC)	03-24-95
Council for Basic Education		95-12(IDC)	03-24-95
Saint Mary's College			95-13(IDC)	03-29-95

			DESK REVIEW OF NONPROFIT GRANTEES' A-133 AUDIT REPORTS

					Report		Date   Questioned Unsupported
Grantee					Number		Issued     Cost      Cost
Independent Media Artists of 
   Georgia, Etc.			95-01(DR)	11-11-94
Museum of Fine Arts			95-02(DR)	11-11-94
Southeastern Library 
   Network, Inc.			95-03(DR)	11-17-94
Folger Shakespeare Memorial
   Library				95-04(DR)	11-26-94
Jewish Museum				95-05(DR)	11-26-94
Connecticut Humanities Council		95-06(DR)	11-28-94
Oklahoma Foundation for the
   Humanities				95-07(DR)	12-20-94
American Academy of Religion		95-08(DR)	12-20-94
Fundacin Puertorriquea de
   las Humanidades			95-09(DR)	01-19-95
Association of American Colleges	95-10(DR)	01-19-95
Louisiana Endowment for the 
   Humanities				5-11(DR)	01-31-95
Texas Committee for the
   Humanities				95-12(DR)	01-31-95
Illinois Humanities Council		95-13(DR)	01-31-95
Hawaii Committee for the
   Humanities				95-14(DR)	01-31-95
Missouri Humanities Council		95-15(DR)	01-31-95
Georgia Humanities Council		95-16(DR)	01-31-95
Idaho Humanities Council		95-17(DR)	01-31-95
California Council for the
   Humanities				95-18(DR)	01-31-95
California Council for the
   Humanities				95-19(DR)	01-31-95
Delaware Humanities Council		95-20(DR)	01-31-95
Kentucky Humanities Council		95-21(DR)	01-31-95
Massachusetts Foundation for
   the Humanities			95-22(DR)	01-31-95
Commonwealth of the Northern 
   Mariana Islands Council for
   the Humanities			95-23(DR)	01-31-95
Florida Humanities Council		95-24(DR)	03-13-95
D.C. Community Humanities Council	95-25(DR)	03-13-95
American Theological Library
   Association				95-26(DR)	03-13-95
Arkansas Humanities Council		95-27(DR)	03-13-95
New Mexico Endowment for
   the Humanities			95-28(DR)	03-13-95
Massachusetts Foundation for
   the Humanities			95-29(DR)	03-13-95
Vermont Council for the 
   Humanities				95-30(DR)	03-13-95
South Carolina Humanities Council	95-31(DR)	03-13-95
North Dakota Humanities Council		95-32(DR)	03-13-95

			COGNIZANT AUDIT AGENCY REVIEW REPORTS ISSUED

					Report		Date   Questioned Unsupported
Grantee					Number		Issued     Cost      Cost
Indiana University			95-01(CAA)	10-14-94
Harvard University and Radcliffe 
   College, MA				95-02(CAA)	10-14-94
Purdue University, IN			95-03(CAA)	10-14-94
Wright State University, OH		95-04(CAA)	10-14-94
Illinois Institute of Technology	95-05(CAA)	10-14-94
Northwestern University, IL		95-06(CAA)	10-14-94
Madonna University, MI			95-07(CAA)	10-14-94
Macalester College, MN			95-08(CAA)	10-14-94
Northland College, WI			95-09(CAA)	10-14-94
University of Minnesota			95-10(CAA)	10-14-94
Research Foundation of the City
   University of New York		95-11(CAA)	10-18-94
Metropolitan Museum of Art		95-12(CAA)	10-18-94
Jewish Theological Seminary
   of America				95-13(CAA)	10-18-94
George Eastman House			95-14(CAA)	10-18-94
Adirondack Historical Association	95-15(CAA)	10-18-94
National Council on the Aging		95-16(CAA)	10-18-94
Philadelphia Museum of Art		95-17(CAA)	10-18-94
Claremont Univ. Center			95-18(CAA)	10-18-94
Dartmouth College			95-19(CAA)	10-18-94
Medical College of PA			95-20(CAA)	10-18-94
Southern Illinois University,
   Carbondale				95-21(CAA)	10-18-94
State System of Higher 
   Education, PA			95-22(CAA)	10-18-94
Trinity College, Hartford		95-23(CAA)	10-18-94
University of Hawaii, Manoa		95-24(CAA)	10-18-94
University of Notre Dame, IN		95-25(CAA)	10-18-94
Wheaton College, MA			95-26(CAA)	10-18-94
American Council on Education		95-27(CAA)	11-07-94
American Music Center, Inc.		95-28(CAA)	11-07-94
American Repertory Theatre		95-29(CAA)	11-07-94
Kurt Weill Foundation for Music		95-30(CAA)	11-07-94
National Academy of Sciences		95-31(CAA)	11-07-94
Northeast Document Conservation
   Center				95-32(CAA)	11-07-94
Pierpont Morgan Library			95-33(CAA)	11-07-94
Research Libraries Group, Inc.		95-34(CAA)	11-07-94
The Frick Collection			95-35(CAA)	11-07-94
WGBH Educational Foundation		95-36(CAA)	11-07-94
Art Institute of Chicago		95-37(CAA)	11-07-94
Community College of Philadelphia	95-38(CAA)	11-07-94
Garret-Evangelical Theological
   Seminary				95-39(CAA)	11-07-94
Georgetown University			95-40(CAA)	11-07-94
Kalamazoo Valley Community 
   College				95-41(CAA)	11-07-94
Saint Mary's University of 
   San Antonio				95-42(CAA)	11-07-94
Samford University Foundation		95-43(CAA)	11-07-94
Stanford University			95-44(CAA)	11-07-94
Western Washington University		95-45(CAA)	11-07-94
State of New Jersey			95-46(CAA)	11-10-94
City of New York			95-47(CAA)	11-10-94
Dartmouth College, NH			95-48(CAA)	11-10-94
University of Pittsburgh, PA		95-49(CAA)	11-10-94
University of Maine System		95-50(CAA)	11-10-94
Onondaga County, NY			95-51(CAA)	11-10-94
Wartburg College, IA			95-52(CAA)	11-10-94
Saint John's College, MD		95-53(CAA)	11-10-94
University of New Hampshire 
   System				95-54(CAA)	11-10-94
Washington University, MO		95-55(CAA)	11-10-94
State of Florida			95-56(CAA)	11-10-94
College of Notre Dame of
   Maryland/of Baltimore		95-57(CAA)	11-14-94
College of Holy Cross, MA		95-58(CAA)	11-14-94
Mount Holyoke College, MA		95-59(CAA)	11-14-94
Rice University (William Rice
   Marsh Rice University, TX)		95-60(CAA)	11-14-94
University of Maine System, Orono	95-61(CAA)	11-14-94
University of Mississippi		95-62(CAA)	11-14-94
University of Missouri System		95-63(CAA)	11-14-94
University of Puerto Rico		95-64(CAA)	11-14-94
University System of New 
   Hampshire				95-65(CAA)	11-14-94
Union College				95-66(CAA)	11-14-94
FilmAmerica, Inc.			95-67(CAA)	11-17-94
Media Resource Associates, Inc.		95-68(CAA)	11-17-94
Espirtruth Films, Inc.			95-69(CAA)	11-17-94
National Council on the 
   Aging, Inc.				95-70(CAA)	11-17-94
Abigail Adams Smith Museum		95-71(CAA)	11-17-94
Southwest Museum			95-72(CAA)	11-17-94
California State University,
   Long Beach Foundation		95-73(CAA)	11-17-94
Renaissance Society of America		95-74(CAA)	11-17-94
Southeastern Library 
   Network, Inc.			95-75(CAA)	11-17-94
White House Historical 
   Association				95-76(CAA)	11-17-94
Massachusetts Historical Society	95-77(CAA)	11-17-94
State of Texas				95-78(CAA)	12-05-94
Saint John's University, MN		95-79(CAA)	12-05-94
Princeton University, NJ		95-80(CAA)	12-05-94
Princeton University, NJ		95-81(CAA)	12-05-94
Science Museum of Minnesota		95-82(CAA)	12-05-94
Japan Society, Inc., NY			95-83(CAA)	12-05-94
New Mexico State University		95-84(CAA)	12-05-94
County of Los Angeles, CA		95-85(CAA)	12-05-94
State of Nevada				95-86(CAA)	12-05-94
State of Alabama			95-87(CAA)	12-05-94
Emory University, GA			95-88(CAA)	12-05-94
Montgomery County Public 
   Schools, MD				95-89(CAA)	12-05-94
Sealaska Heritage Foundation, AK	95-90(CAA)	12-05-94
University of Wisconsin System		95-91(CAA)	12-05-94
Mount Saint Mary's College, MD		95-92(CAA)	12-05-94
University of Missouri-Columbia		95-93(CAA)	12-05-94
City Lore, Inc.:  The New York
   Center for Urban Folk Culture	95-94(CAA)	12-05-94
Syracuse University, NY			95-95(CAA)	12-05-94
City of Los Angeles			95-96(CAA)	12-05-94
University of Puerto Rico-System	95-97(CAA)	12-12-94
State of South Carolina			95-98(CAA)	12-12-94
Saint Mary's College			95-99(CAA)	12-12-94
County College of Morris		95-100(CAA)	12-12-94
University of Miami			95-101(CAA)	12-12-94
Massachusetts Institute of 
   Technology				95-102(CAA)	12-12-94
Cleveland Medical Library
   Association				95-103(CAA)	12-12-94
Brooklyn Historical Society		95-104(CAA)	12-12-94
Emory University			95-105(CAA)	12-12-94
Hampshire College			95-106(CAA)	12-12-94
Rochester Institution of
   Technology				95-107(CAA)	12-12-94
Vermont Folklife Center			95-108(CAA)	12-12-94
National Humanities Center		95-109(CAA)	01-26-95
Sweet Briar College			95-110(CAA)	01-26-95
Pennsylvania Historical & Museum 
   Commission				95-111(CAA)	01-26-95
State of West Virginia	95-112(CAA)	01-26-95
Rollins College				95-113(CAA)	01-26-95
Trinity College, 
   District of Columbia			95-114(CAA)	01-26-95
Catholic University of America		95-115(CAA)	01-26-95
Fordham University			95-116(CAA)	01-26-95
Hofstra University			95-117(CAA)	01-26-95
State of Delaware			95-118(CAA)	01-26-95
Moberly Area Community College		95-119(CAA)	01-26-95
University of Rochester			95-120(CAA)	01-20-95
University of Alabama, Huntsville	95-121(CAA)	01-20-95
State of Mississippi			95-122(CAA)	01-20-95
State of Iowa				95-123(CAA)	01-20-95
Southern Methodist University		95-124(CAA)	01-20-95
Carleton College			95-125(CAA)	01-20-95
Drake University			95-126(CAA)	01-20-95
University of Rochester			95-127(CAA)	01-20-95
University of Alabama			95-128(CAA)	01-20-95
Trenton State College			95-129(CAA)	01-20-95
Shimer College				95-130(CAA)	01-24-95
San Jose State University Fdn.		95-131(CAA)	01-24-95
California State University,
   Sacramento Foundation		95-132(CAA)	01-24-95
Auburn University			95-133(CAA)	01-24-95
State of Utah				95-134(CAA)	01-24-95
Wesleyan College			95-135(CAA)	01-24-95
Robert Morris College			95-136(CAA)	01-24-95
University of Southern California	95-137(CAA)	01-24-95
New York University			95-138(CAA)	01-24-95
Yale University				95-139(CAA)	01-24-95
Cleveland Museum of Art			95-140(CAA)	03-23-95
Washington Press Club			95-141(CAA)	03-23-95
Museum of New Mexico Foundation		95-142(CAA)	03-23-95
Council for Basic Education		95-143(CAA)	03-23-95
New England Foundation for the
   Humanities				95-144(CAA)	03-23-95
Oklahoma State University		95-145(CAA)	03-23-95
University of New Mexico		95-146(CAA)	03-23-95
Virginia Historical Society		95-147(CAA)	03-23-95
City of Baltimore, MD			95-148(CAA)	03-08-95
City of Wheatland, CA			95-149(CAA)	03-08-95
Flathead County, MT			95-150(CAA)	03-08-95
Manatee Community College		95-151(CAA)	03-08-95
State of Colorado			95-152(CAA)	03-08-95
State of Maryland			95-153(CAA)	03-08-95
State of Missouri			95-154(CAA)	03-08-95
State of Montana			95-155(CAA)	03-08-95
State of North Carolina			95-156(CAA)	03-08-95
State of Washington			95-157(CAA)	03-08-95
Commonwealth of Pennsylvania		95-158(CAA)	03-08-95
School District of Pittsburgh, PA	95-159(CAA)	03-08-95
State of Arizona			95-160(CAA)	03-08-95
State of California			95-161(CAA)	03-08-95
State of Georgia			95-162(CAA)	03-08-95
State of Tennessee			95-163(CAA)	03-08-95
Town of Concord, MA			95-164(CAA)	03-08-95
University of Northern Colorado		95-165(CAA)	03-08-95
University of Southern
   Mississippi				95-166(CAA)	03-08-95
Franklin and Marshall College, PA	95-167(CAA)	03-10-95
La Salle University, PA			95-168(CAA)	03-10-95
Johns Hopkins University, MD		95-169(CAA)	03-10-95
Ohio Dominican College, OH		95-170(CAA)	03-10-95
University of Arkansas at
   Fayetteville				95-171(CAA)	03-10-95
Wayne State College			95-172(CAA)	03-10-95
Amarillo College, TX			95-173(CAA)	03-10-95
Eckerd College, FL			95-174(CAA)	03-10-95
Agnes Scott College, GA			95-175(CAA)	03-10-95
University of Puget Sound, WA		95-176(CAA)	03-10-95
Wheelock College, MA			95-177(CAA)	03-16-95
Kenyon College, OH			95-178(CAA)	03-16-95
Dickinson College, PA			95-179(CAA)	03-16-95
Twin Cities Public Television, MN	95-180(CAA)	03-16-95
Bishop Museum, HI			95-181(CAA)	03-16-95
Boise State University			95-182(CAA)	03-16-95
University of South Alabama, AL		95-183(CAA)	03-16-95
Natrona County School District		95-184(CAA)	03-16-95
County of Fairfax, Virginia		95-185(CAA)	03-16-95
Phoenix Art Museum			95-186(CAA)	03-16-95
American Studies Film Center		95-187(CAA)	03-16-95
Association of American Colleges
   and Universities			95-188(CAA)	03-21-95
International Research &
   Exchanges Board			95-189(CAA)	03-21-95
Huntington Library			95-190(CAA)	03-21-95
Founders Society, Detroit
   Institute of Arts			95-191(CAA)	03-21-95
Denver Art Museum			95-192(CAA)	03-21-95
Peabody Essex Museum			95-193(CAA)	03-21-95
New-York Historical Society		95-194(CAA)	03-21-95
American Research Center in
   Egypt, Inc.				95-195(CAA)	03-21-95
Atlanta Historical Society		95-196(CAA)	03-21-95
Colorado Springs Fine Arts
   Center				95-197(CAA)	03-30-95
Central Michigan University		95-198(CAA)	03-30-95
Marquette University			95-199(CAA)	03-30-95
Samford University Foundation		95-200(CAA)	03-30-95
Saint Joseph's College			95-201(CAA)	03-30-95
Great Plains Chautauqua Society		95-202(CAA)	03-30-95
American Film Institute			95-203(CAA)	03-30-95
Waverly Consort, Inc.			95-204(CAA)	03-30-95
Wadsworth Atheneum			95-205(CAA)	03-30-95
ETV Endowment of South Carolina		95-206(CAA)	03-30-95
Society of American Archivists		95-207(CAA)	03-30-95
Emory University			95-208(CAA)	03-30-95
Museum of the City of New York		95-209(CAA)	03-30-95
Museum of the City of New York		95-210(CAA)	03-30-95
American School of Classical 
   Studies				95-211(CAA)	03-30-95
Pittsburgh Regional Library
   Center				95-212(CAA)	03-30-95
Balch Institute for Ethnic
   Studies				95-213(CAA)	03-30-95
University of the State
   of New York				95-214(CAA)	03-30-95
Ohio University				95-215(CAA)	03-30-95
Founders Society, Detroit
   Institute of Arts			95-216(CAA)	03-30-95
American Dance Festival			95-217(CAA)	03-30-95
Maine Collaborative			95-218(CAA)	03-30-95

					TABLE I

			INSPECTOR GENERAL-ISSUED REPORTS
				WITH QUESTIONED COSTS
	  	             			DOLLAR VALUE

                                            No.  Questioned Unsupported                                                    						   Costs     Costs
                                                                         
A.  For which no management decision         1    $   -0-  	$   -0-  
      has been made by the commencement
      for the reporting period

B.  Which were issued during the reporting   1        3,358	$ 3,358

      Subtotals (A+B)                        2    $   3,358	$ 3,358

C.  For which a management decision was      2    $   -0-	-0-  
      made during the reporting period

      (i)  dollar value of disallowed       -0-   $   -0-	-0-  
           costs

      (ii) dollar value of costs not        -0-   $   -0-	-0-  
           disallowed (grantee 
           subsequently supported all
           costs)

D.  For which no management decision         1    $   3,358	     3,358
      has been made by the end of the
      reporting period

    Reports for which no management         -0-   $  -0-	   -0- 
      decision was made within six
      months of issuance

					TABLE II
			INSPECTOR GENERAL-ISSUED REPORTS
		WITH RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE

During this period, we did not issue any audit reports with recommendations that funds be used 
more efficiently.

GLOSSARY OF AUDIT TERMINOLOGY

Questioned Cost - A cost that is questioned by the OIG because of an alleged violation of a 
provision of a law, regulation, contract, grant, cooperative agreement, or other agreement or 
document governing the expenditure of funds; because such cost is not supported by adequate 
documentation; or because the expenditure of funds for the intended purpose is unnecessary or 
unreasonable.

Unsupported Cost - A cost that is questioned because of the lack of adequate documentation at 
the time of the audit.

Disallowed Cost - A questioned cost that management, in a management decision, has sustained or 
agreed should not be charged to the government.

Funds Be Put To Better Use - Funds, which the OIG has disclosed in an audit report, that could 
be used more efficiently by reducing outlays, deobligating program or operational funds, avoiding
unnecessary expenditures, or taking other efficiency measures.

Management Decision - The evaluation by management of the audit findings and recommendations and 
the issuance of a final decision by management concerning its response to such findings and 
recommendations.

Final Action - The completion of all management actions, as described in a management decision, 
with respect to audit findings and recommendations.  When management concludes no action is 
necessary, final action occurs when a management decision is made.

Source:  Excerpt from Section 106(d) of the Inspector General Act Amendments of 1988 
(P.L. 100-504).

									APPENDIX 1 of 3
										

					OVERVIEW OF
			THE NATIONAL ENDOWMENT FOR THE HUMANITIES

In order "to promote progress and scholarship in the humanities and the arts in the United 
States," Congress enacted the National Foundation on the Arts and the Humanities Act of 1965.  
This act established the National Endowment for the Humanities as an independent grant-making 
agency of the federal government to support research, education, and public programs in the 
humanities.  Grants are made through six divisions--Education Programs, Fellowships and Seminars,
Preservation and Access, Public Programs, Research Programs, and State Programs.

THE HUMANITIES

The act that established the National Endowment for the Humanities says "The term `humanities' 
includes, but is not limited to, the study of the following:  language, both modern and classical;
linguistics; literature; history; jurisprudence; philosophy; archaeology; comparative religion; 
ethics; the history, criticism, and theory of the arts; those aspects of social sciences which 
have humanistic content and employ humanistic methods; and the study and application of the 
humanities to the human environment with particular attention to reflecting our diverse heritage,
traditions, and history and to the relevance of the humanities to the current conditions of 
national life."

									APPENDIX 1 of 3

WHAT THE ENDOWMENT SUPPORTS

The National Endowment for the Humanities supports exemplary work to advance and disseminate 
knowledge in all the disciplines of the humanities.  Endowment support is intended to 
complement and assist private and local efforts and to serve as a catalyst to increase nonfederal
support for projects of high quality.

Although the activities funded by the Endowment vary greatly in cost, in the numbers of people 
involved, and in their specific intents and benefits, they all have in common two requirements 
for funding: significance to learning in the humanities, and excellence in conception.  In the 
most general terms, NEH-supported projects aid scholarship and research in the humanities, help 
improve humanities education, and foster in the American people a greater curiosity about and 
understanding of the humanities.  

SOURCE:  Overview of Endowment Programs, 1994, National Endowment for the Humanities booklet.

									APPENDIX 2 OF 3

			NATIONAL ENDOWMENT FOR THE HUMANITIES 
				ORGANIZTIONAL CHART 

WAS NOT REPRODUCED FOR THE ELECTRONIC VERSION OF THIS SEMIANNUAL REPORT

									APPENDIX 3 of 3
	

				ESTABLISHMENT OF THE OFFICE OF 
					INSPECTOR GENERAL

On October 18, 1988, former President Reagan signed into law the Inspector General Act Amendments
of 1988, Public Law 100-504.  In this legislation, Congress established Offices of Inspector 
General in several departments and in thirty-three agencies, including NEH.  The NEH Inspector
General (IG) is appointed by the Chairman.  The independence of the IG is an important aspect 
of the Act.  For example, the IG:

	cannot be prevented from initiating, carrying out, or completing an audit or
 	investigation, or from issuing any subpoena;

	has access to all records of the agency;

	reports directly to the Chairman, and can only be removed by the Chairman, who must
 	promptly advise Congress of the reasons for the removal; and 

	reports directly to Congress.

The OIG has the responsibility and authority to:

	conduct audits and investigations;

	provide leadership and coordination, and recommend policies to promote efficiency and
 	effectiveness and to prevent fraud;
	
	keep the Chairman and Congress fully and currently informed of problems and deficiencies;
 	and

	comply with governmental auditing standards.

The Act requires the IG to report semiannually to the Chairman and Congress.  The report is
provided to the Chairman, who may comment on the report.  The report must be forwarded to 
Congress within thirty days.  Serious or flagrant problems can be reported anytime to the 
Chairman, who may comment but must transmit the report intact to Congress within seven days of 
receipt.

The OIG staff consists of the Inspector General (IG), a Deputy IG, an auditor/investigator, two 
auditors, a secretary, and a clerk-typist.  In addition, through a "memorandum of understanding,"
the deputy general counsel provides legal services for our office.

Over 88 percent of the agency's funding is for grants.  These grants are to colleges, 
universities, nonprofit organizations, state and local governmental organizations, and 
individuals.  Our audit plan for the fiscal year ending September 30, 1995 calls for 50 percent 
of our effort to be devoted to external audits, surveys, inspections, cognizant audit agency 
reviews of single audits, desk reviews of single audits, and indirect cost rate negotiations.  
This is similar to the fiscal year 1994 work plan. 

Considering administration, the actual review, and supervisory review, we spend one man-year or 
25 percent of our resources on negotiating indirect cost rates.  We have brought this matter to 
the attention of agency senior staff and have discussed the transfer of this function to the 
Grants Office.  In a small agency, we believe this position is appropriate for the OIG because 
we have the expertise on board.  The major problem is that since the prior audit office was 
formed into the OIG, we have not received any new resources.

	THE OFFICE OF INSPECTOR GENERAL

	serves American taxpayers
	by investigating reports of waste, fraud,
	mismanagement, or abuse
	involving  federal funds.

	If you want to report any matter
	involving NEH programs, operations, or employees
	
	please call

	(202) 606-8423

	1-800-366-4650

	or,

	you may write

	Office of Inspector General
	National Endowment for the Humanities
	P.O. Box 14242
	Washington, DC  20044

	ELECTRONIC MAIL HOTLINE
	oig@neh.gov

	Be assured that government employees are protected
	from reprisal and that anyone may have
	his or her identity held in confidence,
	unless the Inspector General determines
	that such disclosure is unavoidable.