The Coins Act specified that the first $3 million in surcharges received by the Treasury from the sale of coins be transferred to the Battle of Normandy Foundation and used by the Foundation to create, endow, and dedicate, on the 50th Anniversary of D-Day, a United States D-Day and Battle of Normandy Memorial in Normandy. In carrying out our work, we reviewed historical and current Foundation financial information, including audited financial statements, federal income tax returns, minutes of Board of Directors’ meetings, pertinent agreements, and other financial reports; interviewed current and former Foundation officials regarding financial matters, including management’s plans for current and future financial operations; obtained from the U.S. Mint, Department of the Treasury, documentation on the payment of surcharge coin proceeds to the Foundation; verified selected interest income payments to Foundation bank accounts and performed analytical reviews of selected interest payments through June 30, 1994; traced a sample representing over 95 percent of Memorial Garden design and construction costs through June 30, 1994, to payment vouchers, invoices, and construction manager approvals; traced selected accounting, legal, and consulting costs for the Memorial Garden through June 30, 1994, to payment vouchers and invoices; reviewed the computations and reasonableness of the Foundation’s general and administrative overhead allocation rates and selected salary allocations charged to the Memorial Garden project through June 30, 1994; examined progress and final construction photographs of the Memorial Garden and interviewed officials at the office of the construction manager in New York City who were responsible for the Memorial Garden construction; read the Independent Review Committee’s January 7, 1994, report on its investigation and reviewed the work performed by the public accounting firm which assisted the committee; interviewed a U.S. Department of Defense official who was referred to in a newspaper article as implying that the Foundation had acted improperly in promoting tours to Normandy; and read the travel brochure published by the tour company that contracted with the Foundation. Overall Financial Condition

The Foundation has experienced significant managerial, financial, and internal control problems, and its liabilities substantially exceed its assets. Also, the precarious financial condition casts doubt on whether other projects, such as the Wall of Liberty, will proceed. As of June 30, 1994, the Foundation’s recorded cost included about $400,000 still owed to Memorial Garden contractors. Because of the Foundation’s current financial condition, it is uncertain whether the Foundation will be able to fund future costs of operating and maintaining the Memorial Garden. Allegation one: The Foundation spent most of its revenues from 1986 to 1992 for purposes not related to its stated program activities. For 1993, the Foundation’s financial statements showed that the cost of program activities were about 83 percent of its revenues or 76 percent of its expenses. Through December 1993, Foundation records indicate that $90,000 of the $120,000 pledge had been paid.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the Battle of Normandy Foundation's use of coin surcharge proceeds for the creation of the United States Armed Forces Memorial Garden in Normandy, France.

What GAO Found

GAO found that: (1) the Foundation has experienced significant managerial, financial, and internal control problems; (2) it is uncertain whether the Foundation will be able to pay current and future operating costs for the Memorial Garden or fund other projects such as the Wall of Liberty, since its liabilities substantially exceed its assets and its management structure is unstable; (3) the Foundation spent $3 million in surcharge coin proceeds it received in 1993 for the design and construction of the United States Armed Forces Memorial Garden in accordance with the Commemorative Coins Act; (4) as of June 1994, the total recorded cost of the Memorial Garden was $3.6 million and the Foundation owed $400,000 to Memorial Garden contractors; (5) between 1986 and 1992, the Foundation spent 63 percent of its revenues on program activities; (6) in 1993, the Foundation spent 83 percent of its revenues on program activities; (7) the Foundation properly contracted with a private tour company to promote the Memorial's tour activities; (8) the Foundation recovered $90,000 of the $120,000 a private contractor owed the Foundation; and (9) Battle of Normandy Foundation officials concurred with the findings presented in the report.