U.S. ELECTION 

ASSISTANCE

COMMISSION

 

 

 

 

 

 

INTERIM AGENCY

FINANCIAL REPORT

 

 

 

 

 

 

 

 

 

December 16, 2013
ABOUT THIS REPORT

For FY 2013 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 per guidance in OMB Circular A-136 Financial Reporting Requirements.

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

 December 16, 2013

MESSAGE FROM THE CHIEF OPERATING OFFICER AND ACTING EXECUTIVE 

DIRECTOR
 Election Assistance Commission 
 Election Assistance Commission 
 Election Assistance Commission 
 Election Assistance Commission 
 Election Assistance Commission 

TABLE OF CONTENTS

Page

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

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

 Organization by Program................................................................................................. 3

 Organization Chart........................................................................................................... 5

I.B. Performance Goals, Objectives, and Results............................................................. 6

How EAC Assesses Performance .................................................................................. 6

Accomplishments by Goal............................................................................................. 6

Program Performance Indicators ................................................................................. 13

Summary Performance Information ............................................................................ 13

Portfolio Analysis ........................................................................................................ 13

 

I.C. Financial Results...................................................................................................... 14

Budgetary Resources ..................................................................................................... 14

 Financial Position........................................................................................................... 14

 Results of Operations..................................................................................................... 15

 Limitations of the Financial Statements ........................................................................ 15

I.D. Analysis of Controls, Management Systems, and Legal Compliance..................... 16

 Federal Manager’s Financial Integrity Act .................................................................... 16

 Audit Follow-Up............................................................................................................ 18

 Federal Financial Management Improvement Act ........................................................ 18

 Accountability of Tax Dollars Act of 2002 ................................................................... 18

 Federal Information Security Management Act ............................................................ 18

 Inspector General Act Amendments of 1988................................................................. 18

 Annual Assurance Statement on Internal Control ......................................................... 19

 

SECTION II – Financial Section.................................................................................. 20

II.A. Message from the Chief Financial Officer.............................................................. 20

II.B. Inspector General’s Assessment.............................................................................. 22

II.C. Independent Auditor’s Report ................................................................................. 24

II.D. Financial Statements................................................................................................ 44

II.E. Notes to the Financial Statements............................................................................ 48

II.F. Required Supplementary Stewardship Information................................................. 66

SECTION III - Other Accompanying Information.................................................... 68

III.A. IG Assessment of Most Serious Management Challenges Facing EAC ............... 59

III.B. EAC Response to the Most Serious Management Challenges............................... 73

III.C. Improper Payments ................................................................................................ 74

III.D. Summary of Financial Statement Audit and Management Assurances................. 74
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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; highlevel 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, voluntary guidance, and 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 provide assistance to State and local election officials 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 as determined by the 

Commission;

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

election officials;

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.
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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 serve as the Chair of the TGDC and provide 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 $649,500,000 in 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 

funds were distributed for activities to improve the administration of elections (Section 101) 

and to replace punch card and lever voting machines (Section 102).

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 upgrading 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. 

In FY 2007, Congress recognized the expanding Agency responsibilities and lifted the fulltime equivalent staffing ceiling of 24. As of the end of FY 2013, EAC had a full-time staff 

of 23 employees. Since its inception, EAC has received $2,606,150,000 in requirements 

payments, $24,350,000 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 

$29,987,500 to NIST. EAC also tracks and provides technical assistance on the Section 101 

funds. The time period for using the Section 102 funds has expired, and EAC has collected

remaining unused funds. 
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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 responsible for external 

communications and the tools and platforms used to provide information to election officials 

and the general public. Areas of responsibility include:

EAC Website and Clearinghouse

Social media 

Media inquires

External communications

Congressional relations

The Freedom of Information Act

National Archives and Records Act 

Editorial support: press releases, speeches, and Congressional testimony

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

contains thousands of documents and information about voting systems, press releases, 

informational videos, research, data and program-related information. It also features ondemand webcasts and related information from public meetings, hearings and roundtables.

EAC’s award-winning 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:

Provides technical assistance to the States on administering Federal funds;

Awards and monitors discretionary grant programs including: Help America Vote 

College Program, Help America Vote Mock Election Program, Military Heroes 

Initiative, Voting System Pre-Election Logic and Accuracy Testing and PostElection 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 works with fund recipients on recommendations to resolve 

audit findings applicable to EAC programs;
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Reviews amended State Plan submissions; and

Drafts advisory opinions for Commission approval and issuance.

Research, Policy and Programs

The Research, Policy and Programs Division: 

Conducts research on election administration topics as mandated by Congress and at 

the discretion of the Commission;

Administers the biennial Election Administration and Voting Survey;

Administers the National Mail Voter Registration Form as prescribed by the 

National Voter Registration Act of 1993 (NVRA), also known as “Motor Voter;”

Administers the Election Management Guidelines and Quick Start Guides Program

to help election officials promote secure, efficient, accurate, and accessible elections 

by providing information on topics such as Ballot Design, Polling Place 

Management, Voting Accessibility, Communicating with the Public, 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 glossaries of election terminology in languages 

English and six other languages, translates the National Mail Voter Registration 

Form into ten languages other than English; and

Provides materials to voters and election administration officials to facilitate their 

successful participation in Federal elections such as registering to vote.

Research and reporting is mandated by HAVA on topics such as the impact of the National 

Voter Registration Act of 1993 and on UOCAVA for military and overseas voters’ 

participation in federal elections; the feasibility and advisability of establishing free absentee 

ballot return postage; recounts and contests; the feasibility of alternative voting methods

such as electronic voting; the voting experiences of first-time voters who register to vote by 

mail; administering elections in urban and rural areas; and the feasibility and advisability of 

identifying voters by Social Security Number.

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;
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Promotes quality control in voting system manufacturing through the EAC quality 

monitoring program;

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 the same systems EAC has certified. For instance, under the program, 

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.
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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.

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 2013 Accomplishments

The Communications and Clearinghouse Division began Fiscal Year 2013 with a focused 

effort on providing information and best practices to election officials and voters in the 

remaining weeks prior to the 2012 November election. EAC maintained the goal of 
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building a community of knowledge and expertise that could save election officials time and 

money in preparation for the 2014 federal election cycle. 

EAC.gov Resources

The Election Official Exchange: an online resource built by EAC to help local 

election officials connect and leverage their collective knowledge by sharing best 

practices and knowledge. By participating in the Exchange, any U.S. election 

official can call on a colleague for advice about virtually any administrative task they 

face, from testing voting equipment and training poll workers to creating an audit 

trail and conducting a recount. 

Events finder: a comprehensive presentation of all EAC public events, including 

meetings, hearings and roundtable discussions. 

Webcasts: public events are offered live. On demand webcasts are available within 

24 hours. The meeting agenda accompanies the webcast, and the viewer can select 

topics of interest. All meeting materials are also available to the public. 

Customized program updates: a listserv for EAC’s newsletter and automatic program 

updates. Users are notified daily or weekly when new documents are posted based 

on their delivery preferences. 

Social Media and Stakeholder Updates

Blog posts provided periodic election updates and highlight program activities 

including: EAC resources; election updates; voting system testing updates to track 

progress made on EAC voting system certification; information on absentee and 

early voting; hurricane contingency plans; state election info; post election info; 

roundtables, workshop and symposium; public comments on test lab program 

manual and 2014 EAVS / UOCAVA Survey; and Engineering Change Order (ECO) 

database for State users to better handle our test matrix of VVSG requirements; and 

ongoing blog posts covering election related topics to answer frequently asked 

questions and provide critical or time sensitive information to stakeholders and the 

media;

Used @EACgov on Twitter to rapidly deliver information and updates to 

stakeholders and the public about the voting system certification program, EAC 

activities and election information, communicate with election officials, and build a 

community of expertise; 

Maintained #BReady2012 and #FOV13, the Twitter hashtags where election 

officials and the public can gather and discuss preparation for Federal elections. The 

number of EAC Twitter followers grew from 970 to 1602 from October 2012 

through September 2013;

Hosted online The Election Official Exchange, a platform to help local election 

officials connect and leverage their collective knowledge by sharing and exchanging 

best practices and information expertise; and

Provided program activity updates where the public can customize the kind of 

information and the frequency that it is delivered via EAC’s newsletter and 

automatic program updates.
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EAC delivered information and updates to election officials and stakeholders about: 

(1) 2012 survey report data on the ability of civilian, military and overseas citizens to 

successfully cast a ballot; (2) voting system certification program; and (3) remaining 

HAVA funds available to states. 

As requests were received from election officials, EAC continued to add more links 

to state & local election social media sites.

Post 2012 Election: The Roundtable Series of Public Discussions

In Fiscal Year 2013, EAC hosted two public roundtable discussions which followed the 

series of prior EAC roundtables about topics and initiatives in preparation for 2012 federal 

election cycle. In January, EAC hosted a post election roundtable to assess the 2012 election 

and review shared best practices for addressing some of the challenges presented during the 

election cycle. A second roundtable was held in May to discuss the results of grant funded 

work and how recent innovations in accessibility research may be applied to the future of 

election administration and voting systems. Both roundtables were webcast live and 

featured a live Twitterfall. Questions and comments were taken from the public through the 

webcasts. Participants included election officials and subject experts who provided real 

world solutions to the issues facing election officials and voters as we prepare for the 2012 

elections. EAC distributed press advisories to national media daybooks and contacts, and to 

the home state/local media outlets representing roundtable participants. EAC also 

publicized and promoted participation in two EAC / NIST events: a workshop on accessible 

voting technology; and a symposium on the future of voting systems. 

Informing Change: A Review of Events and Issues of the 2012 Elections Cycle (Jan 

9, 2013). Reviewed shared best practices for addressing some of the challenges 

presented during the 2012 election cycle. EAC heard from state and local election 

officials, poll workers and end users, advocates, leading academics, researchers and 

observers of the election process. Participants shared ideas and strategies for 

improving the administration of elections in the U.S. Objective: to identify which 

aspects of the process may be improved in order to begin developing best practices 

that can be used in the next election. CSPAN covered via webcast. On demand 

webcasts are available of EAC's yearlong series of discussions on major topics to 

prepare for the Presidential Election.

Transforming Election Administration, Voting System Accessibility, and the 

Certification Process (May 9, 2013). Discussed the results of grant funded work and 

how recent innovations in accessibility research may be applied to the future of 

election administration and voting systems. The May 9 roundtable continued 

discussions from the Future of Voting Systems Symposium and the Accessible 

Voting Technology workshop.

EAC / NIST Accessible Voting Technology Research Workshop (April 1-2, 2013). 

EAC and NIST hosted a workshop to discuss current and future research in 

accessible voting technology, and the transition of this research to industry. Topics 

included: Innovative assistive applications and techniques; New approaches to 

accessibility in voting; Accessibility research benchmarks and results; Transitioning 

research to industry; New and existing devices that provide accessible access to 

elements of the voting process; and Challenges in accessible voting
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EAC / NIST Future of Voting Systems Symposium (Feb 26-28, 2013). EAC and 

NIST hosted a symposium to explore emerging trends in voting system technology 

with the election community at large. Topics included: Why some jurisdictions are 

exploring building their own voting systems; Trends in voting system technology 

acquisition and deployment plans; How election officials, manufactures, young 

voters, and academics view the future of voting system technologies; Alternative 

standard development processes for voting systems; and Alternative methods for 

voting system testing and certification at the Federal and State level.

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.

Goal 2 is administered by the Grants Management division and the Office of the Inspector 

General. 

Goal 2 FY 2013 Accomplishments

Disbursed requirements payment grants to States certifying compliance from the FY 

2008 through FY 2011 awards;

Closed the 9 College Poll Worker and the 4 Mock Election grants awarded in FY 

2010; 

Continued to monitor and provide technical assistance to three-year award 2010 

College Poll Worker grantees to help them carry out successful programs;

Continued to monitor and work with the three-year award 2010 Mock Election 

Program grantees; 

Monitored and provided technical assistance for the Voting System Pre-Election 

Logic and Accuracy Testing & Post-Election Audit Initiative grants, and the 

Accessible Voting Technology Initiative grants. In FY 2012, the latter projects 

focused on making pre-election information accessible to voters and using a 

specialized system in the field for elections; 

Closed all open OIG audits of state HAVA funds; and

Provided technical assistance to grant recipients as they are responsible for 

establishing and maintain internal controls that will reasonably ensure compliance 

with federal laws, regulations, and the provisions of the authorizing legislations and 

grant agreements for the applicable grant programs. 

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.

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, 
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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 2013 Accomplishments

Research:

Published, delivered to Congress and posted to EAC’s website, all reports and data 

related to the 2012 EAVS including: the Statutory Overview; the NVRA report; the 

Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA) report and; the 

general EAVS report.

Successfully administered and completed a national survey and final draft report on 

findings from a HAVA-mandated (241b15) study on voting and administering 

elections in urban and rural areas.

Successfully completed an agreement between EAC and the Federal Voting 

Assistance Program (FVAP) for creating a combined 2014 EAVS.

Completed the first of two Federal Register public comment periods on the 2014 

EAVS that will include 12 additional FVAP questions.

Policy:

Responded to and processed requests from Arizona, Georgia, Washington State, 

Kansas, Wisconsin and Florida to modify their state-specific instructions on the 

national mail voter registration application form (Federal form). 

Updates to these states’instructions were posted in English and other required 

languages on the EAC website.

Programs:

To prepare for the 2012 Federal election the division created and widely distributed--

to the general public and to each of the 55 states and territories--Voter Tips cards and 

Voter’s Guides to Elections;

Hosted several briefings for foreign delegations regarding the EAC, the U.S. 

Election system and voting process;

Conducted nine webinars for election officials on Best Practices in Election 

Management. Topics included polling place and election-day management, 

contingency planning, voter registration and education and, poll worker recruitment 

training and retention. Each session--moderated by an election official-- featured 

two local election officials as speakers. Each session involved between 45-50

election officials representing states throughout the US and American Samoa.

Developed a work plan for updating 4-5 EAC Quick Start Guides, concise tips on a 

wide range of election topics, in 2014. 
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Throughout the year RPP staff has also on a continuing basis:

Clarified various data reported in the 2012 EAC Election Administration and Voting 

Survey along with other previous EAVS reports; 

Provided assistance (including assistance in Spanish) regarding the completion of the 

Federal NVRA form; 

Responded to requests to clarify certain technical aspects of election procedures and 

processes.

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 2013 Accomplishments 

In FY 2013 in the area of voting system certification, EAC:

Certified three voting systems;

Drafted and published six Requests for Interpretation (RFIs) to VVSG;

Developed and implemented major updates to the EAC’s Virtual Review Tool 

(VRT). EAC rolled out the addition of the ECO (Engineering Change Order) 

Database to the VRT tool to track change orders for all EAC certified voting 

systems. This tool was also made available to State Certification Authorities to 

assist them in reviewing change orders that may be presented for certification in their 

individual States.

There are currently four voting systems in active test campaigns.

In the area of Voluntary Voting System Guidelines (VVSG) and Test Suites, in FY 2013,

EAC posted the second draft version of VVSG 1.1on www.eac.gov for a 90 day Public 

Comment period. Subsequent comments regarding the comment period coinciding with the 

General election persuaded EAC to revise the Public Comment period to 130 days.

Following the close of the comment period, EAC staff worked with NIST staff to address 

the comments and prepare the VVSG1.1 revised draft document for final formatting so it 

can await EAC Commission vote and approval once a quorum is reestablished.

Regarding laboratory accreditation in FY 2013, EAC performed one laboratory reaccreditation audit in Denver, Colorado; 
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Further, in FY 2013, Certification division staff, in conjunction with NIST, held the “Future 

of Voting Systems” Symposium at the NIST facility February 26-28, 2013. Attended 

meetings with NASED; Election Center; EVN, EAC technical reviewers; voting system 

manufacturers; the Presidential Commission on Election Administration; a voting system 

manufacturer for the kick-off overview meeting on a new system in Austin, TX; with State 

Certification officials in Harrisburg, Pennsylvania; USENIX - EVTWOTE on voting 

technology; and observed elections in Phoenix, AZ and Arlington County, VA.

Strategic Plan Goal 5 is to implement a high performance organization. The 

anticipated outcome of the goal is that EAC proficiently carries out EAC’s strategic 

objectives.

The three strategic objectives of Goal 5 are to improve performance, strengthen internal 

controls; and maximize efficiencies.

The performance measure on implementing audit recommendations is tracked by EAC. To 

date, only two of the recommendations remain open pending a quorum of the Commission 

for final resolution. 

On the metric regarding meeting annual performance measures, management is working to 

foster a culture of accountability among staff. The agency seeks to improve staff 

satisfaction ratings and achieve management excellence through continuous improvement of 

internal controls. Agency directors responsible for implementation of the EAC Strategic 

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

Performance Report along with the Congressional Budget Justification, and on planned 

metrics in the OMB Budget Justification each September. 

Staff completes assessable unit risk assessment questionnaires and individual letters of 

assurance, which are reviewed and rolled into the agency’s Annual Statement of Assurance. 

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.

During FY 2013, to maximize efficiencies, EAC prepared for a paperless work environment 

with inexpensive storage at the National Archives and Records Administration Federal 

Records Center and an October 2, 2013 move to new office space, saving close to 75 

percent on rent; continued its commitment in October 2010 to reduce staff; has reassigned 

functions internally and uses the services of other agencies to obtain efficiencies of scale;

and utilizes four automated systems via interagency agreement.

Key Performance Measures

o Implement 90 percent of the OIG audit 

recommendations within agreed upon timeframes.

o Meet annual performance measures.
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Program Performance Indicators

The following table presents key EAC FY 2013 program performance data. As much detailed 

performance information as possible will be presented, and variances discussed, in the FY 2013

Annual Performance Report. The report will accompany the FY 2015 Congressional Justification.

EAC FY 2013 Performance Summary

Program Performance Indicator

Type of 

Indicator Planned Actual

Strategic Goal 1: Communicate

Issue Clearinghouse policy Output Final

In Final Draft (quorum 

required for final approval)

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%

L&A round two pending 

quorum (to approve new 

Notice of Funds 

Availability)

Resolve 100 percent of audit findings within 

established time frames. Output 100% 100%

Negotiate indirect cost rates within 30 days of receipt 

of acceptable indirect cost proposals Output 100%

Submit requests for 

negotiation to HHS upon 

receipt (proposals are 

forwarded by EAC 

electronically to HHS for 

negotiation)

Strategic Goal 3: Study, Guide, Assist

Issue reports to Congress by statutory deadlines Output 3 3

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

VVSG Version 1.1 revised 

and updated

Conduct at least one review of a manufacturing 

facility of a registered manufacturer at least once 

every 4 years. Output 1

0 (Funding limitations. Will 

reschedule for FY 2014)

Plan to conduct field reviews for at least 50 percent of 

jurisdictions that volunteer for reviews Output 50%

N/A (No requests made in 

FY 2013)

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 
 Election Assistance Commission 

14

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 2013, the Salaries and Expenses appropriation of $11.5 million

funded a $2.7 million transfer to NIST, staff salaries and benefits, 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 2013 to FY 2012; 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. 

Budgetary Resources 

Budgetary resources (Obligations Incurred, apportioned unobligated balances, and 

unobligated balances not available) 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 2013, the available budgetary resources were $19.9 million, down from $21.4

million in FY 2012. In FY 2013, EAC’s appropriations totaled $11.5 million, for salaries 

and expenses.

The remaining unspent HAVA Section 102 payments made to the States in FY 2003 and FY 

2004 for replacement of punch card or lever voting machines were returned to EAC in FY 

2013. These funds will be disbursed as HAVA Section 251 requirements payments to the 

States. 

Obligations Incurred decreased from $9.5 million in FY 2012 to $8.1 million in FY 2013

primarily as a result of the disbursement of FYs 2008 through 2011 Requirements Payments

and the reduction in the annual appropriation. Unobligated Balance – Apportioned 

increased from $3.2 million in FY 2012 to $3.3 million in FY 2013.

Financial Position

Assets

EAC had $32.5 million in total assets (Fund Balance with Treasury, Advances and 

Prepayments, and Other Assets) as of September 30, 2013, down from $40.1 million in FY 

2012. This is decrease is largely the result of disbursements of Requirements Payments 

from FYs 2008-2011. 
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15

Liabilities

EAC had total liabilities (accounts payables, accrued payroll and benefits, and unfunded 

leave) of $1.7 million as of September 30, 2012 and $8.7 million September 30, 2013. 

Net Position

Net position (Unexpended Appropriations and Cumulative Results of Operations) decreased 

in FY 2013 to $23.8 million from $38.4 million in FY 2012. Unexpended Appropriations 

decreased primarily due to expenditure of Requirements Payments. 

Results of Operations

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

programs: Communications and Clearinghouse, 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 a per employee 

basis. This methodology is outlined in EAC’s Cost Allocation Model and is reviewed by 

the financial statement auditors each year to ensure the accurate allocation of expenses to 

each program. 

Total Net Cost of Operations (expenses in the salaries and expenses, and grant 

appropriations) for the EAC was $21.6 million for Fiscal Year 2013, up from $13.6 million 

in FY 2012.

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.
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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 with the aim of ensuring: 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 can provided qualified assurance that internal control over financial reporting to 

ensure that transactions are: executed in accordance with budgetary and financial laws and 

other requirements, consistent with the purposes authorized, and 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. 

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

as follows:

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.

Since FY 2009, EAC has incorporated the results of self-assessments of financial 

management internal controls to further demonstrate evaluation of internal controls.

A material weakness was identified by management beginning in FY 2008 concerning 

EAC’s lack of effective written policies and procedures. EAC finalized records 

management procedures in FY 2013. EAC plans on adopting Communications and 

Clearinghouse Policy and National Voter Registration Act revised rules once a quorum is in 

place.
 Election Assistance Commission 

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EAC is working with the new financial services provider to ensure internal controls over 

financial reporting are strong.

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.

During FY 2013, EAC continued work on an information technology (IT) modernization 

project that was in progress during the FY 2012. To continue the enhancement of the

agency's network infrastructure in its new physical location during FY 2013, the OCIO 

planned, designed and implemented a secured network infrastructure that meets the new 

work office setup and accommodates teleworking option for the staff. As part of the 

agency's effort to improve IT services, EAC replaced aging laptop workstations with highperformance desktop and laptop workstations. EAC’s OCIO provided necessary accessories 

as well as a secured connection to staff for teleworking.

The agency email messaging system Microsoft Exchange server 2010 has been enhanced to 

enable users to access their email thru secured online connection and allow them manage

their emails. During FY 2013, EAC upgraded Servers to Windows 2008, and Windows XP 

workstations to Windows 7.

EAC implemented a self-contained system recovery backup solution at the main office as 

well as at the Continuity of Operations (COOP) site to protect mission-critical data against 

system down-time and for disaster recovery. To ensure internal security, EAC applied

additional access controls including an intrusion detection appliance as well continuous 

monitoring.

Further, EAC finished work to upgrade of the telephone system to a menu-driven interactive

voice response (IVR) system. The main switch number uses a telephone menu to direct 

callers to offices and provides voter contact information for State voter information lines 

during elections. To improve internal and external communication, EAC completed work 

on unified messaging with a Voice Over IP (VOIP) phone system that allows users to access 

voicemail via email, a custom auto-attendant, call forwarding and audio conferencing at any

time from any location.

The FY 2013 Federal Information Security Management Act (FISMA) evaluation report 

found that EAC was in substantial compliance with FISMA requirements. Specifically, it 

was noted that EAC had established sufficient policies and procedures relating to its IT 

security program to address identified risks; implemented actions to address prior concerns 

relating to meeting Privacy Act requirements; established a continuous monitoring program 

that substantially addressed all NIST requirements (using Asset management and IT service 

desk utilities); provided annual security awareness training and specialized training to its IT 

specialists; developed and tested a contingency plan; and had established required access 

controls sufficient to meet identified risks.
 Election Assistance Commission 

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The summary in EAC’s 2013 FISMA audit shows that EAC was in substantial compliance

with FISMA requirements, OMB policy and guidelines, and applicable NIST standards and 

guidelines for the security control areas evaluated. EAC had developed an agency-wide IT 

security program based upon assessed risk. The FISMA audit concluded that the security 

program in place provided reasonable assurance that the agency’s information and 

information systems are appropriately protected.

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 Quarterly Audit Recommendation 

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

Congressional Oversight staff. As of September 30, 2013, EAC has two open findings to 

resolve. EAC made improvements in all Agency management challenges. EAC also 

considers and responds to recommendations from audits and reviews conducted by the 

Government Accountability Office.

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 2013 financial statement audit report identified material weaknesses in 

internal control over financial reporting. 

Federal Information Security Management Act

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

of FY 2013. 

 

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. 
 Election Assistance Commission 

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 Election Assistance Commission 

20

SECTION II

Financial Section

II.A. MESSAGE FROM THE CHIEF FINANCIAL OFFICER

EAC’s financial statements for FY 2013 are an integral component of the Agency Financial 

Report (AFR). This is the sixth year in its ten year operational existence that EAC has 

prepared financial statements and submitted them for audit. This is the fifth year EAC is 

presenting an AFR in place of the Performance and Accountability Report. EAC presents 

summarized performance data in this report, and plans on providing detailed data in 

conjunction with the Fiscal Year (FY) 2015 Congressional Justification.

 For FYs 2009 through 2011, EAC received unqualified audited financial statement opinions

in conjunction with a full-time staff accountant. After loss of the full-time accountant, hire 

of a part-time accountant to reduce administrative staffing levels, conversion from one 

financial service provider to another late in the fiscal year, and incompatible internal 

controls between the providers, among other reasons, the auditors were unable to opine on 

the FY 2012 financial statements. 

EAC hired a full-time accountant in February 2013 to implement an action plan addressing

audit findings and to improve our internal controls. The action plan included detailed 

procedures and training related to advances, accruals, and accounts receivable; and a review 

of accounting treatment for FY 2012 financial entries. These actions were completed. 

For FY 2013, the agency received a disclaimer opinion on the financial statements, due 

primarily to uncertainties relating to the disbursement of a requirements payment grant from 

a cancelled 2008 HAVA Section 251 election reform account in October 2013, and the 

remaining obligations therein. This is a complex appropriations law issue that could not be 

resolved before the end of the FY 2013 financial statement audit period. The uncertainties 

will undergo legal review, and a management determination about the propriety of the 

disbursement will be made. The October 2013 disbursement appears to represent a serious 

internal control issue. We plan on identifying and remediating this issue to avoid it in the 

future as soon as possible.

The FY 2013 audit opinion found one significant deficiency and two material weaknesses. 

One of the weaknesses is mandatory and is related to the FY 2012 restatement to correct 

entries for undelivered orders (orders issued by EAC for goods or services which have not 

yet been received). The second weakness was identified during interim financial statement 

audit testing by the auditors related primarily to the timeliness and accuracy of audit 

deliverables and supporting documentation. Several of the issues related to the material 

weakness were reported by the auditors in FY 2012. EAC will work to resolve issues with 

the disbursement of FY 2008 funds, create an action plan to strengthen controls over the 

preparation and review of entries and supporting documentation, request an action plan from 

the service provider, and pursue additional or different accounting resources during FY 2014 

to improve the timeliness and accuracy of the statements and information provided for audit.
 Election Assistance Commission 

21

During FY 2013, to maximize efficiencies, EAC prepared for a paperless work environment 

with: 1) inexpensive storage at the National Archives and Records Administration Federal 

Records Center in Suitland, Maryland according to retention schedules, and 2) an October 

2013 move to new office space. The new space is saving close to 75 percent on the 

agency’s rent. EAC continues its commitment made in October 2010 to reduce staff, has 

reassigned functions internally, and uses the services of other agencies for economies of 

scale.

Following for your review are EAC’s auditor’s report, and financial statements and notes.

Annette Lafferty

December 16, 2013
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II.B. INSPECTOR GENERAL’S ASSESSMENT

U.S. ELECTION ASSISTANCE COMMISSION 

OFFICE OF INSPECTOR GENERAL

December 16, 2013

Memorandum

To: Ms. Alice Miller

Acting Executive Director

From: Curtis W. Crider 

Inspector General, U.S. Election Assistance Commission

Subject: Audit Report of the U.S. Election Assistance Commission's Financial Statements for 

Fiscal Years 2013 and 2012 (Assignment No. I-PA-EAC-01-13)

Introduction

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

General for the U. S. Election Assistance Commission (EAC) or an independent external auditor, as 

determined by the Inspector General, to audit EAC's financial statements. The independent public 

accounting firm of Leon Snead & Company, P.C. (LSC) performed the audit of the EAC's financial 

statements as of September 30, 2013 and 2012 and for the years then ended. The audit was 

performed by LSC under a contract that was monitored by the Office of Inspector General (OIG). 

The contract required that the audit be performed in accordance with Government Auditing 

Standards issued by the Comptroller General of the United States and the Office of Management and 

Budget (OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial Statements.

Results of Audit

In its audit report, LSC issued a disclaimer on EAC's financial statements. LSC identified two 

material weaknesses in internal control over financial reporting. In addition LSC identified that there 

were significant and pervasive uncertainties relating to the validity of approximately $2.2 million in 

grant accruals, as well as, the validity of obligations totaling approximately $900,000 relating to the 

2008 requirements payment appropriation and reported in the FY 2013 financial statements. The 

resolution of the uncertainties which are pending a legal opinion, could result in the agency needing 

to report an Anti-Deficiency Act violation and an improper payment.
 Election Assistance Commission 

23

Evaluation of Leon Snead & Co. P.C.'s Audit Performance

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;

• 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;

• Performed other procedures we deemed necessary; and

• Coordinated issuance of the audit report.

Leon Snead & Co. P.C. is responsible for the attached auditor's report 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, or compliance with laws and regulations.

Report Distribution

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

reports issued, actions taken to implement recommendation, and recommendations that have not 

been implemented. Therefore, we will include the information in the attached audit report in our 

next semiannual report to Congress. The distribution of this report is not restricted and copies are 

available for public inspection.

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, have any 

questions, please contact me at (301) 734-3104.

Attachment
 

Election Assistance Commission 

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II.C. INDEPENDENT AUDITOR’S REPORT

Election Assistance Commission

Audit of Financial Statements

As of and for the Years Ended 

September 30, 2013 and 2012

Submitted By

Leon Snead & Company, P.C

Certified Public Accountants & Management Consultants
 Election Assistance Commission 

25

TABLE OF CONTENTS

Paee

Independent Auditor's Report ................................................................................................1

Basis for Disclaimer of Opinion.............................................................................................2

Disclaimer of Opinion.............................................................................................................3

Report on Internal Control...................................................................................................... 4

Report on Compliance ..........................................................................................................12

Attachment 1, Status of Audit Recommendations................................................................14

Attachment 2, Agency Response to Draft Report.................................................................16
 Election Assistance Commission 

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II.C. INDEPENDENT AUDITORS’ REPORT

LEON SNEAD Certified Public Accountants

& COMPANY, P.C. _______________________________________________________________________ (£ Management Consultants

416 I lungerford Drive. Suite 400 

Rockville. Maryland 20850 301-738-

8190 Fax:301-738-8210 

leonsnead.companypc@erols.coni

Independent Auditor's Report

Acting Executive Director, Election Assistance Commission 

Inspector General, Election Assistance Commission

We were engaged to audit the accompanying financial statements of the U.S. Election 

Assistance Commission (EAC) which comprise the balance sheet, as of September 30, 2013 

and September 30, 2012, the related statements of net cost, changes in net position, and 

budgetary resources for the years then ended, and the related notes to the financial statements.

SUMMARY

For fiscal years (FY) 2013 and 2012, and as further discussed in the Basis for Disclaimer of 

Opinion paragraph, we were unable to obtain sufficient appropriate audit evidence on which to 

base an opinion, and we concluded that the possible effects on the financial statements of 

undetected misstatements, if any, could be both material and pervasive. Because of the 

significance of the uncertainties, we have not been able to obtain sufficient appropriate audit 

evidence to provide a basis for an audit opinion and accordingly, we do not express an opinion 

on the financial statements.

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 two material weaknesses. We also identified a significant deficiency related to 

financial statement preparation and support.

As discussed further in our Basis for Disclaimer of Opinion paragraph, we identified that there 

were certain significant transactions that pending a legal decision, and related management 

determination could result in EAC's noncompliance with certain significant provisions of laws, 

regulations, contracts and grant agreements that have a material effect on the financial 

statements.

REPORT ON THE FINANCIAL STATEMENTS

We were engaged to audit the accompanying financial statements of the EAC which comprise 

the balance sheet, as of September 30, 2013 and September 30, 2012, the related statements of 

net cost, changes in net position, and budgetary resources for the years then ended, and the 

related notes to the financial statements.
 Election Assistance Commission 

27

Management's Responsibility for the Financial Statements.

Management is responsible for the preparation and fair presentation of these financial statements 

in accordance with accounting principles generally accepted in the United States of America; 

this includes the design, implementation, and maintenance of internal control relevant to the 

preparation and fair presentation of financial statements that are free from material 

misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on the financial statements based on conducting 

the audit in accordance with auditing standards generally accepted in the United States of 

America. Because of the matters described in the Basis for Disclaimer of Opinion paragraph; 

we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit 

opinion.

An audit involves performing procedures to obtain audit evidence about the amounts and 

disclosures in the financial statements. The procedures selected depend on the auditor's 

judgment, including the assessment of the risks of material misstatement of the financial 

statements, whether due to fraud or error. In making those risk assessments in a Federal agency, 

the auditor considers internal control relevant to the entity's preparation and fair presentation of 

the financial statements in order to design audit procedures that are appropriate in the 

circumstances, but not for the purpose of expressing opinions on the effectiveness of the 

agency's internal control or its compliance with laws, regulations, and significant provisions 

of contracts. Accordingly, no opinion is expressed.

Basis for Disclaimer of Opinion on the FY 2013 and 2012 Financial Statements

EAC and its service provider made significant efforts to identify and correct errors impacting 

the FY 2012 financial statements, and to strengthen internal controls during FY 2013; 

however, internal controls over financial reporting were ineffective in FY 2012. As a result of 

material weaknesses in internal control, we were unable to obtain sufficient competent 

evidential support for the restated amounts presented in the balance sheet as of September 30, 

2012, and the related restated statements of net cost, changes in net position, and budgetary 

resources for the year then ended.

During our audit, we were advised by EAC officials that while EAC believed that they had 

properly presented the FY 2013 financial statements, there were significant and pervasive 

uncertainties relating to a grant liability accrual, as well as, the validity of remaining 

obligations reported for a 2008 requirements payments appropriation in the 2013 financial 

statements. EAC officials advised they were requesting legal counsel to assist in confirming 

the propriety of an approximately $2.2 million grant accrual made from a FY 2008 

requirements payments appropriation to one grantee, as well as, the approximately $900,000 in 

related open obligations recorded in the FY 2013 financial statements. The EAC's service 

provider subsequently disbursed the $2.2 million payment to the grantee in October 2013.

Leon Snead & Company, P.C. 2
 Election Assistance Commission 

28

Significant uncertainties concerning the final resolution of the issues discussed above and in 

further detail in the findings and recommendations section of this report existed at the audit's 

completion. Based upon the existing conditions and available audit evidence, we have 

concluded that significant uncertainties exist relating to the reporting of expenses and 

obligations recorded in the fiscal year 2013 financial statements and it is not possible to form 

an opinion on the financial statements as a whole due to the interaction and possible 

cumulative effects of the uncertainties.

Disclaimer of Opinion on the 2013 and 2012 Financial Statements

Because of the significance of the matters described in the Basis for Disclaimer of Opinion 

paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a 

basis for an audit opinion. Accordingly, we do not express an opinion on the FY 2013 and 2012 

financial statements.

Restatement of Previously-Issued Financial Statements

In our report dated November 14, 2012, we disclaimed an opinion for FY 2012 financial 

statements because EAC was unable to provide accurate and timely accounting information 

from its general ledger, could not support amounts recorded for its grant expenses incurred, 

advances paid, and open obligations. Due to internal control and other accounting issues we 

were unable to obtain sufficient competent evidential support for the amounts presented. As 

described in Note 15, EAC and its service provider reviewed their accounting records, and 

made adjustments to the general ledger to correct accounting errors impacting fiscal year 2012 

and restated its 2012 financial statements. However, due to the material internal control issues 

discussed in Basis for Disclaimer of Opinion paragraph, and our 2012 audit report, we have not 

been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion 

on the restated 2012 financial statements. Accordingly, we do not express an opinion on these 

financial statements.

OTHER MATTERS

Required Supplementary Information and Required Supplementary Stewardship Information

Accounting principles generally accepted in the United States of America require that 

Management's Discussion and Analysis and information about investments in non-Federal 

physical property, and research be presented to supplement the basic financial statements. 

Such information, although not a part of the basic financial statements, is required by the 

Federal Accounting Standards Advisory Board (FASAB) who considers it to be an essential 

part of financial reporting for placing the basic financial statements in an appropriate 

operational, economic, or historical context. We have applied certain limited procedures to the 

required supplementary information and required supplementary stewardship information in 

accordance with auditing standards generally accepted in the United States of America, which 

consisted of inquiries of management about the methods of preparing the information and 

comparing the

Leon Snead & Company, P.C. 3
 Election Assistance Commission 

29

information for consistency with management's responses to our inquiries, the financial 

statements, and other knowledge we obtained during our audit of the financial statements. We do 

not express an opinion or provide any assurance on the information because the limited 

procedures do not provide us with sufficient evidence to express an opinion or provide any 

assurance, and due to the uncertainties discussed in the Basis for Disclaimer of Opinion 

paragraph.

Other Accompanying Information

The performance measures, and other related information are presented for the purposes of 

additional analysis and are not required parts 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 do not express an opinion or provide any assurance on it.

OTHER AUDITOR REPORTING REQUIREMENTS

Report on Internal Control

In planning and performing our audit of the financial statements of EAC, as of and for, the 

years ended September 30, 2013 and 2012, in accordance with auditing standards generally 

accepted in the United States of America, except as noted in our Disclaimer of Opinion 

paragraph, we considered the EAC's internal control over financial reporting (internal control) as 

a basis for designing audit procedures that are appropriate in the circumstances 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.

Our consideration of internal control was for the limited purpose described in the preceding 

paragraph and was not designed to identify all deficiencies in internal control that might be 

material weaknesses or significant deficiencies and therefore, material weaknesses or 

significant deficiencies may exist that were not identified. However, as discussed below, we 

identified certain deficiencies in internal control that we consider to be material weaknesses 

and significant deficiencies.

Because of inherent limitations in internal controls, including the possibility of override of 

controls, misstatements, losses, or noncompliance may nevertheless occur and not be detected. 

A deficiency in internal control exists when the design or operation of a control does not allow 

management or employees, in the normal course of performing their assigned functions, to 

prevent, or detect and correct, misstatements on a timely basis. A material weakness is a 

deficiency or a combination of deficiencies, in internal control, such that there is a 

reasonable possibility that a material misstatement of the entity's financial statements will not 

be prevented, or detected and corrected, on a timely basis. We consider findings two and 

three to be material weaknesses.

Leon Snead & Company, P.C. 4
 Election Assistance Commission 

30

FINDINGS AND RECOMMENDATIONS

1. Significant Uncertainties Relating to Transactions Recorded in a FY 2008 

Appropriation and Reported in the 2013 Financial Statements

As discussed in our Basis for Disclaimer of Opinion paragraph and other pertinent 

sections of this report, EAC officials advised that while EAC believed that they had 

properly presented the FY 2013 financial statements, significant uncertainties exist 

relating to the accrual of an approximately $2.2 million grant payment, as well as the

validity of remaining obligations totaling approximately $900,000 reported for a 2008 

requirements payments appropriation. The 2008 requirements payments appropriation, 

among other actions, provided $115 million for requirements payments1. Unlike 

prior and subsequent years the statement "available until expended" was not included 

in the 2008 requirements payments appropriation language. EAC and its previous and 

current service providers recorded the appropriation as an annual appropriation, and the 

funds were all obligated in FY 2008 by operation of law.

The significant uncertainties surrounding the financial events recorded in the 2013 

financial statements relate to whether the 2008 requirements payments appropriation: (1) 

should be cancelled as required by 31 USC § 1552 which provides that "On September 

30th of the 5th fiscal year after the period of availability for obligation of a fixed 

appropriation account ends, the account shall be closed and any remaining balance 

(whether obligated or unobligated) in the account shall be canceled and thereafter shall 

not be available for obligation or expenditure for any purpose"; or (2) obligations remain 

available until disbursed regardless of the fiscal year.

In discussions with EAC officials, we were advised that a legal opinion was needed to 

provide additional authoritative guidance to EAC officials to assist in resolving 

significant uncertainties about the propriety of the grant accrual, as well as related 

obligations recorded in the FY 2013 financial statements for the 2008 requirements 

payments appropriation.

The conflicting information obtained about the propriety of the reporting of the 2008 

requirements payments appropriation in the 2013 financial statements varies 

significantly, as discussed below.

1

The Help America Vote Act of 2002 established the EAC to assist in the administration 

of federal elections and charged the EAC with distributing payments to states under its 

authorized funding programs. HAVA authorizes payments to states for certain enumerated 

purposes, including meeting the requirements of Title HI of HAVA. These payments are 

called "requirements payments." HAVA provides that EAC shall make requirements 

payments in an amount determined by a specified allocation formula to each state that meets 

the statutory preconditions for the receipt of the requirements payments. For fiscal year 

2008, Congress appropriated $115,000,000 for requirements payments under part 1 of 

subtitle D of title II of the Help America Vote Act of 2002.

Leon Snead & Company, P.C. 5
 Election Assistance Commission 

31

• In a June 26, 2008, legal opinion, EAC General Counsel (GC) officials stated

the following:

"While the 2008 requirements payments are obligated by operation of law, as an 

annual appropriation its availability is limited. Federal statute mandates that 

"On September 30th of the 5th fiscal year after the period of availability for 

obligation of a fixed appropriation account ends, the account shall be closed 

and any remaining balance (whether obligated or unobligated) in the account 

shall be cancelled and thereafter shall not be available for obligation or 

expenditure for any purpose." 31 U.S.C.§1552. Like all annual appropriations, 

the 2008 requirements payments will only remain available for a period of five 

years after the period of availability (Fiscal Year 2008). Thus, any funding not 

disbursed to states after this five year period will be returned the Treasury."

Under this opinion, if still valid, the approximately $900,000 in obligations 

reported for the 2008 requirements payments appropriation, as well as, the 

approximately $2.2 million in grant expenses included in these statements would 

be improper, and would result in numerous line items in the financial statements 

being materially misstated.

• In discussions with EAC officials, review of available records and documents

concerning the 2008 requirements payments appropriation, we noted the

following.

■ The agency's service provider cancelled the 2008 requirements payments 

appropriation, and the general ledger trial balances reflected these funds as 

cancelled. The agency's FACTS I and FACTS II reports were filed on 

November 8, 2013, reflecting the 2008 requirements payments appropriation 

as cancelled without the approximately $2.2 million disbursement having 

been made.

■ EAC officials forwarded documents authorizing the approximately $2.2 

million grant disbursement to its service provider in mid-October 2013, 

immediately after the government shutdown ended, and noted that its service 

provider should use available obligations in the 2008 requirements payments 

appropriation. EAC's service provider disbursed these funds to the grantee 

shortly after the grant documentation was provided to it by EAC.

■ The 2013 financial statements presented for audit on December 2, 2013, 

included as "topside" adjustments to the general ledger entries to record the 

accrual of the approximately $2.2 million accounts payable (and related 

entries), and entries to record the approximately $900,000 in undelivered 

orders remaining in the 2008 requirements payments

Leon Snead & Company, P.C. 6
 Election Assistance Commission 

32

appropriation. This supports that the 2008 requirements payments 

appropriation should not have been and was not cancelled.

■ During our audit, we were advised by officials from EAC's service provider, 

and obtained documentation indicating some EAC personnel concurred that the 

2008 requirements payments appropriation was available, and did not need to 

be cancelled. In addition, we were advised by EAC's service provider that 

OMB, at some point, believed that the 2008 requirements payments 

appropriations remained available to EAC.

■ During our audit, we were also advised by other EAC officials and officials 

from EAC's service provider that the 2008 requirements payments 

appropriation was no longer available, that funds could not be disbursed from 

this appropriation after the end of fiscal year 2013, and that undelivered 

orders were no longer valid. We have also been advised that OMB officials 

believed that the 2008 requirements payments appropriation should have 

been cancelled at the end of the 2013 fiscal year.

If the final definitive, authoritative decision by EAC management is that the 2008 

requirements payments appropriation remains available to EAC, the 2013 financial 

statements properly present the transactions occurring for this appropriation. However, if 

it is determined that the 2008 requirements payments appropriation should have been 

cancelled, the 2013 financial statements presented for audit are materially misstated, and 

the agency potentially must report the approximately $2.2 million disbursement as an AntiDeficiency Act (ADA)2

violation and as an improper payment. This payment was 

disbursed in mid-October 2013.

We have concluded that there are pervasive and significant uncertainties surrounding the 

propriety of the approximately $2.2 million accrual, and the approximately $900,000 in 

obligations included in the 2013 financial statements concerning the 2008 requirements 

payments appropriation. Because of these uncertainties, it is not possible to form an 

opinion on the financial statements as a whole due to the

2 Once it is determined that there has been a violation of 31 U.S.C. §§ 1341(a), 1342, or 

1517(a), the agency head "shall report immediately to the President and Congress all relevant 

facts and a statement of actions taken." 31 U.S.C. §§ 1351, 1517(b). The reports are to be signed 

by the agency head. The report to the President is to be forwarded through the Director of OMB. 

In addition, the heads of executive branch agencies and the Mayor of the District of Columbia 

shall also transmit "[a] copy of each report... to the Comptroller General on the same date the 

report is transmitted to the President and Congress." 31 U.S.C. §§ 1351, 1517(b), as amended by 

the Consolidated Appropriations Act, 2005, Pub. L. No. 108-447, div. G, title II, § 1401, 118

Stat. 2809,3192 (Dec. 8, 2004).

OMB has issued further instructions on preparing the reports, which may be found in OMB 

Circular No. A-11, Preparation, Submission, and Execution of the Budget, § 145 (June 21, 

2005). The report is to include all pertinent facts and a statement of all actions taken to address 

and correct the Antideficiency Act violation (such as administrative discipline imposed, referral 

to the Justice Department where appropriate, and new safeguards imposed). An agency also 

should include a request for a supplemental or deficiency appropriation when needed.

Leon Snead & Company, P.C. 7
 Election Assistance Commission 

33

interaction and possible cumulative effects of the uncertainties. Accordingly, we do not 

express an opinion on the 2013 financial statements.

Recommendations

1. Fully document all interim decisions made concerning the accrual and 

subsequent disbursement of the approximately $2.2 million payment made to one 

grantee from 2008 requirements payments appropriations. Based upon an 

assessment of this documentation, strengthen internal control processes at EAC 

and, as appropriate, request internal controls at the service provider be further 

strengthened in this area.

2. Take action, if EAC management officials determine, based upon authoritative 

legal guidance, that the 2008 requirements payments appropriation should have 

been cancelled, to meet the reporting requirements of the ADA and OMB Circular 

A-136.

2. Interim Financial Statements Were Materially Misstated

The 2013 interim financial statements and footnotes provided to us for testing, and 

submitted to the Office of Management and Budget (OMB), as required by OMB 

Circular A-136, Financial Reporting Requirements, contained material misstatements. 

EAC and its service provider needed to strengthen their oversight and review of 

transactions processed in the General Ledger, and internal controls over financial 

reporting. Had EAC's internal controls over financial reporting been in place and 

operating effectively, the errors we identified would have been detected and corrected in 

the financial statements and budgetary reports. As a result, EAC's interim financial 

statements and the FACTS II (SF-133 Report on Budget Execution and Budgetary 

Resources) submissions to OMB were materially misstated for the first three quarters 

of FY 2013.

OMB Circular A-127, Financial Management Systems, requires that "financial events 

shall be recorded applying the requirements of the U.S. Government Standard 

General Ledger (USSGL). Application of the USSGL at the transaction level means that 

each time an approved transaction is recorded in the system, it will generate appropriate 

general ledger accounts for posting the transaction according to the rules defined in the 

USSGL guidance."

The GAO's, Standards for Internal Control in the Federal Government, provides that 

internal control and all transactions and other significant events need to be clearly 

documented, and the documentation should be readily available for examination. The 

GAO standards further provide, "Internal control should generally be designed to assure 

that ongoing monitoring occurs in the course of normal operations. It is performed 

continually and is ingrained in the agency's operations. It includes regular management 

and supervisory activities, comparisons, reconciliations, and other actions people take 

in performing their duties."

Leon Snead & Company, P.C. 8
 Election Assistance Commission 

34

Office of Management and Budget (OMB) Circular No. A-123, Management's 

Responsibility for Internal Control, states 'The agency head must establish controls that 

reasonably ensure that obligations and costs are in compliance with applicable laws; funds, 

property, and other assets are safeguarded against waste, loss, unauthorized use, or 

misappropriation; and revenues and expenditures applicable to agency operations are 

properly recorded and accounted for to permit the preparation of accounts and reliable 

financial and statistical reports..."

OMB Circular A-136, Section 11.4.1 provides that reporting entities should ensure that 

information in the financial statements is presented in accordance with GAAP for Federal 

entities and the requirements of the Circular.

Until September 2013, prior year errors made in the general ledger postings of accounts 

payable accruals, and errors in the balance of outstanding undelivered orders remained 

uncorrected, and resulted in the 2013 interim financial statements and reports being 

materially misstated. In addition, EAC and its service provider processed journal voucher 

(JV) entries that were not in accordance with the United States Standard General Ledger 

(USSGL) causing additional material misstatements.

The following paragraphs provide details of the problems noted.

• We first reported problems with undelivered orders in our 2011 audit report, and 

continued to report significant out of balance conditions between the general ledger 

and subsidiary ledgers in our 2012 financial statement audit report. This problem 

contributed to the reporting of material internal control weaknesses and to the 

disclaimer of opinion on the financial statements for 2012. EAC and its service 

provider have been working to correct this long-standing problem since late in fiscal 

year 2012 when EAC moved their accounting operations to this service provider. 

EAC and the current service provider believe they have processed entries to correct 

this problem.

• Shortly after we initiated our testing of the June 30, 2013, interim financial 

statements, we determined that the FY 2013 statements contained errors resulting from 

the incorrect posting of EAC FY 2012 accounts payable accruals. This problem began 

during conversion of data from the previous service provider when accruals were 

incorrectly recorded as a standard payable, meaning that the amount would not be 

reversed the next accounting period. EAC's service provider had detected this error in 

June 2013, but erroneously posted JV to reverse these accruals to current year 

expenses. Therefore, this material error resulted in an approximately $700,000 

overstatement of FY 2012 accounts payable and expenses, and understated 

undelivered orders, and subsequently misstated FY 2013 accounts payable and 

expenses, and undelivered orders.

• We have reported in prior years that numerous JVs were either improper or were not 

supported resulting in a material internal control weakness. During our interim 

testing of the June 30, 2013, financial statements, we reviewed JVs, and

Leon Snead & Company, P.C. 9
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35

noted that improvements were made in documentation supporting JVs. However, 

we continued to find that material errors were being made in the posting models 

used for these JVs. Details follow:

• A $201,230 adjustment was incorrectly made to reduce current year expenses to 

correct a prior year error. When we questioned this entry, it was later determined 

that the account payable was valid, and this entry was reversed.

• When grant funds were refunded to EAC in FY 2013, an adjusting JV did not 

contain a posting to GL 4802, as required by the USSGL, to remove the prepaid 

obligation remaining in the account from FY 2012 and totaling approximately 

$302,000 causing an overstatement of obligations incurred in FY 2013. The 

agency agreed with us, and posted a correcting JV.

• The permanent reduction of about $440,000 required by the sequestration 

legislation had neither been recorded, as required by authoritative guidance, to the 

EAC general ledger, nor properly presented in the June 30, 2013, interim financial 

statements. We determined that the EAC had properly calculated this reduction 

and had operational plans to make necessary budgetary adjustments; however, 

agency and service provider accounting personnel elected to not record the 

accounting entries without receiving a negative warrant. This error resulted in 

material misstatements to the agency's June 30, 2013, third quarter FACTS II 

reports, and several financial statement line items by about $440,000.

• Documentation provided to support the breakout of governmental and public 

accounts payable line items on the balance sheet, and the Statement of Net Cost 

(SNC) footnote did not contain sufficient information to enable us to determine 

whether the information was correct, or did not support the financial statement 

presentations. Also, the spreadsheet used to allocate costs to the agency's 

responsibility segments to support the SNC footnote was not updated to reflect the 

current staffing levels, and since staffing levels are used to allocate material costs 

between the responsibility segments this error was significant.

• Errors were identified with the plant, property and equipment line item and 

related footnote. The depreciation schedule for two property items showed the 

agency and service provider made errors in calculating depreciation. For 

example, our audit tests showed that one property item was put in service in July 

2011 while the agency showed the property was placed in service about 14 

months later. This resulted in understatement of accumulated depreciation and an 

overstatement of plant, property and equipment.

• GL 4450, Unapportioned Authority, contained an unexplained balance of about 

$234,000.

Recommendations

3. Ensure a comprehensive analysis of JVs is completed prior to approving JVs 

prepared by the service provider. Analyze the problems reported with JVs

Leon Snead & Company, P.C. 10
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36

processed during 2013, and strengthen controls to preclude these errors from 

recurring.

4. Develop specific information requirements and financial statement 

preparation checklists that the service provider and EAC must complete, 

including affirmation that documentation is sufficient and supports all 

financial statements and footnotes, prior to submitting financial statements to 

OMB and for audit.

5. Strengthen internal controls to ensure that necessary supporting documentation 

for all financial statement line items and footnotes is compiled, reviewed, and 

approved by EAC personnel before submitting the financial statements for audit 

and to OMB.

6. Strengthen the quality control process used by EAC to ensure that financial 

statements and reports presented to OMB and for audit are fairly stated in all 

material respects, and in accordance with FASAB, USSGL, and A-136.

3. Restatement of Fiscal Year 2012 Financial Statements

In our report dated November 14, 2012, we disclaimed an opinion for fiscal year 2012 

financial statements. This was because EAC and its service provider were unable to provide 

accurate and timely accounting information from its general ledger, could not support 

amounts recorded for its grant expenses incurred and advances paid, and because of 

material internal control weaknesses, and other accounting issues. Therefore, we were 

unable to obtain sufficient appropriate audit evidence to provide a basis for an audit 

opinion. Accordingly, we did not express an opinion on the FY 2012 financial 

statements.

EAC and its service provider worked throughout most of fiscal year 2013 to review 

accounting records and detailed supporting information in order to determine the financial 

impact of the problems we reported, and determine what adjustments to the general ledger 

were necessary. As a result of these efforts, EAC restated its 2012 financial statements. 

The value of the adjustments made to the 2012 financial statement line items total 

approximately $5.2 million. We tested the actions taken by the EAC and its service 

provider, and concurred in the valuation and recording of these adjustments. However, 

due to the extent of material internal control issues reported, we have not been able to 

obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the 

restated 2012 financial statements.

As required by OMB Circular A-136, EAC must report this restatement as a material 

internal control weakness over financial reporting in the agency's Federal Mangers 

Financial Integrity Act (FMFIA) management assurance report for fiscal year 2013. We 

determined that the EAC has reported this material weakness in its FMFIA report.

Since we included audit recommendations to address the material internal control 

weaknesses in our 2012 financial statement audit report, we are making no 

recommendations on this matter in this report.

Leon Snead & Company, P.C. 11
 Election Assistance Commission 

37

Management of EAC reported the aforementioned material weaknesses in its reporting prepared 

pursuant to the Federal Managers' Financial Integrity Act (FMFIA).

A summary of the status of prior year findings is included as Attachment 1.

Report on Compliance

We performed tests of EAC's compliance with certain provisions of laws, regulations, and 

significant provisions of contracts, and grant agreements, 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 the OMB audit bulletin. 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, and grant agreements was not an objective of 

our audit and, accordingly, we do not express such an opinion.

As discussed in detail in Finding No. 1, during our audit, we obtained information from EAC 

officials that there were significant and pervasive uncertainties relating to the validity of 

approximately $2.2 million in grant accruals, as well as, the validity of obligations totaling 

approximately $900,000 relating to the 2008 requirements payment appropriation and reported 

in the FY 2013 financial statements. The resolution of these uncertainties which are pending a 

legal opinion could result in the agency needing to report an ADA violation and an improper 

payment.

Because of these significant and pervasive uncertainties, we were unable to determine whether 

the EAC complied with applicable laws, regulations, or significant provisions of laws, 

regulations, contracts and grant agreements that have a material effect on the financial 

statements insofar as they relate to accounting matters.

Purpose of the Other Reporting Required bv Government Auditing Standards

The purpose of the communication provided in the Other Reporting Required by 

Government Auditing Standards section is solely to describe the scope of our testing of 

internal control and compliance and the results of that testing, and not to provide an opinion 

on the effectiveness of the agency's internal control or on compliance. This communication is 

an integral part of an audit performed in accordance with U.S. generally accepted government 

auditing standards in considering internal control and compliance with provisions of laws, 

regulations, contracts, and grant agreements that have a material effect on the financial 

statements. Accordingly, this communication is not suitable for any other purpose.

Agency Response

In a memorandum dated December 13, 2013, EAC officials generally concurred with the 

report's findings and recommendations. In addition, EAC officials provided specific

Leon Snead & Company, P.C. 12
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38

actions that they agency planned to take to address the recommendations in this report. A copy of 

management's response is included, in its entirety, as Attachment 2.

Auditor Comments

Since EAC officials general agreed with the recommendations, and provided the actions the 

agency plans to take, we have no additional comments.

This report is intended solely for the information and use of the management, the EAC, 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.

Rockville, Maryland 

December 16, 2013

Leon Snead & Company, P.C. 13
 Election Assistance Commission 

39

 Attachment 1

Status of Prior Year Findings

Finding

No.

Rec

Nos.

FY 2012 Recommendations Status

 1

1 Ensure that EAC personnel with federal accounting expertise, 

including the preparation of financialstatements, are available to 

assist EAC officials in providing appropriate oversight and 

reporting of itsfinancial and accounting operations.

Closed

2 Develop a detailed operating procedure that provides guidance 

on the preparation, review and approval of agency financial 

statements, and requires supporting documentation to be 

compiled, reviewed and approved for all financial statement line 

items and footnotes prior to submission for audit.

Open. While the problem has 

been reduced significantly, we 

continued to note that necessary 

supporting documentation was 

not always provided.

3 Develop policies and detailed operating procedures relating to the 

accounting for and control of advances made by EAC. Ensure 

these policies and procedures specify: (a) under what circumstances

advances are provided; (b) roles and responsibilities; and (c) 

monitoring and reporting requirements for determining when 

advances are reduced, and/or accounts receivable should be

recorded so that accounting records are accurate. Reconsider 

providing advances to other federal agencies.

Closed

4 Review accounting, grant and contracting records

for fiscal year 2012 to ensure that all advances have

been properly recognized in the agency's

accounting and subsidiary records.

Closed

5 Take action to have advances promptly returned to

the agency when either the grant has expired, the

purpose of the grant has been completed, when the

purpose of the non-grant advance has been

accomplished, or when the funds are not being used

in a timely manner.

Closed

6 Ensure that problems identified with undelivered orders in the 

accounting system are corrected, and controls are established to 

prevent such problems in the future

Closed

7 Complete the analysis of differences between EAC

grant subsidiary records and the general ledger

accounting system, and make necessary adjustments

to those systems that are incorrect. Maintain

documentation of the problems noted, and revise or

issue EAC policies and operating procedures to

ensure that the problem does not recur

Closed

8 Strengthen EAC's subsidiary grant records to

ensure that accurate and complete information is

maintained on grant advances, disbursements, and

other required information

Closed

______________________________________________________________________

Leon Snead & Company, P.C. 14 

 

Attachment 1
 Election Assistance Commission 

40

Finding 

No.

Rec 

Nos.

FY 2012 Recommendations Status

9 Strengthen EAC policies and procedures for 

identifying the amount that should be accrued for 

grant and non-grant liabilities.

Closed.

2 1 Implement an internal control process that 

provides appropriate agency oversight over the 

JVs processed by the current service provider.

Open. Significant issues 

continue in this area.

2 Provide training to EAC accounting personnel to 

ensure that they have the skills to provide 

adequate oversight of this area.

Open. Problems in posting JVs 

during 2013 continue.

Finding 

No.

Rec

Nos.

FY 2011 Recommendations3Status

la 1 Strengthen the agreement with the service 

provider to ensure that financial statements and 

supporting documentation are required to be 

provided to EAC and its auditors in a timely 

manner.

Closed.

2 Develop specific information requirements and 

checklists that the service provider must complete 

and provide to EAC to support interim and yearend financial statements.

Closed.

lb 4 Review all 2011 fiscal year JVs that have not 

been approved by EAC to ensure that the entries 

are proper. Require the service provider to 

provide documentation that supports it meets 

published control procedures relating to 

preparation of JVs.

Closed.

Id 5 Ensure that the service provider corrects the 

problem with its undelivered order aging report.

Closed.

6 Ensure that EAC's internal controls over financial 

reporting, including strengthened oversight over 

its accounting service provider, are reestablished.

Closed.

5

The following information relates to the FY 2011 audit recommendations that were still 

considered open when the 2012 audit was released.

Leon Snead & Company, P.C. 15
 

Election Assistance Commission 

41

Attachment 2

U.S. Election Assistance Commission 1335 

East-West Highway, Suite 4-100 Silver 

Spring, MD 20910 www.eac.gov

To: 

From:

Date: 

Subject:

Curtis W. Crider, Inspector General

Alice Miller, Chief 0perating and Acting Executive Director

Annette Lafferty, Chief Financial Officer 

December 13, 2013

Election Assistance Commission Response to the Draft Audit Report of the U.S. 

Election Assistance Commission's Financial Statements for Fiscal Years 2013 and 

2012 (Assignment No. I-PA-EAC-01-13)

The Election Assistance Commission (EAC) went into Fiscal Year (FY) 2013 with relatively new 

agency staff and a financial service provider with another federal agency via memorandum of 

understanding. As you know, EAC changed financial service providers on July 1, 2012. Further, two 

agency program staff members and the agency accountant with experience in presenting information 

to its financial statement auditors left the agency by September 2011. Due to a commitment made in 

October 2010, EAC has been limiting staff replacement in an effort to improve efficiencies. 

Subsequently, after the loss of staff involved with financial statement audits, existing staff were 

reassigned and a new CPA staff member was hired in February 2013. The action plan created to 

address FY 2012 audit findings was implemented in FY 2013.

In the audit report, Leon Snead & Company, P.C. (LSC) issued a disclaimer on the agency's FY 

2013 financial statements. The agency generally concurs with facts stated in the report, where one 

significant deficiency and two material weaknesses were identified (one related to restatement of the 

FY 2012 statements). In addition, there were uncertainties relating to the validity of approximately 

$2.2 million in a grant accrual and disbursement from the 2008 requirements payment appropriation 

that canceled on September 30, 2013. As of this writing, there appears to be a serious internal control 

issue with the agency's contractual disbursing officer, EAC's financial service provider. At this time, 

the agency is working with the U.S. Department of Treasury to clarify the appropriateness of 

disbursement of funds approved for payment by EAC prior to the end of FY 2013 issue.

Our next steps will be to obtain a legal opinion or decision on 2008 Help America Vote Act 

(HAVA) Section 251 requirements payments as described in the audit report, and issue a 

management decision on the propriety of the $2.2 million disbursement. Subsequent to further 

analysis and appropriate evaluation of the disbursement by OMB, Treasury, and EAC management 

and counsel, management may issue a written notice to meet federal reporting requirements. EAC 

will create a corrective action plan to address findings in the audit report, and determine if additional 

or alternative accounting resources in FY 2014 will effectively assist in improving controls and 

timeliness.

Following, please find the EAC responses to recommendations made in the Draft Audit Report for 

FYs 2013 and 2012.
Election Assistance Commission 

42

Attachment 2

Recommendation 1: Fully document all interim decisions made concerning the accrual and 

subsequent disbursement of the approximately $2.2 million payment made to one grantee from 2008 

appropriations. Based upon an assessment of this documentation, strengthen internal control 

processes at EAC and, as appropriate, request internal controls at the service provider be further 

strengthened in this area.

Management Response: EAC will document all actions taken regarding the accrual and disbursement 

of the payment from 2008 funds, and will review and reconcile the agency record of events with 

timeline information provided by the service provider. The agency will develop written procedures to 

strengthen internal controls such as ensuring that any and all agency and service provider staff 

involved is familiar with and follow practices and mandates for accounting entries and payments. 

Further, EAC will request a corrective action plan from its service provider on its processes and 

internal controls.

Recommendation 2: Take action, if EAC management officials determine, based upon authoritative 

legal guidance, that the 2008 appropriation should have been cancelled, to meet the reporting 

requirements of the ADA and OMB Circular A-136.

Management Response: EAC will take action to comply with ADA and A-136 if a legal opinion 

or decision indicates a violation occurred.

Recommendation 3: Ensure a comprehensive analysis of JVs is completed prior to approving JVs 

prepared by the service provider. Analyze the problems reported with JVs processed during 2013, and 

strengthen controls to preclude these errors from recurring.

Management Response: EAC agrees that a sound internal control process and oversight are 

necessary for the processing of Journal Vouchers (JVs). We will work with the current service provider 

on a review and documentation process for necessary JVs to ensure the reasons for the entries and the 

amounts for them are fully documented at the time of the entry, and they are clear, correct, and 

agreed upon. Further, EAC will analyze FY 2013 JVs, discover what recurring issues if any occurred, 

and will strengthen internal controls needed such as level of staff involved in approving the entries, and 

ensure that there is sufficient time available for review and approval prior to entry both internally 

and with the current and any future service providers.

Recommendation 4: Develop specific information requirements and financial statement preparation 

checklists that the service provider and EAC must complete, including affirmation that 

documentation is sufficient and supports all financial statements and footnotes, prior to submitting 

financial statements to OMB and for audit.

Management Response: EAC agrees that a checklist is important to ensure that all necessary steps 

are taken, and plans on developing one based on EACs extensive Accounting Manual and in 

conjunction with its service provider and possibly consultants. Further, the agency will work with its 

current service provider regarding an apparent lack of staff to provide quarterly financial 

statements in time to allow the agency sufficient time to thoroughly review financial statement 

information before OMB quarterly deadlines, and to meet agreed upon deadlines for providing 

information required for financial statement audit in time for agency and then auditor review 

timely. 2
Election Assistance Commission 

43

Recommendation 5: Strengthen internal controls to ensure that necessary supporting documentation 

for all financial statement line items and footnotes is compiled, reviewed, and approved by EAC 

personnel before submitting the financial statement for audit and to OMB.

Management Response: With both EACs previous and current financial services provider, there has 

been a pattern of receiving financial statements for review on the day or very close to the day the 

statements are due to OMB. This appears to be due to insufficient provider staff to meet federal 

reporting deadlines for numerous client agencies.

Further, in order to meet the federal reporting deadlines for numerous client agencies, the service 

provider staff b unavailable to work on client agency Provided by Client (PBC) audit response work. 

Subsequently, audit response deadlines are continually pushed back. The changes in dates often do not 

allow for thorough agency and auditor review during the annual financial statement audit process.

EAC will examine this recurring pattern of service provider last minute completion of statements and 

repeated agreed upon date changes for and delays in PBC responses with its financial services provider, 

and work with the service provider on resolution of this issue.

Recommendation 6: Strengthen the quality control process used by EAC to ensure that financial 

statements and reports presented to OMB and for audit are fairly stated in all material respects, and in 

monitoring of internal controls to ensure that controls are operating effectively. Document the 

actions taken to strengthen controls.

Management Response: EAC plans on writing more extensive procedures and controls identifying 

roles and responsibilities in its Accounting Manual for each step in the process. In conjunction with its 

service provider, the agency will detail what constitutes adequate supporting documentation for all 

statement line items and notes, and staff levels of approval required at the agency and service 

provider.

3
Election Assistance Commission 

44

II.D. FINANCIAL STATEMENTS 

ELECTION ASSISTANCE COMMISSION

BALANCE SHEET

AS OF SEPTEMBER 30, 2013

(In Dollars)

2013

Restated 

2012

Assets:

Intragovernmental

Fund Balance With Treasury (Note 2) $ 30,961,037 $ 38,450,929 

Accounts Receivable (Note 3) - 20,000 

Other (Note 4) 287,680 392,040 

Total Intragovernmental 31,248,717 38,862,969 

Accounts Receivable (Note 3) 1,012 304,919 

Property, Equipment, and Software (Note 5) 1,253,566 923,984 

Other (Note 4) 17,638 1,651 

Total Assets $ 32,520,933 $ 40,093,523 

Liabilities:

Intragovernmental

Accounts Payable $ 825,403 $ 535,064 

Other (Note 7) 15,549 249,127 

Total Intragovernmental 840,952 784,191 

Accounts Payable 408,467 59,161 

Other (Note 7) 7,492,504 876,409 

Total Liabilities $ 8,741,923 $ 1,719,761 

Net Position:

Unexpended Appropriations - Other Funds $ 22,740,863 $ 37,668,292 

Cumulative Results of Operations - Other Funds 1,038,147 705,470 

Total Net Position $ 23,779,010 $ 38,373,762 

Total Liabilities and Net Position $ 32,520,933 $ 40,093,523 
Election Assistance Commission 

45

ELECTION ASSISTANCE COMMISSION

STATEMENT OF NET COST

FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2013

(In Dollars)

2013

Restated 

2012

Program Costs:

Communications and Clearinghouse

Gross Costs $ 662,201 $ 713,994 

Fund and Oversee

Gross Costs $ 16,376,101 $ 7,559,698 

Research, Policy, and Programs

Gross Costs $ 1,495,652 $ 1,889,288 

Testing and Certifications

Gross Costs $ 3,039,641 $ 3,442,063 

Net Cost of Operations $ 21,573,595 $ 13,605,043 
Election Assistance Commission 

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ELECTION ASSISTANCE COMMISSION

STATEMENT OF CHANGES IN NET POSITION

FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2013

(In Dollars)

2013

Restated 

2012

Cumulative Results of Operations:

Beginning Balances $ 705,470 $ 1,048,499 

Beginning Balances, as Adjusted 705,470 1,048,499 

Budgetary Financing Sources:

Appropriations Used 21,725,896 13,030,165 

Imputed Financing Sources 180,376 231,849 

Total Financing Sources 21,906,272 13,262,014 

Net Cost of Operations (21,573,595) (13,605,043)

Net Change 332,677 (343,029)

Cumulative Results of Operations $ 1,038,147 $ 705,470 

Unexpended Appropriations:

Beginning Balances $ 37,668,292 $ 44,650,213 

Beginning Balances, as Adjusted 37,668,292 44,650,213 

Budgetary Financing Sources:

Appropriations Received 11,500,000 11,500,000 

Appropriations Transferred In/Out (2,744,500) (2,750,000)

Other Adjustments (1,957,033) (2,701,756)

Appropriations Used (21,725,896) (13,030,165)

Total Budgetary Financing Sources (14,927,429) (6,981,921)

Total Unexpended Appropriations $ 22,740,863 $ 37,668,291 

Net Position $ 23,779,010 $ 38,373,762 
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ELECTION ASSISTANCE COMMISSION

STATEMENT OF BUDGETARY RESOURCES

FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2013

(In Dollars)

2013

Restated 

2012

Budgetary Resources:

Unobligated Balance Brought Forward, October 1 $ 11,956,227 $ 12,425,038 

 Unobligated Balance Brought Forward, October 1, as adjusted 11,956,227 12,425,038 

Recoveries of Prior Year Unpaid Obligations 400,379 2,299,992 

Other changes in unobligated balance (1,493,855) (2,701,757)

Unobligated balance from prior year budget authority, net 10,862,751 12,023,273 

Appropriations 8,292,322 8,750,000 

Spending authority from offsetting collections 784,656 635,978 

Total Budgetary Resources $ 19,939,729 $ 21,409,251 

Status of Budgetary Resources:

Obligations Incurred $ 8,066,216 $ 9,453,024 

Unobligated balance, end of year:

 Apportioned 3,340,944 3,221,665 

 Unapportioned 8,532,569 8,734,562 

Total unobligated balance, end of year 11,873,513 11,956,227 

Total Budgetary Resources $ 19,939,729 $ 21,409,251 

Change in Obligated Balance

 Unpaid Obligations:

Unpaid Obligations, Brought Forward, October 1 $ 26,534,702 $ 32,727,986 

Obligations Incurred (Note 11) 8,066,216 9,453,024 

Outlays (gross) (15,113,015) (13,346,316)

Recoveries of Prior Year Unpaid Obligations (400,379) (2,299,992)

Unpaid Obligations, End of Year (Gross) 19,087,524 26,534,702 

Uncollected payments:

Uncollected Customer Payments, Federal Sources, Brought Forward, 

October 1

 

(20,000) -

Change in Uncollected Customer Payments, Federal Sources 20,000 (20,000)

Uncollected Customer Payments, Federal Sources, End of Year - (20,000)

Memorandum entries:

Obligated Balance, Start of Year $ 26,494,702 $ 32,727,986 

Obligated Balance, End of Year $ 19,087,524 $ 26,494,702 

Budget Authority and Outlays, Net:

Budget authority, gross $ 9,076,978 $ 9,385,978 

Actual offsetting collections (804,656) (615,978)

Change in uncollected customer payments from Federal sources 20,000 (20,000)

Budget Authority, net $ 8,292,322 $ 8,750,000 

Outlays, gross $ 15,113,015 $ 13,346,316 

Actual offsetting collections (804,656) (615,978)

Outlays, net 14,308,359 12,730,338 

Agency outlays, net $ 14,308,359 $ 12,730,338 
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II.E. NOTES TO THE FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity

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 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.

The 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.

The EAC reporting entity is comprised of General Funds. General Funds are accounts used to 

record financial transactions arising under congressional appropriations or other authorizations to 

spend general revenues. EAC manages Salaries and Expenses, Election Reform Program and 

Election Data Collection Grants General Fund accounts.

EAC has rights and ownership of all assets reported in these financial statements. EAC does not 

possess any non-entity assets.

B. Basis of Presentation

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

operations of EAC. The Balance Sheet presents the financial position of the agency. The 

Statement of Net Cost presents the agency’s operating results; the Statement of Changes in Net 

Position displays the changes in the agency’s equity accounts. The Statement of Budgetary 

Resources presents the sources, status, and uses of the agency’s resources and follows the rules for 

the Budget of the United States Government.

The statements are a requirement of the Chief Financial Officers Act of 1990, the Government 

Management Reform Act of 1994 and the Accountability of Tax Dollars Act of 2002. They have 

been prepared from, and are fully supported by, the books and records of EAC in accordance with 
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the hierarchy of accounting principles generally accepted in the United States of America, 

standards issued by the Federal Accounting Standards Advisory Board (FASAB), Office of 

Management and Budget (OMB) Circular A-136, Financial Reporting Requirements, as amended,

and EAC accounting policies which are summarized in this note. These statements, with the 

exception of the Statement of Budgetary Resources, are different from financial management 

reports, which are also prepared pursuant to OMB directives that are used to monitor and control 

EAC’s use of budgetary resources. The financial statements and associated notes are presented on 

a comparative basis. Unless specified otherwise, all amounts are presented in dollars.

C. Basis of Accounting

Transactions are recorded on both an accrual accounting basis and a budgetary basis. Under the 

accrual method, revenues are recognized when earned, and expenses are recognized when a 

liability is incurred, without regard to receipt or payment of cash. Budgetary accounting facilitates 

compliance with legal requirements on the use of federal funds.

D. Fund Balance with Treasury

Fund Balance with Treasury is the aggregate amount of the EAC’s funds with Treasury in 

expenditure accounts. Appropriated funds recorded in expenditure accounts are available to pay 

current liabilities and finance authorized purchases. 

The EAC does not maintain bank accounts of its own, has no disbursing authority, and does not 

maintain cash held outside of Treasury. Treasury disburses funds for the agency on demand. 

E. Accounts Receivable

Accounts receivable consists of amounts owed to EAC by other Federal agencies and the general 

public. EAC has made advance payments for services from other Federal Agencies. When the 

period of performance for these services expires without fulfillment of the contract, a receivable is 

recorded. EAC has also made advance grant payments to the states for the primary purpose of 

replacing punch card or lever voting machines. The period of use of this grant money has expired. 

All unused funds that have not been returned have been recorded as a receivable. Amounts due 

from Federal agencies are considered fully collectible. Accounts receivable from the public 

include reimbursements from employees. An allowance for uncollectible accounts receivable from 

the public is established when, based upon a review of outstanding accounts and the failure of all 

collection efforts, management determines that collection is unlikely to occur considering the 

debtor’s ability to pay.

F. Property, Equipment, and Software

Property, equipment and software represent furniture, fixtures, equipment, and information 

technology hardware and software which are recorded at original acquisition cost and are 

depreciated or amortized using the straight-line method over their estimated useful lives. Major 

alterations and renovations are capitalized, while maintenance and repair costs are expensed as 

incurred. EAC's capitalization threshold varies based on the property classification for assets with 

a useful life of 2 or more years. For general property and equipment, the capitalization threshold is 
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$10,000 with a bulk purchase policy of $100,000. For leasehold improvements and software, the 

capitalization threshold is $25,000. 

Property, equipment, and software acquisitions that do not meet the capitalization criteria are 

expensed upon receipt. Applicable standard governmental guidelines regulate the disposal and 

convertibility of agency property, equipment, and software. The useful life classifications for 

capitalized assets are as follows:

Description Useful Life (years)

Leasehold 

Improvements 4 - 7

Office Furniture 5

Computer Equipment 5

Office Equipment 5

Software 5

G. Advances and Prepaid Charges

On occasion the 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. The EAC has prepayments and advances with non-governmental, as well as 

governmental, vendors.

H. Liabilities

Liabilities represent the amount of funds likely to be paid by the EAC as a result of transactions or 

events

EAC reports its liabilities under two categories, Intragovernmental and With the Public. 

Intragovernmental liabilities represent funds owed to another government agency. Liabilities With

the Public represents funds owed to any entity or person that is not a federal agency, including 

private sector firms and federal employees. Each of these categories may include liabilities that 

are covered by budgetary resources and liabilities not covered by budgetary resources.

Liabilities covered by budgetary resources are liabilities funded by a current appropriation or other 

funding source. These consist of accounts payable and accrued payroll and benefits. Accounts 

payable represent amounts owed to another entity for goods ordered and received and for services 

rendered except for employees. Accrued payroll and benefits represent payroll costs earned by 

employees during the fiscal year which are not paid until the next fiscal year. EAC also accrues 

liabilities for Section 251 grants, research and development grants for such items as improving 

voting technology and processes for injured military personnel, and logic and accuracy testing 

grants. See the required supplemental information for a more detailed explanation of the grants.

Liabilities not covered by budgetary resources are liabilities that are not funded by any current 

appropriation or other funding source. These liabilities consist of accrued annual leave. 
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I. Annual, Sick, and Other Leave

Annual leave is accrued as it is earned, and the accrual is reduced as leave is taken. The balance in 

the accrued leave account is adjusted to reflect current pay rates. Liabilities associated with other 

types of vested leave, including compensatory, restored leave, and sick leave in certain 

circumstances, are accrued at year-end, based on latest pay rates and unused hours of leave. 

Funding will be obtained from future financing sources to the extent that current or prior year 

appropriations are not available to fund annual and other types of vested leave earned but not 

taken. Nonvested leave is expensed when used. Any liability for sick leave that is accrued but not 

taken by a Civil Service Retirement System (CSRS)-covered employee is transferred to the Office 

of Personnel Management (OPM) upon the retirement of that individual. Credit is given for sick 

leave balances in the computation of annuities upon the retirement of Federal Employees 

Retirement System (FERS)-covered employees effective at 50% beginning FY 2010 and 100% in 

2014.

J. Accrued and Actuarial Workers’ Compensation

The Federal Employees' Compensation Act (FECA) administered by the U.S. Department of Labor 

(DOL) addresses all claims brought by the EAC employees for on-the-job injuries. The DOL bills 

each agency annually as its claims are paid, but payment of these bills is deferred for two years to 

allow for funding through the budget process. Similarly, employees that the EAC terminates 

without cause may receive unemployment compensation benefits under the unemployment 

insurance program also administered by the DOL, which bills each agency quarterly for paid 

claims. Future appropriations will be used for the reimbursement to DOL. 

K. Retirement Plans

EAC employees participate in either the CSRS or the FERS. The employees who participate in 

CSRS are beneficiaries of EAC matching contribution, equal to seven percent of pay, distributed to 

their annuity account in the Civil Service Retirement and Disability Fund.

Prior to December 31, 1983, all employees were covered under the CSRS program. From January 

1, 1984 through December 31, 1986, employees had the option of remaining under CSRS or 

joining FERS and Social Security. Employees hired as of January 1, 1987 are automatically 

covered by the FERS program. Both CSRS and FERS employees may participate in the federal 

Thrift Savings Plan (TSP). FERS employees receive an automatic agency contribution equal to 

one percent of pay and EAC matches any employee contribution up to an additional four percent 

of pay. For FERS participants, EAC also contributes the employer’s matching share of Social 

Security.

FERS employees and certain CSRS reinstatement employees are eligible to participate in the 

Social Security program after retirement. In these instances, EAC remits the employer’s share of 

the required contribution.

EAC recognizes the imputed cost of pension and other retirement benefits during the employees’ 

active years of service. OPM actuaries determine pension cost factors by calculating the value of 

pension benefits expected to be paid in the future and communicate these factors to EAC for 
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current period expense reporting. OPM also provides information regarding the full cost of health 

and life insurance benefits. EAC recognized the offsetting revenue as imputed financing sources 

to the extent these expenses will be paid by OPM.

EAC does not report on its financial statements information pertaining to the retirement plans 

covering its employees. Reporting amounts such as plan assets, accumulated plan benefits, and 

related unfunded liabilities, if any, is the responsibility of the OPM, as the administrator.

L. Other Post-Employment Benefits

EAC employees eligible to participate in the Federal Employees' Health Benefits Plan (FEHBP) 

and the Federal Employees' Group Life Insurance Program (FEGLIP) may continue to participate 

in these programs after their retirement. The OPM has provided the EAC with certain cost factors 

that estimate the true cost of providing the post-retirement benefit to current employees. The EAC 

recognizes a current cost for these and Other Retirement Benefits (ORB) at the time the employee's 

services are rendered. The ORB expense is financed by OPM, and offset by the EAC through the 

recognition of an imputed financing source. 

M. Use of Estimates

The preparation of the accompanying financial statements in accordance with generally accepted 

accounting principles requires management to make certain estimates and assumptions that affect 

the reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from 

those estimates. 

N. Imputed Costs/Financing Sources

Federal Government entities often receive goods and services from other Federal Government 

entities without reimbursing the providing entity for all the related costs. In addition, Federal 

Government entities also incur costs that are paid in total or in part by other entities. An imputed 

financing source is recognized by the receiving entity for costs that are paid by other entities. EAC 

recognized imputed costs and financing sources in fiscal years 2013 and 2012 to the extent 

directed by accounting standards.

O. Grants

The EAC administers and oversees the grant making process in connection with federal 

Requirements Payments and grants made to recipient organizations and the 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 costs. Grant awards made to grantees in 

advance of expenditures are recorded as advances and are included in the balance sheet.
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NOTE 2. FUND BALANCE WITH TREASURY

Fund balance with Treasury account balances as of September 30, 2013 and 2012, were as follows:

No discrepancies exist between the Fund Balance reflected on the Balance Sheet and the balances 

in the Treasury accounts.

The available unobligated fund balances represent the current-period amount available for 

obligation or commitment. 

The unavailable unobligated fund balances represent the amount of appropriations for which the 

period of availability for obligation has expired. These balances are available for upward 

adjustments of obligations incurred only during the period for which the appropriation was 

available for obligation or for paying claims attributable to the appropriations.

The obligated balance not yet disbursed includes accounts payable, accrued expenses, and 

undelivered orders that have reduced unexpended appropriations but have not yet decreased the 

fund balance on hand (see also Note 12).

NOTE 3. ACCOUNTS RECEIVABLE

Accounts receivable balances as of September 30, 2013 and 2012, were as follows:

2013 2012

Fund Balances:

Appropriated Funds 30,961,037 38,450,929 

Total $ 30,961,037 $ 38,450,929 

Status of Fund Balance with Treasury:

Unobligated Balance

 Available $ 3,340,944 $ 3,221,665 

 Unavailable 8,532,569 8,734,562 

Obligated Balance Not Yet Disbursed 19,087,524 26,494,702 

Total $ 30,961,037 $ 38,450,929 
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The accounts receivable is primarily made up of moneys due from funds that had been advanced 

for services that were not used and employee receivables.

Historical experience has indicated that the majority of the receivables are collectible. There are 

no material uncollectible accounts as of September 30, 2013 and 2012.

NOTE 4. ADVANCES AND PREPAYMENTS

Advances and Prepayments balances as of September 30, 2013 and 2012, were as follows:

NOTE 5. PROPERTY, EQUIPMENT, AND SOFTWARE

Schedule of Property, Equipment, and Software as of September 30, 2013 

2013 2012

Intragovernmental

Accounts Receivable $ - $ 20,000

Total Intragovernmental Accounts Receivable $ - $ 20,000

With the Public

Section 102 Grants 302,096

Employee Receivables 1,012 2,823

Total Public Accounts Receivable $ 1,012 $ 304,919

Total Accounts Receivable $ 1,012 $ 324,919

2013 2012

Intragovernmental

Advances and Prepayments $ 287,680 $ 392,040

With the Public

Advances and Prepayments 17,638 1,651

Total Other Assets $ 305,318 $ 393,691

Major Class

Acquisition 

Cost

Accumulated 

Amortization/

Depreciation

Net Book 

Value

Leasehold Improvements $ 675,216 $ 590,814 $ 84,402

Furniture & Equipment 1,389,721 886,350 503,371

Software 172,721 93,375 79,346

Construction-in-Progress 530,614 N/A 530,614

Software-in-Development 55,833 N/A 55,833

Total $ 2,824,105 $ 1,570,539 $ 1,253,566
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Schedule of Property, Equipment, and Software as of September 30, 2012

Depreciation expense was $406,668 and $419,206 for the year ending September 30, 2013 and 

2012, respectively.

NOTE 6. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES

The liabilities for EAC as of September 30, 2013 and 2012 include liabilities not covered by 

budgetary resources. Congressional action is needed before budgetary resources can be provided. 

Although future appropriations to fund these liabilities are likely and anticipated, it is not certain 

that appropriations will be enacted to fund these liabilities. 

FECA liabilities represent the unfunded liability for actual workers compensation claims on EAC’s 

behalf and payable to the Department of Labor. 

Unfunded leave represents a liability for earned leave and is reduced when leave is taken. The 

balance in the accrued annual leave account is reviewed quarterly and adjusted as needed to 

accurately reflect the liability at current pay rates and leave balances. Accrued annual leave is paid 

from future funding sources and, accordingly, is reflected as a liability not covered by budgetary 

resources. Sick and other leave is expensed as taken. 

Major Class

Acquisition 

Cost

Accumulated 

Amortization/

Depreciation

Net Book 

Value

Leasehold Improvements $ 675,216 $ 422,010 $ 253,206

Furniture & Equipment 1,230,518 702,465 528,053

Software 172,721 58,831 113,890

Software-in-Development 28,835 N/A 28,835

Total $ 2,107,290 $ 1,183,306 $ 923,984

2013 2012

Intragovernmental – FECA $ 1,057 $ 1,057

Unfunded Leave 215,345 220,039

Total Liabilities Not Covered by Budgetary Resources $ 216,402 $ 221,096

Total Liabilities Covered by Budgetary Resources 8,525,521 1,498,665

Total Liabilities $ 8,741,923 $ 1,719,761
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NOTE 7. OTHER LIABILITIES

Other liabilities account balances as of September 30, 2013 were as follows:

Other liabilities account balances as of September 30, 2012 were as follows:

NOTE 8. LEASES

EAC has no capital leases. EAC occupies office space under a lease agreement that is accounted 

for as an operating lease. The EAC has a lease for the headquarters office located at 1201 New 

York Avenue, NW, Suite 300 Washington, DC which expires on March 31, 2014. EAC also has a 

lease for additional space located at 1225 New York Ave, NW, Washington, DC which also 

expires on March 31, 2014. EAC is entering into a new lease for headquarters office located at 

1335 East-West Highway, Silver Spring MD which expires on or around October 1, 2018. Below 

is a schedule of future payments for the term of the leases.

Current Non Current Total

Intragovernmental

Other Payroll Liabilities $ 1,795 $ - $ 1,795

Payroll Taxes Payable 13,754 - 13,754

Total Intragovernmental Other Liabilities $ 15,549 $ - $ 15,549

With the Public

 Payroll Taxes Payable $ 2,247 $ - $ 2,247

 Accrued Funded Payroll and Leave 62,756 - 62,756

 Unfunded Leave 215,345 - 215,345

 Other Liabilities w/related Budgetary Obligations 7,212,156 - 7,212,156

Total Public Other Liabilities $ 7,492,504 $ - $ 7,492,504

Current Non Current Total

Intragovernmental

Other Payroll Liabilities $ 13,983 $ - $ 13,983

Payroll Taxes Payable 235,144 - 235,144

Total Intragovernmental Other Liabilities $ 249,127 $ - $ 249,127

With the Public

 Payroll Taxes Payable $ 4,018 $ - $ 4,018

 Accrued Funded Payroll and Leave 53,417 - 53,417

 Unfunded Leave 220,039 - 220,039

 Other Liabilities w/related Budgetary Obligations 598,935 - 598,935

Total Public Other Liabilities $ 876,409 $ - $ 876,409
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Scheduled of Future Lease Payments

The operating lease amount does not include estimated payments for leases with annual renewal 

options.

NOTE 9. INTRAGOVERNMENTAL COSTS AND EXCHANGE REVENUE

Intragovernmental costs and revenue represent exchange transactions between EAC and other 

federal government entities, and are in contrast to those with non-federal entities (the public). 

Fiscal Year Building Totals

2014 $ 338,102 $ 338,102

2015 230,432 $ 230,432

2016 232,198 $ 232,198

2017 234,002 $ 234,002

2018 235,842 $ 235,842

Total Future Payments $ 1,270,576 $ 1,270,576
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Such costs and revenue are summarized as follows:

NOTE 10. BUDGETARY RESOURCE COMPARISONS TO THE BUDGET OF THE 

UNITED STATES GOVERNMENT

The President’s Budget that will include fiscal year 2013 actual budgetary execution information 

has not yet been published. The President’s Budget is scheduled for publication in February 2014 

and can be found at the OMB Web site: http://www.whitehouse.gov/omb/. The 2014 Budget of 

the United States Government, with the "Actual" column completed for 2012, has been reconciled 

to the Statement of Budgetary Resources and there were no material differences. 

The budget that includes the fiscal year 2012 actual execution information is as follows:

2013 2012

Communications and Clearinghouse

 Intragovernmental Costs $ 103,647 $ 188,922

 Public Costs 558,554 525,072

 Total Costs 662,201 713,994

Fund and Oversee

 Intragovernmental Costs $ 2,563,166 $ 2,000,298

 Public Costs 13,812,935 5,559,400

 Total Costs 16,376,101 7,559,698

Research, Policy, and Programs

 Intragovernmental Costs $ 234,097 $ 499,906

 Public Costs 1,261,555 1,389,382

 Total Costs 1,495,652 1,889,288

Testing and Certification

 Intragovernmental Costs $ 475,761 $ 910,771

 Public Costs 2,563,880 2,531,292

 Total Costs 3,039,641 3,442,063

Total Intragovernmental Costs 3,376,671 3,599,897

Total Public Costs 18,196,924 10,005,146

Total Net Cost $ 21,573,595 $ 13,605,043
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NOTE 11. APPORTIONMENT CATEGORIES OF OBLIGATIONS INCURRED

Obligations incurred and reported in the Statement of Budgetary Resources in 2013 and 2012 

consisted of the following:

Category B apportionments typically distribute budgetary resources by activities, projects, objects 

or a combination of these categories.

NOTE 12. UNDELIVERED ORDERS AT THE END OF THE PERIOD

For the fiscal years ended September 30, 2013 and 2012, budgetary resources obligated for 

undelivered orders amounted to $10,867,320 and $25,732,269, respectively.

NOTE 13. RECONCILIATION OF NET COST OF OPERATIONS TO BUDGET 

EAC has reconciled its budgetary obligations and non-budgetary resources available to its net cost 

of operations:

Budgetary Obligations Net

FY2012 Resources Incurred Outlays

Statement of Budgetary Resources $20,828,339 $ 9,153,251 $12,750,338

Spending Authority from Offsetting

 Collections (616,423)

Unobligated Balance Not Available (8,493,852)

Rounding 1,281,936 ($153,251) 249,662

Budget of the U.S. Government $13,000,000 $9,000,000 $13,000,000

2013 2012

Direct Obligations, Category B 8,066,216 9,453,024

Total Obligations Incurred $ 8,066,216 $ 9,453,024
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NOTE 14. 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 Help American Vote Act (HAVA) Section 251 

Requirements Payments to the states to help them meet the Title III requirements of HAVA. The 

EAC periodically receives additional grant money to fund grant programs such as Research of 

Voting Technology Improvements, College Poll Worker and Mock Election grants. 

NOTE 15. RESTATEMENTS

During the fourth quarter of FY12 the EAC converted accounting service providers from the 

General Service Administration (GSA) to the Bureau of Public Debt (BPD), currently DBA as the 

Bureau of Fiscal Service (BFS). While entering the conversion general ledger data and supporting 

2013 2012

 Obligations Incurred $ 8,066,216 $ 9,453,024

 Spending Authority from Offsetting Collections and Recoveries (1,185,035) (2,935,970)

 Obligations Net of Offsetting Collections and Recoveries 6,881,181 6,517,054

 Imputed Financing from Costs Absorbed by Others 180,376 231,849

 Other Resources (93)

 Net Other Resources Used to Finance Activities 180,376 231,756

 7,061,557 6,748,810

 14,105,370 6,437,027

 21,166,927 13,185,837

Generate Resources in the Current Period 406,668 419,206

$21,573,595 $13,605,043

 Total Resources Used to Finance the Net Cost of Operations 

Resources Used to Finance Activities

Budgetary Resources Obligated

Other Resources

 Total Resources Used to Finance Activities 

 Total Resources Used to Finance Items Not Part of the Net 

Cost of Operations 

Net Cost of Operations

2013 2012

FY 2008 Section 251 Requirement Payments $ - $ 575,000

FY 2009 Section 251 Requirement Payments - 500,000

FY 2010 Section 251 Requirement Payments 4,292,871 2,464,199

FY2011 Section 251 Requirement Payments 221,853 435,808

FY 2008 Data Collection Grants - -

Military Heroes Grant - 220,507

College Poll Worker Grants 53,377 126,554

Accessible Voting Technology 2,809,602 1,409,969

Logic and Accuracy Grant Program 485,600 275,040

Mock Election Grants 17,118 13,555

Net Cost of Operations $ 7,880,421 $ 6,020,632
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the FY11/FY12 financial statement audit, 3 significant reporting areas were identified which 

require the need to restate the FY 12 Financial Statements. The areas identified were as 

follows:(1) Abnormal undelivered order balances in the general ledger which resulted in the FY12 

UDO balances being overstated, (2) Conversion misclassification of all accounts payable (AP) and 

AP accruals as payables resulting in an overstatement of liabilities, and (3) insufficient grant 

accrual procedures resulting in an understatement of grant expenses. 

During the EAC accounting data conversion, BFS was unable to obtain reconciling support for the 

undelivered order (UDO) balances which resulted in abnormal balances being entered by 

conversion journal vouchers (JVs) into the general ledger. Subsequently, BFS obtained the UDO 

obligating documents from the EAC which EAC reviewed and confirmed the open UDO balances. 

BFS then entered the open UDO balances into the accounting system module. 

While the normal conversion process should have been to prepare and enter JVs to remove the 

abnormal conversion UDO balances and leave the supported module UDO balances, BFS 

erroneously prepared JVs that reversed module UDO balances resulting in the FY12 financial 

statement UDO balances being overstated. Once the error was identified, BFS prepared correcting 

journal vouchers, approved by the EAC which reversed the erroneous JVs, as well as, the 

abnormal conversion balances. The correcting JVs ultimately reestablished the valid and 

supported module UDO balances. This error resulted in an overstatement of undelivered order 

balances which is reflected by line item below as well as the impact to the financial statements as a 

whole.

BFS analyzed the accounts payable (AP) conversion data and determined the AP accruals were 

misclassified by BFS as accounts payables. BFS subsequently reviewed the conversion data 

mapping to determine the accounts payable misclassification error. BFS prepared journal 

vouchers, approved by the EAC, to properly reflect the accounting of the misclassified accounts 

payable accrual amounts. The misclassification resulted in an overstatement of liabilities. The 

misclassification error resulted in an overstatement of liabilities which is reflected by line item 

below as well as the impact to the financial statements as a whole.

During review of the above items, EAC and BFS also noticed to small errors that were also 

corrected as part of these entries. There was a small error in the statement of an advance on the 

books ($558), which resulted in the restatement of the Assets, Other line. There was also an error 

in the classification of an asset, which resulted in the restatement of the Property, Plant & 

Equipment line by $15,555.

The 2012 Statements are the only statements requiring a restatement. All errors occurred during 

the FY 2012 conversion to the new service provider. There were no errors correct on previous 

statements. The restatements impact the Balance Sheet, Statement of Net Cost, Statement of 

Changes in Net Position, and the Statement of Budgetary Resources. 

The errors related to obligations and accruals were a result of data conversion errors from one 

service provider to another. Because of the nature of these errors, we do not feel there is a high 

risk of these types of errors occurring again. Review processes have been put in place to validate 

both the open obligations and the accruals amounts at each reporting cycle. 

See chart below for overview of the restatement:
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Financial Statement Adjustment Lines

Previously

Reported 

Amount

Adjustment 

Amount

 Restatement 

Amount Explanation for Adjustment

Balance Sheet Property, Equipment and Software $ 939,539.00 $ (15,555.00) $ 923,984.00

Asset placed in service date 

incorrect. Increased Depreciation 

Balance Sheet Assets, Public, Other $ 1,093.00 $ 558.00 $ 1,651.00 Advance previously understated

Balance Sheet Total Assets $ 40,108,519.00 $ (14,996.00) $ 40,093,523.00 Cumulative of both errors listed 

Balance Sheet

Liabilities, Intragovernmental, 

Accounts Payable $ 587,024.00 $ (51,960.00) $ 535,064.00

Conversion error, overstated 

accruals as accounts payable, failed 

to reverse accruals, and grant accrual 

Balance Sheet Liabilities, Public, Accounts Payable $ 560,807.00 $ (501,646.00) $ 59,161.00

Conversion error, overstated 

accruals as accounts payable, failed 

to reverse accruals, and grant accrual 

Balance Sheet Liabilities, Other $ 775,965.00 $ 100,444.00 $ 876,409.00 Grant error mistatements

Balance Sheet Total Liabilities $ 2,172,923.00 $ (453,162.00) $ 1,719,761.00 Cumulative of both errors listed 

Balance Sheet Unexpended Approprations $ 37,214,571.00 $ 453,721.00 $ 37,668,292.00

Cumulative of accrual error, grant 

error and advance misstatement

Balance Sheet Cumulative Results of Operations $ 721,025.00 $ (15,555.00) $ 705,470.00

Asset placed in service date 

incorrect. Increased Depreciation 

amount for the asset

Statement of Net Cost Net Cost of Operations $ 14,043,208.00 $ (438,165.00) $ 13,605,043.00

Cumulative of accrual error, advance 

misstatement and asset depreciation
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Financial Statement Adjustment Lines

Previously

Reported 

Amount

Adjustment 

Amount

 Restatement 

Amount Explanation for Adjustment

Statement of 

Changes in Net 

Position Approprations Used $ 13,483,885.00 $ (453,720.00) $ 13,030,165.00

Cumulative of accrual error, grant 

error and advance misstatement

Statement of 

Changes in Net 

Position Net Cost of Operations $ 14,043,208.00 $ (438,165.00) $ 13,605,043.00

Cumulative of accrual error, grant 

error advance misstatement and 

asset depreciation

Statement of 

Changes in Net 

Position Net Change $ 327,474.00 $ 15,555.00 $ 343,029.00

Asset placed in service date 

incorrect. Increased Depreciation 

amount for the asset

Statement of 

Changes in Net 

Position Cumulative Results of Operations $ 721,025.00 $ (15,555.00) $ 705,470.00

Asset placed in service date 

incorrect. Increased Depreciation 

amount for the asset

Statement of 

Changes in Net 

Position Approprations Used $ 13,483,885.00 $ (453,720.00) $ 13,030,165.00

Cumulative of accrual error, grant 

error and advance misstatement

Statement of 

Changes in Net 

Position Total Budgetary Financing Sources $ 7,435,642.00 $ (453,721.00) $ 6,981,921.00

Cumulative of accrual error, grant 

error and advance misstatement

Statement of 

Changes in Net 

Position Unexpended Approprations $ 37,214,571.00 $ 453,721.00 $ 37,668,292.00

Cumulative of accrual error, grant 

error and advance misstatement

Statement of 

Changes in Net 

Position Net Position $ 37,935,596.00 $ 438,166.00 $ 38,373,762.00

Cumulative of accrual error, grant 

error advance misstatement and 

asset depreciation
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Financial Statement Adjustment Lines

Previously

Reported 

Amount

Adjustment 

Amount

 Restatement 

Amount Explanation for Adjustment

Statement of 

Budgetary

Resources

Recoveries of Prior Year Unpaid 

Obligations $ 1,738,635.00 $ 561,357.00 $ 2,299,992.00

Conversion error for Obligations 

misstated at change in service 

provider

Statement of 

Budgetary

Resources

Spending Authority from Offsetting 

Collections $ 616,423.00 $ 19,555.00 $ 635,978.00

Conversion error for Obligations 

misstated or classified in error at 

change in service provider 

Statement of 

Budgetary

Resources Total Budgetary Resources $ 20,829,339.00 $ 579,912.00 $ 21,409,251.00

Cumulative of Obligation 

misstatements

Statement of 

Budgetary

Resources Obligations Incurred $ 9,153,251.00 $ 299,773.00 $ 9,453,024.00

Conversion error for Obligations 

misstated at change in service 

provider 

Statement of 

Budgetary

Resources

Unpaid Obligaitons, End of Year 

(Gross $ 26,795,841.00 $ (261,139.00) $ 26,534,702.00

Cumulative of Obligation 

misstatements

Statement of 

Budgetary

Resources Obligated Balance, End of Year $ 26,775,841.00 $ (281,139.00) $ 26,494,702.00

Cumulative of Obligation 

misstatements

Statement of 

Budgetary

Resources Budget Authority, Gross $ 9,366,423.00 $ 19,555.00 $ 9,385,978.00

Conversion error for Obligations 

misstated at change in service 

provider 

Statement of 

Budgetary

Resources Actual Offsetting Collections $ (596,423.00) $ (19,555.00) $ (615,978.00)

Conversion error for Obligations 

misstated at change in service 

provider 
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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 

2009

Fiscal Year 

2010

Fiscal Year 

2011

Fiscal Year 

2012

Fiscal Year 

2013

Section 102 

Funds $ 19,905,709 $ 36,838,905 $ (163,130) $ 90,122 $ 137,401

Section 251 

Funds 262,018,224 143,247,989 104,356,159 108,572,160 24,818,183

Data Collection 

Grants 447,650 167 (235) 130 198

Total $282,371,583 $180,087,061 $104,192,794 $108,662,412 $24,955,783

Section 102 Funds. 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. These funds will be converted to Section 251 requirements payments 

and redistributed to the states. 

Section 251 Funds. 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 

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. 

Research and Development

 

The EAC has three research and development initiatives. These initiatives provide funds to 

support the search for new or improved election voting technology that increases the accessibility 
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and accuracy of voting for all citizens. Costs incurred on these initiatives are included in the 

calculation of net costs. 

Initiative Fiscal Year 2013

Military Heroes $ 0 

Accessible Voting 

Disability Technology 3,749,105

Logic and Accuracy 275,040

Total $4,024,145

Military Heroes Initiative

The U.S. Election Assistance Commission has made available up to $500,000 in funds for a twoyear grant focused on research to improve voting technology and processes for recently injured 

military personnel. The purpose of this grant is to enable better understanding of the needs of 

injured military personnel in major hospital, recovery and rehabilitation facilities related to 

election processes, including; 1) documentation of current practices associated with voting 

activities at these facilities; 2) identification of barriers that may prevent this population from 

voting privately and independently; and 3) reviews and assessments of new and innovative 

technologies for assisting military personnel’s ability to participate in the electoral process. 

Accessible Voting Disability Technology Initiative

The U.S. Election Assistance Commission has made available up to $7,000,000 in grant funds for 

a three-year grant to fund research to identify and develop technological and administrative 

solutions that help ensure all citizens can vote privately and independently, a requirement of the 

Help America Vote Act (HAVA) of 2002 (42 U.S.C. §15441). This initiative will support 

research and development activities to increase the accessibility of new, existing, and emerging 

technological solutions in such areas as assistive technologies, interoperability, and design of 

voting systems.

Pre-Election Logic and Accuracy and Post-Election Audit Initiative

The U.S. Election Assistance Commission has awarded $1.4 million in grant funds to develop and 

document processes and best practices for coordinating quality and cost-effective A) voting system 

pre-election logic and accuracy testing (L&A) and B) post-election audits. Funds will support the 

research, development, documentation, and dissemination of a range of procedures and processes 

used in managing and conducting high-quality L&A testing and post-election audit activities by 

type of voting method, vendor-specific equipment, jurisdiction size, or other ways. An additional 

$1.5 million will be available to state and local entities that currently lack adequate funding or 

capacity for conducting pre-election logic and accuracy testing and post-election audits to support 

the implementation of pilot programs funded under this funding notice. 
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SECTION III

Other Accompanying Information

III.A. MOST SERIOUS MANAGEMENT CHALLENGES FACING EAC ACCORDING

TO THE INSPECTOR GENERAL
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III.B. EAC’S RESPONSE TO THE MOST SERIOUS MANAGEMENT CHALLENGES 

FACING EAC ACCORDING TO THE INSPECTOR GENERAL

Memorandum

U.S. Election Assistance Commission

1335 East-West Highway, Suite 4-100

Silver Spring, MD 20910

www.eac.gov
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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 2013 

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 2013 FINANCIAL STATEMENT AUDIT

Audit Opinion Disclaimer

Restatement FY 2012

Material Weaknesses

Beginning 

Balance New Resolved Consolidated

Ending 

Balance

Financial Accounting & Reporting 2 2 0 0 4

Total Material Weaknesses 2 2 0 0 4

Summary of Management Assurances

Statement of Assurance (FMFIA§ 2) Qualified

No. Summary

Beginning 

Balance New Resolved Consolidated

Ending 

Balance

1

Material Weaknesses 

(FMFIA§ 2) 1 0 0 0 1

Total 1 0 0 0 1
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