U.S.-China Economic And Security Review Commission: Actions Needed to Improve Controls over Key Management Functions
Published: 2007-09-28T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In October 2000, Congress established the U.S.-China Economic and Security Review Commission to assess the national security implications of the trade and economic relationship between the United States and the People's Republic of China and issue an annual report by June 1. The 12-member commission has a budget of about $3 million. As requested, GAO assessed the extent to which the commission has (1) complied with its charter, (2) had an organizational structure and policies and procedures for managing its operations effectively, and (3) had internal control over the financial management and reporting that provides reasonable assurance that resources are not at risk. To address these objectives, GAO analyzed the commission's charter, annual reports, records, and management policies and procedures and interviewed commissioners, executive directors, and staff. GAO focused on fiscal years 2005 and 2006 financial transactions.
section_title: What GAO Found
paragraphs: Although the contents of the commission's annual reports have complied with statutory reporting requirements, the commission has not met the annual reporting deadline. It issued its 2005 and 2006 reports over 5 months late because the commissioners' appointment dates and the commission work cycle activities are not aligned with the annual reporting deadline. For example, over half the commissioners' terms will expire in December, 5 months before they are to approve and issue the 2008 report. However, the commission has taken steps to comply with applicable provisions of the Federal Advisory Committee Act. The commission's organizational structure and management policies and procedures have weaknesses and are not in accordance with GAO's internal control standards for the federal government. The commission has not formally defined and assigned key management duties and responsibilities that are typically divided or segregated among different people. Also, policies and procedures were insufficient, incomplete, or not adequately documented. For example, GAO found that the commission had no written policies or procedures to ensure that the procurement of certain goods and services was transparent, competitive, and at the best value. Internal control over financial management and reporting was not adequate to provide reasonable assurance that activities were properly processed and recorded and complied with federal laws and regulations. GAO noted weak or missing internal controls in three broad areas. In examining non-payroll-related financial transactions, GAO found inadequate documentation, lack of proper authorization and approval, and improper classification, including $13,000 in questionable purchases. The purchase and travel card programs lacked written guidance, proper segregation of duties, and adequate training. Also, time and attendance records were not always approved according to the commission's policies and procedures. As a result of inadequate control in these areas, the commission's financial resources are at an increased risk of fraud, waste, abuse, and mismanagement.

section_title: Letter
paragraphs: In October 2000, Congress established the U.S.-China Economic and  In October 2000, Congress established the U.S.-China Economic and  Security Review Commission (USCESRC). The commission is a small  Security Review Commission (USCESRC). The commission is a small  advisory body, one of few such commissions that report to Congress  advisory body, one of few such commissions that report to Congress  rather than the President or an executive branch agency. The charter of  rather than the President or an executive branch agency. The charter of  the commission, which does not contain a time limit on its authorization,  the commission, which does not contain a time limit on its authorization,  requires it to assess the national security implications of the evolving  requires it to assess the national security implications of the evolving  bilateral trade and economic relationship between the United States and  bilateral trade and economic relationship between the United States and  the People’s Republic of China. The charter also requires that the  the People’s Republic of China. The charter also requires that the  commission report the results of its work by issuing an annual report by  commission report the results of its work by issuing an annual report by  June 1 addressing specific economic and security issue areas. The charter  June 1 addressing specific economic and security issue areas. The charter  makes the commission responsible for managing its own operations, with  makes the commission responsible for managing its own operations, with  broad discretion and minimal oversight or support from other entities. The  broad discretion and minimal oversight or support from other entities. The  commission currently has a budget of about $3 million and has requested  commission currently has a budget of about $3 million and has requested  an additional $1 million for fiscal year 2008. The commission has not been  an additional $1 million for fiscal year 2008. The commission has not been  reviewed or audited since it was created.  reviewed or audited since it was created.
To help Congress oversee the commission’s activities, you requested that  To help Congress oversee the commission’s activities, you requested that  we examine the commission’s compliance with its charter and the  we examine the commission’s compliance with its charter and the  commission’s management of its operations. In this report, we assess the  commission’s management of its operations. In this report, we assess the  extent to which (1) the commission has complied with its charter, (2) the  extent to which (1) the commission has complied with its charter, (2) the  commission has an organizational structure and policies and procedures  commission has an organizational structure and policies and procedures  for managing its operations effectively, and (3) internal control over the  for managing its operations effectively, and (3) internal control over the  commission’s financial management and reporting has provided  commission’s financial management and reporting has provided  reasonable assurance that resources are not at risk.  reasonable assurance that resources are not at risk.
To address these objectives, we analyzed the commission’s statutory  To address these objectives, we analyzed the commission’s statutory  charter and related laws and regulations, such as the Federal Advisory  charter and related laws and regulations, such as the Federal Advisory  Committee Act (FACA). According to the charter, as amended, the  Committee Act (FACA). According to the charter, as amended, the  commission must implement FACA, which provides a legal and  institutional framework for the operation of advisory committees. We  reviewed the commission’s annual reports and records, such as documents  describing the organizational structure of the commission and its  management functions, including those related to human capital,  procurement, ethics and conflict of interest, and budgeting and financial  management and reporting. We assessed the extent to which the  commission has an organizational structure and policies and procedures  for managing its operations effectively based on internal control standards  for the federal government. While these standards are not binding for  legislative branch agencies, they are a statement of best practices and  adherence to these standards provides reasonable assurance regarding the  prevention or prompt detection of fraud, waste, abuse, and  mismanagement. These standards give management of federal agencies,  regardless of size, the responsibility and discretion to develop and  implement the mechanisms for internal control necessary for providing  reasonable assurance that the objectives of the agency are being achieved  with regard to effective and efficient operations, reliable financial  reporting, and compliance with applicable laws and regulations. In  reviewing the commission’s financial management and reporting, we  focused on transactions that occurred during fiscal years 2005 and 2006.  We did not audit any financial reports generated by or on behalf of the  commission, and we do not express an opinion on them. We interviewed  current and former commissioners, current and former executive  directors, and the current professional and administrative staff. In  addition, we reviewed information and met with officials from the  Congressional Research Service (CRS), Government Printing Office  (GPO), General Services Administration (GSA), Senate Select Committee  on Ethics, and Senate Office of Public Records. We performed our work  from October 2006 to September 2007 in accordance with generally  accepted government auditing standards. Further details on our scope and  methodology are included in appendix I.
subsections: section_title: Background
paragraphs: Congress established the U.S.-China Economic and Security Review  Commission (USCESRC) on October 30, 2000, through Public Law No.  106-398, which transferred to USCESRC the facilities, material, and staff of  the U.S. Trade Deficit Review Commission. According to the commission’s  charter, USCESRC must monitor and assess the national security  implications of the bilateral trade and economic relationship between the  United States and the People’s Republic of China. It must report results of  its work in annual reports to Congress, addressing specific economic and  security issue areas. The commission has had an annual budget of about  $3 million since fiscal year 2005 and has requested an additional $1 million  to fund its operations in fiscal year 2008. Appendix III provides additional  details on the commission’s appropriations and expenditures.
The commission consists of 12 commissioners, all but 3 of whom hold  other positions. The leadership of the Senate and the House of  Representatives appoint the commissioners to serve 2-year terms, which  are staggered. In turn, the commissioners select a chairman and vice  chairman from among themselves. The chairman and vice chairman rotate  between Democratic and Republican appointees every year. Currently, a  Democratic appointee is serving as chairman and a Republican appointee  as vice chairman. The commission meets at the call of the chairman. A  majority of commissioners must be present for the commission to conduct  business. Appendix II depicts a timeline of commission-related events,  including the election dates of all of the chairmen and vice chairmen since  the inception of the commission.
Each commissioner is compensated at an hourly rate computed from the  annual rate of basic pay prescribed for level IV of the Executive Schedule  (ES-IV). Generally, the commissioners submit a signed statement of hours  worked on commission activities for a given pay period, and they are  reimbursed for that time. However, a commissioner may not be  reimbursed more than the annual rate of pay for an ES-IV in a given fiscal  year, which was $143,000 for fiscal year 2006.
The commissioners are supported by an executive director, and program  and administrative support staff. The current executive director is a senior  executive detailed from the Department of Commerce to the commission  under a reimbursable agreement. Nine of the 11 staff are excepted service  federal employees, who have 1-year appointments and serve at the  discretion of the commission. Two administrative staff, including the  associate director, work for the commission under 1-year personal service  contracts.
To produce its report, the commission undertakes activities such as  holding hearings, conducting research, and traveling on fact-finding  missions to China and other countries. At the direction of the commission,  a commissioner or commissioners may hold hearings. Currently, at least  one Democratic appointee and one Republican appointee co-chair each  hearing. For example, the commission held 14 hearings in 2005 and 8  hearings in 2006 and plans to hold 8 hearings in 2007. Also, the  commission relied on internal research from its professional staff and  commission-sponsored external research by subject matter experts.
section_title: The Commission Has Not Fully Complied with Its Charter
paragraphs: The commission has not fully complied with the statutory requirements set  forth in its charter. The commission has covered the required economic  and security issue areas in its reports. However, since it was established in  2000, the commission has issued all of its annual reports after the required  deadline and failed to issue an annual report in 2003. According to the  commission’s charter, the commission is required to submit an annual  report to Congress no later than June 1. The commission submitted  interim reports to Congress in 2006 and 2007 in an effort to comply with  this deadline. Further, the commission has implemented those FACA  provisions it is capable of applying.
subsections: section_title: The Commission Has Reported on Required Economic and Security Issue Areas
paragraphs: The commission has complied with its statutory charter with regard to the  subjects on which it reports and the scope of its activities. The  commission has broad discretion to examine matters related to U.S.-China  economic and security issue areas. Since the commission was established  in 2000, Congress amended the statutory charter twice to modify the  language related to the scope of its activities. We compared the mandated  issue areas and annual report contents and found the commission’s annual  reports covered the statutory economic and security issue areas.
Despite statutory changes to the charter over time to narrow the number  and extent of reporting topics, the commission has broad discretion on  what specific matters to examine. The commission has the authority to  interpret its own regulations and statute. The commission’s statutory  charter was amended three times, and the second and third amendments  modified the number of issue areas and revised the language related to the  scope of the economic and security issue areas. The statutory charter  originally mandated that the commission’s annual report “include, at a  minimum, a full discussion of” the 10 issue areas. In 2003, the second  amendment to the commission’s charter reduced the number of issue  areas from 10 to 9 and revised the language related to the scope of  reporting to instruct the commission to “focus, in lieu of any other areas of  work or study” on the 9 issue areas. In 2005, the third amendment to the  commission’s charter reduced the number of issue areas from 9 to 8 and  revised the language related to the scope of reporting to instruct the  commission to “investigate and report exclusively on each of the  following” 8 issue areas. Table 1 compares the issue areas the commission  is mandated to report on in the annual report.
Our analysis of the content covered in the commission’s four public annual  reports found that the economic and security issue areas were covered as  required. We found the commission’s 2002 annual report covered the 10  economic and security issue areas mandated at the time. Some chapters  address more than one reporting requirement and are listed multiple  times. Furthermore, chapter 4 of the 2002 annual report covers political  and civil freedoms, which was not a specified issue area but was within  the scope of reporting because the charter originally mandated the  commission’s annual report “include, at a minimum,” the 10 issue areas.  Appendix IV provides details on the issue areas covered by the  commission’s 2002 annual report. We found the commission’s 2004 and  2005 annual reports covered the 9 economic and security issue areas  mandated at the time. Appendix V provides details on the 9 issue areas  covered by the commission’s 2004 and 2005 annual reports. We found the  commission’s 2006 annual report covered the 8 economic and security  issue areas currently mandated. See table 2 for the 8 issue areas covered  by the commission’s 2006 annual report.
According to the chairman, the commissioners discuss the mandate in  relation to the scope of activities and reporting. Furthermore, the  commissioners discuss the scope of the issue areas identified in the  commission’s statutory charter before reaching consensus on the annual  work plan. While acknowledging that the mandate restricts the scope of  reporting to the eight issue areas, several commissioners noted that they  sometimes debate what the commission should cover under these areas  because they leave room for interpretation. The chairman stated that the  commissioners use the issue areas to plan commission activities, including  research, hearings, and overseas trips.
The commission has broad discretion to conduct activities to fulfill its  reporting requirement and can base its reports on a variety of activities.  During the commission’s quarterly business meetings at the conclusion of  one calendar year and the beginning of the next, commissioners discuss  the scope of activities identified by the commission’s statutory charter and  reach consensus on the annual work plan. According to its statutory  charter, the commission can hold hearings, conduct internal and external  research, secure relevant information from U.S. departments and agencies  through classified and unclassified briefings, and carry out fact-finding  missions abroad. For example, the commission used all of these methods  to collect information for the 2006 annual report. Specifically, the  commission held eight public hearings on the required economic and  security related issue areas and delivered a letter to Congress summarizing  significant findings and providing interim recommendations after each.  The commission authorized external research contracts on issues, such as  China’s antisatellite and space warfare activities and China’s oil and gas  investments abroad. The commission received briefings from several U.S.  agencies, such as the Department of Defense and the intelligence  community. An official commission delegation conducted a fact-finding  mission to China, Hong Kong, and Taiwan in June 2006.
During the 2007 reporting cycle, the commission has held five public  hearings as of July 2007 and plans to hold three others through September  2007. All examine topics related to the eight mandated economic and  security issue areas. The commission also plans to award external  research contracts. For example, the commission recently selected a  proposal submitted in response to an advertised request for proposals  (RFP) and awarded a contract providing for a report tracing the parts and  components supply chains for three key U.S. weapon systems. Throughout  2007, the commission plans to receive classified and unclassified briefings  from U.S. departments, agencies, and the intelligence community. A  commission delegation traveled to China and Hong Kong in April 2007, and  another delegation of commissioners and staff traveled to Taiwan and  India in August 2007.
section_title: The Commission Issued Annual Reports Late or Not at All
paragraphs: Since its inception, the commission has failed to submit its annual report  to Congress in time to comply with the statutory reporting deadline. The  commission’s charter requires the commission to submit its annual report  to Congress no later than June 1 each year. The commission has issued its  annual reports late or, in one instance for reasons discussed below, not at  all. The commission was established in October 2000 and was not required  to submit its first report until March 1, 2002. The charter was amended on  November 12, 2001, to change the report issuance date to June 1, 2002.  Congress modified the reporting date from March to June because,  according to a former executive director, the commission “was getting  organized and it would have been difficult to produce a report by March.”  Even with the congressional amendment extending the reporting date 3  additional months, the commission issued its 2002 annual report on July  15, 2002.
Our analysis of the commission’s annual report issuance dates reveals  inconsistent submission dates, with longer delays in 2005 and 2006. For  example, the delays in the issuance dates ranged from 9 days in 2004 to  161 days in 2005. The final 2006 report was issued to Congress 151 days  after the deadline. To comply with the June 1 deadline, the commission  submitted interim reports in 2006 and 2007. However, the former was 20  days late; the latter was on schedule. In its budget request for fiscal year  2008, the commission has requested the issuance date for the annual  report be extended to December 1. Table 3 shows the June 1 annual report  issuance dates since the inception of the commission and number of days  each annual report was late.
The commission has not issued its annual reports on time because  appointment dates for commissioners and the commission work cycle  activities are not aligned with the annual report issuance deadline. Figure  1 shows this misalignment. The commission has scheduled its work cycle  activities according to when commissioners are appointed, not by the  statutory June 1 annual reporting date. Currently, the commission’s work  cycle activities for developing, producing, and submitting its annual report  to Congress is from January through November. The commission approves  its annual work cycle schedule after the new chairman and vice chairman  and the new commissioners are in place early in the calendar year.
According to the commission’s charter, the President pro tempore of the  Senate, acting on the recommendation of both majority and minority  leaders, appoints six commissioners, and the Speaker and the Minority  Leader of the House each select three commissioners for 2-year terms that  begin in January and end in December of the following year, and they can  reappoint commissioners; the terms are staggered. They should appoint  commissioners no later than 30 days after the date on which each new  Congress convenes. Congress regularly convenes on January 3, unless  Congress by law designates a different day to convene. Thus, they  normally should appoint commissioners no later than February 2. In  practice, they have appointed 26 of 45 commissioners after this date. For  example, in 2003, the commission did not produce an annual report  because the required number of commissioners to form a quorum was not  appointed or reappointed until May 6, 2003, giving the commission only 26  days to issue its annual report by the June 1 deadline. Figure 2 shows the  actual ranges of commissioner appointment dates.
The current misalignment makes it difficult for the commission to develop  and produce the annual reports on schedule. The chairman, vice chairman,  and executive director estimate that the commission needs about 11  months to conduct the work and research necessary to produce a robust  annual report that addresses the required economic and security issue  areas and that reflects bipartisan consensus. Thus, moving the annual  report submission date or the timing of commissioner appointments would  provide a work cycle with enough time to develop and produce a report on  schedule, according to the commission. If the annual work schedule were  aligned with the June 1 deadline, without changing the commissioners’  terms, newly appointed commissioners would be required to participate in  determining key findings and recommendations to Congress based on  activities that occurred before they were appointed, according to the three  most recent chairmen. Furthermore, the composition of the commission  could change significantly in the middle of the reporting cycle. For  example, in 2007, the 2-year terms of seven commissioners, including the  current chairman and vice chairman, will expire on December 31,  5 months before the 2008 report is due. The commission will not have a  quorum to conduct its work until at least two commissioners are  (re)appointed. In its budget request for fiscal year 2008, the commission  has requested Congress to move the annual report issuance date to  December 1.
section_title: The Commission Has Implemented Applicable FACA Provisions
paragraphs: The commission has, to the extent possible, taken steps to comply with  FACA and adhere to those provisions it can implement. FACA was  designed to provide for the accountability, management, and transparency  of advisory committees located within the executive branch. FACA can  apply to federal advisory committees created by the President, other  executive branch entities, or an act of Congress. Initially, the legislation  establishing the commission exempted it from FACA. In November 2005,  Congress amended the commission’s charter so as to apply FACA to its  activities. While the commission is in compliance with those provisions of  FACA it can implement, according to commissioners and commission  officials, implementing some provisions has been problematic.
The commission is an independent legislative branch entity, and neither  the legislation mandating applicability of FACA nor its underlying history  provides the commission with guidance for how it should implement  FACA. The commission therefore consulted with GSA—which is  responsible for executive branch compliance with FACA—on how it might  implement FACA. Based on these consultations and its own interpretation  of FACA, the commission determined that it could implement certain  FACA provisions but not others. Table 4 shows the FACA provisions and  which of these the commission determined it could implement.
According to GSA officials, the commission has taken reasonable steps to  comply with the spirit of FACA. For example, after consulting with GSA,  the commission sent an official to a 2-day GSA training session on how to  comply with FACA. Also, the commission has adhered to the provisions of  FACA that require advisory committees to allow the public to attend  meetings and file statements. Specifically, the commission currently  advertises its meetings and holds public hearings and open annual report  drafting sessions. However, the commission cannot implement the FACA  sections imposing certain administrative requirements on agency heads  because those sections apply to commissions operating within larger  agencies.
Opening annual report drafting sessions to the public is problematic,  according to the commission, because the presence of public observers,  including Chinese and other international press and foreign officials,  inhibits the discussion of economic and security-related issues among  commissioners. For example, the 2006 annual report drafting sessions  were open to the public, and the commission’s discussions and personal  opinions related to findings and recommendations were reported in the  national and international press prior to the commission reaching  consensus. Additionally, drafts of the commission’s annual report were  made available to the media prior to commissioners reaching final  concurrence on official findings and congressional recommendations. As a  result, the commission included in its fiscal year 2007 budget a request  that FACA no longer be applied to it. However, in its fiscal year 2008  budget request, the commission dropped the removal request.
section_title: Weaknesses in Current Organizational Structure and Management Policies and Procedures
paragraphs: Weaknesses in the current organizational structure and management  policies and procedures hinder the effectiveness of the commission’s  operations and put the commission at risk of fraud, waste, abuse, and  mismanagement. According to internal control standards for the federal  government the organization structure provides the general framework for  management to plan, direct, and control operations to achieve its  objectives and internal control activities are designed and implemented to  help ensure that management’s directives are carried out. Specifically, in  terms of its organizational structure, the commission has not formally  defined and assigned key duties and responsibilities that are typically  divided or segregated among different people in order to reduce the risk of  error or fraud. The commission has heavily relied on its associate director  for managing most administrative operations and staff, and commissioners  have generally played a passive role in the management of the  commission. In terms of management policies and procedures, the  commission has not appropriately documented and communicated human  capital, procurement, ethics, and financial management policies and  procedures to commissioners and staff.
subsections: section_title: Organizational Structure for Managing Operations Has Weaknesses
paragraphs: Weaknesses in the commission’s current organizational structure for  managing administrative operations and staff hinder its effectiveness and  put the commission at risk of fraud, waste, abuse, and mismanagement.  According to the control environment standard, management should  ensure that the organizational structure, among other things, is  appropriate for the organization’s size and functions, clearly defines areas  of responsibility, appropriately delegates authority, and establishes a  suitable hierarchy for reporting. Specifically, the commission has not  defined and assigned key management duties and responsibilities, which  are typically divided or segregated among different people. Also, most if  not all of these duties and responsibilities have fallen on a single  individual, the associate director.
subsections: section_title: Commission Has Not Formally Assigned Most Management Duties and Responsibilities
paragraphs: The commission has not formally assigned key management duties and  responsibilities in accordance with the control environment standard.  Specifically, we found that the commission has not formally assigned  human capital, procurement, or budgeting and financial management and  reporting responsibilities to any administrative staff. The only exception is  that the commission designated the associate director as the ethics officer,  making her responsible for, among other things, helping commissioners  and staff address ethics and conflict-of-interest matters.
Regardless of its size, under both the control environment standard and  human capital principles, an organization should have individuals with  specialized knowledge, skills, and abilities necessary to perform one or  more of these complex and technical administrative responsibilities  effectively. Commission officials told us during our review that they  recognize the commission has to clarify administrative roles and  responsibilities, identify individuals who will be responsible for them, and  segregate duties among staff. Figure 3 shows the organizational structure  of the commission and, illustrates, among other things, that the  commission formally has an ethics officer but no human capital,  procurement, financial, or other administrative officers and no legal  counsel.
This failure to formally assign administrative responsibilities across the  organization hinders checks and balances and monitoring, undermines  segregation of responsibilities, compromises the accountability for and  effectiveness of administrative procedures, and puts the commission at  risk. For example, the commission has not formally assigned responsibility  for procurement to a qualified official. The chairman, executive director,  and associate director have played de facto roles as procurement officers  by signing contracts, and currently the executive director is acting as  procurement officer for most research contracts. In the absence of a  formally designated procurement officer, it is not clear who has the  authority to negotiate and sign contracts, who should receive goods and  services and maintain records, and who should monitor procurement  decisions and activities, compromising the integrity of procurement  activities. Also, it is not clear whether individuals carrying out these  activities have the necessary background, expertise, experience, and  training to do so.
section_title: Commission Has Relied on Its Associate Director for Carrying Out Most Management Duties and Responsibilities
paragraphs: Since its inception, the commission has delegated to its associate director  the responsibility for running most management functions and supervising  all administrative staff, thereby creating risks. This concentration of duties  and responsibilities is not in accordance with a good internal control  environment. Most commissioners have played a limited and passive role  in the management of the organization. Most commissioners work part  time, and they told us that they focus on producing the annual report  rather than on management matters. Under the direction of the chairman  and vice chairman, the executive director is responsible for the overall  management of the commission, including program as well as  administrative operations and staff. However, the executive director has  mainly focused on managing the commission’s program operations and  staff, which also concentrate on producing the annual report. As a result,  the commission has greatly relied on its associate director, who reports to  the executive director, chairman, and vice chairman, for leading  administrative operations and staff (see fig. 3).
Almost all administrative duties and responsibilities have fallen to the  associate director. According to the position description, the associate  director must have expert knowledge of federal rules and regulations on  human capital, procurement, and budgeting and financial management and  reporting, which involve highly legal and technical problems and sensitive  issues. Also, the associate director must have knowledge of the  commission’s program objectives and policies to carry out a full range of  work activities related to operations and administration. In addition, the  incumbent must have the ability to work on a bipartisan basis with  commission members and to handle administratively confidential and  personal information. The associate director told us that her position  description accurately reflects her responsibilities.
Moreover, she is responsible for managing nine administrative issue areas.  These are broad and varied and include managing    budget and financial management;  facilities and administrative services;   public and media affairs;    hearings, briefings, and meetings; and    other duties, such as representing the commission in interagency  meetings, planning and carrying out administrative projects and studies,  and training and supervising subordinate staff.
For example, as the ethics officer, she is responsible for providing ethics  training, collecting and reviewing financial disclosure forms, and providing  advice on conflict-of-interest matters. Also, she serves as the principal  adviser to the executive director and the commission on personnel-related  matters; interprets and applies personnel and pay authorities provided to  the commission; interprets and applies legislative branch guidance,  authorities, and legal requirements and federal personnel regulations and  directives affecting the commission; and seeks opinions and guidance  from the U.S. Senate Legal Counsel, GSA, and the Office of Personnel  Management on personnel matters for which no clear guidance exists.
In addition, in terms of budgeting and financial management and in  coordination with the chairman and executive director, she is responsible  for    developing budget plans, goals, and objectives for overall projects and    working with the GSA budget office;    developing and reviewing other budget data for automated input into the  Office of Management and Budget (OMB) MAX system; responding to OMB requests for supplemental information;   developing budget material in support of the commission’s budget  requests and congressional budget justifications;   supporting the chairman and other commissioners at hearings and    generating documents that provide spending authority, OMB  apportionment of carryover, and appropriated funds;   assuring the accuracy of the monthly and year-end Report of Budget  Execution of OMB and the Treasury Department; and   monitoring OMB directives for commission application and appropriate  action.
To fulfill her duties and responsibilities, the associate director has limited  administrative support. Commission officials told us that because the  commission is small and has a small budget, it cannot afford to secure the  services of management specialists with the expertise that it needs in  different areas, including legal expertise on administrative matters. During  our review, the commission hired an assistant director/office manager to  improve its administrative capabilities. However, this individual has  limited responsibilities and does not supervise any administrative staff. We  observed that the four other administrative staff worked under the close  supervision of the associate director because they were also new hires or  because sometimes they could not resolve problems without assistance. It  was not clear that some of the administrative staff had the background,  experience, and training to carry out responsibilities if the associate  director delegates them. For example, a staff member who performs  budget and financial management duties has recently required extensive  assistance to solve problems related to a financial spreadsheet used in  day-to-day operations. Furthermore, she said that she would benefit from  training on accounting and related software. We found that commission  staff had received little internal or external training.
Concentration of duties and responsibilities creates risks. By  concentrating so many responsibilities in one individual, this  organizational arrangement, among other things, curtails checks and  balances and monitoring, hampers segregation of responsibilities, and  requires that this individual have a high level of legal and technical  expertise in administrative functions, such as human capital, procurement,  and budgeting and financial management and reporting. For example, as  the sole purchase cardholder, the associate director has broad authority in  procuring supplies and services for the commission. However, as the  designated funds’ manager of the commission, the associate director may  also approve the payments of these purchases omitting any supervisory  review of the purchase card transactions made with commission  appropriations.
Concentration of duties and responsibilities also creates risks because key  staff may leave the organization. The associate director has been with the  commission since its inception. Thus, she has worked with all of the  chairmen, vice chairmen, and executive directors of the commission. The  associate director is a retired federal official working under a personal  services contract for the commission. According to the chairman and  executive director, the commission does not have qualified back-up staff  or a plan for transitioning staff to take on the associate director’s multiple  responsibilities should the associate director leave the commission.
section_title: Management Policies and Procedures Have Weaknesses or Are Not Present
paragraphs: The commission’s policies and procedures for managing administrative  operations and staff are insufficient, incomplete, or not adequately  documented, thereby impairing their effectiveness and putting the  commission at risk of fraud, waste, abuse, and mismanagement. Effective  internal control activities help ensure that management’s directives are  carried out and are an integral part of an entity’s stewardship of  government resources. Control activities are the policies, procedures,  techniques, and mechanisms that enforce management’s directives, such  as the process for approving new hires and authorizing rates of pay.  Specifically, despite the commission’s adopting 17 rules and other efforts  to put management policies and procedures in place since October 2002,  human capital, procurement, ethics, and financial management and  reporting policies and procedures are insufficient or incomplete, and many  basic operational practices are not documented. We found no evidence  that legal and management experts have vetted policies and procedures to  ensure they are technically sound, which is a best practice. Furthermore,  existing policies and procedures are not fully documented and  consolidated in policy and procedures manuals.
subsections: section_title: Human Capital Policies and Procedures Are Incomplete or Are Missing
paragraphs: The commission’s human capital policies and procedures are insufficient  or incomplete. Because of these internal control weaknesses, human  capital procedures do not provide reasonable assurance that these  activities, such as hiring, evaluating, training, and EEO practices, are  performed effectively. Under effective internal control, management  should have appropriate, comprehensive, documented, and fair  procedures for hiring, training, evaluating, compensating, and terminating  staff. Specifically, the commission has only partially implemented formal  performance evaluation procedures. Also, it has incomplete formal  procedures for hiring and does not have formal procedures regarding  training and EEO. Legal and management experts have not vetted human  capital policies and procedures to ensure they are technically sound.
The commission did not evaluate any of its staff prior to 2005.  Nevertheless, it provided bonuses to staff without having formal ratings in  2004 and 2006. The commission is in the process of implementing staff  performance evaluation policy and procedures adopted in May 2006. The  commission did not develop and implement these staff evaluation  procedures before because, according to commission officials, it did not  have the resources to do so. According to the executive director, the  commission informally evaluated staff in 2005 and 2006 and will formally  evaluate its staff in 2007. The commission’s new employee performance  management policy and procedures aim to motivate staff to perform at  their highest levels and give supervisors instruments to evaluate  employees’ performance. These policies and procedures rely on four tools:  a position description for each employee’s position, an employee  performance plan, an annual performance evaluation for each employee  and, if needed, a performance improvement plan to enhance the  performance of an employee whose work is unsatisfactory. The employee  performance management calendar starts with the preparation of the  employee performance plans in December of the previous year, continues  with the staff evaluation period from January to December, and ends with  the finalization of individual performance evaluations in February of the  following year. Based on these performance evaluations, supervisors  recommend salary increases and cash awards in late February. Following  these recommendations, the commission may give salary increases and  cash awards in March. The commission started implementation of these  procedures for calendar year 2007 in December 2006 with the  development of individual performance plans and intends to finish  implementing the procedures in early 2008. According to the executive  director, the implementation is on schedule, and staff have their individual  performance plans on file. Because the commission is still implementing  the procedures for 2007, we did not evaluate the new policy and  procedures.
The commission has incomplete written procedures for hiring staff. Under  the charter of the commission, the chairman may appoint, fix the  compensation, and terminate the employment of the executive director  and any other staff. Under rules 4 and 5 of the commission, as amended in  November 2005, the commission must approve the hiring and firing of the  executive director, and the chairman and vice chairman must approve the  hiring and firing of other staff after consultation with other  commissioners. However, beyond these rules, the commission has not  formalized its hiring practices through further written procedures that  would help ensure that hiring new program and administrative staff is fair,  transparent, and competitive. For instance, no procedure in place captures  that, since 2006, the commission has developed vacancy announcements,  based on its position descriptions, and publicly advertised them through  its Web site and various media, such as USAJOBS and the OPM Web site.  Furthermore, the roles played by the executive director and the associate  director in managing human capital are not formally defined, and the  records that the commission and these officials have to keep during hiring  are not formalized in written procedures.
The commission does not have written training guidelines for its program  and administrative staff. Training allows an organization to invest in its  human capital and focus this investment on organizational goals and  objectives. It helps ensure that staff have the knowledge, skills, and  abilities to fulfill their responsibilities. Internal and external training of  administrative staff help them comply with policies and procedures,  safeguard resources, and prevent errors. Some of the commission’s  program and administrative staff told us that training would help them  improve their professional and technical skills. For example, staff  mentioned that systematic support for training would help them improve  language or technical skills. Staff stated that the commission should have  training guidelines in place so that they have a fair opportunity to develop  their skills. Staff told us that they had individually requested training  support. Without training guidelines, the commission cannot ensure that  training supports organizational objectives and that staff has fair access  to it.
The commission does not have written equal employment opportunity  (EEO) procedures. Although the commission is not subject to EEO  legislation, commission officials told us that the commission has followed  EEO principles, but it has no written procedures. According to these  officials, the commission is aware of the importance of these procedures  when, for example, hiring or terminating staff. A lawsuit that the  commission settled with a former staff member was partially based on an  EEO complaint. In the absence of these EEO procedures, the commission  cannot ensure that human capital procedures (such as recruitment, hiring,  evaluation, promotion, compensation, awards, and training procedures)  are fairly implemented. Also, it cannot monitor EEO-related results.
section_title: Procurement Policies and Procedures Show Weaknesses
paragraphs: The commission has some written procedures for research-related  procurement, but it does not have written procedures for non-research- related procurement. Because of this internal control weakness,  procurement procedures do not provide reasonable assurance that  procurement activity is performed effectively and is not subject to fraud,  waste, and abuse. Also, procurement procedures need to ensure as much  transparency, competition, and accountability as possible. However, legal  and procurement experts have not vetted the commission’s procurement  rule to ensure that it is technically sound or in accordance with best  practices.
Specifically, regarding research-related procurement, rule 12 of the  commission states that the chairman and vice chairman must support  research contracts after receiving recommendations from the co-chairs of  the commission’s research working group. The research working group is  responsible for defining research needs and preparing research proposals.  It has four members—two co-chairs and two other commissioners. The  chairman and the vice chairman select the co-chairs of the group from  among the commissioners from different political parties. Rule 12 also  says that the full commission must approve research contracts in excess  of $25,000.
This research-related procurement procedure does not include practices  the commission has used since 2005 to ensure the transparency and  competitiveness of its research-related procurement. Under these  undocumented practices, for example, if the research working group  determines that funding outside research would contribute to the  commission’s mission, it prepares a request for proposal (RFP) with  support from the commission’s staff. After approving the RFP, the  commission puts the RFP on its Web site and disseminates it to selected  academic institutions and policy institutes. However, the commission does  not use other means to widely circulate the RFP. After examining all of the  responses to the RFP, the research working group selects one and  recommends it to the chair and vice chair, or to the commission.
In fiscal year 2005, the commission competitively awarded seven research  contracts for a total of $105,475 (see app. VI). Only one of these was above  $25,000. In fiscal year 2006, the commission competitively awarded five  research contracts for a total of $77,926. None of these was above $25,000.  During 2007, the commission plans to continue awarding research  contracts using these practices.
In contrast, the commission does not have any written procedures in place  for nonresearch procurement. This procurement involves a variety of  items, such as the costs of hearings, consulting services, and office  supplies and equipment. In fiscal years 2005 and 2006, the commission  spent about 65 percent and 77 percent, respectively, of its total  procurement budget in nonresearch procurement (see apps. VI and VII). In  the absence of nonresearch-related procurement procedures, the  commission has limited assurance that the procurement is as transparent,  competitive, or best value for price as possible, or that responsibilities for  it are segregated among qualified staff. For example, as discussed in the  following section on financial management and reporting, the commission  made significant purchases of office equipment, however, the staff did not  document these pricing and purchasing decisions and it is difficult to  verify that the best value was obtained. Earlier, we noted the absence of a  formally designated procurement officer can compromise the integrity of  procurement activities and together with the lack of procedures put the  commission at risk of fraud, waste, abuse, and mismanagement.
During our review, we identified a transaction that fell outside the scope  of our individual transaction testing. The transaction involved computer  consulting work conducted by a relative of the associate director that  initially did not appear to be approved by the commission. We learned that  the associate director’s son, who is not an employee of the commission  and not under formal contract with the commission, had access to the  commission’s computer system and the sensitive information it contains.  The associate director confirmed that her son had had access to and  worked on the system. She explained that her son had set up the computer  system for the Trade Deficit Review Commission and was paid for those  services by that entity. Subsequently, at its inception, USCESRC inherited  this computer system. The associate director told us that 4 years later, in  2004, when the system experienced a major failure due to an external  power surge, she obtained expert and consulting services from her son to  assist with the recovery of the data and redesign and upgrade of the  system, for which the commission paid him $6,600. The associate director  acting as contracting/ordering officer approved the invoice authorizing the  payment to her son. In addition to the invoice, she also gave us a copy of  the statement of work relating to the invoice. We have seen no other  documentation relating to this work other than the statement of work and  the invoice.
The chairman, vice chairman, and executive director of the commission at  that time informed us that they knew the associate director planned to  obtain the services of her son, but, because of lack of formal procedures  for approving nonresearch procurement, they were unaware of the details.  After 2004, when problems arose with the system, he continued to provide  assistance and other services without receiving additional reimbursement  from the commission. As a part of providing assistance and other services,  he had access to the system both at the commission and off site via the  Internet. We brought this matter to the attention of the current chairman  and executive director, and they told us they were aware that the associate  director’s son had worked on the system after 2004 to troubleshoot the  system he had developed. In the absence of formal approvals or  documentation of his work for the commission after 2004, they were  unaware of his providing other services to the commission and about the  terms and conditions he was operating under. The current chairman and  executive director were confident that he had received no compensation  for these services. They also indicated that as a result of our inquiry, they  intended to take steps to stop this person from having further access to  the computer system and providing further support and services to the  commission without the approval of the chairman and vice chairman.
When the commission accepts services without remuneration, as  authorized by law, it has to document such action in order to protect the  government’s financial interest should the provider of the services submit  a payment claim for such services. Further, since this situation involved  access to the commission’s computer system, the commission has to  document the scope of the access authority granted, which if intentionally  exceeded would, among other things, constitute a possible violation of  legislation dealing with fraud and related activities in connection with  computers.
section_title: Ethics Guidelines Have Some Shortcomings
paragraphs: The commission’s ethics procedures for both commissioners and staff  have shortcomings. According to guidance for a good internal control  environment, management should have appropriate, comprehensive, and  documented written ethics policies and procedures and require that all  members of an organization periodically acknowledge ethics policy and  procedures by signature. Specifically, two rules of the commission provide  ethics guidelines for commissioners and staff. According to commission  rule 16, commissioners must exercise impartial judgment in performing  their duties; may never solicit or accept a gift as part of their official  duties, other than a gift of incidental value; may not use their position in  the commission or the information they receive as part of their duties for  personal gain; and may not receive a present of any kind, other than of  incidental value, from China and Taiwan. This existing rule does not  include ethics guidelines regarding speaking engagements and payment of  related travel expenses. The commission has discussed establishing  guidelines on speaking engagements but has not done so, according to  commission officials. The commission has not vetted its ethics procedures  for commissioners with legal and management experts to ensure these  procedures are technically sound, in accordance with best practices.
Commission rule 17 requires staff to comply with Senate ethics rules. In  March 2007, the executive director conducted the commission’s first  training on the Senate ethics rules for all program and administrative staff.  He also gave each staff member a copy of the ethics rules. Previously, he  and the associate director, who is the formally designated ethics officer,  had discussed these ethics rules with staff individually.
We found no evidence that the commission requires commissioners and  staff to periodically acknowledge ethics policy and procedures by  signature. In addition, the commission has no rule about entering into  contracts with relatives of commissioners and staff, in accordance with  best practices.
In terms of financial disclosure, we found that commission officials who  should have filed financial disclosure reports had done so, and the reports  did not show conflict of interest. Commissioners and staff who are  required by the Ethics in Government Act of 1978 to file financial  disclosure reports must file the reports with the Secretary of the Senate in  its Office of Public Records. Commission officials who earned a rate of  pay equal to or in excess of $109,808 for a period equal to or in excess of  60 days must file financial disclosure reports. Senate ethics rules note that  public disclosure of an official’s personal financial interests is a key  component of an effective code of conduct. After collecting and  processing the forms, the Office of Public Records sends the forms to the  Senate Select Committee on Ethics and, within 30 days, makes them  available to the public electronically. If the committee needs additional  information or finds errors in the forms, commissioners and staff may  need to file amendments.
According to our review of commission and Senate records, commission  officials who should have filed financial disclosure forms had done so  since the inception of the commission. The reports covering 2006 were  due on May 15, 2007. According to the commission’s ethics officer, six  commissioners, including one former commissioner, should have filed  these reports. Three of them did so, and the other three requested and  received a filing extension until August 15, 2007. The three commissioners  who requested extensions filed their reports by the August deadline,  according to the associate director.
section_title: Commission Has Not Appropriately Documented Its Administrative Procedures
paragraphs: The commission has not sufficiently documented its ethics, human capital,  procurement, and budgeting and financial management and reporting  policies and procedures to ensure their effectiveness and to inform and  guide commissioners and staff. Effective internal control activities would  include a comprehensive collection of management policies and  procedures, which are properly managed and maintained, so that  management and staff can apply these activities properly.
Without a complete collection of comprehensive management policies and  procedures, commissioners and staff do not have access to documents in  paper or electronic form containing all of the information needed for  effectively implementing these policies and procedures, and the  commission is at risk, especially if staff responsible for key operations  leave the commission. More important, without a systematic effort to  consolidate management policies and procedures, some remain  incomplete, unwritten, or not vetted by legal and administrative experts.  The commission is currently working to consolidate its management  policies and procedures by developing office manuals. For example, the  commission has in draft a policy manual and a procedures manual.  Commission officials acknowledged the need for policy and procedures  manuals but told us the manuals have not been completed because of a  lack of resources.
section_title: Ineffective Internal Control over Financial Management and Reporting
paragraphs: The commission’s internal control over financial management and  reporting was not adequate to provide reasonable assurance that financial  activities were properly processed and recorded and complied with  federal laws and regulations. Effective internal control is the first line of  defense in safeguarding assets and preventing and detecting errors and  fraud. We noted weak or missing internal control in our examination of the  commission’s (1) non-payroll-related transactions, (2) travel and purchase  card activity, and (3) time and attendance (T&A) reporting. Our tests of  the commission’s non-payroll-related transactions for fiscal years 2005 and  2006 found deficiencies, such as missing or inadequate supporting  documentation, lack of proper authorization and approval, and improper  classification. The commission’s application of the government travel and  purchase card programs lacks written guidance, proper segregation of  duties, and adequate training. In addition, we identified questionable  purchases of over $13,000 made with the commission purchase card. Our  review of the commission’s payroll process for fiscal years 2005 and 2006  showed that the commission’s T&A records were not always validated by  the employee or approved in accordance with the policy described by the  commission’s management. As a result, the commission’s financial  resources are at an increased risk of fraud, waste, abuse, or  mismanagement.
subsections: section_title: Key Controls over Non- Payroll-Related Transactions Are Ineffective
paragraphs: Our tests of the commission’s non-payroll-related transactions for fiscal  years 2005 and 2006 found deficiencies such as missing or inadequate  supporting documentation, lack of proper authorization or approval, and  improper classification. We statistically sampled 59 commission non- payroll-related debit transactions totaling approximately $1.1 million from  fiscal years 2005 and 2006. Ten of the 59 transactions had one or more  internal control failures, leading us to conclude that the controls  commission staff said were in place were not operating effectively. Based  on the results of our work, we estimate that the total dollar value of non- payroll-related debit transactions with ineffective controls during the 2- year period we examined is not more than $1.2 million. The following are  examples of the type of internal control weaknesses identified in our  sample transactions:    Four transactions lacked proper documentation to support travel-related  expenditures centrally billed to the commission travel credit card. The  invoices submitted to GSA for payment processing included only the  credit card statement without supporting documentation, such as copies  of approved travel authorizations or vouchers and lodging invoices.  Although we found annotations on certain credit card statements  indicating that amounts were internally cross-referenced by the  commission to individuals’ travel vouchers, copies of approved vouchers  or support for the lodging expenses incurred were not attached for GSA  verification. In other sample items tested, reimbursements for business  expenses were processed for commission staff or commissioners with  only an e-mail or a handwritten note as supporting documentation.  Typically, the invoice or bill from the supplier or vendor represents the  claim against the government for the items sent or delivered, and is also  used to verify that quantities, prices, and calculations are accurate.
Two transactions were not properly authorized and approved: both were  payments under what the commission called a personal services contract  for hours worked and miscellaneous business expenses claimed for  reimbursement by the associate director. The first transaction, in the  amount of $3,823.60, was approved by the office manager, who was  subordinate to the contract payee. In the second transaction, for $5,315.69,  the contract payee signed the commission chairman’s name approving the  payment that the contract payee claimed, and therefore independent  verification that the services had been received and conformed to the  specifications of the contract was not documented. Although the  commission is relatively small, the separation of key duties and  responsibilities is a key control to reduce the risk of error or fraud.  According to GAO’s Standards for Internal Control in the Federal  Government, no one individual should control all key aspects of a  transaction.
Our sample included two large transactions totaling $90,075 that were  improperly reported as expenses for fiscal year 2006 by the commission at  the end of fiscal year 2006. The items, for $70,000 and $20,075, were  obligations for renovations to the commission’s office space that were  finalized in fiscal year 2007. Because the goods and services had not been  received by the end of fiscal year 2006, these two items should not have  been reported as expenses in fiscal year 2006. These errors were not  detected by commission staff until we questioned the transactions as part  of our testing. According to the commission staff, the errors occurred  when the commission notified GSA that the funds should be obligated  based on the purchase order but mistakenly placed the obligated balances  on the pending accruals worksheet submitted to GSA at year end. In  following up, we found that the related goods and services were received  and paid for in fiscal year 2007.
During our review, we also noted that the commission did not develop or  document criteria for official representation expenses or a means to  properly track appropriated funds for this purpose. Appropriations for the  commission for fiscal years 2005 and 2006 included a provision that no  more than $5,000 of the amount appropriated each year was available for  official representation expenses, which include entertainment.  Representation appropriations permit officials of agencies whose activities  involve substantial contact with foreign officials to reciprocate for  courtesies extended to them. According to the associate director, this is  how the commission has defined its use of representation expense, based  upon the commissioners’ discussions. However, neither the decision to  limit representation expense to the entertainment of foreign nationals on  trips to Asia nor the criteria for classifying transactions as representation  expenses has been documented. Also, the commission did not have a  formal means to track such transactions for fiscal years 2005 and 2006, as  indicated by the manual schedules of representation expenses that were  prepared at our request and were adjusted based on our inquiries. The  final schedules provided to us for representation expenses for fiscal years  2005 and 2006 totaled $2,687 and $4,996, respectively. However, without  definitional guidance and a formal means of accumulating these  transactions, it is difficult to determine the completeness and accuracy of  the amounts provided. As a result, it is difficult for commission  management to know whether the commission kept within its $5,000  statutory limit on representation, and we could not ascertain if it had done  so.
section_title: Travel and Purchase Card Programs Lack Key Controls
paragraphs: The commission’s travel card and purchase card programs lack written  guidance, proper segregation of duties, and adequate training. In addition,  we identified questionable purchases of over $13,000 made with the  commission purchase card. According to internal control standards,  management is responsible for developing policies and procedures that fit  the agency’s operation and are an integral part of operations. As discussed  earlier, internal control standards also state that key duties need to be  divided or segregated among different people to reduce the risk of error  and fraud. This should include separating the responsibilities for  authorizing, processing, recording, and reviewing transactions, and  handling any related assets. Internal control standards also require that all  personnel possess and maintain a level of competence that allows them to  accomplish their assigned duties, as well as understand the importance of  developing and implementing good internal control. This includes  identifying appropriate knowledge and skills as well as providing needed  training.
subsections: section_title: Travel Card
paragraphs: We noted a lack of written policies and procedures for authorizing and  approving temporary duty travel for commissioners, staff, and invited  guests in the 23 travel card transactions we examined for fiscal years 2005  and 2006. The Federal Travel Regulation (FTR) states that internal  policies and procedures must be established for processing travel  authorizations and travel reimbursements as well as establishing policies  and procedures relating to payment of per diem expenses and  miscellaneous expenses. The associate director confirmed that the  commission applies the guidance in the FTR. The lack of written guidance  puts the commission at risk of not processing all travel-related expenses  consistently and in accordance with the FTR. In reviewing the travel card  transactions, we noted that one cardholder’s purchases totaling  approximately $4,000 were for personal use. Although we did not find any  indication that the individual sought reimbursement from the commission  for these transactions, the FTR states that government-issued travel cards  may be used only for official travel-related expenses.
We also found instances where an individual both authorized travel and  approved/certified travel expenses for reimbursement. According to our  discussion with commission officials and staff, all travel is to be  authorized by the commission chairman. In instances where the chairman  is the traveler, he or she authorizes his or her own travel. However, the  associate director sometimes signs for the chairman authorizing travel.  The associate director also prepares travel vouchers claiming  reimbursement for travel expenses for the commissioners and staff or  designates an administrative assistant to do so. Then, as the designated  approving official, the associate director approves the travel voucher  claim for reimbursement. We also observed some instances where the  associate director signed the traveler’s name and also approved the claim  for reimbursement. In order to have proper segregation of duties, no one  individual should control all aspects of a transaction. Also, the FTR states  that the traveler must ensure all travel expenses are prudent and  necessary and submit the expenses in the form of a proper claim. This is  documented with the traveler signing the travel voucher in block 13 of  Standard Form 1012, whereby the traveler asserts that, “I certify that this  voucher is true and correct to the best of my knowledge and belief, and  that the payment of credit has not been received by me.” This certification  was lacking on several commission travel claims we reviewed because the  traveler did not sign the voucher. By not following proper procedures for  claiming and reimbursing travel expenses, the commission is subject to an  increased risk of fraud or error.
The commission’s associate director, who has responsibility for travel card  use and is the approving official, has received no formal training in  administering the travel card program. According to GAO’s internal  control standards, all personnel need to possess and maintain a level of  competence that allows them to accomplish their assigned duties, as well  as understand the importance of developing and implementing good  internal control. This includes identifying appropriate knowledge and  skills as well as providing needed training. Based on the travel vouchers  we reviewed, the associate director appeared to be knowledgeable about  some travel regulations, such as the disallowance of certain unauthorized  expenses on travel claims — including alcoholic beverages or individual  entertainment charges on hotel invoices. However, formal training on the  FTR could have increased compliance with the FTR, such as submitting  claims for payment within 5 days after completing a trip or authorizing  first or business class travel as required by the FTR. Of the 22 travel  voucher claims we reviewed, only 1 was submitted within the 5-day time  period. Also, documentation of FTR-required authorization for first or  business class travel was not provided in seven instances.
section_title: Purchase Card
paragraphs: The commission did not have written policies and procedures concerning  use of the purchase card. The purchase card is used to buy products or  obtain services for everyday operations. Although the commission is  generally not covered by the Federal Acquisition Regulation (FAR), the  commission, as a participant in GSA’s SmartPay Program, is subject to the  FAR for purchases of supplies and services made with the government  purchase card. The associate director told us she was not aware of the  laws, regulations, and procurement policies and procedures under the  FAR as it related to the use of the purchase card. Further, she was not  aware of any restrictions on the use of the card other than using it for  meeting commission objectives. For example, the associate director was  not aware of the micro-purchase threshold, currently at $3,000. While we  noted over $13,000 of computer hardware and software purchases that  appeared on the commission’s June 2006 purchase card statement, each  individual item did not exceed the micro-purchase threshold. The  commission purchased this computer equipment via the Internet because,  according to the associate director, they were the best value. Commission  staff did not document these pricing and purchasing decisions and the  FAR does not require documentation of competitive quotations solicited  under the micro-purchase threshold amount if the contracting officer or  other individual appointed for purchases under the purchase card program  considers the price to be reasonable. While we noted over $13,000 of  computer hardware and software purchases that appeared on the  commission’s June 2006 purchase card statement, each individual item did  not exceed the micro-purchase threshold. Nevertheless, it is difficult to  verify that the best value was obtained without documentation of the  pricing decisions.
Although the associate director is officially the sole authorized purchase  cardholder for the commission, we identified cases in which the associate  director asked other staff to use the purchase card to buy products or  obtain services. For those transactions, the staff signed the purchase card  receipts even though they were not the authorized cardholder. Sometimes  it was not clear who was involved in particular transactions. For example,  we reviewed one receipt signed by someone other than the associate  director in the amount of $408 for toner cartridges, and the associate  director could not tell us whose signature was on the receipt. Effective  internal control requires that transactions are authorized and executed  only by persons acting within the scope of their authority. This is the  principal means of assuring that only valid transactions to commit  resources are initiated or entered into.
The commission’s associate director has not received formal training in  administering the purchase card program. The associate director  purchased bottled water monthly with the purchase card, which is an  example of an improper transaction. Improper transactions occur when  appropriated funds are used for which appropriations are generally not  available. Bottled water is typically considered a personal expense, and  appropriated funds may be used for it only with documentation that  available drinking water poses a health risk. Training of the purchase  cardholder and all staff in the laws and regulations applying to purchase  card transactions is an important step in ensuring that the purchase card is  not misused.
As shown in table 5, we identified questionable purchases totaling over  $13,000 made with the commission purchase card. We considered  questionable transactions as those where items were purchased at an  excessive cost or for a questionable government need, or the support was  insufficient for a determination. They included transactions at Macy’s, Sam  Goody, and Corner Bakery.
The associate director told us that all of the questionable purchases we  identified were for official commission business. According to the  commission, all of the purchases from the Senate gift shop were small  items such as pens or business card cases that were presented as gifts  during commission fact-finding trips to China and Taiwan. Over three- fourths of the purchases in table 5 were for food, which included catering  for commission hearings or quarterly business meetings. According to the  associate director, the food was primarily for commissioners, commission  staff, and witnesses working exclusively on a particular hearing where it  may have been inconvenient or counterproductive to break for lunch. We  did observe instances where nongovernmental personnel participated in  various panel sessions at certain hearings, and it may have been beneficial  for scheduling purposes to provide lunch or other refreshments. However,  as a general rule, the government may not furnish free food to employees  at their official duty station even when they are working under unusual  circumstances.
section_title: Time and Attendance Reporting Lacks Proper Approvals
paragraphs: Our review of the commission’s payroll process for fiscal years 2005 and  2006 showed that the commission’s T&A records were not always  completed and approved in accordance with the policies and procedures  described by the commission. We reviewed all applicable T&A records for  four commissioners in fiscal years 2005 and 2006 and found that 37  percent were not reviewed and approved by the executive director in  accordance with the described policies and procedures. We also reviewed  selected T&A records for three commission staff for fiscal years 2005 and  2006 and found that over one-half were not approved by the executive  director, and 10 of the 25 staff T&A records we reviewed were not  approved by a certifying officer in accordance with commission policy.  According to the commission staff responsible for payroll, the certifying  officer is responsible for (1) reviewing T&A records to ensure that each  one is properly approved by the executive director and (2) affirming that  the hours are accurately entered into the online payroll data entry system  that the commission uses to communicate with GSA. Failure to adhere to  this policy increases the risk that inaccurate or inappropriate time charges  will be entered into the system, resulting in potential errors in wages paid  and recorded by the commission. Supervisory authorization and approval  is a key part of ensuring the propriety of T&A information. According to  GAO’s time and attendance guidance, the supervisor or other authorized  official should review and authorize employees’ planned work schedules  and applications for leave, and review and approve employee submissions  of actual time worked and leave taken, as well as information in T&A  reports, and any adjustments or corrections to T&A records.
This lack of T&A oversight is further compounded by the fact that the  commission’s 12 members generally had differing approaches to charging  time incurred on commission activities. We identified a great range in the  number of hours charged by the commissioners in fiscal years 2005 and  2006, from some commissioners who did not charge any time to  commission activities, to one commissioner who charged almost 1,900  hours in one fiscal year. We also noted several instances where the  number of hours charged to commission activities and paid to a  commissioner exceeded the standard 80 hours for the pay period. While  exceeding 80 hours in a given pay period is permissible, this practice and  other changes to the time and attendance information resulted in  numerous manual adjustments to the Commission’s recorded payroll to  reflect the excess hours or retroactive time. Manual adjustments can lead  to inaccuracies and inconsistencies and provide opportunities for error.  Further, manual adjustments increase the importance of reconciliations to  ensure that all data are captured and recorded in a timely fashion. The  accuracy of time and attendance information is particularly important  because the amount of time devoted to commission activities is a factor46  in commission ethics filing requirements.
section_title: Conclusions
paragraphs: Congress created the commission almost seven years ago to advise it  about the impact of China’s growing economic and military capabilities on  the United States. The commission’s primary vehicle for communicating  its findings to Congress and the American people is the annual report.  However, the commission has issued none by the mandated deadline  because the appointment dates for commissioners and the commission’s  work cycle schedule are not aligned with the annual report issuance  deadline. Seven of the current 12 commissioners’ terms will expire in  December 2007, and a reconstituted commission will again face the  challenge of meeting a June 1 reporting deadline. Unless the  commissioners’ appointment dates and the commission’s work cycle  schedule are aligned with the report issuance date, it is unlikely the  commission will issue future reports on time.
Officers and employees of the legislative branch who are compensated for a period in  excess of 60 days during a calendar year at the annual rate of pay equal to or in excess of  120 percent of the basic rate of pay in effect for the Grade GS-15 of the general schedule  must file a public disclosure report with the Senate. controls is heightened by the fact that it is not subject to the degree of  oversight and legal requirements of most federal agencies.
section_title: Matter for Congressional Consideration
paragraphs: To improve the timeliness of the commission’s annual reports, Congress  should consider aligning the commissioners’ appointment dates with the  annual report issuance date. Depending on its needs, Congress could, for  example, either move the commissioners’ appointment date from January  to July, so that the commission has enough time to plan and issue its  report by June 1 the following year, or keep the commissioners’  appointment date in January and move the report issuance date to  December 1.
section_title: Recommendations for Executive Action
paragraphs: To improve management of its operations and reduce risks, the  commission should apply internal control standards aimed at (1)  strengthening its organizational structure so that key management duties  and responsibilities are segregated and (2) improving its management  policies and procedures so that they are well-documented, communicated,  and consistently applied and reflect expert legal and managerial advice  where appropriate.
Specifically, we recommend that the commission take the following five  actions:    Review the organization’s staffing needs for management functions,  including human capital, procurement, budgeting, and financial  management; properly segregate key duties and responsibilities among  specific officials; and ensure that these officials have appropriate  knowledge, experience, and training to perform these management  functions.
Fully implement recently developed human capital polices and procedures  for evaluating the commission’s professional and administrative staff, and  put in place comprehensive written hiring, training, and EEO-related  procedures.
Establish comprehensive written research and non-research-related  procurement policies and procedures that ensure transparency and  competition as much as possible.
Expand the ethics guidance for commissioners to include guidelines for  speaking engagements and payment of related travel expenses, and require  that commissioners and staff review and formally acknowledge the ethics  guidance periodically.
Put in place policy and procedures manuals and obtain advice from legal  and management experts to make sure that policies and procedures are  technically sound.
Furthermore, to improve internal control over financial management and  reporting, the commission should document applicable policies and  procedures and communicate them to applicable commission staff, and  segregate key duties and responsibilities, to the extent possible, so that no  one individual controls all key aspects of a transaction.
Specifically, we recommend that the commissioners take the following  three actions:    Strengthen key controls over non-payroll-related transactions by    ensuring that all transactions are supported by adequate  documentation and are properly authorized, approved, and classified;  and   developing and documenting criteria for classifying transactions for the  purpose of official representation, and developing and documenting a  means to track such transactions within its accounting and reporting  structure.
Implement key controls over the commission’s government travel and  purchase card programs by    providing training for staff who administer and use the government  travel and purchase card programs, and    developing and documenting commission policies and procedures with  regard to food provided at commission hearings, quarterly business  meetings, or any related events, in compliance with federal  appropriations law prohibiting free food to government employees.
Conduct all T&A reporting in accordance with commission policies and  procedures by checking for proper authorization and approval before  processing T&A records as part of the biweekly payroll procedures, and  verifying that approval and certification is documented.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the commission and GSA. We  obtained written comments from the commission, which are reprinted  with our responses in appendix VIII. GSA had no comments on our draft.  The commission concurred with our recommendations and noted that  these recommendations have the potential to help ensure that its  operations are both legal and appropriate. The commission indicated that  it will follow GAO’s internal control standards to develop a plan for  addressing our recommendations even though these standards are not  binding on legislative branch entities, such as the commission. The  commission emphasized that its charter is brief and offered the  commission little guidance on what internal control mechanisms it should  employ and how they should be structured and applied. Regarding the  commission’s request for GAO to serve as the commission’s official legal  and management expert, in order to be able to conduct work in  accordance with GAGAS, GAO prefers not to accept any nonaudit work  that could potentially create an independence impairment in fact or in  appearance with respect to the entities it reviews. While GAO is willing to  share (nonbinding) advice, the commission is responsible for making such  decisions and implementing the policies and procedures to manage its  operations. The commission can secure the services of needed legal and  management experts by hiring them and developing them through training,  for example, or by contracting with outside parties for these services. The  commission’s comments on the draft of the report, including the technical  comments we received from the executive director, asked that we clarify  various parts of our report. We revised our report, as appropriate.
We are sending copies of this report to interested congressional  committees, USCESRC, and GSA. We will also make copies available to  others upon request. In addition, the report will be available at no charge  on the GAO Web site at http://www.gao.gov.
If you and your staffs have any questions about this report, please contact  me at (202) 512-4347. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this report.  GAO staff who made major contributions to this report are listed in  appendix IX.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: In this report, we assess the extent to which (1) the U.S.-China Economic  Security Review Commission (USCESRC) has complied with its charter,  (2) the commission has had an organizational structure and policies and  procedures for managing its operations effectively, and (3) internal control  over the commission’s financial management and reporting has provided  reasonable assurance that resources are not at risk.
To assess the compliance of the commission with its reporting  requirements and other provisions specified in its charter, we obtained  and analyzed the commission’s statutory charter; pertinent legislation and  regulations, such as the Federal Advisory Committee Act (FACA); and  related commission documentation. According to its charter, as amended,  the commission must implement FACA, which provides a legal and  institutional framework for the operation of advisory committees. We  observed two quarterly business meetings of the commission on February  2 and May 25, 2007. We interviewed the 12 current commissioners and two  former commissioners, including a former chairman of the commission  and a commissioner who left the commission when his appointment  expired at the end of 2006. Also, we interviewed the current executive  director and the two previous executive directors of the commission. We  reviewed information and met with officials from the General Services  Administration (GSA) and the Congressional Research Service (CRS).
To assess the organizational structure and procedures the commission has  in place to manage its administrative operations and staff and achieve its  mission effectively, we obtained and analyzed commission records, such  as documents describing the organizational structure of the commission  and ethics and conflict of interest, human capital, procurement, and  financial management procedures that the commission had in place during  our review.
In reviewing these organizational structure and policy and procedures, we  focused on whether they, as internal control mechanisms, are in  accordance with internal control standards for the federal government,  such as the internal control environment and internal control activities  standards. While these standards are not binding for legislative branch  agencies, they are a statement of best practices and adherence to these  standards provides reasonable assurance against fraud, waste, abuse, and  mismanagement. These standards give management of federal agencies,  regardless of size, the responsibility and discretion to develop and  implement mechanisms for internal control necessary for achieving  organizational objectives, managing operations and staff effectively, and  ensuring the agency is not at risk. Effective internal control provides  reasonable, not absolute, assurance of meeting agency objectives.
In analyzing the organizational structure and administrative procedures,  we assessed whether they were properly documented, communicated, and  implemented. In analyzing human capital and equal employment  opportunity procedures, we secured commission information and  reviewed GAO guidance. A GAO expert reviewed the human capital  information. In reviewing procurement procedures, we obtained  commission documentation and GAO information. A GAO expert reviewed  the procurement information. In reviewing ethics and conflict of interest  procedures, we obtained commission documentation and Senate Select  Committee on Ethics, and the Secretary of the Senate Office of Public  Records information. A GAO expert reviewed the ethics and conflict of  interest information.
In assessing the organizational structure and administrative procedures,  we observed two quarterly business meetings of the commission on  February 2 and May 25, 2007, respectively. We interviewed the 12 current  commissioners and 2 former commissioners, including a former chairman  of the commission, and a commissioner who left the commission when his  appointment expired at the end of 2006. Also, we interviewed the current  executive director and the two previous executive directors of the  commission. In addition, we interviewed all of the commission staff,  including six program staff and six administrative staff. The latter included  the associate director and office manager/assistant director who are  responsible for administrative matters. We reviewed information and met  with officials from the Senate Select Committee on Ethics, and the  Secretary of the Senate Office of Public Records.
In order to determine the extent to which the commission effectively  executes its financial management and reporting responsibilities in  accordance with internal control standards, we gained an understanding  of the commission’s overall financial management and reporting process  by interviewing the commission officials and staff with those  responsibilities. We also spoke with representatives of GSA’s External  Services Division to gain an understanding of GSA’s role in the  commission’s financial management and reporting process. We used  applicable law and commission policy, as well as our standards for  internal control in the federal government as our criteria. We developed  our understanding of the key processes and controls over non-payroll- related transactions, travel and purchase card transactions, and payroll,  from inception at the commission’s office up until the point that the  commission submits vouchers to GSA for processing. We then assessed  the extent to which certain key controls and procedures were effectively  applied to the various types of transactions at the commission.
We selected a statistical sample of 59 debit transactions totaling  approximately $1.1 million from a population of 1,991 debit transactions  totaling approximately $4.5 million for fiscal years 2005 and 2006 to test  specific internal control activities over non-payroll-related transactions,  such as adequacy of supporting documentation, evidence of proper  authorization or approval, and proper classification. The non-payroll- related population included transactions related to purchasing, travel,  leases, payment to contracted employees and other miscellaneous  transactions. Results from the statistical sample were projected to the  population of non-payroll-related transactions for years 2005 and 2006.   To test the reliability of the non-payroll-related transaction data provided,  we (1) performed electronic testing of required data elements,  (2) reviewed existing information about the data and the system that  produced it, and (3) worked closely with commission and GSA officials to  identify any data problems. When we found discrepancies such as zero- dollar transactions or those with descriptions we could not understand  such as nonfederal summary codes, we brought them to GSA’s attention  and worked with them to correct the discrepancies before conducting our  analyses. We determined that the data were sufficiently reliable for the  purposes of our report.
To examine commission travel card transactions, we obtained a database  of commission travel card transactions from Citibank for fiscal years 2005  and 2006 and used data mining techniques to select potentially  questionable travel card transactions. Our selections were made based on  the dollar amount of an individual transaction, transaction volume on  individually billed travel card accounts, group travel events, and any  transactions associated with what are generally considered to be popular  vacation areas. We traced selected transactions to supporting  documentation, examined supporting evidence, and made appropriate  inquiries to the associate director for transactions meeting these criteria.
To examine commission purchase card transactions, we obtained a  database of commission purchase card transactions from Citibank for July  2005 through June 2006 and used data mining techniques to select  potentially questionable purchase card transactions based on merchant  category codes. This database covered 3 months of fiscal year 2005 (July 1,  2005, through September 30, 2005) and 9 months of fiscal year 2006  (October 1, 2005, through June 30, 2006) which we considered sufficient  for our review.
To test the controls over the commission’s payroll transactions, we used a  nonstatistical sample because we could not readily obtain detailed or  aggregated salary information in electronic format for either staff or  commissioners by fiscal year. We performed analytical procedures to  assess if salary expenses were reasonable for fiscal year 2005 and 2006.  We nonstatistically selected four commissioners and verified that they  were paid at the authorized rates of pay for fiscal years 2005 and 2006. We  also nonstatistically selected eight staff and recalculated their respective  salaries for fiscal years 2005 and 2006 based on their authorized rate of  pay. In order to assess the time and attendance part of the payroll process,  we reviewed all T&A records for the same four commissioners for fiscal  years 2005 and 2006 to determine whether they were completed and  approved in accordance with the policy as described by the commission.  We also selected three of the eight staff persons previously sampled  nonstatistically, and reviewed all respective T&A records for fiscal years  2005 and 2006 to determine whether they were completed and approved in  accordance with commission policy.
We did not audit the commission’s Statement of Budget Execution  (Standard Form 133) or the Year-End Closing Statement (Standard Form  2108), nor do we express an opinion on them.
We performed our work from October 2006 to September 2007 in  accordance with generally accepted government auditing standards.
section_title: Appendix II: Timeline of Events Related to USCESRC
section_title: Appendix III: USCESRC Appropriations and Expenses
paragraphs: From its inception in fiscal year 2001 through fiscal year 2007, the  commission has received approximately $17.4 million in appropriations to  fund its operations, as indicated in table 6. The commission has requested  $4 million for fiscal year 2008. According to the commission, the $1 million  in additional funding will support, among other things, internal and  external research efforts and implementation of GAO recommendations.
The commission’s largest annual expense is for the commissioner and staff  salaries, as shown in table 7. Other annual commission expenses include  contracting research and professional services, leasing office space in  Washington, D.C., and incurring other costs to carry out its mission.
The commission is not subject to any financial reporting or audit  requirements. The commission developed a set of rules that require the  commission to prepare a report detailing budget and expenditure  information to be submitted to the commissioners for their review. The  Commission Rules also require quarterly reporting of the status of funds,  personnel actions, status of procurement of contracts, and other financial  information. According to the executive director, the status of funds  report is an internal document used to keep track of commission  expenditures against its approved annual spending plan.
The commission entered into an agreement with the GSA Heartland  Finance Center in Kansas City, Missouri, to perform financial reporting  and accounting each fiscal year. This includes processing (1) obligations  and payments that have been authorized by the commission, (2) receipts  and disbursements of funds available to the commission from the U.S.  Treasury, and (3) all applicable payroll functions. GSA also provides  quarterly reports and year-end financial information to OMB and the  Department of the Treasury. GSA does not have an oversight role  described in its memorandum of understanding with the commission.
section_title: Appendix IV: Economic and Security Issues Covered by 2002 USCESRC Annual Report
paragraphs: We found the commission’s 2002 annual report covered the 10 economic  and security issue areas mandated at the time. Table 8 provides details on  the issue areas covered by the commission’s 2002 annual report.
section_title: Appendix V: Economic and Security Issues Covered by 2004 and 2005 USCESRC Annual Reports
paragraphs: We found the commission’s 2004 and 2005 annual reports covered the nine  economic and security issue areas mandated at the time. Table 9 provides  details on the issue areas covered by the commission’s 2004 and 2005  annual reports.
section_title: Appendix VI: USCESRC Procurement, Fiscal Year 2005
paragraphs: Appendix VI: USCESRC Procurement, Fiscal  Year 2005 $40,000   Report on advanced technology products for Palo  $6,000   U.S. patent laws working paper  $3,000   Briefing paper Palo Alto hearing  $14,000   Monitor and analyze U.S.-China economic  $10,000   Advice, strategies, and facilitation for Seattle hearing $22,475   Report on Chinese plan to acquire and utilize U.S.  $10,000   World Trade Organization compliance study for Feb.
Hearing (Feb. 2005)
Bell Harbor International Conference Center, Lotos Club,  Stanford University, Prague Security Studies  U.S. Senate Catering, Corner Bakery, and others  $12,327   D.C. hearings, meetings, and briefings (catering  expenses)
Karterian Systems Group Richard Harris   $5,800   Media relations for WTO hearing Feb. 3-4, 2005   $18,900   Hearing consulting—multiple hearings   $2,000   Media relations for Palo Alto hearing April 22-23,  $1,344   Consulting Proliferation Hearing March 10, 2005  Translation of news articles Chinese to English  Translations from Czech to English (Prague  symposia)
section_title: Appendix VII: USCESRC Procurement, Fiscal Year 2006
paragraphs: D.C. hearings, meetings, and briefings (catering  expenses)
Office upgrade (construction and materials)
section_title: Appendix VIII: Comments from USCESRC
paragraphs: The following are GAO’s comments on the commission’s letter dated  September 11, 2007.
subsections: section_title: GAO Comments
paragraphs: 1.  In the Highlights and on page 2, it is clear that GAO’s assessment of  organizational structure and management policies and procedures is  based on internal control standards for the federal government. While  these standards are not binding for legislative branch agencies, we  advocate all federal entities follow them because they are a statement  of best practices and adherence provides reasonable assurance  regarding the prevention or prompt detection of fraud, waste, abuse,  and mismanagement. We encourage the commission to adopt these  standards, which give management of federal agencies, regardless of  size, the responsibility and discretion to develop and implement the  mechanisms for internal control necessary for providing reasonable  assurance that the objectives of the agency are being achieved with  regard to effective and efficient operations, reliable financial reporting,  and compliance with applicable laws and regulations.  2.  We characterize the commission’s views on pages 5 and 46.  3.  With regard to the section on internal control over financial reporting,  and the projection of the results of the statistical sample over  nonpayroll transactions, the commission requested specific wording  changes related to the potential impropriety or illegality of all or any  specific transactions. We did not make those changes because the  objective of the sampling performed was to determine whether the  controls over non-payroll-related transactions were in place and  operating effectively. As stated in the objectives, scope, and  methodology in appendix I, we selected a statistical sample of 59 debit  transactions totaling approximately $1.1 million from a population of  1,991 debit transactions totaling approximately $4.5 million for fiscal  years 2005 and 2006 to test specific internal control activities over non- payroll-related transactions, such as adequacy of supporting  documentation, evidence of proper authorization or approval, and  proper classification. The non-payroll-related population included  transactions related to purchasing, travel, leases, payment to  contracted employees and other miscellaneous transactions. Results  from the statistical sample were projected to the population of non- payroll-related transactions for fiscal years 2005 and 2006, where we  estimated that the dollar value on non-payroll-related debit  transactions with ineffective controls during the 2-year period we  examined is not more than $1.2 million. Because this $1.2 million  estimate exceeds the tolerable error of $224,715, we concluded that  the controls were ineffective as stated in the report.  4.  The commission partially disagreed with our observation that free food  was being provided to the commissioners because, beginning in fiscal  year 2006, it began a practice of deducting the cost of the food from  commissioner salaries. We did not review the specific transaction  details related to this practice, and we are unable to say to what  portion of the $9,386 this practice applies. Further, this practice does  not ensure that the commission prevents the use of appropriated funds  to furnish free food to government employees and is subject to errors  and inconsistencies.  5.  On page 46 of the report, we note that GAO prefers not to accept any  nonaudit work that could potentially create an independence  impairment in fact or in appearance with respect to the entities it  reviews.
section_title: Appendix IX: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Adam Cowles (Assistant  Director), Sharon Byrd, Richard Cambosos, Stephen Donahue, Mark  Dowling, Elizabeth Martinez, Mary Arnold Mohiyuddin, Jeremy  Rothgerber, Juan Tapia-Videla, McCoy Williams, and Matthew Wood made  key contributions to this report. The team benefited from the expert  advice and assistance of Martin de Alteriis, Karen Deans, Francine  DelVecchio, William Doherty, Etana Finkler, Carol Henn, India Jenkins,  Ramon Rodriguez, Debra Rucker, Jena Sinkfield, and William Woods.