NATIONAL ENDOWMENT FOR THE HUMANITIES
					WASHINGTON, D.C. 20506
				    OFFICE OF INSPECTOR GENERAL
					SEMIANNUAL REPORT
				   OF THE INSPECTOR GENERAL
					TO THE CONGRESS
				APRIL 1, 1994 TO SEPTEMBER 30, 1994
					REPORT NUMBER 11
			"Democracy demands wisdom and vision in its citizens"
			- National Foundation on the Arts and the Humanities Act of 1965
					October 27, 1994
The Honorable Sheldon Hackney
Chairman
National Endowment for the Humanities
Washington, DC  20506
Dear Chairman Hackney:
I am pleased to submit the eleventh Semiannual Report on the activities of the Endowment's
Office of Inspector General (OIG) for the six-month period ending September 30, 1994.
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.
We have developed a five-year strategic plan taking into consideration the National Performance
Review (NPR) Report and the United States General Accounting Office Report on Offices of
Inspectors General.  During this period, we have strengthened our commitment to working with all
levels of staff within the agency.  We appreciate that the deputy chairman appointed three
members of the OIG to NEH task forces.  This partnership is important because it allows the OIG
to provide advice concerning management controls before action is taken, and helps build a solid
working relationship with program managers to achieve the agency's mission.  We are still very
committed to our responsibilities of preventing and detecting fraud, waste, abuse, and
mismanagement in NEH programs and activities.
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.
		Sincerely,
		Sheldon L. Bernstein
		Inspector General
Enclosure
				TABLE OF CONTENTS
LETTER TO THE CHAIRMAN
EXECUTIVE SUMMARY							1
ESTABLISHMENT OF THE OFFICE OF INSPECTOR GENERAL			2
REPORTING REQUIREMENTS OF THE SEMIANNUAL REPORT
  OF THE OFFICE OF INSPECTOR GENERAL					4
THE ENDOWMENT'S ORGANIZATION CHART 					6
AUDITS AND SURVEYS							7
	Significant Problems, Abuses, and Deficiencies			7
	Summary of Audits Report					7
INVESTIGATIONS 								10
OTHER ACTIVITIES							13
	OMB Circular A-133 Desk Reviews					13
	Cognizant Audit Agency Reviews					13
	Peer Review 							13
	Indirect Cost Rate Negotiations/Reviews				14
	Audit Resolution and Follow-up					14
	Strategic Planning for the OIG					15
	State Humanities Councils					15
	Total Quality 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 Reports Issued				19
		Indirect Cost Rate Desk Review Reports Issued		20
		Desk Review of Nonprofit Grantees' A-133 Report		20
		Cognizant Audit Agency Review Reports Issued		21
TABLE I - INSPECTOR GENERAL-ISSUED REPORTS WITH
  QUESTIONED COSTS							27
TABLE II - INSPECTOR GENERAL-ISSUED REPORTS WITH
  RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE			27
GLOSSARY OF AUDIT TERMINOLOGY						28
APPENDIX I								29
	Overview of the National Endowment for the Humanities
					EXECUTIVE SUMMARY
This is the eleventh 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
April 1, 1994 to September 30, 1994.
We issued four internal reports this period.  Our review of the Endowment's Budget Execution
System disclosed that it is well run.  In our reviews of the Endowment's training program, the
Performance Appraisal System and Employee Recognition/Incentive Award Programs, we made several
recommendations to enhance these programs.  The unannounced petty cash count, a follow-up to an
audit, showed that the procedures are in place; we made one recommendation to improve the
internal controls.
We are very disappointed that no action has been taken to enclose the office of the inspector
general and the Hotline area.  We continue to be seriously hampered in our investigative
activities because of this problem.
We issued 227 reports this period:
   Audits/Surveys of Grantees	 	  2
   Internal Audits/Reviews/Inspections    4
   Indirect Cost Rate Desk Reviews	 20
   Desk Reviews of Nonprofit Grantees'
       A-133 Audit reports	 	 28
   Cognizant Audit Agency Reviews	173
	Total				227
				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.
				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 7
Section 5(a)(2) -- Recommendations with respect to
  significant problems, abuses, and deficiencies	 	Page 7
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 19-26
Section 5(a)(7) -- Summary of each particularly
  significant report	 					Page 7
Section 5(a)(8) -- Statistical table showing number of
  reports and dollar value of questioned costs	 		Page 27
Section 5(a)(9) -- Statistical table showing number of
  reports and dollar value of recommendations that
  funds be put to better use	 				Page 27
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.
			NATIONAL ENDOWMENT FOR THE HUMANITIES
ORGANIZATION CHART WAS NOT INCLUDED IN THE ELECTRONIC EDITION OF THIS SEMIANNUAL REPORT
					AUDITS AND SURVEYS
			SIGNIFICANT PROBLEMS, ABUSES, AND DEFICIENCIES
We issued one report with significant findings and recommendations relating to the administration
of the programs or operations.
Audit of the Gift Certification Letters From State Humanities Councils [94-03 (A)]
We conducted desk audits of eighteen state humanities councils gift certification letters.
During the past several years in our on-site audits of state councils we found many problems
with the councils' procedures for documenting gifts that are matched with federal funds.  We
found that the problems are continuing.  We examined gifts totaling $1,140,281 and found
ineligible gifts of $176,545.  Thirteen councils submitted to our office inadequate documentation.
Eventually, all provided adequate documentation or new gifts were used to replace those
questioned.  Our recommendation was for the Endowment to revise its guidelines to provide
additional guidance to the councils.
				SUMMARY OF AUDIT REPORTS
Unannounced Count of NEH's Imprest Fund [94-08 (I)]
We performed a surprise cash count in the agency's accounting office.  We found the cash intact
and made only one minor recommendation for improvement.   The recommendation has been implemented.
Inspection of the Endowment's Training Programs [94-09 (I)]
We inspected the agency's training program to determine the economy, efficiency and effectiveness
of the program.  While we noted progress in managing the program in the past year, we made
several recommendations for improvement.  We found that the agency was not requiring staff and
supervisors to complete an evaluation of training taken.  Thus, the agency did not have data
available to make informed decisions about the effectiveness of training organizations and courses.
The agency agreed to implement several recommendations and set up task forces to further explore
the training issue.
NEH Performance Appraisal System and NEH Employee Recognition Program/Incentive Award
Program [94-10 (I)]
Our inspection disclosed that while both of the programs are well run, employee perception of
unfairness in the systems is a major concern to staff.  We made several recommendations to
improve the programs: 1) that all supervisors take an annual refresher course concerning the
annual rating system; 2) that supervisors provide written statements to employees to assist the
employees improve; 3) that awards based on tangible benefits provide adequate documentation that
eventually can be audited; and 4) that annual evaluations of the programs be made.  Management
has not responded to the report as of the end of the semiannual reporting period.  However,
management has formed a task force team to further explore each program.
NEH's Budget Execution System [94-11 (IA)]
Our audit of the Endowment's Budget Execution System disclosed that the program is well-run.  We
had one finding and the Endowment's accounting office has agreed to implement our recommendations.
We are currently monitoring the steps taken by the accounting office to correct the problem.
Pre-award Survey of the American Jewish Historical Society [94-02 (S)]
The Endowment's Grants Office requested a pre-award accounting system survey for this grantee.
The amount of the award was small so we performed a survey by letter and telephone.  The Society
provided us with information which we reviewed in our office.  We found that the Society would
be able to account and manage the federal funds if an award were made after the Society agreed
to implement several recommendations that we made.  We have informed the Endowment that if the
Society receives a substantial grant, we should perform an on-site audit early in the project.
				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 April 1, 1994 we had two files open; one has been closed and one remains open as of
September 30, 1994.  The open one concerns a state humanities council.  The situation is being
handled by the Division of State Programs and the OIG is monitoring the progress.
During the just completed six-month period April 1, 1994 to September 30, 1994, eleven matters
were brought to our attention.  Two involved personnel issues of NEH employees, two are internal
administrative issues and the other seven concerned grantees.
The two 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.  One of the internal
matters has been reviewed and closed and the other is on-going.  The open case involves
obligating funds without first going through the agency's requisition system.  We are waiting for
information from the general counsel's office before we take any further steps.  The deputy
chairman of the Endowment issued a memorandum as a measure to prevent future problems.
Two separate complaints involved the same group of individuals who were fraudulently obtaining
fellowships from NEH grantees.  We investigated these with some assistance from the Federal
Bureau of Investigation and the U.S. Postal Inspection Service.  We were able to assist in the
recovery of some of the funds from the grantees.  Two other allegations concerned fellowship
matters and they are being handled by the program division for follow-up.  These matters are
still open.
We also received three complaints related to state humanities councils.  One concerned the fear
that the councils would be using federal funds to lobby.  We reissued a memorandum to all of the
executive directors and chairs of the state humanities councils reminding them of the lobbying
regulations.  All three of these issues are now closed.
As of September 30, 1994, five matters remain open.
			HOTLINE AND PREVENTION ACTIVITIES
We are currently reviewing the feasibility of maintaining our 800 number and local hotline
numbers and a rented post office box that we have had since January 1993.  We obtained all three
to provide additional confidentiality for those persons bringing matters to the attention of the
OIG. We announced our hotline number to NEH employees by inserting a message on the employee pay
stub, thus ensuring that all NEH staff would be aware of this OIG function.  A poster notice
concerning waste, fraud, abuse, and mismanagement is posted in all offices/divisions and by the
elevators in the building where NEH is located.  We have also included on several NEH employee
pay stubs different OIG awareness messages.  In addition, brochures have been provided to NEH
grantees.  However, most matters are brought to our attention through regular postal delivery and
our normal telephone lines.
We issued one memorandum through the agency E-mail system.  It addressed the problem of computer
security.  We intend to use the E-mail on a regular basis for prevention notices.
It is expected that the OIG will be on the Internet by November 1994.  We are exploring the use
of this as a means to promote prevention activities and to use it as a "Hotline."
				Summary of Investigations
Investigative Workload
Pending at beginning of period	 	 2
Matters brought to the OIG		11
        Total Investigations		13
Closed during reporting period 	 	 8
Pending at end of period		 5
				OTHER ACTIVITIES
			OMB CIRCULAR A-133 DESK REVIEWS
During this period we performed twenty-eight 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 continue to modify our procedures so we
now perform the reviews more efficiently and economically.  Following the lead of the PCIE single
audit task force recommendations we are currently reviewing audit reports only if the grantee
received over $250,000 in Endowment funds during the audit period.
			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
173 reports.
				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 Legal Services Corporation
(LSC).  During this period we performed the review and issued a draft report to LSC.
			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 twenty 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.)
			STRATEGIC PLANNING FOR THE OIG
We have developed a strategic plan following guidelines established by the United States General
Accounting Office (GAO).  In January 1994 GAO issued its report entitled "INSPECTORS GENERAL -
Action Needed to Strengthen OIGs at Designated Federal Entities."  GAO stated that the IGs at the
thirty-four designated federal entities did not have effective strategic plans for their audit
activities.
			STATE HUMANITIES COUNCILS
We performed desk-reviews of OMB Circular A-133 audit reports and performed a desk audit of
eighteen councils (see page 7).
During the fiscal year ending September 30, 1994, we did not perform any on-site audits.  For
fiscal year 1995, we are planning to perform three or four on-site audits of the councils
operations, quality reviews of several independent public accountants whom do the A-133 audits,
and we will continue doing desk reviews of the audit reports.
			TOTAL QUALITY MANAGEMENT
During June 1992 the Endowment became involved in total quality management.  The IG is a working
partner in the agency's strategic planning effort and both the IG and the deputy IG are on the
agency's management steering committee.  The IG finds this to be an effective way to work with
agency management in an effort to strengthen the operations of the agency.  The IG, the deputy,
and an auditor are on teams that are working to make the agency more efficient.
			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
monthly ECIE meetings.
			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 responded to Congressmen John Conyers and John Spratt concerning H.R. 4679,
the "Inspector General Reform Act of 1994", and H.R. 4680, the "Whistleblower Protection
Enhancement Act of 1994."  We also provided comments to the Endowment's Grants Office on their
revised General Grant Provisions.
				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.  Our new emphasis will be on performance
type auditing.
			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
Pre-award Survey of the American
   Jewish Historical Society			94-02(S)	07-27-94
Audit of the Gift Certification
   Letters From State Humanities
   Councils					94-03(A)	09-29-94  $176,545 $176,545
			INTERNAL AUDIT/SURVEY OR INSPECTION REPORTS ISSUED
						Report		Date   Questioned Unsupported
						Number		Issued     Cost      Cost
Unannounced Count of NEH's
  Imprest Fund					94-08(I)	04-11-94
Inspection of the Endowment's
 Training Programs				94-09(I)	06-29-94
NEH Performance Appraisal System
   & NEH Employee Recognition
   Program/Incentive Award Prog.		94-10(I)	08-18-94
NEH's Budget Execution System			94-11(IA)	08-09-94
			INDIRECT COST RATE DESK REVIEW REPORTS ISSUED
						Report		Date   Questioned Unsupported
Grantee						Number		Issued     Cost      Cost
American Library Association			94-23(IDC)	04-11-94
Japanese American National Museum		94-24(IDC)	04-26-94
Northern State University			94-25(IDC)	05-11-94
Garrett-Evang Theological Sem.			94-26(IDC)	05-11-94
Buffalo Bill Historical Center			94-27(IDC)	05-26-94
AMIGOS Bibliographic Council			94-28(IDC)	05-11-94
Pacific School of Religion			94-29(IDC)	05-17-94
Aston Magna Foundation for Music
   and the Humanities, Inc.			94-30(IDC)	06-21-94
Samford University Foundation			94-31(IDC)	06-22-94
ETV Endowment of South Carolina			94-32(IDC)	06-28-94
Please Touch Museum				94-33(IDC)	06-21-94
New York Public Library				94-34(IDC)	06-21-94
Baltimore Museum of Industry			94-35(IDC)	07-12-94
GWETA, Inc.					94-36(IDC)	08-09-94
Franklin Pierce College				94-37(IDC)	07-18-94
New England Fnd. f/the Humanities		94-38(IDC)	08-04-94
Modern Language Assn. of America		94-39(IDC)	08-25-94
New York Center for Visual History		94-40(IDC)	09-13-94
Missouri Historical Society			94-41(IDC)	09-21-94
Walters Art Gallery				94-42(IDC)	09-29-94
			DESK REVIEW OF NONPROFIT GRANTEES' A-133 AUDIT REPORTS
					Report		Date   Questioned Unsupported
Grantee					Number		Issued     Cost      Cost
Minnesota Humanities Committee		94-97(DR)	05-10-94
Washington Commission f/the Human.	94-98(DR)	05-10-94
Pennsylvania Humanities Council		94-99(DR)	05-10-94
Idaho Humanities Council		94-100(DR)	05-10-94
Mississippi Humanities Council		94-101(DR)	05-10-94
Louisiana Endowment f/the Human.	94-102(DR)	05-10-94
Alaska Humanities Forum			94-103(DR)	05-10-94
Great Plains Chautauqua Society		94-104(DR)	05-16-94
Utah Humanities Council			94-105(DR)	05-16-94
Society of American Archivists		94-106(DR)	05-16-94
Concert Society at Maryland		94-107(DR)	07-14-94
Association of Research Libraries	94-108(DR)	07-14-94
Ways of Knowing, Inc.			94-109(DR)	07-14-94
Minnesota Humanities Commission		94-110(DR)	07-22-94
Michigan Humanities Council		94-111(DR)	08-01-94
Bostonian Society			94-112(DR)	08-04-94
RI Committee f/the Humani.		94-113(DR)	08-17-94
New York Council f/the Humanities	94-114(DR)	08-18-94
Hudson River Museum of Westchester	94-115(DR)	08-18-94
Asia Society				94-116(DR)	08-18-94
Indiana Humanities Council		94-117(DR)	08-18-94
American Philosophical Assn.		94-118(DR)	08-18-94
Chicago Historical Society		94-119(DR)	08-18-94
Mariners' Museum			94-120(DR)	09-21-94
Huntington Theatre Company		94-121(DR)	09-21-94
American Philological Association	94-122(DR)	09-29-94
Oakland Museum/Museum of
   California Foundation		94-123(DR)	09-29-94
Montana Committee for the Human.	94-124(DR)	09-29-94
			COGNIZANT AUDIT AGENCY REVIEW REPORTS ISSUED
					Report		Date   Questioned Unsupported
Grantee					Number		Issued     Cost      Cost
City of Austin, Texas			94-172(CAA)	04-11-94
City of Puerto Rico-System, PR		94-173(CAA)	04-11-94
Univ. of Georgia Research Fnd.		94-174(CAA)	04-11-94
University of Puerto Rico-System	94-175(CAA)	04-11-94
University of Puerto Rico-System	94-176(CAA)	04-11-94
Onondaga County, New York		94-177(CAA)	04-11-94
City of Prescott, Arizona		94-178(CAA)	04-11-94
State of Ohio				94-179(CAA)	04-11-94
County of Albemarle, Virginia		94-180(CAA)	04-11-94
YIVO Inst. for Jewish Res., NY		94-181(CAA)	04-11-94
Johnson County Community College	94-182(CAA)	04-13-94
Mississippi State University, MS	94-183(CAA)	04-13-94
Department of Commerce, WY		94-184(CAA)	04-13-94
University of North Carolina		94-185(CAA)	04-13-94
Historic Hudson Valley, NY		94-186(CAA)	04-13-94
Montgomery County Pub. Schools		94-187(CAA)	04-13-94
Santa Fe Indian School, NM		94-188(CAA)	04-13-94
Worcester Art Museum, MA		94-189(CAA)	04-13-94
Stanford University, CA			94-190(CAA)	04-13-94
Marquette University, WI		94-191(CAA)	04-13-94
City of Tucson, AZ			94-192(CAA)	04-15-94
Cherokee Nation, OK			94-193(CAA)	04-15-94
Bishop Museum, HI			94-194(CAA)	04-15-94
Peninsula Library System, CA		94-195(CAA)	04-15-94
Illinois State Museum Society		94-196(CAA)	04-15-94
Williams College, MA			94-197(CAA)	04-15-94
State of West Virginia			94-198(CAA)	04-15-94
Natrona County School District		94-199(CAA)	04-15-94
State of Kansas				94-200(CAA)	04-15-94
Town of Concord, MA			94-201(CAA)	04-15-94
American Association of Community
   Colleges, DC				94-202(CAA)	04-20-94
University of Delaware			94-203(CAA)	04-20-94
Wayne State College, NE			94-204(CAA)	04-20-94
Town of Brookline, MA			94-205(CAA)	04-20-94
State of New Jersey			94-206(CAA)	04-20-94
City of North Miami, FL			94-207(CAA)	04-20-94
City of Baltimore, MD			94-208(CAA)	04-20-94
Milwaukee County, WI			94-209(CAA)	04-20-94
State of Arizona			94-210(CAA)	04-20-94
Pueblo of Zuni, NM			94-211(CAA)	04-20-94
State of Wisconsin			94-212(CAA)	04-22-94
New Hanover County, NC			94-213(CAA)	04-22-94
City of San Buenaventura, CA		94-214(CAA)	04-22-94
State of South Dakota			94-215(CAA)	04-22-94
City of Portland, ME			94-216(CAA)	04-22-94
County of Allegheny, PA			94-217(CAA)	04-22-94
School District of Pittsburgh		94-218(CAA)	04-22-94
City of Alexandria, VA			94-219(CAA)	04-22-94
Chesterfield County, VA			94-220(CAA)	04-22-94
State of Iowa				94-221(CAA)	04-22-94
Foundation for New Media, Inc.		94-222(CAA)	05-09-94
Commonwealth of Massachusetts		94-223(CAA)	05-09-94
State of North Dakota			94-224(CAA)	05-09-94
State of North Carolina			94-225(CAA)	05-09-94
State of Maine				94-226(CAA)	05-09-94
County of Fairfax, VA			94-227(CAA)	05-12-94
State of Georgia			94-228(CAA)	05-12-94
State of Delaware			94-229(CAA)	05-12-94
Hillsborough County, FL			94-230(CAA)	05-12-94
State of Missouri			94-231(CAA)	05-12-94
Siena College, NY			94-232(CAA)	05-18-94
American Film Institute, DC		94-233(CAA)	05-18-94
University of Chicago, IL		94-234(CAA)	05-18-94
State of Utah				94-235(CAA)	05-18-94
State of Tennessee			94-236(CAA)	05-18-94
State System of Higher Educ.		94-237(CAA)	05-20-94
State of Ohio				94-238(CAA)	05-20-94
Commonwealth of Kentucky		94-239(CAA)	05-20-94
State of Mississippi			94-240(CAA)	05-20-94
Commonwealth of Pennsylvania		94-241(CAA)	05-20-94
Commonwealth of Virginia		94-242(CAA)	05-25-94
State of South Carolina			94-243(CAA)	05-25-94
State of Colorado			94-244(CAA)	06-06-94
Commonwealth of Massachusetts		94-245(CAA)	06-06-94
State of California			94-246(CAA)	06-06-94
Milwaukee Public Museum, WI		94-247(CAA)	06-06-94
Historical Assn. of South Florida	94-248(CAA)	06-06-94
Amer. Res. Inst.in Turkey, PA		94-249(CAA)	06-06-94
Ohio University, OH			94-250(CAA)	06-06-94
Science Museum of Minnesota, MN		94-251(CAA)	06-06-94
American University, DC			94-252(CAA)	06-06-94
Loyola University, Chicago, IL		94-253(CAA)	06-06-94
Clark University, MA			94-254(CAA)	06-06-94
University of Cincinnati, OH		94-255(CAA)	06-06-94
New York University, NY			94-256(CAA)	06-06-94
Oberlin College, OH			94-257(CAA)	06-06-94
La Salle University, PA			94-258(CAA)	06-06-94
Duke University, NC			94-259(CAA)	06-06-94
State of New York			94-260(CAA)	06-22-94
County of San Joaquin, CA		94-261(CAA)	06-22-94
State of Louisiana			94-262(CAA)	06-22-94
Natrona County Sch. Dist. No. 1		94-263(CAA)	06-22-94
State of Alaska	94-264(CAA)		06-22-94
Commonwealth of Massachusetts		94-265(CAA)	06-22-94
Univ. of Nebraska System, NE		94-266(CAA)	06-22-94
Gallaudet University, DC		94-267(CAA)	06-22-94
University of Maryland System		94-268(CAA)	08-16-94
Dickinson College, PA			94-269(CAA)	08-16-94
Temple University, PA			94-270(CAA)	08-16-94
University and Community College
   System of Nevada			94-271(CAA)	08-16-94
Univ. of Arkansas at Fayetteville	94-272(CAA)	08-16-94
State of Rhode Island & Providence
   Plantations				94-273(CAA)	08-16-94
Univ. of Georgia Res. Fdn., Inc.	94-274(CAA)	08-16-94
Illinois State University		94-275(CAA)	08-16-94
Ithaca College, NY			94-276(CAA)	08-16-94
Sarah Lawrence College, NY		94-277(CAA)	08-16-94
Agnes Scott College, GA			94-278(CAA)	08-17-94
Calumet Col. of Saint Joseph, IN	94-279(CAA)	08-17-94
Saint Joseph College, IN		94-280(CAA)	08-17-94
State of Iowa				94-281(CAA)	08-17-94
City of San Diego, CA			94-282(CAA)	08-17-94
Queens College, NC			94-283(CAA)	08-17-94
Gettysburg College, PA			94-284(CAA)	08-17-94
University of Illinois			94-285(CAA)	08-17-94
Maricopa County Community College
   District, AZ				94-286(CAA)	08-17-94
University of Southern California	94-287(CAA)	08-17-94
Amer. Mus. of Natural Hist., WY		94-288(CAA)	08-18-94
University of Michigan			94-289(CAA)	08-18-94
University of California		94-290(CAA)	08-18-94
Loyola University at Chicago, IL	94-291(CAA)	08-18-94
Simmons College, MA			94-292(CAA)	08-18-94
Wellesley College, MA			94-293(CAA)	08-18-94
Rutgers, the State University, NJ	94-294(CAA)	08-18-94
Tufts University, MA			94-295(CAA)	08-18-94
Museum of Modern Art, NY		94-296(CAA)	08-18-94
University of California		94-297(CAA)	08-18-94
Studio Museum in Harlem, Inc., NY	94-298(CAA)	08-30-94
Studio Museum in Harlem, Inc., NY	94-299(CAA)	08-30-94
Salt Lake County, UT			94-300(CAA)	08-30-94
State of Ohio				94-301(CAA)	08-30-94
Connecticut College, CT	94-302(CAA)	08-30-94
Vanderbilt University, TN		94-303(CAA)	08-30-94
Boston University, MA			94-304(CAA)	08-30-94
National Trust for Hist. Preserv.	94-305(CAA)	08-30-94
State of Oregon				94-306(CAA)	08-30-94
Commonwealth of Virginia		94-307(CAA)	08-31-94
State of Wisconsin			94-308(CAA)	09-01-94
Clark University, MA			94-309(CAA)	09-01-94
Southwest Museum, CA			94-310(CAA)	09-01-94
Ramapo College of New Jersey		94-311(CAA)	09-01-94
American Hist. Assn., DC		94-312(CAA)	09-01-94
Johnson County, KS			94-313(CAA)	09-01-94
Case Western Reserve Univ. OH		94-314(CAA)	09-01-94
Amherst College, MA			94-315(CAA)	09-01-94
Commonwealth of Kentucky		94-316(CAA)	09-01-94
State of South Dakota			94-317(CAA)	09-01-94
Pennsylvania State University		94-318(CAA)	09-02-94
University of Toledo			94-319(CAA)	09-02-94
Spelman College, GA			94-320(CAA)	09-02-94
Brown University, RI			94-321(CAA)	09-02-94
Eastern Michigan University, MI		94-322(CAA)	09-02-94
Ohio Wesleyan University, OH		94-323(CAA)	09-02-94
University of Pennsylvania		94-324(CAA)	09-02-94
George Washington University		94-325(CAA)	09-02-94
Univ. of Vermont & State
  Agricultural College			94-326(CAA)	09-02-94
Davidson College, NC			94-327(CAA)	09-02-94
Five Colleges, Inc., MA			94-328(CAA)	09-29-94
Shoshone Tribe, WY			94-329(CAA)	09-29-94
Wittenberg University, OH		94-330(CAA)	09-29-94
Wayne State University, MI		94-331(CAA)	09-29-94
Founders Soc. Detroit
   Inst. of Arts, MI			94-332(CAA)	09-29-94
Pomona College, CA			94-333(CAA)	09-29-94
Hiram College, OH			94-334(CAA)	09-29-94
Duquesne University, PA			94-335(CAA)	09-29-94
City of Detroit Michigan		94-336(CAA)	09-29-94
Alamo Navajo School Board, Inc.		94-337(CAA)	09-29-94
Amon Carter Museum of Western Art	94-338(CAA)	09-30-94
College Board, NY			94-339(CAA)	09-30-94
Denver Museum of Natural History	94-340(CAA)	09-30-94
Isabella Stewart Gardner Museum		94-341(CAA)	09-30-94
Modern Language Assoc. of America	94-342(CAA)	09-30-94
State of Arizona			94-343(CAA)	09-30-94
State of South Carolina			94-344(CAA)	09-30-94
					TABLE I
			INSPECTOR GENERAL-ISSUED REPORTS
			    WITH QUESTIONED COSTS
               	  	             DOLLAR VALUE
                                         Number  Questioned  Unsupported
                                                    Costs       Costs
A.  For which no management decision         1    $   9,941	$   9,941
      has been made by the commencement
      for the reporting period
B.  Which were issued during the reporting   1      176,545	$ 176,545
      Subtotals (A+B)                        2    $ 186,486	186,486
C.  For which a management decision was      2    $ 186,486	186,486
      made during the reporting period
      (i)  dollar value of disallowed       -0-   $   9,941	9,941
           costs
      (ii) dollar value of costs not         1    $ 176,545	176,545
           disallowed (grantee
           subsequently supported all
           costs)
D.  For which no management decision         0    $  -0-	   -0-
      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
					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."
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.
	THE OFFICE OF INSPECTOR GENERAL
	serves American taxpayers
	by investigating reports of waste, fraud,
	mismanagement, or abuse
	involving  federal funds.
	If you believe an activity is
	wasteful, fraudulent, or abusive
	of federal funds,
	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
	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.