Agency Financial Report 

U.S. Election Assistance Commission 

November 16, 2009 
Election Assistance Commission 

 

ABOUT THIS REPORT

For FY 2009 reporting purposes, the U.S. Election Assistance Commission (EAC) has 

elected to submit an Agency Financial Report at this time, with an Annual Performance 

Report and Citizens’ Report on February 15, 2010. Last year at this time, EAC submitted 

a Performance and Accountability Report (PAR). The PAR consolidates financial, 

budgetary and performance information to the Office of Management and Budget 

(OMB), Congress and the Public. The quantity and diversity of information makes the 

target audience difficult to identify. Acknowledging this issue, OMB implemented a 

pilot program in FY 2007 providing agencies with the option of splitting the information 

in the PAR into three separate reports targeted to OMB, Congress and the Public, 

respectively: the Agency Financial Report (AFR), due 45 days after the close of the 

fiscal year; the Annual Performance Report, due with the Congressional Budget 

Justification; and a Citizens Report. 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 

 

 

MESSAGE FROM THE CHAIR 

I am pleased to present the U.S. Election Assistance Commission (EAC) FY 2009 

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

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

report highlights efforts to strengthen internal controls and financial management 

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

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

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

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

presents summarized performance data in this report, and plans on providing as much 

detailed data as possible in February in conjunction with the FY 2011 Congressional 

Justification. 

During FY 2009, to address issues in the FY 2008 financial statement audit, EAC: 

 Adopted it first Strategic Plan for 2009 through 2014 in March 2009 allowing the 

agency to begin the process of reporting on formal performance metrics; 

 Reorganized, establishing its first Chief Financial Officer department consisting 

of experienced grants, budget, accounting and procurement staff; 

 Finalized financial management policies and procedures; 

 Submitted a FY 2010 Congressional Budget Justification and FY 2011 OMB 

Budget Justification in a performance based format; and 

 Closed out many outstanding recommendations from operational audits and the 

FY 2008 financial statement audit. 

The agency has made tremendous progress in the program areas during FY 2009. EAC 

made strides in speeding up certification of voting systems: between February and 

August, three voting systems were certified. In order to improve communications with 

stakeholders, EAC instituted a Testing and Certification Voting System Reports 

Clearinghouse on its website. EAC issued a report on Voter Registration, Quick Start 

Management guides on administering Federal elections, best practices for voter 

information web sites; held roundtable discussions on Elections, Election Office 

Management and Accessibility; awarded 13 Poll Worker grants to colleges, universities 

and nonprofit organizations totaling $750,000, and seven Mock Election grants to State 

and local election officials, and regional and nonprofit organizations totaling $300,000 to 

educate secondary school students and their parents about the electoral process through 

mock Federal elections. 
Election Assistance Commission 

EAC committed resources and time to move from a disclaimer opinion on our financial 

statements to an unqualified (clean) opinion in the second half of FY 2009. EAC 

continues to improve it programs and operations, strengthening internal controls, 

financial management, and information technology across the agency. Additional 

information on corrective actions can be found in Section I.E. of the Management 

Discussion and Analysis which follows. Some work remains to be done, such as a 

program of continuous internal control assessment and improvement as required by the 

Federal Managers’ Financial Integrity Act. 

The financial and performance data in this report is reliable and complete without any 

current material weaknesses. The financial statements being submitted in this report are, 

to the best of my knowledge and belief, accurate and reliable. 

In FY 2010, we look forward to awarding grants for voting system logic and accuracy 

testing and disability research totaling $6.0 million of no-year funds appropriated in FY 

2009, improving the quality of technical assistance to recipients of Help America Vote 

Act funds, improving the agency’s information technology infrastructure with the hire of 

its first Chief Information Officer, analyzing results of user feedback on the quality and 

usability of our research and training materials, and continuing to provide materials to 

election officials to assist with the administration of Federal elections. 

Gineen Beach, Chair 

November 16, 2009 
Election Assistance Commission 

TABLE OF CONTENTS 

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

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

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

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

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

I.B Performance Goals, Objectives, and Results........................................ 8 

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

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

 Performance Data Collection and Validation............................................ 15 

 Summary Performance Information....................................................... 15 

 Program Performance Indicators.......................................................... 16 

 Portfolio Analysis........................................................................... 17 

 

I.C. Financial Results........................................................................17 

 Budgetary Resources........................................................................17 

 Financial Position............................................................................18 

 Limitations of the Financial Statements.................................................. 21 

I.D. Analysis of Controls, Management Systems, and Legal Compliance........... 21 

 Federal Manager’s Financial Integrity Act............................................... 22 

 Federal Financial Management Improvement Act...................................... 29 

 Accountability of Tax Dollars Act of 2002.............................................. 29 

 Federal Information Security Management Act......................................... 29 

 Inspector General Act Amendments of 1988............................................ 29 

 Annual Assurance Statement on Internal Control....................................... 30 

 

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

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

II.B. Inspector General’s Assessment...................................................... 34 

II.C. Independent Auditor’s Report........................................................ 37 

II.D. Financial Statements................................................................... 53 

II.E. Notes to the Financial Statements.................................................... 57 

SECTION III - Other Accompanying Information.................................. 73

III.A. IG Assessment of Most Serious Management Challenges Facing EAC....... 74 

III.B. EAC Response to the Most Serious Management Challenges.................. 81 

III.C. Improper Payments ................................................................... 85 

III.D. Summary of Financial Statement Audit and Management Assurances........ 85 
Election Assistance Commission 

SECTION I

Management Discussion and Analysis 

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

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

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

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

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

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

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

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

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

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

Circular A-136 Financial Reporting Requirements. 

I.A BACKGROUND, VISION, MISSION AND ORGANIZATIONAL STRUCTURE 

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

need for States to invest in their election infrastructure and set out a comprehensive program of 

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

voting for United States citizens, HAVA established the Election Assistance Commission 

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

to lead election reform that reaffirms the right to vote and to have all eligible votes counted 

accurately. 

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

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

Standards Board, Board of Advisors, and the Technical Guidance Development Committee-- 

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

statutorily required to: 

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

 Distribute and monitor HAVA funds to states for election administration improvements. 

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

Guidelines (VVSG). 

 Accredit voting system test labs and certify voting equipment. 

 Conduct periodic studies of election administration issues. 
Election Assistance 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. 

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

Voluntary Voting System Guidelines 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) serves as the Chair of the TGDC and 

provides technical support to the Committee. Additionally, HAVA specifies that NIST provide 

recommendations to EAC regarding voting system test laboratories. Since Fiscal Year 2004, 

EAC’s annual appropriations have included funds for NIST support. 

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

January 2004, within ten months of the date mandated by HAVA. Its 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 General Services Administration (GSA), establish a website, start clearinghouse 

operations, and distribute Federal financial assistance to states. In regard to Federal financial 

assistance, Congress appropriated nearly $3 billion in Fiscal Years 2003 and 2004 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. As EAC did not begin operations until 2004, GSA initially distributed HAVA funds to 

the fifty States, Guam, Puerto Rico, the U.S. Virgin Islands, American Samoa and the District of 

Columbia on EAC’s behalf in Fiscal Year 2003. 

In FY 2004, EAC 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 focus in subsequent years was on upgrading the VVSG, completing 

required research to promote effective Federal elections and to 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, the full-time equivalent staffing ceiling of 24 was lifted. As of the end of FY 2009, 

EAC had a full-time staff of 43 employees, including three Commissioners and their four special 

assistants. Since its inception, EAC has received $2.5 billion in requirements payments based on 

a formula of the number of eligible voters, $14.7 million in discretionary grant funds for Poll 

Workers, Mock Elections and Election Data Collection, and transferred $17.7 million to NIST. 

EAC is located in Washington, D.C. 

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Election Assistance Commission 

Funding 

 

Enacted Appropriations by Fiscal Year 

(dollars in thousands) 

 2003 2004 2005 2006 2007 2008 2009 Total 

EAC 

EAC Salaries & Expenses 

 Operations $2,000 $1,674 1 $11,110 $10,986 $11,313 $12,330 $12,909 $62,323 

 Mock Election Grants 200 300 500 

 Poll Worker Grants 300 750 750 1,800 

 Transfer to NIST 2,778 2,772 4,950 3,250 4,000 17,750 

Election Reform Programs 

 

 Requirements Payments 830,000 

 

2 1,489,460 

 

115,000 100,000 2,534,460 

 Poll Worker Grants 1,500 746 2,246 

 Mock Election Org. 199 199 

 Help America Vote Act 

 Foundation 1,500 

 

746 

 

 2,246 

 Voting Tech. Research 5,000 5,000 

 Testing &Verification 1,000 1,000 

Election Data Collection 10,000 10,000 

TOTAL EAC 835,000 1,492,824 13,888 14,058 16,263 141,530 123,959 2,637,524 

GSA 

Section 101& 102 Grants 649,500 649,500 

Administrative Expenses 500 500 

TOTAL GSA 650,000 650,000 

TOTAL EAC & GSA 3,287,524 

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

2/ Carried forward to FY 2005 

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Election Assistance Commission 

Status of Help America Vote Act Authorization versus Appropriations 

(dollars in thousands) 

 Authorized 

Appropriated 

FYs 2003-

2009 Remaining

GSA 

Election Administration Improvement (Section 101) 324,750 324,750 - 

Punch Card/Lever Machine Replacement (Section 102) 324,750 324,750 - 

Administrative Expenses for 101 and 102 500 500 - 

EAC 

Requirements Payments (Section 251) 3,000,000 2,534,460 465,540 

Voting Technology Improvement Research Grants 

(Section 271) 20,000 5,000 15,000 

Equipment and Technology Testing Grants (Section 281) 10,000 - 10,000 

Pre-Election Logic and Accuracy Testing & PostElection Verification 1,000 1 1,000 - 

Operations (Section 210) 82,373 2 82,373 - 

Election Data Collection Grants 10,000 3 10,000 - 

National Student and Parent Mock Election Organization 

(Section 295) 1,400 ** 199 1,201

Help America Vote Act Foundation (Section 601) 5,000 2,246 2,754

Poll Worker Grants (Section 501) 5,000 ** 2,246 2,754 

Total 3,784,773 3,287,524 497,249 

1/ Authorized by P.L. 111-8 

2/ $30 million per HAVA, balance per appropriations. Includes $1.8 million Poll Worker grants,$500,000 Mock Election Grants 

3/ Authorized by P.L. 110-161 

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

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

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Election Assistance Commission 

State-Reported HAVA Spending as of September 30, 2009 

Description Amount Percent 

Voting Systems $1,604,367,413 71.0

Voter Registration Systems 354,992,541 15.7

Improving to the Administration of Federal Elections* 155,299,936 6.9

Educating Voters, Training Officials and Poll Workers, and 

Recruiting Poll workers 77,140,039 

 3.4

Improving Polling Places 29,765,726 1.3

Provisional Voting 3,664,550 0.16

Uncategorized 34,206,688 1.5 

Total 2,259,436,893 

*Includes costs associated with preparing state plans, administering the HAVA program, 

identification for first-time voters, posting voting information at polls, and language assistance. 

Also, includes additional costs of training, voting equipment, and voter registration systems that 

was reported collectively. 

EAC Organization by Program 

EAC has organized around the goals in the Strategic Plan. Below are brief descriptions of the 

four offices responsible for implementing the Strategic Plan programmatic goals. 

Communications

The Communications division is responsible for administration of the agency’s website, 

www.eac.gov which contains over 1,000 documents with information about voting system test 

plans, agency correspondence, and testimony from EAC monthly Public Meetings and hearings; 

and external and internal communications such as press releases, informational videotapes on the 

programs, a monthly newsletter about EAC activities and events to approximately 1,200 

subscribers, and a weekly email on internal operations. 

Grants Management

In FY 2009, EAC reorganized, creating a Grants Management division. The division is 

responsible for distributing, monitoring, providing technical assistance to States and grantees on 

use of funds, and reporting on requirements payments and discretionary grants that improve 

administration of elections for Federal office. The office negotiates indirect cost rates with 

grantees and resolves audit findings on use of HAVA funds. 

Research, Policy and Programs

The Research, Policy and Programs division administers: 

1) the Election Management Guidelines Program to provide information on topics such as 

Ballot Design, Contingency Planning, Managing Change in an Election Office, Media 

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Election Assistance Commission 

and Public Relations, and Developing an Audit Trail for the verification of votes, to help 

election officials promote secure, accurate, and accessible elections; 

2) the Language Accessibility Program to provide informational materials on the Federal 

election process and election terminology in languages other than English, translate the 

national voter registration form, and gather information from working groups to address 

the election needs of voters with limited or no English proficiency; 

3) provides materials to voters to facilitate successful participation in Federal elections such 

as registering to vote; and 

4) conducts election research on mandated topics. 

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

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

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

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

Social Security Numbers. 

Testing and Certification

The division works on EAC’s full accreditation and certification program. Staff works with 

NIST to evaluate and accredit voting system test laboratories and the management of the voting 

system certification process. The program assists States with voluntary certification of their 

systems, supports local elections officials in the areas of acceptance testing and pre-election 

system verification, increases quality control in voting system manufacturing, provides clear 

procedures to manufacturers for the testing and certification of voting systems to specified 

Federal standards consistent with the requirements of HAVA Section 231(a)(1).

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Election Assistance Commission Organization Chart 

Level One 

The commissioners: Chair Gineen Bresso Beach; Vice Chair Gracia Hillman; Commissioner Donetta 

Davidson; and one vacancy 

Special assistants report to the commissioners: Sharmili Edwards to Chair Beach; Mary Ann Bradfield to 

Commissioner Davidson; Maisha Leek to Vice Chair Hillman 

Advisory Boards, Standards Board, TGDC 

Level Two: Reporting to the Commissioners 

Inspector General: Curtis Crider, Juliet Hodgkins and one vacancy 

Executive Director: Tom Wilkey and Bert Benavides 

Level Three: Reporting to Executive Director 

Meeting Coordinator: Emily Jones 

General Counsel: Vacancy, vacancy and Tamar Nedzar 

Chief Financial Officer: Annette Lafferty 

Chief Operating Officer: Alice Miller 

Communications and Clearinghouse: Jeannie Layson, Sarah Litton and Bryan Whitener 

Level Four: Reporting to Chief Operating Officer 

Voting Systems and Certifications: Brian Hancock, vacancy, Matt Masterson, James Long, Josh Franklin 

and Robin Sargent 

Research, Policy and Programs: Karen Lynn-Dyson, Shelly Anderson, vacancy, Juliana Milhofer and Matt 

Weil 

Management Services: Diana Scott, Henry Botchway, LaVeeda Monroe, Beverly Russell and Chere 

Pennington 

Human Resources: Sheila Banks and DeAnna Smith 

Level Five: Reporting to Chief Financial Officer 

Budget: vacancy 

Procurement: Darren Gann 

Accounting: Anne Field and Nnenna Nwosu 

Grants: Mark Abbott, Devon Romig and vacancy 
Election Assistance Commission 

I.B. PERFORMANCE GOALS, OBJECTIVES AND RESULTS 

Recognizing the need to formalize its planning, reporting and execution activities, EAC began 

development of its first five year Strategic Plan 2009-2014 in March 2008. 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 

Office of Communications and Clearinghouse. The goal will be achieved via three strategic 

objectives: 

 Strategic Objectives

1. Operate the EAC Clearinghouse effectively. 

Performance measures: 

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Election Assistance Commission 

 Issue clearinghouse policy in six months [from March 2009]

 Post applicable information on the web-based Clearinghouse within 24 hours of 

receipt.

 Distribute at least one email update per month to stakeholders about the webbased clearinghouse. 

2. Respond to outside requests about the EAC timely and accurately. 

Performance measures: 

 Issue policies and procedures to process requests from outside the agency by 

September 2009. 

 Distribute media and Congressional inquiry and response log to EAC staff on a 

daily basis. 

 Respond to FOIA requests in accordance with requirements. 

 Respond to 75 percent of non-FOIA requests within 72 hours. 

3. Convey the results of EAC operations and accomplishments. 

Performance measures: 

 Provide weekly updates about EAC activities and election administration issues to 

EAC employees. 

 Produce an annual FOIA report to chronicle requests and responses. 

 Issue quarterly press releases summarizing EAC activities. 

 Provide regular briefings regarding EAC activities to Congressional staffers. 

 Produce the annual report of EAC activities to Congress by January 1 of each year 

for the preceding year ending September 30. 

 Issue at least 12 EAC newsletters per year. 

Goal 1 FY 2009 Accomplishments

The Communications division has been instrumental in FY 2009 in improving communication 

about EAC’s voting system Testing and Certification program, ensuring that election officials 

are getting the information they need. A Testing and Certification Voting System Reports 

Clearinghouse, where Communications staff post and distribute voting system reports and 

studies that have been conducted or commissioned by a State or local government. To be 

considered for posting on the EAC website, a State or local government official submits the 

report to the EAC Chair or Executive Director and certifies that the report reflects their 

experience operating voting systems or implementing EAC's voluntary voting systems 

guidelines. All system test plans, test reports including discrepancies, and certification 

information are posted to the website. 

Using an interagency agreement with the U.S. Department of Agriculture, the division produced 

poll worker and election official training videos, available on the eac.gov website and on 

YouTube. 

In 2009, in order to accelerate establishment of a Clearinghouse of information on Federal 

elections and to ensure a cost-effective contract, EAC recompeted its website and Clearinghouse 

contract. With the new contract, EAC will pursue its goal to become the “go to” place for trusted 

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Election Assistance Commission 

source information about elections and election administration. In 2010, EAC intends to connect 

its stakeholders to a new separately identifiable Clearinghouse on the EAC website. The new 

Clearinghouse will better disseminate information, data, and reports from outside sources, as 

well as, EAC published materials for easy access by Federal, State, and local election officials 

and voters. 

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. 

 Strategic Objectives

1. Accurately and timely disburse Federal financial assistance administered by EAC.

Performance Measures: 

 Publish program handbook in Fiscal Year 2009.

 Disburse Requirements Payments and award discretionary grants within established 

timeframes.

 Submit State plans for publication in the Federal Register within 30 days of receipt of 

each plan. 

 Submit payment requests to GSA within 10 days of receipt of acceptable 

requests/certifications. 

2. Effectively monitor Federal financial assistance administered by EAC. 

Performance Measures: 

 Review financial and performance reports and notify recipients of reporting 

anomalies or failure to file within 30 days of knowledge of such conditions, in writing 

in all cases and by telephone as time permits, to offer assistance and answer 

questions. 

 Resolve 100 percent of audit findings within established time frames. 

 Conduct site visits to at least three high priority grantees each year. 

 Negotiate indirect cost rates within 30 days of receipt of acceptable indirect cost 

proposals. 

 Issue the annual report to Congress on the expenditure of HAVA funds by July 15 of 

each year. 

3. Provide technical assistance and guidance on the management of Federal financial 

assistance administered by EAC to reduce the risk of inappropriate use of funds and 

accounting errors. 

Performance Measure: 

 Offer at least one workshop per year. 

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

(OIG). 

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Election Assistance Commission 

Goal 2 FY 2009 Accomplishments

In FY 2009, Public Law 111-8 included $100.0 million in FY 2009 to help States improve the 

administration of Federal elections. The funds are known as Requirements Payments and are 

authorized under Section 251 of HAVA. Requirements Payments are used to meet the 

requirements of Title III of HAVA, including voting system standards, voting information 

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

requirements for voters who register by mail. States may also use Requirements Payments to 

improve the administration of Federal elections once they certify that the State has implemented 

the requirements of Title III or that the State will use only up to the minimum payment amount 

for the administration of federal elections. Each year, EAC reports to Congress on how the 

States have spent HAVA funds. EAC distributed $26.3 million of the $100.0 million 

appropriated by the end of September 2009. 

South Dakota received a $500,000 requirements payment in FY 2009. The funds 

will be used by the State’s 66 counties for maintenance of the touch screen voting 

machines required by HAVA for individuals with visual or other disabilities, 

insurance and programming. 

In FY 2009, EAC awarded grants in two discretionary programs funded by Salaries and 

Expenses funds: College Poll Worker recruitment and training and high School Mock Elections. 

Thirteen grants were awarded to colleges, universities, and nonprofit organizations totaling 

$750,000 for College Poll Worker grants. One award winning grantee is Salish Kootenai College 

in Montana. The College is partnering with Flathead Valley Community College, and the Lake 

and Flathead County elections offices to recruit student workers to assist voters who speak the 

Salish and Kootenai languages and those voters who are deaf. The program received a $66,008 

grant to recruit and train 200 students using an innovative multi-media recruitment program 

developed by students. 

 “This grant program will help us recruit the next generation of poll workers by 

focusing on recruiting and educating a new generation of Americans about the 

importance of civic participation on Election Day.” 

Paula Robinson, Flathead County Clerk & Recorder 

EAC awarded seven Federal Student Mock Election Grants to State and local election offices, 

and regional and national nonprofit organizations totaling $300,000. The grants will support 

efforts to allow students to participate in a simulated election, often using actual voting 

equipment and realistic ballots. For example, the Miami Date County Elections department will 

sponsor mock elections reaching over 100,000 students, with 40 targeted high schools serving as 

precincts and students working as poll workers. 

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. 

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Election Assistance Commission 

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

stakeholders improve the administration of elections for Federal office on the 

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

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

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

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

information. 

 Strategic objectives: 

1. Complete research on relevant issues that improve the administration of elections for 

Federal office and expeditiously report on critical administration subjects and election 

data. 

Performance Measures: 

 Start 100 percent of planned and funded projects each year. 

 Meet milestones for the completion of research projects in accordance with schedules 

and deliverable each year. 

 Disseminate all completed research project reports to stakeholders. 

2. Identify and collect required and useful data on election administration practices and on 

voting methods and demographics and make recommendations for improving the quality 

of practices, methods, and data. 

Performance Measures: 

 Establish a baseline in Fiscal Year 2009 on the accuracy and completeness of data 

reported by States in response to EAC surveys. Increase the accuracy and 

completeness of reported data in each of the succeeding years. 

 Include recommendations to improve election administration and data to the Congress 

in the annual report on the Election Day survey. 

 Issue required reports to Congress by statutory deadlines. 

3. Issue guidance and administer programs that provide timely and useful information to 

election officials and voters. 

Performance Measures: 

 Complete the “Voters Guide to Federal Elections” in languages currently covered 

under the minority language provisions of the Voting Rights Act by September 2009. 

4. Update and maintain a national mail voter registration application and report to the 

Congress as required by NVRA. 

Performance Measures: 

 Issue the biennial report on the impact of NVRA by June 30 of 2009. 

Goal 3 FY 2009 Accomplishments

In FY 2009, the Research, Policy and Programs Division developed a listing of potential research 

projects with timelines to guide staff work through 2012. Progress has been made toward the 

completion of several projects noted in the research schedule, many of which are mandated by 

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HAVA and/or authorized by Congress. The list will continue to be revised in accordance with 

EAC and/or congressional priorities. EAC receives input on scheduling of mandated studies 

from the Standards Board and from the Research Subcommittee of the Board of Advisors. 

Consistent with the list of potential research noted above, the Research Division administered its 

biennial election survey, and produced and disseminated two congressionally-mandated reports 

by their statutory deadlines (the Impact of the National Voter Registration Act and the $10.0 

million Election Data Collection Grant Program). A Statutory Overview report on State election 

laws was developed as well. 

The Research Division also initiated an evaluation project to assist with developing a baseline for 

measuring stakeholder use of EAC educational products to improve the administration of 

elections for Federal office. Research efforts continue on the HAVA-mandated study, Vote 

Count/Recount, and work on two others was initiated at the end of FY 2009, on Election 

Administration in Urban and Rural Settings and the Cost of Elections. 

Work completed in FY 2009 includes: 

 

 2008 Election Administration and Voting Survey 

 Impact of the National Voter Registration Act 

 Election Data Collection Grant Program report and 

 Statutory Overview report. 

The Research office continues to identify and collect required and useful data on election 

administration while making recommendations for improving the quality of data collection. A 

conference call was held in FY 2009 with State and local election officials to discuss the 2008 

survey and garner their input on ways to make future versions of the survey more conducive to 

their data collection and submission needs. A draft of the 2010 Election Administration and 

Voting Survey was released for public comment in FY 2009. 

The Research Division’s Election Management Guidelines program released four Quick Start 

Management Guides in October 2008 on Serving Voters in Long-Term Care Facilities, 

Provisional Ballots, Recounts, and Canvassing and Certifying an Election. During the year, staff 

worked on five Election Management Guidelines chapters. In September 2009, staff conducted 

three working groups for new chapters and Quick Starts on Technology in Elections, Election 

Office Management and Accessibility. 

The Research Division’s Language Accessibility Program has been working to meet its strategic 

goal of assisting election officials in meeting the needs of language minority proficiency voters. 

In FY 2009 the Spanish Glossary of Key Election Terminology was redesigned. The new 

glossary is in line with the design of the five Asian language glossaries. In October 2008, EAC 

developed “A Voter’s Guide to Federal Elections” in English, Spanish, Chinese, Japanese, 

Korean, Vietnamese, and Tagalog. 

EAC’s Strategic Plan includes a performance measure of beginning National Voter Registration 

Act (NVRA) of 1993 rulemaking. A Federal Register Notice transferring the NVRA 

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Election Assistance Commission 

Regulations from the Federal Election Commission to EAC was published on July 29, 2009. 

The transfer became effective, August 28, 2009. An expedited Paperwork Reduction Act 

clearance request was submitted to the Office of Management and Budget (OMB) on August 28, 

2009 for NVRA Regulations for the Voter Registration Application and NVRA Regulations for 

Data Collection. Both submissions were approved, and OMB Control Numbers were assigned 

on September 3, 2009. 

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 EAC testing and certification program to 

ensure voting systems meet standards. 

Strategic objectives: 

1. Develop and update the voluntary voting system guidelines. 

2. Provide for the accreditation and revocation of accreditation of independent, non-Federal 

laboratories qualified to test voting systems to Federal standards. 

Performance Measures: 

 Complete accreditation reviews for all laboratories recommended to EAC by NIST 

and for all emergency actions within 90 days.

 Test and document the results of the review of compliance with procedures by 100 

percent of accredited laboratories every 2 years. 

3. Administer the testing, certification, decertification, and recertification of voting system 

hardware and software by accredited laboratories. 

Performance Measures: 

 Test 100 percent of systems applying and qualifying for testing each year.

 Respond to requests for interpretations of voting system standards within 45 days. 

Goal 4 FY 2009 Accomplishments 

In addition to the ongoing work of the Communications Division to make EAC constituents 

aware of Certification Division activities, the Certification Division began issuing its own 

monthly email newsletters specifically focusing on the Certification Division in 2009. The 

newsletter is distributed to approximately 400 State and local election officials, advocacy groups, 

Voting System Test Laboratories (VSTLs), voting system manufacturers and Congressional 

staff. 

 

The Certification Division, working with NIST, drafted and updated the current version of the 

2005 Voluntary Voting System Guidelines (VVSG) (now entitled 2005 VVSG Version 1.1) in 

2009. The draft was published for a 120 day public comment period beginning June 1, 2009 and 

ending September 28, 2009. Staff are currently reviewing over 300 comments received from the 

public. 

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Election Assistance Commission 

In 2009, the EAC timely re-accredited SysTest Laboratories and iBeta Quality Assurance. In 

addition to the semi-annual re-accreditation process, both labs underwent a required EAC Policy, 

Procedures and Practices Review pursuant to the EAC Laboratory Accreditation Program 

Manual. Wyle Laboratories and Ciber, Inc. will undergo re-accreditation review and the 

required on-site Policy, Procedures and Practices Review during 2010. 

The Certification Division drafted internal Standard Operating Procedures generated by the 

requirements of the Testing and Certification Program Manual. In addition to certifying three 

voting systems, EAC approved five test plans for voting systems in 2009. Manufacturing facility 

reviews will be conducted in early FY 2010, following late FY 2009 receipt of the voting system 

certifications. Field Reviews will be conducted in FY 2010 for EAC certified voting systems 

that experience election related anomalies. 

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

organization. 

In order to achieve the goal, EAC will focus on achieving a clean audit opinion, providing 

accurate timely information, and moving toward integration of budget and performance as 

prescribed by the President’s Management Agenda. 

Performance Measures: 

 Implement 90 percent of the OIG audit recommendations within agreed upon 

timeframes. 

 

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

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

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

Performance Data Collection and Validation 

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

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

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

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

documentation of calculation methodology for estimates. Performance indicators are supported 

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

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

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

reported performance data is relevant and reliable. The recommendations will be implemented in 

FY 2010. 

Summary Performance Information 

EAC made strides in speeding up certification of voting systems: between February and August, 

three voting systems were certified. In order to improve communications with stakeholders, 

EAC instituted a Testing and Certification Voting System Reports Clearinghouse on its website. 

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Election Assistance Commission 

EAC issued a report on Voter Registration, Quick Start Management guides on administering 

Federal elections, best practices for voter information web sites; held roundtable discussions on 

Elections, Election Office Management and Accessibility; and awarded 13 Poll Worker grants 

and seven Mock Election grants 

Program Performance Indicators

The following table presents key EAC FY 2009 performance data. Financial reporting is 

included to highlight the soundness of EAC’s financial systems. As much detailed performance 

information as possible will be presented, and variances discussed, in the FY 2009 Annual 

Performance Report due February 15, 2010 along with the FY 2011 Congressional Justification. 

EAC FY 2009 Performance Summary 

Program Performance Indicator 

Type of 

Indicator Planned Actual 

Strategic Goal 1: Communicate 

 Issue Clearinghouse policy Output Final 

In Final 

Draft 

 

Issue Policies/Procedures to process requests 

from outside EAC Output Final 

In Final 

Draft 

Strategic Goal 2: Fund and Oversee 

 Publish Grants Program Handbook Output Final Completed 

 Issue report on expenditure of HAVA funds Output Final In Draft 

Strategic Goal 3: Study, Guide, Assist 

 

Complete Voter's Guide to Federal Elections 

in Voting Rights Act minority languages Output Final 

Completed 

Oct. 2008 

 

Establish baseline on Election Day Survey 

responses accuracy and completeness Output 

Baseline 

% 

96% 

response 

rate 

Strategic Goal 4: Test and Certify 

 

Test 100 percent of systems qualifying for 

testing each year (3 systems) Output 100% 100% 

 

Respond to requests for interpretations of 

voting system standards within 45 days Output 45 days 

52.4 days 

(40% on 

target) 

Strategic Goal 5: Manage 

 

Unqualified financial statement audit opinion 

by FY 2010 Outcome No Yes 

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Portfolio Analysis

 

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

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

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

the collection of election data at the precinct level during the 2008 Federal election. In FY 2009, 

the Salaries and Expenses appropriation of $17,959,000 funded the $4.0 million transfer to 

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

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

contracts, supplies and equipment. 

I.C. FINANCIAL RESULTS 

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

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

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

FY 2008 to FY 2009; and discusses the relevance of balances and amounts in the financial 

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

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

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

Budgetary Resources 

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

Election Reform Program appropriation. Budgetary resources are the amounts available to enter 

into new obligations and to liquidate them. Budgetary resources include new Budget Authority 

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

no year Election Reform Program accounts. For FY 2009, the available budgetary resources 

were $129.0 million, a drop of 11.5% or $16.8 million from FY 2008, restated. A decrease in 

annual appropriations received in FY 2009 as compared to FY 2008 resulted in this change. 

Appropriations received for FY 2009 decreased $17.6 million from FY 2008. In FY 2009 

EAC’s appropriations totaled $123.9 million as opposed to $141.5 million in FY 2008. 

Requirements Payments appropriations were reduced $15.0 million and other grant programs 

were reduced $3.1 million. 

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-

25,000,000

50,000,000

75,000,000

100,000,000

125,000,000

150,000,000

($$)

FY 2009 FY 2008

Appropriations Received

Disability Research Grant

Voting System Logic Grant

College Poll Worker Grants

Mock Election Grants

Data Collection Grants

Requirement payments

Salaries and Expenses

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

to the States in FY 2003 and FY 2004. These funds were originally disbursed by the GSA acting 

as Administrator. Any funds remaining unspent as of November 1, 2010, will return to the EAC 

to be disbursed as HAVA Section 251 Requirements Payments. Of these amount $34.7 million 

remain unspent as of September 30, 2009. 

The status of available budgetary resources as represented in the 2009 and 2008 Statement of 

Budgetary Resources is as follows: 

Budgetary Resources 2009 2008

Obligations Incurred $114,957,639 $138,170,196 

Unobligated Balance – Apportioned 7,452,047 766,190 

Unobligated Balance – Not Available 6,546,853 6,795,762 

Total Budgetary Resources $128,956,539 $145,732,148

Obligations Incurred decreased $23.2 million primarily as a result of the disbursement of FY 

2009 Requirements Payments and disbursements of FY 2008 Requirements Payments. 

Unobligated Balance – Apportioned increased $6.6 million as an appropriation for a $5.0 million 

grant for disability research and an appropriation for a $1.0 million grant for voting system logic 

research were not awarded as of September 30, 2009. 

Financial Position 

The EAC underwent its first financial statement audit in FY 2008, receiving a disclaimer. 

During FY 2009, EAC completed actions to address most of the issues raised in the FY 2008 

financial audit. As a result of this process, EAC found misstatements in the agency’s 2008 

financial reports and have restated them for the 2009 Annual Financial Report. The changes 

made to the FY 2008 financial reports and the processes leading to those changes have been 

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reviewed by management and are detailed in Note 15 in the Notes to the Financial Statements. 

The restated FY 2008 Financial Statements are presented and discussed throughout this report. 

Assets 

The EAC had $195.3 million in total assets as of September 30, 2009. This is an increase of $5.8 

million. Fund Balance with Treasury increased $24.4 million largely as a result of the net 

increase from new appropriations and disbursements for Requirements Payments from years FY 

2008 and FY 2009. EAC received $100,000,000 in FY 2009 appropriations for Requirements 

Payments of which $26.3 million were disbursed. In addition, $57.0 million in FY 2008 

Requirements Payments were disbursed in the current year. The EAC also has $7.0 million in 

FY 2009 grant appropriations that have not been disbursed. 

Advances and Prepayments decreased $18.4 million in FY 2009 with a balance of $36.8 million 

as of September 30, 2009. In FY 2008, EAC recorded $50.7 million in HAVA Section 102 

Advances with the States still unspent as of September 30, 2008. In FY 2009, the States reported 

as having spent $16.0 million of these funds. Accordingly, EAC reduced outstanding advances 

on the Balance Sheet and recorded $16.0 million in program operating expense on the Statement 

of Net Costs. Summary asset data is presented below: 

Assets

 FY 2009 FY 2008 Difference

% 

Change

Fund Balance with Treasury $157,884,882 $ 133,466,533 $24,418,349 18.30% 

Advances and Prepayments 36,790,142 55,210,405 (18,420,263) -33.36% 

Other Assets 618,266 824,583 (206,317) -25.02% 

 $ 195,293,290 $ 189,501,521 $ 5,791,569 3.05% 

Liabilities 

EAC had total liabilities of $8.9 million as of September 30, 2009. This is a $7.3 million 

increase. Accounts Payables increased $7.2 million in FY 2009. As of September 30, 2009, 

EAC had received two completed certifications from the States for Requirements Payments. 

These payments had not yet been disbursed as of September 30, 2009 and were therefore 

accrued. They totaled $6.5 million. 

Liabilities

 FY 2009 FY 2008 Difference

% 

Change

Accounts Payables $ 8,332,010 $ 1,159,670 $ 7,172,340 618.48%

Accrued Payroll and Benefits 290,035 267,713 22,322 8.34%

Unfunded Leave 261,880 185,889 75,991 40.88%

 $ 8,883,925 $ 1,613,272 $ 7,270,653 450.68%

 

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Net Position

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

Operations decreased in FY 2009 $1.5 million. Cumulative Results of Operations of $7,765 as 

of September 30, 2009 is the accumulated difference between expenditures and financing 

sources since the inception of the agency. Unexpended Appropriations decreased $1.2 million. 

The appropriations used in FY 2009, including obligated funds from prior years and the transfer 

to the National Institute of Standards and Technology of $4.0 million, exceeded the 

appropriations received for FY 2009. 

Net Position

 FY 2009 FY 2008 Difference

% 

Change

Unexpended Appropriations $ 186,401,600 $ 187,595,489 $(1,193,889) -0.64%

Cumulative Results of Operations 7,765 292,760 (284,995) -97.30%

 $ 186,409,365 $ 187,888,249 $(1,478,884) -0.79%

 

Results of Operations 

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

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

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

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

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

costs are allocated on either a per employee basis or a percent of overall costs method. This 

methodology is outlined in the EAC’s Cost Allocation Model and is reviewed each year to 

ensure the accurate allocation of expenses to each program. 

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. 

The results of operations for FY 2009 of $121.6 million increased from FY 2008 by $108.4 

million, primarily reflecting the costs of the Requirements Payments and costs of the FY 2008 

Data Collection grant program. Collectively, FY 2008 and FY 2009 Requirements Payments 

reflected in the FY 2009 results of operations total $84.9 million. Data Collection grant 

payments for FY 2009 were $6.6 million. In addition, the EAC recognized as program expenses 

$16.0 million of HAVA Section 102 expenditures made by the States in FY 2009. General 

salaries and other expenses totaled $13.4 million in FY 2009 and $10.4 million in FY 2008 an 

increase of $3.0 million. 

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Results of Operations by Program

 FY 2009 FY 2008 Difference

% 

Change

Communications $ 1,994,125 $ 1,543,834 $ 450,291 29.17%

Fund and Oversee 113,042,449 6,598,961 106,443,488 1613.03%

Research, Policy and Programs 2,972,123 2,300,992 671,131 29.17%

Testing and Certification 3,578,173 2,770,190 807,983 29.17%

 $ 121,586,870 $ 13,213,977 $ 108,372,893 820.14%

 

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 

GAAP for Federal entities and the formats prescribed by OMB, the statements are in addition to 

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

from the same books and records. 

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

Government, a sovereign entity. 

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

COMPLIANCE 

Internal Control Environment

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

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

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

over assets and resources, ensures high-quality, responsible leadership, ensures the effective 

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

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

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

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

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

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

and used for decision-making. 

The agency, during FY 2009, with the hiring of a CFO/Budget Director and Director of 

Accounting who is a CPA, and adoption of a five year Strategic Plan, implemented controls that 

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

requirements, consistent with the purposes authorized, and are recorded in accordance with 

Federal accounting standards. EAC was able, by the end of the fiscal year, to ensure that assets 

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

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disposition, and fraud. Where the agency has work to do, taking into consideration the newly 

adopted Strategic Plan, is collecting performance data and ensuring that it is adequately 

supported. To this end, EAC contracted for an independent review of: 1) its strategic plan 

performance measures and systems to collect the data and 2) risk levels associated with 

providing inaccurate information for internal decision-making. 

During FY 2010, EAC will work on implementing internal control actions described in its new 

Internal Control Procedures. Each manager will be familiar with internal control requirements 

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

functioning. 

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

follows: 

Federal Manager’s Financial Integrity Act

 

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

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

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

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

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

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

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

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

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

EAC also used the results of self-assessments of financial management internal controls. 

A material weakness was identified by management in FY 2008 concerning EAC’s lack of 

effective written policies and procedures in the areas of property, personnel, travel, information 

technology, research, and communications. The pertinent policies and procedures are in draft 

and in legal review. The following chart shows FY 2008 planned corrective actions compared to 

actual completion dates. 

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Election Assistance Commission 

Corrective Actions 

Target 

Completion 

Date 

Actual 

Completion 

Date 

Develop an EAC Manual containing all necessary administrative and 

program procedures. 

1/31/09 Pending 

Implement a strategic plan 12/31/08 03/09/09 

Implement the applicable requirements of Office of Management and 

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

09/30/09 Pending 

Quarter 1 

FY 2010 

Re-evaluate the current organizational structure and clearly define areas 

of authority and responsibility, and hierarchy for reporting. 

01/15/09 03/09/09 

Review and perform a periodic reconciliation of EAC financial activities 

with GSA’s accounting records. 

12/31/08 06/30/09 

Define areas of authority and responsibility, and hierarchy for reporting 

(including the roles of the Commissioners and the Executive Director). 

09/15/09 09/18/08 

Hire staff with federal budgeting experience or provide training to 

appropriate staff in the Office of Administration. 

09/30/09 11/10/08 

On September 18, 2008, EAC adopted a Roles and Responsibilities document clearly defining 

the roles of the Commissioners and the Executive Director. On March 9, 2009, EAC adopted its 

Strategic Plan covering the period of FY 2009 through FY 2014. The Plan includes an 

organization chart which clearly defines areas of authority and responsibility and the hierarchy 

for reporting. With the hire of a Budget Director who started on November 10, 2008 and an 

Accounting Director on April 13, 2009, EAC was able to work on developing and finalizing 

financial management policies and procedures. By June 30, 2009, EAC was able to produce 

reliable financial statements and implement a schedule of periodic reconciliations. 

Corrective actions remaining to be taken include: 1) finalization of non-financial program and 

administrative policies and procedures, and 2) implementation of all applicable internal control 

requirements. Implementation of an internal control program is discussed below. 

Table 1 presents the material weaknesses identified by management for FY 2008 as beginning 

balances. Ending balances reflect status after resolution of findings as of September 30, 2009. 

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Election Assistance Commission 

TABLE 1 

 EFFECTIVENESS OF INTERNAL CONTROL OVER OPERATIONS (FMFIA § 2) 

Statement of Assurance Unqualified 

No. Material Weaknesses 

Beginning 

Balance New Resolved Consolidated 

Ending 

Balance 

1 Lack of Policies & Procedures 1 0 0 0 1 

2 Incomplete Performance and 

Accountability Report (PAR) 1 0 1 0 0 

3 

Insufficient Resources and 

Personnel with Appropriate Federal 

Accounting and Reporting Skills 1 0 1 0 0 

4 Outstanding Accounting Issues 1 0 1 0 0 

5 Lack of an Integrated Financial 

Management System 1 0 1 0 0 

6 Ineffective Financial Statement 

Preparation 1 0 1 0 0 

7 Lack of Reconciliation and Analysis 1 0 1 0 0 

8 Accounting Error Related to Advance 

Payments 1 0 1 0 0 

9 Lack of Support for Grant Accounting 1 0 1 0 0 

10 Weak Funds Control 1 0 1 0 0 

11 

Lack of Federal Managers’ Financial 

Integrity Act Compliance and 

Reporting 1 0 0 0 1 

 TOTAL WEAKNESSES 11 0 9 0 2 

During FY 2009, EAC made tremendous progress in resolving findings from its first financial 

statement audit in FY 2008: 

 Financial management policies and procedures were finalized; 

 Performance measures in the Strategic Plan are addressed in the Agency Financial Report 

for FY 2009; 

 Financial operations were realigned and a Chief Financial Officer department was 

established with experienced financial management staff, including a CPA; 

 All outstanding accounting issues were resolved, including potential Anti-Deficiency Act 

and Purpose Statute violations; 

 Financial statements were produced in conformance with generally-accepted accounting 

principles; 

 A schedule of reconciliations was established and followed; 

 Funds control measures were implemented; 

 Risks in financial management were assessed; and 

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Election Assistance Commission 

 Revenues and expenditures were properly recorded and accounted for to permit the 

preparation of reliable financial reports and to maintain accountability over assets. 

Challenges for FY 2010 include: 1) finalizing effective written policies and procedures in the 

areas of property, personnel, travel, information technology, research, and communications (as 

mentioned above); 2) implementing a robust internal control program; and 3) providing monthly 

status of funds reports to directors. 

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

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

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

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

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

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

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

In November and December 2009, EAC plans on conducting agency-wide internal control 

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

program results. Each agency director will be responsible for risk assessment for their assessable 

unit, and for remediation activities for identified risks, in conjunction with CFO staff. As 

mentioned earlier, performance measurement systems were independently assessed. The 

assessment revealed that existing performance measures are good indicators as to whether 

programs and operations achieve intended results. Recommendations from the assessment, 

including control activities needed to achieve program objectives and control activities that will 

improve accuracy of performance data, will be implemented in FY 2010 so that EAC’s 

performance metric reports are reliable and measure the right activities. 

A challenge exists in providing financial reports to EAC directors on a monthly basis. Since 

GSA records financial transactions on EAC’s behalf, there is a lag between when financial 

documents are signed and submitted to GSA and when they are recorded in Pegasys. During FY 

2009, EAC established office- and program-specific location codes in place of a single code for 

the agency. The agency then underwent a lengthy and labor-intensive effort to recode financial 

documents to the new codes. Once the recode was complete, all financial documents were 

checked to ensure they were coded to the correct location and program. A report to account for 

the recording lag was developed. We expect to be able to provide regular financial reports at the 

office location level, rather than at the agency level and on-demand, in FY 2010. 

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

to improve staff satisfaction ratings and achieve management excellence through improved 

internal controls and human resource initiatives.

 

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 in order to minimize 

risks of inadvertent or deliberate misuse, fraud or destruction is essential. 

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Table 2 identifies the significant deficiencies identified in the FY 2008 audit of the Entity-Wide 

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

2009: 

TABLE 2 

 SIGNIFICANT DEFICIENCIES IN ENTERPRISE-WIDE SECURITY PROGRAM 

No. Significant Deficiency 

Beginning 

Balance New Resolved Consolidated 

Ending 

Balance 

1 

Lack of an internally developed 

agency-wide information security 

program. 1 0 0 0 1 

2 Lack of an inventory of systems and 

applications. 1 0 1 0 0 

3 Lack of an adequate security 

management structure 1 0 0 0 1 

4 

Certification and Accreditation of 

general support systems has not been 

performed. 1 0 1 0 0 

5 

Third party information security 

examinations and inspections are not 

monitored for inclusion within the 

service provider’s Plan of Actions and 

Milestones. 1 0 1 0 0 

TOTAL 5 0 3 0 2 

During FY 2009, EAC conducted an inventory of systems and applications, received 

Certification and Accreditation of general support systems from the General Services 

Administration, and monitored the EAC website and GSA-provided IT services as part of the 

annual FISMA audit. The lack of an internally developed agency-wide information security 

program and of an adequate security management structure will be resolved with implementation 

of policies and procedures currently under review and the hiring of a Chief Information Officer 

(CIO). EAC expects to hire a CIO in the first quarter of FY 2010. 

The FY 2009 Federal Information Security Management Act (FISMA) evaluation report found 

that EAC has taken actions to address many of the serious problems noted in the FY 2008 

FISMA evaluation report. Table 3 below summarizes EAC’s level of compliance in each 

FISMA control area in the FY 2009 FISMA evaluation. SC means substantial compliance, PC 

represents partial compliance, and NSC means not in substantial compliance. 

 

 

 

 

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TABLE 3

CONTROL REQUIREMENT Compliance 

Determination (SC, PC, 

NSC)

Access Control NSC 

Awareness and Training SC 

Audit and Accountability PC 

Certification, Accreditation, and Security Assessments PC 

Configuration Management SC 

Contingency Planning NSC 

Identification and Authentication PC 

Incident Response SC 

Maintenance SC 

Media Protection SC 

Physical and Environmental Protection SC 

Planning PC 

Personnel Security SC 

Risk Assessment PC 

System and Services Acquisition SC 

System and Communications Protection PC 

System and Information Integrity SC 

The FY 2009 report found that weaknesses in four areas had been resolved, weaknesses in two 

areas had been partially resolved, and one weakness had not yet been addressed. Since EAC is 

not in substantial compliance in every FISMA control area, the FY 2009 financial audit will 

report FISMA compliance as a significant deficiency. 

The one issue remaining to be addressed is development of a Continuity of Operations Plan 

(COOP)/Disaster Recovery Plan (DRP)/Business Impact Analysis (BIA). Without the plans, 

EAC’s ability to respond to a disruption in business operations as a result of a disaster or other 

long-term emergency could be affected. EAC will develop a COOP and DRP in order to ensure 

that, if unexpected events occur, critical operations can continue or be promptly resumed without 

significant interruption. Per EAC’s FY 2009 Plan of Action and Milestones (POA&M), the 

agency will develop and test a COOP in FY 2010 based on cost-effective strategies identified in 

the final FY 2009 FISMA risk assessment. 

The FY 2009 FISMA evaluation report includes specific recommendations for ensuring 

substantial compliance in different control areas. These recommendations and other key 

information security tasks are included in EAC’s high-level FY2009 FISMA POA&M. Once the 

items in the POA&M are implemented in FY 2010, EAC will be substantially compliant in every 

FISMA control area. 

27
Election Assistance Commission 

OMB Circular A-127 Financial Management Systems Requirements: 

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

requirements. The beginning balance reflects the results for FY 2008. The ending balance 

reflects the status of the non-conformance as of September 30, 2009. 

TABLE 4 

 CONFORMANCE WITH FINANCIAL MANAGEMENT SYSTEMS REQUIREMENTS 

(FMFIA § 4) 

Statement of Assurance Systems do not fully conform to financial management 

system requirements 

No. Non-Conformance 

Beginning 

Balance New Resolved Consolidated 

Ending 

Balance 

1 Integrated Financial 

Management System 1 0 1 0 0 

 TOTAL 1 0 1 0 0 

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

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

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

That said, EAC takes the recommendation made in the FY 2008 internal control report seriously. 

The recommendation was to “either interface its standalone financial systems with the service 

provider’s system or utilize the service provider’s subsystems, if available.” During FY 2009, 

EAC contracted for an independent assessment of and recommendations to remediate the finding 

as regards to a grants interface. Essentially, the recommendation was to use the U.S. Department 

of Health and Human Services Payment Management System (PMS). 

Since GSA is unwilling and would not be expected to support the interface between PMS and the 

GSA core financial system (Pegasys) for a single client agency, EAC remediates the finding 

using information provided by recipients of HAVA funds on Standard Form (SF) 425 Federal 

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

the SF-425, EAC periodically adjusts the advance accounts and records grant expenditures by 

submitting adjusting entries to GSA for entry into Pegasys. The result is a record of actual grant 

activity and balances at the grantee level and information for periodic monitoring of grantee 

financial activity. 

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

agencies, which EAC is using. 

28
Election Assistance Commission 

29

Audit Follow-Up

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

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

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

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

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

Congressional Oversight staff. Of the 82 recommendations, EAC closed 50, consolidated 13 as 

being repetitive, and has 19 open findings to resolve—a 77 percent improvement. EAC made 

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

improved through the remediation of audit recommendations made by the independent auditor in 

the annual financial statement audit. EAC also considers and responds to recommendations from 

audits and reviews conducted by the Government Accountability Office. 

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 2009 financial statement audit report identified a material weakness pertaining 

to five accounting errors. The errors were corrected by the end of FY 2009. 

 

Federal Information Security Management Act

EAC is not in compliance with the Federal Information Security Management Act. Actions 

necessary to bring EAC into compliance are identified in the EAC response to the draft internal 

control report. 

 

Inspector General Act Amendments of 1988

 

The Inspector General Act requires management to complete all final actions on audit 

recommendations within one year of the date of the Inspector General’s (IG) final audit report. 

The IG also audits HAVA funds administered by recipients of HAVA grants and transmits to 

EAC single audit reports that present findings on HAVA funds. The principal recipients of 

HAVA grant funds are state governments. In FY 2009, EAC resolved audit reports covering 

State use of HAVA funds in Illinois, New Jersey, Ohio, and South Carolina. 
Election Assistance Commission 

30

U.S. ELECTION ASSISTANCE COMMISSION 

1225 New York Ave. NW – Suite 1100 

Washington, DC 20005

 

Annual Assurance Statement on Internal Control 

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

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

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

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

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

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

financial reporting, and compliance with applicable laws and regulations. 

 

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

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

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

Office of the Chief Financial Officer (OCFO). With respect to assessing internal control 

designed to ensure the reliability of financial reporting, EAC is not required by OMB Circular A123 to perform a separate assessment. EAC relied upon the evaluation of internal controls over 

financial reporting conducted by its independent auditors, on reports issued by the Inspector 

General, and on OCFO departmental risk assessments and letters of assurance over the 

accounting, budget, grants, procurement and overall OCFO functions. With respect to internal 

controls to ensure compliance with laws and regulations, the EAC relied upon the evaluation 

conducted by its independent auditors and the Inspector General. 

The independent auditors identified a material weakness in internal controls over financial 

reporting involving five accounting errors in FY 2009. The errors were resolved by September 

30, 2009. Further the auditors identified two significant deficiencies, one regarding controls over 

journal vouchers and one involving the need to determine the collectability of a non-material 

receivable. In FY 2010, EAC will implement policies and procedures for journal vouchers, and 

will resolve the receivable issue as quickly as possible. 

In FY 2009, EAC focused efforts on resolving material weaknesses and strengthening internal 

controls. By the end of FY 2009, management identified two material weaknesses in the 

effectiveness of its internal control over operations: lack of effective written policies and 

procedures in the areas of property, personnel, travel, information technology, research, and 

communications; and full compliance with the requirements of FMFIA. Except for these two 

material weaknesses and the two significant deficiencies described above, the Commission 

provides a qualified statement of assurance that the internal control and financial management 

systems meet the objectives of the Federal Managers’ Financial Integrity Act. 
Election Assistance Commission 

31

EAC will work in FY 2010 to finalize the effective policies and procedures listed above, 

strengthen its processes and systems, and establish a robust internal control program. 

Gineen Beach 

Chair 

November 9, 2009
SECTION II 

FINANCIAL SECTION 

II.A. MESSAGE FROM THE CHIEF FINANCIAL OFFICER 

I am pleased to present EAC’s financial statements for FY 2009. Our financial statements are an integral 

component of the Agency Financial Report (AFR). 

This is the second year in its six year operational existence that EAC has prepared financial statements and 

submitted them for audit. Prior to establishment of an Office of the Chief Financial Officer (OCFO) in the 

Spring of 2009, EAC did not have the systems, controls, processes, and staff expertise necessary to comply 

with the Office of Management and Budget guidance for financial and performance reporting and received 

a disclaimer opinion on last year’s financial statement audit. 

To improve the quality of our financial information and to prepare for future audits, we began taking 

necessary steps at the end of FY 2008 by engaging contractors to help EAC draft policies and procedures, 

identify improvements to internal controls, and upgrade financial reporting; and by hiring a staff of 

budgeting, accounting, grants and contracting experts. The agency now has an exceptional, albeit small, 

OCFO team in place. EAC has worked diligently toward an unqualified opinion on our financial 

statements. 

This is the first year EAC is participating in the pilot performance reporting project as described in OMB 

Circular A-136 on Financial Reporting Requirements, presenting an Agency Financial Report in place of 

the Performance and Accountability Report. EAC presents summarized performance data in this report, 

and plans on providing as much detailed data as possible in February 2010 in conjunction with the FY 2011 

Congressional Justification. 

During FY 2009, to address issues in the FY 2008 financial statement audit, EAC: 

 Reorganized, to both align organizational structure and metrics with the Strategic Plan 2009-2014 

adopted in March and establish its first Office of the Chief Financial Officer consisting of 

experienced grants, budget, accounting and procurement staff; 

 Finalized financial management policies and procedures; 

 Submitted a FY 2010 Congressional Budget Justification and FY 2011 OMB Budget Justification in 

a performance-based format; and 

 Closed out many outstanding recommendations from operational audits and the FY 2008 financial 

statement audit. 

The auditor’s report presented in last year’s Performance and Accountability Report identified material 

weaknesses in Financial Accounting and Reporting, Grant Accounting, Funds Control, and in 

implementing the internal control structure required by the Federal Manager’s Financial Integrity Act. This 

year’s reported material weakness included five accounting errors which were resolved by the end of FY 

2009. 

In FY 2009, EAC focused on cleaning our financial house and resolving audit findings. I look forward to 

the new fiscal year, where efforts will be focused on establishing a robust internal control program and 

reliable performance measurement and reporting. 

Annette Lafferty 

Chief Financial Officer 

November 16, 2009 






U.S. ELECTION ASSISTANCE COMMISSION

OFFICE OF INSPECTOR GENERAL

1225 New York Ave. NW - Suite 1100 

Washington, DC 20005

November 12, 2009 

To: The Commission 

From: Inspector General 

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

Commission’s Financial Statements for Fiscal Year 2009 (Assignment 

No. I-PA-EAC-01-09) 

INTRODUCTION 

The independent public accounting firm of Leon Snead & Co. (Leon 

Snead) performed the audit of the U.S. Election Assistance Commission’s (EAC) 

financial statements as of September 30, 2009 and 2008 and for the years then 

ended. The audit was performed by Leon Snead under a contract that was issued 

by the EAC and 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

 Leon Snead found that EAC’s financial statements, as of and for the year 

ended September 30, 2009, were presented fairly, in all material respects, in 

conformity with accounting principles generally accepted in the United States of 

America. However, EAC’s accounting records and internal controls for 2008 were 

not sufficient, and Leon Snead was not able to apply other auditing procedures to 

satisfy themselves as to the completeness and accuracy of those amounts. 

Accordingly, the scope of their work was not sufficient to enable them to express an 

opinion on the 2008 financial statements.

In connection with the audit, EAC’s internal controls over financial 

reporting and compliance with certain provisions of applicable laws and 

regulations were considered. The audit found that the EAC has made substantial 

progress in correcting weaknesses in its financial management and reporting that 

were identified in prior reports. However, the audit identified one material 

weakness and two significant deficiencies in internal control, respectively, as 

follows: 

Accounting Processes not in Accordance with Generally Accepted 

Accounting Principles 

Controls Over Journal Vouchers 

Information Technology Controls
The results of Leon Snead’s test of compliance with laws and regulations 

described in the audit report disclosed no instances of noncompliance with laws 

and regulations that are required to be reported under Government Auditing 

Standards or OMB Bulletin 07-04. 

OTHER MATTERS 

The OIG has submitted two requests for opinion to the Government 

Accountability Office (GAO). The requests cover two issues related to 

appropriations given to the EAC in FY 2004, 2005 and 2009. The first request 

relates to the EAC’s use of funds appropriated for requirements payments in FY 

2004 to fund two other grant programs, the College Poll Worker Program and 

Parent Student Mock Election, in keeping with the language of the conference 

report associated with the FY 2004 appropriation. This issue involves a potential 

violation of the Anti-deficiency Act. 

The second issue relates to the EAC’s recording obligations based upon 

the appropriation of requirements payments under continuing resolutions in FY 

2005 and FY 2009. In light of the GAO’s previous opinion that requirements 

payments are obligated by operation of law, the question is whether the EAC has 

binding obligations in favor of the states in the aggregate amount of the 

requirements payments appropriated under the FY 2005 and FY 2009 continuing 

resolutions. The additional obligations to the states could be in excess of $500 

million. 

OMB and the EAC do not agree with the OIG that there is a potential 

Anti-deficiency Act violation nor do they agree that there is any additional 

obligation to the states as a result of the requirements payments appropriated in 

the respective continuing resolutions.

We expect to receive the opinions from GAO during the first part of 

calendar year 2010. 

EAC RESPONSE 

The report on internal control contains recommendations to address the 

weaknesses identified in the report. Management was provided a draft copy of the

report for comment and generally concurred with the findings. The OIG will 

monitor the implementation of the recommendations. 

EVALUATION OF LEON SNEAD PERFORMANCE 

To ensure the quality of the audit work performed, the OIG reviewed Leon 

Snead’s report and related documentation and inquired of its representatives. The 

OIG's review, as differentiated from an audit in accordance with U.S. generally 
accepted government auditing standards (GAGAS), was not intended to enable us 

to express, and we do not express, opinions on the EAC's financial statements or 

internal control or on the EAC's compliance with laws and regulations. Leon 

Snead is responsible for the attached auditor's report dated November 10, 2009 

and the conclusions expressed in the report. The OIG review did not disclose any 

instances where Leon Snead did not comply, in all material respects, with 

GAGAS. 

REPORT DISTRIBUTION 

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

reporting to Congress on all reports issued, actions taken to implement 

recommendations, and recommendations that have not been implemented. 

Therefore, we will include the information in the attachment in our next 

semiannual report to Congress. The distribution of this report is not restricted, and 

copies are available for public inspection. 

We appreciate the cooperation and assistance of EAC personnel during the 

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

Attachment 

Cc: Executive Director 
ELECTION ASSISTANCE COMMISSION
 

Audit of Financial Statements
 

As of and for the Years Ended

September 30, 2009 and 2008 

Submitted By
 

Leon Snead & Company, P.C.

Certified Public Accountants & Management Consultants 
TABLE OF CONTENTS

Page 

Independent Auditor’s Report..............................................................................................1 

Summary.....................................................................................................................1 

Opinion on the Financial Statements ..........................................................................2 

Internal Control over Financial Reporting..................................................................3 

1. Accounting Processes not in Accordance with GAAP...................................3 

2. Controls over Journal Vouchers......................................................................6 

3. Information Technology Security Controls ....................................................7 

Compliance with Laws and Regulations.....................................................................8 

Attachment 1, Status of Prior Year Findings.....................................................................11 

Attachment 2, Agency Response to Draft Report..............................................................13 
Generated by a Trial Version of NetCentric Technologies’ CommonLook® Acrobat® Plug-in. www.net-centric.com

LEON SNEAD 	 Certified Public ACCOlilltauts 

& Mmwgemeul CO"51,/laIiIS & COMPANY, rc. _____________________ _____=======_ 

416 Hungerford Drive, Suite 400 

Rockville, Maryland 20850 

301·738·8190 

fax: 301-738-8210 

leonsnead.companypc@'crols.com 

The Commission and Inspector General 

U.S. Election Assistance Commission 

Independent Auditor's Report 

We have audited the accompanying balance sheet of the U.S. Election Assistance 

Commission (EAC), as of September 30, 2009, and the related statements of net cost, 

changes in net position, and budgetary resources (financial statements) for the year then 

ended. We were engaged to audit the accompanying balance sheet of EAC, as of 

September 30, 2008, and the related statements of net cost, changes in net position, and 

budgetary resources for the year then ended. 

In connection with our audit, we also considered the EAC's internal control over 

financial reporting and tested the EAC's compliance with certain provisions of 

applicable laws and regulations that could have a direct and material effect on its 

financial statements. 

SUMMARY 

As stated in our OpIniOn on the financial statements, we found that EAC's financial 

statements, as of and for the year ended September 30, 2009, are presented fairly, in all 

material respects, in conformity with accounting principles generally accepted in the 

United States of America. EAC's accounting records and internal controls for 2008 were 

not sufficient, and we were not able to apply other auditing procedures to satisfy 

ourselves as to the completeness and accuracy of those amounts. Accordingly, the scope 

of our work was not sufficient to enable us to express, and we do not express, an opinion 

on the 2008 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 identified a material weakness in internal controls over financial reporting 

dealing with accounting processes established by EAC that were not in accordance with 

generally accepted accounting principles. 
Leon Snead & Company, P.C. 2 

The results of our tests of compliance with certain provisions of laws and regulations 

disclosed no instance of noncompliance that is required to be reported herein under 

Government Auditing Standards, issued by the Comptroller General of the United States 

and Office of Management and Budget (OMB) Bulletin No. 07-04, Audit Requirements 

for Federal Financial Statements (as amended). 

The following sections discuss in more detail our opinion on the EAC’s financial 

statements, our consideration of the EAC’s internal control over financial reporting, our 

tests of the EAC’s compliance with certain provisions of applicable laws and regulations, 

and management’s and our responsibilities. 

OPINION ON THE FINANCIAL STATEMENTS 

Except as explained in the following paragraph, we conducted our audits of the 

accompanying balance sheets of the EAC, as of September 30, 2009 and 2008, and the 

related statements of net cost, changes in net position, and budgetary resources for the 

years then ended in accordance with auditing standards generally accepted in the United 

States of America. 

Our audit identified weaknesses in EAC’s internal control over financial reporting that 

raised significant concerns about the ability to audit EAC’s 2008 financial statements. 

EAC was unable to provide sufficient evidential matter to support certain transactions 

and account balances presented in the 2008 financial statements. As discussed in 

footnote 15, EAC restated the 2008 financial statements to account for errors made that 

impacted the 2009 opening balances. However, EAC was unable to quantify the impact 

of these and other errors may have had on the 2008 financial statements. Since the 

accounting records were not sufficient to support amounts reported in the financial 

statements, it was impractical to extend our procedures to determine the extent, if any, to 

which EAC financial statements may have been affected by the matters discussed above. 

Because of the matters discussed in the preceding paragraph, the scope of our work was 

not sufficient to enable us to express, and we do not express, an opinion on the balance 

sheet of the EAC, as of September 30, 2008, and the related statements of net cost, 

changes in net position, and budgetary resources for the year then ended. 

In our opinion, the financial statements referred to above present fairly, in all material 

respects, the financial position, net cost, changes in net position, and budgetary resources 

of the EAC, as of and for the year ended September 30, 2009, in conformity with 

accounting principles generally accepted in the United States of America. 

The information in the Management’s Discussion and Analysis section is not a required 

part of the basic financial statements but is supplementary information required by 

accounting principles generally accepted in the United States of America or OMB 

Circular A-136, Financial Reporting Requirements. The EAC is also required to report, 

as supplementary information, the annual investment in non-federal property funded 

through the agency’s grant programs. Except as discussed below, we have applied 
Leon Snead & Company, P.C. 3 

certain limited procedures, which consisted principally of inquiries of EAC management 

regarding the methods of measurement and presentation of the supplementary 

information and analysis of the information for consistency with the financial statements. 

However, we did not audit the information and express no opinion on it. 

The EAC has not presented required supplementary information required by GAAP 

relating to the annual investment in non-federal property that accounting principles 

generally accepted in the United States has determined is necessary to supplement, 

although not required to be part of, the basic financial statements. 

INTERNAL CONTROL OVER FINANCIAL REPORTING 

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

the year ended September 30, 2009, in accordance with auditing standards generally 

accepted in the Unites States of America, we considered the EAC’s internal control over 

financial reporting (internal control) as a basis for designing our auditing procedures for 

the purpose of expressing our opinion on the financial statements, but not for the purpose 

of expressing an opinion on the effectiveness of the EAC’s internal control. Accordingly, 

we do not express an opinion on the effectiveness of the EAC’s internal control. 

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

management override of controls, misstatements, losses, or noncompliance may 

nevertheless occur and not be detected. A control deficiency exists when the design or 

operation of a control does not allow management or employees, in the normal course of 

performing their assigned functions, to prevent or detect misstatements on a timely basis. 

A significant deficiency is a control deficiency, or combination of control deficiencies, 

that adversely affects the entity’s ability to initiate, authorize, record, process, or report 

financial data reliably in accordance with generally accepted accounting principles such 

that there is a more than remote likelihood that a misstatement of the entity’s financial 

statements that is more than inconsequential will not be prevented or detected by the 

entity’s internal control. A material weakness is a significant deficiency, or combination 

of significant deficiencies, that results in more than a remote likelihood that a material 

misstatement of the financial statements will not be prevented or detected by the entity’s 

internal control. 

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

paragraph in this section of the report and would not necessarily identify all deficiencies 

in internal control that might be significant deficiencies or material weaknesses. 

However, as discussed below, we identified certain deficiencies in internal control that 

we consider to be significant deficiencies. We consider finding number one to be a 

material weakness. 

1. Accounting Processes not in Accordance with GAAP 

Accounting errors resulting from accounting processes that did not meet generally 

accepted accounting principles (GAAP) and material weaknesses in internal 
Leon Snead & Company, P.C.	 4 

controls over financial reporting impacted EAC’s 2008 financial statements and 

continued in the 2009 interim financial statements. As a result, EAC’s 2009 

interim financial statements were materially misstated. However, for the 

September 30, 2009, financial statements, EAC officials strengthened internal 

controls over financial reporting, and adopted accounting processes that were in 

accordance with GAAP. Details of the problems noted are discussed below. 

• EAC did not follow GAAP when accounting for advances made to 

grantees. EAC accounted for all funds disbursed to grantees as an expense 

in the year that the funds were disbursed. However, GAAP requires that 

cash outlays made by a federal entity to its employees, contractors, 

grantees, or others to cover a part or all of the recipients’ anticipated 

expenses shall be recorded as an advance. These advances totaled 

approximately $34 million as of the end of fiscal year 2009. 

EAC implemented actions to correct this problem beginning with the June 

30, 2009, interim financial statements. In these financial statements, EAC 

recorded certain cash outlays made to contractors and grantees to cover a 

part or all of the recipients’ anticipated expenses as an advance. However, 

EAC did not adopt the same accounting policies for advances provided 

under another program that EAC administers. EAC fully corrected this 

problem for the agency’s September 30, 2009, financial statements. 

• EAC’s 2009 interim Statement of Net Cost (SNC) was neither presented 

in accordance with the requirements of OMB Circular A-136, nor met the 

cost accounting standards of SFFAS No. 4. As a result of these errors, the 

agency’s interim SNC’s were misstated. 

EAC recorded its salaries and operating expenses as a program on its SNC 

instead of allocating these costs to its major programs, as required. We 

also determined that the EAC did not have a documented and acceptable 

cost accounting method to allocate costs to the agency’s programs, or to 

provide reports to management based upon appropriate cost accounting 

methodologies. 

OMB Circular A-136 requires that the reporting entity should report the 

full cost of each program’s output, which consists of: (a) both direct and 

indirect costs of the output; and (b) the costs of identifiable supporting 

services provided by other segments within the reporting entity and by 

other reporting entities. 

EAC corrected this problem, and developed a costing methodology that 

allocated salaries and expenses to its responsibility segments for the 

agency’s September 30, 2009, financial statements. Our tests of the 

costing methodology established by EAC determined that it met the 

requirements of SFFAS No. 4 in all material respects. 
Leon Snead & Company, P.C.	 5 

• Account receivables totaling approximately $330,000, and representing 

amounts grantees owed EAC for grant funds that were not expended and 

should be returned to the Federal government were not recorded on EAC’s 

financial records. EAC officials have corrected this problem and have 

recorded these amounts in its 2009 year-end financial statements. 

SFFAS No. 1 requires recognition of a receivable when a federal entity 

establishes a claim to cash or other assets against other entities based on 

legal provisions, or when goods or services are provided. If an exact 

amount of a receivable is unknown, a reasonable estimate must be made. 

• Capital assets were not properly accounted for by EAC until the agency 

prepared its June 30, 2009 financial statements. EAC completed its 

review of prior year accounting records, and was able to record these 

assets in its 2009 year-end financial statements in accordance with GAAP. 

EAC officials took action during fiscal year 2009 to hire financial management officials 

with necessary skill sets to develop and implement required accounting policies and 

controls to address the problems that impacted its past financial management operations. 

EAC has developed required financial management policies and procedures in many 

areas and has other policies related to EAC internal controls either planned or under 

development. 

Recommendation 

Implement financial management policies and internal controls, and finalize other 

policies and procedures that are under development or planned. 

Agency Response 

The Chair, U.S. Election Assistance Commission in a response dated November 9, 2009, 

advised us that in fiscal year 2009, EAC began the process of designing, implementing 

and assessing internal controls in compliance with Office of Management and Budget 

Circular A-123. EAC will implement in fiscal year 2010 control activities needed to 

achieve program objectives and control activities. The Chair also advised that EAC will 

work towards finalizing draft operational policies and procedures and will continue to 

refine the already completed financial management policies and procedures. 
Leon Snead & Company, P.C. 6 

2. Controls over Journal Vouchers 

Journal vouchers processed by EAC’s service provider to EAC’s general ledger were 

not sufficiently supported. EAC officials had not established controls to ensure that 

financial management personnel reviewed and approved the journal vouchers 

proposed by EAC’s service provider. As a result, there was reduced assurance that 

errors that may impact financial reports would be detected. 

We obtained from EAC’s service provider a copy of its journal voucher processing 

controls. Our review of this document showed that, if the controls/processes were 

placed in operation, the controls would provide reasonable assurance that risks of 

errors would be reduced to reasonable levels. However, we found that for the journal 

vouchers we tested the service provider had not effectively implemented the control 

procedures. The service provider’s procedures require that backup documentation be 

gathered to support the entries, and that a supervisor review, initial and date the 

back-up documentation. Trial balances or queries should be obtained to ensure the 

journal voucher processed correctly. 

We selected five journal vouchers for review and obtained “documentation” from the 

service provider to support the journal vouchers. For three of the five journal 

vouchers provided, we could not determine that the entries processed were 

appropriate. We subsequently obtained from EAC sufficient documentation to 

support the journal vouchers questioned above. When our testing was performed, 

EAC had not established controls to review and approve journal vouchers processed 

by the agency’s service provider. EAC established internal controls that address this 

problem after we discussed this issue with them. 

Recommendation 

Implement procedures that require EAC accounting personnel to review and approve 

journal vouchers posted to the agency’s records. 

Agency Response 

The Chair advised that in August 2009, EAC management implemented procedures 

with the General Service Administration (GSA) requiring all journal vouchers be 

reviewed and approved by the EAC’s management prior to entry into the financial 

system. 
Leon Snead & Company, P.C. 7 

3. Information Technology Security Controls 

EAC has begun to take actions to address the IT security deficiencies that were 

reported in the 2008 FISMA report. While many corrective actions are underway or 

planned, EAC has not fully corrected all weaknesses that impact its IT security 

program. We attributed this condition, in part, to the absence of management 

officials with IT security program expertise. As a result, EAC is not in full 

compliance with the requirements of the Financial Information Systems Management 

Act (FISMA), which could impact EAC’s financial management operations. 

We assessed whether EAC’s agency-wide IT security program was in substantial 

compliance with each of the security control areas established by Federal Information 

Processing Standards (FIPS) 200, Minimum Security Requirements for Federal 

Information and Information System. For each control area, we determined whether 

the EAC was either in substantial compliance (SC), partial compliance (PC), or not in 

substantial compliance (NSC). The table below shows our determinations. 

CONTROL REQUIREMENT Compliance 

Determination 

(SC, PC, NSC) 

Access Control NSC 

Awareness and Training SC 

Audit and Accountability PC 

Certification, Accreditation, and Security Assessments PC 

Configuration Management SC 

Contingency Planning NSC 

Identification and Authentication PC 

Incident Response SC 

Maintenance SC 

Media Protection SC 

Physical and Environmental Protection SC 

Planning PC 

Personnel Security SC 

Risk Assessment PC 

System and Services Acquisition SC 

System and Communications Protection PC 

System and Information Integrity SC 

FIPS 199, Standards for Security Categorization of Federal Information and 

Information System, provides that policies and procedures play an important role in 

the effective implementation of an enterprise-wide information security program, and 

the success of the resulting security measures employed to protect an agency’s 

information and information systems. FIPS 199 provides that organizations must 

develop and promulgate formal, documented policies and procedures governing the 
Leon Snead & Company, P.C. 8 

minimum security requirements set forth in this standard, and must ensure their 

effective implementation. 

NIST Special Publication (SP) 800-53, Recommended Security Controls for Federal 

Information Systems and Organizations, provides that agencies must categorize their 

information and information systems under the requirements of FIPS 199. Security 

categorization is accomplished as an organization-wide activity with the involvement 

of senior-level organizational officials. As required by FIPS 200, organizations use 

the security categorization results to designate information systems as low-impact, 

moderate-impact, or high-impact systems. For each information system, the agency 

must meet recommended minimum security controls, as applicable to their 

operations. 

EAC in response to the IT security weaknesses developed a detailed Plan of Action 

and Milestone (POA&M) to address each problem area. We have issued 

recommendations to EAC in a separate report; therefore, we are not making any 

recommendations in this report. 

Agency Response 

The Chair advised that the EAC has developed a detailed Plan of Action and 

Milestone (POA&M) to address each problem area. Once the items in the POA&M 

are implemented in fiscal year 2010, EAC will be substantially compliant in every 

FISMA control area. 

Management of EAC reported the aforementioned material weakness 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. 

We noted other control deficiencies over financial reporting and its operation that we 

have reported to the management of the EAC and those charged with governance in a 

separate letter dated November 10, 2009. 

COMPLIANCE WITH LAWS AND REGULATIONS 

The results of our tests of compliance with certain provisions of laws and regulations, as 

described in the Responsibilities section of this report, disclosed no instance of 

noncompliance with laws and regulations that is required to be reported under 

Government Auditing Standards and OMB Bulletin 07-04. 

Under OMB Bulletin 07-04, auditors are generally required to report whether the 

agency’s financial management systems substantially comply with the Federal financial 

management systems requirements, applicable Federal accounting standards, and the 

United States Government Standard General Ledger at the transaction level specified in 

the Federal Financial Management Improvement Act (FFMIA). The Accountability of 

Tax Dollars Act, which requires the EAC to prepare and submit audited financial 
Leon Snead & Company, P.C. 9 

statements to Congress and the Director of OMB, did not extend to EAC the requirement 

to comply with FFMIA. 

RESPONSIBILITIES 

Management Responsibilities 

Management of the EAC is responsible for: (1) preparing the financial statements in 

conformity with generally accepted accounting principles; (2) establishing, maintaining, 

and assessing internal control to provide reasonable assurance that the broad control 

objectives of the FMFIA are met; and (3) complying with applicable laws and 

regulations. In fulfilling this responsibility, estimates and judgments by management are 

required to assess the expected benefits and related costs of internal control policies. 

Auditor Responsibilities 

Our responsibility is to express an opinion on the financial statements based on our audit. 

We conducted our audit in accordance with auditing standards generally accepted in the 

United States of America; the standards applicable to financial audits contained in 

Government Auditing Standards, issued by the Comptroller General of the United States; 

and OMB Bulletin 07-04, Audit Requirements for Federal Financial Statements. Those 

standards require that we plan and perform the audit to obtain reasonable assurance about 

whether the financial statements are free of material misstatement. 

An audit includes (1) examining, on a test basis, evidence supporting the amounts and 

disclosures in the financial statements; (2) assessing the accounting principles used and 

significant estimates made by management, as well as evaluating the overall financial 

statement presentation. We believe that our audit provides a reasonable basis for our 

opinion. 

In planning and performing our audit, we considered the EAC’s internal control over 

financial reporting by obtaining an understanding of the agency’s internal control, 

determining whether internal controls had been placed in operation, assessing control 

risk, and performing tests of controls in order to determine our auditing procedures for 

the purpose of expressing our opinion on the financial statements. 

We limited our internal control testing to those controls necessary to achieve the 

objectives described in OMB Bulletin 07-04 and Government Auditing Standards. We 

did not test all internal controls relevant to operating objectives as broadly defined by 

FMFIA. Our procedures were not designed to provide an opinion on internal control 

over financial reporting. Consequently, we do not express an opinion thereon. 

As required by OMB Bulletin 07-04, with respect to internal control related to 

performance measures determined to be key and reported in Management’s Discussion 

and Analysis, we obtained an understanding of the design of significant internal controls 

relating to the existence and completeness assertions and determined whether they had 
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Leon Snead & Company, P.c' 10 

been placed in operation. Our procedures were not designed to provide assurance on 

internal control over reported perfonnance measures, and, accordingly, we do not provide 

an opinion thereon. 

As part of obtaining reasonable assurance about whether the agency's financial 

statements are free of material misstatement, we perfonned tests of its compliance with 

certain provisions of laws, regulations, and significant provisions of contracts, 

noncompliance with which could have a direct and material effect on the detennination 

of financial statement amounts, and certain other laws and regulations specified in OMB 

Bulletin 07-04. We limited our tests of compliance to these provisions and we did not 

test compliance with all laws and regulations applicable to the EAC. Providing an 

opinion on compliance with certain provisions of laws, regulations, and significant 

contract provisions was not an objective of our audit and, accordingly, we do not express 

such an opinion. 

AGENCY COMMENTS AND AUDITOR EVALUATION 

We have incorporated the agency's comments to our audit recommendations in the 

report, and have attached a copy of the response, in its entirety, as Attachment 2 to this 

report. 

The EAC's written response to the significant deficiencies and material weaknesses 

identified in our audit has not been subjected to the auditing procedures applied in the 

audit of the financial statements and, accordingly, we express no opinion on it. 

DISTRIBUTION 

This report is intended solely for the infonnation and use of the management, the 

Commissioners, 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. 

~-S

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eaa~-A. & nlpa P.c. 

CofV\,;p'q ,u'--t/ ' r

November 10,2009 
Leon Snead & Company, P.C. 11 

Attachment 1 

Status of Prior Year Findings 

No. Prior Year Condition Status As Of September 30, 2009 

1a 

Material Weakness: EAC’s Performance and 

Accountability Report did not meet OMB A-136 

requirements 

EAC officials took action to correct this 

problem. 

1b 

Material Weakness: EAC did not have 

adequate resources and employees with 

appropriate skill sets to handle financial 

management accounting and reporting. The 

financial operations were fragmented, and there 

was a lack of organizational structure relating to 

internal and external financial reporting 

requirements. 

EAC officials took action to correct this 

problem. 

1c Material Weakness: Deficiencies in 

accounting materially impacted EAC’s 2008 

financial statements, including: 

• Grant advances were misclassified as 

expenses. 

• Certain requirement payments may have 

been misclassified as expense. 

• Advances made to a Federal service 

provider were misclassified as expense. 

• Federal assistance receivables were not 

reported. 

• Statement of Net Costs had presentation 

errors. 

• Leasehold improvements and certain 

purchases were not capitalized. 

• Certain liabilities were not accrued. 

• Certain budgetary accounting may have 

been incorrect. 

EAC officials took action to correct these 

problems. 

1d Material Weakness: EAC’s financial 

management system did not meet OMB Circular 

A-127 requirements. 

EAC officials took action to correct this 

problem. 

1e Material Weakness: EAC did not have 

necessary financial management policies and 

procedures to enable the agency to timely and 

properly prepare financial statements. 

EAC officials have finalized financial policies 

and procedures, and other policies and 

procedures for many operational processes are 

in review or planned. However, the condition 

has not been fully corrected. 

1f Material Weakness: EAC did not prepare 

necessary accounting reconciliations. 

EAC officials took action to correct this 

problem. 

1g Material Weakness: Advances made to a 

Federal service provider were recorded as 

expense. 

EAC officials took action to correct this 

problem. 
Leon Snead & Company, P.C. 12 

2 Material Weakness: Grant transactions were 

not prepared in accordance with generally 

accepted accounting principles. 

EAC officials took action to correct this 

problem. 

3 Material Weakness: EAC did not have 

adequate funds control to ensure compliance 

with antideficiency act and purpose statute. 

The EAC OIG has requested a formal opinion 

from the GAO to determine if the issues 

reported constitute a violation. GAO has not 

made a formal determination in this area. As a 

result, this issue remains open. 

4 Material Weakness: EAC did not have a 

process in place to assess its internal controls. 

EAC officials took action to correct this 

problem. 

5 Significant Deficiency: EAC did not have an 

agency-wide IT security program. 

EAC has addressed many of the problems with 

its IT security program. However, EAC has 

not corrected all weaknesses identified in the 

report. As a result, this issue remains open. 
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U.S. ELECTION ASSISTANCE COMMISSION 

1225 NEW YORK AVENUE, N.w., SUITE 1100 

WASHING rON, D.C. 20005 

November 9,2009 

Memorandum 

To: 	 Curtis Crider 

Inspector General 

From: 	 Gineen Bresso Beach 

Chair, u.s. Election Assistance Commission 

Subject: Election Assistance Commission Response to Independent Audit Report on the 

U.S. Election Assistance Commission's Financial Statements for Fiscal Year 

2009 (Assignment No. I-PA-EAC-OI-09) 

During Fiscal Year 2009, the Election Assistance Commission (EAC) took action to 

address the problems that impacted its Fiscal Year 2008 financial management reports. 

This action included resolving all but three ofits prior year findings, implementing sound 

financial management practices and obtaining an unqualified audit opinion on the Fiscal 

Year 2009 financial statements. 

The EAC recognizes that FY 2010 brings new challenges and the opportunity to resolve 

one remaining FY 2008 deficiency and Fiscal Year 2009 deficiencies. Overall EAC 

agrees with the one material weakness and two significant deficiencies identified by the 

audit. 

Our response to each audit recommendation is presented below. 

1. 	 Implement financial management policies and internal controls, and finalize 

other policies and procedures that are under development or planned. 

In Fiscal Year 2009, EAC began the process of designing, implementing and 

assessing internal controls in compliance with Office of Management and 

Budget Circular A-I23, Management's Responsibility for Internal Control, 

and Federal Manager's Financial Integrity Act. In response to 

recommendations obtained from an independent assessment, EAC will 

implement in FY 2010 control activities needed to achieve program objectives 

and control activities that will improve accuracy of performance data. This 

will ensure that EAC's performance metric reports are reliable and measure 

the right activities. 

EAC will work towards finalizing draft operational policies and procedures 

and will continue to refine the already completed financial management 

policies and procedures. 

Tel: (202) 566-3100 www.eac.gov Fax: (202) 566-3127 


Toll free: 1 (866) 747-1471 


Attachment 2 13
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2. 	 Implement procedures that require EAC accounting personnel to review and 

approve journal vouchers posted to the agency's records. 

In August 2009, EAC Management implemented procedures with the General 

Service Administration (GSA) requiring all journal vouchers be reviewed and 

approved by the EAC's management prior to entry into the financial system. 

Upon entry, GSA forwards the EAC journal voucher entry number, providing 

management the opportunity to review the entry for accuracy in the financial 

records. 

3. 	 Information Technology Security Controls 

The FY 2009 Federal Information Security Management Act (FISMA) 

evaluation report found that EAC has taken actions to address many of the 

serious problems noted in the FY 2008 FISMA evaluation report. The FY 

2009 report found that four weaknesses had been resolved, two weaknesses 

had been partially resolved and one weakness had not yet been addressed. 

EAC has developed a detailed Plan of Action and Milestone (POA&M) to 

address each problem area. Once the items in the POA&M are implemented 

in FY 2010, EAC will be substantially compliant in every FISMA control 

area. Detailed information on the results of the evaluation and managements 

responses can be found in the document "Us. Election Assistance 

Commission Evaluation of Compliance with the Requirements of the Federal 

Information Security Management Act Fiscal Year 2009 (Assignment No. 1­

EV-EA C-02-09). 

Attachment 2 14
Assets 2009

Restated 

2008 

Intragovernmental:

Fund balance with Treasury (Note 2) $ 157,884,882 $ 133,466,533

Advances and Prepayments (Note 4) 2,097,844 2,961,010

Total intragovernmental assets 159,982,726 136,427,543

With public:

Accounts receivable, net (Note 3) 349,146 346,948

Advances and prepayments (Note 4) 34,692,298 52,249,395

Total asset with public 35,041,444 52,596,343

General property and equipment, net (Note 5) 269,120 477,635

Total assets $ 195,293,290 $ 189,501,521

Liabilities

Intragovernmental:

Accounts payable (Note 6) $ 348,958 $ 512,984

Employer contribution and payroll taxes payable (Note 6) 48,157 40,645

Total intragovernmental 397,115 553,629

With the public: 

Accounts payable (Note 6) 7,983,052 646,686

Accrued payroll and benefits (Note 6) 241,878 227,068

Unfunded leave (Note 6) 261,880 185,889

Total liabilities 8,883,925 1,613,272

Net position

Unexpended appropriations 186,401,600 187,595,489

Cumulative results of operations 7,765 292,760

Total net position 186,409,365 187,888,249

Total liabilities and net position $ 195,293,290 $ 189,501,521

ELECTION ASSISTANCE COMMISSION

BALANCE SHEET

As of September 30, 2009 and 2008 (In Dollars)

The accompanying notes are an integral part of these financial statements. 

 15
2009

Restated 

2008 

Program Costs:

Communications $ 1,994,125 $ 1,543,834

Fund and Oversee 113,042,449 6,598,961

Research, Policy and Programs 2,972,123 2,300,992

Testing and Certification 3,578,173 2,770,190

Net cost of operations (Note 8) $ 121,586,870 $ 13,213,977

ELECTION ASSISTANCE COMMISSION

STATEMENT OF NET COST

For Years Ended September 30, 2009 and 2008 (In Dollars)

The accompanying notes are an integral part of these financial statements. 

 16
2009

Restated 

2008 

Cumulative results of operations:

Beginning balance $ 292,760 $ (292,114)

Beginning balance, as adjusted 292,760 (292,114)

Budgetary financing sources:

Appropriations used 121,087,642 13,653,058

Other financing sources (non-exchange):

Imputed financing from costs absorbed from others 214,233 145,793

Total financing sources: 121,301,874 13,798,851

Net cost of operations (121,586,870) (13,213,977)

Net change (284,995) 584,874

Cumulative results of operations: 7,765 292,760

Unexpended appropriations:

Beginning balance 187,595,489 62,968,547

Prior period adjustments due to correction of errors 0 -

Beginning balance, as adjusted 187,595,489 62,968,547

Budgetary financing sources:

Appropriations received 123,959,000 141,530,000

Appropriations transferred in/out (+/-) (4,000,000) (3,250,000)

Other adjustments (65,247) -

Appropriations used (121,087,642) (13,653,058)

Total budgetary financing sources (1,193,889) 124,626,942

Total unexpended appropriations 186,401,600 187,595,489

Net position $ 186,409,365 $ 187,888,249

ELECTION ASSISTANCE COMMISSION

STATEMENT OF CHANGES IN NET POSITION

For The Years Ended September 30, 2009 and 2008 (In Dollars)

The accompanying notes are an integral part of these financial statements. 

 17
2009

Restated 

2008 

Budgetary resources:

Unobligated balance, brought forward (Note 11) $ 7,561,952 $ 6,918,986

Recoveries of prior year obligations (Note 11) 662,985 513,671

Budget authority:

Appropriations received 123,959,000 141,530,000

Spending authority from offsetting collections:

 Collected (Note 11) 837,849 19,491

Nonexpenditure transfers, net, anticipated and actual (4,000,000) (3,250,000)

Permanently not available (65,247) -

Total budgetary resources (Note 9) $ 128,956,539 $ 145,732,148

Status of budgetary resources:

Obligations incurred: (Note 9 & Note 11) $ 114,957,639 $ 138,170,196

Unobligated balance - apportioned 7,452,047 766,190

Unobligated balance not available (Note 11) 6,546,853 6,795,762

Total status of budgetary resources (Note 9) $ 128,956,539 $ 145,732,148

Change in obligated balance:

Obligated balance, net

Unpaid obligations, brought forward (Note 11) $ 125,904,580 $ 3,431,129

Obligations incurred, net 114,957,639 138,170,196

Less: gross outlays (Note 11) (96,313,253) (15,183,074)

Less: recoveries of prior year unpaid obligations, actual (662,985) (513,671)

Total, unpaid obligated balance, end of period forward (Note 12) $ 143,885,981 $ 125,904,580

Net outlays:

Gross outlays $ 96,313,253 $ 15,183,074

Less: offsetting collections (837,849) (19,491)

Net outlays (Note 9) $ 95,475,404 $ 15,163,583

ELECTION ASSISTANCE COMMISSION

STATEMENT OF BUDGETARY RESOURCES

For The Years Ended September 30, 2009 and 2008 (In Dollars)

The accompanying notes are an integral part of these financial statements. 

 18
19

Note 1 – Summary of Significant Accounting Policies 

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.

Basis of Accounting and Presentation 

As required by the Accountability of Tax Dollars Act of 2002 (ATDA), the 

accompanying financial statements present the financial position, net cost of 

operations, changes in net position, and budgetary resources of the EAC. While 

these financial statements have been prepared from the books and records of the 

EAC in accordance with United States generally accepted accounting principles 

(GAAP) and in accordance with the form and content for entity financial statements 

specified by the Office of Management and Budget (OMB) in Circular A-136, as 

revised, Financial Reporting Requirements, as well as the accounting policies of the 

EAC, the statements may differ from other financial reports submitted pursuant to 

OMB directives for the purpose of monitoring and controlling the use of the EAC’s 

budgetary resources. GAAP for federal entities are the standards prescribed by the 

Federal Accounting Standards Advisory Board (FASAB), which is the official body for 

setting the accounting standards of the federal government.

These financial statements reflect both accrual and budgetary accounting 

transactions. Under the accrual method of accounting, revenues are recognized 

when earned and expenses are recognized when a liability is incurred, without regard 

to receipt or payment of cash. Budgetary accounting is designed to recognize the 

obligation of funds according to legal requirements. Budgetary accounting is 
20

essential for compliance with legal constraints and controls over the use of Federal 

funds.

Throughout these financial statements, assets, liabilities, revenues, and costs have 

been classified according to the type of entity with which the transactions are 

associated. Intragovernmental assets and liabilities are those from or to other federal 

entities. Intragovernmental earned revenues are collections or accruals of revenue 

from other federal entities and intragovernmental costs are payments or accruals to 

other federal entities. These statements should be read with the understanding that 

they are for a component of the U.S. Government, a sovereign entity.

Assets 

Assets that an entity is authorized to use in its operations are termed entity assets, 

while assets that are held by an entity and are not available for the entity’s use are 

termed non-entity assets. All of the EAC’s assets are entity assets and are available 

to carry out the mission of the EAC, as appropriated by Congress. 

Fund Balance with Treasury 

EAC does not maintain cash in commercial bank accounts. The U.S. Treasury 

processes cash receipts and disbursements. Funds with the U.S. Treasury consist of 

appropriated funds. These funds are available to pay current liabilities and finance 

authorized purchase commitments.

Accounts Receivable 

EAC’s accounts receivable represents claims from associates and amounts due from 

the States and grant recipients. The amounts due from current and separated 

employees result from payroll adjustments and/or court ordered actions. The 

amounts from the States and grant recipients result from audits and examinations 

performed by the EAC on the proper use of funds under the Help America Vote Act of 

2002, Section 101, 102 and 251 payments and Section 102 funds unspent by the 

States that did not file the extension waiver.

The EAC establishes an allowance for the loss on accounts receivable that are 

deemed uncollectible accounts, which is included in Accounts Receivable, net on the 

balance sheet. After an account or portion thereof is deemed delinquent an 

accounts receivable allowance will be established in the financial records. The 

allowance will be based on known historical collection rates and a review of 

circumstances particular to the debtor.

Advances and Prepayments 

 

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 
21

been received or services have been performed. The EAC has prepayments and 

advances with non-governmental, as well as governmental vendors. 

Total prepayments and advances to non-governmental entities as of September 30, 

2009 were $34,692,299. These include primarily HAVA Section 102 disbursements 

unspent by the States as of September 30, 2009. The prepayments and advances to 

governmental entities were $2,097,844 as of September 30, 2009. These included 

deposit accounts with the Department of Interior, Acquisition Services Directorate to 

provide acquisition support services to the EAC. 

General Property and Equipment 

General property and equipment (PP&E) is reported at acquisition cost. 

The capitalization threshold is established at $10,000 for assets with a useful life of 

2 or more years. The bulk purchase policy requires that all items will be capitalized 

when the individual useful lives are at least two years and have an aggregate value of 

$100,000 or more.

Acquisitions of PP&E that do not meet the capitalization criteria are recorded as 

operating expenses. General PP&E consists of items that are used by EAC to support 

its mission. 

Depreciation on these assets is calculated using the straight-line method with no 

salvage value. Depreciation begins the month after the asset is placed in service. 

Useful lives are 5 years for equipment and 5 years for furniture.

Maintenance, repairs and minor renovations are expensed as incurred. Expenditures 

that materially increase values, change capacities or extend useful lives are 

capitalized. 

The headquarters building in which the EAC operates is leased through the General 

Services Administration (GSA) under an occupancy agreement, which manages the 

lease agreement between the Federal government and the commercial entity. EAC is 

billed on a monthly basis by GSA for the leased premises. The cost of the leasehold 

improvements to the headquarters building has been capitalized. Any costs of 

leasehold improvements financed with EAC appropriated funds are capitalized if the 

total cost exceeds $25,000. Any construction costs will be accumulated as 

“construction in-progress” until completion and then transferred and capitalized as a 

“leasehold improvements” over 7 years or the remainder of the lease, whichever is 

less.

Currently, EAC has no internal use software. In future years, any internal use software 

development and acquisition costs of $25,000 will be capitalized as software 

development in progress until the development stage is completed and the software 

successfully tested. At acceptance, software development-in-progress costs will be 

reclassified as internal use software costs and amortized using the straight-line 
22

method over an estimated useful life of 5 years. Purchased commercial software that 

does not meet the capitalization criteria will be expensed. Enhancements which do 

not add significant new capability or functionality will be expensed. 

The estimated useful lives and corresponding capitalization thresholds are as 

follows:

Type Lives Threshold 

Equipment 5 years $ 10,000 

Furniture 5 years 10,000

Vehicles 5 years 10,000

Leasehold Improvements 7 years 25,000

Software 5 years 25,000

Liabilities 

 

Liabilities represent amounts that are likely to be paid by the EAC as the result of 

transactions or events that have already occurred; however, no liabilities are paid by 

the EAC without an appropriation. Intragovernmental liabilities arise from 

transactions with other Federal entities. Liabilities classified as not covered by 

budgetary resources are liabilities for which appropriations have not been enacted 

(e.g., annual leave benefits and actuarial liability under the Federal Employees

Compensation Act).

Accounts Payable 

Accounts payable consist of liabilities to commercial vendors and contractors and 

other federal agencies for amounts owed for goods, services, and other expenses 

received but not yet paid at the end of the fiscal year. Accounts payable also consist 

of disbursements in transit recorded by EAC but not paid by the U.S. Treasury.

Accrued Payroll and Benefits 

Accrued payroll and benefits represents salaries, wages and benefits earned by 

employees, but not disbursed as of September 30, 2009. Accrued payroll and 

benefits are payable to employees and are therefore not classified as 

intragovernmental.

 

Annual, Sick and Other Leave 

Annual leave is recorded as a liability when it is earned; the liability is reduced as 

leave is taken. Each pay period, the balance in the accrued leave account is adjusted 

to reflect the current leave balances and pay rates. Accrued annual leave is paid 

from future funding sources and accordingly is reflected as a liability not covered by 

budgetary resources. Sick leave and other types of non-vested leave are expensed as 

taken.
23

Federal Employee Benefits 

A liability is recorded for estimated and actual future payments to be made for 

worker’s compensation pursuant to the Federal Employees Compensation Act (FECA). 

EAC’s did have a FECA liability at the end of the reporting period for claims filed for 

the period July 1, 2009 through September 30, 2009. Accordingly, EAC recorded a 

liability for estimated payments to be made for workers’ compensation pursuant to 

the Act.

Employee Retirement Plans 

EAC employees participate in either the Civil Service Retirement System (CSRS) or 

the Federal Employees Retirement System (FERS), which became effective on 

January 1, 1987. Most EAC employees are covered by FERS and social security. 

For employees covered by CSRS, the EAC withheld 7.0 percent of base pay earnings. 

The EAC matches this withholding, and the sum of the withholding and the matching 

funds is transferred to the Civil Service Retirement System. FERS contributions made 

by employer agencies and covered employees are comparable to the U.S. 

Government’s estimated service costs. 

For FERS covered employees, the EAC made contributions of 12.3 percent of basic 

pay. Employees participating in FERS are covered under the Federal Insurance 

Contribution Act (FICA) for which the EAC contributes a matching amount to the 

Social Security Administration.

Thrift Savings Plan (TSP) 

The Thrift Savings Plan (TSP) is a retirement savings and investment plan for employees 

covered by either CSRS or FERS. The TSP is administered by the Federal Retirement 

Thrift Investment Board on behalf of Federal agencies. For employees belonging to 

FERS, the EAC automatically contributes one percent of base pay to their account and 

matches contributions up to an additional four percent. For employees belonging to 

CSRS, there is no governmental matching contribution.

The EAC does not report on its financial statements CSRS and FERS assets, 

accumulated plan benefits, or unfunded liabilities, if any, which may be applicable to 

EAC employees. Reporting such amounts is the responsibility of the Office of Personnel 

Management. The portion of the current and estimated future outlays for CSRS not 

paid by EAC is, in accordance with Statement of Federal Financial Accounting Standards 

(SFFAS) No. 5, Accounting for Liabilities of the Federal Government, included in EAC's 

financial statements as an imputed financing source.

 
24

Commitments and Contingencies 

Commitments are contractual agreements involving financial obligations. EAC is 

committed for goods and services that have been ordered, but have not yet been 

received.

A contingency is an existing condition, situation, or set of circumstances involving 

uncertainty as to possible gain or loss. The uncertainty will ultimately be resolved when 

one or more future events occur or fail to occur. A contingency liability is recognized 

when a past event or exchange transaction has occurred, and future outflow or other 

sacrifice of resources is measurable and probable. A contingency is not disclosed when 

any of the conditions for liability recognition are met but the chance of the future event 

or events’ occurring is remote. A contingency is disclosed when any of the conditions for 

liability recognition are not met and the chance of the future confirming event or events 

occurring is more than remote but less than probable.

Revenues and Other Financing Sources 

 

Annual Appropriation 

 

EAC receives its funding through an annual appropriation as provided by Congress.

Imputed Financing Sources 

In accordance with OMB Circular A-136, all expenses should be reported by agencies 

whether or not these expenses would be paid by the agency that incurs the expense. 

The amounts for certain expenses of the EAC, which will be paid by other Federal 

agencies, are recorded in the Statement of Net Cost. A corresponding amount is 

recognized in the “Statement of Changes in Net Position” as an “Imputed Financing 

Source.” These imputed financing sources primarily represent unfunded pension costs 

of EAC employees, as described above.

Statement of Net Cost 

 

Net cost of operations is the difference between the EAC’s expenses and its earned 

revenue. For Fiscal year 2008 and 2009, the EAC has four programs; Communicate, 

Fund and Oversee, Study, Guide & Assist, and Test & Certify. The cost for each 

program is a sum of the direct costs of the program and an allocation of the agency’s 

other overhead costs such as rent, telephone, administrative and financial support 

staff. All grants and requirement payments are included in the Fund and Oversee 

program. 

Grants 

 

The EAC administers and oversees the grant making process in connection with 

federal Requirements Payments and grants made to recipient organizations under 

the HAVA. As Requirements Payments and grants are awarded, they are recorded as 
25

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. Grants awards made to grantees in 

advance of expenditures are recorded as advances and are included in the balance 

sheet. 

Net Position 

Net position is the residual difference between asset and liabilities and is comprised 

of unexpended appropriations and cumulative results of operations. Unexpended 

appropriations represent appropriated spending authority that is unobligated and has 

not been withdrawn by the U.S. Treasury along with obligations that have not been 

paid. Unobligated balances associated with appropriations that expire at the end of 

the fiscal year remain available for obligation adjustments, but not for new 

obligations, until that account is closed, five years after the appropriations expire. 

Cumulative results of operations represent the excess of financing sources over 

expenses since inception.

Use of Estimates 

The preparation of the accompanying financial statements in accordance with 

accounting principles generally accepted in the United States requires management 

where necessary, to make certain estimates and assumptions that directly affect the 

reported amounts of assets, liabilities, revenues, and expenses. Actual results could 

differ from these estimates.

Note 2 – Fund Balance with Treasury 

Fund balances with Treasury are contained within six annual funds (FY2005 through 

FY2009) and two no-year funds. The total of fund balances with treasury consisted of 

the following at September 30, 2009 and September 30, 2008:

FY 2009

Restated 

FY 2008

Fund Balance with Treasury 

Appropriated Funds $ 157,884,882 $133,466,533 

Status of Fund Balance with Treasury: 

Unobligated Balance

Available 7,452,047 766,191

Unavailable 6,546,853 6,795,762

Obligated Balance not yet Disbursed 143,885,982 125,904,580

Total $ 157,884,882 $ 133,466,533
26

Available unobligated balances represent amounts that are apportioned for 

obligation in the current fiscal year. Unavailable unobligated balances represent 

amounts that are not apportioned for obligation during the current fiscal year along 

with expired appropriations that are no longer available to incur new obligations. 

Obligated balances not yet disbursed include undelivered orders unpaid and 

expended authority-unpaid.

Note 3 – Accounts Receivable, net 

Accounts receivable, net comprised of claims from associates consists of the 

following as of September 30, 2009 and September 30, 2008:

FY 2009 

Restated 

FY 2008 

Accounts Receivable, net 

Claims from Associates $ 18,449 $ 16,251

Due from States 330,697 330,697

$ 349,146 $ 346,948

 

Note 4 – Advances and Prepayments 

Advances and prepayments with non-governmental and governmental entities 

consist of the following as of September 30, 2009 and September 30, 2008:

Advances and Prepayments FY 2009 

Restated 

FY 2008 

With Governmental Entities $ 2,097,844 $ 2,961,010 

With Non-governmental Entities 34,692,298 52,249,395

Total $ 36,790,144 $ 55,210,405

 

Note 5 – General Property and Equipment, Net 

The general components of capitalized property and equipment, net of accumulated 

depreciation, consist of the following as of September 30, 2009 and September 30, 

2008:

2009 

 Service Life Acquisition Accumulated Net Book 

Asset Class (years) Value Depreciation value 

Office Equipment 5 $ 113,943 $ 61,256 $ 52,686

Furniture 5 303,613 125,851 177,762

Leasehold 

Improvements 7 551,387 512,716 38,671

Total $ 968,943 $ 699,823 $ 269,120
27

 

Restated 

2008 

 Service Life Acquisition Accumulated Net Book 

Asset Class (years) Value Depreciation value 

Office Equipment 5 $ 84,546 $ 41,355 $ 43,191

Furniture 5 303,613 65,198 238,415

Leasehold 

Improvements 7 551,387

 

355,358 196,029 

Total $ 939,546 $ 461,911 $ 477,635

Depreciation expense was $237,912 for the period ending September 30, 2009 and 

$214,588 for the period ending September 30, 2008. 

Note 6 – Liabilities 

Liabilities Not Covered by Budgetary Resources

Liabilities Not Covered by Budgetary Resources result from the receipt of goods and 

services, or the occurrence of events, for which appropriations, revenues, or other 

financing sources necessary to pay the liabilities have not yet been made available 

through Congressional appropriation. 

Liabilities Not Covered by Budgetary Resources consisted of the following as of 

September 30, 2009 and September 30, 2008:

FY 2009 

Restated 

FY 2008 

With the Public 

Unfunded Annual Leave $ 261,880 $ 185,889

FECA Liability 441 0

$ 262,321 $ 185,889

 

Liabilities Covered by Budgetary Resources 

Liabilities covered by budgetary resources consist of the following as of September

30, 2009 and September 30, 2008:

FY 2009 

Restated 

FY 2008 
28

Intragovernmental 

 Accounts payable $ 348,958 $ 512,984

 Employer contributions and payroll taxes payable 47,716 40,645

Total intragovernmental 396,674 553,629

With the public 

Accounts payable 7,983,052 646,686

Accrued payroll and benefits 241,878 227,068

Total with the public 8,224,930 873,754

Total liabilities covered by budgetary resources $ 8,621,604 $ 1,427,383

 

Note 7 – Leases

EAC has no capital leases. The EAC has a current operating lease for the 

headquarters office space located at 1225 New York Avenue, NW, Washington DC

which has been extended through July 31, 2009. The EAC entered into two new 

operating leases on May 18, 2009 which extended the lease for the current

headquarters’ office space and provided for the occupancy for a future space located 

at 1201 New York Avenue, Washington DC which is scheduled to be occupied in early 

2010. These leases extend through March 31, 2014 or 56 months and commence 

on August 1, 2009. 

The EAC also has an operating lease for additional space located at 1440 New York 

Avenue, NW, Washington, DC which commenced August 5, 2008 with an original 

completion date of December 5, 2008. This lease has been extended through 

January 2010 to coincide with the occupation of the new space as 1201 New York 

Avenue, N.W. Washington, DC. 

Future lease payments due under these leases through March 31, 2014 are:

Future Operating Lease Payments FY 2009 

Fiscal Year Lease Payment 

2010 $ 833,676

2011 921,702

2012 929,627

2013 937,790

2014 477,588

2015 and thereafter 0 

Total future lease payments $ 4,100,383 

 

Future Operating Lease Payments 

Restated 

FY 2008 
29

Fiscal Year Lease Payment 

2009 $ 268,860

2010 0

2011 0

2012 0

2013 0 

2014 and thereafter 0 

Total future lease payments $ 268,860 

 

 

Note 8 – Statement of Net Cost 

For Fiscal year 2008 and 2009, the EAC has four programs; Communicate, Fund and 

Oversee, Study, Guide & Assist, and Test & Certify. The cost for each program is a 

sum of the direct costs of the program and an allocation of the agency’s other 

overhead costs such as rent, telephone, administrative and financial support staff. 

All grants and requirement payments are included in the Fund and Oversee program. 

The total cost of operations for the periods ended September 30, 2009 and 

September 30, 2008 is as follows:

Fiscal Year 2009 

Programs Intragovernmental With the Public Total

 Communications $ 268,849 $ 1,725,276 $ 1,994,125

 Fund & Oversee 658,522 112,383,927 113,042,449

 Research, Policy & Program 400,703 2,571,420 2,972,123

 Testing and Certification 482,411 3,095,762 3,578,173

 Total $ 1,810,485 $119,776,385 $121,586,870

Restated 

Fiscal Year 2008 

Programs Intragovernmental With the Public Total

 Communications $ 431,952 $ 1,111,882 $ 1,543,834

 Fund & Oversee 1,058,028 5,540,933 6,598,961

 Research, Policy & Program 643,798 1,657,194 2,300,992

 Testing and Certification 1,995,116 775,074 2,770,190

 Total $ 4,128,894 $ 9,085,083 $ 13,213,977

In accordance with OMB Circular A-136, costs incurred for goods and services 

provided by other federal entities are reported in the full costs of EAC’s programs and 

are identified as “intragovernmental.” All other costs are identified as “with the 

public.”

Note 9 – Statement of Budgetary Resources 
30

The Statement of Budgetary Resources (SBR) compares budgetary resources with 

the status of those resources. As of September 30, 2009, budgetary resources were 

$128,956,539 and net outlays were $95,475,404. As of September 30, 2008,

restated, budgetary resources were $145,732,148 and net outlays were 

$15,163,583. 

Apportionment Categories of Obligations Received 

EAC receives apportionments of its resources from OMB. These are “Category B” 

apportionments which are for resources that can be obligated in compliance with 

legislation underlying programs for which the resources were made available.

For the periods ended September 30, 2009 and September 30, 2008, restated,

direct obligations incurred amounted to $114,957,639 and $138,170,196.

Note 10 - Comparison to the Budget of the United States Government 

SFFAS No. 7, Accounting for Revenue and Other Financing Sources and Concepts for 

Reconciling Budgetary and Financial Accounting, requires an explanation of material 

differences between budgetary resources available, the status of those resources 

and outlays as presented in the Statement of Budgetary Resources to the related 

actual balances published in the Budget of the United States Government (Budget). 

The Budget that will include FY 2009 actual budgetary execution information is 

scheduled for publication in February 2011, which will be available through OMB’s 

website at http://www.whitehouse.gov/omb. Accordingly, information required for 

such disclosure for FY 2009 is not available at the time of publication of these 

financial statements.

The Budget that includes the FY 2008 actual budgetary execution information was 

published May 7, 2009. There are no differences between budgetary resources 

available, the status of those resources and outlay as presented in the Statement of 

Budgetary Resources for FY 2008 and the published Budget of the United States 

Government (Budget), 

Note 11 – Comparison of Statement of Budgetary Resources to Standard 

Form 133 

The 2008 Statement of Budgetary Resources has been restated to reflect the 

correction of prior years accounting errors. As a result of these corrections, the 2009 

SF-133 Report of Budget Execution and the Statement of Budgetary Resources differ. 

These differences were due to the inclusion of these corrections as 2009 activity in 

the SF-133 Report of Budget Execution, and as prior year activity in the 2009 and 

2008 Statements of Budgetary Resources. The following table details the differences 

for each line item. 

DIFFERENCES

Statement of 

Budgetary 

Resources

SF-133 Period 

Ended 

9/30/09 Differences
31

Unobligated Balance Brought Forward $7,561,952 $ 7,342,134 $219,818 

Recoveries of Prior Year Obligations 662,985 882,803 (219,818)

Appropriations Received 123,959,000 123,959,000 -

Collections 837,849 54,522,217 (53,684,368)

Non-Expenditure Transfers (4,000,000) (4,000,000) -

Permanently Not Available (65,247) (65,247) -

Total Budgetary Resources 128,956,539 182,640,907 (53,684,368)

Obigations Incurred 114,957,639 168,422,189 (53,464,550)

Unobligated Balance - apportioned 7,452,047 7,452,047 -

Unobligated Balance - Not Available 6,546,853 6,766,671 (219,818)

Status of Budgetary Resources 128,956,539 182,640,907 (53,684,368)

Unpaid Obligations, Brought Forward 125,904,580 126,124,398 (219,818)

Obligations Incurred, Net 114,957,639 168,422,189 (53,464,550)

Less: Gross Outlays (96,313,253) (149,997,621) 53,684,368 

Less: Recoveries of Prior Year Obligations (662,985) (882,803) 219,818 

Total, unpaid obligated balance, EOY 143,885,981 143,666,163 219,818 

Gross Outlays 96,313,253 149,997,621 (53,684,368)

Less: Offsetting Collections (837,849) (54,522,217) 53,684,368 

Net Outlays $95,475,404 $ 95,475,404 $ - 

Note 12 - Unpaid Obligated Balance, net 

Unpaid obligated balance, net consists of undelivered orders and accounts payable. 

Undelivered orders represent obligations for which goods and services have not yet 

been received. Accounts payable includes goods and services which have been 

received but not yet paid for. The total unpaid obligated balance, net as of 

September 30, 2009 and September 30, 2008 was as follows:

FY 2009 

Restated 

FY 2008 

Undelivered Orders $135,264,377 $124,477,197

Accounts Payable

 

8,621,604 1,427,383

Unpaid obligated balance, net $143,885,981 $125,904,580

Note 13: Reconciliation of Net Cost of Operations to Budget 

The purpose of this note is to detail the differences between budgetary and financial 

(proprietary) accounting. This is accomplished by means of a reconciliation of 
32

budgetary obligations and non-budgetary resources available to the reporting entity 

with its net cost of operations.

The “Other” amount of $(2,197) shown in “Components not Requiring or Generating 

Resources” in Fiscal Year 2009 represents the net change in accounts receivable 

from employees for the year. 

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 Title III of the Help America 

Vote Act (HAVA) Section 251 Requirements Payments for states to help them meet 

Resources Used to Finance Activities FY 2009 

Restated 

FY 2008 

Budgetary Resources Obligated 

Obligations Incurred $114,957,639 $138,170,196

Less: Spending authority from offsetting collections and 

recoveries (1,500,835) (533,162)

Net Obligations 113,456,804 137,637,034

Other Resources 

Imputed financing from costs absorbed by others 214,233 145,793

Net other resources used to finance activities 214,233 145.793 

Total Resources Used to Finance Activities 113,671,037 137,782,827

Resources Used to Finance Items not Part of the Net Cost of Operations 

Change in budgetary resources obligated for goods, services

and benefits ordered but not yet provided (7,633,082) 123,982,925

Resources that finance the acquisition of assets

 

29,397 878,693

Total Resources Used to Finance Items no Part of 

the Net Cost of Operations (7,603,685) 124,861,618

Total Resources Used to Finance the Net Cost of Operations 121,274,722 12,921,209

Components of Net Cost of Operations that will not 

Require or Generate Resources in the Current Period 

Components Requiring or Generating Resouces in Future Periods: 

Increases in annual leave liability

 

76,432 78,180

Total Components of Net Cost of Operations that 

will Require or Generate Resources in Future Periods 76,432 78,180

Components not Requiring or Generating Resources: 

Depreciation and amortization 237,913 214,588

Other (2,197) 0

Total Components of Net Cost of Operations that will not 

Require or Generate Resources 235,716 214,588

Total Components of Net Cost of Operations that will not 

Require or Generate Resources in the Current Period 312,148 292,768

Net Cost of Operations $121,586,870 $13,213,977
33

HAVA requirements. 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. Reflected in the Statement of Net Costs for 

periods ending September 30, 2009 and September 30, 2008, are the following 

requirements and grant program payments:

FY 2009 

Restated 

FY 2008 

FY 2008 Section 251 Requirement Payments $ 56,958,220 $2,270,345 

FY 2009 Section 251 Requirement Payments 44,003,519 - 

FY 2008 Data Collection Grants 6,592,164 335,464

College Poll Worker Grants 490,952 142,360

Mock Election Grants 113,157 70,305

$108,158,012 $ 2,818,474 

Note 15 Restatement 

 

EAC’s Balance Sheet, Statement of Net Cost, Statement of Changes in Net 

Position and Statement of Budgetary Resources have been restated to correct 

the financial reporting for the following items:

1. At the end of FY 2008, EAC did not capitalize and depreciate leasehold 

improvements completed within the currently occupied office space. EAC

capitalized and depreciated furniture and equipment that did not meet 

EAC’s established capitalization thresholds and EAC did not capitalize and 

depreciate certain furniture and equipment that did meet EAC’s 

established capitalization thresholds. This resulted in a net change to 

General Property and Equipment of $328,754 and an increase in Accounts 

Payable of $511,195. 

2. EAC recognized as program expenses on the Statement of Net Costs,

certain advances made to grantees and vendors for $55,210,405. These 

expenses were reclassified as Advances. These included $52,249,395 for 

EAC’s FY 2008 Data Collection, Mock Election and College Poll worker 

grant programs and unspent Section 102 payments to States and 

$2,961,010 for payments to the Department of Interior’s Acquisition 

Services Directorate (AQD). The Section 102 payments were originally 

disbursed by the General Services Administration. 

3. EAC did not recognize $253,506 as program expenses expenditures made 

by grantees under the EAC grant programs and vendor expenses of 

$150,069 not correctly accrued less vendor expenses of $215,213 that 

were improperly accrued. 

4. The EAC recorded $330,697 in Accounts Receivable for Section 102 funds 

unspent by States that did not file the extension waiver as required by 
34

HAVA. These funds were originally disbursed by the General Services 

Administration. 

5. The EAC reduced Unexpended Appropriations and Expended Appropriations 

by $49,221 for transactions occurring in prior years that were not recorded 

in these accounts. 

The results of these changes are reflected in the table below:

Unaudited 

FY 2008 Effect of FY 2008 

Balance Sheet Reported Restatement Restated 

Accounts receivable, net $ 16,251 $ 330,697 $ 346,948

Advances and prepayments

 Intragovernmental - 2,961,010 2,961,010

With public - 52,249,395 52,249,395

General property and equipment, net 148,881 328,754 477,635 

Accounts payable 

Intragovernmental 215,213 297,771 512,984

With public 244,900 401,786 646,686

Unexpended appropriations 132,803,165 54,792,324 187,595,489

Cumulative results of operations (85,217) 377,977 292,760

Statement of Net Costs: Program Costs 15,180,494 (1,966,517) 13,213,977 

Statement of Changes in Net Position 

Beginning Balance (156,930) (135,184) (292,114)

Appropriations used 15,106,414 (1,453,356) 13,653,058

Unexpended Appropriations 9,629,579 53,338,967 62,968,547

Statement of Budgetary Resources 

Recoveries of prior year obligations 298,458 215,213 513,671 

Status of Budgetary Resources

 Obligations incurred, net 138,174,801 (4,605) 138,170,196

 Unobligated Balance – Apportioned 761,585 4,605 766,190

 Unobligated Balance - Not Available 6,580,549 215,213 6,795,762

Change in Obligated Balance:

Less: Recoveries of PY unpaid obligation (298,458) (215,213) (513,671)
 

U.S. ELECTION ASSISTANCE COMMISSION 

1225 New York Ave. NW – Suite 1100 

Washington, DC 20005 

October 15, 2009 

Memorandum 

To: Gineen Bresso Beach 

Chair, U.S. Election Assistance Commission 

From: Curtis W. Crider 

Inspector General 

Subject: Inspector General’s Statement Summarizing the Major Management and 

Performance Challenges Facing the U.S. Election Assistance Commission 

In accordance with the Reports Consolidation Act of 2000, I am submitting our annual 

statement summarizing what the Office of Inspector General (OIG) considers to be the most 

serious management and performance challenges facing the U.S. Election Assistance 

Commission (EAC). We have compiled this list based upon our audit, inspection and evaluation 

work; general knowledge of the agency’s operations; and the reports of others such as the 

Government Accountability Office (GAO). 

This year’s management challenges fall into four categories: (1) performance 

management and accountability; (2) financial management and performance; (3) information 

technology management and security; and (4) human capital management. Of these challenges, 

two were present in the prior year and two are new. We have noted the progress that EAC has 

made on each of the challenges identified. 

If you have any questions or need additional information, please call me at 202-566-

3125. 

Attachment 

1
 
Attachment 

EAC MANAGEMENT AND PERFORMANCE CHALLENGES
 

FISCAL YEAR 2009 

The U.S. Election Assistance Commission’s (EAC) FY 20089 Top Management 

Challenges identified by the Office of Inspector General (OIG) are below. The OIG 

assessed the EAC’s progress in these areas and continues to review and monitor how 

these issues are addressed. 

 Performance Management and Accountability 

 Financial Management and Performance 

 Information Technology Management and Security 

 Human Capital Management 

CHALLENGE 1: PERFORMANCE MANAGEMENT AND ACCOUNTABILITY 

In fiscal year 2008, the OIG issued the following management challenge: 

Effective management and accountability are integral to any operation and must start 

with senior management. At the EAC, senior management consists of four full-time 

commissioners and an executive director. However, confusion over the roles and 

responsibilities of the commissioners and the executive director has resulted in a lack 

of leadership, a failure to hold people accountable, and a decline in staff morale. 

EAC has recently delineated the roles and responsibilities of the commissioners and 

the executive director. 

In February of 2008, the OIG issued a report that identified long-standing and 

overarching weaknesses related to the operations of the EAC that need to be 

addressed immediately. The assessment disclosed that the EAC needs to establish: 

 Short and long-term strategic plans, performance goals and measurements to 

guide the organization and staff. 

 An organizational structure that clearly defines areas of responsibility and an 

effective hierarchy for reporting. 

 Appropriate and effective internal controls based on risk assessments. 

 Policies and procedures in all program areas to document governance and 

accountability structure and practices in place. It is imperative that the 

Commissioners define their roles and responsibilities in relationship to the 

daily operations of the EAC and to assume the appropriate leadership role. 

1
 
Actions to improve EAC operations are being accomplished; however, a significant 

amount of work still needs to be done. Without effective management and 

accountability, the ability of the EAC to meet its mission is substantially diminished. 

Performance management and accountability continues to be a challenge for EAC in 

fiscal year 2009 and beyond, as EAC has not adopted and implemented the needed 

policies and procedures to define the performance plans and measurements for the 

various EAC programs, identify the reporting relationships beyond the executive director 

and commissioners, and establish effective internal controls. The EAC has completed 

draft policies and procedures for some of its programs, but has not adopted or 

implemented them. In the current environment of increased transparency and 

accountability, it is critical that EAC have these goals, measures, policies and procedures 

in place. EAC is accountable to the American public as to whether its programs and 

activities mirror its goals and objectives, as well as whether the programs and activities 

are ultimately successful in comparison to the established goals and measures. 

EAC’s Progress 

EAC has made some progress toward the development of a strategic plan or direction for 

the agency as well as the implementing policies and procedures that flow from the 

strategic plan. The following is a listing of the activities that EAC has completed: 

 Adopted an agency-wide strategic plan in March 2009 

 Adopted a roles and responsibilities document that delineates responsibilities 

between the commissioners and the executive director in September 2008 

In addition, EAC is in the process of developing strategic planning tools for each of its 

divisions or programs, including the policies and procedures needed to implement the 

programs’ strategic direction. The EAC anticipated having this work completed on or 

before June 30, 2009. EAC has not, however, implemented those policies and 

procedures. 

CHALLENGE 2: FINANCIAL MANAGEMENT AND PERFORMANCE 

In fiscal year 2008, the OIG issued the following management challenge: 

EAC lacks the ability to effectively manage its financial operations. In fiscal year 

2007, poor control over its budget and expenditures resulted in the organization 

returning about $2.4 million to the U.S. Treasury despite the need for additional staff 

and systems to deliver services and complete statutory tasks. In fiscal year 2008, 

problems persisted. EAC did not set up an operating budget for its divisions or a 

sufficient system to determine the status of its appropriations. Furthermore, it was not 

until a contractor was brought on in July 2008 that the EAC determined how much 

operating money it had spent and how much it had left. 

2
 
More recently, the independent auditors, Clifton Gunderson LLP (CG), under 

contract with the OIG, were unable to complete an audit of the EAC’s financial 

statements for fiscal year 2008 due to management’s inability to provide timely 

financial information and material weaknesses in internal controls. In regards to 

controls, management was not able to assure that it had identified, implemented, and 

tested internal controls over its financial or program operations. Congress established 

management’s responsibility for internal controls in the Federal Managers Financial 

Integrity Act of 1982 (FMFIA). The Office of Management and Budget (OMB) 

issued implementing instructions to Federal agencies in Circular No. A-123. The 

Circular requires agencies to issue an annual statement to OMB on whether the 

Agency’s financial, management, and automated information security system controls 

conform to the government-wide standards. The EAC however, does not have a 

process to make such a determination. 

ACTIONS NEEDED 

To move forward, the Commissioners must put someone in place that has the 

responsibility and authority to manage the daily operations of the agency. 

Simultaneously, the EAC must develop and implement a comprehensive strategy that 

addresses the need for qualified and capable financial management staff; and corrects 

inconsistent and flawed business processes, unreliable financial information, and nonexistent FMFIA process. 

The OIG’s 2008 Assessment Report identified weaknesses that related to seven findings 

that directly impact the EAC’s financial management function. According to EAC’s 

follow-up report, only one of those five of those findings remains open. However, the 

EAC must adequately implement internal controls and procedures to ensure that funds are 

reported and expended properly. Furthermore, it must complete a risk assessment to 

identify internal and external risks so as to identify and implement internal controls to 

mitigate those risks. 

EAC’s Progress 

EAC has made progress toward the development of policies and procedures and 

implementation of additional personnel and financial resources to remedy the weaknesses 

identified in the OIG’s 2008 Assessment Report. The following is a listing of the 

activities that EAC has completed: 

 Hired a CFO/Budget Officer 

 Hired an Accounting Director 

 Reconstructed accounts to adequately record most obligations and expenditures 

 Developed a list of financial laws and regulations that apply to EAC 

 Adopted a strategic plan which included a new organizational structure for the 

Administrative Division 

 Implemented monthly fund control reviews 

 Developed policies and procedures to implement audit follow-up 

3
 
CHALLENGE 3: INFORMATION TECHNOLOGY MANAGEMENT AND 

SECURITY 

The Federal Information Security Management Act (FISMA) requires each federal 

agency to develop, document and implement an agency-wide program to provide 

information security and develop a comprehensive framework to protect the 

government’s information, operations and assets. To ensure the adequacy and 

effectiveness of information security controls, the OIG annually assesses the EAC’s 

efforts to safeguard data processed by its computer systems and networks. Our reviews 

have found that the EAC is not in compliance with FISMA or in pertinent part with the 

Privacy Act. For EAC, managing and securing information is a significant deficiency. 

EAC’s Progress 

The most recent FISMA review found that the EAC has made significant efforts to 

improve its information technology security and to protect its sensitive data; however, 

there is still work to be done to bring EAC into compliance with FISMA and OMB 

requirements. The following are the current findings related to information technology 

and data security: 

Finding 

Number 

Title 

FY09-01 Establish an overall comprehensive plan of action and 

milestone (POA&M) document, with target dates for 

completion of corrective actions, to address the problems 

noted in this report. Assure that the plan is monitored on a 

monthly basis and updates provided to the commissioners. 

FY09-02 Provide sufficient specialized training to EAC personnel to 

enable EAC to develop and maintain a risk-based IT security 

program that meets FISMA requirements, or hire an official 

that has experience managing an agency-wide IT security 

program. 

FY09-03 Establish a continuous monitoring program to address the 

NIST 800-53 requirements. 

FY09-04 Finalize the EAC IT security handbook, and establish a 

process to identify and document necessary operational 

processes to enable personnel to meet the control 

requirements contained in the handbook, and applicable 

NIST control requirements. 

FY09-05 Assign a high priority to the completion of required 

contingency plans and COOP documents. 

FY09-06 Implement the minimum password settings for the network. 

Ensure that other FDCC mandatory configuration settings 

are established as soon as possible. 

4
 
Finding 

Number 

Title 

FY09-07 Implement access controls required by FISMA, including 

controls over all remote access methods, and OMB guidance 

on securing PII data. 

FY09-08 Finalize the risk assessment, and ensure it is used to develop 

risk-based controls, and as a starting point for development 

of contingency plans and COOP documents. 

FY09-09 Monitor ongoing actions to ensure that compliance with 

OMB PII guidance and Privacy Act requirements are 

completed expeditiously. 

FY09-10 Establish controls over the audit logs maintained to ensure 

that the system is capable of providing required alerts. 

Ensure that periodic reviews are made of the logs to identify 

any unusual activity, other concerns or problems. 

FY09-11 Ensure that access controls are implemented for all EAC 

network devices. 

CHALLENGE 4: HUMAN CAPITAL MANAGEMENT 

The Government Accountability Office (GAO) has designated strategic human capital 

management as a high risk area across the federal government since 2001. According to 

GAO, human capital management is a government wide problem that is eroding the 

ability of many agencies to economically, efficiently, and effectively perform their 

missions. GAO recognized that an agency’s workforce is its most important 

organizational asset. Agencies alter the organization’s performance by the way that they 

treat and manage their staffs and build commitment and accountability by involving and 

empowering their employees. GAO provided a framework for improving human capital 

management across the federal government which included recruiting, hiring, developing 

and retaining employees with the skills needed for mission accomplishment; creating an 

employee-friendly work place; and empowering and motivating employees while 

ensuring accountability and fairness in the workplace. 

For the past two years, EAC has participated in the government’s annual employee 

survey. The results of these surveys identify critical weaknesses in EAC’s human capital 

management efforts. The EAC employees have consistently expressed their 

dissatisfaction with ability of EAC leadership to generate high levels of motivation, to 

review and evaluate the organization’s progress toward meeting goals and objectives, and 

to communicate the organization’s goals and priorities. Employees did not report a sense 

of involvement in the decisions that impact their work, the policies and practices of the 

senior leaders, or that management shares information about what goes on the 

organization. Employees also do not believe that promotions and rewards are merit based 

or reflect how well the employee performs his/her job. Perhaps the most disturbing of the 

survey questions reports that the percentage of employees that feel that they can report a 

violation of law, rule or regulation without fear of reprisal fell from 55.6% in 2007 to 

5
 
36.3% in 2008. The results of this survey show that EAC does not operate an employeefriendly work place and that its efforts to empower and include employees have fallen 

short. EAC must evaluate its personnel management strategy and it successes and 

failures to develop an approach toward human capital management that will ensure a 

qualified, satisfied work force is available to do the work necessary to fulfill its mission. 

Likewise, EAC must ensure that it has trained, experienced personnel assigned to critical 

functions. The OIG assessed EAC operations in 2008 and determined that there were 

significant gaps in qualified personnel to perform critical financial and administrative 

functions. While some progress has been made to increase the number of employees in 

critical functions that have federal government experience, there are still functions that 

either have not been assigned or are currently assigned to untrained, inexperienced 

personnel. EAC must evaluate its critical administrative and programmatic functions to 

determine its personnel needs. Those needs should be compared to its personnel 

resources. Functions should be assigned to persons who are trained and experienced in 

the activity or persons should be recruited to fill those posts. 

EAC’s Progress 

EAC has made some progress, mostly in the area of hiring additional personnel to staff 

the accounting and financial management function. The EAC has hired a contracting 

officer, a CFO/Budget Officer, and an Accounting Director. EAC also reports having 

completed a skills inventory of all EAC programs. The assessment was conducted in 

conjunction with the Office of Personnel Management (OPM). However, it is unclear 

whether the assessment focused on what skill sets are available at EAC or what skill sets 

are needed at EAC. The OIG encourages EAC to assess both sides of that coin: what is 

needed and what assets are present. 

6
 
 

 November 9, 2009 

Memorandum 

To: Curtis W. Crider 

 Inspector General 

From: Gineen Bresso Beach 

 Chair, U.S. Election Assistance Commission 

Subject: Election Assistance Commission Response to the Inspector General’s 

Statement Summarizing the Major Management and Performance Challenges 

The Election Assistance Commission (EAC) over the past year pursued its mission to 

assist the effective administration of Federal elections. This response to the Inspector 

General’s Statement Summarizing the Major Management and Performance Challenges 

highlights efforts to the strengthen management of its programs and operations. Specifics 

associated with each of the identified major management challenges are discussed below. 

Performance Management and Accountability 

During FY 2009, to address issues in the FY 2008 financial statement audit, EAC: 

 Adopted its first Strategic Plan in March 2009, covering 2009 through 2014, 

which identified the reporting relationships beyond the Executive Director and 

Commissioners in an organization chart, and which allows the agency to begin the 

process of reporting on formal performance metrics contained in the Plan; 

 Reorganized overall structure and established its first Chief Financial Officer 

department consisting of experienced grants, budget, accounting and procurement 

staff; 

 Finalized financial management policies and procedures; 

 Submitted a FY 2010 Congressional Budget Justification and FY 2011 OMB 

Budget Justification in a performance based format; and 

 Closed out many outstanding recommendations from operational audits and the 

FY 2008 financial statement audit. 

The agency has made tremendous progress in the program areas during FY 2009. EAC: 

 Made strides in certifying voting systems: between February and August, three 

voting systems were certified; 
 Improved communications with stakeholders by instituting a Testing and 

Certification Voting System Reports Clearinghouse on its website; 

 Issued best practices for voter information web sites, Quick Start Management 

guides on administering Federal elections, and a report on the Impact of the 

National Voter Registration Act on Federal Elections, 2007-2008 

 Held working groups on UOCAVA, Elections, Technology & Accessibility, and 

Election Office Management. 

 Awarded 13 Poll Worker grants totaling $750,000, and seven Mock Election 

grants totaling $300,000. 

EAC’s plans for FY 2010 are in line with actions identified by the Inspector General for 

completing the process of “developing and implementing strategic planning tools for 

each of its divisions or programs.” Part of this process has been an independent review 

of EAC performance measures, how well the measures capture information useful to 

accomplishing agency goals, and how well the data collection systems produce reliable 

results. EAC will implement a robust internal control program and reliable and useful 

performance measurement systems, based on independent recommendations. Internal 

control training for staff is planned for the first quarter of FY 2010. The training will 

emphasize the importance of identifying risk. 

EAC will work to finalize and implement remaining policies and procedures-- 

Communications, Clearinghouse, Research and updated administrative in FY 2010. 

Financial Management and Performance

Policies and procedures for Grants Management, Testing and Certification, and Financial 

Management have been finalized. Financial management policies and procedures 

developed during the second half of the fiscal year upon set up of the CFO department, 

are currently being implemented. 

As mentioned above, an independent assessment of EAC’s risks was conducted, using the 

reliability of performance measures in the Strategic Plan as a guide. 

Information Technology Management and Security 

As noted by the Federal Information Security Management Act (FISMA) of 2002 

independent evaluation in FY 2009, EAC made significant efforts to improve information 

security. Nevertheless, there is still work to be done to bring EAC in full compliance with 

FISMA requirements. To facilitate this effort, EAC has developed an overall security 

Plan of Action and Milestones (POA&M), which included target dates for completion of 

key corrective actions. EAC is working with a contractor to implement several corrective 

actions. The contractor will be required to keep EAC management closely informed of 

all progress on these actions. 

Once the items in the POA&M are implemented, the agency will be in full compliance 

with requirements in every FISMA control area. 

2
The key areas of effort are summarized below, and more detail is available in both the 

management response to the FISMA evaluation and the overall EAC POA&M. The 

numbers below match the Finding Numbers in the OIG report; i.e., item 3 below matches 

item FY-09-03 in the OIG report, and so on. Key FISMA efforts scheduled for FY 2010 

include: 

1. EAC management will monitor progress on implementation of the EAC FISMA 

POA&M. 

2. EAC will initiate a search for a full-time Chief Information Officer (CIO), who may 

also serve as Senior Agency Information Security Officer (SAISO), Chief Privacy 

Officer, and information security proponent. EAC will finalize information security 

roles and responsibilities across the organization once the CIO position has been 

filled. 

3. All operational procedures developed for information security at EAC will facilitate 

continuous monitoring of EAC information systems and security controls. This 

process will use automatic monitoring procedures such as automated system alerts 

using periodic review by qualified staff to ensure that procedures remain appropriate 

and relevant. In particular, procedures for change management, configuration 

management, audit log monitoring, network monitoring, patch management, risk 

management, and vulnerability scanning will facilitate continuous monitoring. 

4. EAC will finalize and disseminate the provisional information security policies 

handbook to agency staff. In particular, key policies concerning privacy will be 

included in the 2010 employee information security awareness training. EAC 

information owners and information technology (IT) staff will develop, implement, 

and periodically review written operational procedures that specify how to implement 

the required controls to satisfy EAC's information security policy objectives in every 

FISMA control area. 

5. EAC will develop a Business Impact Analysis (BIA), Disaster Recovery Plan (DRP), 

and a Continuity of Operations Plan (COOP), once the information owners review the 

current risk assessment, and major policies, procedures, and controls have been 

finalized and implemented. 

6. Minimum password settings for the network have already been implemented and are 

now fully compliant with Federal Desktop Core Configuration standards (FDCC). At 

the appropriate time, EAC will develop a re-imaging schedule, present this schedule 

to appropriate supervisors, and then re-image computers as per this schedule. 

7. EAC will work with the General Services Administration (GSA) to disable dialup 

remote access or, at a minimum, grant dialup access only on an as-required and/or 

contingency basis. EAC will re-initiate conversations with GSA and develop a 

timeline for the implementation of two-factor authentication for securing remote 

3
4

8. EAC's FISMA contractor will work with EAC information owners to review, refine, 

and finalize the provisional risk assessment. This will include a comprehensive 

review of threats and vulnerabilities, and a review of the National Institute of 

Standards and Technology (NIST) Special Publication 800-53 Recommended Security 

Controls for Federal information Systems security controls baseline already 

developed. Finally, a separation of controls into common and system-specific 

controls will be completed. 

9. The EAC Privacy Officer has already taken inventory of PII systems and developed 

several draft policies and procedures related to protection of PII and privacy-related 

incident response. The FY 2009 EAC FISMA evaluation provides detailed guidance 

on areas in which EAC is still only partially compliant with PII and Privacy Act 

requirements, and EAC will formally adopt the PII recommendations from the 

FISMA evaluation as a guide to complete compliance. In particular, key PII policies 

will be included in the 2010 employee Privacy Act awareness training. 

10. EAC IT staff will create a written itemization of every audit log type in use, will work 

with GSA to both identify and implement appropriate action on audit failures, and 

will develop a procedure to review these log files monthly and report errors to 

appropriate supervisors. 

11. EAC will implement either a separate, limited-access "visitor" virtual local area 

network (VLAN) segment on the EAC network, or else create a completely isolated 

wireless network for visitor access. In either case, there will be no visitor access to 

any resources on the EAC network, including network devices such as printers, 

scanners, and copiers. 

Human Capital Management 

In the management area, EAC provided a process for independent assessment and 

analysis of Human Capital Management in line with the Inspector General’s management 

challenge. Management is addressing issues identified in the agency’s second employee 

survey, through staff teambuilding efforts, staff focus groups, and employee retreats. A 

professional facilitating team was retained to provide guidance, assistance and evaluation 

of the overall issues identified in the Human Capital Survey. 

 

EAC committed resources and time to move from a disclaimer opinion on our financial 

statements to an unqualified (clean) opinion in the second half of FY 2009. EAC 

continues to improve it programs and operations, strengthening internal controls, 

financial management, and information technology across the agency. 
 

 

 

 

Election Assistance Commission 

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 2009, 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.SUMMARYOFFINANCIALSTATEMENTAUDITANDMANAGEMENT

ASSURANCES

SUMMARY OF FISCAL YEAR 2009 FINANCIAL STATEMENT AUDIT 

Audit Opinion Unqualified 

Restatement Yes 

Material Weaknesses 

Beginning 

Balance New Resolved Consolidated 

Ending 

Balance 

Financial Accounting & Reporting 1 0 0 0 1 

Support for Grant Accounting 1 0 1 0 0 

Funds Control 1 0 1 0 0 

FMFIA Compliance & Reporting 1 0 1 0 0 

Accounting Processes not in 

Accordance with GAAP 0 1 1 0 0 

TOTAL WEAKNESSES 4 1 4 0 1 

SUMMARY OF MANAGEMENT ASSURANCES 

Statement of Assurance 

(FMFIA§ 2) 

Qualified 

Financial Management 

System Assurance (FMFIA§ 4) 

Systems conform to financial management system 

requirements 

No. Summary Beginning 

Balance 

New Resolved Consolidated Ending 

Balance 

1 Material Weaknesses 

(FMFIA§ 2) 

11 1 10 0 2 

2 Non-conformances (FMFIA§ 

4) 

1 0 1 0 0 

TOTAL 12 1 11 0 2 

85
 
 

 

 

Election Assistance Commission 

RECONCILIATION OF MATERIAL WEAKNESSES 

For the “Beginning Balances”, in FY 2008, the independent auditors identified four material 

weaknesses. One of the weaknesses identified by the auditors, “Financial Accounting and 

Reporting” contained 7 different subsections. EAC considered these separate subsections 

to be individual material weaknesses for the sake of clarity and tracking improvement. In 

addition, in FY 2008 EAC identified an additional weakness with respect to policies and 

procedures. For year ending September 30, 2009, the independent auditors identified one 

material weakness. The weaknesses identified by the auditors, “Accounting Processes not in 

Accordance with GAAP” contained five different subsections. This material weakness was 

resolved prior to the preparation of the financial statements dated September 30, 2009. 

Material Weaknesses 

Per 

Auditors 

FY 08 

Per 

Auditors 

FY 09 

Per 

EAC 

FY 08 

Per 

EAC 

FY 09 Difference 

Financial Accounting & Reporting 1 -- 7 -- 6 

Support for Grant Accounting 1 -- 1 -- 0 

Funds Control 1 -- 1 -- 0 

FMFIA Compliance & Reporting 1 -- 1 -- 0 

Lack of Policies and Procedures 0 -- 1 -- 1 

Accounting Processes not in 

Accordance with GAAP 

-- 1 -- 1 0 

TOTAL MATERIAL WEAKNESSES 4 1 11 1 7 

86