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093004 1 (1971-05-10)

handle is hein.gao/gaobacwwk0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFCE WASHINGTON, D.C. 20548 CIVIL DIVISION AY 1 71 Dear Mr. Donaty: BEST DOCUMENT AVAILABLE The General Accounting Office has reviewed the status of ~ppropriated unds of the Securities and Exchange Commission as of March 31, 1971, pursuant to a request of November 12, 1970, by the former Chairman, Mr. Hamer Budge. Our review was directed at deter- mining whether the Commission had incurred or could be expected to incur an overobligation of funds during fiscal year 1971. Our review, which was completed in April 1971, included (1) an exanination of selected financial records pertaining to the 9-month period July 1, 1970, through March 31, 1971, (2) an analysis of the events which led to the October 31, 1970, forecast of a possible $310,000 overobligation, (3) an evaluation of actions taken by the Commission to preclude an overobligation of fiscal year 1971 funds, and (4) an evaluation of the Commissionts financial reporting system and financial controls to prevent the occurrence of an overobliga- tion in future years. In December 1970 the Commission imposed limitations on promo- tions, hiring, and other expenditures to preclude incurring the estimated $310,000 overobligation of its fiscal year 1971 appropria- tion. As of March 31, 1971, the Commission estimated that the total expenditures of the Commission would amount to about $23,572,800, or about $47,200 less than the estimate of funds available to the Commission for fiscal yeap 1971. In our opinion the methods used in arriving at the estimated total expenditures were reasonable, and we believe that the Commission will not overobligate its 1971 funds if the planned level of expenditures is maintained and the Commission receives the $1.25 million supplemental appropriation now pending before the Congress. The March 31, 1971, estimate of total expenditures for fiscal year 1971 is predicated on the assumptions that during the fourth quarter of fiscal year 1971 (1) six employees would resign and (2) eight employees would retire and lump-sum payments to the retir- ing employees would not exceed $29,871. In the event that either of these assumptions proves incorrect, additional spending limitations may have to be imposed to prevent an overobligation of funds. In this regard, a total of 198 Commission employees are eligible to retire during fiscal year 1971 and the Commission's contingent lia- bility for lump-sum payments to these employees greatly exceeds the amount provided for in the current operating plan. 50TH ANNIVERSARY 1921-1971 11 I., I W I - , _' i 4V 1

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