Our review of presidential CMB disbursements over $200 did not identify any documented evidence that presidential CMB funds were used to pay for printing reports for the 1998 World Exposition in Lisbon, Portugal. 2. Did congressional CMB videotapes have a narrow political distribution and did internal controls exist over the use of copyrighted material? 3. 4. We found no evidence to indicate that four presidential CMB contracts to conduct studies on census undercounting were improperly procured. 5. Were protected census data accessed by two former congressional CMB employees? We found that 2 of 27 questions in a congressional CMB contractor focus group study mentioned political parties. 7. We found some evidence of a verbal confrontation between a congressional CMB contractor and Bureau of the Census employees in a local census office (LCO). CMB Disbursements

The vast majority of CMB disbursements were supported and related to official business.However, we could not evaluate about $119,000 of disbursements, all but about $1,000 of which were the presidential CMB’s. We found specific internal control weaknesses in three main areas: travel, personnel, and the procurement of services. Some of these weaknesses allowed a number of inappropriate and wasteful practices, and two policies were inconsistent with federal law. We found weak internal controls and poor accounting by CMB regarding annual leave. Although specific weaknesses relating to travel, personnel, and the procurement of services were noted for both components, the congressional CMB made a considerable effort to establish an internal control environment that provided a foundation and tone of discipline and structure. Lack of Administrative Leadership. This contributed to a weak administrative management environment and poor employee attendance. No Evidence of Authority to Travel. Poor Records Management. Our disclosure of related-party relationships and transactions does not imply any improprieties, but is in response to your request for this information. Finally, we identified transactions involving prior substantive relationships among CMB officials, including employer/employee or contractor affiliations. We identified 13 congressional and 11 presidential CMB related-party relationships involving about $1 million in salaries, benefits, and contracts for each side. Scope and Methodology

Our scope was to obtain and review information on seven specific matters requested, as follows: 1. 3. Were congressional and presidential CMB funds used in connection with political events? 4. 6. In addition, our scope was to audit all CMB out-of-town travel disbursements and all other disbursements over $200 from the first transactions in June 1998 through March 31, 2000, including any unusual transactions that came to our attention after this period. Further, our scope included evaluating the internal control environment that existed for both sides of CMB; identifying CMB financial policies, procedures, and internal controls and whether they were followed and effective; determining if CMB disbursements were incurred for official CMB government purposes; and identifying related-party relationships and transactions. evaluate the effectiveness of CMB program activities in monitoring the 2000 Census; conduct a search for CMB transactions incurred before March 31, 2000, but paid later; determine whether royalty payments should have been made by the congressional CMB on copyrighted material used in the production of videotapes; evaluate CMB official travel or other activity beyond the stated purpose of the trip; evaluate the congressional CMB contractor’s focus group methodology or questions that were asked; conduct physical inventories of property; determine the extent of personal telephone usage; determine the extent of long distance telephone usage on office telephones; quantify the aggregate impact of improper charges discussed in this report; audit transactions with inadequate support; or determine whether frequent flyer mileage earned was used for personal travel.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the financial management of the Census Monitoring Board (CMB), focusing on: (1) information on seven specific matters contained in congressional requests; (2) an audit relating to all CMB out-of-town travel disbursements and all other financial transactions over $200 from CMB's inception in June 1998 through March 31, 2000, which resulted in GAO auditing about 98 percent of the dollar value of total CMB disbursements; (3) CMB financial policies and practices, the internal control environments, and specific internal controls over disbursements, including those related to travel, personnel, and procurement of services; and (4) related-party transactions that met the criteria congressional members asked GAO to use.

What GAO Found

GAO noted that: (1) it found little documented evidence to substantiate possible improprieties in connection with seven specific matters identified in congressional request letters: (a) no presidential CMB funds were used to print reports for the 1998 World Exposition; (b) congressional CMB videotapes did not have a narrow political distribution; (c) no CMB funds were used for political travel; (d) presidential CMB contracts for studies on census undercounting were not improperly procured; (e) no evidence existed that former congressional CMB employees accessed protected census data; (f) two out of 27 questions in a congressional CMB contractor focus group study made some mention of political parties; and (g) some verbal confrontation occurred between a congressional CMB contractor and Bureau of the Census employees, and the contract was terminated shortly thereafter for a variety of reasons; (2) GAO's remaining efforts focused on CMB support for expenditures and an assessment of the internal control environment established to ensure disciplined financial operations; (3) the majority of CMB disbursements were generally supported and related to official business; (4) however, GAO found a pattern of significant CMB internal control weaknesses related to travel, personnel, and the procurement of services, some of which resulted in inappropriate and wasteful practices; (5) weak internal controls allowed unreconciled payroll, benefits, and annual leave accounts, weak contract accounting, and disbursements without required approvals to pay; (6) some CMB policies were inconsistent with federal law; (7) while weaknesses related to travel, personnel, and procurement existed for both sides, the congressional and presidential CMB operated in substantially different internal control environments; (8) the congressional CMB made a considerable effort to establish an internal control environment; (9) the presidential CMB operations were primarily characterized by weak or unenforced policies, oral authorizations, and poor records management, largely due to a lack of administrative leadership; (10) GAO identified transactions involving prior business relationships among CMB officials, including employer/employee or contractor affiliations; (11) GAO found 13 congressional and 11 presidential CMB related-party relationships involving about $1 million in salaries and contracts for each side; and (12) GAO's disclosure of related-party relationships and transactions does not imply any improprieties.