Civil Rights Commission Faces Serious Financial Problems

Civil Rights Agency Cuts Budget by 9% (WaPo)

The financially strapped U.S. Commission on Civil Rights voted yesterday to lay off employees, order a staff furlough and close two of six regional offices to save about $800,000.

The decision to cut about 9 percent of the budget was followed by news that at least four auditing firms had declined to examine the commission’s financial affairs because of the poor conditions of its records and because the agency has not had an audit in 12 years, according to commission member Peter N. Kirsanow.

The seven-member commission agreed to submit to an audit two weeks ago to put its finances in order and persuade Congress to approve a budget increase. The budget has fluctuated between $8 million and $9 million for more than a decade. As inflation rose, its staff fell from about 100 to 67 today.

The announcements were a major blow for the agency that was once called the conscience of the federal government, but they were not unexpected. The commission, which is deeply in debt, failed to pay $75,000 in rent last year and did not honor a $188,000 partial payment to employees who won an equal-opportunity complaint against it.

“This place is completely out of control and spiraling into a ditch,” Kirsanow said. The commission has no budget ledger, no budget director and no financial director and has been underpaying its employees’ benefits package.

Believe it or not, the Post actually understates the extent of the problems. A more thorough report would have mentioned these findings by the GAO:

Deficiencies Found in Financial Management and Internal Controls

Our tests of the Commission’s fiscal year 2003 financial transactions identified substantial deficiencies in the underlying support for a significant level of its expenditures. Specifically, while our tests of $5.3 million of payroll transactions found them to be substantially correct, our tests of $4.9 million of nonpayroll-related transactions, including travel and procurement, found serious deficiencies in the supporting documentation underlying these transactions. These deficiencies precluded us from being able to determine whether as much as 18 percent of the statistically tested nonpayroll-related transactions of the Commission for fiscal year 2003 were valid. Our review of the Commission’s internal controls over nonpayroll financial transactions and financial reporting identified fundamental weaknesses in internal controls. We found that the Commission lacked a formal comprehensive set of policies and procedures governing its financial management practices. We also identified serious deficiencies in the Commission’s maintenance of financial records, enforcement of travel regulations, adherence to the Federal Acquisition Regulation (FAR) regarding the ordering process for contracted services from commercial vendors, adherence to provisions of the Prompt Payment Act, monitoring of budgetary resources, and cost accumulation and reporting. These deficiencies stemmed from a weak overall control environment, which led to BPD’s decision to discontinue providing accounting services for the Commission after fiscal year 2003, citing inadequate management oversight and control. This weak control environment increases the risk of abuse of the Commission’s financial resources. Our review of the manner in which the Commission addressed its budget priorities found that the Commission was unable to provide evidence of how its fiscal year 2003 budgetary resources were used to fulfill its statutory duties and to achieve the six goals listed in its fiscal year 2003 annual performance plan. Further, we could not determine how the Commission planned, communicated, and prioritized its budgetary resources, which makes it difficult for the Office of Management and Budget (OMB) and the Congress to understand whether the Commission is using its financial resources to achieve its mission and goals. Given the long-standing congressional concerns over the Commission’s management priorities, we believe the Commission could enhance the transparency of its budgetary, financial, and operational activities.

These problems are systemic. In this regard, it’s awfully hard to pin the entire blame on Republican efforts to “starve the commission,” as some people quoted by the Post contend.

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Robert Garcia Tagorda
About Robert Garcia Tagorda
Robert blogged prolifically at OTB from November 2004 to August 2005, when career demands took him in a different direction. He graduated summa cum laude from Claremont McKenna College with a Bachelor of Arts in Philosophy, Politics, and Economics and earned his Master in Public Policy from Harvard's Kennedy School of Government.