Equal Employment Opportunity Commission
Independent Auditor’s Report on Compliance with Laws and Regulations
We audited the Balance Sheets of the U.S. Equal Employment Opportunity Commission (EEOC) as of September 30, 2007, and 2006, and the related Statements of Net Cost, Changes in Net Position, and Budgetary Resources for the years then ended. We have issued our report thereon dated November 2, 2007. We conducted our audits in accordance with auditing standards generally accepted in the United States of America; standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Budget (OMB) Bulletin 07-04, Audit Requirements for Federal Financial Statements.
EEOC management is responsible for complying with laws and regulations applicable to the agency. As part of obtaining reasonable assurance about whether EEOC’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws and regulations, noncompliance with which could have a direct and material effect on the determination of financial statement amounts, and certain other laws and regulations specified in OMB Bulletin 07-04. Providing an opinion on compliance with those provisions was not, however, an objective of our audits, and accordingly, we do not express such an opinion.
Results of our tests disclosed an instance of noncompliance that is required to be reported under Government Auditing Standards and OMB Bulletin No. 07-04 and is described below.
EEOC violated the Anti-Deficiency Act by obligating funds within the Revolving Fund before those funds were apportioned by OMB during Fiscal Year (FY) 2007.
According to 31 USC, Section 1517, Subsection (a):
An officer or employee of the United States Government.. may not make or authorize an expenditure or obligation exceeding – (1) an apportionment; or (2) the amount permitted by regulations prescribed under section 1514(a) of this title.
EEOC operated under a year-long continuing resolution during FY 2007. OMB issued OMB Bulletin 06-04 providing an automatic apportionment for all funds covered under the continuing resolution. The Revolving Fund does not receive appropriated funds and was not covered by the continuing resolution. As a result, EEOC was required to submit a Standard Form-132 to OMB requesting that funds for the year be apportioned for the Revolving Fund. EEOC personnel misunderstood Bulletin 06-04 and assumed that it apportioned funds in the Revolving Fund. EEOC obligated $189,498 within the Revolving Fund before funds were apportioned for FY 2007, thus violating the Anti-Deficiency Act.
This report is intended solely for the information and use of EEOC management, others within EEOC, OMB, and Congress. It is not intended to be and should not be used by anyone other than these specified parties.
Cotton & Company LLP
Colette Y. Wilson, CPA
November 2, 2007