Description of document: Library of Congress (LOC), Office of the Inspector General Semiannual Report to the Congress For 01-Apr-2006 - 30-Sep-2006

Released date: 28-February-2008 Posted date: 10-March-2008 Date/date range of document: 01-Apr-2006 - 30-Sep-2006 Source of document: The Library of Congress

Office of the Inspector General 101 Independence Ave, SE Washington, DC 20540

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COUNSEL TO THE IG

Vacant (Part-Time)

INSPECTOR GENERAL

Karl W. SchornagelCPA

ASSISTANTTO THE IG

Kathleen L. O'Neal

........................................................................................................

ASSISTANT INSPECTORGENERAL FORINVESTIGATIONS

Nicholas G. ChristopherEsq., CPA

.......................................................................................................

Kenneth R. Keeler

SENIOR AUDITOR

John W. Kane

SENIOR AUDITOR

John R. MechCPA

AUDITOR

Sherry D. AngwafoEsq.

Cover: U.S. Capitol Rotunda

\.

SENIOR AUDITOR

Patrick J. CunninghamCIA

AUDITOR

Cornelia E. Jones

AUDITOR

Douglas C. McLellanCPA

SENIOR AUDITOR

Judy M. FischerCISA, CIA

IT SPECIALIST

Vacant

AUDITOR

Mary A. HarmisonCPA

AUDITOR

Vacant

SPECIAL AGENT

Pamela D. Hawe(Part-Time)

INVESTIGATOR

Barbara A. Hennix

INVESTIGATOR

Vacant(Part-Time)

LEGAL ASSISTANT

Michael R. Peters

i. The LIBRARY of CONGRESS

Ocrober 31, 2006

A MESSAGE FROM THE INSPECTOR GENERAL

I am pleased ro presem our Semiannual Report ro the Congress for the period ending September 30, 2006.

In the last six momhs we prepared reports on performance-based budgeting, warehouse comrols, the "North Carolina

Telecommunications Project" grant, the fiscal year (FY) 2005 Library-wide and Cooperative Acquisitions Program Revolving

Fund financial statemems, the digital talking book program, the NEWSUNE fund, and indirect COSt rates related ro two of

the Library's gram programs. We also reviewed the initiative to acquire an asset managemem system and project plans for

the "New Visitors' Experience." In addition, we followed up on our FY 2004 audit of reading room space allocations and

FY 2005 audit of succession planning, and cominued to monitor visitor runnel preparation activities. Finally, we conducted

several investigations on tOpics ranging from copyright infringemem to personal information securiry.

In the next six momhs, we will report on in-progress reviews of the Library's collections acquisition program, human

resources policies, travel administration, managemem of the contracts office, financial disbursemems, research request

services, National Digital Information Infrastructure and Preservation Program grants, the Library's and Madison Council's

FY 2006 financial statements audits, the FY 2006 financial statements audit of the Open World Leadership Center, and

other topics.

We look forward to a continued harmonious relationship with Library management, and appreciate the support and

cooperation extended to our staff.

Karl W. Schornagel

Inspector General

TABLE OF CONTENTS

INTRODUcnON .

AUDITS 3

Performance-based Budgeting..................................................................................................... 3

Telecommunications Grant.......................................................................................................... 3

Warehouse Internal Controls....................................................................................................... 4

Library of Congress Financial Statements 5

Cooperative Acquisitions Program Financial Statements 6

INVESTIGATIONS..... 8

FOLLOW-UP ON PRlOR PERlOD RECO;\IMENDKflONS......................................................................................... 12

Visitor Tunnel Preparations.......................................................................................................... 12

Education and Research Consortium of the Western Carolinas............................................ 12

Succession Planning.. 13

Reading Room Utilization............................................................................................................. 13

UNI~[PLD[ENTED REC01\1MENDATIO<'..'S................................................................................................................ 14

FUNDS QUESTIONED OR PCT TO BElTER USE........................................... 17

INSTA.'.:CES WHERE INFORJvIATIO, OR ASSISTANCE REQCESTS \X/ERE RUCSED................................................ 18

STATCS OF RECOM1\'IFNDATIONS WITHOUT MANAGEMENT DECfSIONS.............................................................. 18

SIGNIFICA.'.:T REVISED MANAGEMENT DECISrONS.............................................................................................. 18

SIGNIFICANT MANAGOfENT DECISIONS WrrH WHICH OIG DiSAGREES......................................................... 18

OTHER ACflVITlES.................... 19

REVIEW OF LEGrSLATION AND REGULATIONS..................................................................................................... 21

INTRODUCTION

THh MI~SIO~ OF THI:. OFFICi'. OF THI:. INSPI:ClOR GENFRAI IS I'o PRO\10TI:. bCONOMY,

HFICIENCY, AND l-.FFECTIVl-.NESS BY DE'l H'TlNG AND PRl-Yl-.N l'ING \X'ASTr, FR.,\UD, AND

ABUSl-.

To accomplish our mission. we conducr audirs and invesrigarions. Our goals, objecrives, srraregies, and performance

indicarors can be found in our Srraregic Plan, available on our Web sire ar hrrp:llwww.loc.gov/abour/oig.

In addirion ro conducring audirs and invesrigarions, we lend our experrise on a consulring basis ro many Library offices

and exrernal organizarions. We are currenrly working wirh rhe Cenrer for Research Libraries in an advisory capacity ro

derermine an approach for audiring and cerrifying reposirories of digiral informarion.

Our philosophy is ro be proacrive rarher rhan audir "afrer rhe facr." We believe rhis approach resu!rs in a more efficienr use

of resources by derecring and prevenring problems early. Accordingly, we are following several key projecrs rhroughour rhe

Library and rendering assisrance and making recommendarions as needed.

Our highly qualified sraff of eighr audirors and cwo invesrigarors is educared and cerrified in various disciplines. We

are, collecrively. five cerrified public accounranrs, cwo arrorneys, cwo cerrified inrernal audirors, one certified informarion

sysrems audiror, and one librarian.

SEMIANNUAL REPORI ro I"HE CONGRrSS II

The U.S. Capito!: National Statuary Hall viewed from the south

II SEMIANNUAL R~.POR'J TO THE C()NC;Rt:SS

AUDITS

PERFORMANCE-BASED BUDGETING

\L1da Rcrort o. 211114 I ::;111

"~'r(cll1hl'f 2( JlI()

Congress has direcred me legislarive agencies

including rhe Library ro begin ro use performance

based budgering (PBB). PBB is designed ro improve

governmenral accounrabiliry by linking budger

decisions ro resulrs. This provides decision-makers

wirh rhe means ro objecrively evaluare and allocare

budgerary resources. We conduered a review of

rhe Library's currem budgering process wirh rhe

objecrive of evaluaring Library managemenr's

progress in moving roward PBB.

Our audir found rhar rhe Library has iniriared

rhe developmem of several componems of PBB,

including significam emphasis on revamping

irs srraregic planning process. We concluded

rhar rhe Library's developmem of PBB could be

improved wirh a plan of aerion and milesrones

rhar coordinares PBB developmem wirh orher

performance managemem funcrions. Specifically,

we made rhe following recommendarions for

improving and expediring rhe Library's rransirion

ro PBB:

Plan of Acrion and Milesrones - The Library

should develop a plan rhar idenrifies rhe roles of key

members ofsenior managemem as well as milesrones

for rhe complerion of key PBB elemenrs.

Adminisrrarive Officer - The Chief Financial Officer

should be appoimed as rhe PBB adminisrrarive

officer.

Policy Improvemems - The Library should

enhance irs policy for Planning, Sudgering, and

Program Performance Assessmem by designaring

responsibiliry for conducring exrernal environmenral

assessmems, idemifying duplicarions in programs

and services, and exempring areas from cerrain

elemems of PBS where irs use is impracrical.

Performance Managemenr Informarion Sysrem

- Planning should begin now for an auromared

emiry-wide performance managemem informarion

sysrem.

Coordinarion of Funcrions - Library managemem

should coordinare efforrs for workforce

rransformarion, performance managemem, and

PBB.

Library managemem generally disagreed wirh our

recommendarions. As a resulr, rhey are unresolved

ar rhis rime.

TELECOMMUNICATIONS GRANT

\L1L11l RL'j1I1J'1 1I.2111 1() ')\12

crtclllhn 21 JlI()

In December 200 1, rhe Library awarded rhe Norrh

Carolina Telecommunicarions Projecr (''rhe granr")

ro rhe Educarion and Research Consorrium of rhe

Wesrern Carolinas, Inc. (ERC). The gram's purpose

is ro provide a low-cosr, high-speed connecrion

berween rhe Library of Congress and educarional

faciliries, libraries, and nerworks serving rhe wesrern

Carolinas.

We performed an audir of rhe gram. Our objecrive

was ro derermine if ERC was adminisrering rhe

gram according ro irs rerms and condirions and

applicable laws and regularions. Overall. we found

rhar ERC was adequarely adminisrering rhe gram,

bur had some findings and recommendarions, as

follows:

Noncompliance wirh Cerrain Gram Provisions ­

ERC did nor comply wirh cerrain gram provisions.

FirsI', ir did nor maimain a separare gram bank

accoum for program income. As a resulr, ir may nO[

have been able ro disringuish berween gram funds

and program income. Second, ERC has neirher

acknowledged rhe Library in cerrain marerials

SEMIANNUAl RJ..l'ORI TO THE CON(.RJ-.SS II

publicizing the grant, nor obtained the Library's approval

prior to using its name in other materials. As a result,

the Library's abiliry to protect the goodwill and prestige

associared with its name is impaired and the general public

is denied rhe oppoerunity to know how its tax money is

being spent. We recommended that ERC immediately

establish a separate bank account for grant program income,

begin acknowledging the Library in the grant's publiciry

marerials, and stop using rhe Library's name wirhour prior

approval.

Lack of Adequate Policies and Procedures - ERe's

Operating Policies Manual did not contain procedures for

drawing down funds, derermining allowability of cosrs,

adminiStering program income, acknowledging and using

the Library's name, or for making key personnel changes.

As a result, adequate safeguards did not exist to control

ERe's program and financial management of rhe grant.

We recommended that ERC make appropriate revisions to

its policy manual to provide procedures to address these

important management areas.

Borh ERC and rhe Library's Grants Management Office

concurred with our findings, and have already begun

implementing our recommendations.

WAREHOUSE INTERNAL CONTROLS

\(r~~l,tll'1I1 R~I'{)rr ll.21111;:i \T ()fJ4

'Llne .21111(,

The Library's Logistics Section manages more than 100,000

assets valued ar over $200 million. Because of recem

rhefrs of Library compurers from the Landover Annex

Warehouse, we conducted a review of rhe internal concrol

system in place at the warehouse to derermine wherher

inventory controls, management oversight, and physical

securiry were comparable ro besr indusrry pracrices.

We derermined that rhe controls are nor comparable to

besr indusrry pracrices. However, management has taken

acrion in rhe pasr two years to address COntrol weaknesses.

If rhese acrions and our recommendations are properly

implemented and pursued continuously, improvements in

physical inventory controls and inventory record accuracy,

as well as physical security for the warehouse will result.

Our findings and recommendations are summarized as

follows:

The Logistics Secrion Has Not Maintained Physical

Accountability of its Inventory - For the two years prior to

thefts of computers, warehouse staff had neither performed

inventories ofassets stored at the warehouse, nor maintained

perpetual inventory records. During our field work,

Logistics was adding inventory dara into a new automated

inventory sYStem, "Intellicrack." We recommended

conducting periodic counts of rhe highly susceptible

assers and comparing rhe counts with inventory records.

We also recommended limiting access to the Intellicrack

system and assigning the Assistant Head of Logistics or a

designated alternate responsibility for recording inventory

adjustments.

Security Measures Did Not Sufficiendy Address the Threat

of Employee Theft - Overall security needs to be bener

targeted to address the threat of employee theft. Although

infrascructure security weaknesses are being addressed,

additional inspections are needed to fuerher improve

ovetall securi ty.

Bener Separation of Duties and Reconciliations Should

Improve Receiving and Shipping - To improve inventory

integrity, we recommended separating the functions

of entering information into the Intellicrack inventory

system and performing the custodial activities such as

receiving, shipping, and storing physical assets. We also

recommended thar Logisrics periodically reconcile all back

orders with rhe service units to determine if rhe vendors

filled the orders.

Grearer Separation of Duries Is Necessary To Ensure

Integrity of rhe "Computers for Learning" Program ­

Landoverwarehouse staffare responsible for borh processing

requests from charitable organizarions to participare in rhe

program and disposing of surplus propeery. Management

should assign someone nor working at rhe Landover

warehouse responsibility for processing and approving

SEMIANNUAL Rr.PORT 101 HE CONGRESS II

partiCipation requests. We also recommended considering

the surplus program operated by Dell Computers, Inc. as

a best practice.

The Library's warehousing and security officials generally

agreed with our findings.

LIBRARY OF CONGRESS

FISCAL YEAR 2005 FINANCIAL STATEMENTS

\udlt Rq'"l"f "\.11. 21 II I.:;

\ L1\ 2\ 111(\

Kearney & Company audited the Library's consolidated

balance sheets as of September 30, 2005 and 2004, and

the related consolidated statements of net COStS, changes in

net position, and financing, and the combined statements

of budgetary resources for the fiscal years then ended. In

the auditOrs' opinion, the financial statements, including

the accompanying notes, present fairly in all material

respects the financial position of the Library and its net

COStS, changes in net position, budgetary resources, and

financing in conformity with generally accepted accounting

principles. The Library's financial statements were delayed

because of the implementation of its new financial system

in FY 2005.

The auditors also performed tests of compliance with laws

and regulations; considered internal controls over financial

reporting and compliance; and in a separate report,

examined management's assertion about the effeCtiveness

of internal COntrols over safeguarding collections assets.

The auditOrs found one instance of non-compliance with

laws and regulations. The auditors performed tests of

compliance with certain provisions of laws and regulations

and determined that during FYs 2005 and 2004, the

Library was not in compliance with the CongreSSional

Accountability Act of 1995. In the Act, Congress made

its facilities and employees subject to the same safety laws

that apply outside the legislative branch. l1Je Office of

Compliance conducted a yearlong fire safety investigation

thaI culminated in a report issued in January 200 I thar

identified numerous safety hazards in the Library's three

Capitol Hill buildings. As of this semiannual period, the

Library has abated ninety-nine percent of the fire safety

hazards for which it is responsible, and has devised a plan

of action to abate the remaining open items.

Internal Controls Over Financial Reporting - The auditors

did not express an opinion on internal controls. However,

their evaluation of those controls revealed the following

repOrtable conditions:

Weaknesses in the General Support Systems (GSS)

(Modified Repeat Condition) - The General SuppOrt

Systems include hardware and supporting utility software

to maintain the overall system. Effectively applied, controls

in this area increase the likelihood that data confidentiality,

integrity, and availability are maintained in the application

systems.

The auditors identified control weaknesses in the

Library's GSS that affected the availability, integrity, and

confidentiality of all applications and data residing in the

processing environment. In order to address the control

concerns, the Library's Information Technology Services

(ITS) developed the Financial Hosting Environment

(FHE) to maintain only certified and accredited GSS and

applications. ITS completed the FHE in late June 2005.

While the FHE has appropriate risk assessments, security

plans, and security testing and evaluations, it was in place

for only three months of FY 2005, and therefore could not

be relied on for the nine months of activity prior to the

FHE's implementation.

Entity-Wide Security Program Not Fully Implemented

(Modified Repeat Condition) - The Library had not

implemented an entity-wide security program 10

compliance with Library of Congress Regulation 1620,

"Information Technology Security Policy of the Libtary of

Congress."

While the Library developed a plan and strategy for

an entity-wide security program (dated July 2005), the

program had not been implemented entity-wide. As of

SE.VlIANNUAI REPORt 10 tHE CONGRfSS II

January 2006, however, rhe Library esrablished a more

comprehensive enriry-wide securiry program.

Managemenr's AsserrionAbour rhe Effecriveness oflnrernaJ

Conrrols Over Safeguarding Collecrions Assets - Alrhough

the vaJuarion of rhe coJJecrions of herirage assers is nor

reporred in rhe Library's balance sheer, rhe assers represenr

an imporranr srewardship responsibiliry requiring a sysrem

of conrrols ro ensure accoumabiliry. To rhis exrem, rhe

Library includes in irs financial sraremems a srewardship

reporr and makes an asserrion abour rhe effecriveness of rhe

imernal comrols over collecrions assers.

The audirors evaluared imernal comrols over collecrions

assers by examining, on a resr basis, evidence supporring

managemenr's asserrion and by performing such orher

procedures as rhey considered necessary. The audirors

believe rhar because of inherem limirarions in inrernal

comrols as of Seprember 30, 2005, unaurhorized

acqulSl[lOnS, use, or disposirion of collecrions assers may

occur and may nor be derecred, and rhar rhe Library fairly

represems rhar ir cannor asserr rhar collecrions invemory

conrrols are fully implemenred when herirage assers are in

processing and in srorage.

COOPERATIVE ACQUISITIONS

PROGRAM REVOLVING FUND

FISCAL YEAR 2005 FINANCIAL STATEMENTS

\ud,' Rl PI 'I" t •• 21 Ill') I ')112

\u'U'! 21111(1

In 1958, rhe Congress approved Public Law 83-480,

aurhorizing rhe Library ro use foreign currencies rhat accrued

to rhe governmenr from sales of agriculrural commodiries

to finance rhe acquisirion of books, periodicals, and orher

marerials. The law led ro rhe formarion of rhe Library's

overseas offices and Cooperarive Acquisirions Program.

Kearney & Company audired rhe FY 2005 and 2004

balance sheers and rhe relared srarernenrs of ner cosrs,

changes in net position, budgerary resources, and financing

of the Cooperative Acquisitions Program Revolving Fund

(the Fund) and issued its Independenr Audiror's Report.

The audirors concluded that the financial sraremenrs,

including rhe accompanying notes, presenr fairly in all

marerial respects the financial posirion of rhe Fund as of

Seprember 30. 2005 and 2004. The audirors found no

mareriaJ weaknesses in inrernal conrrols over financial

reporring bur did find two insrances of noncompliance

reporrable under Governmem Audiring Srandards:

Noncompliance wirh rhe Congressional Accoumabiliry

Acr - This finding mirrors the Library's finding lisred on

page 5 regarding safery violations.

Noncompliance with Public Law 105-55 - This law requires

rhe Fund ro submit audited financial sraremems ro rhe

Congress no later than March 31 of each year for rhe prior

fiscal year. The audir of the Fund's financial sraremenrs

was delayed beyond irs srarurory due dare because of rhe

implememarion of rhe Library's new financial sysrem. The

Library advised rhe appropriare Congresional oversighr

commirrees of rhe delay in issuing the sraremems.

The Fund is a componenr of the Library's consolidared

financial sraremenrs. The Library processes all of rhe

Fund's financial uansaction. Therefore, rhe two reporrable

condirions related ro Information rechnology that were

idenrified in rhe Library's financial audir also affecred the

Fund's imernal conrrol structure.

SEMIANNUAL REPORT '10 THE CONl;R.hSS II

The US. Capitol: Section of the West Corridor

SE\.flANNUAl Rf.poRr ro THE CON(,RfSS II

INVESTIGATIONS

During this reponing period we opened - and closed - 21 investigations. We referred four cases to

the U.S. Atwrney's Office; of those, three were declined and one is pending. We recovered $4,000 in

telephone credits, and prevented the illegal sale of29 National Library Service for the Blind and Physically

Handicapped (NLS) talking book players. We also forwarded four cases w Library management for

adminisuative action. Case and Hotline activity are detailed below:

TABLE 1: INVESTIGATION CASE ACTIVITY

CRI II \[ (1\11 \() I I I ~ I I

Beginning of period 8 20 28

Opened 7 14 21

Closed 3 18 21

End of Period 12 16 28

TABLE 2: HOTUNE ACTIVITY

(ll I

AJlegations received 2

Referred w management for action 4

Opened as investigations

Closed with no action

II SloMIANNUAI Rt.rORI TO lHE CONGRESS

SIGNIFICANT CRIMINAL AND

ADMINISTRATIVE INVESTIGATIONS

A Cataloging Disrribution Services (CDS) manager

complained ro the Office of me Inspecror General (OIG)

about hundreds of harassing telephone calls from Puerro

Rico to the CDS 1-800 Audix number. The calls incurred

significanr charges billed ro CDS and limited recording

space for legitimate calls. The manager also complained

that over several monrhs, AT&T had not resolved the

problem. OIG special agenrs documenred the offending

calls and worked successfully with AT&T's law enforcemenr

liaison ro obtain a credit for past and furure calls from the

Pueno Rico caller, including a $4,000 credit for prior

charges. Agenrs idenrified and conracted the caller in an

unsuccessful attempt ro srop the calls. We enlisted the

services of the ITS, who responded by setting up an Audix

accounr ro redirect the harassing calls. A local telephone

company in Puerro Rico is conremplating a civil aerion

against the caller. We may pursue criminal charges if the

problem persists.

(.()p\righllntnl1t:l·Il1Ull

A Library conrracror reponed that an audio book that was

narrated exclusively for NLS was for sale on eBay. OIG

agenrs determined that the seller, a convicted felon, had

sold 84 of the copyright-protected items afrer convening

them ro digital audio formar. An Assistanr U.S. Anorney

declined ro prosecute. The seller was banned from selling

on eBay and NLS removed the individual from its Talking

Books program.

[alsif~.Ing Illkr.tll.l11pll" Il11111 1);11.1

The Deparrmenr of Labor (DOL) OIG alerred us to

their arrest of a Library employee for stealing credit card

information from the DOL and making unauthorized

purchases while working there as a conrracror. OIG agenrs

determined that although fired from herconrracror position

at the DOL, she had failed ro disclose the terminarion

when applying at the Library. As a resule, her Library

employmenr was terminated.

l nauth()rl/ed l Sc ()t tbe I.ihl'.ln·~ ;llll(:

The OIG received a complainr alleging unauthorized use of

the Library's name for commercial purposes and solicitation

on Library property. Our investigation determined mat

represenratives of a company that marketed retail sales

discounrs had distributed coupons to Library staff in one

of the Library's buildings. The prinr on the coupons read:

"Complimenrs of the Library of Congress." We referred

the marrer ro the Library's Office of General Counsel,

who responded by enforcing existing Library regulations

disallowing commercial vendors on Library property.

Previously, vendors had been allowed ifa sponsoring Library

organization received a percenrage of sales receipts.

., i~t:ri,ln -Ill)" I I1ICrl1Ct ~C.1111

OIG agenrs acted on a tip from an external law enforcemenr

source that an employee was communicating via Library

e-mail with foreign nationals from Nigeria and Ghana

engaged in an Inrernet fraud known as the "Nigerian 419"

scam. The scammers promised ro send the employee a

large amounr of money after he paid some related expenses,

duping the employee into sending them approximately

$30,000. The employee also provided his Social Security

number, birrh date, and home address, thus exposing him

to idenrity theft and further loss. OIG agenrs coordinated

with the Library's Inrerpretive Services staff ro refer the

employee ro an organization that would help him protect

his remaining assets, and teferred information about the

employee's misuse of governmenr time and equipmenr

to Library managemenr. Disciplinary action is pending.

OIG agenrs also referred specific infotmation about the

scam to the U.S. Secret Service.

I t1SI I 1C;\1 I< '11 1>1 TlIllL IIld \lkl1d.l11l"l [{ce. >Ills

Library managemenr officials alleged that twO employees

had engaged in lime and ;}rrendance fraud. OIG agenrs

examined tecords, security surveillance video tapes, and

SE:I.1IANNUAI Rr.l'ORT 1'0 THE CONGRfSS II

electronic access files, which revealed significant

fraud. Faced with the evidence, both subjects

admitted to falsifying time and attendance records.

An Assistant U.S. Attorney declined prosecution.

One employee retired immediately following the

OIG interview; a removal action has been proposed

against the other.

An unattended trash bin in a public area containing a

large amount ofpersonal information was discovered

by OIG staff. Social Security numbers, credit card

receipts, and personal records were visible. OIG staff

prom pdy advised the responsible manager abou t

proper methods for disposal of personal information

and management immediately tightened security

procedures. The unsecured information may have

exposed individuals to identify theft.

(omputlT I ncidcnt

An automation liaison employee working for

NLS reported a key logger (a spyware tool)

installed on a computer used to process financial

and administrative information. An OIG agent

transported the computer to the Library's Security

Operations Center where it was examined by

a Computer Incident Response Team member.

Examination determined that the key logger had

been installed without malicious intent. Members

of the Security Operations Center and the Incident

Response Team, which includes the OIG, provided

several recommendations to Library management

to prevent a recurrence.

Pnl,lCri\l Inirlltl\c: Intlrnll ~lIt"\l'ill<lncc

We continue to monitor the Internet for stolen

Library property. During this reporting period, we

found 29 NLS cassette players and/or phonographs

for sale on eBay. The sellers were contacted and

directed to return the items to NLS.

Misuse of Government Equipment

We previously reported a case involving evidence

that a GS-14 employee had illegally accessed

another employee's e-mail account and forwarded

a derogatory message from the account to another

Library employee. Management suspended the

employee for 30 days.

Employee Attempts to Destroy Library Books

We previously reported a case involving a Library

employee who had intentionally placed 23 books in

a trash bin. Management removed the employee

from his position for misconduct.

SEMI NNUAI. RJiI'ORl TO rHE CONGtu-.SS II

The U.S Capitol Crypt

SF.M1ANNUAl. REI'Ol1.l' •\0 1liE. CONCRE.S~

FOLLOW-UP ON PRlOR PERlOD RECOMMENDATIONS

Effecring positive managemenr change in Library programs

and acrivities requires a four-phase approach: (I) idenrif}ring

areas rhar could benefir from OIG reviews, rhen planning

audirs, (2) conducting audirs and reponing rhe results,

(3) obraining agreemenr from Library managers ro rake

acrion ro resolve recommendations, and (4) following up ro

derermine rhar implementarion has occurred. Significanr

recommendarions from previous semiannual repons

on which correcrive acrion has nor been complered are

conrained in Table 3 on page 14.

We conducred rhree reviews rhis period ro follow up on

audirs reponed in prior semiannual repons:

VISITOR TUNNEL PREPARATIONS

"linn Report 0.21111') 1)\-1112

.I Ullt 21'"5

In FY 2005 we conducred an audir survey of prepararions

for opening rhe runnel berween rhe Jefferson Building and

rhe Capi£Ol Visiror Center (CVC). We found rhar acriviries

requiring long lead rimes had been planned and execured ro

prepare for opening rhe runnel ro rhe public. We followed

up on rhis survey in Seprember 2006. In our follow-up we

derermined rhar all consuucrion required ro accommodare

rhe runnel had been complered.

In anriciparion of rhe increased number of visirors ro

rhe Library due co rhe opening of rhe evc, rhe Library

is embarking on a program called rhe "New Visirors'

Experience" (NVE) rhar will reconfigure space in rheJefferson

building co add and significanrly enhance exhibirs and rhe

experience of visiring rhe Library. Projecr managemenr for

rhis program is under rhe Librarian's Chief of Sraff. The

projecr will be opened in phases, wirh rhe firsr expecred co

coincide wirh rhe opening of rhe CVC in 2007.

We conducred a survey of rhe sratus of prepararions for rhe

NVE. We imerviewed rhe Chief of Staff, key personnel in

Library Services, and Inregrated Suppon Services' Faciliry

DeSign and Conmuction (FD&C). We reviewed rhe

NVE operaring plan and derermined rhar Library Services

has planned for rhe expecred relocarion of Library sraff

due ro rhe reconfigured space. We found char FD&C has

worked wirh rhe NVE ream in developing scopes of work

and conuacring wirh archirecrural and engineering design

firms. The NVE ream has developed an inrraner Web sire

as a means ofcommunicaring currenr NVE news co rhe sraff

and inrroduced rhe NVE rheme "Bringing Knowledge Inro

Life:' ro Library sraff ar a Town Hall Meering in Augusr.

Based on our survey work, we believe char rhe planning

framework esrabJished by rhe NVE ream is effecrively

addressing rhe Library's plans for rhe NVE. We will

conrinue ro follow rhe Library's progress in FY 2007.

EDUCATION AND RESEARCH

CONSORTIUM OF THE WESTERN CAROLINAS

Rcpl'rl fl. 21J1)() (>1 -~()I

f i~c.t1 'r'L;\r 2111)') Illdirect Cost R,lte

In FYs 2000 and 2002, rhe Library awarded rhe "Advenrure

of rhe American Mind" and rhe "Nonh Carolina

Telecommunicarions Projecr" grams ro ERe. Borh grams

incorporare Office of Managemenr and Budger Circular

A-133 requiremenrs. These requirements, among orhers,

mandare rhar an enriry's Federal cognizam agency is

responsible for negoriaring and approving irs indirecr cosr

rares. As rhe cognizanr agency for ERC, rhe Library is

responsible for approving indirect cost rates on behalf of all

federal agencies providing funding co ERe.

We evaluated ERe's FY 2005 indirect rate proposal and

found errors in equipmenr classification and other issues.

ERC agreed wirh our findings and revised its FY 2005

indirecr rare proposal. We negoriated a rare .36 percenr

lower than rhe revised rare.

SI"flANNUAl RI'PORI ['()IHL C r ONCR~SS II

SUCCESSION PLANNING

Audit Report o. 200'+-PA-l 05 \larcb 2005

In March 2005, we issued an audit reporr on me Library's

succession planning efforrs. Our objective was ro

determine if the Library had a srrategy ro deal with the

emerging challenges of mainraining its workforce inro the

21 St cenrury.

We found that the Library's service units (aside from the

Congressional Research Service and Copyright Office)

did not have succession plans, and had not idenrined

critical posirions ro ensure continuiry of leadership and

knowledge. Therefore, we recommended that the Library,

with Human Resources Services at the helm, prepare a

formal succession planning program. This program would

provide guidance on succession planning ro Library offices.

We also recommended that Library offices link succession

planning ro their training and srrategic plans and also

identify mission-critical positions.

So far, the Library has resolved cwoofour recommendations.

The Srrategic Planning Office (SPO) recommended that

Library offices' FY 2007 Annual Program Performance

Plan objectives focus on workforce developmenr and

succession planning, and Library offices are now linking

some componenrs of succession planning to their rraining

and strategic plans. At the same time, Library offices are in

the process of idenrifying their mission-critical positions.

Nocwithstanding progress in those areas, the Library has srill

not implemented a formal succession planning program.

The Deputy Librarian has, however, agreed ro include key

succession planning componenrs - the idenrincation of

key skills, knowledge and training needs, and leadership

competencies - in the Library's Workforce Transformation

Iniriarive. We will evaluate the effect of these acrions once

that initiative is under way.

READING ROOM UTILIZATION

\udlt Rcrort '\Jo 2003-PA-lO.+

\1arch 200.+

In March 2004, we issued an audit reporr on the utilization

of the Library's reading rooms. Library Services has 20

reading rooms/information cenrers, the Congressional

Research Service (CRS) cwo, and the Law Library one.

The objecrive ofour audit was to determine whether reading

room space is utilized in the most efficienr way possible.

We found that, in general, Library Services and the Law

Library accumulated inconsistenr and inaccutate reference

statistics. Nocwithstanding the limited usefulness of the

statistics, we found that there was evidence of a substanrial

decline in the number of in-person visits ro the Library.

We recommended that Library Services and the Law

Library obtain more accurate and useful reading room

usage data. We believe the use of a uniform sampling

methodology would improve the reliability and efficiency

of reference counrs and create greater uniformity across

reading rooms. Furrhermore, we recommended that CRS,

the Law Library, and Library Services perform structured

requiremenrs analyses to determine reading room space

requiremenrs. For many years, most of the Library's

reading rooms have been in the same physical location and

connguration, bur their space requiremenrs had not been

formally evaluated. Finally, we recommended that Library

Services develop a decision model to help make decisions

about space usage. A standardized model would help

managemenr more objectively and consistently determine

the most appropriate use of space.

Since rhen, CRS and the Law Library have implemenred

the spirit of our recommendations. Library Services has

implemenred a system to better measure reading room

usage, however, more than cwo and a half years after we

issued our reporr, the remaining recommendations ro

Library Services remain open.

SEMIANNUAL REPOI<J 10 ['HI:. CONGR.I:.SS II

UNIMPLEMENTED RECOMMENDATIONS

TABLE 3: SIGNIFICANT RECOMMENDATIONS FROM PREVIOUS SEMIANNUAL

REpORTS FOR WHICH CORRECTIVE ACTION HAs NOT BEEN COMPLETED

R Vll I I !{[ • >.

I I) II

Office of the Librarian

Dispute Resolution Center

2002-PA-I04 September 2003

Office of Workforce Diversity

III Revise LCR 2020-7 to allow complainants to use dispute resolution during the formal EEO complaint process.

Learning at the Library 2001-PA-lOS

April 2003

Operations Management and Training

LG Provide training to new supervisors. I

Equal Employment Opportunity Complaints Office

2001-PA-I04 February 2003

Office of Workforce Diversity

Evaluate and revise LCR 2010-3.1.2

Succession Planning 2004-PA-lOS March 2005

Office of the Librarian

1.1 Mandate a Library-wide succession planning program that endows Human Resources Services with a strong leadership role. 3

Office of Strategic Initiatives"

FY 2004 Financial Sta tements/ Info. Technology

2004-FN-S02 February 2005

Information Technology

Services Fully implement an entiry-wide security program.

Integrated Support Services

Inventory and Equipment Management

2004-PA-I03 March 2005

ISS 1.2 Reevaluate space needs for the future warehouse planned at Ft. Meade.

Transportation Services 200S-PA-I01 March 2006

ISS LB Document policies and procedures and centralize transportation activities.

I The Library has implemented a new training program for new supervisors. Included are online training courses and instructor-led

training. Due to budgetary constraints, the instructor-led portion has been delayed until later in FY 2007. Once fully implemented,

this program will satisfy the intent of our recommendation.

2 LCR 201 0-3.1 is currently being revised .

.1 See page 13 for a discussion of this topic.

"(a) The Library's external auditors modified and consolidated current and prior year financial statements findings into the one

finding shown here. (b) Due to the implementation of the Library's new financial system, the auditors' opinion on the Library's

FY 2005 financial statements was not released until May 2006. (c) According to ITS, substantial progress was made during FY

2005 toward implementing this recommendation. The external auditors, conducting the FY 2006 audit of the Library's financial

statements, are currently reviewing documentation supporting this assertion.

II SEM[ANNUAL RhPORT [0 fHF CONGRESS

TABLE 3: SIGNIFICANT RECOMMENDATIONS FROM PREVIOUS SEMIANNUAL

REpORTS FOR WHICH CORRECTIVE ACTION HAs NOT BEEN COMPLETED (CONTINUED)

R

I. I

(l

I) J I ~I, \ If I I Rrc. R.

Office of the Chief Financial Officer

Management 2004-PA-I06 Strategic Revise the MCP Process to better identify Control Program March, 2006 Planning Office control weaknesses.

Management Control Program

2004-PA-I06 March, 2006

Strategic Planning Office

II Implement an automated tracking system.

Management Control Program

2004-PA-l 06 March, 2006

Strategic Planning Office

III Implement a verification review process.

Management Control Program

2004-PA-I06 March,2006

Strategic Planning Office

IV Improve the MCP communications mechanism.

Management Control Program

2004-PA-I06 March,2006

Strategic Planning Office

V Report implementation delays to the Librarian.

Office of Security and Emergency Preparedness

Management of Police 2003-PA-I05 August 2004

OSEP 53,545 Develop a mission statement and engage in a greater level of strategic planning.

Emergency Preparedness Program

2005-PA-l 04 March 2006

OSEP Develop a regulation defining and designating authoriry for the Emergency Preparedness Program.

Emergency Preparedness Program

2005-PA-I04 March 2006

OSEP III Develop or obtain a threat/risk assessment.

Emergency Preparedness Program

2005-PA-I04 March 2006

OSEP VI Develop an annual training plan and provide more emergency response training.

Emergency Preparedness Program

2005-PA-l 04 March 2006

OSEP VII Improve communications and training for disabled staff and disability monitors.

Emergency Preparedness Program

2005-PA-I04 March 2006

OSEP VIII,IX Develop an MOU with the Capitol Police and the Architect of the Capitol to clarify authority for direcring emergency situarions.

Library Services6

Utilization of Reading Rooms

2003-PA-I04 March 2004

Library Services II.l Develop a decision model for determining reading room space requirements.

Utilizarion of Reading Rooms

2003-PA-I04 March 2004

Library Services IL2 Use the model ro make decisions about reading room, office space, and storage requirements.

5 Recommendation numbers refer to an external consultant's report.

6 See page 13 for a discussion of this topic.

ShMJANNUAL. REPOR'1 fO fHE CONGIU.SS II

The U.S. Capitol Dome viewed from the south

II S~\;I1A NLlAI R~I'ORI TO ("HE CONCRESS

FUNDS QUESTIONED OR PUT TO BETTER USE

TABLE 4: AUDITS WITH RECOMMENDATIONS FOR BETTER USES OF FUNDS

R In

... for which no management decision was made by the starr of the period.

.. .issued during the period.

Subrotal

... for which a management decision was made during me reporring period:

Value of recommendations agreed [Q by managemenr. 1

HII \ I I

$4,000

Value of recommendations not agreed to by management.

· .. for which no management decision was made by the end of the reporting period.

... for which no management decision was made within six months of issuance.

TABLE 5:

R

AUDITS WITH QUESTIONED COSTS

· . Jor which no management decision was made by the start of the period.

.. .issued during the period.

· .. for which a management decision was made during the reporting period:

Value of recommendations agreed ro by management.

Subrotal

Value of recommendations nor agreed ro by managemenr.

... for which no management decision was made by the end of the reporting period.

.. .for which no management decision was made within six months of issuance.

I See "Telecomunications Abuse - 800 Number" on p. 9.

SEMIANNUAl. REpORT TO THE CONGRf.SS II

INSTANCES WHERE INFORMATION OR

ASSISTANCE REQUESTS WERE REFUSED

There were no instances during the period concerning the Library's unreasonable refUsal to provide

informacion or assistance, or any other refusal from a Federal, State, or local government agency.

STATUS OF RECOMMENDATIONS

WITHOUT MANAGEMENT DECISIONS

During the reponing period there were no recommendations more than six months old without management

decisions.

SIGNIFICANT REVISED MANAGEMENT DECISIONS

During the reponing period there were no significant revised management decisions.

SIGNIFICANT MANAGEMENT DECISIONS

WITH WHICH OIG DISAGREES

During the reponing period there were no significant disagreements with management about decisions

on OIG recommendations.

II S~.MIAN UAL REPOR[ 10 IHf CONGRESS

OTHER ACTIVlTIES

NEWSLINE FINANCIAL INFORMATION

~pL'(:ul RUlc\\" Rc:p"n 11.211(1(,-[

'ul~ 21I(J()

Pursuant to a request by the Chairman of the House

Appropriations Committee (Committee), the OIG

conducted a special review of financial information about

the NEWS LINE fund of the appropriation for the NLS.

The Chairman requested an explanation for the erroneous

information that the Library reponed to the Committee

in May 2006. The information involved $993,500 that

was made available for NEWS LINE's operation through

rhe FY 2003 appropriation. The Chairman specifically

asked whether rhe NEWSLINE account was properly

established in rhe Library's previous financial system and

properly convened ro irs new sysrem. He also requesred

rhar each rransaction be identified rhar should have been

recorded in rhe account, rhe locarions be identified where

rhose rransacrions were recorded in the financial sysrem,

and rhe reason for rheir erroneous recording.

We derermined rhar:

The NEWSLINE fund was nor properly esrablished in

rhe former financial sysrem, but a correction was made

prior ro conversion to rhe new financial sysrem.

Because of rhe way rhe correction was made, some of

NEWSLINE's financial informarion was nor properly

convened ro rhe Library's new financial sysrem.

Three NEWSLINE expenditures roraling $993,500 were

incorrecdy recorded.

As a resulr of rhese errors, rhe Library correcred rhe

NEWSLINE aCCount and enhanced irs procedures for

identifYing and correcring errors in irs financial sysrem. In

spire of rhe error in rhe conversion of rhis informarion, we

confirmed rhar the resulrs COntained in rhe OIG repon,

"Financial Sysrem Conversion Reconciliarion," reponed in

our March 2006 Semiannual Repon, are valid.

CONVERSION TO DIGITAL TALKING BOOKS

~Ul'\ \ Report '.,rl. 2111!(I-P\ Ill!

\UL,U't 21111()

We performed a survey of rhe NLS projecr ro conven and

replace rhe primary rechnology used in rhe narionallibrary

program that provides talking books, playback equipment,

and Braille marerials for blind and physically handicapped

patrons. NLS' plans call for digiral books and equipment

to begin replacing analog cassette books and machines in

FY 2008 and become rhe program's primary rechnology

by FY 20 II. Based on our survey, we derermined rhar an

audir of rhe projecr is nor necessary ar rhis time.

Informarion we collecred led us to conclude rhar NLS'

plans should enable ir to successfully converr rhe talking

book program's primary rechnology from analog to digital

formar over rhe currently planned transirion period.

Specifically, our survey revealed rhar NLS is effectively

managing irs plans ro:

· develop a digiral playback machine and relared

equipment,

· tesr and validare rhe new playback machine rhroughout

irs evolurion from design to full producrion, and

· produce 20,000 talking book tides in digital formal by

the time the new playback machine becomes available in

FY 2008.

Despite NLS' progress in these areas, we are concerned

rhal an acquisirion plan has nor been prepared for rhe

manufacturing phase of rhe digiral equipment. Acquisirion

planning is a requirement of the Federal Acquisirion

Regularion (FAR) for all acquisirions made by execurive

branch agencies. Moreover, il is Library policy [Q follow

rhe FAR in rhe procurement of goods and services unless

ir is formally derermined rhar following ir is nor in rhe

Library's besr interest. The Chief of rht: Library's Office

of Contracrs acknowledged rhar acquisirion plans are

required by the FAR, bur nored rhar because rhe Direcror

SEMIANNUAL REPORT TO tHE CONGlU-.SS II

posirion is vacam for rhe Office of Conrracrs and Grams

Managemenr, FAR-specified inrernal procedures have nor

been esrablished for rhe Library ro address rhe regularion's

requiremenrs.

Ir is clearly in me Library's besr inrerest ro have a wrinen

acquisition plan for the manufacturing phase of the digiral

equipmenr, and rhe lack of inrernal procedures should nor

prevenr me Library from preparing one. By preparing

an acquisirion plan for rhis major acquisirion of digiral

equipmenr - esrimared ro cosr $140 million over five years

- rhe Library would nor only be following the FAR and its

own policy, but would also be in line with standard federal

agency practice. Therefore, we recommended that NLS

work closely wirh rhe Chief of the Office of Conrracrs

ro promprly prepare a wrinen acquisirion plan for the

manufacruring phase of the digital playback equipmenr.

ACQUISITION OF MAxIMO

P1"I'1<'" <I 21111h .1' XIII

Pn 'i~cl 1>1111 RL \ I~\\

At the request of rhe Library's Chief Financial Officer, we

performed a review of the Maximo acquisition process.

Maximo, a sofrware package rhat inregrates with rhe

Library's new financial system, was inrended ro be the

Library's choice as an invenrory- and asset-managemenr

system. We began our review in December 2005 in

response LO the Chief Financial Officer's concern rhat the

Library's pace of assessing the possibility of implemenring

Maximo was stalling.

We determined that although the Library had acquired

Maximo in 2004, ir had not yet implemenred the sofrware.

In June 2006, we advised the Deputy Librarian that the

Library had not fully analyzed and compared its asset

managemenr requiremenrs ro Maximo's capabilities.

Subsequenrly, the Library's Executive Committee decided

that the Library needed ro renew anent ion to rhe Maximo

invesrmenr, and a project was initiared at the commirtee's

direction to analyze the Library's asset-managemenr

requirements.

ANNUAL FINANCIAL STATEMENTS AUDIT

I~~r/)rt /). 2011( I I ..,0")

RL ~ILlL 'I f"f PI"< '1" >'al

In FY 2006 we senr a Request for Proposal (RFP) to five

audit firms for bids on the next five-year conrract for

financial sratemenrs audits of the Library of Congress,

James Madison National Council Fund, and the Open

World Leadership Cenrer. The RFP was completely

rewrinen from prior years based on guidance from The

Presidenr's Council on Inregrity and Efficiency and the

Executive Council on Inregrity and Efficiency.

The primary changes were in the presenrarion of a more

detailed list of deliverables for each audit, with a suggested

rime line, in order to ensure timely delivery of a quality

audir. The paymenr schedule was changed from one based

on paymenr for hours worked, to one based on sarisfactory

acceptance of deliverables. The minimum conrract

deliverables and estimated due dates were described in

derail to enable the successful bidder to amici pare rhe

conrracr requiremenrs. We expecr rhis change in srrucrure

to allow us to more closely match rhe disbursement of

funds wirh rhe receipr of deliverables and rherefore bener

monitor the contractor.

The proposals received were evaluared by the Technical

Evaluation Panel, which scored each bidding firm by three

separare, weigh red facrors including relevanr experience

and past performance, corporare resources and staff

qualificarions, and technical approach. While COSt was a

subsranrial factor, it was considered along with rhe factors

lisred above. A conrraer was awarded to the successful

bidder, pending passage of rhe FY 2007 appropriarion

bill.

Sf.M1ANNUAI RFPOKI TO fHE CONGRESS II

REVIEW OF LEGISLATION AND REGULATIONS

TABLE 6: REVIEW OF LIBRARY OF CONGRESS REGULATIONS

II R R

LCR 1811 Employee Identification Cards

LCR 2013 Pay Administration

LCR 2010-7 Employment of Non-U.S. Cirizens Using Appropriared and Non-Appropriared Funds

(. , ,'I I I II () I" II I' 'I I (R I,

The Office of Security and Emergency Preparedness is proposing [Q updare the regulation on employee identificarion cards. We recommended against issuing the proposed draft because it did not vesr the Office of Security and Emergency Preparedness with enough authority to prorect the integrity of the badging function.

Human Resources Services is proposing [Q replace 30 regulations on pay administration with one comprehensive policy. We suggested adopting language contained in the Government Accoumability Office's pay administration policy [Q explain which federal statutes rhe Library musr follow. Additionally, we suggesred insening hyperlinks to federal pay regulations posred on rhe Federal Regisrer's Web sire.

We had no comments on rhis proposed regularion.

SEMIAN UAL RI:.I'ORT ro THE CONGRESS II

THIS PAGE INTENTIONALLY LEFr BLANK

II SF\llA~NUAL R~.pORr ]"0 JH~ CONGRESS

THIS PAGE INTENTIONALLY LEFT BLANK

SEMIANNUAl REPORf ro THE CONGRESS II

THIS PAGE INTENTIONALLY LEFT BLANK

II SEM[ANNUAL RH'ORI' TO rHc Co GRf.SS

INSPECTOR GENERAL HOT INE

Help Promote Integrity, Economy, and Efficiency

Report Suspected Fraud, Waste, Abuse, or Mismanagement

Complaints May be Made Anonymously

Inspector Genera I

Library of Congress

101 Independence Avenue, S.E.

LM-630

Washington, DC 20540-1060

Main Telephone Number: (202) 707-6314

Fax Number: (202) 707-6032

Hotline Telephone Number: (202) 707-6306

Hotline E-mail: oighotline@loc.gov

Any information you provide will be held in confidence.

However, providing your name and a means of communicating

with you may enhance our ability to investigate.