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entitled 'Financial Audit: Independent and Special Counsel 
Expenditures for the Six Months Ended September 30, 2001' which was 
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United States General Accounting Office: 
GAO: 

Report to Congressional Committees: 

March 2002: 

Financial Audit: 

Independent and Special Counsel Expenditures for the Six Months Ended
September 30, 2001: 
	
GAO-02-443: 

Contents: 

Letter: 

Auditor's Report: 

Background: 

Opinion on Statements of Expenditures: 

Consideration of Internal Control: 

Compliance with Laws and Regulations: 

Objectives, Scope, and Methodology: 

Agency Comments: 

Appendixes: 

Appendix I: Statement of Expenditures for Independent Counsel Barrett: 

Appendix II: Statement of Expenditures for Independent Counsel Bruce: 

Appendix III: Statement of Expenditures for Independent Counsel 
Lancaster: 

Appendix IV: Statement of Expenditures for Independent Counsel Pearson: 

Appendix V: Statement of Expenditures for Independent Counsel Ray: 

Appendix VI: Statement of Expenditures for Independent Counsel Smaltz: 

Appendix VII: Statement of Expenditures for Special Counsel Danforth: 

Abbreviations: 

AOUSC: Administrative Office of the U.S. Courts: 

FBI: Federal Bureau of Investigation: 

OIC: Office of Independent Counsel: 

OSC: Office of Special Counsel: 

[End of section] 

United States General Accounting Office: 
Washington, D.C. 20548: 

March 29, 2002: 

Congressional Committees: 

Enclosed is our report on the statements of expenditures of six 
offices of independent counsel and one office of special counsel for 
the 6 months ended September 30, 2001. We are sending copies of this 
report to the attorney general, the director of the Administrative 
Office of the U.S. Courts, the independent counsels and special 
counsel included in our audit, and other interested parties. Copies of 
this report will be made available to others upon request. This report 
will also be available on GAO's home page [hyperlink, 
http://www.gao.gov]. 

If you or your staffs have any questions concerning this report, 
please contact me at (202) 512-9406 or Hodge Herry, assistant 
director, at (202) 512-9469. You can also reach us by e-mail 
franzelj@gao.gov or herryh@gao.gov. Key contributors to this report 
were Carol Keightley, Kwabena Ansong, and Theresa Patrizio. 

Signed by: 

Jeanette M. Franzel: 
Acting Director: 
Financial Management and Assurance: 

[End of letter] 

United States General Accounting Office: 
Washington, D.C. 20548: 

Congressional Committees: 

This report presents the results of our audits of expenditures 
[Footnote 1] reported by six offices of independent counsel and one 
office of special counsel for the 6 months ended September 30, 2001. 
The Department of Justice and the independent counsels are required 
under 28 U.S.C. 594 (d)(2), (h) and 596 (c)(1) (1994) to report on 
expenditures from a permanent, indefinite appropriation established 
within the Department of Justice to fund independent counsel 
activities. We are required under 28 U.S.C. 596 (c)(2) to audit the 
statements of expenditures prepared by the independent counsels. We 
also audited the statement of expenditures of Special Counsel John C. 
Danforth, who is authorized by the Department of Justice to fund his 
operations from the permanent, indefinite appropriation. 

In our audits covering the 6 months ended September 30, 2001, we found: 

* the statements of expenditures presented in appendixes I through 
VII, for the offices of independent counsel David M. Barrett, Carol 
Elder Bruce, Ralph I. Lancaster, Daniel S. Pearson, Robert W. Ray, and 
Donald C. Smaltz, and special counsel John C. Danforth, respectively, 
are presented fairly, in all material respects, in conformity with the 
basis of accounting described in note 1 of each counsel's statement, 
which is principally the cash basis, a comprehensive basis of 
accounting other than U.S. generally accepted accounting principles; 

* no material weaknesses in internal control over financial reporting 
(including safeguarding assets) and compliance with laws and 
regulations; and; 

* no reportable noncompliance with laws and regulations we tested.
The following sections provide background information, outline each 
conclusion in more detail, and discuss the scope of our audits. 

Background: 

The Ethics in Government Act of 1978 amended title 28 of the United 
States Code to authorize the judicial appointment of independent 
counsels when the attorney general determines that reasonable grounds 
exist to warrant further investigation of high-ranking government 
officials for certain alleged crimes. The independent counsel law (28 
U.S.C. 591-599 (1994)) was intended to preserve and promote the 
accountability and integrity of public officials and of the 
institutions of the federal government. The independent counsel law 
expired on June 30, 1999. Provisions of the law allow the independent 
counsels serving at the expiration date to continue investigating 
pending matters until they determine that the investigations of such 
matters have been completed. Also, the Department of Justice 
determined that the appropriation established by Public Law 100-202 to 
fund expenditures by independent counsels appointed pursuant to 28 
U.S.C. 591-599, or other law, is available to fund the expenditures of 
John C. Danforth, who was appointed as a Special Counsel within the 
Department of Justice by the attorney general. 

The independent counsel law directs the Department of Justice to pay 
all costs relating to the establishment and operation of independent 
counsel offices from the permanent, indefinite appropriation 
established to fund independent counsel activities. The independent 
counsel law also designates specific responsibilities to the 
Administrative Office of the U.S. Courts (AOUSC) for independent 
counsels' administrative support. The Department of Justice 
periodically disburses lump-sum payments to AOUSC for this purpose. 

During any 6-month period, there may be other significant costs 
incurred in support of the work of the counsels, which are paid from 
appropriations other than the permanent, indefinite appropriation 
established to fund independent counsel activities. These costs arise 
when a counsel uses detailees from other federal agencies, such as the 
Federal Bureau of Investigation (FBI). Independent counsels are not 
required to reflect such costs in their statements of expenditures and 
neither the independent counsels nor special counsel do so. However, 
to the extent practicable, the counsels identified and disclosed these 
costs in the notes to their statements presented in the appendixes to 
this report. 

Opinion on Statements of Expenditures: 

The statements of expenditures including the accompanying notes for 
the offices of independent counsel David M. Barrett, Carol Elder Bruce,
Ralph I. Lancaster, Daniel S. Pearson, Robert W. Ray, and Donald C. 
Smaltz, and for the office of special counsel John C. Danforth, 
present fairly, in all material respects, the expenditures of these 
counsels for the 6 months ended September 30, 2001, on the basis of 
accounting described in note 1 to each office's statement. 

The counsels prepared their statements of expenditures principally on 
a cash basis of accounting, which is a comprehensive basis of 
accounting other than U.S. generally accepted accounting principles. 
The bases of accounting are described in note 1 of each counsel's 
statement. 

Consideration of Internal Control: 

In planning and performing our audits, we considered internal control 
over financial reporting and compliance.[Footnote 2] We did this to 
determine our procedures for auditing the statements of expenditures, 
not to express an opinion on internal control. Accordingly, we do not 
express an opinion on internal control over financial reporting and 
compliance. However, for the controls we tested, we found no material 
weaknesses in internal control over financial reporting (including 
safeguarding assets) and compliance for the 6-month period ended 
September 30, 2001. A material weakness is a condition in which the 
design or operation of one or more of the internal control components 
does not reduce to a relatively low level the risk that errors, fraud, 
or noncompliance in amounts that would be material to the statements 
of expenditures may occur and not be detected promptly by employees in 
the normal course of performing their duties. Our internal control 
work would not necessarily disclose all material weaknesses. 

Compliance with Laws and Regulations: 

Our tests for compliance with selected provisions of laws and 
regulations disclosed no instances of noncompliance that would be 
reportable under U.S. generally accepted government auditing 
standards. However, the objective of our audit was not to provide an 
opinion on overall compliance with laws and regulations. Accordingly, 
we do not express such an opinion. 

Objectives, Scope, and Methodology: 

The independent counsels are responsible for preparing statements of 
expenditures in conformity with the bases of accounting described in 
the accompanying notes. Though not required to do so, the special 
counsel also elected to prepare a statement of expenditures. The 
counsels are also responsible for establishing, maintaining, and 
assessing internal control to provide reasonable assurance that the 
following internal control objectives are met and for complying with 
applicable laws and regulations. 

* Financial reporting: Transactions are properly recorded, processed, 
and summarized to permit the preparation of the statements of 
expenditures in conformity with the bases of accounting described in 
the notes to their statements, and assets are safeguarded against loss 
from unauthorized acquisition, use, or disposition. 

* Compliance with laws and regulations: Transactions are executed in 
accordance with laws and regulations that could have a direct and 
material effect on the counsels' statements of expenditures. 

We are responsible for (1) obtaining reasonable assurance about 
whether the counsels' statements of expenditures are presented fairly, 
in all material respects, in conformity with the basis of accounting 
described in the notes accompanying their statements of expenditures, 
(2) obtaining a sufficient understanding of internal control over 
financial reporting and compliance to plan the audits, and (3) testing 
compliance with selected provisions of laws and regulations that have 
a direct and material effect on the statements. 

In order to fulfill these responsibilities, for each counsel, we (1) 
examined, on a test basis, evidence supporting the amounts and 
disclosures in the statement of expenditures, except for items 
indicated as unaudited, (2) assessed the accounting principles used by 
management, (3) evaluated the overall presentation of the statement of 
expenditures, (4) obtained an understanding of internal control 
related to financial reporting (including safeguarding assets) and 
compliance with laws and regulations, and (5) tested compliance with 
selected provisions of 28 U.S.C. 591-599 (1994), 5 U.S.C. Chapter 55, 
and regulations relating to pay administration. 

We limited our internal control testing to controls over financial 
reporting and compliance. Because of inherent limitations in internal 
control, misstatements due to error, fraud, losses, or noncompliance 
may nevertheless occur and not be detected. We also caution that 
projecting our evaluation to future periods is subject to the risk 
that controls may become inadequate because of changes in conditions 
or that the degree of compliance with controls may deteriorate. In 
addition, we caution that our internal control testing may not be 
sufficient for other purposes. 

We did not test compliance with all laws and regulations applicable to 
the offices of independent and special counsel. We limited our tests 
of compliance to those laws and regulations that we deemed applicable 
to the statements of expenditures. We caution that noncompliance may 
occur and not be detected by these tests and that such testing may not 
be sufficient for other purposes. 

We obtained, but did not audit, information on costs that were paid 
from sources other than the permanent, indefinite appropriation, as 
well as information on receipts. We obtained information on these 
costs and receipts from the independent and special counsel offices 
and the Department of Justice, including the FBI. 

We performed our audits in accordance with U.S. generally accepted 
government auditing standards. 

Agency Comments: 

We provided drafts of this report to the six offices of independent 
counsel, the office of the special counsel, the Department of Justice, 
and AOUSC for review and comment. These entities agreed with the facts 
and conclusions in our report. 

Signed by: 

Jeanette M. Franzel: 
Acting Director: 
Financial Management and Assurance: 

March 8, 2002: 

List of Committees: 

The Honorable Robert C. Byrd:
Chairman:
The Honorable Ted Stevens: 
Ranking Minority Member: 
Committee on Appropriations: 
United States Senate: 

The Honorable Joseph I. Lieberman: 
Chairman:
The Honorable Fred Thompson: 
Ranking Minority Member:
Committee on Governmental Affairs: 
United States Senate: 

The Honorable Patrick J. Leahy: 
Chairman:
The Honorable Orrin G. Hatch: 
Ranking Minority Member:
Committee on the Judiciary: 
United States Senate: 

The Honorable C. W. Bill Young: 
Chairman:
The Honorable David R. Obey: 
Ranking Minority Member: 
Committee on Appropriations: 
House of Representatives: 

The Honorable Dan Burton:
Chairman:
The Honorable Henry A. Waxman: 
Ranking Minority Member:
Committee on Government Reform: 
House of Representatives: 

The Honorable James F. Sensenbrenner: 
Chairman:
The Honorable John Conyers, Jr.
Ranking Minority Member:
Committee on the Judiciary:
House of Representatives: 

[End of section] 

Appendix I: Statement of Expenditures for Independent Counsel Barrett: 

David M. Barrett: 
Office of Independent Counsel: 
Statement of Expenditures (Cash basis): 
Six Months Ended September 30, 2001: 

Personnel compensation and benefits: $453,386: 
Travel (note 2): $40,675: 
Rent, communications, and utilities (note 3): $221,070: 
Contractual services (note 4): $309,109: 
Acquisition of capital assets: $8,241: 
Supplies and materials: $4,982: 
Administrative services (note 5): $80,617: 
Total expenditures: $1,118,080: 

The accompanying notes are an integral part of this statement. 

Notes to Statement of Expenditures: 

Note 1 - Accounting policies: 

Reporting entity: The accompanying statement of expenditures presents 
the expenditures of the Office of Independent Counsel-David M. Barrett 
(OIC-Barrett) for the 6 months ended September 30, 2001. The statement 
of expenditures includes only expenditures made from the permanent, 
indefinite appropriation for the office of independent counsel that 
are processed through the Administrative Office of the U.S. Courts 
(AOUSC) and the OIC. Mr. Barrett was appointed on May 24, 1995, to 
investigate certain allegations against the secretary of housing and 
urban development. 

Basis of accounting: The accompanying statement of expenditures was 
prepared principally on the cash basis of accounting, which is a 
comprehensive basis of accounting other than U.S. generally accepted 
accounting principles. Under this method, except for personnel 
compensation and benefits, expenditures are recorded when the funds 
are disbursed by AOUSC or, for noncash transfers, when charged by 
AOUSC. Most personnel compensation and benefits are recorded at the 
end of the pay period when earned. 

Note 2 - Travel: 

Travel generally includes expenditures for investigation-related 
travel paid for OIC-Barrett personnel and witnesses. 

Note 3 - Rent, communications, and utilities: 

Approximately $158,000 in office rent is included in rent, 
communications, and utilities. 

Note 4 - Contractual services: 

Contractual services primarily consist of expenditures for 
investigators, court reporters, and services of other experts in areas 
of interest to the investigation. 

Note 5 - Administrative services: 

AOUSC receives an administrative fee equal to 3 percent of OIC 
expenditures for performing disbursement and accounting functions for 
OIC-Barrett. Payment of these fees generally occurs in the month 
following the services. Also included in administrative services are 
other costs incurred by AOUSC in providing administrative guidance and 
support to independent counsel offices. These costs were certified by 
AOUSC, paid from the independent counsel appropriation, and allocated 
to the OIC. 

[End of section] 

Appendix II: Statement of Expenditures for Independent Counsel Bruce: 

Carol Elder Bruce: 
Office of Independent Counsel: 
Statement of Expenditures (Cash basis): 
Six Months Ended September 30, 2001: 

Personnel compensation and benefits: $47,514:
Rent, communications, and utilities: $1,843:
Contractual services and supplies (note 2): $4,371:
Administrative services (note 3): $5,985:
Total expenditures: $59,713: 

The accompanying notes are an integral part of this statement. 

Notes to Statement of Expenditures: 

Note 1 - Accounting policies: 

Reporting entity: The accompanying statement of expenditures presents 
the expenditures of the Office of Independent Counsel-Carol Elder 
Bruce (OIC-Bruce) for the 6 months ended September 30, 2001. The 
statement of expenditures includes only expenditures made from the 
permanent, indefinite appropriation for the office of independent 
counsel that are processed through the Administrative Office of the 
U.S. Courts (AOUSC) and the OIC. Ms. Bruce was appointed on March 19, 
1998, to investigate whether the secretary of the interior may have 
violated federal criminal law in sworn testimony before a 
congressional committee. Ms. Bruce submitted her final report to the 
Special Division of the U.S. Court of Appeals for the District of 
Columbia Circuit on December 30, 1999. Ms. Bruce received the order to 
terminate her office from the U.S. Court of Appeals for the District 
of Columbia Circuit effective March 22, 2001. 

Basis of accounting: The accompanying statement of expenditures was 
prepared principally on the cash basis of accounting, which is a 
comprehensive basis of accounting other than U.S. generally accepted 
accounting principles. Under this method, except for personnel 
compensation and benefits, expenditures are recorded when the funds 
are disbursed by AOUSC or, for noncash transfers, when charged by 
AOUSC. Most personnel compensation and benefits are recorded at the 
end of the pay period when earned. 

Note 2 - Contractual services and supplies: 

Contractual services primarily consist of payments to experts in 
preparing independent counsel records for archiving. 

Note 3 - Administrative services: 

AOUSC receives an administrative fee equal to 3 percent of OIC 
expenditures for performing disbursement and accounting functions for 
OIC-Bruce. Payment of these fees generally occurs in the month 
following the services. Also included in administrative services are 
other costs incurred by AOUSC in providing administrative guidance and 
support to independent counsel offices. These costs were certified by 
AOUSC, paid from the independent counsel appropriation, and allocated 
to the 01C. 

[End of section] 

Appendix III: Statement of Expenditures for Independent Counsel 
Lancaster: 

Ralph I. Lancaster: 
Office of Independent Counsel: 
Statement of Expenditures (Cash basis): 
Six Months Ended September 30, 2001: 

Personnel compensation and benefits: $96,453:
Travel (note 2): $691:
Rent, communications, and utilities (note 3): $23,950:
Contractual services (note 4): $44,608:
Supplies and materials: $94:
Administrative services (note 5): $13,821:
Total expenditures: $179,617: 

The accompanying notes are an integral part of this statement. 

Notes to Statement of Expenditures: 

Note 1 - Accounting policies: 

Reporting entity: The accompanying statement of expenditures presents 
the expenditures of the Office of Independent Counsel-Ralph I. 
Lancaster (0IC-Lancaster) for the 6 months ended September 30, 2001. 
The statement of expenditures includes only expenditures made from the 
permanent, indefinite appropriation for the office of independent 
counsel that are processed through the Administrative Office of the 
U.S. Courts (AOUSC) and the OIC. Mr. Lancaster was appointed on May 
26, 1998, to investigate activities of the secretary of labor 
regarding a possible undisclosed financial interest in a company and 
the solicitation of illegal campaign contributions. Mr. Lancaster has 
submitted his final report (sealed) to the Special Division of the 
U.S. Court of Appeals for the District of Columbia. Mr. Lancaster 
received the order to terminate his office from the U.S. Court of 
Appeals for the District of Columbia effective July 11, 2001. 

Basis of accounting: The accompanying statement of expenditures was 
prepared principally on the cash basis of accounting, which is a 
comprehensive basis of accounting other than U.S. generally accepted 
accounting principles. Under this method, except for personnel 
compensation and benefits, expenditures are recorded when the funds 
are disbursed by AOUSC or, for noncash transfers, when charged by 
AOUSC. Most personnel compensation and benefits are recorded at the 
end of the pay period when earned. 

Note 2 - Travel: 

Travel generally includes expenditures for investigation-related 
travel paid for OIC-Lancaster personnel. 

Note 3 - Rent, communications, and utilities: 

Approximately $19,800 in office rent is included in rent, 
communications, and utilities. 

Note 4 - Contractual services: 

Contractual services represent expenditures for maintenance and repair 
of equipment and for services of experts and other specialists in 
areas of interest to the investigation. 

Note 5 - Administrative services: 

AOUSC receives an administrative fee equal to 3 percent of OIC 
expenditures for performing disbursement and accounting functions for 
OIC-Lancaster. Payment of these fees generally occurs in the month 
following the services. Also included in administrative services are 
other costs incurred by AOUSC in providing administrative guidance and 
support to independent counsel offices. These costs were certified by 
AOUSC, paid from the independent counsel appropriation, and allocated 
to the OIC. 

[End of section] 

Appendix IV: Statement of Expenditures for Independent Counsel Pearson: 

Daniel S. Pearson: 
Office of Independent Counsel: 
Statement of Expenditures (Cash basis): 
Six Months Ended September 30, 2001: 

Personnel compensation and benefits: $71,210: 
Rent, communications, and utilities (note 2): $26,673: 
Contractual services (note 3): $4,687: 
Administrative services (note 4): $7,496: 
Total expenditures: $110,066: 

The accompanying notes are an integral part of this statement. 

Notes to Statement of Expenditures: 

Note 1 - Accounting policies: 

Reporting entity: The accompanying statement of expenditures presents 
the expenditures of the Office of Independent Counsel-Daniel S. 
Pearson (OIC-Pearson) for the 6 months ended September 30, 2001. The 
statement of expenditures includes only expenditures made from the 
permanent, indefinite appropriation for the office of independent 
counsel that are processed through the Administrative Office of the 
U.S. Courts (AOUSC) and the OIC. Mr. Pearson was appointed on July 6, 
1995, to investigate certain allegations against the secretary of 
commerce. On April 3, 1996, the secretary was killed in a plane crash. 
Shortly thereafter, the independent counsel closed the investigation 
of the secretary and transferred the investigation related to other 
parties to the Department of Justice. Expenditures during this period 
relate to efforts to archive the investigative records and to respond 
to issues related to the investigation. 

Basis of accounting: The accompanying statement of expenditures was 
prepared principally on the cash basis of accounting, which is a 
comprehensive basis of accounting other than U.S. generally accepted 
accounting principles. Under this method, except for personnel 
compensation and benefits, expenditures are recorded when the funds 
are disbursed by AOUSC or, for noncash transfers, when charged by 
AOUSC. Most personnel compensation and benefits are recorded at the 
end of the pay period when earned. 

Note 2 - Rent, communications, and utilities: 

Approximately $24,000 in office rent is included in rent, 
communications, and utilities. 

Note 3 - Contractual services: 

Contractual services primarily consist of payments to experts in 
preparing independent counsel records for archiving. 

Note 4 - Administrative services: 

AOUSC receives an administrative fee equal to 3 percent of OIC 
expenditures for performing disbursement and accounting functions for 
OIC-Pearson. Payment of these fees generally occurs in the month 
following the services. Also included in administrative services are 
other costs incurred by AOUSC in providing administrative guidance and 
support to independent counsel offices. These costs were certified by 
AOUSC, paid from the independent counsel appropriation, and allocated 
to the OIC. 

Appendix V: Statement of Expenditures for Independent Counsel Ray: 

Robert W. Ray: 
Office of Independent Counsel: 
Statement of Expenditures (Cash basis): 
Six Months Ended September 30, 2001: 

Personnel compensation and benefits: $1,279,071
Travel (note 2): $273,172
Rent, communications, and utilities (note 3): $518,718: 
Contractual services (note 4): $1,349,379: 
Acquisition of capital assets (note 5): $16,648: 
Supplies and materials (note 6): $37,737: 
Administrative services (note 7): $209,122: 
Total expenditures: $3,683,847: 

The accompanying notes are an integral part of this statement. 

Notes to Statement of Expenditures: 

Note 1 - Accounting policies: 

Reporting entity: The accompanying statement of expenditures presents 
the expenditures of the Office of Independent Counsel-Robert W. Ray 
(OIC-Ray) for the 6 months ended September 30, 2001. The statement of 
expenditures includes only expenditures made from the permanent, 
indefinite appropriation for the office of independent counsel that 
are processed through the Administrative Office of the U.S. Courts 
(AOUSC) and the OIC. 

Kenneth W. Starr (OIC-Starr) was appointed on August 5, 1994, to 
assume the investigation of possible violations of federal criminal 
law in Re: Madison Guaranty Savings and Loan Association and other 
entities (Whitewater), which was begun by regulatory Independent 
Counsel Robert B. Fiske, Jr. The U.S. Court of Appeals subsequently 
expanded OIC-Starr's jurisdiction to include selected White House 
Travel Office and access-to-personnel-file issues on March 22, 1996, 
and June 21, 1996, respectively. On October 25, 1996, it further 
expanded OIC-Starr's jurisdiction to include issues related to 
statements made before the Government Reform and Oversight Committee, 
U.S. House of Representatives, on June 26, 1996. On January 16, 1998, 
the court expanded OIC-Starr's jurisdiction to include issues related 
to whether, in a civil case, certain individuals suborned perjury, 
obstructed justice, intimidated witnesses, or otherwise violated 
federal law in dealing with witnesses, potential witnesses, attorneys, 
or others (commonly referred to as the Lewinsky matter). 

On October 18, 1999, Mr. Starr resigned his appointment, and was 
succeeded by Robert W. Ray as independent counsel effective the same 
date. On March 16, 2000, Mr. Ray submitted to the Special Division of 
the U.S. Court of Appeals for the District of Columbia Circuit two 
final reports on (1) the access-to-personnel-files issues and (2) the 
issues related to statements made before the Government Reform and 
Oversight Committee. On July 28, 2000, the court ordered the public 
release of the two reports. Further, on June 22, 2000, Mr. Ray
submitted to the court a final report on the White House travel 
matter. On October 18, 2000, the court ordered the public release of 
that report. On January 19, 2001, Mr. Ray announced the conclusion of 
all current matters before the office of independent counsel. 

On August 21, 2001, the Special Division of the U.S. Court of Appeals 
for the District of Columbia Circuit, at the request of the 
independent counsel, ordered the termination of the investigative 
functions of the independent counsel as of September 30, 2001, except 
to the extent necessary to conclude any remaining noninvestigative and 
nonprosecutorial tasks required by statute. On March 2, 2001, and May 
18, 2001, Mr. Ray submitted to the court the final reports on the 
Whitewater and Lewinsky matters, respectively. On March 6, 2002, the 
court ordered the publication and release of the Lewinsky report. On 
March 20, 2002, the court ordered the publication and release of the 
Whitewater report. 

Basis of accounting: The accompanying statement of expenditures was 
prepared principally on the cash basis of accounting, which is a 
comprehensive basis of accounting other than U.S. generally accepted 
accounting principles. Under this method, except for personnel 
compensation and benefits, expenditures are recorded when the funds 
are disbursed by AOUSC or, for noncash transfers, when charged by 
AOUSC. Most personnel compensation and benefits are recorded at the 
end of the pay period when earned. 

Note 2 - Travel: 

Travel generally includes expenditures for investigation-related 
travel paid for OIC-Ray personnel; detailees from other federal 
agencies, such as the Federal Bureau of Investigation (FBI); 
contractors; and witnesses. 

Note 3 - Rent, communications, and utilities: 

Approximately $396,200 in office rent is included in rent, 
communications, and utilities. 

Note 4 - Contractual services: 

Contractual services primarily consist of expenditures for computer 
support and maintenance and investigators and other specialists in 
areas of interest to the investigation. 

Note 5 - Acquisition of capital assets: 

The capital assets expenditures are primarily for automated data 
processing equipment. These assets will remain the property of the 
federal government at the conclusion of the investigation. 

Note 6 - Supplies and materials: 

The supplies and materials expenditures are primarily for office 
supplies used in the archiving of records. 

Note 7 - Administrative services: 

AOUSC receives an administrative fee equal to 3 percent of OIC 
expenditures for performing disbursement and accounting functions for 
OIC-Ray. Payment of these fees generally occurs in the month following 
the services. Also included in administrative services are other costs 
incurred by AOUSC in providing administrative guidance and support to 
independent counsel offices. These costs were certified by AOUSC, paid 
from the independent counsel appropriation, and allocated to the OIC. 

Note 8 - Other costs (unaudited): 

Certain costs relating to employees assigned to work with the OIC by 
the FBI and the Department of Justice were financed through funds 
appropriated to these agencies and, accordingly, are not included in 
the statement of expenditures. These agencies were not reimbursed for 
these costs. The schedule below shows the estimated costs (unaudited) 
of the assistance provided to the OIC during the 6-month period, based 
on information provided by officials of these agencies. 

Costs (unaudited): 

FBI: $85,930; 
Other Justice: $284; 
Total: $86,214. 
		
[End f section] 

Appendix VI: Statement of Expenditures for Independent Counsel Smaltz: 

Donald C. Smaltz: 
Office of Independent Counsel: 
Statement of Expenditures (Cash basis): 
Six Months Ended September 30, 2001: 

Personnel compensation and benefits: $297,305: 
Travel (note 2): $5,113: 
Rent, communications, and utilities (note 3): $98,819: 
Contractual services (note 4): $25,394: 
Supplies and materials: $2,747: 
Administrative services (note 5): $39,707: 
Total expenditures: $469,085: 

The accompanying notes are an integral part of this statement. 

Notes to Statement of Expenditures: 

Note 1 - Accounting policies: 

Reporting entity: The accompanying statement of expenditures presents 
the expenditures of the Office of Independent Counsel-Donald C. Smaltz 
(OIC-Smaltz) for the 6 months ended September 30, 2001. The statement of
expenditures includes only expenditures made from the permanent, 
indefinite appropriation for the office of independent counsel that 
are processed through the Administrative Office of the U.S. Courts 
(AOUSC) and the OIC. Mr. Smaltz was appointed on September 9, 1994, to 
investigate activities of a former secretary of agriculture. Mr. 
Smaltz submitted his final report to the Special Division of the U.S. 
Court of Appeals for the District of Columbia Circuit on January 30, 
2001. The report was published on October 25, 2001. 

Basis of accounting: The accompanying statement of expenditures was 
prepared principally on the cash basis of accounting, which is a 
comprehensive basis of accounting other than U.S. generally accepted 
accounting principles. Under this method, except for personnel 
compensation and benefits, expenditures are recorded when the funds 
are disbursed by AOUSC or, for noncash transfers, when charged by 
AOUSC. Most personnel compensation and benefits are recorded at the 
end of the pay period when earned. 

Note 2 - Travel: 

Travel generally includes expenditures for travel paid for OIC-Smaltz 
personnel. 

Note 3 - Rent, communications, and utilities: 

Approximately $70,300 in office rent is included in rent, 
communications, and utilities. 

Note 4 - Contractual services: 

Contractual services primarily consist of expenditures for repair and
maintenance of equipment and for services of experts and other 
specialists in areas of interest to the investigation. 

Note 5 - Administrative services: 

AOUSC receives an administrative fee equal to 3 percent of OIC 
expenditures for performing disbursement and accounting functions for 
OIC-Smaltz. Payment of these fees generally occurs in the month 
following the services. Also included in administrative services are 
other costs incurred by AOUSC in providing administrative guidance and 
support to independent counsel offices. These costs were certified by 
AOUSC, paid from the independent counsel appropriation, and allocated 
to the OIC. 

Note 6 - Receipts (unaudited): 

As of September 30, 2001, OIC-Smaltz's convictions and referrals have 
resulted in the imposition of $11,803,082 in criminal fines, civil 
penalties, damages, and reimbursement of costs. Approximately 
$10,905,536 of that amount has been received and deposited into the 
U.S. Treasury. 

[End of section] 

Appendix VII: Statement of Expenditures for Special Counsel Danforth: 

John C. Danforth: 
Office of Special Counsel: 
Statement of Expenditures (Cash basis): 
Six Months Ended September 30, 2001: 

Personnel compensation and benefits: $24,787: 
Travel (note 2): $362: 
Rent, communications, and utilities (note 3): $159,844: 
Contractual services (note 4): $505,829: 
Supplies and materials: $282: 
Administrative services (note 5): $1,267: 
Total expenditures: $692,371: 
	
The accompanying notes are an integral part of this statement. 

Notes to Statement of Expenditures: 

Note 1 - Accounting policies: 

Reporting entity: The accompanying statement of expenditures presents 
the expenditures of the Office of Special Counsel-John C. Danforth 
(OSC-Danforth) for the 6 months ended September 30, 2001. The 
statement of expenditures includes only expenditures made from the 
permanent, indefinite appropriation for OSC-Danforth that are 
processed through the Department of Justice. On September 9, 1999, the 
attorney general appointed John C. Danforth as a special counsel to 
investigate the government conduct relative to events at the Branch 
Davidian complex near Waco, Texas, on April 19, 1993. Mr. Danforth 
submitted his final report to the deputy attorney general concerning 
the 1993 confrontation at the Branch Davidian complex on November 8, 
2000. Mr. Danforth officially closed his office in March 2001. 

Basis of accounting: The accompanying statement of expenditures was 
prepared principally on the cash basis of accounting, which is a 
comprehensive basis of accounting other than U.S. generally accepted 
accounting principles. Under this method, except for personnel 
compensation and benefits, expenditures are recorded when the funds 
are disbursed by the Department of Justice. Personnel compensation and 
benefits are recorded at the end of the pay period when earned. 

Note 2 - Travel: 

Travel generally includes expenditures for investigation-related 
travel for OSC-Danforth personnel and detailees from other components 
of the Department of Justice. 

Note 3 - Rent, communications, and utilities: 

Approximately $132,500 in office rent is included in rent, 
communications, and utilities. This category also includes rental 
charges for office furniture. 

Note 4 - Contractual services: 

Contractual services consist primarily of expenditures for contract 
guard service, litigation support, automated legal research, and other 
specialists in areas of interest to the investigation. 

Note 5 - Administrative services: 

Administrative services represent Department of Justice expenditures for
performing administrative and payroll functions for OSC-Danforth. 

[End of section] 

Footnotes: 

[1] The term expenditures as used in this report generally means cash 
disbursed. 

[2] The objectives of internal control are to provide reasonable 
assurance that management objectives regarding financial reporting 
(including safeguarding assets) and compliance with laws and 
regulations are achieved. 

[End of section] 

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