	Opinion on Financial Statements

The financial statements and accompanying notes present fairly, in all  material respects, in conformity with U.S. generally accepted accounting  principles, the Foundation’s financial position as of September 30, 2005,  and 2004, and the results of its activities and its cash flows for the fiscal  years then ended. Compliance With Laws and Regulations

Our tests for compliance with relevant provisions of laws and regulations  for fiscal year 2005 disclosed no instances of noncompliance that would be  reportable under U.S. generally accepted government auditing standards. Specifically, section 104(c)(1) of the Congressional Award Act, as amended  (2 U.S.C. For 2004, because the Foundation did not have appropriate fiscal  procedures and did not have an individual with expertise in accounting and  financial management to routinely administer the procedures and account  for the financial operations of the Foundation, we determined that the  Director did not substantially comply with the requirements in section  104(c)(1) of the Congressional Award Act, as amended (2 U.S.C. §  804(c)(1)). In order to fulfill these responsibilities, we  examined, on a test basis, evidence supporting the amounts and  disclosures in the financial statements;  assessed the accounting principles used and significant estimates made   evaluated the overall presentation of the financial statements and notes;  read unaudited financial information for the Foundation for the first 6  months of fiscal year 2006;  obtained an understanding of the internal control related to financial  reporting (including safeguarding assets) and compliance with laws and  regulations;   tested relevant internal control over financial reporting and compliance  and evaluated the design and operating effectiveness of internal control;  and  tested compliance with selected provisions of the Congressional Award  Act, as amended. We performed our work in accordance with U.S. generally accepted  government auditing standards. Presented below are the Foundation's expenses by functional classification  for the fiscal years ended September 30, 2005, and 2004. The Foundation’s ability to  continue as a going concern is dependent on increasing revenues.
Why GAO Did This Study

This report presents our opinion on the financial statements of the Congressional Award Foundation for the fiscal years ended September 30, 2005, and 2004. These financial statements are the responsibility of the Congressional Award Foundation. This report also presents (1) our opinion on the effectiveness of the Foundation's related internal control as of September 30, 2005, and (2) our conclusion on the Foundation's compliance in fiscal year 2005 with selected provisions of laws and regulations we tested. We conducted our audit pursuant to section 107 of the Congressional Award Act, as amended (2 U.S.C. 807), and in accordance with U.S. generally accepted government auditing standards. This report also includes our determination required under section 104(c)(2)(A) of the Act (2 U.S.C. 804(c)(2)(A)) relating to the Foundation's financial operations.

What GAO Found

We have audited the statements of financial position of the Congressional Award Foundation (the Foundation) as of September 30, 2005, and 2004, and the related statements of activities and statements of cash flows for the fiscal years then ended. We found (1) the financial statements are presented fairly, in all material respects, in conformity with U.S. generally accepted accounting principles, although substantial doubt exists about the Foundation's ability to continue as a going concern; (2) the Foundation did not have effective internal control over financial reporting (including safeguarding assets) but did have effective control over compliance with laws and regulations; and (3) no reportable noncompliance with the provisions of laws and regulations we tested during fiscal year 2005.