United States General Accounting Office 

Washington, DC 20548 

May 20, 2004 


The Honorable Orrin G. Hatch 


Chairman 


The Honorable Patrick J. Leahy 


Ranking Minority Member 


Committee on the Judiciary 


United States Senate 


The Honorable F. James Sensenbrenner, Jr. 


Chairman 


The Honorable John Conyers, Jr. 


Ranking Minority Member 


Committee on the Judiciary 


House of Representatives


Subject: Financial Management: Audit of the White House Commission on the 

National Moment of Remembrance for Fiscal Years 2003 and 2002 

The White House Commission on the National Moment of Remembrance 

(Commission) was created on December 28, 2000, by the National Moment of 

Remembrance Act (Act).1

 The Commission received appropriated funds in fiscal 

years 2003 and 2002. Its purpose is to sustain the American spirit through acts of 

remembrance for those who died serving their country, not only on Memorial Day, 

but also throughout the year. We are required by the Act to audit the financial 

transactions of the Commission, and this report covers our work on its fiscal years 

2003 and 2002 financial transactions. 

Results in Brief 

We found that the Commission’s financial records for fiscal years 2003 and 2002 were 

incomplete and that its financial record keeping lacked basic internal controls. As a 

result, we were unable to audit the Commission’s financial transactions, and the 

Commission does not have reasonable assurance that its records are accurate, that it 

has adequate information for decision making, or that its funds are being spent as 

intended. 

The Commission’s records of financial transactions for fiscal years 2003 and 2002, 

including receipts and expenditures, were incomplete and not regularly reconciled to 

the statements produced by the Department of Veterans Affairs (VA) or General 

Services Administration (GSA), agencies that provided the Commission with 

administrative and financial processing services. In addition, significant amounts of 

1

Pub. L. No. 106-579, 114 Stat. 3078 (2000). 

GAO-04-497R Commission on the National Moment of Remembrance 
the Commission’s expenditures for fiscal years 2003 and 2002 were not supported by 

documentation. 

Without such basic internal controls as documentation to support transactions and 

the reconciliation of transactions recorded by the Commission to the actual receipts 

and expenditures processed by VA and GSA, the Commission does not have 

reasonable assurance that its financial information is complete and accurate, that its 

funds are being spent as intended, and that financial and programmatic decisions are 

based on complete and accurate information. 

The Commission’s difficulties in financial record keeping and internal controls result, 

in part, from the Commission’s lack of staffing and financial expertise. The 

Commission depends on temporary and part-time detailees from other agencies, and 

has never had the full level of staffing called for in its authorizing legislation. 

When the Commission received its initial appropriations in 2002, the Commission 

assumed several program activities2

 of No Greater Love, a nonprofit organization 

founded in 1971 by the Commission’s current White House Liaison and Executive 

Director. The Commission also shares office space, services, and personnel with No 

Greater Love. Although the Act allows the Commission to enter into cooperative 

agreements with private entities in carrying out its duties, the respective program 

sponsorship costs borne by the Commission and No Greater Love have not been 

accounted for and documented clearly. Without clear accountability and 

transparency of activities and related costs for each entity, donors and Congress are 

at risk of not knowing which programs they are supporting. 

Congress may wish to consider amending the National Moment of Remembrance Act 

to make the Commission an independent entity within VA. Retaining the Act’s 

provisions regarding the Commission’s duties and powers but placing the 

Commission within VA would require VA to assume responsibility for the 

Commission’s administrative functions. These would include maintaining the 

Commission’s accounting records, processing the Commission’s transactions, and 

performing personnel and payroll services. The Commission currently has an 

interagency agreement with VA for administrative services, but making the 

Commission an entity within VA could streamline this arrangement and make it more 

efficient. In addition, the Commission’s mission of remembering those who have 

served the country is related to that of VA, and the two organizations could achieve 

synergy by working together on their complementary missions. 

If Congress chooses not to act upon the matter for congressional consideration 

discussed above, we are recommending that the Commission develop and implement 

basic financial record keeping and internal controls; consider hiring accounting or 

bookkeeping assistance; and clearly account for its finances separately from those of 

No Greater Love. The Commission agreed with our recommendations for executive 

action and is taking initial steps to implement some of the recommendations. 

However, the Commission expressed concerns regarding the matter for 

2

The activities assumed are “remembrance programs,” which have as their purpose promoting 

remembrance of those who have died for our country, those who have served our country, and those 

who continue to serve our country. 

Page 2 GAO-04-497R Commission on the National Moment of Remembrance 
congressional consideration. We continue to believe that making the Commission an 

independent entity within VA presents a viable and practical alternative for resolving 

the Commission’s internal control and financial reporting weaknesses described in 

this report. 

Objective, Scope, and Methodology 

Our objective was to audit the Commission’s financial transactions (donations and 

expenditures) recorded during fiscal years 2003 and 2002 for proper supporting 

documentation and management approval. Because the Commission did not maintain 

complete accounting records, we were unable to perform an audit. Instead, our work 

was limited to a review of those transactions recorded for the Commission by VA and 

GSA. Therefore there is a risk that there could be unrecorded transactions for 

services that the Commission purchased but for which it did not forward invoices to 

VA or GSA for payment. When possible, we traced the recorded transactions to 

supporting documentation, including contracts, invoices, credit card statements, and 

travel vouchers. However, because the Commission lacked supporting 

documentation for a significant portion of its transactions, we were unable to 

perform an audit of the Commission’s transactions. 

We obtained an understanding of the accounting procedures and related internal 

controls of the Commission and the financial accounting and other services provided 

by VA and GSA. 

We performed our work in Washington, D.C., from November 2003 through March 

2004 in accordance with U.S. generally accepted government auditing standards. We 

requested comments on a draft of this report from the White House Liaison and 

Executive Director of the White House Commission on the National Moment of 

Remembrance and from the Secretary of Veterans Affairs. We received written 

responses from both the Commission and VA. Those comments are addressed in a 

later section of this report and included in enclosures I and II, respectively. 

Background 

Section 6 of the Act3 states that the Commission’s duties are to 

(1) encourage the people of the United States to give something back to their country, 

which provides them so much freedom and opportunity; 

(2) encourage national, state, local, and tribal participation by individuals and entities 

in commemoration of Memorial Day and the National Moment of Remembrance, 

including participation by 

(a) national humanitarian and patriotic organizations, 

(b) elementary, secondary, and higher education institutions, 

(c) veterans’ societies and civic, patriotic, educational, sporting, artistic, 

cultural, and historical organizations, 

(d) federal departments and agencies, and 

(e) museums, including cultural and historical museums; and 

3

114 Stat. at 3080. 

Page 3 GAO-04-497R Commission on the National Moment of Remembrance 
(3) provide national coordination for commemorations in the United States of 

Memorial Day and the National Moment of Remembrance. 

In fiscal year 2003, Congress appropriated $250,000 directly to the Commission.4

 In 

fiscal year 2002, Congress provided that $500,000 of a larger appropriation was 

available for the Commission.5 

We met with the Commission’s Executive Director and staff on several occasions late 

in 2002 to gain an understanding of the financial records and internal control 

environment. We held discussions with the Executive Director on key accounting 

issues and internal controls that should be established in order to achieve 

accountability over operations and to facilitate future audits. In January 2003, we 

issued a letter to the Commission stating that the fiscal year 2002 audit would be 

delayed until the end of fiscal year 2003, so that the Commission could get its 

financial records in order. 

Although administrative support services were provided by other agencies, the 

Commission’s management is responsible for preparing accurate and reliable 

financial reports reflecting its activities. The Commission is also responsible for 

establishing, maintaining, and assessing internal control

6

 to provide reasonable 

assurance that internal control objectives are met. The Commission engaged VA in 

fiscal year 2003 and GSA in fiscal year 2002 for administrative support services, 

including payment of the Commission’s bills and personnel and payroll services. VA 

processed the Commission’s obligations, expenditures, and cash donation 

transactions recorded during fiscal year 2003. GSA processed the Commission’s 

obligation and expenditure transactions during fiscal year 2002. The Commission 

entered into interagency agreements with both VA and GSA for their services. The 

interagency agreements provided the terms of payment for the services. 

When the Commission was funded in 2002, it assumed several of the program 

activities of No Greater Love, a nonprofit established in 1971, and the founder of No 

Greater Love was appointed as the Commission’s White House Liaison and Executive 

Director. The founder resigned her position with No Greater Love in April 2002. 

According to No Greater Love’s 2002 financial statements, the organization’s primary 

program is to sponsor programs of friendship for and care of children of servicemen 

missing or killed in action, hospitalized veterans, servicemen overseas, and senior 

citizens without families. 

The Act allows for the Commission’s close involvement with other entities. Section 

8(f) of the Act explicitly authorizes the Commission to enter into cooperative 

4

Pub. L. No. 108-7, 117 Stat. 11, 460 (2003). 
 5

Pub. L. No. 107-117, Stat. 2230, 2299 (2002). 
 6

According to our Standards for Internal Control in the Federal Government, management’s internal


control responsibility encompasses controls related to (1) the effectiveness and efficiency of


operations, including the use of resources; (2) the reliability of financial reporting, including internal


and external reports on the use of resources and financial statements; and (3) compliance with


applicable laws and regulations. Within each of these categories, management is responsible for


establishing controls to prevent or promptly detect unauthorized acquisition, use, or disposition of


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


Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999). 


Page 4 GAO-04-497R Commission on the National Moment of Remembrance 
agreements that involve private, as well as government, entities in assisting the 

Commission to carry out its duties. The Act further authorizes the Commission to 7

accept program support from nonprofit organizations. While the Commission may 

accept assistance and support from other entities, and in so doing engage in jointly 

funded activities, the Act does not provide for the Commission to use its 

appropriations for anything other than carrying out its statutory duties. 

The Act also provides that the Commission will receive six employees—one each 

from the Army, Air Force, Navy, Marines, VA, and Department of Education— 

detailed to assist the Commission in carrying out the Act. During fiscal years 2003 

and 2002, the assignment and service of the details was inconsistent. The 

Commission never had more than two detailees at one time except for 30 working 

days in 2002 and 2003, and most of the staff detailed from the other agencies did not 

complete their full terms. 

Commission Financial Records Were Incomplete and Lacked Supporting 

Documentation 

We found that the Commission’s financial records for fiscal years 2003 and 2002 were 

incomplete. The Commission also lacked basic documentation for its expenditures. 

As a result, it does not have reasonable assurance that its financial records are 

accurate or that its funds are being spent as intended. (See table 1.) 

7

Pub. L. No. 106-579, 114 Stat. at 3084. 

Page 5 GAO-04-497R Commission on the National Moment of Remembrance 
Table 1: White House Commission on National Moment of Remembrance Schedule of 

Management and Documentation Support for Fiscal Years 2003 and 2002 Expenditures 

(Unaudited) 

Expenditures Fiscal year 2003 Fiscal year 2002 

(January - September) 

White House Liaison and Executive $164,366 $111,953 a Director salary and benefits b

Programs and administration 

Supported by documents and 48,245 45,869 

approved by management 

Supported by documents but not 13,075 10,415 

approved by management 

Unsupported by documents 51,279c 66,968d 

Programs and administration total $112,599 $123,252 

Total $276,965 $235,205 

Sources: VA, GSA, and the White House Commission on National Moment of Remembrance. 

a

For fiscal year 2003, VA records showed salary and benefits of $164,366, and for fiscal year 2002, GSA records 

showed salary and benefits of $111,953; however, the Commission did not maintain support for salary and 

benefits. 

b

For fiscal year 2003, the program and administration amount presented is from VA records of amounts 

processed, which showed $7,105 more than the recorded expenditures in the Commission’s database. For fiscal 

year 2002, the amount presented is from GSA records of amounts processed, which showed $29,204 more than 

the recorded expenditures in the Commission’s database. 

c

The Commission’s contract with VA to provide payroll and accounting services for fiscal year 2003 totaled 

$34,237; however, the Commission did not maintain support for the actual amounts paid. 

d

The Commission’s contract with GSA to provide payroll and accounting services for fiscal year 2002 totaled 

$46,513; however, the Commission did not maintain support for the actual amounts paid. 

Fiscal Year 2003 

In fiscal year 2003, the Commission received an appropriation of $250,000. According 

to VA, the Commission also received cash donations of $5,140 during fiscal year 2003. 

According to the Commission, it also received various in-kind donations------such as 

calendars, phone service, and Web site design and hosting at a value estimated by the 

Commission as approximately $43,149 during fiscal year 2003. Office space was also 

donated, but the Commission did not provide an estimated value. The Commission 

did not record the cash donations or completely record in-kind donations received in 

fiscal year 2003. 

We also found that the Commission did not reconcile its recorded expenditures to 

those processed by VA on behalf of the Commission. As a result, the Commission 

lacks assurance that its recorded expenditures are complete and accurate. Of the 

Commission’s $276,965 expenditures processed by VA for fiscal year 2003, $164,366 

was for the White House Liaison and Executive Director’s salary and benefits. Of the 

remaining $112,599 recorded by the Commission as spent on programs and 

administration for fiscal year 2003, $61,320 was supported by documentation and 

$51,279 lacked supporting documentation. Of the $61,320 in supported transactions, 

$13,075 did not have documentation indicating approval by management. (See table 

1.) During our review, we noted expenditure transactions that were recorded more 

than once in the Commission’s financial records and transactions that were not 

recorded at all. 

Page 6 GAO-04-497R Commission on the National Moment of Remembrance 
Fiscal Year 2002 

In fiscal year 2002, the Commission similarly lacked basic supporting documentation 

and reconciliation procedures for its expenditure transactions. For fiscal year 2002, 

the Commission received an appropriation of $500,000. Because the funding was 

provided in January 2002, the Commission was operational for approximately 9 

months of the fiscal year (January 10, 2002, through September 30, 2002). According 

to the Commission, it received no cash donations for fiscal year 2002 but did receive 

various in-kind donations—including office supplies, phone service, and Web site 

design and hosting at a value estimated by the Commission as approximately $91,353. 

The Commission did not record the in-kind donations received in 2002 in its financial 

records. Of the $235,205 in expenditures processed by GSA during fiscal year 2002, 

$111,953 was for the White House Liaison and Executive Director’s salary and 

benefits. Of the remaining $123,252 recorded by the Commission for programs and 

administration, $56,284 was supported by documentation and the remaining $66,968 

lacked documentation. Of the $56,284 in supported transactions, $10,415 did not have 

documentation indicating approval by management. (See table 1.) 

Fiscal Years 2003 and 2002 

For both fiscal years 2003 and 2002, basic internal controls did not exist for recording 

transactions and reconciling recorded transactions to funds received and 

expenditures. In addition, the majority of the Commission’s fiscal year 2002 

expenditures were not coded by expense category or obligation number. As a result, 

VA or GSA had to designate, without knowledge of the nature of the transactions, 

what type of expenditure was being made in each transaction. For both fiscal years 

2003 and 2002, we noted that the Commission’s financial records were not reconciled 

to the VA and GSA records, respectively. Without such basic internal controls as 

documentation, management approvals, complete transaction records, and 

reconciliation, the Commission does not have reasonable assurance that its financial 

information is complete and accurate, that its funds are being spent as intended, and 

that financial and programmatic decisions can be based on complete and accurate 

information. Retaining supporting documentation, such as invoices for goods or 

services purchased; management approval; and recording transactions are all basic 

internal control activities. 

Because the financial records and documentation for fiscal years 2003 and 2002 were 

incomplete, unsupported, and not reconciled, we were not able to audit the 

Commission’s financial records. 

The Commission’s difficulties in maintaining its financial records result, in part, from 

the lack of staffing and financial expertise. The only full-time employee is the White 

House Liaison and Executive Director. The Commission has had the assistance of 

several detailees from the military service branches and VA, as authorized by 

legislation; however, it has never had its full authorized staffing levels called for in its 

authorizing legislation, and except for one, the detailees assigned to the Commission 

did not serve the full period to which the military service branch or VA had 

committed. No Greater Love has loaned staff to the Commission, but the staff were 

generally short term and did not have a financial background. 

Page 7 GAO-04-497R Commission on the National Moment of Remembrance 
Commission’s Mission, Operations, and Use of Resources Overlap with Those of 

a Related Organization 

The Commission lacks accountability for and internal control over its own 

transactions, as well as accountability and internal control over resources and 

activities it shares with No Greater Love. The Commission operates in the same 

location and with a similar purpose as No Greater Love. Both organizations share 

personnel and services and have cosponsored programs. However, the respective 

costs born by each entity in sponsoring programs have not been accounted for and 

documented clearly. 

Even though the Act allows the Commission to be closely involved with entities in 

carrying out its duties, because the Commission receives federal appropriations, 

there is an increased fiduciary responsibility for all parties to account for the funds 

received and activities conducted. Without the clear accountability of each entity for 

its own activities and costs and without transparency in those activities and costs, 

donors and Congress are at risk of not knowing which programs their funds are 

supporting. 

Matter for Congressional Consideration 

Congress may wish to consider amending the National Moment of Remembrance Act 

to make the Commission an independent entity within VA. Retaining the Act’s 

current provisions regarding the Commission’s duties and powers, but placing the 

Commission within VA, would require VA to assume responsibility for the 

Commission’s administrative functions. This would include maintaining the 

Commission’s accounting records, processing the Commission’s transactions, and 

performing personnel and payroll services. The Commission currently has an 

interagency agreement with VA for administrative services, but making the 

Commission an entity within VA could streamline this arrangement and make it more 

efficient. In addition, the Commission’s mission of remembering those who have 

served the country is related to that of VA, and the two organizations could achieve 

synergy by working together on their complementary missions. 

Recommendations for Executive Action 

If Congress chooses not to act on the matter for congressional consideration, then in 

order to achieve basic accountability for, and internal control over, its transactions 

and properly account for related-party activities, we recommend that the White 

House Liaison and Executive Director of the Commission 

• consider hiring a bookkeeping service on a part-time basis to help maintain the 

Commission’s financial records, including producing year-end summaries and 

reconciliations; 

• maintain a complete record or log of Commission financial transactions, including 

all appropriations, donations, revenues, obligations, and expenditures; 

Page 8 GAO-04-497R Commission on the National Moment of Remembrance 
• develop and implement procedures to properly approve all invoices prior to 

payment; 

• require that all invoices are properly coded to indicate type of expense on a timely 

basis; 

• develop procedures to ensure that all transactions are supported by appropriate 

documentation; 

• reconcile, at least monthly, the Commission’s financial records or logs to the 

statements showing obligations and expenditures that were actually processed; 

and 

• develop a clear accountability for expenditures

8

 related to the Commission’s 

operations, including transactions with No Greater Love. 

Agency Comments and Our Evaluation 

We received written comments from the Executive Director and White House Liaison 

of the Commission and the Secretary of Veterans Affairs. These comments are 

reprinted in enclosures I and II, respectively. The Commission agreed with our 

recommendations for executive action and is taking initial steps to implement some 

of the recommendations. For example, the Commission is working to finalize 

procedures for processing, reviewing, and approving financial transactions and plans 

to retain an accountant to perform monthly financial reconciliations. In addition, the 

Commission has stated that in order to achieve better accountability for the two 

organizations, it will no longer cosponsor any programs with No Greater Love, and as 

of the end of June 2004, the Commission will no longer share office space with No 

Greater Love. 

The Commission did not agree with the matter we raised for congressional 

consideration, that the Commission be made an independent entity within VA. The 

Commission stated that its mission requires it to work with numerous departments 

throughout the government and becoming an entity within VA might create the 

appearance of a conflict of interest. The Commission’s Executive Director also 

believes that making the Commission an entity within VA would be limiting to the 

Commission’s unique and specific mission and detrimental to its ability to meet 

changing demands and priorities. The Commission also expressed concern that the 

matter for congressional consideration does not ensure that it will receive 

resources------funds and people------necessary to accomplish its mission. The 

Commission also suggested that Congress may want to consider alternative methods 

for providing the Commission with resources and funding. 

We agree that there are alternative methods for strengthening the Commission and 

providing resources to the Commission. We continue to believe that the alternative 

presented in this letter------making the Commission an independent entity within VA-----­

is a viable and practical alternative. We believe that the Commission should work 

with both VA and its congressional stakeholders to arrive at mutually agreeable 

8

Expenditures related to office space, personnel, office equipment, and joint remembrance projects. 

Page 9 GAO-04-497R Commission on the National Moment of Remembrance 
-------

solutions for achieving accountability, streamlined administrative processes, 

appropriate staffing levels, and the autonomy needed to achieve the Commission’s 

mission. 

VA deferred to the Commission’s views in regards to the matter for congressional 

consideration. 

We are sending copies of this report to the Chairmen and Ranking Minority Members


of the Senate Committee on Appropriations and the House Committee on 


Appropriations; the Chairman of the White House Commission on the National 


Moment of Remembrance; the Secretary of Veterans Affairs; and other interested 


parties. This report will also be available on our home page at http://www.gao.gov. 


If you or your staff have any questions, please contact me at (202) 512-9471 or by 


e-mail at franzelj@gao.gov or Julie T. Phillips, Assistant Director, at (202) 512-5121 or 


by e-mail at phillipsjt@gao.gov. Key contributors to this report were Kimberley A. 


McGatlin and Kara M. Scott. 


Jeanette M. Franzel 


Director 


Financial Management and Assurance 


Enclosures --- 2
 -

Page 10 GAO-04-497R Commission on the National Moment of Remembrance 
Enclosure I 

Comments from the White House Commission 

on the National Moment of Remembrance 

Page 11 GAO-04-497R Commission on the National Moment of Remembrance 
Page 12 GAO-04-497R Commission on the National Moment of Remembrance 
Enclosure II 

Comments from the Department of Veterans Affairs 

(194381) 


Page 13 GAO-04-497R Commission on the National Moment of Remembrance