U.S. ELECTION 

ASSISTANCE 

COMMISSION 

 

 

 

 

 

 

AGENCY FINANCIAL 

REPORT 

 

 

 

 

 

 

 

 

 

November 15, 2010
Election Assistance Commission 

 

ABOUT THIS REPORT

For FY 2010 reporting purposes, the U.S. Election Assistance Commission (EAC) has 

again elected to submit an Agency Financial Report, with an Annual Performance Report 

and Citizens’ Report along with the Congressional Budget Justification. The reports are 

targeted to the Office of Management and Budget (OMB), the Public, and Congress, 

respectively. The AFR allows EAC to focus on and lay out its financial position at this 

time, while providing summary performance data. A Citizen’s Report and a combined 

Annual Performance Report/Congressional Budget Justification will follow on February 

15, 2011 per guidance in OMB Circular A-136 Financial Reporting Requirements. 

Information about EAC’s programs is available at www.eac.gov. 
Election Assistance Commission 

 

 

MESSAGE FROM THE CHAIR 

I am pleased to present the U.S. Election Assistance Commission (EAC) FY 2010 

Annual Financial Report. The report describes EAC’s financial results over the past year 

as it pursued its mission to assist the effective administration of Federal elections. The 

report highlights efforts to strengthen internal controls and financial management 

activities. This is the third year EAC has undergone a financial statement audit per the 

Accountability of Tax Dollar Act of 2002, and the second year EAC is participating in 

the pilot performance reporting project as described in OMB Circular A-136 on Financial 

Reporting Requirements in place of the Performance and Accountability Report. EAC 

presents summarized performance data in this report, and will provide detailed data in 

February in conjunction with the FY 2012 Congressional Justification. 

During FY 2010, to address issues in the FY 2009 financial statement audit, EAC 

finalized policies and procedures in the areas of general administration, travel, and 

information technology. During FY 2011, EAC plans to finalize remaining policies and 

procedures discussed in this document. 

In the program areas during FY 2010, EAC made a great deal of progress in achieving 

the goals described in its Strategic Plan, which is based on the mandates of the Help 

America Vote Act (HAVA) of 2002: 

Communications & Clearinghouse

 Launched a new website with powerful search and improved navigation tools. 

 Posted videos on its website and YouTube on Contingency Planning, Polling 

Place Management, the EAC Voluntary Voting System Testing and Certification 

Program, and Making Polling Places Accessible. 

Grants Management

 Awarded 8 Mock Election grants that in conjunction with the current active grant 

portfolio will help educate approximately 850,000 students about the electoral 

process; awarded 15 Help America Vote College Program grants to recruit 

students to serve as poll workers; and awarded a $500,000 Military Heroes grant 

to improve voting accessibility for recently injured military personnel. 

 In coordination with the Testing and Certification division, conducted a 

roundtable discussion on research, development and implementation of 

technologies and other assistance to make voting more accessible. 

 Adopted Maintenance of Effort Policy to facilitate State compliance with the 

maintenance of expenditure (MOE) requirement in HAVA of 2002. 
Election Assistance Commission 

Research, Policy and Programs

 Issued Election Management Guideline chapters and Quick Start Guides on 

Technology in Elections, Elections Office Administration, Accessibility, Building 

Community Partnerships, Canvassing and Certifying an Election, Communicating 

with the Public, Conducting a Recount, and Provisional Ballots. 

 Released the mandated report Free Postage for the Return of Voted Absentee 

Ballots. 

 Conducted a working group on Administering Elections in Rural and Urban 

Areas. 

 Initiated the public comment process on proposed changes to incorporate HAVA 

requirements into the National Voter Registration Act regulations. 

 Translated the National Mail Voter Registration Form into five Asian languages. 

 Expanded the translated versions of the Voter’s Guide to Federal Elections to 

include four Native American languages. 

 Partnered with the Office of Citizenship within U.S. Citizenship and Immigration 

Services to make the Voter’s Guide available to new citizens in the U.S. 

naturalization ceremony packet. 

Voting Systems Testing and Certification

 Certified a fourth voting system in six months at a cost of less than $1 million. 

 Issued a report to Congress on progress in establishing guidelines for remote 

electronic voting systems for absentee voters. 

 Held a joint workshop with the Federal Voting Assistance Program and the 

Commerce Department's National Institute of Standards and Technology on

Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA) remote 

electronic absentee voting systems; and jointly completed a UOCAVA Pilot 

Program Testable Requirements document. 

 A revision of the 2005 VVSG Version 1.1 addressing comments received during 

the public comment period ending September 28, 2009 was completed. The 

revised version and policy decisions were presented to the Commissioners and 

discussed at a public meeting in September 2010. 

EAC continues to improve its programs and operations, strengthening internal controls, 

financial management, and information technology across the agency. Additional 

information on actions for continued improvement can be found in Section I.E. of the 

Management Discussion and Analysis which follows. 

The financial and performance data in this report is reliable and complete with one 

material weakness related to the finalization of policies and procedures. The financial 

statements being submitted in this report are, to the best of my knowledge and belief, 

accurate and reliable. 

In FY 2011, we look forward to awarding grants for voting system logic and accuracy 

testing and disability research totaling $5.0 million, improving the quality of technical 

assistance to recipients of Help America Vote Act funds, improving the agency’s 
Election Assistance Commission 

information technology infrastructure, and continuing to provide materials to election 

officials to assist with the administration of Federal elections. 

Donetta Davidson, Chair 

November 15, 2010 
Election Assistance Commission 

TABLE OF CONTENTS 

SECTION I - Management Discussion and Analysis................................. 1 

I.A Background, Vision, Mission and Organization Structure......................... 1 

 Funding........... ............................................................................ 3 

 Organization by Program...................................................................5 

 Organization Chart.......................................................................... 7 

I.B Performance Goals, Objectives, and Results........................................ 7 

 How EAC Assesses Performance......................................................... 8 

 Strategic Goal Structure.................................................................... 8 

 Performance Data Collection and Validation............................................ 18 

 Summary Performance Information....................................................... 18 

 Program Performance Indicators.......................................................... 18 

 Portfolio Analysis........................................................................... 20 

 

I.C. Financial Results........................................................................ 20 

 Budgetary Resources........................................................................20 

 Financial Position............................................................................22 

 Limitations of the Financial Statements.................................................. 24 

I.D. Analysis of Controls, Management Systems, and Legal Compliance........... 24 

 Federal Manager’s Financial Integrity Act............................................... 25 

 Federal Financial Management Improvement Act...................................... 30 

 Accountability of Tax Dollars Act of 2002.............................................. 30 

 Federal Information Security Management Act......................................... 30 

 Inspector General Act Amendments of 1988............................................ 30 

 Annual Assurance Statement on Internal Control....................................... 31 

 

SECTION II – Financial Section......................................................... 32 

II.A. Message from the Chief Financial Officer......................................... 32 

II.B. Inspector General’s Assessment...................................................... 33 

II.C. Independent Auditor’s Report........................................................ 35 

II.D. Financial Statements................................................................... 46 

II.E. Notes to the Financial Statements.................................................... 50 

II.F. Required Supplementary Stewardship Information................................ 64 

SECTION III - Other Accompanying Information.................................. 66 

III.A. IG Assessment of Most Serious Management Challenges Facing EAC....... 67 

III.B. EAC Response to the Most Serious Management Challenges.................. 78 

III.C. Improper Payments ................................................................... 81 

III.D. Summary of Financial Statement Audit and Management Assurances........ 81
Election Assistance Commission 

SECTION I

Management Discussion and Analysis 

Management Discussion and Analysis (MD&A) is presented in accordance with Statement of 

Federal Financial Accounting Standards (SFFAS) 15. The MD&A is intended to provide a clear 

and concise description of the agency’s mission and organizational structure; high-level 

discussion of key performance goals, results and measures; analysis of financial statements; 

systems, controls, and legal compliance (i.e., Management Assurance signed by the Agency 

Head); compliance with laws and regulations; and actions taken or planned to address problems. 

It provides a balanced analytical assessment, with both positive and negative information, of key 

program and financial performance. The MD&A is a vehicle for communicating insights about 

the agency, its operations, programs, successes, challenges and future outlook. Contents of this 

report and the MD&A are in conformance with Office of Management and Budget (OMB) 

Circular A-136 Financial Reporting Requirements. 

I.A BACKGROUND, VISION, MISSION AND ORGANIZATIONAL STRUCTURE 

In October 2002, Congress passed the Help America Vote Act (HAVA) of 2002. The law 

recognized the need for States to invest in their election infrastructure and set out comprehensive 

programs of funding, guidance, and ongoing research. To foster those programs and to promote 

and enhance voting for United States citizens, HAVA established the Election Assistance 

Commission (EAC). The vision for EAC, according to the Strategic Plan 2009-2014, adopted 

March 2009, is to lead election reform that reaffirms the right to vote and to have all eligible 

votes counted accurately. 

EAC is an independent, bipartisan agency. Four full-time Commissioners, appointed by the 

President and confirmed by the U.S. Senate, and three Federal advisory committees, the 

Standards Board, Board of Advisors, and Technical Guidelines Development Committee, guide 

the EAC. Its mission is to assist in the effective administration of Federal elections. EAC is 

statutorily required to: 

 Create a clearinghouse of information for election officials and the public; 

 Distribute and monitor HAVA funds to States for election administration improvements; 

 Issue, periodically review and modify, as necessary, Voluntary Voting System Guidelines 

(VVSG); 

 Accredit voting system test laboratories and certify voting equipment; 

 Conduct periodic studies of election administration issues; 

 Establish best practices and guidelines on election administration for State and local 

election officials; 
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 Maintain the national voter registration form developed in accordance with the National 

Voter Registration Act (NVRA) of 1993; 

 Provide Congress with a bi-annual report to assess the impact of the NVRA. 

The Standards Board and the Board of Advisors provide advice and guidance to EAC on 

Voluntary Voting System Guidelines (VVSG) and other election administration issues. In 

addition, the Technical Guidelines Development Committee (TGDC) assists EAC in the 

preparation of the VVSG. The VVSG sets the standards against which voting systems are tested. 

The Director of the National Institute of Standards and Technology (NIST) of the U.S. 

Department of Commerce serves as the Chair of the TGDC and provides technical support to the 

Committee. Additionally, HAVA specifies that NIST provide recommendations to EAC 

regarding voting system test laboratories. Since Fiscal Year 2004, EAC’s annual appropriations 

have included funds for NIST support. 

In Fiscal Years 2003 and 2004, Congress appropriated nearly $3 billion in Federal financial 

assistance for payments to States under Titles I and II of HAVA. States received the funds to 

upgrade their voting systems, establish a statewide voter registration database, train election 

officials, and educate voters. In Fiscal Year 2003, General Services Administration (GSA) 

distributed HAVA funds to the fifty States, Guam, Puerto Rico, the U.S. Virgin Islands, 

American Samoa and the District of Columbia on EAC’s behalf. 

The Senate confirmed four Commissioners in December 2003 and EAC began operations in 

January 2004, within ten months of the date mandated by HAVA. The Agency’s Fiscal Year 

2004 operating budget was $1.7 million. At the close of the fiscal year, EAC had a staff of 18. 

EAC’s focus in 2004 was to assemble staff, obtain office space, arrange for administrative 

support from the GSA, establish a website, start election administration clearinghouse 

operations, and distribute Federal financial assistance to the States. In FY 2004, EAC also 

appointed a statutorily-required General Counsel. 

During Fiscal Year 2005, EAC appointed its other statutorily-required position, the Executive 

Director, and an interim Inspector General. EAC’s focus in subsequent years was on adopting 

the VVSG, completing required research to promote effective Federal elections and present key 

data on election practices and voting, instituting a voting system testing and certification 

program, auditing State use of HAVA funds, and providing information on improving elections 

to its stakeholders. 

Since its inception, EAC has received $2.6 billion in requirements payments, $25.9 million in 

discretionary grant funds for Poll Workers, Mock Elections, Election Data Collection, Voting 

Technology Improvement Research and Equipment and Pre-Election Logic and Accuracy 

Testing and Post-Election Verification and transferred $21.3 million to NIST as illustrated in the 

following tables. 
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Funding 

 

Enacted Appropriations by Fiscal Year 

(dollars in thousands) 

 2003 2004 2005 2006 2007 2008 2009 2010 Total 

EAC (FY 2003–2010) 

 EAC Salaries & Expenses 

 Operations $2,000 $1,674 1

 $11,110 $10,986 $11,313 $12,330 $12,909 $13,409 $75,731 

 

 Mock Election Grants 200 300 300 800 

 

 Poll Worker Grants 300 750 750 750 2,550 

 

 Transfer to NIST 2,778 2,772 4,950 3,250 4,000 3,500 21,250 

 

 Election Reform Grants 

 

 

 

 Requirements Payments 

 

830,000 

 

2 1,491,150 

 

115,000 100,000 70,000 2,606,150 

 

 Poll Worker Grants 1,500 

 

 1,500 

 

 Foundation 1,500 

 

 1,500 

 

 Voting Tech. Research 

 

 5,000 3,000 8,000 

 

 Testing & Verification 

 

 1,000 2,000 3,000 

 

 Election Data Collection 

 

10,000 10,000 

 TOTAL EAC 835,000 1,492,824 13,888 14,058 16,263 141,530 123,959 92,959 2,730,481 

GSA (FY 2003) 

 

 Section 101 and 102 649,500 

 

 649,500 

 

 Administrative Expenses 500 

 

 500 

 TOTAL GSA 650,000 650,000 

TOTAL EAC & GSA $3,380,481 

 1/ Includes $481,092 transferred from the Federal Election Commission 

2/ Carried forward to FY 2005 
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Status of Help America Vote Act Authorization versus Appropriations 

(in whole dollars) 

 Authorized 

Appropriated 

FYs 2003-2010 Remaining 

GSA (FY 2003) 

Election Administration Improvement (Section 101) $324,750,000 $324,750,000 

Punch Card/Lever Machine Replacement (Section 102) 

 

324,750,000 

 

324,750,000 

Administrative Expenses for 101 and 102 

 

500,000 

 

500,000 

EAC (FY 2003 – 2010) 

Requirements Payments (Section 251) 

 

3,000,000,000 ** 

 

2,606,150,000 

 

393,850,000 

Voting Technology Improvement Research Grants (Section 

271) 

 

20,000,000 

 

8,000,000 

 

12,000,000 

Equipment and Technology Testing Pilot Program (Section 

281) 

 

10,000,000 

 

10,000,000 

Pre-Election Logic and Accuracy Testing & Post-Election 

Verification 

 

3,000,000 1,4

 

3,000,000 

 

- 

Operations (Section 210) 

 

100,331,108 2

 

100,331,108 

 

- 

Election Data Collection Grants 

 

10,000,000 3

 

10,000,000 

 

- 

National Student and Parent Mock Election Organization 

(Section 295) 200,000 ** 200,000 

Poll Worker Grants (Section 501) 

 

5,000,000 ** 

 

1,500,000 3,500,000 

Help America Vote Foundation (Section 601) 

 

5,000,000 ** 

 

1,500,000 

 

3,500,000 

Total $3,803,531,108 $3,380,481,108 $423,050,000 

1/ Authorized by P.L. 111-8 

2/ $30 million per HAVA, balance per appropriations. Includes $2.55 million Poll Worker grants and $800,000 Mock Election Grants 

3/ Authorized by P.L. 110-161 

4/ Authorized by appropriations 

**Plus such sums as may be necessary in succeeding years 

Note: excludes $140 million plus such sums authorized for HHS under Disability Access Section 261 and Participation Section 291, 

$15 million appropriated to GSA in FY 2003 for Title I, and $5 million plus such sums for the Help America Vote Foundation Section 

601
Election Assistance Commission 

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EAC Organization by Program 

EAC has organized its offices around the goals in the Strategic Plan. Below are brief 

descriptions of the four offices responsible for implementing the Strategic Plan programmatic 

goals. Following the descriptions is EAC’s organization chart. 

Communications and Clearinghouse

The Communications and Clearinghouse division is primarily responsible for external 

communications, as well as the tools used to provide information to the public. Areas of 

responsibility include: 

 EAC Web site and Clearinghouse 

 Media inquires 

 External communications 

 Congressional relations 

 The Freedom of Information Act 

 National Archives and Records Act 

 Editorial support: press releases, speeches, Congressional testimony 

The agency’s website, www.eac.gov, is the primary communications tool. EAC.gov contains 

thousands of documents with information about voting system test plans, agency 

correspondence, testimony from EAC monthly public meetings and hearings, and external and 

internal communications such as press releases, informational videotapes, research, data and 

program-related information. EAC’s website features a user-driven notification system, allowing 

visitors to customize how they receive information. Users can customize their online experience 

by signing up for automatic e-mail alerts on a variety of election topics and events, including 

public meetings, advisory board meetings, reports, policies and agency news. These alerts can be 

received in real time on a daily or weekly basis. 

Grants Management

The Grants Management Division: 

 Issues guidance and conducts trainings on the administration and use of HAVA funds; 

 Provides technical assistance to States on administering Federal funds; 

 Awards and monitors discretionary grants programs including: Help American Vote 

College Program, Help American Vote Mock Election Program, Election Data Collection 

Grant Program, Military Heroes Initiative, Voting Systems Pre-Election Logic and 

Accuracy Testing and Post-Election Audit Initiative and Accessible Voting Technology 

Initiative. 

 Processes and disburses payments to States and discretionary grant recipients; 

 Tracks the submission of and reviews the content of financial and performance reports 

submitted by States and discretionary grant recipients; 

 Reviews audit reports and resolves findings applicable to EAC programs; 

 Reviews amended State Plan submissions; 
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 Drafts advisory opinions for Commission approval and issuance. 

Research, Policy and Programs

The Research, Policy and Programs division: 

 Administers the Election Management Guidelines Program to help election officials 

promote secure, accurate, and accessible elections by providing information on topics 

such as Ballot Design, Contingency Planning, Managing Change in an Election Office, 

Media and Public Relations, and Developing an Audit Trail for the verification of votes; 

 Manages the Language Accessibility Program to provide informational materials on the 

Federal election process and election terminology in languages other than English, 

translates the National Mail Voter Registration Form, and gathers information from 

working groups to address the election needs of voters with limited or no English 

proficiency; 

 Provides materials to voters to facilitate successful participation in Federal elections such 

as registering to vote; 

 Conducts election research on mandated topics. 

HAVA mandates that EAC issue studies on the impact of free absentee ballot return postage on 

voter participation, electronic voting and Uniformed and Overseas Citizens Absentee Voting 

Act voters, the feasibility of alternative voting methods, the voting experiences of first-time 

voters who register to vote by mail, and the feasibility and advisability of identifying voters by 

Social Security Numbers. 

Voting System Testing and Certification

Under the Help America Vote Act, EAC accredits voting system test laboratories and certifies 

voting equipment, marking the first time the Federal government has offered these services to the 

States. Participation by States in the program is voluntary. Staff works with NIST to evaluate 

and accredit voting system test laboratories and the management of the voting system 

certification process. 

The Testing and Certification (T&C) division: 

 Assists States with voluntary certification of their systems; 

 Supports local elections officials in the areas of acceptance testing and pre-election 

system verification; 

 Promotes quality control in voting system manufacturing; 

 Provides procedures to the voting system manufacturers for the testing and certification 

of voting systems to specified Federal standards consistent with the requirements of 

HAVA Section 231. 

EAC’s voting system certification program establishes accountability through its Quality 

Monitoring Program which ensures, through various check points, that the voting systems used 

in the field are in fact the same systems EAC has certified. For instance, under the program, 
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EAC has the ability to conduct site visits to production facilities to determine whether systems 

produced are consistent with those that have received EAC certification. In addition, EAC 

collects reports from election officials regarding voting system anomalies. After reviewing the 

reports, EAC disseminates the information to election officials. Furthermore, upon invitation or 

with permission from election officials, the EAC conducts reviews of systems that are in use in 

the field. 

More information about EAC’s Voting System Certification and Testing Program is available in 

EAC’s Frequently Asked Questions on eac.gov. 

*Other than full time permanent staff 

I.B. PERFORMANCE GOALS, OBJECTIVES AND RESULTS 

EAC formalized its planning, reporting and execution activities with its first five year Strategic 

Plan 2009-2014. The plan was reviewed by the Office of Management and Budget, and 

presented to EAC’s Board of Advisors and Standards Board for comment, as required by HAVA. 

EAC adopted the Plan in March 2009. 
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How EAC Assesses Performance 

EAC has five strategic goals: 

1. Communicate timely and accurate information on the effective administration of 

elections for Federal office and on the operations and services offered by EAC. 

2. Deliver and manage Federal funds effectively. 

3. Identify and develop information on areas of pressing concern regarding the 

administration of elections for Federal office, issue recommended improvements, 

guidance, translations, and best practices as required by HAVA, and carry out 

responsibilities under the National Voter Registration Act. 

4. Build public confidence in elections by testing and certifying voting systems to 

improve system security, operation, and accessibility. 

5. Achieve organizational and management excellence. 

The EAC Strategic Plan objectives listed below describe in general terms the results needed to 

accomplish its Strategic Goals. Outcomes measure the effect program outputs have on their 

stakeholders. Outputs are quantifiable targets that directly measure the results of a program. A 

program may have multiple outputs but each output is associated with one program. 

Performance measures are quantifiable, documentable, representations of a capacity, process or 

outcome that is relevant to the assessment of performance. 

Strategic Plan Goal 1: Communicate timely and accurate information on the effective 

administration of elections for Federal office and on the operations and services offered by 

EAC. 

 

Outcome: The Congress, Federal agencies, State and local election officials and 

the public receive reliable, accurate, and non-partisan information about 

administering, conducting and participating in Federal elections and how, 

where, and when Americans vote. 

Goal 1’s aim of communication of timely and accurate information is the responsibility of the 

Communications and Clearinghouse division. 

Goal 1 FY 2010 Accomplishments

In 2010, the Communications and Clearinghouse division unveiled a new website enabling EAC 

to receive more public input and feedback, increase transparency, and add more information than 

ever about EAC programs and operations. The new website features leading-edge search, 

navigation and content-delivery tools that transform the site into a more modern, dynamic and 

transparent source of information for the public and election officials. The new tools enhance 

users’ ability to find information more efficiently through a powerful search device that provides 

more qualified, relevant results as well as options for sorting and filtering results. Site searches 

are also enhanced by the new streamlined mouse-over navigation bar, which allows users to 

quickly scan the contents of the site without clicking through to subsequent pages. 
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EAC’s most commonly requested materials, such as the National Mail Voter Registration Form, 

voter guides, election management guidelines, and National Voter Registration Act reports are 

just one click away. The new Election Resource Library now holds all of these materials for easy 

searching, sorting and browsing. 

The site also provides several mechanisms through which the public can provide direct feedback 

to EAC on agency activities and operations. For instance, the public can rate and comment on 

nearly 200 EAC reports, policies, manuals and election management guidelines in the Election 

Resource Library. 

The new website will also play a major role in the efforts to deliver information to voters to help 

them have a successful experience on Election Day during the 2010 Federal election year. The 

Resources for Voters will provide information on poll worker requirements, registration 

information, provisional voting requirements, and other election administration information such 

as early voting deadlines. 

In FY 2010, EAC contracted for new educational videos that will provide further information to 

the public about the EAC. The Communications Division is currently producing four of these 

videos to inform the public about key election administration procedures. Topics include 

information for student voters, pre-election and post-election activities, about the EAC and 

registering to vote. 

Communications staff completed a draft Open Government Policy in accordance with Federal 

requirements and created the companion www.eac.gov/open site to notify the public about 

EAC’s open government initiatives. In addition, EAC’s new Public Comment section at eac.gov 

makes it easier for the public to keep track of draft EAC policies on which the agency is seeking 

public input. The public may also submit general comments at www.eac.gov/contact. 

Also in FY 2010, Communications staff proposed a National Clearinghouse for Elections as the 

central location for information about elections pursuant to HAVA Section 202 on duties of the 

Commission and EAC operations and initiatives. The proposal included a recommendation for 

an initial pilot program to be reviewed in FY 2011. The EAC website, eac.gov, already has the 

capability to support the National Clearinghouse for Elections. 

To further educate the public about EAC’s Voting System Testing and Certification Program, 

Communications staff developed, built and populated a map categorizing States based on state 

laws regarding voting system certifications, as well as the location of EAC-certified systems. 

Users will be able to click through for historical records about the voting system, including 

System Advisory Alerts, draft and final test plans, correspondence and basic information about 

the voting system manufacturer. (The EAC-certified systems in the field map appear in the 

Strategic Plan Goal 4 Accomplishments section of this document.) 

Strategic Plan Goal 2: Deliver and manage Federal funds effectively. 

Outcome: States and other recipients promptly and accurately receive Federal 

funds administered by EAC and use the funds appropriately to improve the 

administration of elections for Federal office. 
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Goal 2 is administered by the Grants Management division and the Office of the Inspector 

General. 

Goal 2 FY 2010 Accomplishments

In FY 2010, Public Law 111-117 included $70.0 million for HAVA Section 251 payments. The 

funds are distributed according to a formula based on the voting age population of the State per 

the last Census and the total voting age population of all States. In order to draw the funds, the 

States certify that they are in compliance with applicable laws and requirements per HAVA 

Section 253. 

A State may use a requirements payment to carry out activities to improve the administration of 

elections for Federal office outside of the activities listed under HAVA Title III if the State per 

Section 251 certifies that the State has implemented the requirements of Title III, or the amount 

it will spend on other activities will not exceed an amount equal to the minimum payment 

amount applicable to the State under section 252. Title III includes voting system standards, 

voting information requirements, provisional voting, statewide voter registration lists, and 

identification requirements for voters who register by mail. States may also use requirements 

payments to improve the administration of Federal elections. Each year, EAC reports to 

Congress on how the States have spent HAVA funds. EAC paid $29.7 million of the $70.0 

million awarded in FY 2010, which represents all funds requested by the states by September 30, 

2010. 

In FY 2010, EAC awarded a total of $750,000 in College Poll Worker grants to 14 institutions of 

higher education and one nonprofit organization to recruit students to serve as poll workers in the 

2010 Federal election. As of FY 2010, EAC has awarded 89 grants totaling $3.1 million to 

recruit and train college poll workers since the College Program was established in 2004. 

 

 FY 2010 College Poll Worker Grant Recipients

 Alverno College, Milwaukee, Wisconsin 

 Benedictine University, Lisle, Illinois 

 Central Connecticut State University, Hartford, Connecticut 

 College of the Canyons, Santa Clarita, California 

 Harris-Stowe State University, St. Louis, Missouri 

 Keystone College, La Plume, Pennsylvania 

 Kids Voting of Central Ohio, Columbus, Ohio 

 Kutztown University, Kutztown, Pennsylvania 

 Lourdes College, Sylvania, Ohio 

 Marshall-Wythe Law School Foundation, Williamsburg, Virginia 

 Morehouse College, Atlanta, Georgia 

 Southern Utah University, Cedar City, Utah 

 Suffolk University, Boston, Massachusetts 

 University of Tennessee, Knoxville, Tennessee 

 University of Rochester, Rochester, New York 
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In FY 2010, EAC awarded eight Mock Election Program grants totaling $300,000 to six 

government agencies, one civic group and one nonprofit organization with the grants aimed at 

operating programs of simulated elections for high school students, with voting equipment, 

ballots and poll workers. The Mock Election Program grants are authorized under HAVA 

Section 295. As of fiscal year 2010, EAC has awarded grants totaling $998,820 to organizations 

under this program since the Mock Election program was established in 2004. 

The grants allow students to become familiar with voting processes and technologies so that 

when they become eligible to vote they will be more comfortable with their civic duties. The 

2010 winners, chosen from a highly competitive pool of 34 applicants that sought a combined 

$1.2 million, will use a wide range of creative approaches to engage high school students. EAC 

was particularly interested in funding opportunities that promote the use of voting machines 

through partnerships with local election officials. The schools are located in rural areas, 

including American Indian reservations, as well as urban locales. 

The grants will support mock elections in 14 States and territories and along with the continuing 

grants will educate more than 850,000 students about the electoral process during the 2010 midterm election cycle. The competition was open to State and local election offices, and regional 

and national nonprofit organizations, including faith-based, community-based, and tribal 

organizations. Winners were selected through an independent review process that examined 

each applicant’s level of experience, and their management and conceptual approaches for 

meeting program goals. 

 FY 2010 Mock Election Grant Recipients 

Office of the Secretary of State of the Commonwealth of Kentucky, 

Franklin, Kentucky 

Polk County Auditor’s Office, Des Moines, Iowa 

Office of the Washington Secretary of State, Olympia, WA 

State of Montana Secretary of State, Helena, Montana 

League of Women Voters of Oregon Education Fund, Salem, OR 

State of Rhode Island and Providence Plantations, Providence, RI 

Michigan Government Television, Lansing, Michigan 

Seminole County Supervisor of Elections, Sanford, Florida 

In November 2009, EAC provided training via a webinar to States on using the Standard Form 

425 Federal Financial Report. The webinar is available on eac.gov. On February 1, 2010, the 

division released the EAC Annual Report on Grant programs as of September 30, 2008. The 

Report was released along with the FY 2011 Congressional Budget Justification and FY 2009 

Annual Performance Report. 

Strategic Plan Goal 3: Identify and develop information on areas of pressing concern 

regarding the administration of elections for Federal office and issue recommended 

improvements, guidance, translations, and best practices as required by HAVA, and carry 

out responsibilities under the National Voter Registration Act. 
Election Assistance Commission 

12

Outcome: As a result of this goal: 1) the election community and other key 

stakeholders improve the administration of elections for Federal office on the 

bases of pertinent, impartial, timely, and high-quality information, 

recommendations, guides and other tools on election and voting issues and 2) 

eligible citizens use the mail voter registration application to register to vote, 

register with a political party, or report a change of name, address, or other 

information. 

Goal 3 is administered by the Research, Policy and Programs division. 

Goal 3 FY 2010 Accomplishments

In FY 2010, the Research, Policy and Programs (RPP) division developed a listing of potential 

research projects, policy and program initiatives including timelines, to guide staff work through 

2012. Progress has been made toward completing several projects noted in the research 

schedule, many of which are mandated by HAVA and/or authorized by Congress. The list will 

continue to be revised in accordance with EAC and/or Congressional priorities. 

Research efforts continued on the HAVA-mandated study “Recounts and Contests”, and a 

working group convened and preliminary research began on a study of “Election Administration 

in Urban and Rural Settings”. 

Research work completed in FY 2010 includes: 

 

 Reports to Congress on the findings of the 2008 Election Administration and Voting 

Survey and the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA). 

 The three-year National Academy of Sciences study on Statewide Voter Registration 

Databases. 

 A study evaluating stakeholder use of EAC educational products designed to improve the 

administration of elections for Federal office. 

 A report to Congress on the study of use of Free or Reduced Postage for the Return of 

Voted Absentee Ballots. 

 Selecting a contractor to collect and analyze data for the 2010 Election Administration 

and Voting Survey. 

EAC’s Strategic Plan includes reissuing regulations pertaining to the National Voter Registration 

Act (NVRA) of 1993. A Notice of Proposed Rulemaking related to NVRA was developed and 

subsequently published in the Federal Register on August 9, 2010. The Notice proposes the 

incorporation of HAVA requirements into the NVRA regulations and asks for public comment 

on these proposals, and on other proposals related to the National Mail Voter Registration Form. 

The period for commenting on the proposed rules ends in November 2010. EAC has held three 

public hearings on the Notice of Proposed rulemaking in Orlando, FL, Washington, DC and 

Pasadena, CA. 

The Policy Department of RPP completed research on a compendium of State laws applicable to 

provisional voting and began work on voluntary guidance related to provisional voting that will 

be provided to the States in early 2011. 
Election Assistance Commission 

13

The RPP Program Department’s Election Management Guidelines program released three new 

Quick Start Management Guides in 2010 on Technology in Elections, Elections Office 

Administration, and Accessibility. In addition, the Department created and released eight new 

Election Management Guidelines chapters: 

 Building Community Partnerships 

 Canvassing and Certifying an Election 

 Communicating with the Public 

 Conducting a Recount 

 Provisional Voting 

 Technology in Elections 

 Elections Office Administration and 

 Accessibility. 

 The Quick Starts and chapters were sent to over 5,000 election officials across the country. 

The Program Department’s Language Accessibility Program has worked to meet its strategic 

goal of assisting election officials in meeting the needs of language minority voters by translating 

glossaries of election terms into four Native American languages and by broadly distributing the 

“Voter’s Guide to Federal Elections”. The glossaries and the Voter’s Guide were translated into 

Navajo, Cherokee, Dakota, and Yu’Pik. The Office of Citizenship of the U.S. Citizenship and 

Immigration Services distributed over 700,000 copies of the Voter’s Guide to new citizens. 

Finally, the National Mail Voter Registration Form has been translated into five Asian 

languages: Chinese, Japanese, Korean, Tagalog and Vietnamese. 

Strategic Plan Goal 4: Build public confidence in elections by testing and certifying 

voting systems to improve system security, operation and accessibility. 

Outcome: Voting equipment operates more reliably and securely and is more 

accessible to the disabled. States use the EAC testing and certification program 

to ensure voting systems meet standards. 

Goal 4 is administered by the Voting System Testing and Certification (T&C) division. 

Goal 4 FY 2010 Accomplishments 

In 2009, Congress passed the Military and Overseas Voters Empowerment Act (MOVE) 

instructing the Federal Voting Assistance Program (FVAP) to run pilot programs to test the 

ability of new or emerging technology to better serve uniformed and overseas citizens. (The 

Director of FVAP administers the Uniformed and Overseas Citizens Absentee Voting Act 

(UOCAVA) on behalf of the Secretary of Defense.) MOVE goes on to mandate that should 

FVAP choose to run a pilot program, EAC and the National Institute of Standards and 

Technology (NIST) are to help support FVAP by providing best practices or standards to support 

the projects. Further, MOVE reiterated the 2004 mandate from Congress requiring EAC to 

create guidelines for FVAP to follow in the development of a remote electronic voting system. 

EAC submitted a mandated report to Congress on MOVE Act implementation in April 2010. 
Election Assistance Commission 

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In addition to participation in implementation of the MOVE Act, EAC is actively involved with 

efforts to facilitate military and overseas voting. UOCAVA requires that the States, the District 

of Columbia and territories allow U.S. citizens living abroad to register and vote absentee in 

elections for Federal office. The EAC led a working group that included representatives of 

FVAP, NIST, the EAC advisory board and manufacturers in August 2010 to explore the 

technical issues associated with remote electronic absentee voting systems for military and 

overseas voters. This group completed a UOCAVA Pilot Program Testable Requirements 

document, which was approved by tally vote of the Commissioners in September 2010. Further, 

EAC staff developed an EAC Pilot Program Certification Manual which went out for public 

comment in April 2010. 

Regarding EAC work with the voting system test laboratories, T&C completed an on-site 

laboratory assessment of Wyle Labs. In addition to the semi-annual re-accreditation process, 

labs undergo a required EAC Policy, Procedures and Practices Review pursuant to the EAC 

Laboratory Accreditation Program Manual. The T&C Director approved the ES&S request to 

transfer testing of Unity 5.0 from iBeta to Wyle because of capacity issues at iBeta. EAC was 

able to close out audit recommendations made in GAO Audit Report 08-770, Voting System Test 

Laboratory Accreditation. GAO staff made a “Closed-Implemented” recommendation in August 

2010 following the latest round of T&C responses. 

In FY 2010, T&C completed internal Standard Operating Procedures for both the Certification 

Program and the Laboratory Accreditation Program. The procedures were generated from the 

T&C Program Manual. Further, T&C, working with NIST, drafted and updated the current 

version of the 2005 Voluntary Voting System Guidelines (VVSG) (now entitled 2005 VVSG 

Version 1.1) in 2009. The draft was published for a 120-day public comment period beginning 

June 1, 2009 and ending September 28, 2009. Staff reviewed over 300 comments received from 

the public. In FY 2010, a revision of the 2005 VVSG addressing comments was completed and 

policy decisions were presented to the Commissioners. The Commission discussed the proposed 

changes to the 2005 Voluntary Voting System Guidelines at a public meeting on September 21, 

2010. The VVSGs are mandated by HAVA. They comprise a set of specifications that voting 

systems, voting devices, and software must meet to receive a certification from EAC. EACaccredited laboratories test voting systems, voting devices, and software against these guidelines. 

Under HAVA, NIST is directed to assist EAC with the certification program through its National 

Voluntary Laboratory Accreditation Program (NVLAP), and to provide recommendations to 

EAC regarding laboratory accreditation. EAC makes the final decision to accredit laboratories. 

Participation by the states for EAC's Voting System Testing and Certification Program is 

voluntary. States use varying approaches for both the type of testing required and the language 

used to require testing. The following four categories illustrate the diverse approaches taken by 

each state (as of April 30, 2009), including the degree states have mandated (though statutes or 

administrative regulations) the use of EAC’s Testing and Certification Program. These varying 

state requirements, as well as the location of EAC-certified systems, are available via an 

interactive map on EAC.gov. 

• Twenty states have no federal requirements: Relevant state statutes and/or regulations 

make no mention of any Federal agency, certification program, laboratory, or standard. 

• Ten states require testing to federal standards: Relevant state statutes and/or rules 

require testing to Federal voting system standards. (States reference standards drafted by 
Election Assistance Commission 

15

the Federal Election Commission (FEC), National Institute of Standards and Technology, 

or the EAC). 

• Thirteen states require testing by a federally accredited laboratory: Relevant state 

statutes and/or regulations require testing by a federally or nationally accredited 

laboratory to Federal standards. 

• Twelve states require federal certification: Relevant state statutes and/or rules require 

that voting systems be certified by a federal agency. 

Also in FY 2010, EAC accepted the final work product for the Elections Operations Assessment. 

The assessment was conducted to produce a scientifically-founded risk assessment tool that will 

facilitate informed decision-making by EAC and its Technical Guidelines Development 

Committee (TGDC) when developing voluntary voting system guidelines. The tool will provide 

EAC with information needed to conduct a cost-benefit analysis of a comprehensive list of risks 

associated with voting systems. 

 

EAC and the TGDC will use the Elections Operations Assessment risk assessment tool to further 

improve Federal voluntary voting system guidelines. EAC staff will use the tool to conduct a 

scientifically-based cost benefit analysis of voting systems risks and requirements. It will also 

help the agency develop voting system requirements that can help mitigate risk. Examples of 

risks include software bugs, equipment failures, power failures, natural disasters, terrorist 

attacks, or fraudulent acts or errors committed by persons involved in the elections process. 

In 2010, T&C continued to make progress in certifying voting systems and working with voting 

system manufacturers. Unisyn Open Elect System received Final EAC Certification on January 

12, 2010. ES&S Unity 3.2.0.0 received an initial decision on certification. The MicroVote EMS 

4.0B Modification was certified on August 23, 2010. EAC staff and technical reviewers 

conducted Manufacturer Facility Inspections for Unisyn and ES&S as required by Section 8.5 of 

Testing and Certification Program Manual on May 10-13, 2010. EAC published a System 

Advisory on the ES&S Unity 3.2.0.0 DS200 freeze/lock-up issue reported by Cuyahoga County, 

Ohio. The System Advisories alert jurisdictions across the country about reported voting system 

anomalies. EAC works with jurisdictions experiencing problems and with the manufacturers on 

resolving the issues. 

The following map shows the location of EAC-certified voting systems being used during the 

2010 Federal election cycle. The EAC Certified Voting System Map allows users to quickly 

access key information about EAC-certified voting systems, including the county in which the 

systems are used and test reports issued during the certification process. The interactive map 

makes it easy to track advisory alerts that EAC has issued about a system, a critical component 

of EAC’s Quality Monitoring Program. As part of the Program, EAC notifies the public about 

potential Federally-certified voting systems performance issues, including anomalies. 

The map also depicts State requirements for voting system certification. Twelve States require 

Federal certification; ten States require testing to Federal standards; and thirteen States require 

testing by a Federally-accredited laboratory. Twenty States have no Federal requirement. 
Election Assistance Commission 

16

The Certified Voting Systems Map represents the most recent enhancement to the nation’s 

Clearinghouse on election administration information, eac.gov, which features numerous reports, 

in-depth research and State-specific data on the election administration process. 

Strategic Plan Goal 5 consists of one clear-cut objective: Implement a high performance 

organization. 

Goal 5 is administered by the Commissioners, the Standards Board, the Board of Advisors, the 

Technical Guidelines Development Committee, Executive Director, Chief Operating Officer and 

Chief Financial Officer with support from the Offices of the General Counsel and Administration. 
Election Assistance Commission 

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The performance measure on implementing 90 percent of OIG audit recommendations with 

agreed upon timeframes has been affected by the need for Federal Information Security 

Management Act (FISMA) resolution and a small number of remaining policies and procedures 

that must be put in place. Now that a Chief Information Officer is on board and with the 

assistance of a contractor experienced in FISM compliance, FISMA recommendations were 

resolved rapidly, and only two remain open. Further, each month, EAC’s Chair reports to the 

Chair and Ranking Member of the House Subcommittee on Elections, Committee on House 

Administration on the status of 82 OIG audit recommendations made as of March 2008. To date, 

only four of the 82 recommendations remain open. With the exception of a recommendation 

related to the National Voter Registration Act rulemaking process, the open recommendations 

are expected to be resolved in FY 2011. 

On the performance measure regarding meeting annual performance measures, management is 

working to foster a culture of accountability among staff. The agency is seeking to improve staff 

satisfaction ratings and achieve management excellence through improved internal controls and 

human resource initiatives. Agency directors responsible for implementation of the EAC 

Strategic Plan goals report on their division metrics in the Agency Financial Report in 

November, the Annual Performance Report along with the Congressional Budget Justification in 

February, and on planned metrics in the OMB Budget Justification each September. In addition, 

in FY 2010 EAC started quarterly strategic planning meetings to discuss implementation of 

strategic goals. 

EAC plans on independently verifying the reported programmatic (non-financial) metrics data. 

To provide further assurance, EAC will implement programmatic internal control procedures as 

part of the Agency Financial Report process. This will include sending the program managers 

assessable unit risk assessment questionnaires and having the managers provide individual letters 

of assurance for signature per EAC Internal Control Procedures. The directors’ letters of 

assurance will be rolled into the CFO’s Annual Statement of Assurance. 

One of the keys to management excellence is a strong internal control program. EAC staff was 

offered internal control training onsite in two sessions during FY 2010. The agency is working 

towards an integrated internal control evaluation process to evaluate program performance, 

control activities and assessments, and formal monitoring of the effectiveness of programmatic 

activities on a periodic basis. EAC will continue to focus on resolution of issues identified in 

audits, setting up sound systems and policies and procedures, working with managers on the 

relationship between budget and performance, maximizing use of staff and financial resources, 

and training EAC staff on financial management processes and their responsibilities. 

Key Performance Measures

o Implement 90 percent of the OIG audit 

recommendations within agreed upon timeframes.

o Meet annual performance measures. 
Election Assistance Commission 

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Performance Data Collection and Validation 

Managing for results and producing an Annual Performance Plan requires valid, reliable and 

high-quality performance measures and data. EAC is committed to the continuous improvement 

of its performance and financial management data. To this end, EAC is working on 

recommendations for a data validation system, mandatory source documentation, and 

documentation of calculation methodology for estimates. Performance indicators are supported 

by documentation. An independent reviewer evaluated EAC business processes related to 

implementation of the four programmatic goals in the Strategic Plan. The reviewer made 

recommendations on procedures EAC can implement to provide reasonable assurance that the 

reported programmatic performance data is relevant and reliable. EAC plans on having a system 

of continuous improvement beginning in FY 2011. 

Summary Performance Information 

By program, summary performance information for FY 2010 is as follows: 

Communications & Clearinghouse -- launched a new website with powerful search and 

improved navigation tools; posted videos on its website and YouTube on Contingency 

Planning, Polling Place Management, the EAC Voluntary Voting System Testing and 

Certification Program, and Making Polling Places Accessible. 

Grants Management -- awarded 8 Mock Election grants that along with the continuing grants 

will help educate approximately 850,000 students about the electoral process, 15 Help 

America Vote College Program grants to recruit students to serve as poll workers, and a 

$500,000 Military Heroes grant to improve voting accessibility for recently injured military 

personnel; and adopted Maintenance of Effort Policy to facilitate State compliance with the 

maintenance of expenditure requirement in HAVA. 

Research, Policy and Programs -- issued Election Management Guideline chapters and 

Quick Start Guides on Technology in Elections, Elections Office Administration, 

Accessibility, Building Community Partnerships, Canvassing and Certifying an Election, 

Communicating with the Public, Conducting a Recount, and Provisional Ballots; and the 

mandated Free or Reduced Postage for the Return of Voted Absentee Ballots Report. 

Voting Systems Testing and Certification -- certified a fourth voting system, issued a report to 

Congress on our progress in establishing guidelines for remote electronic voting systems for 

absentee voters, jointly with FVAP and NIST completed a UOCAVA Pilot Program Testable 

Requirements document, and reworked for presentation to the Commissioners and discussion 

at a public meeting the 2005 VVSG Version 1.1 following the public comment period. 

Program Performance Indicators

The following table presents key EAC FY 2010 program performance data. As much detailed 

performance information as possible will be presented, and variances discussed, in the FY 2010 

Annual Performance Report due February 15, 2011 along with the FY 2012 Congressional 

Justification. 
Election Assistance Commission 

19

EAC FY 2010 Performance Summary 

Program Performance Indicator 

Type of 

Indicator Planned Actual 

Strategic Goal 1: Communicate 

 Issue Clearinghouse policy Output Final In Final Draft 

 

Issue Policies/Procedures to process requests 

from outside EAC Output Final In Final Draft 

Strategic Goal 2: Fund and Oversee 

 Award grants within established timeframes. Output 100% 

100% of 

requirements 

payments & one 

year grants, 33% 

of no year 

discretionary 

grants 

 

Resolve 100 percent of audit findings within 

established time frames. Output 100% 

No overdue 

management 

decisions as of 

9/30/10 

Negotiate indirect cost rates within 30 days 

of receipt of acceptable indirect cost 

proposals. Output 100% 

Signed Memo of 

Understanding 

with HHS July 

2010 for 

negotiation 

services 

Strategic Goal 3: Study, Guide, Assist 

 

Establish, in Fiscal Year 2010, a baseline for 

measuring stakeholder use of EAC research 

and educational products to improve the 

administration of elections for Federal office. 

In subsequent years, increase the percentage 

of stakeholder use of EAC research products. Output Baseline 

Baseline 

established at 

50% usage 

 

Disseminate all completed research project 

reports to stakeholders. Output 100% 100% 

Strategic Goal 4: Test and Certify 

 

Produce updates to the VVSG in Fiscal Years 

2010 and 2013. Output 

Complete 

VVSG 

update in 

FY 2010 

Revised in FY 

2010 

Commissioners 

need to accept. 

 

Conduct at least one review of a 

manufacturing facility of a registered 

manufacturer at least once every 4 years. Output 1 review 2 reviews 
Election Assistance Commission 

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Portfolio Analysis

 

Since 2004, EAC has received funds in three appropriations: Salaries and Expenses, Election 

Reform Programs, and for FY 2008 only, Election Data Collection Grants. The purpose of the 

Data Collection grants of $2.0 million each to five States was to measure the costs of improving 

the collection of election data at the precinct level during the 2008 Federal election. In FY 2010, 

the Salaries and Expenses appropriation of $17,959,000 funded the $3.5 million transfer to 

NIST, $750,000 for College Poll Worker recruitment and training grants, $300,000 for Mock 

Elections for high school students, salaries, travel, rent and telecommunications, printing, 

contracts, supplies and equipment. 

I.C. FINANCIAL RESULTS 

This analysis is intended to help readers understand EAC’s financial results, position and 

condition as portrayed in the financial statements and notes to the statements. It explains 

changes in assets, liabilities, costs, revenues, obligations, and outlays; includes comparisons of 

FY 2010 to FY 2009; and discusses the relevance of balances and amounts in the financial 

statements and notes. The changes are discussed in the context of whether the year’s activities 

improved or deteriorated the agency’s financial position. Since EAC depends on Congress for 

its funds, future financial position will be dependent on annual appropriations. 

Budgetary Resources 

Budgetary resources are the amounts available to enter into new obligations and to liquidate 

them. The majority of EAC’s available budgetary resources are for Requirements Payments in 

the Election Reform Program appropriation. Budgetary resources include new Budget Authority 

from appropriations and unobligated balances of Budget Authority provided in previous years in 

the no year Election Reform Program account. For FY 2010, the available budgetary resources 

were $103.6 million, a drop of 19.7% or $25.4 million from FY 2009. A decrease in 

appropriations received in FY 2010 resulted in this change. 

Appropriations received for FY 2010 decreased $31.0 million from FY 2009. In FY 2010 

EAC’s appropriations totaled $93.0 million as opposed to $124.0 million in FY 2009. 

Requirements Payments appropriations were reduced $30.0 million and other grant programs 

were reduced $1.0 million. 
Election Assistance Commission 

21

$‐

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

FY 2010 FY 2009

Voting Technology

Improvement Research

Grants

Pre‐Election Logic &

Accuracy Testing and

Post‐Election Verification

College Poll Worker

Grants

Mock Election Grants

Requirement payments

Grant  & Requirement Payments Appropriations

In FY 2008, EAC recorded $50.7 million of unspent HAVA Section 102 payments paid to the 

States in FY 2003 and FY 2004. These funds were originally disbursed by the General Services 

Administration (GSA) acting as Administrator. Any funds remaining unspent as of November 1, 

2011, will return to EAC to be disbursed as HAVA Section 251 payments. Of these amounts, 

$1.0 million remain unspent as of September 30, 2010, a decrease of $33.6 million from last 

year. The State of New York, the largest holder of unspent HAVA Section 102 funds in the 

amount of $33.6 million as of September 30, 2009 expended all of their funds in FY 2010. 

The status of available budgetary resources as represented in the 2010 and 2009 Statement of 

Budgetary Resources is as follows: 

Budgetary Resources 2010 2009 Difference

% 

Change

Obligations Incurred $ 86,303,814 $114,957,639 ($28,653,825) -24.92% 

Unobligated Balance – Apportioned 12,046,897 7,452,047 4,594,850 61.66% 

Unobligated Balance – Not 

Available 5,246,828 6,546,853 (1,300,025) -19.86%

Total Budgetary Resources $103,597,539 $128,956,539 ($25,359,000) -18.25%

Obligations Incurred decreased $28.7 million primarily as a result of the disbursement of FYs 

2008-2010 Requirements Payments and the reduction in the annual appropriation for 

Requirements Payments in FY 2010. Unobligated Balance – Apportioned increased $4.6 million 

as appropriations for a $3.0 million grant for disability research and for a $2.0 million grant for 

pre-election logic and accuracy testing and post-election verification were not awarded as of 

September 30, 2010. EAC awarded in the current year a $500,000 Military Hero’s grant from the 

Election Reform Program funds. 
Election Assistance Commission 

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Financial Position 

Assets 

EAC had $144.5 million in total assets as of September 30, 2010. This is a decrease of $50.8 

million. Fund Balance with Treasury decreased $18.2 million largely as a result of the net 

increase from new appropriations offset by disbursements for Requirements Payments from FYs 

2008-2010. EAC received $70.0 million in FY 2010 appropriations for Requirements Payments, 

of which $29.7 million were disbursed as of September 30, 2010. In addition, $30.4 million in 

FY 2009 Requirements Payments and $22.0 million in FY 2008 Requirements Payments were 

disbursed in the current year. EAC has $5.0 million in FY 2010 and $5.5 million in FY 2009 

grant appropriations that have not yet been disbursed or awarded. 

Advances and Prepayments decreased $33.4 million in FY 2010 with a balance of $3.4 million 

as of September 30, 2010. In FY 2008, EAC recorded $50.7 million in HAVA Section 102 

Advances with the States still unspent as of September 30, 2008, and an unspent balance of 

$34.7 million as of September 30, 2009. In FY 2010, the States reported as having spent $33.6 

million of the remaining funds. Accordingly, EAC reduced outstanding advances on the Balance 

Sheet and recorded $33.6 million in program operating expense on the Statement of Net Costs. 

Summary asset data is presented below: 

Assets

 FY 2010 FY 2009 Difference

% 

Change

Fund Balance with Treasury $139,699,928 $ 157,884,882 ($18,184,954) -11.52%

Advances and Prepayments 3,375,688 36,790,142 (33,414,454) -90.82%

Other Assets 1,401,329 618,266 783,063 126.65%

 $ 144,476,945 $ 195,293,290 ($50,816,345) -26.02%

Liabilities 

EAC had total liabilities of $1.8 million as of September 30, 2010. This is a $7.1 million 

decrease from FY 2009. Accounts Payables decreased $7.2 million in FY 2010. As of 

September 30, 2009, EAC had received two completed certifications from the States for 

Requirements Payments. These payments had not yet been disbursed as of September 30, 2009 

and were therefore accrued. They totaled $6.5 million. All Requirements Payments due as of 

September 30, 2010 had been disbursed and no accrual was recorded. 

Liabilities

 FY 2010 FY 2009 Difference

% 

Change

Accounts Payables $ 1,087,876 $ 8,332,010 ($7,244,134) -86.94%

Accrued Payroll and Benefits 380,928 290,035 90,893 31.34%

Unfunded Leave 327,803 261,880 65,923 25.17%

 $ 1,796,607 $ 8,883,925 $ 7,087,318 -79.78%

 
Election Assistance Commission 

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Net Position 

Net position, which is the sum of Unexpended Appropriations and Cumulative Results of 

Operations, decreased in FY 2010 by $43.7 million. Cumulative Results of Operations of 

$846,195 as of September 30, 2010 is the accumulated difference between expenditures and 

financing sources since the inception of the agency. Unexpended Appropriations decreased 

$44.6 million. The appropriations used in FY 2010, including obligated funds from prior years 

and the transfer to the National Institute of Standards and Technology of $3.5 million, exceeded 

the appropriations received for FY 2010. In addition, EAC expended $82.1 million in 

Requirements Payments and $33.6 million in HAVA Section 102 expenditures. 

Net Position

 FY 2010 FY 2009 Difference % Change

Unexpended Appropriations $ 141,834,143 $ 186,401,600 $(44,567,457) -23.91%

Cumulative Results of Operations 846,195 7,765 838,430 10,797.55%

 $ 142,680,338 $ 186,409,365 $(43,729,027) -23.46%

 

Results of Operations 

The EAC, as presented in its Statement of Net Costs, reports its results of operations within four 

programs: Communications, Fund and Oversee, Research, Policy and Programs, and Testing and 

Certification. Costs specifically identified with each of these programs such as assigned 

personnel costs and specific program contract costs are allocated to the program directly. The 

Fund and Oversee program reports the expenditures for the Requirements Payments and the 

other EAC grants. In years in which EAC receives significant appropriation for these HAVA 

funds, this program, Fund and Oversee, typically exceeds the other programs in overall costs. 

Other general agency overhead costs such as rent, human resource costs and financial 

management costs are allocated on either a per employee basis or a percent of overall costs 

method. This methodology is outlined in EAC’s Cost Allocation Model and is reviewed each 

year to ensure the accurate allocation of expenses to each program. 

Total Net Cost of Operations for the EAC was $131.0 million for Fiscal Year 2010. This was an 

overall increase from FY 2009 of $9.4 million. Net Cost of Operations in FY 2010 consists of 

general salaries and other expenses totaling $12.8 million and grant and Requirements Payments 

of $118.2 million. Net Cost of Operations for FY 2009 consisted of $13.4 million in general 

salaries and expenses and $108.2 million in grant and Requirements Payments. 

Results of Operations by Program

 FY 2010 FY 2009 Difference

% 

Change

Communications $ 1,797,916 $ 1,994,125 $ (196,209) -9.84%

Fund and Oversee 122,834,439 113,042,449 9,791,990 8.66%

Research, Policy and Programs 2,845,652 2,972,123 (126,471) -4.26%

Testing and Certification 3,531,576 3,578,173 (46,597) -1.30%

 $ 131,009,583 $ 121,586,870 $ 9,422,713 7.75%
Election Assistance Commission 

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Limitations of the Financial Statements 

The principal financial statements have been prepared to report the financial position and results 

of operations of the entity, pursuant to the requirements of 31 U.S.C. 3515(b). While the 

statements have been prepared from the books and records of the entity in accordance with 

Generally Accepted Accounting Principles (GAAP) for Federal entities and the formats 

prescribed by the Office of Management and Budget, the statements are in addition to the 

financial reports that are used to monitor and control budgetary resources, which are prepared 

from the same books and records. 

The statements should be read with the realization that they are for a component of the U.S. 

Government, a sovereign entity. 

I.D. ANALYSIS OF CONTROLS, MANAGEMENT SYSTEMS, AND LEGAL 

COMPLIANCE 

Internal Control Environment

EAC is subject to numerous legislative and regulatory requirements that promote and support 

effective internal controls. EAC believes that maintaining integrity and accountability in its 

programs and operations is critical for good government, demonstrates responsible stewardship 

over assets and resources, helps ensure high-quality and responsible leadership, allows for 

effective delivery of services to customers, and maximizes desired program outcomes. 

EAC has developed and implemented management, administrative and financial system controls 

that reasonably ensure: 1) programs and operations achieve intended results efficiently and 

effectively; 2) resources are used in accordance with the mission of the agency; 3) programs and 

resources are protected from waste, fraud and abuse; 4) program and operations activities are in 

compliance with laws and regulations; and 5) reliable, complete and timely data are maintained 

and used for decision-making. 

The agency used controls that ensure that transactions are executed in accordance with budgetary 

and financial laws and other requirements, consistent with the purposes authorized, and are 

recorded in accordance with Federal accounting standards. EAC ensures that assets are properly 

acquired and used, safeguarded to deter theft, accidental loss or unauthorized disposition, and 

fraud. The agency still has work to do in collecting programmatic performance data and 

ensuring that it is adequately supported. To this end, EAC contracted for and received 

recommendations from an independent review of: 1) its strategic plan performance measures and 

systems to collect the data and 2) risk levels associated with providing inaccurate information for 

internal decision-making. During FY 2011, each manager will be familiar with internal control 

requirements and responsibilities and be able to sign statements of assurance that controls are in 

place and functioning. 

Laws that help EAC improve the management of its financial operations and programs are as 

follows: 
Election Assistance Commission 

25

Federal Manager’s Financial Integrity Act

 

The Federal Manager’s Financial Integrity Act (FMFIA) of 1982 requires Executive Branch 

agencies to establish, maintain, and assess internal controls to ensure that agency program and 

financial operations are performed effectively and efficiently. To help ensure that controls have 

been identified and implemented, the heads of agencies must annually evaluate and report on the 

effectiveness of the internal control (FMFIA Section 2) and financial management systems 

(FMFIA Section 4) that protect the integrity of Federal programs. 

During FY 2008, the EAC evaluation was limited to identifying weaknesses disclosed in reports 

issued by the General Accountability Office and by the EAC Office of the Inspector General, 

including the weaknesses identified through the year’s financial statement audit. In FYs 2009 

and 2010, EAC also used the results of self-assessments of financial management internal 

controls. 

A material weakness was identified by management in FYs 2008 and 2009 concerning EAC’s 

lack of effective written policies and procedures in the areas of property, personnel, records 

management, mail management, physical security, travel, information technology, research, and 

communications. Travel, information technology, and research handbooks were finalized in FY 

2010. The remaining handbooks are in draft, some are undergoing legal review and all are 

planned to be finalized in FY 2011. The following chart shows FYs 2009 and 2010 planned 

corrective actions compared to actual completion dates. 

Corrective Actions 

Target 

Completion 

Date 

Actual 

Completion 

Date 

Develop an EAC Manual containing all necessary administrative and 

program procedures. 

1/31/09 Pending 

Implement the applicable requirements of Office of Management and 

Budget Circular A-123, Management’s Responsibility for Internal 

Controls. 

09/30/09 09/30/09 

Table 1 presents the material weaknesses identified by management for FY 2010 as beginning 

balances. Ending balances reflect status after resolution of findings as of September 30, 2010. 

TABLE 1 

 EFFECTIVENESS OF INTERNAL CONTROL OVER OPERATIONS (FMFIA § 2) 

Statement of Assurance Unqualified 

No. Material Weaknesses 

Beginning 

Balance New Resolved Consolidated 

Ending 

Balance 

1 Lack of Policies & Procedures 1 0 0 0 1 

 TOTAL WEAKNESSES 1 0 0 0 1 
Election Assistance Commission 

26

During FY 2009, EAC began the process of designing, implementing, and assessing internal 

controls in full compliance with Office of Management and Budget Circular A-123, 

Management’s Responsibility for Internal Control, and FFMIA. A-123 requires the managers of 

Federal agencies to take responsibility for assessing internal controls over financial reporting. 

EAC contracted for independent review of the key business processes impacting financial 

operations and the financial statements, and business processes with no material impact on the 

financial statements but which have some potential for risk or exposure for the agency. 

In December 2009 and April 2010, EAC conducted agency-wide internal control training, 

emphasizing identification of risks to accomplishment of the agency’s mission and program 

results. Each director will be responsible for risk assessment for their assessable unit, and for 

remediation activities for identified risks, in conjunction with CFO staff. As mentioned earlier, 

performance measurement systems were independently assessed. The assessment revealed that 

existing performance measures are good indicators as to whether programs and operations 

achieve intended results. Recommendations from the assessment, including control activities 

needed to achieve program objectives and control activities that will improve accuracy of 

performance data, will be implemented in FY 2011 so that EAC’s performance metric reports are 

reliable. 

The CFO Department was able to provide regular financial reports at the office location level to 

fund holders in FY 2010. 

Entity-Wide Security Program 

EAC recognizes that effective security management is critical to EAC’s mission. The ability to 

ensure confidentiality, integrity, and availability of its information assets is essential to 

minimizing risks of inadvertent or deliberate misuse, fraud or destruction. 

Table 2 identifies the significant deficiencies identified in the FY 2009 audit of the Entity-Wide 

Security Program. The ending balances provide status of the deficiencies as of September 30, 

2010: 
Election Assistance Commission 

27

TABLE 2 

 SIGNIFICANT DEFICIENCIES IN ENTERPRISE-WIDE SECURITY PROGRAM 

No. Significant Deficiency 

Beginning 

Balance New Resolved Consolidated 

Ending 

Balance

1 

Lack of an internally developed 

agency-wide information security 

program. 1 0 1 0 0 

2 Lack of an inventory of systems 

and applications. 1 0 1 0 0 

3 Lack of an adequate security 

management structure 1 0 1 0 0 

4 

Certification and Accreditation 

of general support systems has 

not been performed. 1 0 1 0 0 

5 

Third party information security 

examinations and inspections are 

not monitored for inclusion 

within the service provider’s Plan 

of Actions and Milestones. 1 0 1 0 0 

TOTAL 5 0 5 0 0 

During FY 2010, EAC conducted an inventory of information technology systems and 

applications, received Certification and Accreditation of general support systems from the 

General Services Administration, and monitored the EAC website and GSA-provided IT services 

as part of the annual FISMA audit. EAC is committed to establishing and maintaining an 

agency-wide program to provide security for information and information systems that support 

the operations and assets of the agency, including those systems managed by another agency or 

contractor. As part of this effort, EAC hired a Chief Information Officer (CIO) in FY 2010 and 

developed, documented, and implemented its agency-wide Information Security Program. As a 

result, EAC management made significant progress in resolving the FY 2009 Federal 

Information Security Management Act (FISMA) audit findings. 

The FY 2010 FISMA evaluation report found that EAC has taken actions to address the majority 

of the serious problems noted in the FY 2009 FISMA evaluation report. Table 3 below 

summarizes EAC’s level of compliance in each FISMA control area in the FY 2010 FISMA 

evaluation. SC means substantial compliance, PC represents partial compliance, and NSC means 

not in substantial compliance. 

 

 

 

 

 
Election Assistance Commission 

28

TABLE 3

CONTROL REQUIREMENT Compliance Determination 

(SC, PC, NSC)

Access Control SC 

Awareness and Training SC 

Audit and Accountability SC 

Certification, Accreditation, and Security Assessments SC 

Configuration Management SC 

Contingency Planning PC 

Identification and Authentication SC 

Incident Response SC 

Maintenance SC 

Media Protection SC 

Physical and Environmental Protection SC 

Planning SC 

Personnel Security SC 

Risk Assessment SC 

System and Services Acquisition SC 

System and Communications Protection SC 

System and Information Integrity SC 

The FY 2010 report indicates that four areas that had been found in FY 2009 to be in Partial 

Compliance are resolved. Compliance in two areas has been partially resolved. The first area 

deals with the agency’s contingency planning and testing. The second area involves the agency’s 

compliance with Personal Identification Information (PII) and Privacy Act requirements. The 

FY 2010 FISMA evaluation report includes specific recommendations for ensuring substantial 

compliance in these two control areas. These recommendations and other key information 

security tasks are included in EAC’s high-level FY2010 FISMA Plan of Action & Milestones 

(POA&M). Once the remaining items in the POA&M are implemented in early FY 2011, EAC 

will be substantially compliant in every FISMA control area. Since EAC is in substantial 

compliance in every FISMA control area, the FY 2010 financial audit will report EAC’s FISMA 

program as being in significant compliance with the requirements of the Act. 

EAC has taken action to address the issues identified in FY 2009 with EAC’s agency-wide IT 

security program. The review indicated that EAC has corrected most of the significant issues but 

needs to implement corrective actions in two major areas. 

OMB Circular A-127 Financial Management Systems Requirements: 

Table 4 presents the results of management analysis of financial management systems 

requirements. The beginning balance reflects the results for FY 2009. The ending balance 

reflects the status of the non-conformance as of September 30, 2010. 
Election Assistance Commission 

29

TABLE 4 

 

CONFORMANCE WITH FINANCIAL MANAGEMENT SYSTEMS 

REQUIREMENTS 

(FMFIA § 4) 

Statement of Assurance Systems do not fully conform to financial management 

system requirements 

No. Non-Conformance 

Beginning 

Balance New Resolved Consolidated 

Ending 

Balance 

1 Integrated Financial 

Management System 0 0 0 0 0 

 TOTAL 0 0 0 0 0 

The Financial Managers Financial Integrity Act (FMFIA) Section 4 on accounting system 

requirements is interpreted by OMB Circular A-127 Financial Management Systems. OMB 

revised A-127 on January 9, 2009, eliminating the integrated financial management systems subsections. The integration issue was no longer a finding on the audit checklist as of FY 2009. 

EAC uses information provided by recipients of HAVA funds on Standard Form (SF) 425 

Federal Financial Report and advance accounting methodology. Based on the information 

reported on the SF-425, EAC periodically adjusts the advance accounts and records grant 

expenditures by submitting adjusting entries to GSA for entry into Pegasys. The result is a 

record of actual grant activity and balances at the grantee level and information for periodic 

monitoring of grantee financial activity. 

Additionally, at the end of FY 2009, GSA made a capital asset module available to client 

agencies, which EAC is using. 

Audit Follow-Up

EAC’s Office of Inspector General (OIG) conducts audits and reviews of the agency’s 

operations. The Office of the Chief Financial Officer (OCFO) works closely with EAC 

management and the OIG to complete actions necessary to respond to audit findings. OCFO 

tracks the completion of the audit recommendations in a Monthly Audit Recommendation 

Tracking Report. The report is carefully reviewed by EAC and is submitted each month to 

Congressional Oversight staff. Of the 82 recommendations, as of September 30, 2010, EAC 

closed 71, consolidated seven as being repetitive, and has four open findings to resolve. EAC 

made improvements in all Agency management challenges. Financial internal control has 

substantially improved since FY 2009 through the remediation of audit recommendations made 

by the independent auditor in the annual financial statement audit. EAC also considers and 

responds to recommendations from audits and reviews conducted by the Government 

Accountability Office. 
Election Assistance Commission 

30

Federal Financial Management Improvement Act

Per OMB Bulletin No. 07-04 “Audit Requirements for Federal Financial Statements,” EAC as an 

Accountability of Tax Dollars Act of 2002-covered agency, is not subject to the requirements of 

the Federal Financial Management Improvement Act. 

Accountability of Tax Dollars Act of 2002 

 

The Fiscal Year 2010 financial statement audit report identified one area of noncompliance 

which was corrected on September 29, 2010. 

 

Federal Information Security Management Act

EAC was in compliance with the Federal Information Security Management Act by the end of 

the fiscal year. 

 

Inspector General Act Amendments of 1988

 

The EAC Office of the IG audits HAVA funds administered by recipients of HAVA grants and 

transmits to EAC single audit reports that present findings on HAVA funds. The principal 

recipients of HAVA grant funds are State governments. In FY 2010, EAC resolved audit reports 

issued by the IG for Illinois, Michigan, New Mexico, North Carolina, Oregon, South Carolina, 

Tennessee, and Wyoming. In FY 2010, EAC also resolved Single Audit Act findings for the 

States of California, Illinois, Iowa, and Nebraska. 
Election Assistance Commission 

31

U.S. ELECTION ASSISTANCE COMMISSION 

1201 New York Ave. NW – Suite 300 

Washington, DC 20005

 

Annual Assurance Statement on Internal Control 

The management of the Election Assistance Commission (EAC) is responsible for establishing 

and maintaining effective internal control and financial management systems that meet the 

objectives of the Federal Managers’ Financial Integrity Act (FMFIA) and Office of Management 

and Budget (OMB) Circular A-123 Management’s Responsibility for Internal Control. Internal 

control is an integral component of EAC’s management that provides reasonable assurance the 

following objectives are being achieved: effectiveness and efficiency of operations, reliability of 

financial reporting, and compliance with applicable laws and regulations. 

 

EAC’s assessment of internal controls for ensuring the effectiveness and efficiency of operations 

focused on assessing controls for ensuring the reliability of information associated with the 

performance measures presented in its strategic plan, and on self-assessments in the Office of the 

Chief Financial Officer (OCFO). With respect to assessing internal control designed to ensure 

the reliability of financial reporting, EAC is not required by OMB Circular A-123 to perform a 

separate assessment. EAC relied upon the evaluation of internal controls over financial reporting 

conducted by its independent auditors, on reports issued by the Inspector General, and on OCFO 

departmental risk assessments and letters of assurance over the accounting, budget, grants, 

procurement and overall OCFO functions. With respect to internal controls to ensure 

compliance with laws and regulations, the EAC relied upon the evaluation conducted by its 

independent auditors and the Inspector General. 

In FY 2010, EAC worked to resolve one material weakness in the effectiveness of its internal 

control over operations: lack of effective written policies and procedures. EAC will work in FY 

2011 to finalize the effective policies and procedures listed above. On October 13, 2009, the 

Inspector General submitted to the GAO for review a potential anti-deficiency violation. In its 

report, the GAO found that EAC had violated the purpose statute for fiscal year 2004. As a 

result, the auditors in the FY 2010 audit identified one instance of material non-compliance with 

the Anti-Deficiency Act. The agency reported the violation to the President, Congress, and 

Comptroller General in letters dated September 29, 2010, closing the finding. 

Except for the material weakness described above, the Commission provides a qualified 

statement of assurance that the internal control and financial management systems meet the 

objectives of the Federal Managers’ Financial Integrity Act. 

Donetta Davidson 

Chair 

November 15, 2010
Election Assistance Commission 

32

SECTION II

Financial Section 

II.A. MESSAGE FROM THE CHIEF FINANCIAL OFFICER 

I am pleased to present EAC’s financial statements for FY 2010. Our financial statements are an 

integral component of the Agency Financial Report (AFR). This is the third year in its seven 

year operational existence that EAC has prepared financial statements and submitted them for 

audit. EAC has worked diligently toward unqualified opinions on the last two financial 

statements. 

This is the second year EAC is participating in the pilot performance reporting project as 

described in OMB Circular A-136 Financial Reporting Requirements, presenting an Agency 

Financial Report in place of the Performance and Accountability Report. EAC presents 

summarized performance data in this report, and will provide detailed data in February 2011 in 

conjunction with the Fiscal Year (FY) 2012 Congressional Justification. 

During FY 2010, to address issues in the FY’s 2009 financial statement audit, EAC worked on 

written policies and procedures, addressed a report from GAO on an area of noncompliance with 

laws and regulations, and resolved the majority of Federal Information Security Management 

Act findings by the end of the fiscal year. 

Annette Lafferty 

Chief Financial Officer 

November 15, 2010 


U.S. ELECTION ASSISTANCE COMMISSION
 

OFFICE OF INSPECTOR GENERAL
 

1201 New York Ave. NW - Suite 300 

Washington, DC 20005
 

November 10, 2010 

To: The Commission 

From: Curtis W. Crider 

Inspector General, U.S. Election Assistance Commission 

Subject: Independent Auditor’s Reports on the U.S. Election Assistance 

Commission’s Financial Statements for Fiscal Year 2010 and 2009 

This memorandum transmits Leon Snead & Co.’s financial statement audit report 

of the U.S. Election Assistance Commission (EAC) for the Fiscal Years 2010 and 

2009. 

Results of Independent Audit 

The Chief Financial Officer’s (CFO) Act of 1990 (P.L. 101-576), as amended, 

requires EAC Inspector General or an independent external auditor, as determined 

by the Inspector General, to audit EAC’s financial statements. Under a contract 

monitored by the Office of Inspector General (OIG), Leon Snead & Co. P.C., an 

independent public accounting firm, performed an audit of EAC’s Fiscal Years 

2010 and 2009 financial statements. The contract required that the audit be 

performed in accordance with the Government Auditing Standards issued by the 

Comptroller General of the United States, and Bulletin 07-04, Audit Requirements 

of Federal Financial Statements, as amended, issued by the United States Office of 

Management and Budget. 

Leon Snead & Co. P.C. issued an unqualified opinion on EAC’s financial 

statements. In its report on test of compliance with laws and regulations, Leon 

Snead & Co. P.C., reported one instance of material noncompliance with laws and 

regulations that is required to be reported under Government Auditing Standards 

and OMB Bulletin 07-04 (as amended). The audit did not identify any deficiencies 

in internal control that may be considered material weaknesses, as defined by 

auditing standards generally accepted in the United States of America. 

EAC’s management response, dated November 5, 2010, follows Leon Snead & Co. 

P.C.’s report. 

To fulfill our responsibilities under the CFO Act of 1990, as amended, and other 

related financial management requirements, the OIG: 

Reviewed Leon Snead & Co. P.C.’s approach and planning of the audit; 

Election Assistance Commission 33 II.B INSPECTOR GENERAL'S ASSESSMENT
	 

	 

	 

	 

	 

Evaluated the qualification and independence of the auditors; 

Monitored the progress of the audit at key points; 

Coordinated periodic meetings with EAC management to discuss 

progress, findings, and recommendations; 

Reviewed Leon Snead & Co. P.C.’s audit report to ensure compliance 

with Government Auditing Standards and Office of Management and 

Budget Bulletin No. 07-04, as amended; and 

Coordinated issuance of the audit report. 

Leon Snead & Co. P.C. is responsible for the attached auditor’s report dated 

November 9, 2010, and the conclusions expressed in the report. We do not 

express any opinion on EAC’s financial statements or conclusions on the 

effectiveness of internal control, compliance with laws and regulations. 

The Office of Inspector General appreciates the courtesies and cooperation EAC 

extended to Leon Snead & Co. P.C. and the OIG staff during the audit. If you or 

your staff has any questions, please contact me at (202) 566-3125. 

Report Distribution 

The Inspector General Act of 1978, as amended, requires semiannual reporting to 

Congress on all reports issued, actions taken to implement recommendations, and 

recommendations that have not been implemented. Therefore, we will include the 

information in the attachment in our next semiannual report to Congress. The 

distribution of this report is not restricted, and copies are available for public 

inspection. 

Attachment 

Cc: Executive Director 

Election Assistance Commission 34
U. S. ELECTION ASSISTANCE COMMISSION
 

Audit of Financial Statements
 

As of and for the Years Ended
 

September 30, 2010 and 2009
 

Submitted By
 

Leon Snead & Company, P.C.

Certified Public Accountants & Management Consultants 

Election Assistance Commission 35 II.C. INDEPENDENT AUDITORS' REPORT
 

 

 

 

...................................................................................................

.............................................................................

......................................................................

TABLE OF CONTENTS
 

Page 

Independent Auditor’s Report 1

Attachment 1, Status of Prior Year Findings 7

Attachment 2, Agency Response to Draft Report 9

i 

Election Assistance Commission 36
__________________________________________________________________ __ LEON SNEAD 

&COMPANY,P.C. Certified Public Accountants 

& Management Consultants 

416 Hungerford Drive, Suite 400 

Rockville, Maryland 20850 

301-738-8190 

fax 301-738-8210 

leonsnead.companypc@erols.com 

The Commission and Inspector General 

u.s. Election Assistance Commission 

Independent Auditor's Report 

We have audited the accompanying balance sheets of the u.s. Election Assistance 

Commission (EAC), as of September 30,2010, and 2009, and the related statements of 

net cost, changes in net position, and budgetary resources (financial statements) for the 

years then ended. The objective of our audits was to express an opinion on the fair 

presentation of those financial statements. In connection with our audit, we also 

considered the EAC's internal control over financial reporting and tested the EAC's 

compliance with certain provisions of applicable laws and regulations that could have a 

direct and material effect on its financial statements. 

SUMMARY 

As stated in our opinion on the financial statements, we found that the EAC's financial 

statements as of and for the years ended September 30, 2010 and 2009, are presented 

fairly, in all material respects, in conformity with accounting principles generally 

accepted in the United States of America. 

Our consideration of internal control would not necessarily disclose all deficiencies in 

internal control over financial reporting that might be material weaknesses under 

standards issued by the American Institute of Certified Public Accountants. However, 

our testing of internal control identified no material weaknesses in financial reporting. 

The results of our tests of compliance with certain provisions of laws and regulations 

disclosed one material instance of noncompliance that is required to be reported herein 

under Government Auditing Standards, issued by the Comptroller General of the United 

States and Office of Management and Budget (OMB) Bulletin No. 07-04, Audit 

Requirements/or Federal Financial Statements (as amended). 

The following sections discuss in more detail our opinion on the EAC's financial 

statements, our consideration of the EAC's internal control over financial reporting, our 

tests of the EAC' s compliance with certain provisions of applicable laws and regulations, 

and management's and our responsibilities. 

Election Assistance Commission 37

LEON SNEAD Certified Public Accountants &COMPANY,P.C. __________________________________________________________________ & Ma nagement Cons ultants __ 

416 Hungerford Drive, Suite 400 

Rockville, Maryland 20850 

301-738-8190 

fax 301-738-8210 

leonsnead.companypc@erols.com 

The Commission and Inspector General 

U.S. Election Assistance Commission 

Independent Auditor's Report 

We have audited the accompanying balance sheets of the U.S. Election Assistance 

Commission (EAC), as of September 30, 2010, and 2009, and the related statements of 

net cost, changes in net position, and budgetary resources (financial statements) for the 

years then ended. The objective of our audits was to express an opinion on the fair 

presentation of those financial statements. In connection with our audit, we also 

considered the EAC's internal control over financial reporting and tested the EAC's 

compliance with certain provisions of applicable laws and regulations that could have a 

direct and material effect on its financial statements. 

SUMMARY 

As stated in our opinion on the financial statements, we found that the EAC's financial 

statements as of and for the years ended September 30, 2010 and 2009, are presented 

fairly, in all material respects, in conformity with accounting principles generally 

accepted in the United States of America. 

Our consideration of internal control would not necessarily disclose all deficiencies in 

internal control over financial reporting that might be material weaknesses under 

standards issued by the American Institute of Certified Public Accountants. However, 

our testing of internal control identified no material weaknesses in financial reporting. 

The results of our tests of compliance with certain provisions of laws and regulations 

disclosed one material instance of noncompliance that is required to be reported herein 

under Government Auditing Standards, issued by the Comptroller General of the United 

States and Office of Management and Budget (OMB) Bulletin No. 07-04, Audit 

Requirements/or Federal Financial Statements (as amended). 

The following sections discuss in more detail our opinion on the EAC's financial 

statements, our consideration of the EAC's internal control over financial reporting, our 

tests of the EAC' s compliance with certain provisions of applicable laws and regulations, 

and management's and our responsibilities. 

LEON SNEAD Certifred Public Accountants &COMPANY, P.C. ________________________________________________________________ & Ma nagement Consultants __ 

416 Hungerford Drive, Suite 400 

Rockville, Maryland 20850 

301-738-8190 

fax: 301-738-8210 

leonsnead.companypc@erols.com 

The Commission and Inspector General 

U.S. Election Assistance Commission 

Independent Auditor's Report 

We have audited the accompanying balance sheets of the U.S. Election Assistance 

Commission (EAC), as of September 30, 2010, and 2009, and the related statements of 

net cost, changes in net position, and budgetary resources (financial statements) for the 

years then ended. The objective of our audits was to express an opinion on the fair 

presentation of those financial statements. In connection with our audit, we also 

considered the EAC's internal control over financial reporting and tested the EAC's 

compliance with certain provisions of applicable laws and regulations that could have a 

direct and material effect on its financial statements. 

SUMMARY 

As stated in our opinion on the financial statements, we found that the EAC's financial 

statements as of and for the years ended September 30, 2010 and 2009, are presented 

fairly, in all material respects, in conformity with accounting principles generally 

accepted in the United States of America. 

Our consideration of internal control would not necessarily disclose all deficiencies in 

internal control over financial reporting that might be material weaknesses under 

standards issued by the American Institute of Certified Public Accountants. However, 

our testing of internal control identified no material weaknesses in financial reporting. 

The results of our tests of compliance with certain provisions of laws and regulations 

disclosed one material instance of noncompliance that is required to be reported herein 

under Government Auditing Standards, issued by the Comptroller General of the United 

States and Office of Management and Budget (OMB) Bulletin No. 07-04, Audit 

Requirements/or Federal Financial Statements (as amended). 

The following sections discuss in more detail our opinion on the EAC's financial 

statements, our consideration of the EAC's internal control over financial reporting, our 

tests of the EAC' s compliance with certain provisions of applicable laws and regulations, 

and management's and our responsibilities. 
 

 

 

 

Leon Snead & Company, P.C. 2 

OPINION ON THE FINANCIAL STATEMENTS 

We have audited the accompanying balance sheets of the EAC as of September 30, 2010 

and 2009, and the related statements of net cost, changes in net position, and budgetary 

resources for the years then ended. 

In our opinion, the financial statements referred to above present fairly, in all material 

respects, the financial position, net cost, changes in net position, and budgetary resources 

of the EAC as of and for the years ended September 30, 2010 and 2009, in conformity 

with accounting principles generally accepted in the United States of America. 

The information in the Management’s Discussion and Analysis section is not a required 

part of the basic financial statements but is supplementary information required by 

accounting principles generally accepted in the United States of America or OMB 

Circular A-136, Financial Reporting Requirements. We have applied certain limited 

procedures, which consisted principally of inquiries of EAC management regarding the 

methods of measurement and presentation of the supplementary information and analysis 

of the information for consistency with the financial statements. However, we did not 

audit the information and express no opinion on it. The Annual Financial Report, except 

for Management’s Discussion and Analysis, is presented for the purposes of additional 

analysis and is not a required part of the basic financial statements. Such information has 

not been subjected to the auditing procedures applied in the audit of the basic financial 

statements and, accordingly, we express no opinion on it. 

We inquired of EAC’s management as to its methods for preparing Required 

Supplementary Stewardship Information (RSSI), and reviewed this information for 

consistency with the financial statements. The RSSI is not a required part of the basic 

financial statements and provides investments in nonfederal property. However, our 

audit was not designed to express an opinion and, accordingly, we do not express an 

opinion on EAC’s RSSI. 

INTERNAL CONTROL OVER FINANCIAL REPORTING 

In planning and performing our audit of the financial statements of the EAC as of and for 

the years ended September 30, 2010 and 2009, in accordance with auditing standards 

generally accepted in the Unites States of America, we considered the EAC’s internal 

control over financial reporting (internal control) as a basis for designing our auditing 

procedures for the purpose of expressing our opinion on the financial statements, but not 

for the purpose of expressing an opinion on the effectiveness of the EAC’s internal 

control. Accordingly, we do not express an opinion on the effectiveness of the EAC’s 

internal control. 

Because of inherent limitations in internal controls, including the possibility of 

management override of controls, misstatements, losses, or noncompliance may 

nevertheless occur and not be detected. A control deficiency exists when the design or 

operation of a control does not allow management or employees, in the normal course of 

Election Assistance Commission 38
 

 

 

 

 

 

 

 

 

 

 

 

 

Leon Snead & Company, P.C. 3 

performing their assigned functions, to prevent or detect misstatements on a timely basis. 

A material weakness is a deficiency, or combination of significant deficiencies, in 

internal control, such that there is a reasonable possibility that a material misstatement of 

the financial statements will not be prevented or detected and corrected on a timely basis. 

A significant deficiency is a control deficiency, or combination of control deficiencies, 

that is less severe than a material weakness, yet important enough to merit attention by 

those charged with governance of the EAC. 

Our consideration of internal control was for the limited purpose described in the first 

paragraph in this section of the report and would not necessarily identify all deficiencies 

in internal control that might be deficiencies, significant deficiencies or material 

weaknesses. We did not identify any deficiencies in internal control that we consider to 

be material weaknesses, as defined above. 

A summary of the status of prior year findings is included as Attachment 1. 

We noted other control deficiencies over financial reporting and its operation that we 

have reported to the management of the EAC and those charged with governance in a 

separate letter dated November 9, 2010. 

COMPLIANCE WITH LAWS AND REGULATIONS 

The results of our tests of compliance with certain provisions of laws and regulations, as 

described in the Responsibilities section of this report, disclosed one instance of material 

noncompliance with laws and regulations, discussed in the following paragraphs, that is 

required to be reported under Government Auditing Standards and OMB Bulletin 07-04 

(as amended). 

During our 2009 financial statement audit, we became aware as part of our follow-up on 

prior year’s findings and recommendations that EAC may have violated the purpose 

statute, 31 U.S.C. § 1301(a), when it obligated certain grant programs to its fiscal year 

2004 requirements payments appropriation. 

For fiscal year 2004, Congress made two appropriations to EAC. Consolidated 

Appropriations Act, 2004, PL 108-199, 118 Stat. 3 (Jan. 23, 2004). Congress provided 

$1.2 million for salaries and expenses "to carry out the Help America Vote Act of 2002" 

and a total of $1.5 billion "to carry out a program of requirements payments to States". 

In the accompanying conference report, the conferees stated: "The conferees agree to 

provide $500,000,000 for Election Reform Programs...Within the amount provided; the 

conferees also agree to provide $750,000 for the Help America Vote Foundation, 

$750,000 for the Help America Vote College Program, and $200,000 for the National 

Student/Parent Mock Election ...." 

EAC apportioned and expended about $825,000 for the three grant programs as set out in 

the conference report. When we discussed this matter with EAC officials, we were 

Election Assistance Commission 39
 

 

 

 

 

 

 

 

 

 

Leon Snead & Company, P.C. 4 

advised that the agency followed the language in a conference report, and the 

apportionment made by the Office of Management and Budget (OMB). 

To make a final determination as to whether the EAC violated the above referenced 

legislation, the EAC Inspector General (IG) requested a decision regarding EAC's 

obligation of certain grant payments made under the Help America Vote Act of 2002 

(HAVA) from the Government Accountability Office (GAO). At issue was whether 

EAC's properly used its requirements payments appropriation for poll worker and mock 

election grants the agency made in 2004. 

In a decision dated April 28, 2010, the GAO concluded that EAC violated the purpose 

statute and should have charged its obligations for poll worker and mock election grants 

to its salaries and expenses appropriation, which is available "for necessary expenses to 

carry out HAVA." GAO further noted that EAC should adjust its accounts accordingly, 

and if EAC, after adjusting its accounts, has insufficient funds available, EAC should 

report an Antideficiency Act violation under 31 U.S.C. § 1351 and recover the grant 

funds. 

EAC has established controls to ensure that this situation does not recur, and has reported 

this violation in accordance with the Antideficiency Act. Therefore, we are making no 

recommendations. 

Under OMB Bulletin 07-04, auditors are generally required to report whether the 

agency’s financial management systems substantially comply with the Federal financial 

management systems requirements, applicable Federal accounting standards, and the 

United States Government Standard General Ledger at the transaction level specified in 

the Federal Financial Management Improvement Act (FFMIA). The Accountability of 

Tax Dollars Act, which requires the EAC to prepare and submit audited financial 

statements to Congress and the Director of OMB, did not extend to EAC the requirement 

to comply with FFMIA. 

RESPONSIBILITIES 

Management Responsibilities 

Management of the EAC is responsible for: (1) preparing the financial statements in 

conformity with generally accepted accounting principles; (2) establishing, maintaining, 

and assessing internal control to provide reasonable assurance that the broad control 

objectives of the Federal Managers Financial Integrity Act (FMFIA) are met; and (3) 

complying with applicable laws and regulations. In fulfilling this responsibility, 

estimates and judgments by management are required to assess the expected benefits and 

related costs of internal control policies. 

Election Assistance Commission 40
 

 

 

Leon Snead & Company, P.C. 5 

Auditor Responsibilities 

Our responsibility is to express an opinion on the financial statements based on our audit. 

We conducted our audit in accordance with auditing standards generally accepted in the 

United States of America; the standards applicable to financial audits contained in 

Government Auditing Standards, issued by the Comptroller General of the United States; 

and OMB Bulletin 07-04, Audit Requirements for Federal Financial Statements (as 

amended). Those standards require that we plan and perform the audit to obtain 

reasonable assurance about whether the financial statements are free of material 

misstatement. 

An audit includes (1) examining, on a test basis, evidence supporting the amounts and 

disclosures in the financial statements; (2) assessing the accounting principles used and 

significant estimates made by management, as well as evaluating the overall financial 

statement presentation. We believe that our audit provides a reasonable basis for our 

opinion. 

In planning and performing our audit, we considered the EAC’s internal control over 

financial reporting by obtaining an understanding of the agency’s internal control, 

determining whether internal controls had been placed in operation, assessing control 

risk, and performing tests of controls in order to determine our auditing procedures for 

the purpose of expressing our opinion on the financial statements. 

We limited our internal control testing to those controls necessary to achieve the 

objectives described in OMB Bulletin 07-04 (as amended) and Government Auditing 

Standards. We did not test all internal controls relevant to operating objectives as 

broadly defined by FMFIA. Our procedures were not designed to provide an opinion on 

internal control over financial reporting. Consequently, we do not express an opinion 

thereon. 

As required by OMB Bulletin 07-04 (as amended), with respect to internal control related 

to performance measures determined to be key and reported in Management’s Discussion 

and Analysis, we made inquiries of management concerning the methods of preparing the 

information, including whether it was measured and presented within prescribed 

guidelines; changes in the methods of measurement or presentation from those used in 

the prior period(s) and the reasons for any such changes; and significant assumptions or 

interpretations underlying the measurement or presentation. We also evaluated the 

consistency of Management’s Discussion and Analysis with management’s responses to 

the foregoing inquiries, audited financial statements, and other audit evidence obtained 

during the examination of the financial statements. Our procedures were not designed to 

provide assurance on internal control over reported performance measures, and, 

accordingly, we do not provide an opinion thereon. 

We inquired of EAC’s management as to its methods for preparing Required 

Supplementary Stewardship Information (RSSI), and reviewed this information for 

consistency with the financial statements. The RSSI is not a required part of the basic 

Election Assistance Commission 41
~~~"cOYVLfJI1P7IfJC 

Leon Snead & Company, P. C. 6 

financial statements. However, our audit was not designed to express an opinion and, 

accordingly, we do not express an opinion on EAC's RSSI. 

As part of obtaining reasonable assurance about whether the agency's financial 

statements are free of material misstatement, we performed tests of its compliance with 

certain provisions of laws, regulations, and significant provisions of contracts, 

noncompliance with which could have a direct and material effect on the determination 

of financial statement amounts, and certain other laws and regulations specified in OMB 

Bulletin 07-04 (as amended). We limited our tests of compliance to these provisions and 

we did not test compliance with all laws and regulations applicable to the EAC. 

Providing an opinion on compliance with certain provisions of laws, regulations, and 

significant contract provisions was not an objective of our audit and, accordingly, we do 

not express such an opinion. 

AGENCY COMMENTS 

EAC officials advised in a memorandum, dated November 5, 2010, that the auditors did 

not report any material weaknesses or significant deficiencies in internal controls, and 

one material instance of noncompliance with laws and regulations. EAC officials noted 

that they had taken actions to report this deficiency prior to the end of the fiscal year. 

DISTRIBUTION 

This report is intended solely for the information and use of the management, the 

Commission, the Office of Inspector General, and others within the EAC, OMB, and 

Congress, and is not intended to be and should not be used by anyone other than these 

specified parties. 

Leon Snead & Company, P.C. 

November 9, 2010 

Election Assistance Commission 42
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 1 

Status of Prior Year Findings 

Issue Prior Year Condition Status as of September 30, 2010 

1. 

Material Weakness: Accounting errors resulting from 

accounting processes that did not meet generally 

accepted accounting principles (GAAP) and material 

weaknesses in controls over financial reporting 

impacted EAC’s 2008 financial statements and 

continued in the 2009 interim financial statements. 

EAC had corrected these issues by the end of 

the 2009 audit. Closed. 

2. 

Material Weakness: EAC did not follow GAAP when 

accounting for advances made to grantees. EAC 

accounted for all funds disbursed to grantees as an 

expense in the year that the funds were disbursed. 

However, GAAP requires that cash outlays made by a 

federal entity to its employees, contractors, grantees, or 

others to cover a part or all of the recipients’ anticipated 

expenses shall be recorded as an advance. These 

advances totaled approximately $34 million as of the 

end of fiscal year 2009. 

EAC had corrected these issues by the end of 

the 2009 audit. Closed. 

3. 

EAC’s 2009 interim Statement of Net Cost (SNC) was 

neither presented in accordance with the requirements of 

OMB Circular A-136, nor met the cost accounting 

standards of SFFAS No. 4. As a result of these errors, 

the agency’s interim SNC’s were misstated. 

EAC had corrected these issues by the end of 

the 2009 audit. Closed. 

4. 

Account receivables totaling approximately $330,000, 

and representing amounts grantees owed EAC for grant 

funds that were not expended and should be returned to 

the Federal government were not recorded on EAC’s 

financial records. EAC officials have corrected this 

problem and have recorded these amounts in its 2009 

year-end financial statements. 

EAC had corrected these issues by the end of 

the 2009 audit. Closed. 

5. 

Capital assets were not properly accounted for by EAC 

until the agency prepared its June 30, 2009 financial 

statements. EAC completed its review of prior year 

accounting records, and was able to record these assets 

in its 2009 year-end financial statements in accordance 

with GAAP. 

Corrected by final statements 

No issues noted in 2010 

6 

Journal vouchers processed by EAC’s service provider 

to EAC’s general ledger were not sufficiently supported. 

EAC officials had not established controls to ensure that 

financial management personnel reviewed and approved 

the journal vouchers proposed by EAC’s service 

provider. As a result, there was reduced assurance that 

errors that may impact financial reports would be 

detected. 

Corrected by final statements 

No issues noted in 2010 

Leon Snead & Company, P.C. 7 

Election Assistance Commission 43
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leon Snead & Company, P.C. 8 

Attachment 1 

7. 

EAC has begun to take actions to address the IT security 

deficiencies that were reported in the 2008 FISMA 

report. While many corrective actions are underway or 

planned, EAC has not fully corrected all weaknesses 

that impact its IT security program. We attributed this 

condition, in part, to the absence of management 

officials with IT security program expertise. As a result, 

EAC is not in full compliance with the requirements of 

the Financial Information Systems Management Act 

(FISMA), which could impact EAC’s financial 

management operations. 

EAC had corrected these issues by the end of 

the 2009 audit. Resolved. 

8. 

EAC had not established a policy for determining an 

allowance for estimated uncollectible amounts for its 

accounts receivables. Although the footnotes disclosed 

that the EAC would use the direct write off method, this 

is not an acceptable method of accounting for losses due 

to uncollectible amounts. In addition, we identified an 

account totaling approximately $15,000 that was shown 

in EAC records as a 2006 “loan” to an EAC employee. 

EAC had corrected these issues by the end of 

the 2009 audit. Closed. 

9. 

Subsidiary records were not maintained by EAC for its 

capitalized property. 

EAC had corrected these issues by the end of 

the 2009 audit. Closed. 

10. 

Material Noncompliance : EAC did not have adequate 

funds control to ensure compliance with Antideficiency 

Act and purpose statute. 

EAC issued required notifications in 2010 

to address Antideficiency Act reporting 

requirements. 

Election Assistance Commission 44
~~"-~ 

Attachment 2

U.S. ELECTION ASSISTANCE COMMISSION 

1201 New York Ave. NW - Suite 300 

Washington, DC 20005 

November 5, 2010 

Memorandum 

To: 	 Arnie Garza, 

Assistance Inspector General for Audits 

From: Donetta Davidson 

Chair, U.S. Election Assistance &~mission 

Subject: Election Assistance Commission Response to Independent Audit 

Report on the U.S. Election Assistance Commission's Financial Statements 

for Fiscal Year 2010 (Assignment No. I-PA-EAC-01-10) 

During Fiscal Year 2010, the Election Assistance Commission (EAC) took 

action to address the problems that impacted its Fiscal Year 2009 financial 

management reports. This action included resolving all of its prior year 

findings, continuing sound financial management practices and obtaining an 

unqualified audit opinion on the Fiscal Year 2010 financial statements. 

The Independent Auditors Report, submitted by Leon Snead & Company, Inc. 

did not identify any findings related to Internal Control Over Financial 

Reporting and one instance of material noncompliance with laws and 

regulations. However, since EAC had reported this issue in accordance with 

the Antideficiency Act prior to the close of the fiscal year, the auditors did not 

make any overall recommendations related to this item. 

Overall, EAC agrees with the findings in the report. 

9

Election Assistance Commission 45

U.S. ELECTION ASSISTANCE COMMISSION 

1201 New York Ave. NW - Suite 300 

Washington, DC 20005 

November 5, 2010 

Memorandum 

To: Arnie Garza, 

Assistance Inspector General for Audits 

From: Donetta Davidson ~\~,,-b~ Chair, U.S. Election Assistance &~mission 

Subject: Election Assistance Commission Response to Independent Audit 

Report on the U.S. Election Assistance Commission's Financial Statements 

for Fiscal Year 2010 (Assignment No. I-PA-EAC-01-10) 

During Fiscal Year 2010, the Election Assistance Commission (EAC) took 

action to address the problems that impacted its Fiscal Year 2009 financial 

management reports. This action included resolving all of its prior year 

findings, continuing sound financial management practices and obtaining an 

unqualified audit opinion on the Fiscal Year 2010 financial statements. 

The Independent Auditors Report, submitted by Leon Snead & Company, Inc. 

did not identify any findings related to Internal Control Over Financial 

Reporting and one instance of material noncompliance with laws and 

regulations. However, since EAC had reported this issue in accordance with 

the Antideficiency Act prior to the close of the fiscal year, the auditors did not 

make any overall recommendations related to this item. 

Overall, EAC agrees with the findings in the report. 

U.S. ELECTION ASSISTANCE COMMISSION 

1201 New York Ave. NW - Suite 300 

Washington, DC 20005 

November 5, 2010 

Memorandum 

To: Arnie Garza, 

Assistance Inspector General for Audits 

From: Donetta Davidson ~\\'#J-.,jff~ Chair, U.S. Election Assistance &~mission 

Subject: Election Assistance Commission Response to Independent Audit 

Report on the U.S. Election Assistance Commission's Financial Statements 

for Fiscal Year 2010 (Assignment No. I-PA-EAC-01-10) 

During Fiscal Year 2010, the Election Assistance Commission (EAC) took 

action to address the problems that impacted its Fiscal Year 2009 financial 

management reports. This action included resolving all of its prior year 

findings, continuing sound financial management practices and obtaining an 

unqualified audit opinion on the Fiscal Year 2010 financial statements. 

The Independent Auditors Report, submitted by Leon Snead & Company, Inc. 

did not identify any findings related to Internal Control Over Financial 

Reporting and one instance of material noncompliance with laws and 

regulations. However, since EAC had reported this issue in accordance with 

the Antideficiency Act prior to the close of the fiscal year, the auditors did not 

make any overall recommendations related to this item. 

Overall, EAC agrees with the findings in the report. 
Election Assistance Commission 

46

II.D. FINANCIAL STATEMENTS 

The Balance Sheet presents information as of September 30, 2010, amounts of future economic 

benefits owned or managed by EAC (i.e., assets), amounts owed by EAC (i.e., liabilities), and 

amounts that comprise the difference (i.e., net position). 

ELECTION ASSISTANCE COMMISSION 

BALANCE SHEET 

As of September 30, 2010 and 2009 (In Dollars) 

Assets 2010 2009 

 Intragovernmental: 

 Fund balance with Treasury (Note 2) $ 139,699,928 $ 157,884,882 

 Advances and Prepayments (Note 4) 2,263,002 2,097,844 

 Total intragovernmental assets 141,962,930 159,982,726 

 With public: 

 Accounts receivable, net (Note 3) 228,374 349,146 

 Advances and prepayments (Note 4) 1,112,686 34,692,298 

 Total assets with public 1,341,060 35,041,444 

 General property and equipment, net (Note 5) 1,172,955 269,120 

 Total assets $ 144,476,945 $ 195,293,290 

 

Liabilities 

 Intragovernmental: 

 Accounts payable (Note 6) $ 306,504 $ 348,958 

 

Employer contribution and payroll 

taxes payable (Note 6) 73,289 48,157 

 Total intragovernmental 379,793 397,115 

 With the public: 

 Accounts payable (Note 6) 781,372 7,983,052 

 Accrued payroll and benefits (Note 6) 307,639 241,878 

 Unfunded leave (Note 6) 327,803 261,880 

 Total liabilities 1,796,607 8,883,925 

 

Net position 

 Unexpended appropriations 141,834,143 186,401,600 

 Cumulative results of operations 846,195 7,765 

 Total net position 142,680,338 186,409,365 

 

 Total liabilities and net position $ 144,476,945 $195,293,290 

The accompanying notes are an integral part of these financial statements. 
Election Assistance Commission 

47

ELECTION ASSISTANCE COMMISSION 

STATEMENT OF NET COST 

For The Years Ended September 30, 2010 and 2009 (In Dollars) 

 2010 2009 

Program Costs: 

Communications $ 1,797,916 $ 1,994,125 

Fund and Oversee 122,834,439 113,042,449 

Research, Policy and Programs 2,845,652 2,972,123 

 Testing and Certification 3,531,576 3,578,173 

Net cost of operations (Note 8) $ 131,009,583 $121,586,870 

The accompanying notes are an integral part of these financial statements. 
Election Assistance Commission 

48

ELECTION ASSISTANCE COMMISSION 

STATEMENT OF CHANGES IN NET POSITION 

For The Years Ended September 30, 2010 and 2009 (In Dollars) 

 

 2010 2009 

Cumulative results of operations: 

 Beginning balance $ 7,765 $ 292,760

 Beginning balance, as adjusted 7,765 292,760

 

Budgetary financing sources: 

 Appropriations used 131,610,830 121,087,642 

 

Other financing sources (non-exchange): 

 Imputed financing from costs absorbed from others 237,183 214,233 

 

Total financing sources: 131,848,013 121,301,875 

 

 Net cost of operations (131,009,583) (121,586,870)

 Net change 838,430 (284,995) 

 

Cumulative results of operations: 846,195 7,765 

Unexpended appropriations: 

 Beginning balance 186,401,600 187,595,489 

 Beginning balance, as adjusted 186,401,600 187,595,489

 

Budgetary financing sources: 

 Appropriations received 92,959.000 123,959,000 

 

 Appropriations transferred in/out (+/-) (3,500,000) (4,000,000)

 Other adjustments (2,415,627) (65,247)

 Appropriations used (131,610,830) (121,087,642)

Total budgetary financing sources (44,567,457) (1,193,889)

Total unexpended appropriations 141,834,143 186,401,600 

 

Net position $ 142,680,338 $ 186,409,365 

The accompanying notes are an integral part of these financial statements. 
Election Assistance Commission 

49

ELECTION ASSISTANCE COMMISSION 

STATEMENT OF BUDGETARY RESOURCES 

For The Years Ended September 30, 2010 and 2009 (In Dollars) 

 2010 2009 

Budgetary resources: 

 Unobligated balance, brought forward (Note 11) $ 13,998,900 $ 7,561,952 

 Recoveries of prior year obligations (Note 11) 1,181,062 662,985 

 Budget authority: 

Appropriations received 92,959,000 123,959,000 

Spending authority from offsetting 

collections: 

 Collected (Note 11) 1,374,204 837,849 

 Nonexpenditure transfers, net, anticipated and actual (3,500,000) (4,000,000)

 Permanently not available (2,415,627) (65,247) 

Total budgetary resources (Note 9) $ 103,597,539 $ 128,956,539 

 

Status of budgetary resources: 

 Obligations incurred: (Note 9 & Note 11) $ 86,303,814 $ 114,957,639 

 Unobligated balance - apportioned 

 

12,046,897 7,452,047 

 

 Unobligated balance not available (Note 11) 5,246,828 6,546,853 

Total status of budgetary resources (Note 9) $ 103,597,539 $ 128,956,539 

 

Change in obligated balance: 

 Obligated balance, net 

 Unpaid obligations, brought forward (Note 11) $ 143,885,983 $ 125,904,580 

 Obligations incurred, net 86,303,814 114,957,639

 Less: gross outlays (Note 11) (106,602,531) (96,313,253)

Less: recoveries of prior year unpaid obligations, 

actual (1,181,062) (662,985)

Total, unpaid obligated balance, end of period forward 

(Note 12) $ 122,406,204 $ 143,885,981 

 

Net outlays: 

 Gross outlays $ 106,602,531 $ 96,313,253 

 Less: offsetting collections (1,374,204) (837,849)

Net outlays (Note 9) $ 105,228,327 $ 95,475,404

The accompanying notes are an integral part of these financial statements. 
Election Assistance Commission 

50

II.E NOTES TO FINANCIAL STATEMENTS 

Note 1 – Summary of Significant Accounting Policies 

Reporting Entity 

The U.S. Election Assistance Commission (EAC) is an independent, bipartisan commission 

charged with developing guidance to meet the Help America Vote Act (HAVA) requirements, 

adopting voluntary voting system guidelines, and serving as a national clearinghouse of 

information about election administration. EAC also accredits voting system testing 

laboratories and certifies voting systems, as well as audits the use of HAVA funds. Other 

responsibilities include distributing and monitoring HAVA funds provided to States and other 

grantees, and maintaining the national mail voter registration form developed in accordance 

with the National Voter Registration Act of 1993. 

HAVA established the Standards Board and the Board of Advisors to advise EAC. The law 

also established the Technical Guidelines Development Committee to assist EAC in the 

development of voluntary voting system guidelines. 

Four EAC Commissioners are appointed by the President and confirmed by the United States 

Senate. EAC is required to submit an annual report to Congress as well as testify 

periodically about HAVA progress and related issues. The Commission also holds public 

meetings and hearings to inform the public about its progress and activities. 

Basis of Accounting and Presentation 

As required by the Accountability of Tax Dollars Act of 2002 (ATDA), the accompanying 

financial statements present the financial position, net cost of operations, changes in net 

position, and budgetary resources of the EAC. While these financial statements have been 

prepared from the books and records of the EAC in accordance with United States generally 

accepted accounting principles (GAAP) and in accordance with the form and content for 

entity financial statements specified by the Office of Management and Budget (OMB) in 

Circular A-136, as revised, Financial Reporting Requirements, as well as the accounting 

policies of EAC, the statements may differ from other financial reports submitted pursuant to 

OMB directives for the purpose of monitoring and controlling the use of EAC’s budgetary 

resources. GAAP for Federal entities are the standards prescribed by the Federal Accounting 

Standards Advisory Board (FASAB), which is the official body for setting the accounting 

standards of the Federal government. 

These financial statements reflect both accrual and budgetary accounting transactions. 

Under the accrual method of accounting, revenues are recognized when earned and 

expenses are recognized when a liability is incurred, without regard to receipt or payment of 

cash. Budgetary accounting is designed to recognize the obligation of funds according to 

legal requirements. Budgetary accounting is essential for compliance with legal constraints 

and controls over the use of Federal funds. 
Election Assistance Commission 

51

Throughout these financial statements, assets, liabilities, revenues, and costs have been 

classified according to the type of entity with which the transactions are associated. 

Intragovernmental assets and liabilities are those from or to other Federal entities. 

Intragovernmental earned revenues are collections or accruals of revenue from other 

Federal entities, and intragovernmental costs are payments or accruals to other Federal 

entities. These statements should be read with the understanding that they are for a 

component of the U.S. Government, a sovereign entity. 

Assets 

Assets that an entity is authorized to use in its operations are termed entity assets, while 

assets that are held by an entity and are not available for the entity’s use are termed nonentity assets. All of the EAC’s assets are entity assets and are available to carry out the 

mission of EAC, as appropriated by Congress. 

Fund Balance with Treasury 

EAC does not maintain cash in commercial bank accounts. The U.S. Treasury processes 

cash receipts and disbursements. Funds with the U.S. Treasury consist of appropriated 

funds. These funds are available to pay current liabilities and finance authorized purchase 

commitments. 

Accounts Receivable 

EAC’s accounts receivable represents claims from associates and amounts due from the 

States and grant recipients. The amounts due from current and separated employees result 

from payroll adjustments and/or court-ordered actions. The amounts from the States and 

grant recipients result from audits and examinations performed by EAC on the proper use of 

funds under the Help America Vote Act of 2002, Sections 101, 102 and 251 payments, and 

Section 102 funds unspent by the States that did not file the extension waiver. 

Advances and Prepayments 

 

On occasion, EAC prepays amounts in anticipation of receiving future benefits. Although a 

payment has been made, an expense is not recorded until goods have been received or 

services have been performed. EAC has prepayments and advances with nongovernmental, as well as governmental vendors. 

Total prepayments and advances to non-governmental entities as of September 30, 2010 

and 2009 were $1,112,686 and $34,692,298, respectively. These include primarily HAVA 

Section 102 disbursements unspent by the States as of September 30, 2010 and 2009. 

The prepayments and advances to governmental entities were $2,263,002 and $2,097,844 

as of September 30, 2010 and 2009. These included deposit accounts with the U.S. 

Department of Interior Acquisition Services Directorate to provide acquisition support 

services to EAC. 
Election Assistance Commission 

52

General Property and Equipment 

General property and equipment (PP&E) is reported at acquisition cost. 

The capitalization threshold is established at $10,000 for assets with a useful life of two or 

more years. The bulk purchase policy requires that all items will be capitalized when the 

individual useful lives are at least two years and have an aggregate value of $100,000 or 

more. 

Acquisitions of PP&E that do not meet the capitalization criteria are recorded as operating 

expenses. General PP&E consists of items that are used by EAC to support its mission. 

Maintenance, repairs and minor renovations are expensed as incurred. Expenditures that 

materially increase values, change capacities or extend useful lives are capitalized. 

The headquarters building in which EAC operates is leased through the General Services 

Administration (GSA) under an occupancy agreement, which manages the lease agreement 

between the Federal government and the commercial entity. EAC is billed on a monthly basis 

by GSA for the leased premises. The cost of the leasehold improvements to the 

headquarters building has been capitalized. Any costs of leasehold improvements financed 

with funds appropriated to EAC are capitalized if the total cost exceeds $25,000. Any 

construction costs are accumulated as “construction in-progress” until completion and then 

transferred and capitalized as “leasehold improvements” over seven years or the remainder 

of the lease, whichever is less. 

Currently, EAC has no internal use software. In future years, any internal use software 

development and acquisition costs of $25,000 will be capitalized as software development 

in progress until the development stage is completed and the software is successfully 

tested. At acceptance, software development-in-progress costs will be reclassified as 

internal use software costs and amortized using the straight-line method over an estimated 

useful life of five years. Purchased commercial software that does not meet the 

capitalization criteria will be expensed. Enhancements which do not add significant new 

capability or functionality will be expensed. 

Liabilities 

 

Liabilities represent amounts that are likely to be paid by the EAC as the result of 

transactions or events that have already occurred; no liabilities are paid by EAC without an 

appropriation. Intragovernmental liabilities arise from transactions with other Federal 

entities. Liabilities classified as not covered by budgetary resources are liabilities for which 

appropriations have not been enacted (e.g., annual leave benefits and actuarial liability 

under the Federal Employees Compensation Act). 

Accounts Payable 

Accounts payable consists of liabilities to commercial vendors and contractors and other 

Federal agencies for amounts owed for goods, services, and other expenses received but 
Election Assistance Commission 

53

not yet paid at the end of the fiscal year. Accounts payable also consists of disbursements 

in transit recorded by EAC but not paid by the U.S. Treasury. 

Accrued Payroll and Benefits 

Accrued payroll and benefits represent salaries, wages and benefits earned by employees, 

but not disbursed as of September 30, 2010 and 2009. Accrued payroll and benefits are 

payable to employees and are therefore not classified as intragovernmental. 

 

Annual, Sick and Other Leave 

Annual leave is recorded as a liability when it is earned; the liability is reduced as leave is 

taken. Each pay period, the balance in the accrued leave account is adjusted to reflect the 

current leave balances and pay rates. Accrued annual leave is paid from future funding 

sources and accordingly is reflected as a liability not covered by budgetary resources. Sick 

leave and other types of non-vested leave are expensed as taken. 

Federal Employee Benefits 

A liability is recorded for estimated and actual future payments to be made for worker’s 

compensation pursuant to the Federal Employees Compensation Act (FECA). 

EAC had a FECA liability at the end of the reporting period for claims filed for the period July 

1, 2009 through June 30, 2010. Accordingly, EAC recorded a liability for estimated 

payments to be made for workers’ compensation pursuant to the Act. 

 

Employee Retirement Plans 

EAC employees participate in either the Civil Service Retirement System (CSRS) or the 

Federal Employees Retirement System (FERS), which became effective on January 1, 1987. 

Most EAC employees are covered by FERS and Social Security. 

For employees covered by CSRS, EAC withheld 7.0 percent of base pay earnings. EAC 

matches this withholding, and the sum of the withholding and the matching funds is 

transferred to the Civil Service Retirement System. 

For FERS covered employees, EAC made contributions of 12.3 percent of base pay. 

Employees participating in FERS are covered under the Federal Insurance Contribution Act 

(FICA) for which EAC contributes a matching amount to the Social Security Administration. 

FERS contributions made by employer agencies and covered employees are comparable to 

the U.S. Government’s estimated service costs. 

Thrift Savings Plan (TSP) 

The Thrift Savings Plan (TSP) is a retirement savings and investment plan for employees 

covered by either CSRS or FERS. TSP is administered by the Federal Retirement Thrift 

Investment Board on behalf of Federal agencies. For employees belonging to FERS, EAC 

automatically contributes one percent of base pay to their account and matches contributions 
Election Assistance Commission 

54

up to an additional four percent. For employees belonging to CSRS, there is no governmental 

matching contribution. 

EAC does not report on its financial statements CSRS and FERS assets, accumulated plan 

benefits, or unfunded liabilities, if any, which may be applicable to EAC employees. Reporting 

such amounts is the responsibility of the Office of Personnel Management. The portion of the 

current and estimated future outlays for CSRS not paid by EAC is, in accordance with 

Statement of Federal Financial Accounting Standards (SFFAS) No. 5, Accounting for Liabilities 

of the Federal Government, included in EAC's financial statements as an imputed financing 

source. 

Commitments and Contingencies 

Commitments are contractual agreements involving financial obligations. EAC is committed for 

goods and services that have been ordered, but have not yet been received. 

A contingency is an existing condition, situation, or set of circumstances involving uncertainty 

as to possible gain or loss. The uncertainty will ultimately be resolved when one or more future 

events occur or fail to occur. A contingency liability is recognized when a past event or 

exchange transaction has occurred, and future outflow or other sacrifice of resources is 

measurable and probable. A contingency is not disclosed when any of the conditions for liability 

recognition are met but the chance of the future event or events occurring is remote. A 

contingency is disclosed when any of the conditions for liability recognition are not met and the 

chance of the future confirming event or events occurring is more than remote but less than 

probable. 

Revenues and Other Financing Sources 

 

Annual Appropriation 

 

EAC receives its funding through an annual appropriation as provided by Congress. 

Imputed Financing Sources 

In accordance with OMB Circular A-136, all expenses should be reported by agencies whether 

or not these expenses would be paid by the agency that incurs the expense. The amounts for 

certain expenses of EAC, which will be paid by other Federal agencies, are recorded in the 

Statement of Net Cost. A corresponding amount is recognized in the “Statement of Changes in 

Net Position” as an “Imputed Financing Source.” These imputed financing sources primarily 

represent unfunded pension costs of EAC employees, as described above. 

Statement of Net Cost 

 

Net cost of operations is the difference between EAC’s expenses and its earned revenue. 

For Fiscal Years 2009 and 2010, EAC has four programs: Communications, Fund and 

Oversee, Research, Policy and Programs, and Testing & Certification. The cost for each 

program is the sum of the direct costs of the program and an allocation of the agency’s 

other overhead costs such as rent, telecommunications, and administrative and financial 
Election Assistance Commission 

55

support staff. All grants and requirements payments are included in the Fund and Oversee 

program. 

Grants 

 

EAC administers and oversees the grant-making process in connection with Federal 

Requirements Payments and grants made to recipient organizations under HAVA. As 

Requirements Payments and grants are awarded, they are recorded as obligations and 

represent uses of budgetary resources. Payments made under the grant awards for 

expenditures already incurred by the recipients are fully expended and are included in the 

Statement of Net Cost. Grant awards made to grantees in advance of expenditures are 

recorded as advances and are included in the balance sheet. 

Net Position 

Net position is the residual difference between assets and liabilities, and is comprised of 

unexpended appropriations and the cumulative results of operations. Unexpended 

appropriations represent appropriated spending authority that is unobligated and has not 

been withdrawn by the U.S. Treasury along with obligations that have not been paid. 

Unobligated balances associated with appropriations that expire at the end of the fiscal year 

remain available for obligation adjustments, but not for new obligations, until that account is 

closed, five years after the appropriations expire. Cumulative results of operations 

represent the excess of financing sources over expenses since inception. 

Use of Estimates 

The preparation of the accompanying financial statements in accordance with accounting 

principles generally accepted in the United States requires management where necessary, 

to make certain estimates and assumptions that directly affect the reported amounts of 

assets, liabilities, revenues, and expenses. Actual results could differ from these estimates. 

Note 2 – Fund Balance with Treasury 

Fund balances with Treasury are contained within six annual funds (FY2005 through 

FY2010) and two no-year funds. The total of fund balances with Treasury consisted of the 

following at September 30, 2010 and September 30, 2009: 
Election Assistance Commission 

56

 FY 2010 FY 2009 

Fund Balance with Treasury 

 Appropriated Funds $ 139,699,928 $157,884,882 

 

Status of Fund Balance with Treasury: 

 Unobligated Balance 

 Available 12,046,895 7,452,047 

 Unavailable 5,246,828 6,546,853 

 Obligated Balance not yet Disbursed 122,406,205 143,885,982

 Total $ 139,699,928 $ 157,884,882

Available unobligated balances represent amounts that are apportioned for obligation in the 

current fiscal year. Unavailable unobligated balances represent amounts that are not 

apportioned for obligation during the current fiscal year, along with expired appropriations 

that are no longer available to incur new obligations. Obligated balances not yet disbursed 

include undelivered orders unpaid and expended authority-unpaid. 

Note 3 – Accounts Receivable, Net 

Accounts Receivable, Net is comprised of claims from associates and consists of the 

following as of September 30, 2010 and September 30, 2009: 

 FY 2010 FY 2009 

 

Accounts Receivable, Net 

 Claims from Associates $ 2,067 $ 18,449 

 Due from States 226,307 330,697 

 $ 228,374 $ 349,146 

 

EAC establishes an allowance for the loss on accounts receivable that are deemed 

uncollectible accounts, which is included in Accounts Receivable, Net on the balance sheet. 

After an account or portion thereof is deemed delinquent, an accounts receivable allowance 

is established in the financial records. The allowance is based on known historical collection 

rates and a review of circumstances particular to the debtor. 

 

Note 4 – Advances and Prepayments 

Advances and prepayments with non-governmental and governmental entities consist of the 

following as of September 30, 2010 and September 30, 2009: 

Advances and Prepayments FY 2010 FY 2009 

 With Governmental Entities $ 2,263,002 $ 2,097,844

 With Non-governmental Entities 1,112,686 34,692,298 

Total $ 3,375,688 $ 36,790,142 

 
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Note 5 – General Property and Equipment, Net 

The general components of capitalized property and equipment, net of accumulated 

depreciation, consist of the following as of September 30, 2010 and September 30, 2009: 

2010 

 Service Life Acquisition Accumulated Net Book 

Asset Class (years) Value Depreciation Value 

Office Equipment 5 $ 128,264 $ 61,208 $ 67,056 

Furniture 5 726,933 211,411 515,522 

Leasehold 

Improvements 4 681,915 91,538 590,377 

Total $1,537,112 $ 364,157 $1,172,955

 

2009 

 Service Life Acquisition Accumulated Net Book 

Asset Class (years) Value Depreciation value 

Office Equipment 5 $ 113,943 $ 61,256 $ 52,687 

Furniture 5 303,613 125,851 177,762 

Leasehold 

Improvements 7 551,387 

 

512,716 38,671 

Total $ 968,943 $ 699,823 $ 269,120 

 

Depreciation expense was $262,236 for the period ending September 30, 2010 and 

$237,912 for the period ending September 30, 2009. 

Depreciation on these assets is calculated using the straight-line method with no salvage 

value. Depreciation begins the month after the asset is placed in service. Useful lives are 

five years for equipment and five years for furniture. 

The estimated useful lives and corresponding capitalization thresholds are as follows: 

Type Lives Threshold 

Equipment 5 years $ 10,000 

Furniture 5 years 10,000 

Vehicles 5 years 10,000 

Leasehold Improvements 7 years 25,000 

Software 5 years 25,000 
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Note 6 – Liabilities 

Liabilities Not Covered by Budgetary Resources

Liabilities Not Covered by Budgetary Resources result from the receipt of goods and 

services, or the occurrence of events, for which appropriations, revenues, or other financing 

sources necessary to pay the liabilities have not yet been made available through 

Congressional appropriation. 

Liabilities Not Covered by Budgetary Resources consisted of the following as of September 

30, 2010 and September 30, 2009: 

 FY 2010 FY 2009 

 

With the Public 

 Unfunded Annual Leave $ 327,803 $ 261,880 

Intragovernmental 

 FECA Liability 1,023 441 

 $ 328,826 $ 262,321 

 

Liabilities Covered by Budgetary Resources 

Liabilities covered by budgetary resources consist of the following as of September 30, 

2010 and September 30, 2009: 

 FY 2010 

 

FY 2009 

Intragovernmental 

 Accounts payable $ 306,504 $ 348,958 

 Employer contributions and payroll taxes payable 72,266 47,716 

Total intragovernmental 378,770 396,674 

 

With the public 

 Accounts payable 781,372 7,983,052 

 Accrued payroll and benefits 307,639 241,878 

Total with the public 1,089,011 8,224,930 

 

Total liabilities covered by budgetary resources $ 1,467,781 $ 8,621,604 

 

 

 
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Note 7 – Leases

EAC has no capital leases. EAC has a current operating lease for the headquarters office 

space located at 1201 New York Avenue, NW, Suite 300 Washington DC which runs through 

March 31, 2014. EAC took occupancy of this space on March 19, 2010. 

EAC also has an operating lease for additional space located at 1440 New York Avenue, NW, 

Washington, DC, which commenced August 5, 2008 with an original completion date of 

December 5, 2008. This lease has been extended through March 17, 2010 to coincide with 

the occupation of the new space at 1201 New York Avenue, N.W. Washington, DC. EAC 

continues to occupy past March 17, 2010 a portion of the previous space at 1440 New York 

Avenue. GSA is currently working on either negotiating for the continued use of this space or 

for space at a different location. 

Future lease payments due under these leases through March 31, 2014 are: 

Future Operating Lease Payments FY 2010 

Fiscal Year Lease Payment 

2011 $ 921,702 

2012 929,627 

2013 937,790 

2014 477,588 

2015 0 

2016 and thereafter 0 

Total future lease payments $ 3,266,707 

 

Future Operating Lease Payments FY 2009 

Fiscal Year Lease Payment 

2010 $ 833,676 

2011 921,702 

2012 929,627 

2013 937,790 

2014 477,588 

2015 and thereafter 0 

Total future lease payments $ 4,100,383 

 

 

Note 8 – Statement of Net Cost 

For Fiscal Years 2009 and 2010, EAC has four programs: Communications, Fund and 

Oversee, Research, Policy and Programs, and Testing and Certification. The cost for each 

program is a sum of the direct costs of the program and an allocation of the agency’s other 

overhead costs such as rent, telecommunications, and administrative and financial support 

staff. All grants and Requirement Payments are included in the Fund and Oversee program. 

The total cost of operations for the periods ended September 30, 2010 and September 30, 

2009 is as follows: 
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60

Fiscal Year 2010 

 Programs Intragovernmental With the Public Total 

 Communications $ 521,265 $ 1,276,651 $ 1,797,916

 Fund & Oversee 1,329,791 121,504,648 122,834,439

 Research, Policy & Program 825,032 2,020,620 2,845,652

 Testing and Certification 1,023,899 2,507,677 3,531,576

 Total $ 3,699,987 $127,309,596 $ 131,009,583 

Fiscal Year 2009 

 Programs Intragovernmental With the Public Total 

 Communications $ 268,849 $ 1,725,276 $ 1,994,125

 Fund & Oversee 658,522 112,383,927 113,042,449

 Research, Policy & Program 400,703 2,571,420 2,972,123

 Testing and Certification 482,411 3,095,762 3,578,173

 Total $ 1,810,485 $119,776,385 $ 121,685,870

In accordance with OMB Circular A-136, costs incurred for goods and services provided by 

other Federal entities are reported in the full costs of EAC’s programs and for Fiscal year 

2010 employer benefits for payroll, excluding TSP were included. They are identified as 

“intragovernmental.” All other costs are identified as “with the public.” 

Note 9 – Statement of Budgetary Resources 

The Statement of Budgetary Resources (SBR) compares budgetary resources with the status 

of those resources. As of September 30, 2010, budgetary resources were $103,597,539 

and net outlays were $105,228,327. As of September 30, 2009, budgetary resources were 

$128,956,539 and net outlays were $95,475,404. 

Apportionment Categories of Obligations Received 

EAC receives apportionments of its resources from OMB. These are “Category B” 

apportionments which are for resources that can be obligated in compliance with legislation 

underlying programs for which the resources were made available. 

For the periods ended September 30, 2010 and September 30, 2009, direct obligations 

incurred amounted to $86,303,814 and $114,957,639. 

 

Note 10 - Comparison to the Budget of the United States Government 

SFFAS No. 7, Accounting for Revenue and Other Financing Sources and Concepts for 

Reconciling Budgetary and Financial Accounting, requires an explanation of material 

differences between budgetary resources available, the status of those resources and 

outlays as presented in the Statement of Budgetary Resources to the related actual 

balances published in the Budget of the United States Government (Budget). The Budget

that will include FY 2010 actual budgetary execution information is scheduled for 

publication in February 2011, which will be available through OMB’s website at 
Election Assistance Commission 

61

http://www.whitehouse.gov/omb. Accordingly, information required for such disclosure for 

FY 2010 is not available at the time of publication of these financial statements. 

The Budget that includes the FY 2009 actual budgetary execution information was 

published February 1, 2010. 

FY 2009 

Budgetary 

Resources 

Obligations 

Incurred Net Outlays 

Statement of Budgetary 

Resources $128,956,539 $114,957,639 $ 96,313,253

Section 102 Advances 50,723,357 50,723,357 50,723,357

Unobligated Balances Not 

Available (6,546,853) 0 0

Non-Expenditure Transfer 0 0 4,000,000

 Total Adjusted Balance $173,133,043 $165,680,996 $151,036,610

Budget of the U.S. Government 172,000,000 164,000,000 150,000,000

Difference $ 1,133,043 $ 1,680,996 $ 1,036,610

The difference between the Statement of Budgetary Resources and the Budget of the U.S. 

Government is largely related to timing differences for the HAVA Section 102 Advances given 

to States that have not yet been spent by the States. These advances were recorded in 

Fiscal Year 2009 for the President’s Budget and the SF-133 forms. However, for financial 

statement reporting purposes these transactions were recorded in the fiscal year ended 

September 30, 2008. Other minor differences include expired unobligated balances 

included on the Statement of Budgetary Resources but not available for the President’s 

Budget, and a Non-expenditure transfer to the National Institute of Standards and 

Technology (NIST). Remaining differences are due to rounding. 

Note 11 - Unpaid Obligated Balance, Net 

Unpaid obligated balance, net consists of undelivered orders and accounts payable. 

Undelivered orders represent obligations for which goods and services have not yet been 

received. Accounts payable includes goods and services which have been received but not 

yet paid for. The total unpaid obligated balance, net as of September 30, 2010 and 

September 30, 2009 was as follows: 

 

FY 2010 FY 2009 

Undelivered Orders $120,938,416 $135,264,377 

Accounts Payable 1,467,788 8,621,604 

Unpaid obligated balance, net $122,406,204 $143,885,981 

 
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Note 12: Reconciliation of Net Cost of Operations to Budget 

The purpose of this note is to detail the differences between budgetary and financial 

(proprietary) accounting. This is accomplished by means of a reconciliation of budgetary 

obligations and non-budgetary resources available to the reporting entity with its net cost of 

operations. 

The “Other” amount of $129,113 and $(2,197) shown in “Components Not Requiring or 

Generating Resources” in Fiscal Year 2010 and Fiscal Year 2009 represents the net change 

in accounts receivable from employees and a reduction in accounts receivable for the 

Section 102 funds for the year. 

Note 13 Requirements Payments and Grant Programs 

The EAC Requirements Payments and grant programs are funded through annual 

appropriations. The largest of the grant programs is the Title III of the Help America Vote Act 

Resources Used to Finance Activities FY 2010 FY 2009 

Budgetary Resources Obligated 

 Obligations Incurred $86,303,814 $114,957,639

 

Less: Spending authority from offsetting collections and 

recoveries (2,555,266) (1,500,835)

 Net Obligations 83,748,548 113,456,804

 

Other Resources 

 Imputed financing from costs absorbed by others 237,183 214,233

 Net other resources used to finance activities 237,183 214,233 

Total Resources Used to Finance Activities 83,985,731 113,671,037

 

Resources Used to Finance Items Not Part of the Net Cost of Operations 

 Change in budgetary resources obligated for goods, services 

 and benefits ordered but not yet provided 47,740,411 7,633,082

 Resources that finance the acquisition of assets 

 

(1,174,413) (29,397)

Total Resources Used to Finance Items Not Part of 

the Net Cost of Operations 46,565,998 7,603,685

Total Resources Used to Finance the Net Cost of Operations 130,551,729 121,274,722

 

Components of Net Cost of Operations that Will Not 

Require or Generate Resources in the Current Period 

Components Requiring or Generating Resources in Future Periods: 

 Increases in annual leave liability 

 

66,505 76,432

 Total Components of Net Cost of Operations that 

 Will Require or Generate Resources in Future Periods 66,505 76,432

Components Not Requiring or Generating Resources: 

 Depreciation and amortization 262,236 237,913

 Other 129,113 (2,197)

Total Components of Net Cost of Operations that Will Not 

Require or Generate Resources 391,349 235,716

Total Components of Net Cost of Operations that will not 

Require or Generate Resources in the Current Period 457,854 312,148

Net Cost of Operations $131,009,583 $121,586,870
Election Assistance Commission 

63

(HAVA) Section 251 Requirements Payments for States to help them meet HAVA 

requirements. EAC periodically receives additional grant money to fund grant programs such 

as Voting Technology Improvement Research Grants, and College Poll Worker and Mock 

Election grants. Reflected in the Statement of Net Costs for the periods ending September 

30, 2010 and September 30, 2009, are the following requirements and grant program 

payments. For presentation purposes, EAC has separated Section 102 Advances Spent by 

States from Section 251 Requirement Payments for FY 2009 and FY 2010. 

FY 2010 

 

FY 2009 

FY 2008 Section 251 Requirement Payments $21,978,026 $56,958,220 

FY 2009 Section 251 Requirement Payments 30,457,959 27,972,461 

FY 2010 Section 251 Requirement Payments 29,671,329 0

Section 102 Advances Spent by States 33,713,042 16,031,058

FY 2008 Data Collection Grants 1,745,231 6,592,164

College Poll Worker Grants 429,841 490,952

Mock Election Grants 252,371 113,157

 $118,247,799 $108,158,012 
Election Assistance Commission 

64

II.F REQUIRED SUPPLEMENTARY STEWARDSHIP 

INFORMATION (Unaudited) 

Non-Federal Physical Property 

Stewardship investments are substantial investments made by the Federal Government for 

the benefit of the nation but are not physical assets owned by the Federal Government. 

When incurred, they are treated as expenses in determining the net cost of operations. 

However, these items merit special treatment so that users of Federal financial reports know 

the extent of investments that are made for long-term benefit. Such investments are 

measured in terms of expenses incurred for non-Federal physical property, human capital, 

and research and development. In October 2002, Congress passed the Help America Vote 

Act (HAVA). The law recognized the need for States to invest in their election infrastructure. 

A major provision of HAVA, Title III Uniform and Nondiscriminatory Election Technology and 

Administration Requirements, sets forth requirements for each voting system used in an 

election for Federal office. 

 Fiscal Year 

2007 

Fiscal Year 

2008 

Fiscal Year 

2009 

Section 102 

Funds $ 15,533,405 $ 2,103,632 $ 19,905,709 

Section 251 

Funds 181,694,563 358,536,246 262,018,224 

Data Collection 

Grants 0 0 447,650 

Total $197,227,968 $360,639,878 $282,371,583 

Section 102 Funds. A total of $300.3 million has been disbursed to States under Section 

102. States report, as of September 30, 2009, having spent approximately 91.1% of 

Section 102 funds for a total of $273.7 million. Section 102 funds were disbursed to States 

for the primary purpose of replacing punch card or lever voting machines. As such, Section 

102 funds have been used to purchase physical property. 

Section 251 Funds. A total of $2,400.6 million has been distributed to States under Section 

251. States report, as of September 30, 2009, having spent approximately 81.0% of 

Section 251 Funds for a total of $1,945.0 million. Section 251 requirements payments are 

to be used only to meet the requirements of Title III Uniform and Nondiscriminatory Election 

Technology and Administration Requirements. As such, Requirements Payments have been 

used in part to purchase physical property but also to provide funds to States to carry out 

other activities to improve administration of elections. 

Data Collection Grants. In Fiscal Year 2008, EAC awarded $10.0 million in Election Data 

Collection Grants to five States. These funds were to be used to improve the collection of 
Election Assistance Commission 

65

precinct-level data relating to the November 2008 elections. Based on budgetary 

information supplied by each State, Federal physical property purchased with these funds is 

presented above. 
Election Assistance Commission 

66

SECTION III

Other Accompanying Information 
Election Assistance Commission 67

U. S. ELECTION ASSISTANCE COMMISSION

OFFICE OF INSPECTOR GENERAL

UU..

SS..EELLEECCTTIIOONNAASSSSIISSTTAANNCCEECCOOMMMMIISSSSIIOONN

MMAANNAAGGEEMMEENNTTAANNDDPPEERRFFOORRMMAANNCCEECCHHAALLLLEENNGGEESS

FFIISSCCAALLYYEEAARR22001100

U.S. Election Assistance Commission, Office of Inspector General 

 1201 New York Avenue, NW, Suite 300, Washington, DC 20005 

(202) 566-3100 (p), (202) 566-3127 (f), www.eac.gov 

Page 1 

Introduction 

The Reports Consolidation Act of 2000 requires the Office of Inspector General (OIG) to 

report annually on what it considers to be the most serious management and performance 

challenges facing the U.S. Election Assistance Commission (EAC). Management 

challenges are derived from cross-cutting issues that arise during our regular audit, 

evaluation and investigatory work. They are also influenced by our general knowledge of 

the agency’s operations and the works of other evaluative bodies such as the Government 

Accountability Office (GAO). 

For fiscal year (FY) 2010, the OIG is reporting on five management and performance 

challenges facing the EAC. Four of these management challenges have been reported in 

prior years: 

 Performance Management and Accountability 

 Financial Management and Performance 

 Information Technology Management and Security 

 Human Capital Management 

One challenge is reported in FY 2010 for the first time. That management and 

performance challenge is the EAC’s lack of an established and implemented records 

management system. 

The OIG has assessed the EAC’s progress with regard to the four previously issued 

challenges. Based upon reports provided by the EAC, the OIG deems that remedial 

measures have been taken to resolve one of the four management challenges, specifically 

the challenge involving financial management and performance. In addition, the EAC 

has taken substantial steps toward improving its information technology management and 

security. However, the EAC has several critical steps to fully resolve the management 

challenge. The OIG will continue to review and monitor the challenges involving 

information technology management and security, performance management and 

III.A. MOST SERIOUS MANAGEMENT CHALLENGES FACING EAC ACCORDING 

TO THE INSPECTOR GENERAL
U.S. Election Assistance Commission, Office of Inspector General 

 1201 New York Avenue, NW, Suite 300, Washington, DC 20005 

(202) 566-3100 (p), (202) 566-3127 (f), www.eac.gov 

Page 2 

accountability, as well as human capital management to determine whether steps have 

been taken to improve the agency’s operations in these areas. 

CHALLENGE 1: PERFORMANCE MANAGEMENT AND 

ACCOUNTABILITY 

In fiscal year 2008, the OIG issued the following management challenge: 

Effective management and accountability are integral to any operation and must start 

with senior management. At the EAC, senior management consists of four full-time 

commissioners and an executive director. However, confusion over the roles and 

responsibilities of the commissioners and the executive director has resulted in a lack 

of leadership, a failure to hold people accountable, and a decline in staff morale. 

EAC has recently delineated the roles and responsibilities of the commissioners and 

the executive director. 

In February of 2008, the OIG issued a report that identified long-standing and 

overarching weaknesses related to the operations of the EAC that need to be 

addressed immediately. The assessment disclosed that the EAC needs to establish: 

 Short and long-term strategic plans, performance goals and measurements to 

guide the organization and staff. 

 An organizational structure that clearly defines areas of responsibility and an 

effective hierarchy for reporting. 

 Appropriate and effective internal controls based on risk assessments. 

 Policies and procedures in all program areas to document governance and 

accountability structure and practices in place. It is imperative that the 

Commissioners define their roles and responsibilities in relationship to the 

daily operations of the EAC and to assume the appropriate leadership role. 

Actions to improve EAC operations are being accomplished; however, a significant 

amount of work still needs to be done. Without effective management and 

accountability, the ability of the EAC to meet its mission is substantially diminished. 

Performance management and accountability continues to be a challenge for EAC in 

fiscal year 2009 and beyond, as EAC has not adopted and implemented the needed 

policies and procedures to define the performance plans and measurements for the 

various EAC programs, identify the reporting relationships beyond the executive director 

and commissioners, and establish effective internal controls. The EAC has completed 

draft policies and procedures for some of its programs, but has not adopted or 

implemented them. In the current environment of increased transparency and 

U.S. ELECTION ASSISTANCE COMMISSION 

MANAGEMENT AND PERFORMANCE CHALLENGES 

FISCAL YEAR 2010

Election Assistance Commission 68
U.S. Election Assistance Commission, Office of Inspector General 

 1201 New York Avenue, NW, Suite 300, Washington, DC 20005 

(202) 566-3100 (p), (202) 566-3127 (f), www.eac.gov 

Page 3 

U.S. ELECTION ASSISTANCE COMMISSION 

MANAGEMENT AND PERFORMANCE CHALLENGES 

FISCAL YEAR 2010 

 

accountability, it is critical that EAC have these goals, measures, policies and procedures 

in place. EAC is accountable to the American public as to whether its programs and 

activities mirror its goals and objectives, as well as whether the programs and activities 

are ultimately successful in comparison to the established goals and measures. 

EAC’s Progress 

EAC has made some progress toward the development of a strategic direction for the 

agency as well as the implementing policies and procedures that flow from the strategic 

plan. The following is a listing of the activities that EAC has completed:1

1

 The EAC provided information regarding which of the policies and procedures have been finalized. The 

OIG has not conducted a follow up review to determine the adequacy or sufficiency of these documents. 

 Adopted an agency-wide strategic plan in March 2009 

 Adopted a roles and responsibilities document that delineates responsibilities 

between the commissioners and the executive director in September 2008 

 Finalized a grants manual in September 2009 

 Finalized a travel handbook in Quarter 4, FY 2010 

 Finalized an administrative manual that provides a broad overview of the statutes, 

regulations, policies, procedures, and other requirements Commissioners and staff 

follow when conducting the work of the Commission 

The EAC has not completed policy and procedure handbooks for several of its divisions 

or programs. The EAC anticipated having this work completed on or before June 30, 

2009. The EAC currently sets the completion timeframe as Quarter 1, FY 2011. 

CHALLENGE 2: FINANCIAL MANAGEMENT AND 

PERFORMANCE 

In fiscal year 2008, the OIG completed and issued its assessment of the EAC’s operations 

and conducted the first financial statement audit of the EAC. Based upon the findings in 

those two reports, the OIG issued the following management challenge: 

EAC lacks the ability to effectively manage its financial operations. In fiscal year 

2007, poor control over its budget and expenditures resulted in the organization 

returning about $2.4 million to the U.S. Treasury despite the need for additional staff 

and systems to deliver services and complete statutory tasks. In fiscal year 2008, 

problems persisted. EAC did not set up an operating budget for its divisions or a 

Election Assistance Commission 69
U.S. Election Assistance Commission, Office of Inspector General 

 1201 New York Avenue, NW, Suite 300, Washington, DC 20005 

(202) 566-3100 (p), (202) 566-3127 (f), www.eac.gov 

Page 4 

U.S. ELECTION ASSISTANCE COMMISSION 

MANAGEMENT AND PERFORMANCE CHALLENGES 

FISCAL YEAR 2010 

sufficient system to determine the status of its appropriations. Furthermore, it was not 

until a contractor was brought on in July 2008 that the EAC determined how much 

operating money it had spent and how much it had left. 

More recently, the independent auditors, Clifton Gunderson LLP (CG), under 

contract with the OIG, were unable to complete an audit of the EAC’s financial 

statements for fiscal year 2008 due to management’s inability to provide timely 

financial information and material weaknesses in internal controls. In regards to 

controls, management was not able to assure that it had identified, implemented, and 

tested internal controls over its financial or program operations. Congress established 

management’s responsibility for internal controls in the Federal Managers Financial 

Integrity Act of 1982 (FMFIA). The Office of Management and Budget (OMB) 

issued implementing instructions to Federal agencies in Circular No. A-123. The 

Circular requires agencies to issue an annual statement to OMB on whether the 

Agency’s financial, management, and automated information security system controls 

conform to the government-wide standards. The EAC however, does not have a 

process to make such a determination. 

ACTIONS NEEDED

To move forward, the Commissioners must put someone in place that has the 

responsibility and authority to manage the daily operations of the agency. 

Simultaneously, the EAC must develop and implement a comprehensive strategy that 

addresses the need for qualified and capable financial management staff; and corrects 

inconsistent and flawed business processes, unreliable financial information, and nonexistent FMFIA process. 

EAC’s Progress - RESOLVED

EAC has made progress toward the development of policies and procedures and 

implementation of additional personnel and financial resources to remedy the weaknesses 

identified in the OIG’s 2008 Assessment Report. The following is a listing of the 

activities that EAC has completed: 

 Hired a Chief Financial Officer/Budget Officer 

 Hired an Accounting Director 

 Reconstructed accounts to adequately record most obligations and expenditures 

 Developed a list of financial laws and regulations that apply to EAC 

 Adopted a strategic plan which included a new organizational structure for the 

Administrative Division 

 Implemented monthly fund control reviews 

 Developed policies and procedures to implement audit follow-up 

Election Assistance Commission 70
U.S. Election Assistance Commission, Office of Inspector General 

 1201 New York Avenue, NW, Suite 300, Washington, DC 20005 

(202) 566-3100 (p), (202) 566-3127 (f), www.eac.gov 

Page 5 

U.S. ELECTION ASSISTANCE COMMISSION 

MANAGEMENT AND PERFORMANCE CHALLENGES 

FISCAL YEAR 2010 

EAC’s FY 2009 Financial Statement Audit revealed that the EAC had made significant 

progress in implementing sound financial practices. The EAC received an unqualified 

opinion on its FY 2009 financial statements. Similarly, the FY 2009 Financial Statement 

audit discovered limited issues with the EAC’s internal control environment related to 

financial management. The EAC identified resolutions to those issues and has begun 

and/or completed the implementation of those resolutions. 

At this time, the OIG deems this management challenge to be resolved. 

CHALLENGE 3: INFORMATION TECHNOLOGY 

MANAGEMENT AND SECURITY 

In FY 2009, the OIG issue the following management challenge to the EAC: 

The Federal Information Security Management Act (FISMA) requires 

each federal agency to develop, document and implement an agency-wide 

program to provide information security and develop a comprehensive 

framework to protect the government’s information, operations and assets. 

To ensure the adequacy and effectiveness of information security controls, 

the OIG annually assesses the EAC’s efforts to safeguard data processed 

by its computer systems and networks. Our reviews have found that the 

EAC is not in compliance with FISMA or in pertinent part with the 

Privacy Act. For EAC, managing and securing information is a significant 

deficiency. 

EAC has made significant progress in addressing this challenge, but still has deficiencies 

in two major areas: contingency planning and compliance with personally identifiable 

information (PII) and Privacy Act requirements. A recent review of the EAC’s 

information technology systems and practices revealed that the EAC has not tested its 

contingency plan and that the EAC is not in compliance with the following OMB 

requirements related to PII and the Privacy Act: 

 Develop and publish “routine use” policy dealing with breach of security relating 

to PII data, including actions taken for individuals affected by the breach (OMB 

Memorandum M-07-16, May 22, 2007); 

 Publish and review biennially each system of records notice to ensure that it 

accurately describes the system of records (OMB Circular A-130); 

 Review every four years the routine use disclosures associated with each system 

of records in order to ensure that the recipient’s use of such records continues to 

Election Assistance Commission 71
U.S. Election Assistance Commission, Office of Inspector General 

 1201 New York Avenue, NW, Suite 300, Washington, DC 20005 

(202) 566-3100 (p), (202) 566-3127 (f), www.eac.gov 

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U.S. ELECTION ASSISTANCE COMMISSION 

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be compatible with the purpose for which the disclosing agency collected the 

information (OMB Circular A-130); and 

 Conduct privacy impact assessments for electronic information systems and 

collections and, in general, make them publicly available (OMB Memorandum 

03-22) 

EAC’s Progress 

The most recent FISMA review (FY 2010) found that the EAC is in substantial 

compliance with FISMA requirements but still has some work to do in order to comply 

with the PII and Privacy Act requirements. The following is an assessment of the EAC’s 

progress on the FY 2009 findings related to FISMA, PII, and the Privacy Act: 

No. FY 2009 Finding Current Status 

1 IT Security Program Improved but Additional 

Controls are Necessary. 

EAC officials took action to 

correct this problem. 

2 An agency-wide information security program in 

compliance with FISMA has not been developed. 

A security management structure with adequate 

independence, authority, and expertise which is 

assigned in writing has not been implemented. 

EAC officials took action to 

correct this problem. 

3 Policies or procedures for information security or 

privacy management have not been developed. Per 

the terms of the MOU, the GSA procedures will 

prevail where there are not guiding policies 

provided by the user organization. 

EAC officials took action to 

correct this problem. 

4 A Continuity of Operations Plan, Disaster 

Recovery Plan, or Business Impact Assessment has 

not been developed. 

EAC has completed a 

contingency plan, but has 

not yet tested the plan. 

5 FDCC requirements were not met. EAC officials took action to 

correct this problem. 

6 Access Controls and Remote Access Need 

Strengthening 

EAC officials took action to 

correct this problem. 

7 Security Risk Assessments Need to be Finalized 

and Used to Develop Controls 

EAC officials took action to 

correct this problem. 

Election Assistance Commission 72
U.S. Election Assistance Commission, Office of Inspector General 

 1201 New York Avenue, NW, Suite 300, Washington, DC 20005 

(202) 566-3100 (p), (202) 566-3127 (f), www.eac.gov 

Page 7 

U.S. ELECTION ASSISTANCE COMMISSION 

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FISCAL YEAR 2010 

No. FY 2009 Finding Current Status 

8 EAC is not fully compliant with several Privacy 

Act Requirements including: 

 A Chief Privacy Officer with the 

responsibility for monitoring and enforcing 

privacy related policies and procedures have 

not been designated. 

 EAC has not identified systems housing 

personally identifiable information or 

conducted related Privacy Impact 

Assessments required by OMB 

Memorandum 06-16. 

 EAC has not developed formal policies that 

address the information protection needs 

associated with personally identifiable 

information that is accessed remotely or 

physically removed. 

EAC officials took action to 

correct some but not all of 

these problems. Issue 

remains open. 

9 Establish Controls to Ensure Audit Accountability EAC officials took action to 

correct this problem. 

The OIG will consider this management challenge resolved when the EAC completes 

testing its contingency plan and implements appropriate remedial measures to protect PII. 

CHALLENGE 4: HUMAN CAPITAL MANAGEMENT 

In FY 2009, the OIG issued the following management challenge: 

The Government Accountability Office (GAO) has designated strategic 

human capital management as a high risk area across the federal 

government since 2001. According to GAO, human capital management 

is a government wide problem that is eroding the ability of many agencies 

to economically, efficiently, and effectively perform their missions. GAO 

recognized that an agency’s workforce is its most important organizational 

asset. Agencies alter the organization’s performance by the way that they 

treat and manage their staffs and build commitment and accountability by 

involving and empowering their employees. GAO provided a framework 

for improving human capital management across the federal government 

which included recruiting, hiring, developing and retaining employees 

with the skills needed for mission accomplishment; creating an employeeElection Assistance Commission 73
U.S. Election Assistance Commission, Office of Inspector General 

 1201 New York Avenue, NW, Suite 300, Washington, DC 20005 

(202) 566-3100 (p), (202) 566-3127 (f), www.eac.gov 

Page 8 

U.S. ELECTION ASSISTANCE COMMISSION 

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FISCAL YEAR 2010 

friendly work place; and empowering and motivating employees while 

ensuring accountability and fairness in the workplace. 

For the past two years, EAC has participated in the government’s annual 

employee survey. The results of these surveys identify critical weaknesses 

in EAC’s human capital management efforts. The EAC employees have 

consistently expressed their dissatisfaction with ability of EAC leadership 

to generate high levels of motivation, to review and evaluate the 

organization’s progress toward meeting goals and objectives, and to 

communicate the organization’s goals and priorities. Employees did not 

report a sense of involvement in the decisions that impact their work, the 

policies and practices of the senior leaders, or that management shares 

information about what goes on the organization. Employees also do not 

believe that promotions and rewards are merit based or reflect how well 

the employee performs his/her job. Perhaps the most disturbing of the 

survey questions reports that the percentage of employees that feel that 

they can report a violation of law, rule or regulation without fear of 

reprisal fell from 55.6% in 2007 to 36.3% in 2008. The results of this 

survey show that EAC does not operate an employee-friendly work place 

and that its efforts to empower and include employees have fallen short. 

EAC must evaluate its personnel management strategy and it successes 

and failures to develop an approach toward human capital management 

that will ensure a qualified, satisfied work force is available to do the work 

necessary to fulfill its mission. 

Likewise, EAC must ensure that it has trained, experienced personnel 

assigned to critical functions. The OIG assessed EAC operations in 2008 

and determined that there were significant gaps in qualified personnel to 

perform critical financial and administrative functions. While some 

progress has been made to increase the number of employees in critical 

functions that have federal government experience, there are still functions 

that either have not been assigned or are currently assigned to untrained, 

inexperienced personnel. EAC must evaluate its critical administrative 

and programmatic functions to determine its personnel needs. Those 

needs should be compared to its personnel resources. Functions should be 

assigned to persons who are trained and experienced in the activity or 

persons should be recruited to fill those posts. 

The OIG completed an investigation into allegations of retaliation and a hostile working 

environment at the EAC in FY 2010. The investigation concluded that there were no 

incidents of retaliation and that the EAC did not have a hostile working environment as 

defined by federal statutes. However, the investigation did reveal that the EAC continues 

to experience problems related to its human capital management, particularly: 

Election Assistance Commission 74
U.S. Election Assistance Commission, Office of Inspector General 

 1201 New York Avenue, NW, Suite 300, Washington, DC 20005 

(202) 566-3100 (p), (202) 566-3127 (f), www.eac.gov 

Page 9 

U.S. ELECTION ASSISTANCE COMMISSION 

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 Employees expressed fear of retaliation or retribution. 

 Employees have an apparent lack of confidence in reporting complaints to 

HR/EEO. 

 EAC’s implementation of a performance management system. 

 Communications failures 

 Dissatisfaction of distrust of supervisors or co-workers 

 Perception of an us/them environment 

These concerns were echoed by the results of the EAC’s 2009 Annual Employee Survey. 

That survey showed that less than half of the EAC employees feel that: 

 Promotions in their work units are based on merit (34%) 

 Steps are taken to deal with poor performers (38%) 

 Pay raises depend on how employees perform their jobs (28%) 

 Leaders generate high levels of motivation and commitment in the workforce 

(42%) 

 Managers communicate the goals and priorities of the organization (45%) 

 Employees have a feeling of personal empowerment with respect to work 

processes (34%) 

Based upon this information, human capital management continues to be a challenge for 

the EAC. 

EAC’s Progress 

In May 2010, the OIG requested an update on actions taken to remedy this management 

challenge, particularly as related to the additional concerns raised by the OIG’s 

investigation and the employee survey. The EAC responded in June 2010 citing the 

following activities as having been conducted to remedy the existing management 

challenge: 

 EEO training was conducted in May/June 2010 

 Teambuilding efforts conducted by Hines and Associates 

 Management supervisory training for EAC managers 

 Leadership training and development courses attended by the Chief Operating 

Officer, Chief Financial Officer and Executive Director 

 Internal control training, email etiquette guidance an d emotional intelligence 

training have been offered to all EAC staff 

 Three decision-based forgiveness sessions have been conducted to deal with 

interpersonal issues 

Election Assistance Commission 75
U.S. Election Assistance Commission, Office of Inspector General 

 1201 New York Avenue, NW, Suite 300, Washington, DC 20005 

(202) 566-3100 (p), (202) 566-3127 (f), www.eac.gov 

Page 10 

U.S. ELECTION ASSISTANCE COMMISSION 

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EAC further recited existing policies and/or practices that were in place prior to the 

investigation or employee survey. 

CHALLENGE 5: RECORDS MANAGEMENT

Maintaining complete and accurate records of the operations, policy, procedure and 

practice of an agency are critical to the effective operation of the agency. Without these 

records, the agency cannot retain an institutional knowledge. The EAC, like many other 

federal government agencies, has seen turn over in its staff and leaders. Since its 

inception, the EAC has had seven Commissioners. Likewise, program directors have 

come and gone. Furthermore, retention of government records is mandated by federal 

law. 

The EAC does not have an approved records retention schedule. Similarly, there are no 

procedures for management and retention of records being uniformly implemented at the 

EAC. 

The OIG first noted the EAC’s lack of a records management system in 2008, when it 

issued the Assessment of EAC’s Program and Financial Operations. Since that time, the 

OIG has conducted several audits and evaluations of EAC and its programs that have 

revealed a continuing problem with maintaining records. Most recently, in 2010, the OIG 

audited a grant distributed by the EAC. EAC staff was unable to locate the file related to 

that grant. Furthermore, even after repeated requests for records related the grant, the 

EAC failed to provide even a single email from the previous grants director under whose 

administration the grant was awarded. The EAC disbursed payment on that grant without 

records of whether and to what extent the grantee had performed services commensurate 

with the grant proposal and award. 

The continued failure to adopt and implement an approved system for records retention at 

the very least leaves the EAC vulnerable to suit by information requesters and at worst 

susceptible to waste, fraud, or abuse of its resources and the intentional destruction of 

government records in violation of federal law. The EAC must take immediate steps to 

adopt a records management system, obtain approval of that system from the National 

Archives and Records Administration, and train its staff on the proper retention of federal 

government records. 

Election Assistance Commission 76
U.S. Election Assistance Commission, Office of Inspector General 

 1201 New York Avenue, NW, Suite 300, Washington, DC 20005 

(202) 566-3100 (p), (202) 566-3127 (f), www.eac.gov 

Page 11 

U.S. ELECTION ASSISTANCE COMMISSION 

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FISCAL YEAR 2010 

EAC’s Progress 

The EAC has reported that it met and is working with a representative of the National 

Archives and Records Administration on the coordination of a records management 

policy. 

Election Assistance Commission 77
-j)!5. <' ~ 

~,\\ ';)' 

~ 

1 


u.s. ELECTION ASSISTANCE COMMISSION 

1201 New York Ave. NW - Suite 300 

Washington, DC 20005 

November 5, 2010 

Memorandum 

To: 	 Curtis W. Crider 

Inspector General 

From: 	 Donetla Davidson 

Chair, U.S. Election Assistance Commission 

Subject: 	 Election Assistance Commission Response to the Inspector General's 

Statements Summarizing the Major Management and Performance 

Challenges 

The Election Assistance Commission (EAC) over the past year pursued its mission to 

assist the effective administration ofFederal Elections. This response to the Inspector 

General's Statement Summarizing the Major Management and Performance Challenges 

highlights efforts to strengthen the management of its programs and operations. Specifics 

associated with each ofthe identified major management challenges are discussed below. 

Performance Management and Accountability 

As recognized by the summary report. EAC has made progress in this area by 

developing, finalizing and implementing policies and procedures that flow from the 

strategic plan that was adopted in March 2009. In addition to the adoption ofthe Roles 

and Responsibilities between the commissioners and the executive director, the 

development and completed manual for grants, EAC has finalized the travel handbook 

and the administrative manual. As indicated, these documents provide a broad overview 

of the statues, regulations, policies and procedures as well as other requirements 

Commissioners and staff follow when conducting the work ofEAC. 

Election Assistance Commission

78

III.B. EAC'S RESPONSE TO THE MOST SERIOUS MANAGEMENT CHALLENGES 

FACING EAC ACCORDING TO THE INSPECTOR GENERAL 

U.S. ELECTION ASSISTANCE COMMISSION 

1201 New York Ave. NW - Suite 300 

Washington, DC 20005 

November 5, 2010 

Memorandum 

To: 

From: 

Subject: 

Curtis W. Crider 

Inspector General ~ . .-- ~ 

Donetla Davidson ~,\\ ';)' 

Chair, U.S. Election Assistance Commission ~ 

Election Assistance Commission Response to the Inspector General's 

Statements Summarizing the Major Management and Performance 

Challenges 

The Election Assistance Commission (EAC) over the past year pursued its mission to 

assist the effective administration of Federal Elections. This response to the Inspector 

General's Statement Summarizing the Major Management and Performance Challenges 

highlights efforts to strengthen the management of its programs and operations. Specifics 

associated with each of the identified major management challenges are discussed below. 

Performance Management and Accountability 

As recognized by the summary report. EAC has made progress in this area by 

developing, finalizing and implementing policies and procedures that flow from the 

strategic plan that was adopted in March 2009. In addition to the adoption ofthe Roles 

and Responsibilities between the commissioners and the executive director, the 

development and completed manual for grants, EAC has finalized the travel handbook 

and the administrative manual. As indicated, these documents provide a broad overview 

of the statues, regulations, policies and procedures as well as other requirements 

Commissioners and staff follow when conducting the work of EAC. 

1 

u.s. ELECTION ASSISTANCE COMMISSION 

1201 New York Ave. NW - Suite 300 

Washington, DC 20005 

November 5, 2010 

Memorandum 

To: 

From: 

Subject: 

Curtis W. Crider 

Inspector General ~. /'~ 

Donet!a Davidson ~,\\ '/ 

Chair, U.S. Election Assistance Commission ~ 

Election Assistance Commission Response to the Inspector General's 

Statements Summarizing the Major Management and Performance 

Challenges 

The Election Assistance Commission (EAC) over the past year pursued its mission to 

assist the effective administration of Federal Elections. This response to the Inspector 

General's Statement Summarizing the Major Management and Performance Challenges 

highlights efforts to strengthen the management of its programs and operations. Specifics 

associated with each of the identified major management challenges are discussed below. 

Performance Management and Accountability 

As recognized by the summary report. EAC has made progress in this area by 

developing, finalizing and implementing policies and procedures that flow from the 

strategic plan that was adopted in March 2009. In addition to the adoption ofthe Roles 

and Responsibilities between the commissioners and the executive director, the 

development and completed manual for grants, EAC has finalized the travel handbook 

and the administrative manual. As indicated, these documents provide a broad overview 

of the statues, regulations, policies and procedures as well as other requirements 

Commissioners and staff follow when conducting the work of EAC. 

1 
2 


EAC is working on the completion of policy and procedure handbooks as follows: 

1. 	 Personnel/Human Resources; this handbook has been completed and is currently 

under review with the Office ofthe General Counsel. 

2. 	 Communications/Clearinghouse; This handbook, which contains policy that is 

needed for approval by the Commissioners is scheduled to be presented for tally 

vote. It will subsequently be released for public comments. 

3. 	 Property Management and Mail Management handbooks are presently under 

development. Target date for completion ofthese handbooks is within the next 90 

days. 

4. 	 The Occupant Emergency Handbook, which also contains process and procedures 

for Physical Security, was completed in July 2010 and has been made available to 

EAC Staff. 

Information Technology Management and Security 

With respect to Information Technology, subsequent to hiring an experienced Chief 

Information Officer in mid-May ofthis calendar year, EAC has made significant progress 

and has reached substantial compliance in the areas of: 

• 	 Access Control 

• 	 Awareness and Training 

• 	 Audit and Accountability 

• 	 Certification, Accreditation, and Security Assessments 

• 	 Configuration Management 

• 	 Identification and Authentication 

• 	 Incident Response 

• 	 Maintenance 

• 	 Media Protection 

• 	 Physical and Environmental Protection 

• 	 Planning 

• 	 Risk Assessment 

• 	 System and Services Acquisition 

• 	 System and Communication Protection 

• 	 System and Information Integrity 

EAC has begun testing its Contingency Plan working in coordination with GSA. The 

EAC has developed various scenarios for testing. EAC anticipates it will complete all 

testing requirements within the next 90 days. 

Election Assistance Commission

79

EAC is working on the completion of policy and procedure handbooks as follows: 

1. Personnel/Human Resources; this handbook has been completed and is currently 

under review with the Office of the General Counsel. 

2. Communications/Clearinghouse; This handbook, which contains policy that is 

needed for approval by the Commissioners is scheduled to be presented for tally 

vote. It will subsequently be released for public comments. 

3. Property Management and Mail Management handbooks are presently under 

development. Target date for completion of these handbooks is within the next 90 

days. 

4. The Occupant Emergency Handbook, which also contains process and procedures 

for Physical Security, was completed in July 2010 and has been made available to 

EAC Staff. 

Information Technology Management and Security 

With respect to Information Technology, subsequent to hiring an experienced Chief 

Information Officer in mid-May ofthis calendar year, EAC has made significant progress 

and has reached substantial compliance in the areas of: 

• Access Control 

• Awareness and Training 

• Audit and Accountability 

• Certification, Accreditation, and Security Assessments 

• Configuration Management 

• Identification and Authentication 

• Incident Response 

• Maintenance 

• Media Protection 

• Physical and Environmental Protection 

• Planning 

• Risk Assessment 

• System and Services Acquisition 

• System and Communication Protection 

• System and Information Integrity 

EAC has begun testing its Contingency Plan working in coordination with GSA. The 

EAC has developed various scenarios for testing. EAC anticipates it will complete all 

testing requirements within the next 90 days. 

2 

EAC is working on the completion of policy and procedure handbooks as follows: 

1. Personnel/Human Resources; this handbook has been completed and is currently 

under review with the Office of the General Counsel. 

2. Communications/Clearinghouse; This handbook, which contains policy that is 

needed for approval by the Commissioners is scheduled to be presented for tally 

vote. It will subsequently be released for public comments. 

3. Property Management and Mail Management handbooks are presently under 

development. Target date for completion of these handbooks is within the next 90 

days. 

4. The Occupant Emergency Handbook, which also contains process and procedures 

for Physical Security, was completed in July 2010 and has been made available to 

EAC Staff. 

Information Technology Management and Security 

With respect to Information Technology, subsequent to hiring an experienced Chief 

Information Officer in mid-May ofthis calendar year, EAC has made significant progress 

and has reached substantial compliance in the areas of: 

• Access Control 

• Awareness and Training 

• Audit and Accountability 

• Certification, Accreditation, and Security Assessments 

• Configuration Management 

• Identification and Authentication 

• Incident Response 

• Maintenance 

• Media Protection 

• Physical and Environmental Protection 

• Planning 

• Risk Assessment 

• System and Services Acquisition 

• System and Communication Protection 

• System and Information Integrity 

EAC has begun testing its Contingency Plan working in coordination with GSA. The 

EAC has developed various scenarios for testing. EAC anticipates it will complete all 

testing requirements within the next 90 days. 

2 
3 


EAC has identified a Chief Privacy Officer. Further, policies are in place for the PH 

Agreement. PH information is housed at EAC 's offices in fire retardant file cabinets 

which are maintained by the PH Officer in locked offices. In addition, Personal Impact 

Assessments have begun. EAC anticipates it will publish its Plan in the Federal Register 

within the next 90 days. 

Human Capital Management 

EAC was pleased with the outcome of the independent investigation conducted by the 

Inspector General through the Department of Interior (DOl) (IG) which concluded that 

there was not any evidence of retaliation or a hostile work environment at the EAC. EAC 

continues to seek ways to maintain Human Capital Management. 80 % of EAC 

Managers have successfully completed Supervisory Training and the HR Director is 

seeking resources for managers to participate with ongoing training through e-Iearning 

methods. 

Currently, EAC is conducting its annual employee survey, and on November 19th , the 

Executive Director has scheduled a workshop entitled "Four Generations: One 

Workplace" for EAC personnel. A facilitator will explore the communication gap 

created by multiple generations in the workplace. Although not mandatory, EAC 

employees are strongly encouraged to attend. 

Records Management 

Through NARA, a member ofthe EAC staffhas completed the required training to be 

certified as a records manager. Subsequent to successfully completing the tests required 

for certification within the next ten days, this individual will be charged with the 

responsibility to work with managers to bring the EAC in full compliance with OMB 

Circular A-130. 

Election Assistance Commission

80

EAC has identified a Chief Privacy Officer. Further, policies are in place for the PH 

Agreement. PH information is housed at EAC 's offices in fire retardant file cabinets 

which are maintained by the PH Officer in locked offices. In addition, Personal Impact 

Assessments have begun. EAC anticipates it will publish its Plan in the Federal Register 

within the next 90 days. 

Human Capital Management 

EAC was pleased with the outcome of the independent investigation conducted by the 

Inspector General through the Department of Interior (DOl) (IG) which concluded that 

there was not any evidence of retaliation or a hostile work environment at the EAC. EAC 

continues to seek ways to maintain Human Capital Management. 80 % of EAC 

Managers have successfully completed Supervisory Training and the HR Director is 

seeking resources for managers to participate with ongoing training through e-Iearning 

methods. 

Currently, EAC is conducting its annual employee survey, and on November 19th , the 

Executive Director has scheduled a workshop entitled "Four Generations: One 

Workplace" for EAC personnel. A facilitator will explore the communication gap 

created by multiple generations in the workplace. Although not mandatory, EAC 

employees are strongly encouraged to attend. 

Records Management 

Through NARA, a member ofthe EAC staffhas completed the required training to be 

certified as a records manager. Subsequent to successfully completing the tests required 

for certification within the next ten days, this individual will be charged with the 

responsibility to work with managers to bring the EAC in full compliance with OMB 

Circular A-130. 

3 

EAC has identified a Chief Privacy Officer. Further, policies are in place for the PH 

Agreement. PH information is housed at EAC 's offices in fire retardant file cabinets 

which are maintained by the PH Officer in locked offices. In addition, Personal Impact 

Assessments have begun. EAC anticipates it will publish its Plan in the Federal Register 

within the next 90 days. 

Human Capital Management 

EAC was pleased with the outcome of the independent investigation conducted by the 

Inspector General through the Department of Interior (DOl) (IG) which concluded that 

there was not any evidence of retaliation or a hostile work environment at the EAC. EAC 

continues to seek ways to maintain Human Capital Management. 80 % of EAC 

Managers have successfully completed Supervisory Training and the HR Director is 

seeking resources for managers to participate with ongoing training through e-Iearning 

methods. 

Currently, EAC is conducting its annual employee survey, and on November 19th , the 

Executive Director has scheduled a workshop entitled "Four Generations: One 

Workplace" for EAC personnel. A facilitator will explore the communication gap 

created by multiple generations in the workplace. Although not mandatory, EAC 

employees are strongly encouraged to attend. 

Records Management 

Through NARA, a member ofthe EAC staffhas completed the required training to be 

certified as a records manager. Subsequent to successfully completing the tests required 

for certification within the next ten days, this individual will be charged with the 

responsibility to work with managers to bring the EAC in full compliance with OMB 

Circular A-130. 

3 
Election Assistance Commission 

81

III.C. IMPROPER PAYMENTS 

The Improper Payments Act requires each Federal agency to assess all programs and 

identify which, if any, may be subject to high risk with respect to improper payments. For 

fiscal year 2010, EAC does not believe that it has any programs where the erroneous 

payments could exceed 2.5 percent of program payments or $10.0 million threshold (set in 

OMB Guidance) to trigger further agency action. 

III.D. SUMMARY OF FINANCIAL STATEMENT AUDIT AND MANAGEMENT

ASSURANCES

SUMMARY OF FISCAL YEAR 2010 FINANCIAL STATEMENT AUDIT

Audit Opinion Unqualified

Restatement None

Material Weaknesses

Beginning

Balance New Resolved Consolidated

Ending

Balance

Financial Accounting & Reporting 1 0 1 0 0

TOTAL WEAKNESSES 1 0 1 0 0

SUMMARY OF MANAGEMENT ASSURANCES

Statement of Assurance

(FMFIA§ 2) Qualified

Financial Management System

Assurance (FMFIA§ 4)

Systems conform to financial management system

requirements

No. Summary

Beginning

Balance New Resolved Consolidated

Ending

Balance

1 Material Weaknesses

(FMFIA§ 2) 2 0 1 0 1

TOTAL 2 0 1 0 1
Election Assistance Commission 

82