Summary
The Chairman of the House Subcommittee on Interior and Related Agencies, Committee on Appropriations, and the Ranking Minority Member, House Subcommittee on Legislative, Committee on Appropriations, requested that we review the Library's Special Events Gift Fund. As agreed, we focused on the Library's analysis supporting its June 2000 decision to increase suggested room contributions associated with the Great Hall effective January 2001, and key policies, procedures, and controls associated with holding the approximately 120 fiscal year 2001 special events that were accounted for in the Gift Fund. Specifically, we agreed to (1) review and comment on the analysis behind the Library's January 2001 increase in the suggested room contributions from outside sponsors of events held in the Great Hall of the Jefferson Building; (2) identify key policies and procedures applicable to requesting, approving, and planning those special events accounted for through the Gift Fund and determine whether the Library is following those policies and procedures; and (3) identify key accounting and control policies and procedures over receipts, expenditures, and the fund balance of the Gift Fund and determine whether the Library is following those policies and procedures.
The January 2001 increase in the suggested room contributions from outside-sponsored Great Hall events was based on the Library's decision to fund the projected salary and benefit costs of its special events support staff with contributions from outside sponsors of those events while trying to limit the number of such events in response to concerns about the wear and tear on the Great Hall. To identify the level of contributions needed to fund the forecast salary and benefit costs of special events support staff over a 5-year period, in May 2000, the Library analyzed alternative combinations of contribution levels and numbers of outside-sponsored Great Hall events. In performing the analysis, the Library did not take into account alternatives for funding the forecast salary and benefit costs other than suggested room contributions and sponsorship for Great Hall events. According to Library officials, at the time of the analysis, demand for use of the Great Hall had been increasing. However, in the aftermath of the terrorist attacks and the anthrax incidents on Capitol Hill, the Library received less in suggested room contributions from outside sponsors and cosponsors of Great Hall events for 2001 than it had projected in its the analysis. Specifically, the Library reported 3 fewer (13 instead of 16) total events than projected for 2001: 4 fewer (5 instead of 9) for-profit sponsored events and one additional non-profit event. The types of special event activities that can be held at the Library are governed by Library regulations, which also establish policies and procedures that guide the processes through which events are requested, approved, planned, and held. Library procedures provide for documenting the implementation of these policies and procedures, and OSEPP establishes what it refers to as event files to maintain this documentation. We examined files for 93 events that, according to Library officials, involved Gift Fund receipts, disbursements, or both, and we found that, at the time of our review, key supporting documentation was missing from 73 of those event files. Among the missing items were letters requesting approval to hold events, direct evidence of the Library's approval for events, key agreements required for the use of the facilities, and certificates of tax status for nonprofit sponsors. In four cases, OSEPP had difficulty finding entire files, which according to OSEPP staff had been misplaced following an office move. However, based on additional inquiries and procedures, we were able to conclude that the Library had generally followed its policies and procedures for requesting, approving, and planning these special events. In addition to event-related policies and procedures, OSEPP has established accounting and internal control-related policies and procedures for Gift Fund receipts and expenditures. While Library records showed that these policies and procedures were generally followed, we found that the policies and procedures were not sufficient to achieve full accountability over Gift Fund transactions and funds. Specifically, OSEPP lacked basic financial management records for events involving the Gift Fund, such as schedules of receipts and expenditures approved by OSEPP, and thus did not have a basis for reconciling approved receipts and expenditures to the receipts and expenditures recorded in the Library's financial management system (FMS) for the Gift Fund. We found errors that could have been identified by Library staff if the basic financial records for events had been maintained and reconciled to the Library's financial management system. Also, OSEPP did not have a policy or related controls to ensure that final accountings for events were performed within an established time period. We found that for the files we reviewed, final accountings were performed on average about 5 months after their respective events, with some final accountings occurring roughly a year or more after the event.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change
from "In process" to "Implemented" or "Not implemented" based on our follow up work.
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Recommendations for Executive Action
Recommendation: To help ensure that the Library of Congress has the ability to fund the salary and benefit costs of personnel who support the Library's overall special events activities, the Librarian of Congress should direct the Library's Financial Services Director to work with OSEPP to conduct a new analysis that considers various options for funding forecast salary and benefits costs of special events support staff. In conducting this analysis, the Library should develop and maintain documentation to support the assumptions incorporated into the analysis.
Agency Affected: Library of Congress
Status: Not Implemented
Comments: Following our report, the Library received authority to transfer the Special Events operating activities from a Library Gift Fund to one of the Library's Revolving Funds. As part of the transfer, the Library performed a new pricing analysis in September 2003 and updated that analysis in July 2005. Relying on various assumptions, the analysis projected anticipated revenues and costs associated with operating the Special Events activities as a revolving fund over the next 5 years. However, in conducting its analysis, the Library did not develop and document data and other information needed to support the underlying assumptions, which was a key element of our recommendation. Accordingly, we are closing the recommendation as not implemented.
Recommendation: To help improve the Library's internal control over event files and their contents, the Librarian of Congress should direct the Library's Financial Services Director to work with OSEPP to develop documentation standards for maintaining event files.
Agency Affected: Library of Congress
Status: Implemented
Comments: Following our recommendation, the Library's Office of Special Events and Public Programs (OSEPP) implemented an event management software system known as Raiser's Edge. This software requires the Special Events staff to create electronic records associated with event approval, planning, execution, and final accounting. The software provides for automated routing of key electronic records/documents to appropriate officials and offices for formal review and, where required, provides an electronic record that documents necessary approvals. Key event-related documentation, including event request/approval and final accounting, is maintained electronically in the Raiser's Edge system. Other documentation related to event execution (e.g. vendor invoices) is retained electronically in the Library's Momentum financial management system--its primary system of record--as supporting documentation for applicable accounting transactions recorded therein. Event-related financial data, including receipt and disbursement amounts, is also recorded in Raiser's Edge and routinely reconciled to the Library's Momentum system. To help ensure that Special Event documentation is properly prepared and maintained, OSEPP also implemented an on-line procedures manual in September 2005 which covers the various phases of the event cycle, including required supporting documentation. The manual lists required file documentation and provides workflow charts that address the timing of required documents.
Recommendation: To help improve the Library's internal control over event files and their contents, the Librarian of Congress should direct the Library's Financial Services Director to work with OSEPP to require periodic review of event folders to ensure compliance with Library policies and procedures.
Agency Affected: Library of Congress
Status: Implemented
Comments: Following our recommendation, the Special Events Fund Manager, who assumed responsibility for managing Special Events and the Fund in 2005, established an operating procedure requiring the Fund Manager to annually review event planners' electronic event file documentation for completeness as part of the event staff annual performance assessment process. The Special Events Office on-line procedures manual serves as the criteria for this review, the overall objective of which is assessment of compliance with applicable Special Events policies/procedures, including those requiring the preparation and approval of event-specific documentation. The Fund Manager performs the reviews in two phases. The first phase, generally conducted at mid-fiscal year, involves an informal review of all electronic records of events assigned to event planners through that date; this preliminary review provides planners with the opportunity to address any documentation deficiencies before the formal, year-end review. During this second phase, the Fund Manager reviews the files in which deficiencies were noted during the mid-year review, and also reviews files for all events assigned to planners since the first review. The results of the year-end review have a direct impact on planners' performance ratings and the completeness of event-related supporting documentation. In addition to periodic event file reviews, Library officials also cited the implementation of an electronic event record management system and its related on-line procedures manual as contributing to improved understanding of the documentation requirements. According to Library officials, the Fund Manager's reviews have increased the percentage of events that have all required documentation permanently maintained in the appropriate location in Raiser's Edge.
Recommendation: To help improve the Library's internal control over event files and their contents, the Librarian of Congress should direct the Library's Financial Services Director to work with OSEPP to develop policies for including in events files documentation for exceptions of deviations from policies.
Agency Affected: Library of Congress
Status: Implemented
Comments: Following our recommendation, Library officials implemented a new event management system which provides for the documentation and approval of exceptions and deviations from established Special Events policies and procedures. Event planners are expected to identify and electronically document requests for exceptions and deviations associated with special event requests and execution. The system's routing and approval process electronically documents the routing and approval of event requests and planning/execution activities, including requests for exceptions and deviations from policies and procedures. In May 2007, Library officials formally documented an established operating practice governing which Library officials have authority to approve exceptions to Special Events policies and procedures and how these exceptions are to be documented.
Recommendation: To improve the Library's accounting for and control of the funds in the Special Events Gift Fund, the Librarian should direct the Financial Services Director to work with OSEPP to establish basic accounting records in OSEPP for the Gift Fund, including receipts, expenses, amounts due, and amounts owed by event.
Agency Affected: Library of Congress
Status: Implemented
Comments: In response to our recommendation, the Library took several actions to improve the basic accounting records maintained by the Library's Office of Special Events and Public Programs. The Library implemented a new event management software system (Raiser's Edge) which includes accounting functionality. Specifically, the system provides for tracking event-related receipts (advances from internal and external event sponsors for both event administrative fees and costs) and expenses (catering, printing, and other charges); producing reports of amounts due/owed (by event); and preparing final accountings for all events based on the recorded accounting information. In addition, the Special Events Office hired a senior accountant with the skills needed to effectively utilize the system's accounting functionality. The Library's fiscal year 2005 implementation of event-specific project codes in Momentum--its financial management system and primary system of record--was also a critical action that created a common data element with Raiser's Edge and facilitated routine reconciliations of data recorded in the two systems.
Recommendation: To improve the Library's accounting for and control of the funds in the Special Events Gift Fund, the Librarian should direct the Financial Services Director to work with OSEPP to establish a policy to reconcile, on a monthly basis, OSEPP's Gift Fund receipts and disbursements to amounts maintained in the Library's FMS.
Agency Affected: Library of Congress
Status: Implemented
Comments: In response to our recommendation, the Library implemented several corrective actions that have improved its ability to perform periodic reconciliations of event-related receipts and disbursements. Following our recommendation, the Special Events Fund Manager established a requirement for monthly reconciliation of receipt and disbursement amounts recorded in Raiser's Edge--the Library's events management system--with event-related amounts recorded in the Library's financial management system, Momentum. In October 2005, the Special Events Senior Accountant began routinely preparing the required reconciliation reports. A key factor in the development of these control procedures was the establishment of a unique project code for each event in Momentum which is also used in the Special Events Office's event management software system. The Senior Accountant reconciles receipts on a monthly basis (by event) by extracting amounts from Momentum and importing them into an Excel spreadsheet that contains the Raiser's Edge Cash Receipts Journal. To reconcile disbursements recorded in Raiser's Edge to those recorded in Momentum, the Senior Accountant produces a bi-weekly Project Report from Momentum for each project code (i.e., a history of Momentum postings, by event) and manually compares disbursement amounts per the report to those recorded in Raiser's Edge.
Recommendation: To improve the Library's accounting for and control of the funds in the Special Events Gift Fund, the Librarian should direct the Financial Services Director to work with OSEPP to compile a monthly status report as a tool for monitoring the operations and finances of the Gift Fund. The report could include event-specific information, such as event date, sponsor, budget event number, budgeted expenses, payments received to date, expenses incurred to date, amount and date of final billing, and amount owed to or from event sponsor.
Agency Affected: Library of Congress
Status: Implemented
Comments: In response to our recommendation, the Library's Office of Special Events and Public Programs designed and implemented the Balance Outstanding Report that enables the Special Events Fund Manager to routinely monitor fund operations and finances. The Special Events Senior Accountant produces this report for all events on a weekly basis, and the data reported includes event date, event number/name, final accounting date, and net amount due to or owed by the Library. During fiscal year 2006, the Fund Manager implemented procedures to review the report to monitor events with outstanding balances for further collection effort or refund.
Recommendation: To improve the Library's accounting for and control of the funds in the Special Events Gift Fund, the Librarian should direct the Financial Services Director to work with OSEPP to establish a policy for completing all final accountings on a timely basis.
Agency Affected: Library of Congress
Status: Implemented
Comments: In response to our recommendation, the Library instituted a policy requiring that the final accounting for all special events be completed within three months following the event, and revised its Special Events Agreement form used for externally-funded events to reflect this policy. In addition, the Library's Office of Special Events and Public Programs began preparing a monthly status report that tracks the period of time between the event date and completion of the final accounting. During fiscal year 2006, the Special Events Fund Manager implemented procedures to review this Final Accounting Aging Report to assess the timeliness of processing final accountings. According to the Library, for FY 2007 events held through May 31, 2007, the final accountings have been completed in an average of 43 days following the date of the event.
