NATIONAL ENDOWMENT FOR THE HUMANITIES OFFICE OF INSPECTOR GENERAL SEMIANNUAL REPORT TO THE CONGRESS NUMBER 16 OCTOBER 1, 1996 TO MARCH 31, 1997 "Democracy demands wisdom and vision in its citizens" - National Foundation on the Arts and the Humanities Act of 1965 NATIONAL ENDOWMENT FOR THE HUMANITIES MISSION STATEMENT As a leader in the nation's cultural and intellectual life, the National Endowment for the Humanities promotes knowledge of human history, thought, and culture and enhances the role of the humanities throughout the nation. The Endowment, an independent federal agency, supports significant and innovative scholarship in all humanities disciplines; fosters effective teaching and life-long learning in the humanities; encourages thoughtful public participation in and enjoyment of the humanities; preserves cultural and intellectual resources essential to the people of the United States. OIG MISSION STATEMENT The Office of Inspector General provides professional audit, review, investigative, inspection, and advisory services to the National Endowment for the Humanities, its community of grant recipients, other federal agencies, and the Congress. These services engage the agency in a continual process of enhancing the quality and effectiveness of its grant programs and operations. OIG VISION STATEMENT The Office of Inspector General aspires to maintain a reputation for professional competence, leadership, and integrity. We strive to achieve our goal through self-examination and a teamwork environment that fosters professional development, open communication, and creativity. OIG VALUE STATEMENT We have a commitment to independence and excellence in the quality of our services. This commitment is characterized by integrity, fairness, cooperation, creativity, and respect both within and outside the OIG. Phone 202/606-6350 Fax 202/606-8329 E-mail oig@neh.fed.us April 28, 1997 Honorable Sheldon Hackney Chairman National Endowment for the Humanities Washington, DC 20506 Dear Chairman Hackney: Enclosed is the Semiannual Report for the Office of Inspector General (OIG) for the period October 1, 1996 - March 31, 1997. The report, which is required by the Inspector General Act as amended, provides an overview of the activities of the Office during this six-month period. The Act requires that you transmit this report, along with any comments you may wish to make and the report of final actions taken, to the appropriate Congressional committees within 30 days of its receipt. On April 21, 1997, you told NEH staff that President Clinton was notified of your decision to return to the University of Pennsylvania in August 1997. We in the OIG appreciate your efforts in helping the agency become stronger in many ways -- both programmatically and administratively - especially during the period of significant budget cuts. I appreciate the continued cooperation of all NEH employees in the conduct of the OIG activities. Sincerely, Sheldon L. Bernstein Inspector General Enclosure TABLE OF CONTENTS LETTER TO THE CHAIRMAN EXECUTIVE SUMMARY 1 AUDITS, SURVEYS, INSPECTIONS 2 INVESTIGATIONS 4 OTHER ACTIVITIES 5 Indirect Cost Rate Negotiations/Reviews 5 Intra-Agency Cooperation 6 Strategic Planning for the OIG 6 Participation on the Executive Council on Integrity and Efficiency 6 Regulatory and Legislative Reviews 6 Training 6 Audit Resolution and Follow-Up 6 Semi-Annual Reports on the World Wide Web 7 SPECIFIC REPORTING REQUIREMENTS OF THE INSPECTOR GENERAL ACT 8 LIST OF AUDIT REPORTS 10 TABLE I - INSPECTOR GENERAL-ISSUED REPORTS WITH QUESTIONED COSTS 16 TABLE II - INSPECTOR GENERAL-ISSUED REPORTS WITH RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE 17 REPORTING REQUIREMENTS 18 GLOSSARY OF AUDIT TERMINOLOGY 19 APPENDIX 1 - OVERVIEW OF THE NATIONAL ENDOWMENT FOR THE HUMANITIES 20 APPENDIX 2 - ESTABLISHMENT OF THE OFFICE OF INSPECTOR GENERAL 20 EXECUTIVE SUMMARY During the reporting period, our planned efforts were interrupted by the number of hotline calls received. Previously, the OIG had an auditor who had been trained in investigative methods. Since the departure of the person, the IG has been responsible for handling the hotline and following up through on activity generated by these calls and letters. We plan to provide basic administrative investigator training to two other staff members. No significant problems, abuses and deficiencies came to our attention during this reporting period. INTERNAL AUDITS/INSPECTIONS We issued two reports during this period. These are: (1) Fiscal Year End September 30, 1996 Consolidated Review of the Federal Manager's Financial Integrity Act (FMFIA) and (2) Review of the Small Purchase and Travel Credit Cards. EXTERNAL/GRANTEE AUDITS/SURVEYS We performed one follow-up review of a grantee after performing a quality review on its Certified Public Accountants report and documentation. The purpose of the review was to determine if the grantee corrected a significant weakness in complying with a grant provision. QUALITY REVIEWS We performed two on-site quality reviews of Certified Public Accounting (CPA) firms that audited our grantees, and issued reports on each one. Both reviews noted deficiencies in the CPAs working papers and reports. INVESTIGATION ACTIVITY During this period, we received twelve Hotline contacts regarding grantees and internal matters. At the beginning of the reporting period three matters were open; all are now closed. Of the twelve new contacts, three remain open as of March 31, 1997. AUDITS AND SURVEYS SIGNIFICANT PROBLEMS, ABUSES, AND DEFICIENCIES No reports were issued this period that disclosed significant problems. SUMMARY OF AUDIT REPORTS INTERNAL ACTIVITY Federal Manager's Financial Integrity Act (OIG-97-01, December 20, 1996) We conducted a review of the Endowment's Federal Manager's Financial Integrity Act (FMFIA) questionnaire completed by all offices and divisions and the resulting annual assurance statement. In complying with OMB's Circular A-123, Management Accountability and Control, and A-127 Financial Management Systems, the agency issued a questionnaire to all offices and divisions. Our reviews disclosed no reported major weaknesses in NEH's internal controls for fiscal year 1996. Review of the Small Purchase and Travel Credit Cards (OIG-97-02, March 31, 1997) Our review was conducted in conjunction with the President's Council on Integrity and Efficiency Reviews on Government-wide Procurement Activities. The objective of these reviews are to assist the General Services Administration in establishing new methodologies for credit card use. We concluded that NEH's management controls and procedures applicable to the use of credit cards were adequate. In addition, we found that the Administrative Services Office was using the cards as intended. EXTERNAL ACTIVITY Follow-up Review at Newberry Library (OIG 97-01 External Review) During our quality review of Newberry Library's independent public accountant we learned that the Library failed to obtain the debarment and suspension certifications as required. We determined that the Library was making a concerted effort to correct their finding; and, informed the Library that if the finding appears again it will lead to serious consequences. SINGLE AUDIT ACT REVIEWS We receive audit reports on NEH grantee organizations from other federal agencies, state and local government auditors, and independent public accountants. These reports generally are the result of A-128 or A-133 audits. These single audits report on financial activities, compliance with laws and regulations, and the grantee's management (internal) controls over federal expenditures. In most instances, the cognizant agency is the Department of Health and Human Services, the federal agency with the predominant financial interest. The reports are reviewed by OIG staff and the results of the reviews are submitted to NEH management for action, if needed, or for information purposes. During this period we reviewed 298 reports. QUALITY REVIEWS The two reviews that were performed revealed that some problems continue to exist concerning the quality of the CPAs work. While accounting firms receive "clean opinions" on Peer Reviews performed by other CPAs, federal auditors are still finding problems in reports and workpapers. Although not perfect, the single audit is useful for providing assurance that government funds are spent as intended. With the increased dollar threshold imposed by OMB Circular A-133, a significant amount of NEHs nonprofit grantees will not be receiving adequate oversight. While preparing for an on-site quality review of a media grantee's CPA we learned that the grantee had terminated its operations. We informed NEH and we and other NEH offices are following-up. INVESTIGATIONS The Inspector General Act of 1978, as amended, provides that the Inspector General may receive and investigate complaints or information concerning the possible existence of an activity constituting a violation of law, rules, or regulations; mismanagement; gross waste of funds; or abuse of authority. The OIG does not employ special investigators. Should the need arise, either the matter would be referred to the Federal Bureau of Investigation or assistance would be contracted with another federal Office of Inspector General. The results of investigations may be referred to the appropriate federal, state, or local prosecutive authorities for action. As of October 1, 1996, we had three files open; all are now closed. During the six-month period October 1, 1996 to March 31, 1997, we received twelve "Hotline" contacts. Two dealt with NEH employees issues, nine concerned grantees, and one was referred to another OIG. As of March 31, 1997, three cases involving grantees remain open. MATTERS REFERRED TO PROSECUTION AUTHORITIES None. HOTLINE AND PREVENTION ACTIVITIES We maintain a local hotline phone number, agency E-mail address, and an Internet address. We maintain all three to provide additional confidentiality for those persons bringing matters to the attention of the OIG. We issued two agencywide E-mail messages to NEH staff. One informed staff of what violations should be reported to the OIG and the second was issued because we received information concerning a chain letter that was being distributed inside the agency. We plan on using E-mail messages to inform NEH staff about the OIG operations three times a year. Summary of Investigations Investigative Workload Open at beginning of period 3 Matters brought to the OIG 12 Total Investigative contacts 15 Closed or referred during reporting period 12 Open at end of period 3 Presently, the IG is performing all investigation work since the auditor/investigator retired in February 1996. Assistance is obtained from other OIG's on an as-needed basis. OTHER ACTIVITIES INDIRECT COST RATE NEGOTIATIONS/REVIEWS Grantees are entitled to recover total project costs, both direct and indirect. Indirect costs are those costs of an organization or institution that are not readily identifiable with a particular project or activity but are nevertheless necessary to the general operation of the organization or institution and the conduct of the activities it performs. The cost of office supplies, general telephone, postage, accounting, and administrative salaries are types of expenses usually considered as indirect costs. In theory, all such costs might be charged directly; practical difficulties, however, preclude such an approach. Therefore, they are usually grouped into a common pool(s) and distributed to those organizational or institutional activities that benefit from them through the expedient of an indirect cost rate(s). Cognizant federal agencies approve the rates after reviewing cost allocation plans submitted by grantees. The approved rate will generally be recognized by other federal agencies. During this period, we negotiated indirect cost rates with ten grantees. INTRA-AGENCY COOPERATION In this period OIG staff attended and engaged in various NEH meetings - panel meetings (where grant applications are reviewed by outside consultants), pre-council meetings (where the program divisions discuss the panel review results with the Chairman and his immediate staff), and the National Council meetings. In addition, the IG attended the Chairman's weekly meetings; the Deputy Chairman's bi-weekly meeting, and a monthly travel policy meeting. The Deputy Inspector General partakes in the Deputy Chairman's bi-weekly meeting and is an active member on the NEH Internal Technology Committee. Two OIG staff attended monthly NEH Employee Association Meetings; one is on the executive committee. The Office of Inspector General contributes to the discussions; however, the office does not participate in the policy making. STRATEGIC PLANNING FOR THE OIG We developed a strategic plan following guidelines established by the United States General Accounting Office (GAO). This is a continuous effort. With the downsizing of the NEH and the elimination of certain programs, our audit universe has changed and this has had a significant effect on our plan. We are developing a strategy to work with grantees early in the grant period to avoid future problems. We anticipate that we will need more agency support of computer hardware and software. Due to the staffing constraints, we will continue to use various reporting structures such as surveys, memorandums, and management alerts to speed up the reporting process. The evidence and supporting documentation will continue to support our opinions. We expect to have a revised strategic plan prior to the next semiannual reporting period end. The OIG will focus our resources on programs and operations considered the most vulnerable to waste, fraud, and abuse. In addition, we will take into consideration the fact that the Single Audit Act as amended, and the revised OMB Circular A-133 raised the audit threshold from $25,000 to $300,000. The improvements to the Single Audit Act and the OMB Circular will mainly benefit large federal agencies with large dollar amounts above the new dollar threshold. A significant amount of the grantees that NEH is the cognizant agency for will fall below this dollar limit. Therefore, a significant monitoring activity of NEH grantees, the single audit, will disappear. PARTICIPATION ON THE EXECUTIVE COUNCIL ON INTEGRITY AND EFFICIENCY The Executive Council on Integrity and Efficiency (ECIE) was established by the President in 1992 to coordinate and implement governmentwide activities to combat fraud and waste in federal programs and operations. OIG staff regularly attend ECIE meetings. During this period, the IG attended the Annual Joint Conference of the PCIE/ECIE. In addition, the IG served on a selection panel with two other IG's to assist in the selection of an IG at another government entity. REGULATORY AND LEGISLATIVE REVIEWS The Inspector General Act of 1978, as amended, requires the Office of Inspector General to review proposed legislation and regulations. The reviews are made to assess whether the proposed legislation or regulation (1) impacts on the economy and efficiency of Endowment programs and operations, and (2) contains adequate internal controls to prevent and detect fraud and abuse. During this period, we commented on several OMB circulars. We also reviewed several documents for NEH grantees and staff. In addition, we reviewed several internal administrative directives for NEH. TRAINING The OIG is complying with the continuing education requirements of the General Accounting Office's Government Auditing Standards. All auditors are receiving at least forty hours of training per year as required. AUDIT RESOLUTION AND FOLLOW-UP Budgetary restraints at NEH have forced the OIG to assume the dominant role in the audit follow-up process. Fortunately, the procedures used by NEH make the process efficient. Many of the auditors' recommendations concern accounting system improvements by our grantees. Our auditors are the only staff in the agency qualified to review and reply to grantees. In addition, since we are aware of time frames, we are generally able to meet the 180-day deadline. In this small agency, we find this procedure to be efficient and effective. Some of our grantees are taking longer than the 180-day deadline to implement procedural recommendations and in responding to questioned costs. These delays are understandable because of the grantees' small staffs. SEMIANNUAL REPORTS ON THE WORLD WIDE WEB (WWW) The OIG has portions of several semiannual reports on the www. The reports have been accessible through the Inspector's General homepage (http://www.sbaonline.sba.gov/ignet/ig.html). Now it links up with the NEH homepage (http://www.neh.fed.us). To access the semiannual reports, enter the URL "http://www.sbaonline.sba.gov/ignet/internal/neh.neh.html." SPECIFIC REPORTING REQUIREMENTS OF THE INSPECTOR GENERAL ACT PRIOR SIGNIFICANT RECOMMENDATIONS NOT YET IMPLEMENTED Section 5(a)(3) of the Inspector General Act, as amended, requires an identification of audit recommendations disclosed in previous semiannual reports which corrective actions are still in process. The following is a list of all OIG audit reports, discussed in prior semiannual reports, for which final management actions have not been completed and closed out. Report Issued Grantee Report No. 05-09-95 Audit of Gift Certification Letters from State Humanities Councils OIG-95-03 (EA)1/ Our approach is to be aggressive in meeting the deadlines--including recommending that the agency suspend grants in progress and hold in abeyance new grant applications. However, we believe the above are working diligently to implement the findings. 1/ One council is required to provide documentation for $20,000. See below. SUMMARY OF AUDIT REPORTS ISSUED BEFORE THE COMMENCEMENT OF THE REPORTING PERIOD FOR WHICH NO MANAGEMENT DECISION HAS BEEN MADE Audit of Gift Certificate Letters from State Humanities Councils OIG-95-03 (EA) We reviewed eighteen state humanities councils' records and documentation supporting gift certification letters. We originally questioned $534,847 of gifts certified to release federal matching funds. Of this amount $20,000 remains open. The Endowment's grants office is allowing the grantee until the end of the grant period (10/31/98) to find substitute gifts or refund the money the NEH. A final decision therefore cannot be made until the end of the grant period. SUMMARY OF INSTANCES WHERE INFORMATION WAS REFUSED OR NOT PROVIDED There were no reports made to the Chairman of the National Endowment for the Humanities where information or assistance, requested under section 5(a)(5) of the Inspector General Act of 1978, as amended, was unreasonably refused or not provided. SIGNIFICANT REVISED MANAGEMENT DECISIONS No significant management decisions were revised during this reporting period. SIGNIFICANT MANAGEMENT DECISIONS WHICH THE INSPECTOR GENERAL DISAGREED The Inspector General has no disagreement with significant management decisions made during this reporting period. LISTING OF AUDIT REPORTS The following is a list of audit/survey reports issued by the OIG during the reporting period. For each audit report, where applicable, the total dollar value of questioned costs (including a separate category for the dollar value of unsupported costs) is provided. The Act also requires us to report on "the dollar value of recommendations that funds be put to better use." INTERNAL AUDIT/SURVEY/INSPECTION REPORTS ISSUED Funds Report Date Questioned Unsupported Put to Number Issued Cost Cost Better Use Fiscal Year End September 30, 1996 Consolidated Review of the 97-01 12-20-96 $ $ $ Federal Manager's Financial Integrity Act (FMFIA) Review of the Small Purchase and Travel Credit Cards 97-02 03-31-97 EXTERNAL AUDIT/SURVEY/REPORTS ISSUED Funds Report Date Questioned Unsupported Put to Number Issued Cost Cost Better Use The Newberry Library - 97-01 02-27-97 $ $ Follow-up Review INDIRECT COST RATE DESK REVIEW REPORTS ISSUED Funds Report Date Questioned Unsupported Put to Grantee Number Issued Cost Cost Better Use Modern Language Association of 97-01 10-03-96 $ $ $ American The Westfield Center for Early 97-02 10-08-96 Keyboard Studies, Inc. Rochester Museum and 97-03 10-28-96 Science Center School of American Research 97-04 11-21-96 Conservation Center for Art and 97-05 12-16-96 Historic Artifacts Missouri Historical Society 97-06 12-18-96 The Walters Art Gallery 97-07 02-03-97 The Valentine Museum 97-08 02-05-97 The Shelburne Museum 97-09 03-17-97 Virginia Historical Society 97-10 03-31-97 ON-SITE QUALITY REVIEW Funds Report Date Questioned Unsupported Put to Grantees Number Issued Cost Cost Better Use The Newberry Library 97-101 12-12-96 $ $ $ Film Odyssey, Inc. 97-102 01-29-97 $ $ $ SINGLE AUDIT ACT REVIEWS Report Date Questioned Unsupported Grantee Number Issued Cost Cost Steeplechase Films 97-001 (CAA) 10/09/96 $ $ Steeplechase Films 97-002 (CAA) 10/09/96 Louisiana Endowment for the Humanities 97-003 (CAA) 10/09/96 Denver Art Museum 97-004 (CAA) 10/09/96 City of North Miami 97-005 (CAA) 10/09/96 State of Maryland 97-006 (CAA) 10/09/96 State of Delaware 97-007 (CAA) 10/09/96 City of Portsmouth 97-008 (CAA) 10/30/96 State of Rhode Island 97-009 (CAA) 10/30/96 State of Missouri 97-010 (CAA) 10/30/96 State of Utah 97-011 (CAA) 10/30/96 State of Texas - University of Texas at Arlington - University of Texas at Austin - University of Texas at Dallas - University of Texas at El Paso - University of Texas at San Antonio - University of Houston - University of North Texas - Texas Southern University - Texas A&M Univ. System Research Found. - Sam Houston State University - Southwest Texas State University - Texas Tech University - Prarie View A&M University - Texas A&M University - Kingsville 97-012 (CAA) 10/30/96 State of Florida - State University System - State Community College System 97-013 (CAA) 10/30/96 State of Iowa - State University of Iowa - University of Northern Iowa - Iowa State University - Iowa Department of Cultural Affairs 97-014 (CAA) 11/12/96 State of North Carolina - North Carolina Dept. of Cultural Resources - Fayetteville State University - North Carolina State University - University of North Carolina at Asheville - University of North Carolina at Chapel Hill 97-015 (CAA) 11/12/96 State of California 97-016 (CAA) 11/12/96 State of Arizona - Arizona Historical Society 97-017 (CAA) 11/12/96 State of Arizona - Arizona Historical Society - University of Arizona - Arizona State University - Northern Arizona University 97-018 (CAA) 11/12/96 City of Newport News 97-019 (CAA) 11/12/96 Bradford County School Board 97-020 (CAA) 11/12/96 Natrona County Schools 97-021 (CAA) 11/12/96 State of South Carolina - University of South Carolina 97-022 (CAA) 11/12/96 State of Alaska 97-023 (CAA) 11/12/96 Commonwealth of Kentucky - Kentucky Educational Television Foundation 97-024 (CAA) 11/14/96 City of Los Angeles, CA 97-025 (CAA) 11/14/96 City of Lynchburg, VA 97-026 (CAA) 11/14/96 City of Fairfax, VA 97-027 (CAA) 11/14/96 City of Tucson, AZ 97-028 (CAA) 11/14/96 City of Alexandria, VA 97-029 (CAA) 11/14/96 County of Allegheny 97-030 (CAA) 11/14/96 Stanford University 97-031 (CAA) 11/14/96 Middlebury College 97-032 (CAA) 11/05/96 Long Island University 97-033 (CAA) 11/05/96 Social Science Research Council 97-034 (CAA) 11/05/96 Hofstra University 97-035 (CAA) 11/05/96 American Music Center 97-036 (CAA) 11/05/96 Report Date Questioned Unsupported Grantee Number Issued Cost Cost University of Delaware 97-037 (CAA) 11/05/96 $ $ Fordham University 97-038 (CAA) 11/05/96 Pomona College 97-039 (CAA) 11/05/96 San Diego State University Foundation 97-040 (CAA) 11/05/96 San Diego State University Foundation 97-041 (CAA) 11/05/96 San Diego State University Foundation 97-042 (CAA) 11/05/96 San Diego State University Foundation 97-043 (CAA) 11/05/96 San Diego State University Foundation 97-044 (CAA) 11/05/96 Hope College 97-045 (CAA) 11/05/96 University of Pittsburgh 97-046 (CAA) 11/05/96 Vanderbilt University 97-047 (CAA) 11/05/96 George Washington University 97-048 (CAA) 11/05/96 Johns Hopkins University 97-049 (CAA) 11/05/96 Dickinson College 97-050 (CAA) 11/05/96 Georgetown University 97-051 (CAA) 11/05/96 Tufts University 97-052 (CAA) 11/05/96 University of California 97-053 (CAA) 11/05/96 Southern Illinois University 97-054 (CAA) 11/05/96 Wilkes University 97-055 (CAA) 11/05/96 The University of Chicago 97-056 (CAA) 11/05/96 Duquesne University 97-057 (CAA) 11/05/96 University of Hawaii 97-058 (CAA) 11/05/96 University of Southern Mississippi 97-059 (CAA) 11/05/96 Temple University 97-060 (CAA) 11/05/96 University of Michigan 97-061 (CAA) 11/05/96 Maricopa County Community College District 97-062 (CAA) 11/05/96 University of Notre Dame 97-063 (CAA) 11/05/96 College of the Holy Cross 97-064 (CAA) 11/05/96 University of Rochester 97-065 (CAA) 11/18/96 The State University of New Jersey, (Rutgers) 97-066 (CAA) 11/18/96 New Mexico State University 97-067 (CAA) 11/18/96 Pennsylvania State University 97-068 (CAA) 11/18/96 University of Minnesota 97-069 (CAA) 11/18/96 Northwestern University 97-070 (CAA) 11/18/96 Mount Holyoke College 97-071 (CAA) 11/18/96 Ramapo College of New Jersey 97-072 (CAA) 11/18/96 Claremont University Center 97-073 (CAA) 11/18/96 Rochester Institute of Technology 97-074 (CAA) 11/18/96 Emory University 97-075 (CAA) 11/20/96 Cornell University 97-076 (CAA) 11/20/96 Cooper Union for the Advancement of Science and Art 97-077 (CAA) 11/20/96 Wheaton College 97-078 (CAA) 11/20/96 Eastern Michigan University 97-079 (CAA) 11/20/96 Ohio University 97-080 (CAA) 11/20/96 University of Illinois 97-081 (CAA) 11/20/96 University of Vermont 97-082 (CAA) 11/20/96 Harvard University 97-083 (CAA) 11/20/96 Dartmouth College 97-084 (CAA) 11/20/96 Williams College 97-085 (CAA) 11/20/96 University of Cincinnati 97-086 (CAA) 11/20/96 Columbia University 97-087 (CAA) 11/20/96 Springfield Library 97-088 (CAA) 11/20/96 Research Foundation of the City University of New York 97-089 (CAA) 11/20/96 Georgia State University 97-090 (CAA) 11/20/96 Rollins College 97-091 (CAA) 11/20/96 Syracuse University 97-092 (CAA) 11/20/96 Saint Mary's College, Notre Dame 97-093 (CAA) 11/20/96 Southern Methodist University 97-094 (CAA) 11/20/96 University of Alabama 97-095 (CAA) 11/20/96 Santa Barbara Museum of Natural History 97-096 (CAA) 02/03/97 Santa Barbara Museum of Natural History 97-097 (CAA) 02/03/97 The College Board 97-098 (CAA) 02/03/97 George Eastman House 97-099 (CAA) 02/03/97 Research Foundation of the City University of New York 97-100 (CAA) 02/03/97 American Institute of Physics 97-101 (CAA) 02/03/97 American Repertory Theatre Company, Inc. 97-102 (CAA) 02/03/97 Museum of Fine Arts 97-103 (CAA) 02/03/97 Philadelphia Museum of Art 97-104 (CAA) 02/03/97 Science Museum of Minnesota 97-105 (CAA) 02/03/97 American Association of Community Colleges 97-106 (CAA) 02/03/97 American Institute of Indian Studies 97-107 (CAA) 02/03/97 The Field Museum of Natural History 97-108 (CAA) 02/03/97 New School for Social Research 97-109 (CAA) 02/03/97 ETV Endowment of South Carolina, Inc. 97-110 (CAA) 02/03/97 International Documentary Association 97-111 (CAA) 02/03/97 Historical Society of Cheshire County 97-112 (CAA) 02/03/97 Hawaii Humanities Council 97-113 (CAA) 02/03/97 Indiana Humanities Council 97-114 (CAA) 02/03/97 Indiana Humanities Council 97-115 (CAA) 02/03/97 Idaho Humanities Council 97-116 (CAA) 02/04/97 Idaho Humanities Council 97-117 (CAA) 02/04/97 Wyoming Council for the Humanities 97-118 (CAA) 02/04/97 Utah Humanities Council 97-119 (CAA) 02/04/97 Voorheesville Central School District 97-120 (CAA) 02/04/97 Association of Research Libraries 97-121 (CAA) 02/04/97 Ventura County Museum of History and Art 97-122 (CAA) 02/04/97 Louisiana Endowment for the Humanities 97-123 (CAA) 02/04/97 State of Alabama 97-124 (CAA) 02/04/97 Elon College 97-125 (CAA) 02/04/97 San Jose State University Foundation 97-126 (CAA) 02/13/97 City of Riverside, CA 97-127 (CAA) 02/13/97 State of Wisconsin - State Historical Society of Wisconsin 97-128 (CAA) 02/13/97 Chesterfield County, VA 97-129 (CAA) 02/13/97 State of Tennessee (Nashville) - University of Tennessee - Memphis State University 97-130 (CAA) 02/13/97 Town of Concord, Massachusetts 97-131 (CAA) 02/13/97 State System of Higher Education, Commonwealth of Pennsylvania 97-132 (CAA) 02/13/97 County College of Morris, NJ 97-133 (CAA) 02/13/97 Wellesley College 97-134 (CAA) 02/13/97 University of Maine System 97-135 (CAA) 02/13/97 Atlanta-Fulton Public Library Foundation, Inc. 97-136 (CAA) 02/13/97 Atlanta-Fulton Public Library Foundation, Inc. 97-137 (CAA) 02/13/97 Atlanta-Fulton Public Library Foundation, Inc. 97-138 (CAA) 02/13/97 Atlanta-Fulton Public Library Foundation, Inc. 97-139 (CAA) 02/13/97 Atlanta-Fulton Public Library Foundation, Inc. 97-140 (CAA) 02/13/97 Atlanta-Fulton Public Library Foundation, Inc. 97-141 (CAA) 02/13/97 Atlanta-Fulton Public Library Foundation, Inc. 97-143 (CAA) 02/13/97 State of Maine - Maine State Archives 97-144 (CAA) 02/13/97 Kirkwood Community College 97-145 (CAA) 02/13/97 Kean College 97-146 (CAA) 02/13/97 State of Kansas - Kansas State University - University of Kansas 97-147 (CAA) 02/13/97 State of Washington - Washington State University - Western Washington University - University of Washington 97-148 (CAA) 02/13/97 State of New Jersey 97-149 (CAA) 02/13/97 State of New York 97-150 (CAA) 02/13/97 Museum of African Art 97-151 (CAA) 02/13/97 Community College Humanities Association 97-152 (CAA) 02/13/97 Community College Humanities Association 97-153 (CAA) 02/13/97 Currier Gallery of Art 97-154 (CAA) 02/13/97 Council for Basic Education 97-155 (CAA) 02/13/97 The Colonial Williamsburg Foundation 97-156 (CAA) 03/03/97 University of Missouri System 97-157 (CAA) 03/03/97 New York University 97-158 (CAA) 03/03/97 University of Maine System 97-159 (CAA) 03/03/97 University of Southern California 97-160 (CAA) 03/03/97 University of Southern California 97-161 (CAA) 03/03/97 New York University 97-162 (CAA) 03/03/97 State of Kansas 97-163 (CAA) 03/03/97 Eckerd College 97-164 (CAA) 03/03/97 Eckerd College 97-165 (CAA) 03/03/97 Maryland Humanities Council 97-166 (CAA) 03/17/97 Massachusetts Foundation for the Humanities 97-167 (CAA) 03/17/97 New York Historical Society 97-168 (CAA) 03/17/97 California Council for the Humanities 97-169 (CAA) 03/17/97 State of South Dakota 97-170 (CAA) 03/17/97 The Newberry Library 97-171 (CAA) 03/17/97 The Newberry Library 97-172 (CAA) 03/17/97 The Newberry Library 97-173 (CAA) 03/17/97 The Newberry Library 97-174 (CAA) 03/17/97 The Newberry Library 97-175 (CAA) 03/17/97 Arkansas Dept. of Higher Education 97-176 (CAA) 03/03/97 Center for American Archeology 97-177 (CAA) 03/03/97 State of Oklahoma 97-178 (CAA) 03/03/97 Arkansas Dept. of Education, General Division 97-179 (CAA) 03/03/97 Pueblo of Zuni 97-180 (CAA) 03/03/97 Illinois Institute of Technology 97-181 (CAA) 03/03/97 Medical College of Pennsylvania 97-182 (CAA) 03/03/97 Educational Film Center 97-183 (CAA) 03/03/97 Northwestern University 97-184 (CAA) 03/03/97 State of Utah 97-185 (CAA) 03/03/97 Tufts University 97-186 (CAA) 03/03/97 New Hampshire Humanities Council 97-187 (CAA) 03/03/97 Auburn University 97-188 (CAA) 03/03/97 Medical College of Pennsylvania 97-189 (CAA) 03/03/97 Worthington City School District 97-190 (CAA) 03/03/97 New Mexico State University 97-191 (CAA) 03/03/97 Rutgers, The State Univ. of New Jersey 97-192 (CAA) 03/03/97 State of Ohio 97-193 (CAA) 03/03/97 City of New York, New York 97-194 (CAA) 03/03/97 State of Nebraska 97-195 (CAA) 03/17/97 State of Connecticut 97-196 (CAA) 03/17/97 State of Colorado 97-197 (CAA) 03/17/97 Brown University 97-198 (CAA) 03/17/97 University of Maine System 97-199 (CAA) 03/17/97 University of Alabama Tuscaloosa 97-200 (CAA) 03/17/97 The Children's Museum, MA 97-201 (CAA) 03/17/97 The Jewish Museum 97-202 (CAA) 03/17/97 Boston Symphony Orchestra 97-203 (CAA) 03/18/97 University of Wyoming 97-204 (CAA) 03/18/97 Peabody Essex Museum 97-205 (CAA) 03/18/97 North Dakota Humanities Council 97-206 (CAA) 03/18/97 Georgia Humanities Council 97-207 (CAA) 03/18/97 Rochester Institute of Technology 97-208 (CAA) 03/18/97 Commonwealth of the Northern Mariana Islands Council for the Humanities 97-209 (CAA) 03/18/97 Kentucky Humanities Council 97-210 (CAA) 03/18/97 Kentucky Humanities Council 97-211 (CAA) 03/18/97 Pennsylvania Humanities Council 97-212 (CAA) 03/18/97 Association of Research Libraries 97-213 (CAA) 03/18/97 Fundacion Puertorriquena Humanidades 97-214 (CAA) 03/18/97 Fundacion Puertorriquena Humanidades 97-215 (CAA) 03/18/97 Museum of Fine Arts, Boston 97-216 (CAA) 03/18/97 Virginia Historical Society 97-217 (CAA) 03/18/97 Guam Humanities Council 97-218 (CAA) 03/18/97 Illinois State Historical Society 97-219 (CAA) 03/18/97 The Research Libraries Group, Inc. 97-220 (CAA) 03/18/97 The Research Libraries Group, Inc. 97-221 (CAA) 03/18/97 The Art Institute of Chicago 97-222 (CAA) 03/18/97 Utah Humanities Council 97-223 (CAA) 03/18/97 City Lore, Inc. 97-224 (CAA) 03/18/97 Historic Deerfield, Inc. 97-225 (CAA) 03/18/97 Kurt Weill Foundation for Music, Inc. 97-226 (CAA) 03/18/97 Connecticut Humanities Council 97-227 (CAA) 03/18/97 Judah L. Magnes Museum 97-228 (CAA) 03/18/97 Massachusetts Found. for the Humanities, Inc. 97-229 (CAA) 03/18/97 New York Council for the Humanities 97-230 (CAA) 03/18/97 Dixie College 97-231 (CAA) 03/18/97 Nevada Humanities Committee 97-232 (CAA) 03/18/97 Alaska Humanities Forum 97-233 (CAA) 03/18/97 Philadelphia Maritime Museum 97-234 (CAA) 03/18/97 New York Public Library 97-235 (CAA) 03/25/97 Society of Biblical Literature 97-236 (CAA) 03/25/97 Facing History and Ourselves Nat. Foundation 97-237 (CAA) 03/25/97 Facing History and Ourselves Nat. Foundation 97-238 (CAA) 03/25/97 YIVO Institute for Jewish Research 97-239 (CAA) 03/25/97 Florida Humanities Council 97-240 (CAA) 03/25/97 Delaware County Historical Association 97-241 (CAA) 03/25/97 Folger Shakespeare Memorial Library 97-242 (CAA) 03/25/97 Commonwealth of the Northern Mariana Island 97-243 (CAA) 03/25/97 Washington Commission for the Humanities 97-244 (CAA) 03/25/97 Five Colleges Inc. 97-245 (CAA) 03/25/97 Rhode Island Commission for the Humanities 97-246 (CAA) 03/25/97 Rhode Island Commission for the Humanities 97-247 (CAA) 03/25/97 The Westfield Center 97-248 (CAA) 03/25/97 New England Foundation for the Humanities, Inc. 97-249 (CAA) 03/25/97 The Huntington 97-250 (CAA) 03/25/97 Bay State Historical League 97-251 (CAA) 03/25/97 National Public Radio 97-252 (CAA) 03/25/97 New Hampshire Humanities Council 97-253 (CAA) 03/25/97 North Dakota Humanities Council, Inc. 97-254 (CAA) 03/25/97 Great Plains Chautauqua Society 97-255 (CAA) 03/25/97 Queens Museum of Art 97-256 (CAA) 03/25/97 Ohio Historical Society 97-257 (CAA) 03/25/97 Filmmakers Collaborative 97-258 (CAA) 03/25/97 Minnesota Humanities Council 97-259 (CAA) 03/25/97 Stone Lantern Films 97-260 (CAA) 03/25/97 The Brooklyn Historical Society 97-261 (CAA) 03/25/97 Shelburne Museum, Inc. 97-262 (CAA) 03/25/97 Chicago Historical Society 97-263 (CAA) 03/25/97 Plimoth Plantation, Inc. 97-264 (CAA) 03/25/97 Historic Deerfield, Inc. 97-265 (CAA) 03/25/97 State of Wyoming 97-266 (CAA) 03/25/97 Univ. of Georgia Research Foundation, Inc. 97-267 (CAA) 03/25/97 University of Kentucky 97-268 (CAA) 03/25/97 Oklahoma State University 97-269 (CAA) 03/27/97 Rice University 97-270 (CAA) 03/25/97 Amon Carter Museum 97-271 (CAA) 03/25/97 Association of American College and Universities97-272 (CAA) 03/25/97 American Musicological Society 97-273 (CAA) 03/25/97 Missouri Humanities Council 97-274 (CAA) 03/25/97 Oklahoma Foundation for the Humanities 97-275 (CAA) 03/31/97 New York Council for the Humanities 97-276 (CAA) 03/31/97 Arkansas Humanities Council 97-277 (CAA) 03/31/97 Vermont Folklife Center 97-278 (CAA) 03/31/97 The Pierpont Morgan Library 97-279 (CAA) 03/31/97 Conservation Center for Art & Historic Artifacts97-280 (CAA) 03/31/97 Community Television of Southern California 97-281 (CAA) 03/31/97 Mississippi Humanities Council 97-282 (CAA) 03/31/97 Missouri Historical Society 97-283 (CAA) 03/31/97 Foundation for New Media, Inc. 97-284 (CAA) 03/31/97 Indiana University 97-285 (CAA) 03/31/97 Washington University 97-286 (CAA) 03/31/97 University of Pennsylvania 97-287 (CAA) 03/31/97 University of Mississippi 97-288 (CAA) 03/31/97 City and County of Denver Colorado 97-289 (CAA) 03/31/97 City of Ukiah 97-290 (CAA) 03/31/97 BJC Health System 97-291 (CAA) 03/31/97 Boston Symphony Orchestra 97-292 (CAA) 03/31/97 Asian Art Museum of San Francisco 97-293 (CAA) 03/31/97 Asia Society 97-294 (CAA) 03/31/97 American University 97-295 (CAA) 03/31/97 American Film Institute 97-296 (CAA) 03/31/97 American Research Institute in Turkey 97-297 (CAA) 03/31/97 Auburn University 97-298 (CAA) 03/31/97 TABLE I INSPECTOR GENERAL-ISSUED REPORTS WITH QUESTIONED COSTS DOLLAR VALUE Number of Questioned Unsupported Reports Cost Costs A. For which no management decision has been made by the commence- ment of the reporting period 1 $ 74,500 $ 74,500 B. Which were issued during the reporting period 0 $ - $ - Subtotals (A+B) 1 $ 74,500 $ 74,500 C. For which a management decision was made during the reporting period (i) dollar value of disallowed costs 1 $ 54,500 $ 54,500 (ii) dollar value of costs not disallowed (grantee subsequently supported all costs) $ $ D. For which no management decision has been made by the end of the reporting period 1 $ 20,000 $ 20,000 Reports for which no management decision was made within six months of issuance 1 $ 20,000 $ 20,000 TABLE II INSPECTOR GENERAL-ISSUED REPORTS WITH RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE Number of Dollar Reports Value A. For which no management decision has been made by the commence- ment of the reporting period 1 $ 16,000 B. Which were issued during the reporting period 0 $ 0 C. For which a management decision was made during the reporting period (i) dollar value of recommendations that were agreed to by management 1 $ 16,000 (ii) dollar value of recommendations that were not agreed to by management 0 $ 0 D. For which no management decision was made by the end of the reporting period 0 $ 0 REPORTING REQUIREMENTS The Inspector General Act of 1978, as amended (Public Law 100-504), specifies reporting requirements for semiannual reports. The requirements are listed and cross-referenced to the applicable pages in this report. Citation Reporting Requirements page Section 4(a)(2) Review of Legislation and Regulations 6 Section 5(a)(1) Significant Problems, Abuses, and Deficiencies 2 Section 5(a)(2) Recommendations for Corrective Action with Respect to Significant Problems, Abuses, and Deficiencies 2-3 Section 5(a)(3) Prior Significant Recommendations Not Yet Implemented 8 Section 5(a)(4) Matters Referred to Prosecutive Authorities 4 Section 5(a)(5) Summary of Instances Where Information and 6(b)(2) Was Refused or Not Provided 9 Section 5(a)(6) Listing of Audit Reports 10-15 Section 5(a)(7) Summary of Significant Reports 2-3 Section 5(a)(8) Audit Reports - Questioned Costs 10-15 Section 5(a)(9) Audit Reports - Funds Be Put to Better Use 10-15 Section 5(a)(10) Summary of Audit Reports Issued Before the Commencement of the Reporting Period for Which No Management Decision Has Been Made 8 Section 5(a)(11) Significant Revised Management Decisions 9 Section 5(a)(12) Significant Management Decisions with which the Inspector General Disagreed 9 GLOSSARY OF AUDIT TERMINOLOGY Questioned Cost - A cost that is questioned by the OIG because of an alleged violation of a provision of a law, regulation, contract, grant, cooperative agreement, or other agreement or document governing the expenditure of funds; because such cost is not supported by adequate documentation; or because the expenditure of funds for the intended purpose is unnecessary or unreasonable. Unsupported Cost - A cost that is questioned because of the lack of adequate documentation at the time of the audit. Disallowed Cost - A questioned cost that management, in a management decision, has sustained or agreed should not be charged to the government. Funds Be Put To Better Use - Funds, which the OIG has disclosed in an audit report, that could be used more efficiently by reducing outlays, de-obligating program or operational funds, avoiding unnecessary expenditures, or taking other efficiency measures. Management Decision - The evaluation by management of the audit findings and recommendations and the issuance of a final decision by management concerning its response to such findings and recommendations. Final Action - The completion of all management actions, as described in a management decision, with respect to audit findings and recommendations. When management concludes no action is necessary, final action occurs when a management decision is made. Source: Excerpt from Section 106(d) of the Inspector General Act Amendments of 1988 (P.L. 100-504). APPENDIX 1 OVERVIEW OF THE NATIONAL ENDOWMENT FOR THE HUMANITIES In order "to promote progress and scholarship in the humanities and the arts in the United States," Congress enacted the National Foundation on the Arts and the Humanities Act of 1965. This act established the National Endowment for the Humanities as an independent grant-making agency of the federal government to support research, education, and public programs in the humanities. Grants are made through three divisions--Education and Research Programs, Preservation and Access, and Public Programs -- and three offices -- Challenge Grants, Enterprise, and Federal State Partnership. THE HUMANITIES The act that established the National Endowment for the Humanities says "The term `humanities' includes, but is not limited to, the study of the following: language, both modern and classical; linguistics; literature; history; jurisprudence; philosophy; archaeology; comparative religion; ethics; the history, criticism, and theory of the arts; those aspects of social sciences which have humanistic content and employ humanistic methods; and the study and application of the humanities to the human environment with particular attention to reflecting our diverse heritage, traditions, and history and to the relevance of the humanities to the current conditions of national life." APPENDIX 2 ESTABLISHMENT OF THE OFFICE OF INSPECTOR GENERAL On October 18, 1988, the Inspector General Act Amendments of 1988, Public Law 100-504 was signed into law. In this legislation, Congress established Offices of Inspector General in several departments and in thirty-three agencies, including NEH. The NEH inspector general (IG) is appointed by the Chairman. The independence of the IG is an important aspect of the Act. For example, the IG: cannot be prevented from initiating, carrying out, or completing an audit or investigation, or from issuing any subpoena; has access to all records of the agency; reports directly to the Chairman, and can only be removed by the Chairman, who must promptly advise Congress of the reasons for the removal; and reports directly to Congress. The OIG has the responsibility and authority to: conduct audits and investigations; provide leadership and coordination, and recommend policies to promote efficiency and effectiveness and to prevent fraud; keep the chairman and Congress fully and currently informed of problems and deficiencies; and comply with governmental auditing standards. The Act requires the IG to report semiannually to the Chairman and Congress. The report is provided to the chairman, who may comment on the report. The report must be forwarded to Congress within thirty days. Serious or flagrant problems can be reported anytime to the chairman, who may comment but must transmit the report intact to Congress within seven days of receipt. The OIG consists of the Inspector General, three professional staff, and a secretary. The OIG and the Office of General Counsel have a Memorandum of Understanding detailing the procedures for the OIG to be provided with OGC legal services. THE OFFICE OF INSPECTOR GENERAL serves American taxpayers by investigating reports of waste, fraud, mismanagement, or abuse involving federal funds. To report any suspected activity Involving NEH programs, operations, or employees Please Call (202) 606-8423 or, Write Office of Inspector General-HotLine National Endowment for the Humanities 1100 Pennsylvania Ave. N.W., Room 419 Washington, DC 20506 FAX: (202) 606-8329 ELECTRONIC MAIL HOTLINE OIG@neh.fed.us • Government employees are protected from reprisal • Caller can remain anonymous • Information is confidential