SEMIANNUAL REPORT TO CONGRESS 
April 1, 2004 to September 30, 2004 


NATIONAL 
ENDOWMENT
FOR THE 
HUMANITIES


“Democracy demands wisdom and vision in its citizens” 
National Foundation on the Arts and Humanities Act of 1965 


THE OFFICE OF INSPECTOR GENERAL 

serves American taxpayers
by investigating reports of waste, fraud,
mismanagement, abuse, integrity violations or 
unethical conduct involving federal funds.


To report any suspected activity
involving NEH programs, operations, or employees


Call the OIG Hotline 

(202) 606-8423 
Mailing Address 

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.gov 

Government employees are protected from reprisal 
Caller can remain anonymous 
Information is confidential 

This report is also available on the NEH/OIG Website at http://www.neh.gov/whoweare/ 
oig.html 


NATIONAL OFFICE OF INSPECTOR GENERAL 
ENDOWMENT 1100 PENNSYLVANIA AVE., NW 
FOR THE WASHINGTON, D.C. 20506 

HUMANITIES ROOM 419 

TELEPHONE(202) 606-8350 

FACSIMILE (202) 606-8329 

E-mail sbernstein@neh.gov 

October 29, 2004 

Honorable Bruce Cole 
Chairman 
National Endowment for the Humanities 
Washington, D.C. 20506 

Dear Chairman Cole: 

I am pleased to provide you with the Office of Inspector General’s Semiannual Report to Congress 
for the second half of fiscal year 2004. 

The report is submitted in accordance with the Inspector General Act of 1978, as amended. 
Section 5 of the Act requires that you submit this report, with your Report of Final Action, to 
the appropriate committee or subcommittee of the Congress within 30 days of its receipt. The 
report provides a summary of the activities of the OIG during the six-month period ended 
September 30, 2004. 

During this period, we completed and issued reports on one internal review; one inspection 
report on the accounting and management systems of a grantee and its two subcontractors; and 
two overhead desk reviews. In addition, we processed 105 OMB Circular A-133 audit reports, 
with 15 containing findings. We also issued a special management advisory memorandum informing 
the agency of an internal control weakness. Two inspections of grantee accounting 
and management systems, one audit of costs claimed by a grantee, five overhead desk reviews, 
and one quality review of a grantee’s accounting firm are in progress. In the investigations 
program, we received several “Hotline” contacts. Three contacts from this period and two 
from the prior semiannual report are open. 

I appreciate your support and look forward to working with you and all agency staff to help 
ensure that NEH delivers grant awards in an economical, effective and efficient manner. 

Sincerely, 

Sheldon L. Bernstein 
Inspector General 


TABLE OF CONTENTS


LETTER TO THE CHAIRMAN 
THE NATIONAL ENDOWMENT FOR THE HUMANITIES…… ........................................ 1 
THE OFFICE OF INSPECTOR GENERAL..................................................................... 1 
AUDIT AND REVIEW ACTIVITIES ................................................................................ 2 
INVESTIGATIVE ACTIVITIES …………………………………………………………………… 7 
OTHER ACTIVITIES..................................................................................................... 10 
TABLE I - REPORTING REQUIREMENTS………………………………………………… ..... 12 
TABLE II - INSPECTOR GENERAL-ISSUED REPORTS ................................................ 13 
WITH QUESTIONED COSTS 
TABLE III - INSPECTOR GENERAL-ISSUED REPORTS WITH ...................................... 13 
RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE 
GLOSSARY OF AUDIT TERMINOLOGY ....................................................................... 14 


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 four divisions - Research Programs, Education Programs, Preservation and 
Access, and Public Programs -- and two offices -- Challenge Grants and Federal-State Partnership. 
The divisions and offices also administer the We the People: NEH’s American History initiative. 

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." 

THE OFFICE OF INSPECTOR GENERAL 

The NEH Office of Inspector General was established April 9, 1989, in accordance with the Inspector 
General Act Amendment of 1988, (Public Law 100-504). In this legislation, Congress established 
Offices of Inspector General in several departments and in thirty-three agencies, including the 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 Act states that the Office of Inspector General is responsible for (1) conducting audits and investigations; 
(2) reviewing legislation; (3) recommending policies to promote efficiency and effectiveness; 
and (4) preventing and detecting fraud, waste, and abuse in the operations of the agency. The 
Inspector General is also responsible for keeping the Chairman and Congress fully and currently 
informed of problems and deficiencies in the programs and operations. 

The OIG staff consists of the Inspector General, a Deputy Inspector General, two auditors, and a 
secretary. The OIG and the Office of the General Counsel (OGC) have a Memorandum of 
Understanding detailing the procedures for the OIG to be provided with OGC legal services. 
Investigations are handled by the Inspector General, an auditor and as required by the agency’s 
Assistant General Counsel. 

NEH OIG Semiannual Report 
1 
September 2004 


AUDIT AND REVIEW ACTIVITIES


LIST OF REPORTS ISSUED


This office is responsible for external and internal audits. External auditing includes grants, pre-
award accounting system surveys, review of OMB Circular A-133 audit reports, overhead desk reviews, 
and on-site quality control reviews of CPA work papers. Internal efforts consist of audits, 
inspections, and reviews/evaluations of NEH administrative, programmatic, and financial operations. 

Following is a list of reports issued by the OIG during this reporting period. We also received 105 
OMB Circular A-133 audit reports and processed fifteen containing findings (see Single Audit Act 
Reviews). The Inspector General Act of 1978, as amended, requires us to report on the "Dollar 
Value of Recommendations that Funds Be Put to Better Use" and the "Total Dollar Value of Questioned 
Costs" (including a separate category for the “Dollar Value of Unsupported Costs”). None are 

reported during this period. 
INTERNAL AUDITS/REVIEWS Report Number Date Issued 
Federal Information Security Management Act Review OIG-04-02(IR) 09/30/04 
Accounting System Internal Control Weakness MAM 07/21/04 
(Management Advisory Memorandum) 
EXTERNAL AUDITS/REVIEWS/SURVEYS 
Inspection of the Catticus Corporation OIG-04-01 (I) 07/12/04 
SINGLE AUDIT ACT REVIEWS 
La Fundación Puertorriqueña de las Humanidades OIG-04-01 (CAA) 09/16/04 
New York Foundation for the Arts OIG-04-02 (CAA) 09/16/04 
Oregon Council for the Humanities OIG-04-03 (CAA) 09/16/04 
St. Thomas Foundation OIG-04-04 (CAA) 09/16/04 
The Filmmakers Collaborative OIG-04-05 (CAA) 09/22/04 
Humanities Council of Washington OIG-04-06 (CAA) 09/22/04 
Ohio Humanities Council OIG-04-07 (CAA) 09/22/04 
Rhode Island Council for the Humanities OIG-04-08 (CAA) 09/22/04 
Vermont Humanities Council OIG-04-09 (CAA) 09/22/04 
Florida Humanities Council OIG-04-10 (CAA) 09/30/04 
Humanities Tennessee OIG-04-11 (CAA) 09/30/04 
Kentucky Humanities Council OIG-04-12 (CAA) 09/30/04 
Minnesota Humanities Commission OIG-04-13 (CAA) 09/30/04 
Montana Committee for the Humanities OIG-04-14 (CAA) 09/30/04 
New Mexico Endowment for the Humanities OIG-04-15 (CAA) 09/30/04 
OVERHEAD DESK REVIEWS 
Ways of Knowing NEH-04-06 (ODR) 08/25/04 
Virginia Historical Society NEH-04-07 (ODR) 08/31/04 

NEH OIG Semiannual Report 2 September 2004 


AUDIT AND REVIEW ACTIVITIES (Continued)


SUMMARY OF REPORTS ISSUED 

INTERNAL REVIEWS/AUDITS 

• 
We issued report OIG-04-02 (IR), Federal Information Security Management Act Review 
(FISMA) on September 30, 2004. This review was conducted to determine NEH’s compliance 
with FISMA, Office of Management and Budget guidance on FISMA and E-Authentication, and 
National Institute of Standards and Technology (NIST) guidance on information security. Our 
scope was limited to NEH IT security policies that were in force for fiscal year 2004. 
We found these deficiencies: 

• 
The NEH Accounting System was not certified and accredited prior to operating in accordance 
with OMB Circular A-130. This system still has not been certified and accredited. 
The OIG considers this a reportable condition as defined by OMB’s FISMA 
reporting guidance. 
• 
The security tests and testing schedule recommended by the NEH Security Officer 
(SO) are not in compliance with NIST guidance. 
Several recommendations were made to correct the deficiencies. 

• 
We issued a Management Advisory Memorandum concerning an accounting system internal 
control weakness, on July 21, 2004. We reported on a problem related to segregation of duties 
in the NEH requisition process. 
We made recommendations that are necessary to improve the internal control system. Our 
understanding is that management agrees to make the necessary changes. 

NEH OIG Semiannual Report 
3 
September 2004 


AUDIT AND REVIEW ACTIVITIES (Continued)


EXTERNAL AUDITS/REVIEWS/SURVEYS/OVERHEAD DESK REVIEWS 

• 
We issued report OIG-04-01 (I), Inspection Report on Catticus Corporation (a California corporation) 
on July 12, 2004. NEH awarded Catticus a grant that was subcontracted out to two other organizations. 
Catticus was in fact the fiscal agent for Videoline Productions, and Two Dollars and A Dream, 
both located in New York City. 
The objective of this review was to determine the adequacy of the grantee’s accounting system, internal 
controls, and monitoring procedures related to the two subrecipients. In addition, we reviewed the 
adequacy of the two subrecipients’ accounting system and internal controls. The grantee was selected 
for this review because the organization received a substantial award from NEH and was not required 
to have an OMB Circular A-133 audit. 

We found that for all three organizations, the accounting system and the procedures in use at the time 
of the review were adequate for controlling and monitoring costs incurred by the organizations. However, 
we did make several recommendations to further improve the systems for the accounting of federal 
funds.

OVERHEAD DESK REVIEWS 

The NEH OIG performs overhead desk reviews (ODRs) for grantees requiring an indirect cost rate. The 
reviews are done in accordance with the PCIE, Quality Standards for Inspections. The OIG sends the results 
of the ODRs to the NEH Accounting Office, where a member of that staff negotiates the indirect cost 
rates with the grantees. We completed two reviews during this period, 

NEH OIG Semiannual Report 
4 
September 2004 


AUDIT AND REVIEW ACTIVITIES (Continued)


SINGLE AUDIT ACT REVIEWS 

In fiscal year 2004, the NEH spent approximately 85% of it's annual expenditures on grantees. Many of 
NEH’s grantees are covered by the Single Audit Act Amendments of 1996. Grantees expending 
$300,000 or more in federal dollars per annum are required to obtain an OMB Circular A-133 audit. The 
OIG receives A-133 reports from other federal agencies (mainly the Department of Health and Human 
Services), state and local government auditors, and independent public accountants. The objective of 
the audit is to determine whether federal funds are expended in accordance with applicable laws and 
regulations. 

During the six-month period ended September 30, 2004, we reviewed 105 OMB Circular A-133 audit 
reports. Fifteen of the reports contained audit findings and summaries of these reports were issued to 
NEH for action and follow-up. The most common deficiencies noted were that the organizations: 

1. 
did not adequately monitor subrecipient activities; 
2. 
failed to adhere to federal reporting requirements; and 
3. 
lacked satisfactory internal control/segregation of duty policies and procedures such as: 
a. 
bank reconciliations were not reviewed by anyone other than the person doing the reconciliation, 
b. 
invoices paid were not stamped “paid” to avoid using the invoice twice, 
c. 
travel policies were not formalized in writing, 
d. 
executive director’s expenditures were not approved by a board member, 
e. 
approval on invoices were lacking, and 
f. 
purchase orders were not used. 
The OIG will be increasing our efforts to monitor these single audit reviews because we continually find 
deficiencies during our quality control reviews (QCRs) of independent auditor workpapers. 

NEH OIG Semiannual Report 
5 
September 2004 


AUDIT AND REVIEW ACTIVITIES (Continued)


AUDITS/REVIEWS IN PROGRESS 
United States Accountability of Tax Dollars Act of 2002 

This law requires NEH, as well as several other small agencies and commissions, to prepare and submit 
to the Congress and the Director of the U.S. Office of Management and Budget an audited financial 
statement. NEH received a written waiver from OMB for fiscal year 2003, and a verbal waiver for fiscal 
year 2004. During this period, staff took training to provide adequate management of the audit. 

Inspection of Grantee’s Accountability and Management Systems 

The objective of this review is to determine the adequacy of the grantee’s accounting system, internal 
controls, and management policies to provide reasonable assurance that NEH grant projects are accounted 
for and managed in accordance with NEH requirements. 

Two inspections are in progress: 

· Southeastern Library Network, Inc., Atlanta, GA 
· AMIGOS Library Services, Inc., Dallas, TX 
Audit of Grantee Costs Claimed 

The objective of this audit is to determine if the costs charged to the grant awarded to the Theolonius 
Monk Institution of Jazz, Washington, DC are allowable in accordance with NEH requirements and applicable 
OMB Circulars.

 Overhead Desk Reviews 
Grantee City, State 

The Center for Research Libraries, Inc. Chicago, IL 
The Huntington Library San Marino, CA 
Southeastern Library Network Atlanta, GA 
Amigos Library Services Dallas, TX 
Oxford University Press New York, NY 

NEH OIG Semiannual Report 6 September 2004 


INVESTIGATIVE ACTIVITIES


BACKGROUND 

The Inspector General Act provides the authority for the Office of Inspector General to investigate 
possible violations of criminal or civil laws, administrative regulations, and agency policies, which relate 
to the programs and operations of the NEH. The OIG Hotline, e-mail address, and regular mail are 
efficient and effective means of receiving allegations or complaints from employees, grantees, 
contractors, and the general public. The OIG has obtained assistance from other OIGs, the Federal 
Bureau of Investigation, the Postal Inspection Service, and other investigative entities as necessary. 

When the OIG receives a complaint or allegation of a criminal or administrative violation, we make a 
determination of the appropriate action to take. This can be an audit, an investigation, a referral to 
another NEH office or division, or a referral to another federal agency. 

As of April 1, 2004, three cases were open. During the six months ended September 30, 2004, we 
received seventeen “Hotline" contacts. We are holding five matters open at September 30, 2004. 

OPEN AT APRIL 1, 2004 

One matter concerning the unauthorized release of confidential information was sent to the Department 
of Justice (DOJ) for further review. The DOJ declined prosecution and the case was resolved administratively. 


The second case involving a grantee institution and project director that may have provided false information 
in grant applications has been referred to senior level officials at the institution. The case is being 
handled under the NEH Policy of Research Misconduct. The organization will provide an internal 
investigative report to the NEH OIG. The IG has the authority to accept, reject, or perform additional 
work as necessary. The organization is expected to report to the NEH OIG in December 2004. 

The third matter concerns a grantee in the New England area that submitted a number of incorrect financial 
reports. This case remains active. The attorneys for the grantee, NEH, and the OIG are working on 
a settlement. 

CONTACTS DURING THE PERIOD 

We received seventeen contacts during this six-month period. Eight concerned internal NEH matters, 
three of which were closed after the OIG made inquiry into the matters and found they were unsubstantiated. 
One internal issue involved ethical conduct and this was referred to the NEH ethics official. 

Two contacts concerned the new NEH accounting system and one involved the use of gift funds received 
by NEH. These three complaints were combined with one contact received from the General Accountability 
Office (GAO) in August 2004 which referenced similar issues. We have closed the respective files 
for the three contacts since the subject complaints are addressed as part of our investigation of the complaints 
forwarded by GAO. The GAO letter stated that they received an anonymous e-mail that contained 
six allegations of wrong doing by NEH management. This investigation is still in process. 

Another matter involved an EEO allegation, by a prospective grant applicant, that NEH discriminates 
against a minority group. Since the NEH EEO official was not in town, the OIG handled the case. We 
gathered information from several NEH offices that provided the basis for our conclusion that the complaint 
had no merit. We closed the file. 

NEH OIG Semiannual Report 7 September 2004 


INVESTIGATIVE ACTIVITIES (Continued)


Five contacts involved NEH grantees: 

¨ One contact included a charge that an employee at a grantee organization forged checks and used 
NEH funds to purchase personal items. The organization’s attorneys contracted with an independent 
public accountant (IPA) to audit the books and records. The IPA determined that NEH funds 
were misappropriated. We requested and received a refund. 
¨ One complaint was referred to the OIG Audit Division and an audit was initiated in late September 
2004. 
¨ One grantee matter concerned misuse of funds; however, the allegation did not specifically state 
that federal funds were involved. We intend to pursue this in the next semi-annual period. 
¨ One complaint concerned an NEH challenge grant. We were unable to look into this matter during 
this period due to other priorities. 
¨ One complaint concerned a charge of misappropriation of funds by a grantee that has discontinued 
operations. We were unable to look into this matter during this period due to other priorities. 

Three other contacts were found not to be NEH issues, and were referred to other agencies. 

MATTERS REFERRED TO PROSECUTIVE AUTHORITIES 

One new case was referred for criminal prosecution during this reporting period. The U.S. Attorney’s 
Office declined prosecution. The matter has been settled administratively. 

HOTLINE AND PREVENTION ACTIVITIES 

We maintain a local Hotline phone number, agency e-mail address, and an Internet address to provide 
additional confidentiality for those persons bringing matters to the attention of the OIG. We continue to 
issue agency-wide e-mail messages to NEH staff informing them of violations that should be reported to 
the OIG. We also send e-mail messages several times during the year to inform NEH staff about the OIG 
operations. Posters advising staff to contact the OIG are displayed throughout the agency’s facilities. 

ANONYMOUS E-MAIL 

We have on the NEH Intranet and the Internet a system for staff, grantees, contractors, etc. to report 
waste, fraud, abuse, and mismanagement in an anonymous manner. 

NEH OIG Semiannual Report 8 September 2004


INVESTIGATIVE ACTIVITIES (Continued)


SUMMARY OF INVESTIGATION ACTIVITY 

Open at beginning of period 3 
Matters brought to the OIG during 
the reporting period 17 
Total investigative contacts 20 
Closed or referred during 
the reporting period 15 (a) 
Open at end of period 5 

(a) Three cases were combined with the GAO contact. 
NEH OIG Semiannual Report 9 September 2004


OTHER ACTIVITIES


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 government-wide activities to combat fraud and waste in federal 
programs and operations. OIG staff regularly attend ECIE meetings and provide information to the 
ECIE. 


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 legisla-
tion and/or regulations (1) impact on the economy and efficiency of agency programs and operations, 
and (2) contain adequate internal controls to prevent and detect fraud and abuse. During this period 
we provided the ECIE with comments on various matters affecting the Inspector General.


WORKING WITH THE AGENCY 

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 program staff 
discuss panel review results with the chairman and his immediate staff), and the National Council 
meeting. In addition, the IG and Deputy IG attended the Chairman's monthly policy group meetings. 
An OIG staff person attended monthly NEH Employee Association meetings. OIG staff was also in-
volved in the review of NEH administrative directives.


The Office of Inspector General contributes to the discussions; however, the office does not partici


pate in policy making. 

PEER REVIEW OF THE U.S. COMMODITY FUTURES TRADING COMMISSION ~ OIG AUDIT FUNCTION 

During this period, the OIG reviewed the audit function of the U.S. Commodity Futures Trading Commission ~ 
Office of Inspector General (CTFC-OIG). Our review covered the year ended September 30, 2003 and was 
conducted in conformity with standards and guidelines established by the President’s Council on Integrity and 
Efficiency. We issued our report to the CTFC-OIG on August 27, 2004. 

OIG INTERNET AND INTRANET 

The OIG has listed several semiannual reports on the Internet. The reports are accessible through the 

NEH homepage and the OIG homepage (http://www. neh.gov/whoweare/OIG.html). 

To enhance the NEH staff's recognition of the OIG mission and responsibilities, we provide links to 
several other federal agencies such as the Office of Management and Budget, the General Accounting 
Office, the Office of Government Ethics, and the IGNET.


NEH OIG Semiannual Report 10 September 2004 


OTHER ACTIVITIES (Continued)


INVESTIGATION ASSISTANCE GIVEN TO IMLS 

Under an agreement with the Institute of Museum and Library Services, (IMLS), the NEH OIG provides 
investigative services to IMLS. During this period, the OIG performed investigative work for IMLS concerning 
a grantee in Connecticut. A draft report has been issued to the IMLS general counsel. 

TECHNICAL ASSISTANCE 

Throughout the reporting period, OIG staff provided telephone technical assistance to NEH grantees and 
independent public accountants concerning various matters including the preparation of indirect cost proposals 
and the implementation of federal audit requirements. 

NEH OIG Semiannual Report 11 September 2004 


TABLE I 
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. 
IG Act Reference Reporting Requirements Page 
Section 4(a)(2) Regulatory and Legislative Reviews……………………………… 10 
Section 5(a)(1) Significant Problems, Abuses, and Deficiencies………………… * 
Section 5(a)(2) Recommendations for Corrective Action ………………………… * 
Section 5(a)(3) Prior Significant Recommendations Unimplemented…………… * 
Section 5(a)(4) Matters Referred to Prosecutive Authorities……………………… 8 
Section 5(a)(5) Instances Where Information Was Refused or Not Provided…… * 
Section 5(a)(6) List of Audit Reports Issued………………………………………… 2 
Section 5(a)(7) Summary of Significant Reports…………………………………… 3-6 
Section 5(a)(8) Audit Reports - Questioned Costs….……………………………… * 
Section 5(a)(9) Audit Report - Funds To Be Put to Better Use.…….…………….. * 
Section 5(a)(10) Prior Audit Reports Unresolved…………………………………..… * 
Section 5(a)(11) Significant Revised Management Decisions………………………. * 
Section 5(a)(12) Significant Management Decisions with which OIG Disagreed…..* 
* None this period 
NEH OIG Semiannual Report 12 September 2004 


TABLE II 
INSPECTOR GENERAL-ISSUED REPORTS 
WITH QUESTIONED COSTS 

A. For which no management decision has been made by the 
commencement of the reporting period. 
Number 
Of Reports 
- 0 Questioned 
Cost 
$ - 0 Unsupported 
Cost 
$ - 0 B. 
Which were issued during the reporting period. - 0 $ 
- 0 $ 
- 0 Subtotals 
(A+B) - 0 $ 
- 0 $ 
- 0 C. 
For which a management decision was made during 
the reporting period. 
i. Dollar value of disallowed costs. - 0 $ 
- 0 $ 
- 0 ii. 
Dollar value of costs not disallowed (grantee 
subsequently supported all costs). 
- 0 $ 
- 0 $ 
- 0 D. 
For which no management decision has been made by the 
end of the reporting period. 
- 0 $ 
- 0 $ 
- 0 E. 
Reports for which no management decision was made within 
six months of issuance. 
- 0 $ 
- 0 -$ - 0 TABLE 
III 
INSPECTOR GENERAL-ISSUED REPORTS 
WITH RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE 

Number Dollar 
Of Reports Value 

A. 
For which no management decision has been made by the commencement - 0 -$ - 0 of 
the reporting period. 
B. 
Which were issued during the reporting period. - 0 -$ - 0 C. 
For which a management decision was made during the reporting period. - 0 - $ - 0 i. 
Dollar value of recommendations that were agreed to by management. - 0 -$ - 0 ii. 
Dollar value of recommendations that were not agreed to by 
- 0 -$ - 0 management. 
D. 
For which no management decision was made by the end of the reporting - 0 -$ - 0 period. 
NEH OIG Semiannual Report 13 
September 2004 


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. 100504). 


NEH OIG Semiannual Report 14 September 2004