Financial Management:

Audit of the Centennial of Flight Commission for Fiscal Year 2002

GAO-03-888R: Published: Jul 31, 2003. Publicly Released: Jul 31, 2003.

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The Centennial of Flight Commission (Commission) was created on November 13, 1998, by the Centennial of Flight Commemoration Act (Public Law 105-389, as amended by Public Law 106-68). The purpose of the Commission is to commemorate the 100th anniversary of the Wright Brothers' flight at Kitty Hawk, North Carolina, on December 17, 1903. The Commission is to provide recommendations and advice to the President, the Congress, and federal agencies on the most effective ways to encourage and promote national and international participation and sponsorships in commemoration of the centennial of powered flight. We are required by the act to audit the financial transactions of the Commission. This report presents the results of our audit of the Commission's fiscal year 2002 financial transactions, with cumulative information since the Commission's inception. We previously reported the results of our audits on Commission financial transactions for fiscal years 1999 and 2000, and 2001.

We found that all 114 of the Commission's recorded obligations and expenditures during fiscal year 2002 were supported by documentation that was approved by management. In addition, the Commission recorded the receipt of one payment under a licensing agreement for use of the logo of the Centennial of Flight Commission. The Commission recorded no other receipts for user fees, cash donations, or in-kind donations for fiscal year 2002. When comparing Commission transactions recorded by the Federal Aviation Administration, and the National Aeronautics and Space Administration (NASA), which provide administrative support to the Commission, we found a minor error of $937 by NASA in underrecording Commission travel expenses. We also identified an internal control weakness over licensing agreements by the Commission in not monitoring the timely receipt of fees in accordance with the agreements. This resulted in the Commission receiving no minimum quarterly licensing fees for the quarters June 30, 2002, and September 30, 2002, as of May 30, 2003.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: NASA has correctly recorded a fiscal year 2002, Commission travel expenditure of $937 as a Commission expense instead of an expense from NASA direct funds.

    Recommendation: The Executive Director of the Commission should direct NASA to correctly record the Commission travel expenditure of $937 that was improperly coded and paid out of NASA's direct funds.

    Agency Affected: Centennial of Flight Commission

  2. Status: Closed - Implemented

    Comments: The Commission has developed a spreadsheet that lists each licensing agreement, date signed, terms of the license, payments made, and the product that is licensed that has been kept up to date and checked regularly to ensure that the terms of the license are being met and payments are made in a timely manner.

    Recommendation: The Executive Director of the Commission should strengthen internal controls over licensing agreements by monitoring the timely receipt of fees in accordance with the agreements.

    Agency Affected: Centennial of Flight Commission

  3. Status: Closed - Implemented

    Comments: The Commission collected $2,000 due under licensing agreements for the first four quarters through March 31, 2003.

    Recommendation: The Executive Director of the Commission should collect licensing fees due the Commission since the beginning of the June 30, 2002, quarter, in accordance with licensing agreements.

    Agency Affected: Centennial of Flight Commission

 

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