u.s. OFFICE OF PERSONNEL MANAGEMENT 

OFFICE OF THE INSPECTOR GENERAL 

OFFICE OF AUDITS 

Final Audit Report 

Subject: 

AUDIT OF THE 2006 AND 2007
 

FORT HOOD
 

COMBINED FEDERAL CAMPAIGNS
 

KILLEEN, TEXAS
 

Report No. 3A-CF-OO-09-040 

Date: March 11,2010 

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UNITED STATES OFFICE OF PERSONNEL MANAGEMENT
 

Washington, DC 20415
 

Office of the 

Inspector General 

AUDIT REPORT 

AUDIT OF THE 2006 AND 2007
 

FORT HOOD
 

COMBINED FEDERAL CAMPAIGNS
 

KILLEEN, TEXAS
 

Report No. 3A-CF-OO-09-040 Da~: March 11 ; 2010 

Michael R. Esser 

Assistant Inspector General 

for Audits 

www.opm.gov www.usajobs.gDv 
UNITED STATES OFFICE OF PERSONNEL MANAGEMENT
 

Washington, DC 20415
 

Office of the 

Inspector General 

EXECUTIVE SUMMARY
 

AUDIT OF THE 2006 AND 2007
 

FORT HOOD
 

COMBINED FEDERAL CAMPAIGNS
 

KILLEEN, TEXAS
 

Report No, 3A-CF-OO-09-040 Da~: March 11, 2010 

The Office of the Inspector General has completed an audit of the 2006 and 2007 Fort Hood 

Combined Federal Campaigns (CFC). The United Way ofthe Greater Fort Hood Area 

(UWGFHA), located in Killeen, Texas, served as the Principal Combined Fund Organization 

(PCFO) during both campaigns. Our main Objective was to determine ifthe Fort Hood CFC was 

in compliance with Title 5, Code of Federal Regulations, Part 950 (5 CFR 950), including the 

responsibilities of both the PCFO and Local Federal Coordinating Committee (LFCC). The 

audit identified seven instances of non-compliance with the regulations (5 CFR 950) governing 

theCFC. 

The following findings represent the results of our audit work as ofthe date ofthis report. 

BUDGET AND CAMPAIGN EXPENSES 

• Campaign Expenses Charged to the Incorrect Campaign Year 

The PCFO charged the 2007 campaign for expenses related to the 2006 and 2008 campaigns. 

• Campaign Expense Reimbursement Not Approved by the LFCC 

The PCFO did not request approval from the LFCC prior to reimbursing itself for 2007 

campaign expenses. 

I 

www.opm.gov www.usajebs.gcv 
•	 PCFO Application Not in Compliance 

The UWGFHA's PCFO application did not include all of the statements required per the 

Federal regulations.
 

CAMPAIGN RECEIPTS AND DISBURSEMENTS
 

•	 CFC Receipts Applied to the Incorrect Campaign Year 

The PCFO did not use proper procedures to determine the campaign year funds belong to. 

As a result, the funds designated by Federal employees were not properly accounted for and 

disbursed according to the donor's wishes. 

•	 Incorrect Pledge Loss Applied to One-Time Disbursements 

The PCFO did not apply the appropriate pledge loss percentage to agencies and federations 

receiving one-time disbursements. 

•	 Pledge Card Errors 

The PCFO incorrectly input two pledge cards which resulted in a misapplied designation and 

the improper release of donor information.
 

ELIGIBILITY
 

•	 Local Eligibility Notification Letters Mailed Untimely 

The LFCC did not mail local agency and federation eligibility letters to applicants of the 

2007 campaign by the date required in the Federal regulations. 

PCFO AS A FEDERATION 

Our review of the PCFO' s activities as a federation did not identify any problems. 

AUDIT GUIDE REVIEW 

Our review of the agreed-upon procedures as performed by the PCFO's Independent Public 

Accountant did not identify any problems. 

II 
CONTENTS
 

PAGE
 

EXECUTIVE SUMMARY	 i
 

I. INTRODUCTION AND BACKGROUND	 1
 

II. OBJECTIVES, SCOPE, AND METHODOLOGy	 3
 

III. AUDIT FINDINGS	 7
 

A.	 BUDGET AND CAMPAIGN'EXPENSES 7
 

1. Campaign Expenses Charged to the Incorrect Campaign year	 7
 

2. Campaign Expense Reimbursement Not Approved by the LFCC 8
 

3. PCFO Application Not in Compliance	 9
 

B.	 CAMPAIGN RECEIPTS AND DISBURSEMENTS 10
 

L CFC Receipts Applied to the Incorrect Campaign Year 10
 

2. Incorrect Pledge Loss Applied to One-Time Disbursements	 11
 

3. Pledge Card Errors	 11
 

C.	 ELIGIBILITY 12
 

1. Local Eligibility Notification Letters Mailed Untimely	 12
 

D.	 PCFO AS A FEDERATION 13
 

E.	 AUDIT GUIDE REVIEW 13
 

IV. MAJOR CONTRIBUTORS TO THIS REPORT	 14
 

APPENDIX	 (The PCFO and LFCC's response, dated October 22,2009, to the draft 

audit report.) 
I. INTRODUCTION AND BACKGROUND
 

Introduction 

This report details the findings and conclusions resulting from our audit of the Fort Hood 

Combined Federal Campaigns (CFC) for 2006 and 2007. The audit was performed by the Office 

of Personnel Management's (OPM) Office ofthe Inspector General (OIG), as authorized by the 

Inspector General Act of 1978, as amended. 

Background 

The CFC is the sole authorized fund-raising drive conducted in Federal installations throughout 

the world. It consists of 260 separate local campaign organizations located throughout the 

United States, including Puerto Rico, the Virgin Islands, and foreign assignments. The Office of 

Combined Federal Campaign Operations (OCFCO) at OPM has the responsibility for 

management of the CFC. This includes publishing regulations, memorandums, and other forms 

ofguidance to Federal officials and private organizations to ensure that all campaign objectives 

are achieved. 

CFC's are conducted by a Local Federal Coordinating Committee (LFCC) and administered by a 

Principal Combined Fund Organization (PCFO). The LFCC is responsible for organizing the 

local CFC, determining the eligibility of local voluntary organizations, selecting and supervising 

the activities of the PCFO, and acting upon any problems relating to a voluntary agency's 

noncompliance with the policies and procedures of the CFC. The PCFO is responsible for 

training employee key-workers and volunteers; preparing pledge cards and brochures; 

distributing campaign receipts; submitting to an extensive and thorough audit of its CFC 

operations by an Independent Certified Public Accountant (IPA) in accordance with generally 

accepted auditing standards; cooperating fully with OIG audit staff during audits and 

evaluations; responding in a timely and appropriate manner to all inquiries from participating 

organizations, the LFCC, and the Director of OPM; and consulting with federated groups on the 

operation of the local campaign. 

Executive Orders No. 12353 and No. 12404 established a system for administering an annual 

charitable solicitation drive among federal civilian and military employees. Title 5, Code of 

Federal Regulations Part 950 (5 CFR 950), the regulations governing CFC operations, sets forth 

ground rules under which charitable organizations receive federal employee donations. 

Compliance with these regulations is the responsibility ofthe PCFO and LFCC. Management of 

the PCFO is also responsible for establishing and maintaining a system of internal controls. 

All findings from our previous audit of the Fort Hood CFC (Report Number 3A-CF-OO-OI-041) 

dated May 31, 2001) covering the 1998 and 1999 campaign years have been satisfactorily 

resolved. 

The initial results ofour audit were discussed with PCFO and LFCC officials during an exit 

conference held on June 19,2009. A draft report was provided to the PCFO and the LFCC on 

1
 
October 5, 2009, for review and comment. The PCFO's response to the draft report was 

considered in preparation ofthis final report and is included as an Appendix. 

2
 
II. OBJECTIVES, SCOPE, AND METHODOLOGY
 

OBJECTIVES 

The primary purpose of our audit was to determine ifthe Fort Hood CFC was in compliance with 

5 CFR 950, including the activities of both the PCFO and LFCC. Our specific audit objectives 

for the 2007 campaign were as follows: 

Budget and Campaign Expenses 

•	 To determine ifthe PCFO's budget was in accordance with the regulations. 

•	 To determine if expenses charged to the campaign were actual, reasonable, did 

not exceedl IO percent of the approved budget, and were properly allocated. 

Campaign Receipts and Disbursements 

•	 To determine ifthe total amount offunds received for the campaign, plus interest 

income and less expenses, was properly distributed to the designated 

organizations. 

•	 To determine ifthe total amount of undesignated funds was properly allocated 

and distributed to the various CFC participants. 

Eligibility 

•	 To determine ifthe charitable organization application process was open for the 

required 30 day period; if applications were appropriately reviewed, evaluated, 

and approved; and ifthe appeals process for rejected applicants was followed. 

PCFO as a Federation 

• . To determine ifthe PCFO distributed funds only to member agencies. 

•	 To determine ifthe PCFO charged its member agencies for expenses in a 

reasonable manner. 

Additionally, our audit objective for the 2006 campaign was: 

Audit Guide Review 

•	 To determine if the IPA completed the Agreed-Upon Procedures (AUP) as 

outlined in the CFC Audit Guide (For Campaigns with Pledges $150,000 to 

$999,999). 

SCOPE Al'lD METHODOLOGY 

We conducted this performance audit in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the audit to obtain 

sufficient and appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on the audit objectives. We believe that the evidence obtained provides a 

reasonable basis for our findings and conclusions based on the audit objectives. 

3
 
The audit covered campaign years 2006 and 2007. The United Way ofthe Greater Fort Hood 

Area (UWGFHA), located in Killeen, Texas, served as the PCFO during both campaigns. The 

audit fieldwork was conducted at the offices ofthe PCFO from June 15 through June 19,2009. 

Additional audit work was completed at our Washington, D.C. office. 

The Fort Hood CFC received campaign pledges, collected campaign receipts, and incurred 

campaign administrative expenses for the 2006 and 2007 campaigns as shown below: 

Campaign Total Total Administrative 

Year Pledges Receipts Expenses 

2006 $717,282	 $644,018 $105,524 

2007 $586,885	 $513,977 $ 94,851 

In conducting the audit we relied to varying degrees on computer-generated data. Our review of 

a sample of campaign expenses and supporting data, a sample of pledge card entries, and the 

distribution of campaign contributions and related bank statements, verified that the computergenerated data used in conducting the audit was reliable. Nothing came to our attention during 

our review ofthe data to cause us to doubt its reliability. 

We considered the campaign's internal control structure in planning the audit procedures. We 

gained an understanding of management procedures and controls to the extent necessary to 

achieve our audit objectives. We relied primarily on substantive testing rather than tests of 

internal controls. The audit included such tests of the accounting records and such other auditing 

procedures as we considered necessary to determine compliance with 5 CFR 950 and CFC 

Memorandums. 

In regard to our objectives concerning the 2007 campaign's budget and campaign expenses, we 

accomplished the following: 

•	 Reviewed the PCFO application to verify if it was complete. 

•	 Reviewed a copy of the public notice to prospective PCFOs and LFCC meeting minutes 

to verify that the PCFO was selected timely. 

•	 Traced and reconciled amounts on the PCFO's Schedule of Actual Expenses to the 

PCFO's general ledger. 

•	 Reviewed supporting documentation for expense transactions included in the sample of 6 

out of 14 campaign expense reimbursement payments to the PCFO to verify that the 

expenses were allowable. We judgmentally selected the largest five reimbursement 

checks. We also judgmentalJy selected one additional check because the timing of the 

reimbursement appeared odd. 

•	 Reviewed the LFCC meeting minutes and verified if the LFCC authorized the PCFO's 

reimbursement of campaign expenses. 

•	 Compared the budgeted expenses to actual expenses and determined if actual expenses 

exceeded 110 percent of the approved budget. 

4
 
To determine if the 2007 campaign's receipts and disbursements were handled in accordance 

with CFC regulations, we reviewed the following: 

•	 A judgmental sample of35 out o.f7,830 pledge cards from the 2007 PCFO's Donor 

Pledge Campaign Report (starting with page 25, selected highest contributor listed on 

every 25th page for a total of35) and compared pledge information from the report to the 

actual pledge card. 

•	 Cancelled distribution checks to verify that the appropriate amount was distributed in a 

timely manner. 

•	 One-time disbursements to verify that the PCFO properly calculated pledge loss and 

disbursed the funds in accordance with the ceiling amount established by the LFCC. 

•	 The PCFO's most recent listing of outstanding checks to verify that the PCFO was 

following its policy for such checks. 

•	 The Pledge Notification Letters to verify that the PCFO notified the CFC agencies ofthe 

designated and undesignated amounts due them by the date required in the regulations. 

•	 The donor list letters sent by the PCFO to organizations to verify the letters properly 

notify the organization ofthe donors who wish to be recognized. 

•	 Forms 1417 provided by the PCFO and the OCFCO to identify material differences. 

•	 CFC receipts and distributions from the PCFO's campaign bank statements, campaign 

receipt, agency disbursement and campaign expense support to verify whether the PCFO 

accurately recorded and disbursed all 2007 campaign receipts and disbursements. 

•	 All bank statements used by the PCFO to verify that the PCFO was properly accounting 

for and distributing funds. 

•	 The PCFO's cutoff procedures and bank statements to verify that funds were allocated to 

the appropriate campaign year.. 

•	 The General Designation Options and Undesignated Funds Spreadsheet and the 

Allocations and Disbursements Spreadsheet to verify disbursements were accurate and 

proportionate to the PCFO's allocation rates. 

In order to determine that the LFCC and PCFO were in compliance with CFC regulations in 

regards to eligibility for the 2007 campaign, we reviewed the following: 

•	 The public notice to prospective charitable organizations to determine if the LFCC 

accepted applications from organizations for at least 30 days. 

•	 The process and procedures for the application evaluation process. 

•	 Sample eligibility letters to verify they were properly sent by the LFCC. 

•	 The LFCC's processes and procedures for responding to appeals from organizations. 

To determine ifthe PCFO was in compliance with the CFC regulations as a federation 

(UWGFHA) for the 2007 campaign, we reviewed the following: 

•	 Data reported on the CFC Receipts Schedule with supporting documentation to verify 

whether receipts were properly recorded. 

•	 The CFC Distribution Schedule to ensure that the UWGFHA did not disburse any funds 

to member agencies not participating in the CFC. 

•	 The UWGFHA contract with its member agencies to determine if the fees were
 

reasonable and supported.
 

5 
The samples, mentioned above, that were selected and reviewed in performing the audit were not 

statistically based. Consequently, the results could not be projected to the universe since it is 

unlikely that the results are representative ofthe universe taken as a whole. 

Finally, to accomplish our objective for the Audit Guide Review, we reviewed the CFC Audit 

Guide (for campaigns with pledges $150,000 to 999,999) and completed the AUP checklist to 

verify that the IPA completed and documented the AUP steps. 

6
 
III. AUDIT FINDINGS
 

A. BUDGET AND CAMPAIGN EXPENSES 

1. Campaign Expenses Charged to the Incorrect Campaign Year 

The PCFO recovered $74,273 in campaign expenses related to either the 2006 or 

2008 CFCs from receipts ofthe 2007 campaign. 

5 CFR 950.106 (b) states that "The PCFO may only recover campaign expenses from 

receipts colIected for that campaign year. Expenses incurred preparing for and 

conducting the CFC cannot be recovered from receipts col1ected in the previous 

year's campaign. The PCFO may absorb the costs associated with conducting the 

campaign from its own funds and be reimbursed, or obtain a commercial loan to pay 

for costs associated with conducting the campaign. If the commercial loan option is 

used, the amount of a reasonable rate of interest is an allowable campaign expense, 

subject to approval of the LFCC when the PCFO budget is submitted." 

We reviewed a sample of campaign expense reimbursements for the 2007 campaign 

to determine if the costs were properly supported and ifthey were related to the 2007 

campaign. During our review, we noticed that the PCFO paid for CFC related 

expenses directly out of the CFC bank account as the expenses were incurred and did 

not, as the regulation states, absorb the costs of the campaign from its own funds or 

obtain a commercial loan to cover those costs. 

Expenses related to any campaign year are typically incurred fully prior to the 

beginning of disbursements to the member agencies and federations. For the 2007 

campaign, the period for most expenses would be approximately March 2007 to 

February 2008.' However, our review found that the PCFO charged the 2007 

campaign $74,273 in expenses related to other campaigns. 

Specifical1y, we identified $67,573 in expenses incurred in March 2008 (and later) 

that relate to the 2008 campaign year. During this same period, we also identified 

$6,700 in expenses for the IPA AUP audit of the 2006 campaign. 

During the period March through September of any campaign year, there are no 

campaign receipts available to offset CFC expenses incurred. With this in mind the 

regulations [5 CFR 950.106 (b)] cal1 for the PCFO to do one of two things: 

1. To absorb the costs of the CFC expenses upfront and be reimbursed later; or 

2. To obtain a commercial loan to pay for the costs associated with the 

campaign. 

Rather than use either of these options, the PCFO chose to use receipts related to the 

2007 campaign to pay for 2006 and 2008 campaign expenses. As a result ofnot 

properly matching campaign expenses with receipts, the 2007 campaign was 

overcharged $74,273. 

7 
PCFO and LFCC's Comments: 

The LFCC and PCFO agree with the finding and state that they will comply with the 

regulations in the future. They also stated that although most oftheir activities from 

March through December are oriented toward the new campaign, that the PCFO staff 

does work on the prior campaign reconciling receipts and disbursements ofCFC 

funds during that same period. To help rectify the situation, the PCFO will obtain a 

commercial loan to defray campaign cost until CFC funds are available. 

Recommendation 1 

We recommend that the OCFCO direct the LFCC to require the PCFO to adhere to 

the requirements of5 CFR 950.106 and properly offset campaign expenses with that 

campaign's receipts. 

2. Campaign Expense Reimbursement Not Approved by the LFCC 

The PCFO did not submit, nor did the LFCC approve, a request for the
 

reimbursement of 2007 campaign expenses to the PCFO.
 

5 CFR 950.106 (a) states that the PCFO shall recover campaign expenses, approved 

by the LFCC, which reflect the actual costs of administering the campaign. 

Our review ofLFCC meeting minutes did not identify where the LFCC discussed, 

reviewed, or approved the reimbursement of 2007 campaign expenses to the PCFO. 

Additionally, discussion with the PCFO and LFCC determined that both parties were 

unaware oftheir responsibilities regarding CFC expenses. We informed both the 

LFCC and PCFO that prior to reimbursement of expenses the LFCC must give 

authorization to the PCFO to do so. 

As a result of not submitting its expenses for approval before their reimbursement, the 

PCFO'sreimbursement was not authorized as required by the regulations. 

Additionally, by not reviewing and approving the reimbursement of2007 campaign 

expenses, the LFCC runs the risk of improper expenses being charged to the 

campaign, as identified in the previous finding. 

PCFO and LFCC's Comments: 

The PCFO and LFCC agree with the finding and state that the PCFO will document 

LFCC approval prior to reimbursement for campaign expenses. The PCFO and 

LFCC also stated that they believe the use of a commercial loan will simplify the 

process for approval prior to reimbursement. 

8
 
OIG Comments: 

Obtaining a commercial loan mayor may not simplify the campaign expense 

approval process. The approval process, whether a loan is obtained or not, should 

involve the same basic steps.' The PCFO must provide all expenses incurred in the 

operation ofthe campaign (in detail) to the LFCC. The LFCC should then review 

those expenses and supporting documentation to ensure the accuracy and applicability 

to the campaign year in question. Finally, the LFCC must compare total expenses 

against the approved budget to ensure they are no more than I 10 percent of the 

approved budget. 

Additionally, the comments noted that the PCFO would document the LFCC's 

approval of the expenses. The LFCC should be the one to document both its review 

of the expenses and its approval of the reimbursement in its meeting minutes. 

Recommendation 2 

We recommend that the DCFCO direct the PCFO to submit its expenses to the LFCC 

prior to reimbursement and that the LFCC approve only those expenses related to that 

campaign year. 

3. PCFO Application Not in Compliance 

The UWGFHA's application for PCFO did not include all ofthe statements required 

per the Federal regulations. 

5 CFR 950.105 (c) (2) (ii) requires the PCFO application to include a statement 

signed by the local director pledging to "conduct campaign operations, such as 

training, kick-off and other events, and fiscal operations, such as banking, auditing, 

reporting and distribution separate from the applicant's non-CFC operations." 

Additionally, (iii) requires the local director to "abide by the directions, decisions, 

and supervision of the LFCC and/or Director." 

We reviewed the application to determine if it included all ofthe required 

information, Additionally, we reviewed the cover letter of the application to 

determine if all ofthe required statements were included. Our review identified two 

statements that were not included in the application cover letter that are required by 

the regulations. Specifically, the following statements were not included or were 

incomplete: 

•	 The Jetter did not include the statement to "conduct campaign operations, such 

as training, kick-off and other events, and fiscal operations, such as banking, 

auditing, reporting and distribution separate from the applicant's non-CFC 

operations," and 

•	 The letter left off the fact that the PCFO must adhere to the directives of "the 

LFCC and/or Director." 

9 
By not including all of the required statements in the application letter, the PCFO is 

not stating that it will abide by those things required in the Federal regulations. 

PCFO and LFCC's Comments: 

The PCFO and LFCC agree with the finding and state that future applications will 

include all required language and statements as required per the Federal regulations. 

Recommendation 3 

We recommend that the OCFCO direct the LFCC to ensure that its review ofPCFO 

applications verifies that all ofthe language and statements required by Federal 

regulations are included. 

B. CAMPAIGN RECEIPTS AND DISBURSEMENTS 

1. CFC Receipts Applied to the Incorrect Campaign Year 

The PCFO did not use proper procedures to determine the campaign year that CFC 

receipts belong to. As a result, the funds designated by Federal employees were not 

properly accounted for and disbursed according to the donor's wishes. 

CFC Memorandum 2006-5 states that beginning with the 2005 campaign, all 

campaigns should track receipts by payroll office to determine which campaign year 

funds received belong to. If questions arise they should be directed to the specific 

payroll office or the OCFCO. 

We reviewed the CFC bank statements for January 2008 and 2009, to determine how 

the PCFO accounts for CFC receipts during the payroll year change-over. Our review 

of the PCFO's bank statements determined that it did not attempt to track CFC 

receipts by payroll office. Instead, the PCFO's procedure was to apply all receipts 

after the first of the year to the next campaign year. The PCFO stated that this was 

done for convenience as the information included on the bank statement does not 

provide sufficient means for determining what year the funds belong to. 

As a result of not tracking the CFC receipts by payroll office, the PCFO did not 

adhere to the Federal donor's wishes related to the disposition of their donated 

monies. 

PCFO and LFCC's Comments: 

The LFCC and PCFO agree with the finding and state that they will apply receipts 

with complete fidelity to the campaign year. 

IO
 
Recommendation 4 

We recommend that the OCFCO and LFCC direct the PCFO to develop procedures to 

ensure that all CFC payroll office receipts are individually tracked to determine the 

campaign year to which they belong according to the guidance outlined in CFC 

Memorandum 2006-5. 

2. Incorrect Pledge Loss Applied to One-Time Disbursements 

The PCFO did not properly apply pledge loss to those agencies receiving one-time 

disbursements from the 2007 campaign. 

5 CFR 950.901 (i) (3) states that the PCFO may deduct the proportionate amount of 

each organization's share ofthe campaign's administrative costs and the average of 

the previous three years pledge loss from the one-time disbursement. 

We reviewed the one-time disbursements made by the peFO for the 2007 campaign 

to determine if they were properly approved, were disbursed to the appropriate 

agencies, and appropriately applied the correct pledge loss percentage. Using the 

pledge loss figures from the 2004 through 2006 campaigns we calculated the average 

pledge loss during those years to be 11.44 percent. However, a review ofthe onetime disbursements made by the PCFO determined that only a three percent pledge 

loss was applied to those agencies receiving one-time disbursements for the 2007 

campaign. The PCFO stated that the pledge loss percentage used was obtained from 

a calculation from its Cam~aign Assistant software. 

As a result of applying an incorrect pledge loss percentage, the PCFO reduced the 

amount of monies available to the agencies not receiving one-time disbursements. 

PCFO and LFCC's Comments: 

The PCFO and LFCC agree with the finding and state that they will develop manual 

procedures to verify that the pledge Joss applied to the one-time disbursements is 

accurate. 

Recommendation 5 

We recommend that the OCFCO and LFCC ensure the PCFO has put procedures in 

place to ensure that the pledge loss allocated to agencies and federations receiving 

one-time disbursements is correctly calculated. 

3. Pledge Card Errors 

The PCFO incorrectly input two pledge cards into its database, which resulted in a 

misapplied designation and an improper release of donor information. 

11
 
5 CFR 950.105 (d) (1) states that itis the responsibility ofthe PCFO to honor the 

employee designations. Additionally. 5 CFR 950.105 (d) (6) states that it is the 

responsibility ofthe PCFO to honor the request of employees who indicate they do 

not want personally identifiable information released to organizations they donate to. 

We reviewed a sample of35 pledge cards to determine ifthe following areas were 

correctly input into the pledge card system by the PCFO: a) donor name, b) amount 

donated to each agency. c) agency codes donated to. d) total amount donated. and e) 

donor's choice to release information. Our review identified two pledge card errors. 

Specifically. we identified: 

•	 One pledge card where the PCFO misapplied a designation by inputting the 

wrong agency code; and 

•	 One pledge card where the PCFO released a donor's personally identifiable 

information without the donor giving permission to do so on the pledge card. 

As a result of misapplying a designation, the PCFO inadvertently applied the 

donation of an employee to the wrong agency code. Additionally, by releasing the 

personally identifiable information of a donor against their wishes, the PCFO risked 

the donor receiving unwanted contact from the agencies donated to. 

PCFO and LFCC's Comments: 

The PCFO and LFCC agree with the finding and state that the PCFO will revise its 

procedures to ensure the accuracy of both donor pledge card designation entries and 

the release of information indications. 

Recommendation 6 

We recommend that the OCFCO ensure that the PCFO has put adequate procedures 

in place to improve its pledge card data entry so that errors are corrected prior to 

distribution of funds and donor information to agencies and federations. 

C. ELIGIBILITY 

1. Local Eligibility Notification Letters Mailed Untimely 

The LFCC did not mail local agency and federation eligibility letters to applicants of 

the 2007 campaign by the date required in the Federal regulations. 

5.CFR 950.801 (a) (5) states that the LFCC "must issue notice of its eligibility 

decisions within 15 business days ofthe closing date for receipt of applications." 

We reviewed the LFCC's local agency and federation application process to 

determine if it mailed its local eligibility decision letters by the date required in the 

Federal regulations. The LFCC's application period closed on April] I, 2007. 

According to the regulations, the letters announcing eligibility decisions were due 15 

12
 
business days later on May 2, 2007. Our review found that the eligibility notification 

letters were mailed by the LFCC on May 7, 2007. 

As a result, agencies and federations were not notified ofthe LFCC's eligibility 

decisions in a timely manner. 

PCFO and LFCC's Comments: 

The PCFO and LFCC agree with the finding and state that the PCFO will facilitate 

ensuring that the LFCC notifies all applicant agencies and federations of its eligibility 

determinations within 15 business days ofthe close ofthe application period as 

required by the regulations. 

Recommendation 7 

We recommend that the OCFCO ensure that the LFCC has procedures in place to 

notify all applicant agencies and federations ofits eligibility determinations within 15 

business days of the close of the application period, as required by the regulations. 

D.	 PCFO AS A FEDERATION 

OUfreview of the PCFO's activities as a federation did not identify any problems. 

E.	 AUDIT GUIDE REVIEW 

Our review of the agreed-upon procedures as performed by the PCFO's Independent Public 

Accountant did not identify any problems. 

13
 
IV. MAJOR CONTRIBUTORS TO THIS REPORT 

Special Audits Group 

Auditor-In-Charge 

Group Chief 

Senior Team. 

14
 
APPENDIX
 

DEPARTMENT OF THE ARMY


u.s. ARMY tNSTALLATlON MANAGEMENT COMMAND
 

HEADQUARTERS, UNITED STATES ARMY GARRISON, FORT HOOD
 t t . 

FORT HOOD, TEXAS 76644.$002 

RePLY TO '09 NOV 2RCVD 

ATTENtION OF 

Greater Fort Hood Area . October 22, 2009 

Local Federal Coordinating Committee (LFCC) 

Combined Federal Campaign 

78th St. Building 4230 Room 135 

Fort Hood, Texas 76544 

Report No. 3A-CF-00-09-040 

Office ofPersonnel Management 

Office ofthe Inspector General 

Attention: 

1900 E Street, NW, Room 6400 

Washington, DC 20415-1100 

Dear_ 

Enclosed is our response to your draft report regarding the results ofthe 2006 and 2007 Fort 

Hood Combined Federal Campaigns (CFC) Audit. We are in general concurrence with the 

findings and recommendations noted by your audit team. 

Respectfully, 

LFCC Chair ExecutiveDirector 

Directorate of Emergency Services t p ... • nd Organization 

Building 23020 United Way ofthe GreaterFort Hood Area 

Room 103A 208 West Avenue A 

Fort Hood, Texas 76544-5000 Killeen, Texas 76541 
Fort HoodArea CFC
 

PCFO Reponses
 

Recommendation 1 

We recommend that the Office of Combined Federal Campaign Operations (OeFeO) Require 

the PCFO to adhere to- the requirements of 5 CFR 950.106 and properly offset campaign 

expenses with that campaign's receipts. 

Response 

5 CFR 950.106 states: The PCFO may only recover campaign expenses from receipts collected 

for that campaign year. Expenses incurred preparing for and conducting the CFC cannot he 

recovered from receipts collected in the previous year's campaign. LFCC activities conducted 

between March and December are mostly oriented towards preparing and conducting the new 

campaign. However, staff time is split between supporting the LFCC campaign planning and 

reconciling the receipt of and distribution of funds. New campaign supply and event costs have 

always been absorbed by the PCFO until new campaign receipts can be recovered for 

reimbursement. We understand OPM's clarification on the interpretation of this requirement and 

will comply accordingly. 

DELETED BY OPM OIG
 

NOT RELEVANT TO TBE REP.ORT
 
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RecommendationS 

We recommend that the DeFCO direct the PCFO to submit its expenses to the LFCC prior to 

reimbursement for approval. 

Response 

We concur. PCFO will document LFCC approval prior to reimbursement for expenses. 

Recommendation6 

We recommend that the DeFeO and LFCC direct the peFO to ensure that future applications 10 

serve as PCFO include all the statements required per the Federal regulations. 

Response 

We concur. PCFO will ensure that future applications include all required language and 

statements as per Federal regulations. 

Recommendation 7 

We recommend that the DeFCO and LFCC direct the PCFO to begin tracking all CFC payroll 

office receipts individually to determine the campaign year to which they belong according to the 

guidance outlined in CFC Memorandum 2006-5. . 

Response 

We concur and will apply receipts with complete fidelity to the campaign year. 

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Recommendation8 

We recommend that the OCFCO and LFCC require the PCFO to put procedures in place to 

ensure that the pledge loss allocated to agencies and federations receiving one-time 

disbursements correctly calculated. 

We concur. We previously relied solely on the Campaign Assistant software to calculate and 

apply pledge loss prior to disbursements. PCFO will develop manual procedures 

Recommendation 9 

We recommend that the OCFCO direct the PCFO to ensure that all donor designations are 

honored. 

Response 

We concur. PCFO Will revise procedures to include verification of the accuracy of all donor 

designation pledge card entries. 

Recommendation 10 

We recommend that the OCFCO and LFCC require that the PCFO only release the requested 

information for those donors who indicate on their pledge card that they wish to release 

information. 

Response 

. We concur. PCFO will revise procedures to ensure the accuracy of donor pledge card release of 

information indications. (See response above.) 

Recommendation 11 

We recommend that the OCFCO ensure that the LFCC notifies all applicant agencies and 

federation of its eligibility determinations within 15 business days of the close of the application 

period as required by the regulations. 

Response 

We concur. PCFO will facilitate ensuring that LFCC notifies all applicant agencies and 

federation of its eligibility determinations within 15 business days of the close of the application 

period as required bythe regulations.