Report to Congressional Requesters

United States General Accounting Office 

GAO 

January 2004 CORPORATION FOR 

NATIONAL AND 

COMMUNITY 

SERVICE 

Better Internal 

Control and Revised 

Practices Would 

Improve the 

Management of 

AmeriCorps and the 

National Service Trust 

GAO-04-225 
www.gao.gov/cgi-bin/getrpt?GAO-04-225.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Cornelia M. 

Ashby, (202) 512-8403 (ashbyc@gao.gov) or 

Susan Poling (202) 512-2667. 

Highlights of GAO-04-225, a report to 

Congressional Requesters 

January 2004

CORPORATION FOR NATIONAL AND 

COMMUNITY SERVICE 

Better Internal Control and Revised 

Practices Would Improve the 

Management of AmeriCorps and the 

National Service Trust 

Discrepancies between information in the Trust database and participant 

documentation indicate that not all AmeriCorps participant information was 

accurately reflected in the Trust database. An estimated 5 percent (8,300) of 

about 158,000 enrollments from program years 2000 to 2002 have 

discrepancies, and about 3 percent (4,400) have discrepancies that could 

affect estimates of future probable expenditures of the Trust. Further, the 

users’ manual for the Trust database system had not been updated. 

In 2003 the Corporation began using a new model with conservative 

assumptions of participant behavior to develop its funding estimates. 

Corporation officials explained that they used conservative assumptions 

because the AmeriCorps program does not have a long history from which to 

extrapolate participant behavior, and the Corporation wanted to regain 

credibility after the enrollment suspension in 2002. Using the new model 

may be prudent until the Corporation gains more experience. However, 

because the new model increased the Trust’s funding estimates, the 

Corporation will need to monitor actual experience compared with the 

model’s assumptions and may need to deobligate unused Trust funds. 

Further, the new model does not incorporate external factors, such as 

downturns in the economy, which may affect funding estimates or the 

Trust’s balances. The Corporation recently formed a team to assess the costs 

and benefits of adding external factors in its model. 

Flow of Funds and Information for AmeriCorps Education Awards 

Source: Corporation officials and GAO analysis.

 AmeriCorps 

Participants

Corporation for National and Community Service

Corporation

Models 

and 

Databases

National Service

Trust Fund

(responsible for management and oversight)

The Corporation has made some changes to its operations that minimize the 

likelihood it will need to suspend enrollments in the future. Corporation 

officials have been obligating Trust funds when positions are approved since 

June 2003, and the communication and coordination among officials have 

greatly improved. Changes have also been implemented and planned to 

address the Strengthen AmeriCorps Program Act requirements. However, 

changes to improve oversight of grantees have not been fully implemented, 

and policies related to refilling vacated positions and converting unfilled 

positions may limit enrollments, hinder service delivery, and contribute to 

the accumulation of a larger Trust balance. 

The Corporation for National and 

Community Service (the 

Corporation) was created to help 

meet community needs and expand 

educational opportunity by 

providing education awards to 

participants. The Corporation 

oversees and funds the AmeriCorps 

program as well as the National 

Service Trust (the Trust), which 

pays the education awards. From 

November 2002 to March 2003 the 

Corporation suspended 

AmeriCorps enrollments because 

there would not have been 

sufficient funds in the Trust to pay 

education awards. GAO was asked 

to determine (1) if all AmeriCorps 

enrollments were accurately 

recorded, (2) how the Corporation 

estimated its funding needs, and (3) 

if the Corporation made changes to 

prevent another enrollment 

suspension and to address 

requirements established in the 

Strengthen AmeriCorps Program 

Act. GAO analyzed laws, reviewed 

documents, interviewed officials, 

assessed the reliability of the Trust 

database, examined the model used 

to estimate funding needs, and 

surveyed AmeriCorps grantees. 

GAO recommends that the 

Corporation make improvements 

to strengthen internal control, 

enhance the accuracy of its budget 

estimates, ensure the Trust does 

not accumulate large balances, and 

ensure that its policies support 

efforts to deliver services. The 

Corporation generally agreed with 

GAO’s recommendations. 
Page i GAO-04-225 Management of AmeriCorps and the National Service Trust 

Letter 1

Results in Brief 2

Background 5

Trust Database and Participant Documentation Discrepancies 

Could Affect Estimates of Probable Education Award 

Expenditures 12

The New Model Increased Funding Estimates and Does Not 

Consider External Factors 16

Operational Changes Should Reduce the Risk of Enrollment 

Suspensions, but Two New Policies May Hinder Service Delivery 

and May Contribute to Higher Balances in the Trust 22

Conclusion 28

Recommendations 29

Agency Comments and Our Evaluation 30

Appendix I Scope and Methodology 32 

Appendix II The Corporation’s Antideficiency Act Violation 37 

Appendix III Discrepancies between Trust Data and Participant 

Documentation That Could Affect the Amount Owed 

by the Trust 41 

Appendix IV The Service Award Liability Model 43 

Appendix V Comments from the Corporation for National and 

Community Service 45 

Appendix VI GAO Contacts and Acknowledgments 51 

GAO Contacts 51

Staff Acknowledgments 51

Contents 
Page ii GAO-04-225 Management of AmeriCorps and the National Service Trust 

Tables 

Table 1: Estimates of Documentation Availability for AmeriCorps 

State and National Grantee and VISTA Participants, 

Program Years 2000-2002 34

Table 2: Description of Discrepancies for AmeriCorps State and 

National Cases 41

Table 3: Description of Discrepancies for AmeriCorps VISTA cases 42

Figures 

Figure 1: Flow of Funds and Information for AmeriCorps 

Education Awards 8

Figure 2: AmeriCorps Enrollments by Program Year 10

Figure 3: Estimate of Discrepancies between Trust Data and 

Participant Documentation 13

Figure 4: Percentage of AmeriCorps Participants Who Earned 

Education Awards Compared with the Percentages used 

in the SAL and the New Model 20

Figure 5: Points in AmeriCorps Program Cycle when Deobligation 

May Occur 21

Figure 6: The SAL Model 44

Abbreviations 

NCCC National Civilian Community Corps 

OIG Office of Inspector General 

SAL Service Award Liability 

SSA Social Security Administration 

SSN Social Security number 

VISTA Volunteers in Service to America 

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Page 1 GAO-04-225 Management of AmeriCorps and the National Service Trust 

January 16, 2004 

The Honorable Christopher S. Bond 

Chairman, Subcommittee on VA, 

 HUD, and Independent Agencies 

Committee on Appropriations 

United States Senate 

The Honorable Charles E. Grassley 

United States Senate 

The Corporation for National and Community Service (the Corporation) 

was created in 1993 to help meet community needs in education, the 

environment, and public safety through activities such as tutoring and 

mentoring youth, building affordable housing, cleaning parks and streams, 

and helping communities respond to disasters. The Corporation also helps 

to expand educational opportunity by providing national service 

participants who complete a term of service with funds—$4,725 for a fulltime participant in 2002—to help pay for their education. AmeriCorps is 

one of three national service programs the Corporation oversees. The 

Corporation receives appropriations to fund program operations and the 

National Service Trust (the Trust), which provides money to pay education 

awards. In fiscal year 2003 the Corporation was appropriated about $400 

million to support AmeriCorps—about $300 million to support program 

operations and $100 million for the Trust. 

From November 2002 to March 2003, the Corporation suspended 

enrollments in AmeriCorps because it concluded that there would not be 

sufficient funds in the Trust to pay the education awards for all of the 2002 

program positions. In April of 2003 we provided a statement for the record 

to the Subcommittee on Veterans Affairs, Housing and Urban 

Development, and Independent Agencies of the Senate Committee on 

Appropriations describing our preliminary observations regarding the 

causes for the enrollment suspension and the proposed policy changes.1

 In 

 1

U.S. General Accounting Office, Corporation for National and Community Service: 

Preliminary Observations on the National Service Trust and AmeriCorps, GAO-03-642T

(Washington, D.C.). 

United States General Accounting Office

Washington, DC 20548 
Page 2 GAO-04-225 Management of AmeriCorps and the National Service Trust 

that statement, we emphasized that had the Corporation appropriately 

recorded and tracked its obligations for education awards to program 

participants, the Corporation likely would not have needed to suspend 

enrollments. In July 2003, Congress passed the Strengthen AmeriCorps 

Program Act (Pub. L.No. 108-45). This act requires the Corporation to 

obligate funds in the Trust at the time AmeriCorps positions are approved 

and to estimate the value of the education awards based on a formula that 

considers historical rates of enrollment in the program and for the earning 

and use of education awards. The act also established several other 

requirements for the Corporation. 

Because of concerns about the Corporation’s management of AmeriCorps 

and the Trust, you asked us to answer the following questions: (1) Has all 

AmeriCorps participant information been accurately recorded in the Trust 

database? (2) How does the Corporation estimate the funding needed to 

provide education awards through the Trust? (3) Has the Corporation 

made management and operational changes that ensure enrollments will 

not be suspended in the future and that address the Strengthen 

AmeriCorps Program Act requirements? 

To answer these questions we used a multifaceted methodology. We 

performed a detailed reliability assessment of the Trust database by 

comparing information in the database with original enrollment and exit 

forms. We obtained enough documentation to compare key information on 

363 of 400 cases in our sample, or an estimated 157,045 of the 172,434 

enrollments in the 2000 to 2002 program years. We examined the model 

used by the Trust to estimate its funding requirements and reviewed 

reports of auditors and contractors related to the model. We surveyed all 

148 AmeriCorps grantees for their views on the Corporation’s new 

enrollment and oversight policies as well as the training and technical 

support provided by the Corporation, and obtained a response rate of 71 

percent. We also reviewed applicable laws, analyzed Corporation data, 

reviewed relevant documents and reports from the Corporation’s 

Inspector General, and interviewed knowledgeable officials. We 

conducted our work between March and December 2003 in accordance 

with generally accepted government auditing standards. For more details 

about our scope and methodology, see appendix I. 

Discrepancies between information in the Trust database and participant 

documentation indicate that not all AmeriCorps enrollment and exit 

information has been accurately recorded in the Trust database. We 

estimate that there are discrepancies in about 5 percent (8,300) of 158,000 

Results in Brief 
Page 3 GAO-04-225 Management of AmeriCorps and the National Service Trust 

enrollments from program years 2000 to 2002, and of these, about 3 

percent (4,400) could affect estimates of future probable expenditures of 

the Trust. One of the most frequently occurring discrepancies pertained to 

cases in which the Trust database showed participants were still serving 

while their documentation showed they had exited the program without 

earning an award. For example, the database, as of July 25, 2003, indicated 

that a participant was still serving and the documentation showed that this 

participant had completed service on August 24, 2002. Our analysis also 

found that more than 300 of the participants enrolled between 1999 and 

2002 had Social Security numbers that were invalid or had not been issued 

and about 170 had numbers for persons listed as deceased in the Social 

Security death master file. In addition to the data discrepancies, we found 

the documentation for the Trust database difficult and cumbersome to 

use. Corporation managers told us the users’ manual had not been updated 

since it was first prepared in 1995, although there have been many changes 

to the system. Documenting systems is an important internal control that 

helps organizations ensure that data are reliably collected and properly 

used and helps ensure organizations are positioned to continue operations 

in the event of a disaster or emergency. 

The Corporation used one model for several years to estimate the funding 

needed to provide education awards through the Trust, and in 2003 it 

developed and used a new model that increased the funding estimates of 

the Trust. According to Corporation officials, the Corporation used the 

Service Award Liability (SAL) model from 1996 to 2003 to estimate the 

future probable expenditures of the Trust for past and current 

participants, as well as to develop funding estimates for future participants 

that it used in its budget requests. Following the passage of the Strengthen 

AmeriCorps Program Act in July 2003, the Corporation developed and 

used a new model to estimate the funding needed for future participants. 

This new model used more conservative values as compared with the 

previous model. Corporation officials stated that they believe their 

historical data provide a sound basis for Trust funding estimates. 

However, they chose to use more conservative assumptions because the 

AmeriCorps program does not have a long history and they wanted to 

regain credibility after having had to suspend enrollments last year. As a 

result, the new model increased the funding estimates. For example, the 

SAL model generated a requirement of about $116 million for fiscal year 

2004 for 75,000 participants, and 7,000 scholarships for high school 

students, while the new model generated funding estimates of about $133 
Page 4 GAO-04-225 Management of AmeriCorps and the National Service Trust 

million for the same number of participants and scholarship recipients. 2

Our analysis indicates that by using the new model’s assumptions, the 

Trust may accumulate larger balances than if historical rates were used. 

This accumulation in the balance may occur in addition to the reserve 

account that is required by the Strengthen AmeriCorps Program Act. While 

Corporation officials acknowledged that these changes may cause larger 

balances in the Trust, they said they would be able to deobligate funds at 

several points in the AmeriCorps program life cycle and could adjust the 

assumptions in the future. While there may be large balances in the Trust, 

there are external factors, such as the strength of the economy and the 

support for volunteerism, that could either reduce these balances or 

further increase them. The Corporation has reported that external factors 

have affected its programs, but has not incorporated into its model the 

possible effects these factors could have on its estimates. The Corporation 

recently formed a management improvement team to assess the costs and 

benefits of incorporating external factors into its model. Building in 

consideration of external factors could further improve the quality of the 

Corporation’s estimates. 

The Corporation has made changes that minimize the likelihood of a need 

to suspend enrollments in the future, and changes have been implemented 

and planned to address the Strengthen AmeriCorps Program Act 

requirements. However, some operational changes have not been fully 

implemented, and two new policies are of concern to grantees. Prior to the 

suspension of enrollments, the Corporation did not record an obligation to 

the Trust fund at the time it created positions, officials did not 

communicate regularly about the number of positions created or the 

number of participants enrolled in AmeriCorps relative to Trust resources, 

and the Corporation allowed grantees various flexibilities concerning the 

enrollment of participants. Beginning in July 2003, Corporation officials 

began obligating Trust funds when they approved positions in accordance 

with the Strengthen AmeriCorps Program Act. Corporation officials have 

placed greater emphasis on monitoring the availability of funds in the 

Trust, and the communication and coordination between officials 

responsible for managing the Trust and officials responsible for creating 

positions have greatly improved. Since March 2003, Corporation managers 

have been tracking AmeriCorps enrollments on a biweekly basis, 

investigating discrepancies in counts between its enrollment system and 

the Trust database, and monitoring enrollments in relation to the 

 2

AmeriCorps distributes funds to high school students through Presidential Freedom 

Scholarships. These scholarships are valued at $500 for each participant. 
Page 5 GAO-04-225 Management of AmeriCorps and the National Service Trust 

availability of funds in the Trust. The Corporation also tightened grantee 

program rules and now requires grantees to provide timely enrollment 

information. For example, grantees can no longer enroll more participants 

than are specified in their grant award, and grantees are now required to 

enroll participants within 30 days of their starting work. The Corporation 

has plans to improve the process for monitoring enrollments, to improve 

grantee oversight, and to meet the requirements of the Strengthen the 

AmeriCorps Program Act. However, two new policies are of concern to 

grantees because they believe these policies may limit enrollments and 

hinder service delivery. If these policies reduce enrollments, balances in 

the Trust may be further increased. Under current policy, if a participant 

enrolls in a program and drops out before earning an award, the grantee 

cannot offer the position to another applicant for the balance of the term 

of service. Grantees are also prohibited from exchanging a full-time 

position for an equivalent value of part-time positions. More than 80 

percent of the respondents to our survey stated that the policy prohibiting 

refilling positions will have a negative effect on the program operations of 

their subgrantees, and 75 percent of the respondents stated that the policy 

prohibiting them from converting positions would hurt their ability to 

provide services. Also, these policies could hinder the Corporation’s ability 

to fulfill its mission and reduce the number of participants and the number 

of earned education awards, thereby contributing further to the balance of 

funds in the Trust. 

We are recommending that the Corporation’s chief executive officer 

review and document the Corporation’s data assurance processes, update 

and improve Trust database system documentation, incorporate external 

factors into its Trust estimates, and assess enrollment policies to 

determine whether they have negatively affected service delivery and 

contributed to the balance of funds in the Trust. 

The Corporation’s chief executive officer provided written comments on a 

draft of this report and generally agreed with our recommendations. 

Additionally, he suggested several changes to help clarify the report, 

which we incorporated as appropriate. These comments are discussed in 

the report and are shown in appendix V. 

The Corporation is part of the USA Freedom Corps, a White House 

initiative to foster a culture of citizenship, service, and responsibility, and Background 
Page 6 GAO-04-225 Management of AmeriCorps and the National Service Trust 

help all Americans answer the President’s Call to Service.3 The 

Corporation maintains administrative field offices in almost every state. 

AmeriCorps was created in 1993 and is one of three national service 

programs the Corporation oversees: the Senior Corps, AmeriCorps, and 

Learn and Serve America. AmeriCorps consists of three programs: 

AmeriCorps State and National (state and national), AmeriCorps VISTA 

(Volunteers in Service to America), and AmeriCorps NCCC (National 

Civilian Community Corps). AmeriCorps programs for tribes and 

territories are included in state and national programs. 

The Corporation makes grants from its program appropriations to help 

grant recipients carry out national service programs. These include 

programs that tutor and mentor youth, build affordable housing, teach 

computer skills, clean parks and streams, run after-school activities, help 

communities respond to disasters, and those that are related to homeland 

security. About 60 percent of the Corporation’s fiscal year 2003 grant funds 

for AmeriCorps programs went to state service commissions, tribes, and 

national direct grantees4

 for AmeriCorps State and National programs, 

which award subgrants to nonprofit groups, which then enroll the 

AmeriCorps participants. The remaining grant and administrative funding 

paid for VISTA and NCCC participants—about 32 percent and 8 percent 

respectively, in 2003. AmeriCorps is open to U.S. citizens and nationals or 

lawful permanent resident aliens age 17 and older. Participants in the 

AmeriCorps program can receive stipends as well as health benefits and 

child care coverage. For example, about one-half of AmeriCorps 

participants received a $9,300 living allowance and health benefits in 

program year 2002. Those participants who successfully complete a 

required term of service earn a national service education award that can 

be used to pay tuition, fees, and expenses for undergraduate school, 

graduate school, or an approved school-to-work program, or to pay back 

qualified student loans. In exchange for a term of service, full-time 

 3

On January 29, 2002, during the State of the Union Address, President George W. Bush said 

“My call tonight is for every American to commit at least two years—4,000 hours over the 

rest of your lifetime—to the service of your neighbors and your nation.” 

4

State service commissions are governor-appointed public agencies or private nonprofit 

organizations that distribute AmeriCorps funding within a state. The Corporation reported 

there are 52 state service commissions, with one each in the District of Columbia, 

American Samoa, and Puerto Rico, and one in every state except South Dakota. National 

direct grantees are charitable organizations that operate in more than one state, such as the 

American National Red Cross. The Corporation provided a list of 48 national direct 

grantees. 
Page 7 GAO-04-225 Management of AmeriCorps and the National Service Trust 

AmeriCorps participants earned an education award of $4,725 in program 

year 2002. VISTA participants can elect to receive a cash stipend instead of 

an education award. About one-third of VISTA participants chose to take 

the stipend rather than the education award in 2002. Figure 1 illustrates 

the flow of the funds and information for the AmeriCorps program. 
Page 8 GAO-04-225 Management of AmeriCorps and the National Service Trust 

Figure 1: Flow of Funds and Information for AmeriCorps Education Awards 
Page 9 GAO-04-225 Management of AmeriCorps and the National Service Trust 

According to the Corporation’s Trust database, AmeriCorps enrollments 

more than doubled between 1994 and 2000. Overall AmeriCorps 

enrollments increased from about 25,000 in 1994 to about 42,000 in 1999, 

to over 59,000 in 2001. Enrollments fell in 2002 because of the suspension 

of enrollments and were legislatively limited to 50,000 in 2003. The 

Corporation requested Trust funding to support 75,000 new enrollments 

for 2004. 

AmeriCorps enrolls participants on a full-time and a part-time basis. Parttime participants who serve 900 hours or less annually earn education 

awards proportional to the hours served. During the first three years when 

AmeriCorps programs enrolled participants, 60 percent or more of the 

participants served in full-time positions. By 2000 less than 50 percent of 

the participants were full-time, and Corporation officials stated that they 

are planning for about a 50/50 full-time/part-time mix in 2004. Trends in 

total enrollment from 1994 to 2002, and projected enrollment for 2003, and 

the full-time and part-time mix of participants for each year are shown in 

figure 2. 
Page 10 GAO-04-225 Management of AmeriCorps and the National Service Trust 

Figure 2: AmeriCorps Enrollments by Program Year 

Note: Program year 2003 figures are planned positions. 

Additionally, AmeriCorps enrolls “education award only” participants. 

AmeriCorps does not pay these participants a living allowance or other 

benefits, but it provides funding to grantees for administrative purposes 

only, about $400 annually per participant. However, each education award 

participant receives an education award equivalent to that earned by a 

paid AmeriCorps member. More than half of the AmeriCorps enrollment 

growth has come from grants that provide participants no benefits other 

than the education award. The Corporation reports there has been high 

interest in these grants in recent years. Enrollments for these positions 

increased from fewer than 6,500 in 1999 to almost 16,000 in 2001. All 

participants—full-time, part-time, and education award—have up to 7 

0

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Enrollment

Source: National Service Trust Database.

Part time

Full time

Program year
Page 11 GAO-04-225 Management of AmeriCorps and the National Service Trust 

years after they successfully complete their service to use their education 

awards.5

AmeriCorps also distributes funds to high school students through 

Presidential Freedom Scholarships. These scholarships are valued at $500 

for each participant. For 2003 and 2004, the Corporation planned to award 

about 7,000 Presidential Freedom Scholarships. 

The Government Corporation Control Act requires the Corporation to 

have an annual audit of its financial statements. 6 The Corporation 

prepares its financial statements using generally accepted accounting 

principles that are used by private sector corporations and federal 

corporations. The Corporation plans to include a statement of net cost and 

a statement of budgetary resources as supplemental information in its 

annual Performance and Accountability Report by fiscal year 2005. 

The Corporation’s financial statement auditor reported that in fiscal year 

2002 the Corporation approved AmeriCorps national service positions in 

excess of the number of positions that the Trust could support. In 

November 2002 the Corporation suspended enrollments in AmeriCorps. 

Several factors contributed to the need to suspend enrollments, including 

a lack of communication among staff responsible for program and Trust 

operations. The Office of the Inspector General (OIG) reported in April 

2003 that the AmeriCorps program approved grants for thousands of 

positions more than were used in the Corporation’s model to estimate the 

funding needs of the National Service Trust. On July 24, 2003, the OIG 

reported the Corporation had enrolled more AmeriCorps participants than 

the Corporation’s National Service Trust could support, and as a result, 

beginning in 2000, the Trust’s liabilities exceeded the funds it had available 

from appropriations and interest earnings.7

 In that report, the OIG 

concluded that the Corporation had violated the Antideficiency Act. The 

Antideficiency Act prohibits an employee or officer of the United States 

 5

Funds deposited into the Trust and obligated for education service awards remain 

available without fiscal year limitation. For example see Consolidated Appropriations 

Resolution, 2003, Pub.L.108-7 (“...of which $100,000,000, to remain available without fiscal 

year limitation, shall be transferred to the National Service Trust for educational 

awards...”) 

6

31 U.S.C. §§ 9105, 9106. 

7

Office of Inspector General Report 03-007, The National Service Trust: Internal Control 

Weaknesses Cause an Anti-Deficiency Act Violation at the Corporation for National and 

Community Service, July 24, 2003. 
Page 12 GAO-04-225 Management of AmeriCorps and the National Service Trust 

government from making or authorizing an expenditure or obligation 

exceeding an amount available in an appropriation.8

 The Corporation 

submitted an Antideficiency Act report to OMB, but as of December 2003, 

the report, including the amount of the deficiency, had not been submitted 

to the President and the Congress.9

 For more information see appendix II. 

Discrepancies between the information in the Trust database and 

participant documentation indicate that not all AmeriCorps enrollment 

and exit information has been accurately recorded in the Trust database.10

Some of these discrepancies could affect the estimated probable 

expenditures of the Trust because these data are used to estimate the 

amount of education awards the Corporation will ultimately pay. 

Furthermore, the Corporation does not have complete or current user 

documentation for the Trust database. Without clear documentation 

explaining the components of the database, the Corporation may be at risk 

of not being able to properly interpret and analyze its participant data. 

Out of about 172,000 enrollments in program years 2000 to 2002, we 

obtained sufficient documentation to estimate the extent of discrepancies 

for about 158,000 enrollments.11 We estimate that about 5 percent (8,300 

enrollments) have a discrepancy between the Trust database and 

participant documentation.12 Of these, about 3 percent (4,400 enrollments) 

could affect estimates of future probable expenditures of the Trust.13

Figure 3 illustrates these results. 

 8

31 U.S.C. § 1341(a). 

9

The Antideficiency Act requires that if an officer or employee of the United States 

government violates the act, the agency head “shall report immediately to the President 

and Congress all relevant facts and a statement of actions taken.” 31 U.S.C. §1351. OMB 

Circular A-11 instructs agencies to submit the transmittal letter and report from the agency 

head to the President through OMB. Circular A-11 § 145.7. 

10The database used by the Trust is called SPAN, for System for Programs, Agreements, and 

National Service Participants. 

11Some participants were enrolled for more than one term of service during this period. 

12With a 95 percent confidence interval between 3 and 9 percent. 

13With a 95 percent confidence interval between 1 and 6 percent. 

Trust Database and 

Participant 

Documentation 

Discrepancies Could 

Affect Estimates of 

Probable Education 

Award Expenditures 

Trust Database and 

Participant Documentation 

Discrepancies Could 

Affect Estimates of How 

Much the Corporation 

Owes in Education Awards 
Page 13 GAO-04-225 Management of AmeriCorps and the National Service Trust 

Figure 3: Estimate of Discrepancies between Trust Data and Participant 

Documentation 

Several of the discrepancies that could affect what is owed by the Trust 

were similar in nature. One of the most frequently occurring discrepancies 

pertained to cases in which the Trust database showed participants were 

still serving while their documentation showed they had exited the 

program without earning an award. For several other cases, the Trust data 

showed VISTA participants were still serving while the documentation 

showed they had elected to receive a cash stipend instead of an education 

award. According to an AmeriCorps official, cash stipends are not paid 

from funds in the Trust. In several other cases, the Trust data showed 

participants were still serving while their documentation showed they had 

signed up for a shorter term of service and should have exited the 

program. The Corporation acknowledged it would need to take further 

action to determine the actual status of these cases. The specific 

discrepancies we found that could affect the amount owed by the Trust 

are described in appendix III. 

Nearly all the discrepancies that will not affect the amount owed by the 

Trust were for cases without an enrollment date on the form, although an 

enrollment date was in the database. These cases do not affect the 

estimate of what the Trust owes because other information in the 

documentation was consistent with the database, such as whether or not 

the participant earned an award. Corporation officials told us an 
Page 14 GAO-04-225 Management of AmeriCorps and the National Service Trust 

enrollment date should be recorded on the forms and that they would 

issue clarifying instructions to grantees. 

According to Corporation officials, there are numerous processes 

designed to help ensure the accuracy and validity of its data. However, the 

results of our analysis raise questions about the effectiveness of some of 

these processes. The Corporation has controls over who may enter or 

change participant information in the Web-Based Reporting System 

(WBRS), and several edit and data checks are in place to ensure data is 

entered properly and completely. For example, only a grantee’s program 

director can certify that participants have completed their service and 

qualified for an award, and WBRS will not allow grantees to enroll more 

participants than the number of slots they were awarded. Corporation 

officials also stated that a number of data checks are performed when 

WBRS data are transferred to the Trust database. For example, after each 

weekly upload, an error report is generated showing such things as 

participants who had not been officially enrolled in the Trust and duplicate 

enrollments. Furthermore, the Corporation’s fiscal year 2001 Performance 

and Accountability Report noted that the Corporation had instituted a 

procedure to randomly sample and verify enrollment and exit data on an 

annual basis. However, Corporation officials could not provide any reports 

documenting the results of these reviews. 

Our analysis of the Trust data also found that out of 186,000 participants 

enrolled during program years 1999 to 2002, 313 participants had Social 

Security numbers (SSNs) that were invalid or that the Social Security 

Administration (SSA) had not issued, and 169 had SSNs for persons listed 

in SSA’s death master file. In about 75 percent of these last cases, the 

name and birthday of the individual in the SSA death file differed from the 

information in the Trust database. In the remaining 25 percent of cases, 

the name and birthday matched, but either the SSA records show the 

individual had died more than 30 days before the service completion date 

shown in the Trust database or no completion date was in the Trust 

database, indicating these participants may be listed as still serving. 

Corporation officials told us that some of these cases could be the result 

of data entry errors. They also said that, on occasion, grantee officials 

create records for nonexistent individuals, including mock SSNs, to test 

how the data entry system works. However, these erroneous data are not 

routinely cleared from the database, according to Corporation officials. 

Since these cases are in the database, they are considered as enrolled 

participants. Such records for nonexistent individuals will cause the 

Corporation to overstate the estimated amount owed by the Trust for 
Page 15 GAO-04-225 Management of AmeriCorps and the National Service Trust 

education awards. In November, 2001, the Corporation entered into an 

agreement with SSA to test the validity of the SSNs of newly enrolled 

participants. Corporation officials provided information showing that they 

completed a SSN match under this agreement in May 2002 and found that 

2,910 participants out of about 58,000 that did not match SSAs records. 

Corporation officials stated that they were undertaking an internal review 

to resolve these discrepancies. The Corporation has not done any 

subsequent matches, but officials told us that because of our findings, they 

would reconsider this. Corporation officials also said that while the 

database could be improved, there are safeguards to prevent an 

unauthorized person from claiming an award. For example, the 

postsecondary institution the participant is attending must verify that he 

or she is a student there, and the award funds are sent directly to the 

institution. Nonetheless, since there are tens of thousands of different 

individuals joining AmeriCorps every year and given the concerns about 

how SSNs are used and protected, particularly in light of the rise in 

identify theft, it may be in the Corporation’s best interest to regularly 

verify the accuracy of the SSNs. 14 Without valid SSNs in the Trust 

database on its participants, the Corporation cannot be certain that it has 

accurate information on its participants and that all participants meet the 

eligibility criteria. 

We found the system documentation for the Trust database was difficult to 

use and, in some instances, out of date. As a result, we had to rely on oral 

testimony and e-mails provided by Corporation officials and the WBRS 

support contractor for information about the system. The users’ manual 

for the database was prepared in 1995. However, Trust database managers 

told us that this manual does not reflect all system changes since that 

time.15 The Corporation has a data definition dictionary for the Trust 

database intended to describe the data fields used in the database and 

what information they represent. However, the document we obtained 

does not provide definitions or labels for the data fields. Without this 

information, we were not able to identify what the data fields represented, 

nor would any new users of the system be able to identify the data fields. 

In commenting on a draft of this report, Corporation officials stated that 

the system documentation, including the data definition dictionary, was 

 14U.S. General Accounting Office, Social Security Numbers: Government Benefits from 

SSN Use, but Could Provide Better Safeguards. GAO-02-352 (Washington, D.C.) May 31, 

2002. 

15An updated e-SPAN operator’s guide was issued in August 2002 for use by VISTA 

programs. 

The Corporation Has Not 

Updated Its Users’ Manual 

for the Trust Database 
Page 16 GAO-04-225 Management of AmeriCorps and the National Service Trust 

formatted to facilitate use by system developers rather than laypersons. 

We were also only able to obtain a partial written inventory of edit and 

data checks used for the database. We had to rely on two Corporation 

employees knowledgeable about the system's components to explain the 

type of information in each of the data fields, identify the data fields used 

in determining education awards, and determine what related data and 

edit checks were used. 

Documenting how data systems are to be used is a common, and required, 

management practice.16 Without clear or up-to-date system documentation 

explaining the data elements in the Trust database, and procedures for 

validating the data, the Corporation may be at risk of using incorrect data 

for its estimates of future probable expenditures. Also, the Corporation 

would be dependent upon a few employees who are familiar with the 

system to produce reports or prepare analyses of the data. Documenting 

systems is an important internal control that helps organizations ensure 

that data are reliably collected and properly used and helps ensure 

organizations are positioned to continue operations in the event of a 

disaster or an emergency. 

In 2003, the Corporation began using a new model to estimate the funding 

needed to provide future education awards through the Trust. This new 

model used conservative values that increased the Trust’s funding 

estimates as compared with the previous model. Corporation officials 

believe the historical data they possess provide a sound basis for Trust 

funding estimates. However, they chose to use more conservative values 

because the AmeriCorps program does not have a long history and they 

wanted to regain credibility after having had to suspend enrollments in 

2002. In addition, the Trust fund now includes a reserve account required 

by the Strengthen AmeriCorps Program Act. The Corporation’s model also 

does not include a way to consider the possible effects that external 

factors could have on its estimates. If the Corporation does not ensure its 

funding estimates for future education awards are as reasonable and 

complete as possible, millions of federal dollars may accumulate in the 

Trust and not be available to help support this or other programs. 

 16Agencies are required by OMB to follow Federal Financial Management Systems 

Requirements issued by the Joint Financial Management Improvement Program (JFMIP). 

These include maintaining comprehensive and up to date systems documentation. JFMIP is 

a joint undertaking of the U.S. Department of Treasury, GAO, the Office of Management 

and Budget and the Office of Personnel Management, working in cooperation with one 

another and other agencies to improve financial management practices in Government. 

The New Model 

Increased Funding 

Estimates and Does 

Not Consider 

External Factors 
Page 17 GAO-04-225 Management of AmeriCorps and the National Service Trust 

The Corporation used one model, the SAL model, to estimate both the 

probable expenditures of the Trust for past and current participants and 

the funding needed to provide education awards for future participants. 

According to Corporation officials, the SAL model was used from 1996 to 

2003. In 2003, the Corporation developed a new model and revised its 

method for developing the Trust’s future funding estimates. 

The SAL model is still used to estimate probable education award 

expenditures for past and current participants. The reliability and 

supportability of the estimates produced by earlier versions of the SAL 

model have been examined by outside auditors on two separate 

occasions.17 The auditors asked to review and assess the Trust model 

determined that the model produced reliable estimates for the period 

examined. However, they suggested functional enhancements and 

provided model documentation to the Corporation. Other auditors also 

reviewed the model as part of the annual audits of the Corporation’s 

financial statements.18 These auditors advised the Corporation that 

controls and checks on the model’s data should be strengthened. They 

also recommended that automated techniques be periodically used to 

systematically review the model’s database and that the Corporation 

should consider several minor changes to the model to enhance the 

reasonableness of its estimates.19 We also reviewed the SAL model and 

found that the key factors and assumptions used to develop the 

accounting estimates were generally reasonable. Furthermore, neither the 

Corporation’s IG nor our assessment found that the SAL model was a key 

factor that contributed to the suspension of enrollments in 2002. For 

information on the structure and content of the SAL model, see Appendix 

IV. 

In the new model, the Corporation used more conservative values for the 

rates at which education awards are earned and used. The Strengthen 

AmeriCorps Program Act states that the Corporation shall use a formula 

for estimating Trust obligations that takes into consideration historical 

rates of relevant participant behavior. In considering historical rates, the 

 17See OIG Audit Report Number 01-49, June 15, 2001, Assessment of the Service Award 

Liability Calculation, Price Waterhouse Coopers, December 10, 2001. 

18See OIG Audit Report Number 03-01, February 4, 2003, Audit of the Corporation for 

National and Community Service Fiscal Year 2002 Financial Statements. 

19Audit Report Number 03-02. Recommended Improvements to the Corporation’s Internal 

Controls, Fiscal Year 2002 Management Letter. January 24, 2003. 

The New Model Increased 

the Estimated Funding 

Needed for the Trust 
Page 18 GAO-04-225 Management of AmeriCorps and the National Service Trust 

Corporation officials commented that they believe the historical data they 

possess provides a sound basis for Trust funding estimates and having 

extra funds available in the Trust—as compared with those estimated by 

the SAL model—might be prudent, particularly since the AmeriCorps 

program does not have a long history from which to extrapolate trends in 

participant behavior—only one cycle has been completed. The officials 

also noted that the new model’s assumptions do not differ significantly 

from the historical averages. For example, the rate at which participants 

earn awards in the former model is about 75 percent, while the new model 

uses a rate of 80 percent. Further, the officials said they chose to use more 

conservative values because they wanted to regain credibility after having 

had to suspend enrollments in 2002. These officials said that they wanted 

to ensure that the Corporation would have adequate funds in the Trust and 

avoid any possible need to suspend enrollments again. It may be 

appropriate to gain some experience with the new model and current 

participant behavior before adjusting the assumptions used. 

The Strengthen AmeriCorps Program Act also required the Corporation to 

consult with the Congressional Budget Office (CBO) on its model formula. 

CBO focused its analysis on the Corporation’s discount rate and reported 

that the Corporation used a discount rate that is more conservative than 

the one it uses when calculating the costs related to proposed legislation. 

When the new model’s assumptions are used, the Corporation’s Trust 

funding estimates were greater for the same number of participants than if 

the values in the SAL model were used. We calculated that the cost to 

provide education awards for up to 75,000 AmeriCorps participants and 

7,000 Presidential Freedom scholarship recipients using SAL model 

assumptions was about $116 million. Using the assumptions in the new 

model, the Corporation’s funding estimate was about $133 million for the 

same number of participants and scholarship recipients. The total amount 

in the Trust also may be higher because the act required the Corporation 

to include a reserve account. Corporation officials told us the reserve 

account value of 10 percent of the funding estimate was a value reached 

through discussions with congressional staff, and this value could change 

in subsequent years. 

Our analysis indicates that by using the assumptions in the new model, the 

Trust may accumulate more funds than have been needed to pay estimated 

education awards in the past. For instance, the Corporation’s data show 

the Trust funding estimates are $13 million and $17 million more, 

respectively, when 50,000 and 75,000 participants are assumed, and the 

The New Model 

Assumptions May Increase 

Balances in the Trust 
Page 19 GAO-04-225 Management of AmeriCorps and the National Service Trust 

new award levels and the award earning and usage rates are used than 

those used in the SAL model. Not only are the assumptions in the new 

model greater than those used in the SAL model, but the SAL model 

assumptions are higher than the actual rates in most years. For example, 

the percentage of AmeriCorps participants who earned education awards 

has fluctuated since the beginning of the program. The rate decreased 

from a high of about 75 percent in 1994 to 68 percent in 1998, and then 

increased to 73 percent in 2001. The rate used in the SAL model for earned 

awards was about 75 percent—the highest average percentage rate 

achieved in the history of the program.20 Figure 4 compares the actual 

rates at which education awards were earned with the rate used in the SAL 

model and the rate used in the new model. If future participant behavior 

reflects the behavior of most past participants, the Trust fund balance may 

increase more using the new model assumptions than it would using the 

estimates produced by the SAL model. It may be appropriate for the 

Corporation to gain some experience with the new model and current 

participant behavior before adjusting the assumptions used. 

 20We are using the SAL model from June 30, 2003. The rate shown is for the 1994 program 

year. 
Page 20 GAO-04-225 Management of AmeriCorps and the National Service Trust 

Figure 4: Percentage of AmeriCorps Participants Who Earned Education Awards 

Compared with the Percentages used in the SAL and the New Model 

The Corporation acknowledges that the new model may create Trust 

balances that are greater than if historical rates were used if future 

participant behavior mirrors historical behavior. The Corporation chief 

financial officer said that there are opportunities to periodically deobligate 

funds during the program cycle. Funds could be deobligated from the 

Trust if (1) the positions created in the grant awards are less than the fulltime-equivalent number of the positions approved, (2) all positions are not 

filled, (3) participants drop out before earning an education award, and (4) 

participants who earn awards do not use them. Figure 5 illustrates the 

points when the Corporation can deobligate funds. 

60

65

70

75

80

85

Percent

Source: National Service Trust Database.

Participants who earned awards

SAL model rate

New model rate

Program year

1994 1995 1996 1997 1998 1999 2000 2001
Page 21 GAO-04-225 Management of AmeriCorps and the National Service Trust 

Figure 5: Points in AmeriCorps Program Cycle when Deobligation May Occur 

Note: Shaded boxes are points at which Trust funds may be deobligated. 

Corporation officials said any deobligated funds would become available 

for other enrollments. They also said these funds would be used to fund 

other awards in current and future program years, and would be 

considered as reductions in subsequent budget requests. Furthermore, 

Corporation officials stated that the annual financial audit will address 

whether the size of the reserve account and the assumptions used are 

prudent. 

As of December 2003, the Corporation had two studies under way 

examining AmeriCorps participants’ attrition rates and their utilization of 

earned awards.21 These studies focus on the frequency with which awards 

are earned and used. Corporation officials said that these studies have 

provided information that aids them in understanding AmeriCorps 

attrition and award usage, but they have not resulted in recommendations 

for policy changes that could affect the assumptions used in the model. 

Although Corporation reports indicate that external factors have affected 

program participation levels, these factors are not included in either 

model, nor have the Corporation officials taken them into account when 

they submit their funding request for the Trust. Estimating models should 

account for factors external to the business or entity that can affect the 

reasonableness of the estimates. Several factors can affect the 

assumptions used by the Corporation to estimate its budget needs. These 

factors include the state of the economy, the cost of postsecondary 

education and the availability of financial aid, and the levels of interest in 

 21These studies are called the AmeriCorps Attrition Overview Study and the AmeriCorps 

Education Award Utilization Survey. 

External Factors Not 

Considered in Developing 

Estimates 
Page 22 GAO-04-225 Management of AmeriCorps and the National Service Trust 

volunteerism. Neither of the Corporation’s models takes into account any 

external factors that could change future trends when it creates its 

assumptions or calculates its final budget estimates. Corporation officials 

stated that the models are not sophisticated enough to account for all of 

these factors. However, the Corporation has formed a Management 

Improvement Team to examine the potential costs and benefits of 

upgrading the model to account for some external factors. 

External factors could affect the number of AmeriCorps participants, as 

well as the attrition rate and use of awards once enrolled. For example, if 

unemployment rates are high, more participants may be willing to enroll, 

since they could receive a stipend as well as future education awards. 

Additionally, if postsecondary education costs increase, more participants 

may be likely to ensure they earn, and afterward use, their education 

awards. The Corporation has acknowledged that external factors have 

prevented it from achieving program goals. In its fiscal year 1999 and 2000 

Performance Reports, the Corporation said it believed the strong economy 

was partly to blame for the Corporation’s not achieving its program year 

1998 and 1999 enrollment goals. In its fiscal year 2002 Performance and 

Accountability Report, the Corporation said the high level of interest in 

volunteerism following September 11, 2001, and the President’s Call to 

Service contributed to higher levels of AmeriCorps enrollments than were 

anticipated. 

The Corporation has implemented and planned substantive changes that 

should minimize the risk of an enrollment suspension in the future, and it 

has met or plans to meet the requirements established by the Strengthen 

AmeriCorps Program Act. Our previous statement and testimony from the 

Corporation’s Inspector General identified several factors that contributed 

to the conditions surrounding the November 2002 suspension in 

enrollments.22 The Corporation has made changes to address these factors. 

However, grantees raised concerns about two new policies because they 

may limit enrollments and hinder service delivery. If these policies reduce 

enrollments, balances in the Trust may be further increased. 

 22Testimony of J. Russell George, Inspector General of the Corporation for National and 

Community Service, Before the Subcommittee on VA, HUD, and Independent Agencies of 

the Senate Committee on Appropriations. April 10, 2003. 

Operational Changes 

Should Reduce the 

Risk of Enrollment 

Suspensions, but Two 

New Policies May 

Hinder Service 

Delivery and May 

Contribute to Higher 

Balances in the Trust 
Page 23 GAO-04-225 Management of AmeriCorps and the National Service Trust 

The Corporation has made changes to address the three conditions that 

we reported contributed to the need to suspend enrollments in 

AmeriCorps.23 The Corporation had not recognized its obligation to fund 

participant education awards. There was a lack of communication among 

program, grants management, and Trust officials with regard to the 

number of AmeriCorps positions the Trust could support. Finally, because 

they did not require grantees to provide timely enrollment information, 

Corporation and AmeriCorps managers could not be certain about the 

number of AmeriCorps participants and their effect on the Trust. 

The Corporation’s obligation practices comply with the Strengthen 

AmeriCorps Program Act. In accordance with this act, the Corporation 

began obligating Trust funds when it approved positions in AmeriCorps 

grants beginning in June 2003. As of September 2003, the Corporation had 

obligated fiscal year 2003 appropriated Trust funds for about 46,000 of the 

50,000 AmeriCorps positions. 

Greater emphasis has been placed on monitoring the availability of funds 

in the Trust, and the communication and coordination between officials 

responsible for managing the Trust and officials responsible for creating 

positions have greatly improved. Since March of 2003, the Corporation has 

been tracking AmeriCorps enrollments on a biweekly basis, investigating 

discrepancies in counts between its enrollment system and the Trust 

database, and monitoring the enrollments against the capacity of the Trust. 

These results are made available to high-ranking program and financial 

management officials of the Corporation, who meet monthly to discuss the 

results of these exercises. 

The Corporation has also tightened the controls and eliminated much of 

the flexibility it previously gave grantees. Grantees are now prohibited 

from enrolling more participants than specified in their grant awards, and 

the Corporation modified WBRS to prevent grantees from enrolling more 

participants than the number of positions contained in the grant award. To 

better monitor progress toward its enrollment goals and their effect on the 

Trust, the Corporation now requires grantees to report certain data about 

potential participants to the Corporation prior to their actual enrollment. If 

a potential participant does not enroll within 45 days of the expected start 

 23U.S. General Accounting Office, Corporation for National and Community Service: 

Preliminary Observations on the National Service Trust and AmeriCorps. GAO 03-642T

(Washington, D.C.) April 10, 2003. 

The Corporation Has 

Improved Aspects of Its 

Operations 
Page 24 GAO-04-225 Management of AmeriCorps and the National Service Trust 

date, the file on the potential participant is deleted. If the individual enrolls 

as scheduled, the grantee must complete the enrollment process within 30 

days of the participant beginning work. The Corporation added a tool to 

WBRS that allows managers to monitor the average number of days 

between a participant’s start date and enrollment. According to the 

Corporation, 60 percent of program year 2002-2003 grantees have 

improved the average time between participants’ start dates and the 

reporting of their enrollment compared to their performance in program 

year 2001-2002. However, less than 50 percent of the program year 2002-

2003 grantees reported an average time from start date to enrollment of 30 

days, or less. 

In addition, the Corporation provided training and technical support to 

assist grantees with the system changes and new enrollment requirements. 

Most of the AmeriCorps grantees who responded to our survey said the 

training was adequate to meet the new requirements. Of the AmeriCorps 

grantees who responded, 80 percent said that the Corporation provided 

enough training and technical support to help them meet these new 

requirements. However, in written responses some grantees said they 

would like to receive training more frequently and believed it would be 

beneficial if the Corporation could provide training directly to 

subgrantees, rather than just to grantees. Additionally, about 7 percent of 

the responding grantees said that as a result of the new requirements, they 

or their subgrantees would have to perform additional tasks in their 

enrollment procedures. One of the responding grantees said that because 

it had over 150 part-time positions, and only limited staff, the requirement 

to enter data on participants twice imposed a significant burden. 

Corporation officials stated that they are planning to improve oversight of 

grantees’ performance. The Corporation plans to create consolidated 

reports in WBRS to facilitate oversight of the performance of its grantees, 

such as the state commissions and national direct grantees. This will allow 

them to identify programs having enrollment reporting problems more 

quickly and allow them to focus their oversight on those most in need of 

attention. Additionally, the Corporation plans to strengthen grantee 

oversight requirements to ensure that grantees are overseeing their 

subgrantees’ compliance with enrollment procedures and time frames. The 

Corporation updated the administrative standards for the state 

commissions’ process for monitoring their subgrantees’ compliance with 

the enrollment procedures. These standards also include the expectation 

that state commissions will consider a subgrantee’s compliance with the 

enrollment procedures and time frames in their funding decisions. The 

Corporation issued this guidance to the commissions in November 2003. In 

Some Changes Have Not 

Been Fully Implemented 
Page 25 GAO-04-225 Management of AmeriCorps and the National Service Trust 

commenting on the draft report, Corporation officials said that the revised 

standards will be piloted in spring 2004 and then submitted to OMB for 

review in early fiscal year 2005. The Corporation also plans to establish a 

schedule for its staff to review grantees’ enrollment cycle times and 

provide additional training and technical assistance to grantees. 

There are two provisions in the Strengthen AmeriCorps Program Act that 

increase the oversight of Trust operations. The first provision requires that 

the Corporation’s chief executive officer (CEO) certify annually in a report 

to Congress that the Corporation is in compliance with other sections of 

the act. The second provision requires an annual audit of the accounts and 

records supporting the national service positions, and the National Service 

Trust estimate to fund those positions—referred to in the act as the 

Corporation’s trust obligations. The act requires the CEO to include this 

annual audit with the CEO certification report forwarded to Congress. 

Although the audit has been completed, the Corporation has not yet 

provided its report to Congress.24 The auditor found, after accounting for 

the model’s assumptions and reserve account, the Trust still had about $10 

million of its fiscal year 2003 appropriation available for awards as of 

September 30, 2003. The acting CEO certified the Corporation’s 

compliance with the act in the management representation letter provided 

to the Corporation's Inspector General on November 13, 2003. Corporation 

officials said they also plan to include the CEO certification and the audit 

of the estimated obligations in its 2003 Performance and Accountability 

report to Congress. 

Prior to the suspension in enrollments, the Corporation allowed grantees 

to replace a participant who left AmeriCorps before earning a full award 

and to convert an unfilled position to a different number of positions with 

an equivalent value of education awards. For example, if a grantee had a 

difficult time recruiting full-time participants, it could convert the full-time 

position into two half-time positions. In an effort to help ensure the Trust 

would not incur education award expenditures greater than its funds, the 

Corporation established policies that prohibit grantees from replacing 

participants and converting full-time positions. With these policies, if a 

participant enrolls in a program but then leaves after 1 week, the grantee 

cannot replace that person, and if a grantee has one full-time position but 

can only find people willing to work part-time, the grantee cannot convert 

 24Audit Report 04-03, Audit of the Corporation for National and Community Service’s 

National Service Trust Schedule of Fiscal Year 2003 Budgetary Resources and Obligations, 

October 31, 2003. 

Two Policy Changes May 

Limit Enrollments and 

Contribute to Balances in 

the Trust 
Page 26 GAO-04-225 Management of AmeriCorps and the National Service Trust 

that position to two half-time positions but instead can only fill it with one 

part-time person. The Corporation established these policies because it 

estimated that the Trust could only support a finite number of 2002 

positions. Subsequently, Congress placed a 50,000 limit on the number of 

total AmeriCorps enrollments that could be filled with the 2003 Trust 

appropriations. However, as of November 2003, Congress has not included 

an enrollment limit in the proposed 2004 Trust appropriations. 

The policies prohibiting grantees from refilling vacated positions and 

converting unfilled positions helped the Corporation officials to control 

enrollments and helped them to comply with the legislatively imposed 

limit, which in turn helped ensure the solvency of the Trust. However, 

grantees who responded to our survey said that these policies may hinder 

their ability to provide services. Additionally, these policies may lead to 

fewer enrollments and coupled with the Corporation’s obligation practices 

and the model assumptions may contribute to a higher balance of funds in 

the Trust. 

Our survey of AmeriCorps grantees shows that of those grantees that 

responded, 80 percent reported that the prohibition regarding the refilling 

of positions will have a generally or very negative effect on their program 

operations. Three-quarters of respondents reported that this policy will 

force changes in their program operations or those of their subgrantees or 

operating sites. Eighty-one percent reported that that it will limit 

enrollments and hinder their ability to provide services. Sixty-five percent 

reported that the policy will require changes to the services provided. 

Respondents reported that they may have to recruit more carefully, or not 

report recruitments until the latest possible time, to maximize the 

likelihood participants will remain in the program. This will affect 

AmeriCorps participants as well as those being served. One respondent in 

our survey commented, 

Our subgrantees must now rethink their member enrollment and termination policies. In 

the past, programs could “take a chance” on enrolling a potential member who showed 

promise but who may have also had potential risk factors. They were able to do this 

because they could refill the slot if the member did not work out. In relation to terminating 

members, subgrantees will now be somewhat hesitant to release a member who is not 

performing as expected, because they will not be able to refill the slot. 

Similarly, most of the respondents reported that the policy on converting 

unfilled positions will affect program operations and service delivery. 

About 75 percent of respondents reported that this restriction will 
Page 27 GAO-04-225 Management of AmeriCorps and the National Service Trust 

negatively affect their operations and require them to change their 

operations. Seventy-five percent reported that it will hinder service 

delivery, and 60 percent reported that it will cause changes in services 

provided. Respondents commented that the authority to convert positions 

allowed them to respond positively to changing circumstances and better 

address community needs. One respondent noted that without being able 

to convert positions, applicants will not be accommodated if their 

availability does not conform to the slots provided in the grant. Positions, 

therefore, could go unfilled. 

Furthermore, if these policies result in fewer enrollments, the balance in 

the Trust may grow. As previously mentioned, since the passage of the 

Strengthen AmeriCorps Program Act, the Corporation obligates funds for 

all AmeriCorps positions when the grants are approved and prior to 

participants actually enrolling. Also, the new model the Corporation uses 

for developing funding estimates assumes 100 percent enrollment for all 

positions created. If enrollments do not reach the approved levels, and if 

Corporation officials do not regularly and diligently monitor enrollments 

and periodically deobligate funds, the funds in the Trust may accumulate. 

Financial statement auditors have reported several internal control 

weaknesses or conditions at the Corporation and whether the Corporation 

has improved those previously identified. For example, the auditors 

reported that the grant approval policies and procedures were a serious 

weakness in fiscal years 1999 and 2000. The reports for 2001 and 2002 

show that the Corporation improved in this area and the auditors did not 

list this as a concern in the 2003 report. 

However, the Corporation continues to have some internal control 

problems. The fiscal year 2003 audit reported a continuing internal control 

problem regarding the Corporation’s monitoring of grantee activities. This 

problem was also cited in the audit reports for fiscal years 2001 and 2002. 

Additionally, as previously stated, we found that the Corporation has not 

fully implemented its efforts to improve oversight of grantees’ 

performance, its procedures do not ensure accurate data in the Trust 

database, and the Corporation’s ability to fully use the data on its 

participants may be limited because the users’ manual for the database has 

not been kept current. 

In light of these internal control weaknesses and the concerns related to 

the problems that lead to the suspension in enrollments, having an auditor 

review internal control would provide a measure of assurance over the 

Corporation’s accountability and internal control. Auditor opinions on 

Internal Control 

Weaknesses Remain 
Page 28 GAO-04-225 Management of AmeriCorps and the National Service Trust 

internal control are a critical component of monitoring the effectiveness of 

an entity’s risk management and accountability systems. When an auditor 

renders an opinion on internal control, the auditor is providing reasonable 

assurance that the entity has maintained effective internal control over 

financial reporting (including safeguarding of assests) and compliance 

such that material misstatements, losses, or noncompliance that are 

material to the financial statements would be detected in a timely fashion. 

The auditor also reports on any significant deficiencies or material 

weaknesses in the internal control over financial reporting. An opinion on 

internal control is appropriate and necessary for major government 

entities and in other cases where an opinion on internal control would add 

value and mitigate risk.25

The suspension of AmeriCorps enrollments had a serious impact on the 

Corporation’s operations, resulting in both internal and external scrutiny. 

This scrutiny revealed many shortcomings with the Corporation’s 

management of the AmeriCorps program and the Trust. Since the 

suspension in enrollments, the Corporation has made significant changes 

to some of its operating procedures and internal controls. Most notably, 

the Corporation began obligating Trust funds when AmeriCorps positions 

were created, and key Corporation officials have been much more focused 

on ensuring adequate funds are in the Trust. 

However, weaknesses still existing in the Corporation’s procedures and 

internal control could negatively affect the Trust or hinder the 

Corporation’s ability to fulfill its management responsibilities. For 

instance, discrepancies between the Trust database and the participant 

data indicate that the Corporation does not have adequate internal control 

procedures to ensure the accuracy of its data. Accurate and complete 

participant information in the Trust database is critical. This information 

plays a significant role in estimating the education awards owed by the 

Corporation and ensuring they are awarded properly. Inadequate system 

documentation is an internal control weakness that could limit the 

Corporation’s ability to maximize its use and understanding of the data it 

possesses. Without valid SSNs in the Trust database on its participants, the 

Corporation cannot be certain that it has accurate information on its 

participants and could indicate that not everyone participating in the 

program meets the eligibility criteria. 

 25U.S. General Accounting Office, Government Auditing Standards. GAO-03-673G

(Washington, D.C.) June 2003. 

Conclusion 
Page 29 GAO-04-225 Management of AmeriCorps and the National Service Trust 

In addition, other changes are needed to enhance the Corporation’s efforts 

to be good stewards of public funds while fulfilling its mission. Given the 

Corporation’s relatively short history, and fluctuation in its program data, 

it may be prudent for the Corporation to use factors and value in its model 

that provide some additional funds in the Trust. Nonetheless, future 

funding estimates for the Trust should be as reasonable and complete as 

possible to minimize the accumulation of large balances in the Trust. The 

Corporation needs to balance its efforts to ensure the Trust does not 

assume future probable expenditures in excess of its funds with the 

mission and goals of the grantees and subgrantees that enroll AmeriCorps 

participants to help meet community needs. Policies that do not balance 

these goals may also contribute to the accumulation of balances in the 

Trust. If the Corporation does not ensure its funding estimates are as 

reasonable and complete as possible and does not regularly and diligently 

monitor enrollments and periodically deobligate funds, millions of federal 

dollars may accumulate in the Trust and not be available to help support 

other federal programs. Finally, obtaining an auditor’s opinion on internal 

control over financial reporting as part of its annual financial statement 

audits would provide additional accountability and assurance. 

To improve the management of AmeriCorps and the National Service 

Trust, we recommend that the chief executive officer of the Corporation 

take the following nine actions: 

To ensure the Trust receives accurate data for use in its model estimates 

and Trust database, 

• implement a strategy to correct discrepancies between the Trust database 

and the enrollment and exit forms, 

• review and document the effectiveness of its data assurance processes, 

• regularly verify the accuracy of the SSNs of its participants. 

To better ensure that the Corporation has data that are readily available 

and is positioned to continue operations in the event of a disaster, 

emergency, or employee turnover, and 

• update the users’ manual for the Trust database and develop an inventory 

of edit and data checks used for the database. 

To provide additional assurance over internal control and to minimize the 

related risks, 

Recommendations 
Page 30 GAO-04-225 Management of AmeriCorps and the National Service Trust 

• obtain an auditor’s opinion on the adequacy of the internal control over 

financial reporting as part of the annual financial statement audit. 

To enhance the accuracy of Trust budget estimates and ensure the Trust 

does not accumulate large balances, 

• create a means to take into account the possible impact that external 

factors may have on participant behavior in its funding estimates and 

budget requests, 

• establish and execute a periodic deobligation schedule for unused Trust 

obligations, and 

• review the assumptions being used in the new funding model after the 

Corporation gains more experience with the new model and current 

participant behavior. 

To ensure its policies support its mission and grantees’ efforts to deliver 

services while also providing adequate management controls, 

• evaluate the enrollment policies regarding refilling and converting 

positions. 

We received written comments from the chief executive officer for the 

Corporation for National and Community Service. These comments are 

reprinted in appendix V. The chief executive officer agreed with eight of 

the nine recommendations and identified the actions planned to address 

them. As for the other recommendation—to obtain an auditor’s opinion on 

the adequacy of the Corporation’s internal control over financial reporting 

as part of the annual financial statement audit—the chief executive officer 

stated that he would refer it to the Corporation’s Office of Inspector 

General, since that office contracts for the annual financial audit. 

Additionally, the chief executive officer identified several areas that 

needed further clarification. He pointed out that the system 

documentation for the Trust module of eSPAN was not outdated, as we 

said in our draft, and informed us that the documentation is up to date but 

neither it nor the data dictionary is maintained in a laypersons’ format. We 

modified the report to better reflect this information. The chief executive 

officer stated that the Corporation believes that the historical data 

currently used to estimate Trust funding provides a sound basis for the 

estimates. We modified the language in the report to reflect the 

Agency Comments 

and Our Evaluation 
Page 31 GAO-04-225 Management of AmeriCorps and the National Service Trust 

Corporation’s views. Further responding to the chief executive officer’s 

comments, we (1) deleted the statement that the Corporation planned to 

begin using Generally Accepted Accounting Principles for federal 

government entities, (2) added program year information to better 

describe the comparison of the average time between participants’ start 

dates and reporting of their enrollment, (3) made it clear that the 

Corporation’s oversight efforts will focus on its grantees—the state 

commissions and national direct grantees, (4) updated the status of the 

Corporation’s revised administrative standards, and (5) changed the date 

when the CEO certification was provided. 

Further, the chief executive officer expressed the view that our discussion 

of the Antideficiency Act violation focused on the amount of the 

deficiency at a specific time in the past and does not calculate the amounts 

deobligated over time. He also states that it is the Corporation’s view that 

the deficiency is the amount needed at this time to liquidate obligations. 

We disagree and we revised this section of the report to explain that the 

Antideficiency Act requires an agency to report the amount of the violation 

at the time the violation occurred. The chief executive officer also stated 

that the $64 million deficiency appropriation should be sufficient. The 

report does not reflect nor did we calculate the amount the Corporation 

needs to liquidate its obligations. 

As we agreed with your office, unless you publicly announce the contents 

of this report earlier, we plan no further distribution of it until 30 days 

from the issuance date. We will then send copies to the Chief Executive 

Officer of the Corporation for National and Community Service and make 

copies available to others who request them. At that time, the report will 

also be made available at no charge on GAO’s Web site at 

http://www.gao.gov. 

If you have any questions about this report, please call me on (202) 

512-8403 or Carolyn Taylor on (202) 512-2974. Other contacts and staff 

acknowledgments are listed in appendix VI. 

Cornelia M. Ashby 

Director, Education, Workforce 

 and Income Security Issues 
Appendix I: Scope and Methodology 

Page 32 GAO-04-225 Management of AmeriCorps and the National Service Trust 

To determine if the activities of AmeriCorps participants were accurately 

recorded in the Trust database, we performed a data reliability test 

comparing information in the Trust database with information from 

original enrollment and exit forms completed by the participants and their 

AmeriCorps program managers. We obtained data files from the WebBased Reporting System (WBRS) and the System for Programs, 

Agreements, and National Service Participants (SPAN). SPAN is the 

database used by the Trust. We performed general checks on these files to 

look for invalid data such as Social Security numbers that are invalid or 

have not been assigned. Because of a lack of documentation describing 

the data fields in detail, particularly for SPAN, we held several discussions 

with Corporation officials and contractor staff to resolve technical issues 

associated with the data files and to identify data fields to use in our 

reliability test. Based on these discussions, we developed a list of WBRS 

data fields that would document participants’ enrollment, exit, and award 

eligibility. At our request, Corporation staff provided a list of 

corresponding SPAN data fields. 

The population we performed the reliability test for consisted of 172,434 

state and national direct grant program and VISTA individual enrollments 

that were in the SPAN database as of July 25, 2003, and enrolled during the 

2000, 2001, and 2002 program years. Each individual enrollment consisted 

of a discrete period of time a specific individual was an AmeriCorps 

participant at a single grantee. We did not sample National Civilian 

Conservation Corps (NCCC) participants because they constitute a small 

percentage of AmeriCorps enrollments (less than 3 percent). 

We drew a stratified random sample of 400 enrollments from this SPAN 

database. The population was stratified into four groups on the basis of 

program enrollment (i.e., state and national direct grant program or 

VISTA) and exit status (i.e., had exited from the program or not). With this 

statistically valid probability sample, each enrollment in the study 

population had a nonzero probability of being included, and that 

probability could be computed for any enrollment. Each sample element 

was subsequently weighted in the analysis to reflect the sample design. 

The weighting factors were computed as the ratio of the population to the 

Appendix I: Scope and Methodology 
Appendix I: Scope and Methodology 

Page 33 GAO-04-225 Management of AmeriCorps and the National Service Trust 

sample within each stratum. We express confidence in the precision of our 

estimates as a 95 percent confidence interval.1

 

Corporation regulations require that participant documentation be kept on 

file for 3 years from the date a participant finishes his or her term of 

service.2

 Documentation for VISTA participants is maintained at the 

Corporation’s state field offices and for state and national participants the 

documentation is maintained at the grantee’s or subgrantee’s office. The 

Corporation sent requests for the participant documentation to the 

appropriate grantees for each enrollment in our sample. The grantees sent 

the documents to the GAO headquarters in Washington, DC. We reviewed 

the documentation to make sure all applicable forms were submitted. 

Because of a larger than expected number of nonresponses and 

incomplete document submissions, we made a second request to the 

grantees that had not provided complete documentation. In total we 

allowed program officials 6 weeks to provide the documents. 

Not all grantees provided us with complete participant documentation for 

the cases we randomly selected. We did not receive any of the 

documentation needed to assess whether enrollment information was 

accurately recorded for an estimated 14,055 of the 172,434 enrollments in 

the 2000 to 2002 program years. Although we received incomplete 

documents for an estimated 30,176 enrollments, we were able to compare 

key information with the SPAN data. Corporation officials expressed 

surprise that we did not receive all of the documents requested. Table 1 

 1

Because we used a sample (called a probability sample) to develop our estimates, each 

estimate has a measurable precision, or sampling error, that may be expressed as a 

plus/minus figure. A sampling error indicates how closely we can reproduce from a sample 

the results that we would obtain if we were to take a complete count of the universe using 

the same measurement methods. By adding the sampling error to and subtracting it from 

the estimate, we can develop upper and lower bounds for each estimate. This range is 

called a confidence interval. Sampling errors and confidence intervals are stated at a 

certain confidence level—in this case, 95 percent. For example, a confidence interval at the 

95-percent confidence level means that in 95 out of 100 instances, the sampling procedure 

we used would produce a confidence interval containing the universe value we are 

estimating. 

2

In certain circumstances, paper forms are not required. For example VISTA summer 

associates do not need to complete an enrollment form. Also, VISTA has developed a 

practice of not requiring programs to complete the certification section of the paper exit 

form if the program official who certifies the award status of the participant is the same 

individual who would complete this section in e-Span. Several cases for which paper forms 

are not required were included in the sample and we considered these cases as ones for 

which complete documentation was provided.
Appendix I: Scope and Methodology 

Page 34 GAO-04-225 Management of AmeriCorps and the National Service Trust 

shows estimates of documentation availability for all enrollments during 

program years 2000-2002. 

Table 1: Estimates of Documentation Availability for AmeriCorps State and National Grantee and VISTA Participants, Program 

Years 2000-2002 

Number of 

enrollees 

No documentation 

available 

Incomplete 

documentation 

available 

Complete documentation 

available 

AmeriCorps state and national 

157,045 

7.6% 

(4.3 – 12.4%) 

15.9% 

(11 – 21.8%) 

76.5% 

(70.5 – 82.5%) 

AmeriCorps VISTA 

15,388 

13.4% 

(8.5 – 19.6%) 

34.3% 

(27.1 – 41.6%) 

52.3% 

(44.7 – 59.9%) 

Total 172,434 

8.2% 

(5 – 12.4%) 

17.5% 

(13 – 22.8%) 

74.3% 

(68.9 – 79.8%) 

Notes: Totals may not add because of rounding. 

Ninety-five percent confidence intervals shown in parentheses. 

Grantee officials are responsible for entering and updating all information 

about participants. Participants complete enrollment and exit forms at the 

start and completion, respectively, of their terms of service. Grantee 

officials complete and sign other portions of these forms certifying the 

participant’s enrollment and exit dates and whether or not the participant 

earned an education award. The grantee officials enter the participant’s 

information into WBRS.3

 It is then transferred to the Trust database on a 

weekly basis. 

Since participant data from the Trust database were used to calculate the 

Corporation’s future probable expenditures of the Trust for past and 

current participants as well as develop its funding estimates for future 

participants that it uses in its annual budget requests, we focused our 

comparison on key fields that would affect the estimates. According to 

Corporation officials, these include the enrollment date, the number of 

hours the participant committed to serve, the number of hours actually 

served, and the participant’s termination status—whether or not the 

participant completed the term of service and earned an award. We 

recorded as a discrepancy any case where the information for these fields 

in the documentation did not match the information recorded in SPAN or 

 3

VISTA participants do not enroll through WBRS. They are enrolled by Corporation officials 

at AmeriCorps state offices into the Trust database through eSPAN, an enrollment program 

that feeds into SPAN directly. 
Appendix I: Scope and Methodology 

Page 35 GAO-04-225 Management of AmeriCorps and the National Service Trust 

the information appeared to be inconsistent with enrollment period rules 

such as participants still serving when other information indicates they 

should have finished their term. We assessed whether the discrepancies 

would affect what the Trust owed. We provided a list of the discrepancies 

to Corporation officials for further investigation. In several cases, they 

were able to explain why we found a discrepancy and document that the 

case was accurately recorded in the Trust database. We did not include 

these cases in our discrepancy count. 

To answer the question of how the Corporation develops its funding 

estimates for the Trust, we reviewed the models used by the Trust to 

develop its funding estimates. We obtained electronic versions of the 

models and input data to assess whether the models worked as described 

by Corporation officials. We gained an understanding of the controls over 

the preparation of the estimates and supporting data. We also learned 

about the controls over the sources of data and external factors that could 

affect the estimates. We verified the consistency of assumptions with 

historical data and the reliability of historical data. We considered whether 

changes in business or industry would cause other factors to become 

significant, and questioned Corporation officials regarding the possible 

impact of changes in Corporation operations on the factors. We also 

performed a test of calculations in the model. We obtained and reviewed 

revisions to the model recommended by auditors and contractors, and the 

changes planned for future budget submissions. We discussed all these 

issues with knowledgeable staff in the chief financial officer’s office and 

conducted several hands-on sessions during which the Corporation staff 

demonstrated how the model worked and was used. Additionally, we 

obtained and reviewed financial statement reports from the Corporation’s 

IG and assessed the sections of those reports that discussed the models 

and the supporting data. 

To determine if the management and operational changes to controls put 

in place following the suspension in enrollments in November 2002 would 

be effective, we reviewed Corporation memos and related data to check 

the progress of and compliance with these reforms and we interviewed 

knowledgeable staff. We also surveyed 148 AmeriCorps grantees—state 

commissions, national direct parent organizations, education award 

programs, tribes and territories—and asked their views on the new 

enrollment and oversight policies as well as the adequacy of the training 

and technical assistance provided by the Corporation. In developing the 

questionnaire, we reviewed memos implementing the new policies and 

met with Corporation officials to gain a better understanding of the new 

policies. We also obtained comments from Corporation officials on a draft 
Appendix I: Scope and Methodology 

Page 36 GAO-04-225 Management of AmeriCorps and the National Service Trust 

of the questionnaire. We pretested the questionnaire in person or by 

telephone with the four grantee groups—state commissions, national 

direct grantees, education award programs, tribes and territories. Guided 

by the pretest results and comments from the Corporation, we revised the 

questionnaire to ensure that all questions were fair, relevant, and easy to 

understand and answer. In addition, we tested the questionnaire to ensure 

that completing it would not place too great a time burden on grantees. 

Overall, we received responses from about 71 percent of the grantees (105 

of the 148 surveyed). Response rates for each type of grantee were: state 

commissions (81 percent), national direct (73 percent), education award 

programs (60 percent), tribes and territories (54 percent). 

To establish whether the Corporation obligated funds in excess of the 

amount available in the Trust, we reviewed applicable statutes concerning 

how federal funds should be obligated and the 1993 Corporation 

legislation. We also reviewed reports related to the violation issued by the 

Corporation’s OIG and its financial statement auditor. We clarified legal 

issues through correspondence with legal counsel from the Corporation 

and the Office of Management and Budget (OMB). 

We reviewed the internal control processes related to various Corporation 

activities using the Standards for Internal Control in the Federal 

Government.4

 

We conducted our work between March and December 2003 in 

accordance with generally accepted government auditing standards. 

 4

U.S. General Accounting Office, Standards for Internal Control in the Federal 

Government. GAO/AIMD-00-21.3.1 (Washington, D.C.) November 1999. 
Appendix II: The Corporation’s Antideficiency 

Act Violation 

Page 37 GAO-04-225 Management of AmeriCorps and the National Service Trust 

In July 2003, the Corporation’s Office of the Inspector General (OIG) 

reported that the Corporation had obligated funds in excess of the amount 

available to it in the National Service Trust. In that report the OIG noted 

that the Corporation had suspended participant enrollment on November 

15, 2002, because it was concerned that the Trust would not have 

sufficient funds to cover education awards. At the time, in November 2002, 

Corporation did not record education award obligations in the Trust Fund 

until it paid education awards to eligible participants, so it had no 

assurance that adequate funds were available. The Corporation amended 

AmeriCorps grants to suspend enrollments and did not permit any 

additional enrollments until Congress appropriated additional funds to the 

Trust in March 2003. 

However, the suspension came too late. In February 2003, the 

Corporation’s financial statement auditor reported that, in fiscal year 2002, 

the Corporation had approved AmeriCorps national service positions in 

excess of the number of positions that the Trust could support.1

 The July 

2003 OIG report stated that the Corporation had enrolled more 

AmeriCorps participants than the Trust could support, and as a result, the 

“[t]rusts’ liabilities, based on appropriations and interest forbearance2

expected to be paid, exceeded the Trust’s appropriations and interest 

earnings beginning in 2000.”3

 The report also stated that the Corporation 

had violated the Antideficiency Act.4

Additionally, the OIG report stated that the Corporation estimated that the 

violations resulted in a Trust deficiency of approximately $64 million. This 

$64 million was derived from a reconstruction of the Trust’s financial 

status that the Corporation prepared at the Office of Management and 

Budget’s (OMB) request. In its July 25, 2003, response to the OIG’s report, 

the Corporation conceded that it had violated the Antideficiency Act but 

 1

Audit of the Corporation for National and Community Service’s Fiscal Year 2002 Financial 

Statements, Audit Report 03-01 at 24, KPMG, Feb. 4, 2003. 

2

Interest forbearance refers to the payment of student loan interest by the Corporation for 

the participant during the period of service. 

3

Office of Inspector General Report 03-007, The National Service Trust: Internal Control 

Weaknesses Cause an Anti-Deficiency Act Violation at the Corporation for National and 

Community Service, July 24, 2003. 

4

The Antideficiency Act prohibits an employee or officer of the United States government 

from making or authorizing an expenditure or obligation exceeding an amount available in 

an appropriation. 31 U.S.C. § 1341(a). 

Appendix II: The Corporation’s 

Antideficiency Act Violation 
Appendix II: The Corporation’s Antideficiency 

Act Violation 

Page 38 GAO-04-225 Management of AmeriCorps and the National Service Trust 

disagreed with the amount of the violation reported by its OIG and stated 

that the financial reconstruction was a draft that was prepared “while the 

legal landscape was still unfolding.”5

We suspect that the $64 million amount of the violation may be 

understated. In two legal opinions, in April and June 2003, we explained 

that the Corporation incurred, and was required to record, an obligation at 

the time it awarded a grant approving a new participant slot.6

 We 

concluded that the Corporation, by waiting to record an obligation until it 

paid an education award, was under recording its obligations. In addition, 

we explained that the Corporation could not, without specific statutory 

authority, record an obligation on the basis of estimates of what it would 

have to pay when education awards are earned (its probable accounting 

liability). We stated that the Corporation should record its maximum 

potential liability. As our legal opinions established, the Corporation under 

recorded its obligations by recording (1) obligations at the time of 

drawdown rather than at grant award and (2) estimates of what it would 

have to pay rather than the full potential costs of the education awards. 

In 2002, OMB advised the Corporation that it should record obligations as 

the grantees enrolled new participants. OMB also advised the Corporation 

that it should record the amount of the obligation based on estimates of 

what enrolled participants will draw down in the future, using historical 

information, such as attrition rates and actual usage by participants who 

complete a term of service and earn an education award. The Corporation 

had already been developing these estimates for its budget request to the 

Congress. 

At the time of the enrollment suspension, while the Corporation had not 

yet instituted the practice of recording obligations as the grantees enrolled 

participants, it took into consideration the consequences of recording 

obligations at the time of enrollment in its financial reconstruction for 

OMB and concluded that if the Corporation had been recording 

obligations at the time of enrollment, the deficiency would be $279 million. 

We suspect that $279 million might also understate the amount of the 

violation at the time the violation occurred because the Corporation still 

 5

Preliminary Response by Corporation for National and Community Service to the July 24, 

2003, Office of Inspector General Report 03-007, July 25, 2003. 

6

See B-300480, April 9, 2003 and B-300480.2, June 6, 2003, for a more detailed discussion of 

the obligation practices of the Corporation. 
Appendix II: The Corporation’s Antideficiency 

Act Violation 

Page 39 GAO-04-225 Management of AmeriCorps and the National Service Trust 

would have recorded estimates, as opposed to the maximum potential 

liability, and still would have failed to record obligations when incurred—-

at time of grant award. The Corporation submitted an Antideficiency Act 

report to OMB, but as of December 2003, the report, including the amount 

of the deficiency, had not been submitted to the President and the 

Congress.7

In our June 6, 2003, legal opinion we noted that the Corporation could 

seek legislation that would permit it to use an estimation model for 

recording its obligations, and that this model could be similar to the 

process that would be used to determine the Corporation’s probable 

accounting liability. 8

 On July 3, 2003, the Congress passed the Strengthen 

AmeriCorps Program Act,9

 permitting the Corporation to record 

obligations based on estimates, as it had been doing without statutory 

authority prior to the passage of the act. The act redefined what an 

obligation is for purposes of the AmeriCorps program by authorizing the 

Corporation to “record as an obligation an estimate of the net present 

value of the national service educational award associated with the 

position, based on a formula that takes into consideration historical rates 

of enrollment in such a program, and of earning and using national service 

educational awards for such a program.”10 With regard to when the 

Corporation incurs a liability, the act requires the Corporation to change 

its obligation practices by specifying that the Corporation obligate funds 

from the Trust at the time it awards a grant approving a new participant 

slot, rather than at time of enrollment.11

Nevertheless, the Corporation must report the amount of its 

Antideficiency Act violation based on the legal requirement in place at the 

time the violation occurred. According to the report by the Corporation’s 

OIG, and conceded by the Corporation, the Corporation’s violation 

 7

The Antideficiency Act requires that if an officer or employee of the United States 

government violates the act, the agency head “shall report immediately to the President 

and Congress all relevant facts and a statement of actions taken.” 31 U.S.C. §1351. OMB 

Circular A-11 instructs agencies to submit the transmittal letter and report from the agency 

head to the President through OMB. Circular A-11 § 145.7. 

8

B-300480.2, June 6, 2003. 

9

Pub. L. No. 108-45, 117 Stat. 844 (2003). 

10Id. at § 2(b)(1)(B), 117 Stat. at 844. 

11Id. at § 2(b)(A)(ii), 117 Stat. at 844. 
Appendix II: The Corporation’s Antideficiency 

Act Violation 

Page 40 GAO-04-225 Management of AmeriCorps and the National Service Trust 

occurred beginning in fiscal year 2000, before the Corporation obtained 

legal authority to alter its obligation practices. Had the Corporation 

reported its violation at the time it occurred, the Antideficiency Act would 

have required it to report a violation calculated in consideration of the 

cost of new participant slots approved at the time the Corporation 

awarded new grants, and not based on an estimate of what these 

participants would cost the Corporation in the future. The Corporation 

should calculate its Antideficiency Act violation for purposes of its report 

to the President and Congress based on the requirement in place at the 

time the Corporation incurred the overobligations. 

The Antideficiency Act requires an agency to report all relevant facts and a 

statement of actions taken.12 Accordingly, an agency, among other things, 

must inform the President and Congress if a violation occurred and in 

what amount, and request from the Congress, if needed, a deficiency 

appropriation. Even though an agency may cure a violation, it is still 

required to report the violation to the President and Congress. Because the 

Corporation’s legal requirement for recording obligations differs today 

from the requirement that was in place when this violation occurred, the 

Corporation, in fact, may not need additional appropriations to cure the 

violation. Regardless, the Corporation should report the actual amount of 

the violation, but advise Congress of the changed circumstances. We have 

not assessed and do not address whether the Corporation will need 

additional funds to meet its current potential liabilities. To the extent that 

the Corporation identifies a need for additional appropriations as a result 

of its Antideficiency Act violation, the Corporation should include that 

request in its Antideficiency Act report. 

 1231 U.S.C. §1351. 
Appendix III: Discrepancies between Trust 

Data and Participant Documentation That 

Could Affect the Amount Owed by the Trust 

Page 41 GAO-04-225 Management of AmeriCorps and the National Service Trust 

Table 2: Description of Discrepancies for AmeriCorps State and National Cases 

State, national participants 

case number 

Description of discrepancy (Trust data as of July 25, 

2003) 

1 Trust data show participant still serving. WBRS report 

provided in lieu of exit form indicates member was to 

complete service on 4-6-03. 

2 Trust data show participant completed term and earned 

full award. Award eligibility status was left blank on exit 

form. 

3 Trust data show participant still serving. Documentation 

provided shows participant completed service and earned 

award. 

4 Trust data show participant still serving. Enrollment form 

shows participant signed up for summer term on 8-15-02 

with expected completion date of 8-14-03. 

5 Trust data show participant still serving. Enrollment form 

shows participant signed up for summer term on 8-15-01 

with expected completion date of 8-14-02. 

6 Trust data show participant still serving. Enrollment form 

shows participant signed up for summer term on 8-15-02 

with expected completion date of 8-14-03. 

Source: GAO analysis. 

Appendix III: Discrepancies between Trust 

Data and Participant Documentation That 

Could Affect the Amount Owed by the Trust 
Appendix III: Discrepancies between Trust 

Data and Participant Documentation That 

Could Affect the Amount Owed by the Trust 

Page 42 GAO-04-225 Management of AmeriCorps and the National Service Trust 

Table 3: Description of Discrepancies for AmeriCorps VISTA cases 

VISTA participants 

case number Description of discrepancy (Trust data as of July 25, 2003) 

1 Trust data show participant still serving. Documentation shows 

participant exited on 3-18-02 as an early termination and was not 

eligible for an award. 

2 Trust data show participant still serving. Exit form shows 

participant completed service as scheduled on 8-24-02 and is 

eligible for a full award. 

3 Trust data show participant still serving. Documentation shows 

participant resigned on 3-21-03 and is not eligible for an award. 

4 Trust data show participant still serving. Documentation shows 

participant resigned on 4-30-01 and is not eligible for an award. 

5 Trust data show participant still serving. Documentation shows 

participant exited on 2-28-01. 

6 Trust data show participant served 305 days with completion date 

of 10-9-00. Exit form shows completion date of 12-9-00. (Enrolled 

12-10-99.) 

7 Trust data show participant still serving. Exit form shows 

participant exited early, 1-13-03, and is not eligible for award. 

8 Trust data show participant still serving. Documentation shows 

enrollment period ended 2-4-03 and on 2-19-03, participant 

changed benefit to cash stipend. 

9 Trust data show participant completed as scheduled and is eligible 

for award. Exit form shows participant not eligible for an award 

because cash stipend was chosen. 

10 Trust data show participant still serving. Documentation shows 

participant changed benefit to cash stipend before completing 

term. 

11 Trust data show participant still serving. Documentation shows 

participant changed benefit to cash stipend before completing 

term. 

Source: GAO analysis. 
Appendix IV: The Service Award Liability 

Model 

Page 43 GAO-04-225 Management of AmeriCorps and the National Service Trust 

The Service Award Liability (SAL) model used SPAN data on the actual 

behavior of past and current AmeriCorps participants as the basis for 

assumptions of future participant behavior. These data included the 

proportion of participants who earned awards, the percentage of earned 

awards used, the period when awards were used, and the size of the 

average award. Also included in the calculations were past and anticipated 

appropriations, net of rescissions, as well as the actual and expected 

interest earnings of the Trust balance in order to arrive at the estimates of 

the funding needed for future participants.1

 The model used the portfolio 

of the Trust’s investments—the proportion held as short- and mediumterm treasury securities—to calculate a discount rate, which in turn is 

used to convert future funding needs into a net present value.2

 Corporation 

officials would then adjust the resulting estimate to account for any 

accumulated funds in the Trust. Figure 5 shows how the SAL model 

works. 

 1

Trust funds are held in Treasury securities. 

2

Net present value refers to the amount required today to provide a stream of benefits over 

a number of years. In the case of AmeriCorps, the period of eligibility is about 9 years from 

the start of the program year. The Corporation uses the weighted average interest earnings 

of the Trust’s portfolio as its discount rate. 

Appendix IV: The Service Award Liability 

Model 
Appendix IV: The Service Award Liability 

Model 

Page 44 GAO-04-225 Management of AmeriCorps and the National Service Trust 

Figure 6: The SAL Model 

Note: Shaded boxes represent data used by the SAL model. 

SPAN

database

Education 

award reports

SAL model

worksheet

Appropriations, 

rescissions, and 

interest earnings

Discount rate for 

weighted average 

portfolio maturity

SAL

assumptions 

Source: Corporation officials and GAO analysis.

AmeriCorps

enrollments

from WBRS

and eSPAN

Estimate of the 

future probable 

expenditure of 

the Trust 

Enrollment at actual

Earning rate

Usage rate at actual

Actual average award amounts 
Appendix V: Comments from the Corporation for National and Community Service 

Page 45 GAO-04-225 Management of AmeriCorps and the National Service Trust 

Appendix V: Comments from the Corporation 

for National and Community Service 
Appendix V: Comments from the Corporation for National and Community Service 

Page 46 GAO-04-225 Management of AmeriCorps and the National Service Trust 
Appendix V: Comments from the Corporation for National and Community Service 

Page 47 GAO-04-225 Management of AmeriCorps and the National Service Trust 
Appendix V: Comments from the Corporation for National and Community Service 

Page 48 GAO-04-225 Management of AmeriCorps and the National Service Trust 
Appendix V: Comments from the Corporation for National and Community Service 

Page 49 GAO-04-225 Management of AmeriCorps and the National Service Trust 
Appendix V: Comments from the Corporation for National and Community Service 

Page 50 GAO-04-225 Management of AmeriCorps and the National Service Trust 
Appendix VI: GAO Contacts and 

Acknowledgments 

Page 51 GAO-04-225 Management of AmeriCorps and the National Service Trust 

Carolyn M. Taylor (202) 512-2974 or taylorcm@gao.gov 

Anthony DeFrank (202) 512-4377 or defranka@gao.gov 

In addition to those named above, the following individuals made 

important contributions to this report: Joel Marus, Susan Higgins, 

Elizabeth Lessmann, Patrick diBattista, Hannah Laufe, Thomas Armstrong, 

James Rebbe, Julie Phillips, LuAnne Moy, Bob Deroy, Jennifer Popovic, 

and Avrum Ashery. 

Appendix VI: GAO Contacts and 

Acknowledgments 

GAO Contacts 

Staff 

Acknowledgments 

(130245) 
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