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tJNITED STATES OFFICE OF PERSONNEL MANAGEMENT 

Washington, DC 20415 

. Office of the 

Inspector General 

AUDIT REPORT
 

AUDIT OF THE 2004 AND 2005
 

GREATER LOS ANGELES AREA
 

COMBINED FEDERAL CAMPAIGNS
 

LOS ANGELES, CALIFORNIA
 

Report No. 3A-CF-OO-07-037 Date: 02/18/2009 

~e~
 Michael R. Esser 

Assistant Inspector General 

for Audits 

www.opm.gov www.usaJobs.gov 
UNITED STATES OFFICE OF PERSONNEL MANAGEMENT
 

Washington. DC 20415
 

Office of the 

Inspector General 

EXECUTIVE SUMMARY
 

AUDIT OF THE 2004 AND 2005
 

GREATER LOS ANGELES AREA
 

COMBINED FEDERAL CAMPAIGNS
 

LOS ANGELES, CALIFORNIA
 

Report No. 3A-CF-OO-07-037 Date: 0211812009 

The Office ofthe Inspector General completed an audit ofthe Greater Los Angeles Area 

Combined Federal Campaigns (CFC) for 2004 and 2005. The United Way ofGreater Los 

Angeles, located in Los Angeles, California, served as the Principal Combined Fund Organization 

(PCFO) during both campaigns. The primary objective was to determine ifthe Greater Los 

Angeles Area CFC was in compliance with Title 5, Code ofFederal Regulations, Part 950 (5 CFR 

950), including the responsibilities of both the PCFO and Local Federal Coordinating Committee 

(LFCC). The audit identified 10 instances of non-compliance with the regulations governing the 

CFC. 

AUDIT GUIDE REVIEW 

• Agreed-Upon Procedures Not in Compliance 

The Independent Public Accountant's audit ofthe 2004 campaign did not comply with all 

aspects ofthe 2006 Audit Guide. 

www.opm.goY www.usajobs.goY 
Financial Statements Not Provided 

Financial Statements required to be distributed by the 2006 Audit Guide were not provided 

by the PCFO and LFCC. 

BUDGET AND CAMPAIGN EXPENSES 

•	 Improper Matching of Campaign Expenses 

The PCFO incorrectly charged the 2005 campaign for $36,504 in CFC expenses related to 

the 2004 campaign. 

•	 Campaign Expense Reimbursement Not Authorized 

The PCFO reimbursed itself for 2005 campaign expenses without receiving authorization 

from the LFCC as required by the Federal regulations. 

•	 Untimely PCFO Selection 

The LFCC did not select the PCFO by March IS, in accordance with 5 CFR 950.801 (a)(3), 

for the 2005 campaign year.
 

CASH RECEIPTS AND DISBURSEMENTS
 

•	 Uncashed CFC Distribution Checks 

The PCFO did not redistribute or reissue 16 CFC distribution-checks, totaling $910, to 

charities as required by the Office of Combined Federal Campaign Operations. 

•	 Inaccurate Release of Donor Information 

The PCFO allowed personal donor information to be released to participating agencies 

against the wishes of the donor. 

•	 Cutoff Procedures 

The PCFO incorrectly used January 31st as a cutoff date for incoming payroll receipts.
 

LOCAL ELIGIBILITY
 

•	 Agency Application Evaluation Process 

The local agency and federation application screening procedures applied by the PCFO and 

LFCC do not account for all requirements outlined in the Federal regulations. 

11 
PCFO AS A FEDERATION
 

• Campaign Receipts Not Distributed 

The PCFO did not distribute $4,025 received from other participating CFCs to the member 

agencies for the 2005 campaign. 

111 
CONTENTS
 

PAGE 

EXECUTIVE SUMMARy .i
 

1. INRODUCTION AND BACKGROUND 1
 

II. OBJECTIVES, SCOPE, AND METHODOLOGY 2
 

III. AUDIT FINDINGS AND RECOMMENDATIONS 5
 

A. AUDIT GUIDE REVIEW 5
 

1. Agreed-Upon Procedures Not in Compliance 5
 

2. Financial Statements Not Provided 6
 

B. BUDGET AND CAMPAIGN EXPENSES 7
 

1. Improper Matching of Campaign Expenses 7
 

2. Campaign Expense Reimbursement Not Authorized 9
 

3. Untimely PCFO Selection , 10
 

C. CASH RECEIPTS AND DISBURSEMENTS 11
 

1. Uncashed CFC Distribution Checks 11
 

2. Inaccurate Release ofDonor Information 12
 

3. Cutoff Procedures 13
 

D. LOCAL ELIGlBILITY 13
 

1. Agency Application Evaluation Process .13
 

E. PCFO AS A FEDERATION 14
 

1. Campaign Receipts Not Distributed 14
 

IV. MAJOR CONTRIBUTORS TO THIS REPORT 16
 

APPENDIX (The PCFO and LFCC joint response, dated August 1,2008, to the draft 

audit report) 
I. INTRODUCTION AND BACKGROUND
 

Introduction 

This report details the findings, conclusions, and recommendations resulting from our audit of the 

Greater Los Angeles Area Combined Federal Campaigns (CFC) for 2004 and 2005. The audit 

was performed by the Office of Personnel Management's (OPM) Office of the 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 at Federal installations throughout 

the world. It consists of 299 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 aPM has the responsibility for management 

of the CFC. This includes publishing regulations, memorandums, and other forms of guidance 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 eligibility of local voluntary organizations, selecting and supervising the 

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

noncompliance with the policies and procedures of the CPC. 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 DIG audit staff during audits and evaluations; responding in a 

timely and appropriate manner to all inquiries from participating organizations, the LFCC, and the 

Director ofOPM; and consulting with federated groups on the operation of the local campaign. 

Executive Orders 12353 and 12404 established a system for administering an annual charitable 

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

Regulations (CFR) 950, the regulations governing CFC operations, set forth ground rules under 

which charitable organizations receive federal employee donations. Compliance with these 

regulations is the responsibility of the PCFO and LFCC. Management of the PCFO is also 

responsible for establishing and maintaining a system of internal controls. 

All recommendations from our previous audit of the Greater Los Angeles Area CFC (Report No. 

3A-CF-00-OI-081, dated August 8, 2001) covering campaign years 1998 and 1999 have been 

satisfactorily resolved. 

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

conference held on June 8,2007. A draft report was provided to the PCFO and LFCC on June 23, 

2008 for review and comment. The PCFO and LFCC's response to the draft report was 

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

1
 
II. OBJECTIVES, SCOPE, AND METHODOLOGY
 

Objectives 

The primary purpose ofthe audit was to determine if the Greater Los Angeles Area CFC was in 

compliance with 5 CFR 950, including the activities of both the PCFO and LFCC. The specific 

objectives for the 2005 campaign were: 

Local 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. 

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 

exceed 110percent ofthe 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 ofundesignated funds was properly allocated and 

distributed to the various CFC participants. 

PCFO as a Federation 

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

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

reasonable manner. 

Additionally, our audit objective for the 2004 campaign was: 

Audit Guide Review 

•	 To determine ifthe Independent Public Accountant (lPA) completed the AgreedUpon Procedures (AUP) as outlined in the 2006 CFC Audit Guide for Campaigns 

with pledges $1 Million and Greater (Audit Guide) for the 2004 campaign. 

Scope and Methodology 

We conducted this performance audit in accordance with generally accepted govenunent 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. 

The audit covered campaign years 2004 and 2005. The United Way ofGreater Los Angeles, 

located in Los Angeles, California, served as the PCFO during both campaigns. The audit 

2
 
fieldwork was conducted at the United Way of Greater Los Angeles Area office in California from 

June 4 through June 8, 2007. Additional audit work was completed at our Washington, D.C. 

office. 

The Greater Los Angeles Area CFC received campaign pledges, collected campaign receipts, and 

incurred campaign administrative expenses for the 2004 and 2005 campaigns as shown below: 

Campaign Campaign Campaign Administrative
 

Year Pledges Receipts Expenses
 

2004 $3,879,059 $3,735,676 $402,860
 

2005 $3,957,451 $3,730,440 $411,190
 

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 out attention during our 

review of the 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 ofthe accounting records and such other auditing 

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

Memorandums. 

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

regards to eligibility, we reviewed the following: 

•	 The public notice to prospective charitable organizations to determine ifthe 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. 

In regard to our objectives concerning the budget and campaign expenses, we accomplished the 

following: 

•	 Reviewed the PCFO application and completed the PCFO application checklist. 

•	 Reviewed a copy of the public notice to prospective PCFO's, and LFCC meeting minutes 

related to the selection of the PCFO. 

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

PCFO's general ledger.
 

•	 Reviewed supporting documentation for a judgmental sample of actual expenses from 28 

expense accounts. 

3
 
•	 Reviewed the LFCC meeting minutes and verified ifthe LFCC authorized the PCFO's 

reimbursement of campaign expenses. 

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

exceeded 110 percent ofthe approved budget. 

To determine if the campaign receipts and disbursements were handled in accordance with CFC 

regulations, we: 

•	 Selected and reviewed ajudgmental sample of25 out of 17,916 pledge cards (selected the 

top 10 pledge cards by high dollar, every 100th pledge card [10 total], and the first 5 pledge 

cards identified with two or more charities designated) and compared them to the Pledge 

Card Report prepared by the PCFO 

•	 Reviewed cancelled distribution checks to verify that the appropriate amount was
 

distributed in a timely manner.
 

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

was following its policy for such checks. 

•	 Reviewed Pledge Notification Letters to verify that the PCFO notified the CFC agencies of 

the designated and undesignated amounts due them before the March 15, 2006 deadline. 

•	 Reviewed and compared the Form 1417 provided by the PCFO to the Form 1417 obtained 

from the Office of Combined Federal Campaign Operations (OCFCO) to identify any 

material differences. 

•	 Verified the monthly disbursements on the Distribution ofFunds Schedule to amounts 

reported on the PCFO's Campaign Receipts and Disbursements Schedule. 

•	 Reviewed all bank statements used by the PCFO for the 2005 campaign to verify that the 

PCFO was properly accounting for and distributing funds. 

•	 Reviewed the PCFO's Campaign Receipts and Disbursements Schedule to verify that the 

PCFO properly calculated allocation rates for undesignated funds. 

•	 Reviewed the PCFO's cutoff procedures and bank statements to verify that funds were 

'allocated to the appropriate campaign year. 

•	 Reviewed one-time payments to verify that the PCFO properly calculated pledge loss and 

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

To determine if the PCFO acted appropriately as a federation, we reviewed federation receipts and 

disbursements and the contract with its member agencies. 

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 of the 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 greater than $1 million) and determined the type of audit to be 

completed by the IPA for the 2004 campaign. We also completed the AUP checklist to verify that 

the IPA completed and documented the AUP steps. 

4
 
III. AUDIT FINDINGS AND RECOMMENDATIONS
 

The PCFO and LFCC administered the 2004 and 2005 Greater Los Angeles Area CFCs in 

compliance with all applicable CFC regulations with the exception of the following areas. 

A. AUDIT GUIDE REVIEW 

1.	 Agreed-Upon Procedures Not in Compliance 

We found that the PCFO's IPA audit ofthe 2004 campaign did not comply with all 

aspects ofthe 2006 CFC Audit Guide AUPs. 

The Audit Guide states that the IPA performs "specified agreed-upon procedures (AUP) 

over the PCFO's compliance with CFC regulations and OPM guidance, and the 

effectiveness ofthe PCFO's internal controls over its compliance as ofthe end ofthe Fall 

2004 campaign period ...." Chapter III ofthe Audit Guide outlines the specific AUP 

steps for the IPA to perform. 

We reviewed the IPA working papers related to the 2004 campaign's AUPs to determine 

if the IPA complied with the Audit Guide's requirements. We identified two AUP steps 

where the IPA did not fully comply with the requirements ofthe Audit Guide. 

Specifically we noted the following: 

a.	 We identified one instance where the AUP step was completed, however, the IPA did 

not report a finding identified in its working papers. 

•	 PCFO Budget and Administrative Expenses, step six, required the IPA to report 

all instances where the PCFO was not properly matching campaign receipts and 

expenses. Our review found that the IPA noted in its work papers that some 

expenses were included in the incorrect campaign year. However, these instances 

were not reported by the IPA. Discussions with the PCFO's Comptroller verified 

that certain expenses (specifically the auditing fees) were not matched to the 

correct campaign. For instance, the IPA expenses for the 2003 campaign would 

not be known or billed until July 2005. The PCFO Comptroller did not 

understand that this was not allowed, but stated that the expense would be 

properly matched in the future. 

b.	 We also found one instance where the documentation maintained by the IPA was not 

sufficient for us to determine if the AUP step was completed correctly. 

•	 PCFO Budget and Administrative Expenses, step five, required the IPA 10 report 

all instances where the PCFO's actual expenses did not agree to the general 

ledger. Our review showed that the IPA performed adjusting entries to balance 

the general ledger. However, there was no documentation included to SUpp011 

these adjustments and, consequently, we could not verify the validity of these 

entries. 

5 
If the IPA does not complete the AUPs as stated in the Audit Guide or we are unable to 

verify the IPA's work, the OCFCO will not be able to rely on the IPA's work and, 

therefore, the ability to monitor the activities of the campaign is impaired. 

PCFO and LFCC's Comments: 

The PCFO and LFCC agree with the finding and state that they will work very closely 

with the IPA to ensure it is meeting all CFC audit guidelines when conducting audits for 

the campaign. 

Recommendation 1 

We recommend that the OCFCO ensure that the LFCC works with the PCFO and their 

IPA to implement procedures so that the AUPs, as outlined in the CFC Audit Guide, are 

properly completed. 

2. Financial Statements Not Provided 

The PCFO was unable to provide support to show that it provided its organizational-wide 

statements to the LFCC as required by the Audit Guide. In addition, the LFCC did not 

submit the required audited financial statements to OPM as required by the Audit Guide. 

The Audit Guide requires that the PCFO provide its most recent organizational-wide 

financial statements, "as of and for the fiscal year ended, that are prepared in accordance 

with GAAP and audited by an IPA in accordance with GAAS. The PCFO must provide 

the financial statements and the related audit report to the LFCC no later than August 1, 

2006." 

Per our review and discussion with the PCFO, the PCFO did not provide and was unable 

"to locate documentation to support that the organizational-wide financial statements were 

provided to the LFCC. 

In addition, the Audit Guide states that the LFCC must provide the required financial 

statements and reports "to OPM no later than September 15,2006." 

Per the OCFCO, the LFCC did not provide any of the reports or financial statements 

required by the 2006 CFC Audit Guide to OPM. 

As a result ofthe PCFO and LFCe not complying with the requirements of the Audit 

Guide, the OCFeO can not provide reasonable assurance that the CFe Campaign is 

being operated in an effective and efficient manner. 

6
 
PCFO.and LFCC's Comments: 

The PCFO and LFCC contend that the organizational-wide financial statements were 

submitted to the LFCC by the required deadline. 

The PCFO and LFCC do agree that the audit reports and financial statements were not 

provided to OPM and state that the PCFO will "work directly with the LFCC to provide 

OPM with the financial statements by the deadline." 

OIG Response: 

The PCFO and LFCC did not provide any documentation with their response to support 

its position that the organizational-wide financial statements were provided to the LFCC 

by the deadline requirements. Therefore, we can not remove this issue from our report. 

Recommendation 2 

We recommend that the OCFCO ensure that the PCFO and LFCC understand the 

reporting requirements of the CFC Audit Guide so that the audit reports and financial 

statements are provided to the appropriate patties by the CFC Audit Guide's deadlines. 

B. BUDGET AND CAMPAIGN EXPENSES 

1.	 Improper Matching of Campaign Expenses $36,504 

The PCFO charged the 2005 CFC Campaign for expenses that were not related to that 

campaign year, resulting in $36,504 in inappropriate administrative charges. 

5 CFR 950.106 (a) states, "The PCFO shall recover from the gross receipts of the 

campaign its expenses, approved by the LFCC, reflecting the actual costs of 

administering the local campaign." 

5 CFR 950.1 06 (b) states, "The PCFO may only recover campaign expenses from 

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

conducting the Cf'C cannot be recovered from receipts collected 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." 

Based on our review ofthe 2005 campaign expenses, we identified campaign expenses 

totaling $36,504 that are related to a previous campaign. Specifically, we identified the 

following: 

•	 The PCFO charged the 2005 campaign for audit expenses related to the 2004 CFC 

Campaign. This resulted in an administrative expense overcharge to the 2005 

campaign of $32,888. 

7 
•	 The PCFO charged the 2005 campaign for donor recognition awards related to the 

2004 campaign, resulting in a $3,616 overcharge. 

By charging expenses to the incorrect campaign year, the PCFO is not matching 

campaign expense with the receipts for that campaign year as required by 5 CFR 

950.106(a). In addition, using current year campaign receipts to pay for prior year 

campaign expenses is prohibited by 5 CFR 950.106 (b). As a result, $36,504 was not 

properly distributed to member agencies of the 2005 campaign. 

PCFO and LFCC's Comments: 

The PCFO and LFCC do not agree with the finding. They stated that all expenses were 

"posted to the appropriate year and reflected in the budgets provided to the LFCC and 

OPM at the end of every campaign year." They also pointed out that "There have been 

no instances ofovercharging any campaign year for related expenses to that particular 

campaign year." ­

OIG Response: 

The PCFO and LFCC did not provide any additional documentation supporting their 

disagreement with the finding. Their response also did not fully address the issue that 

the expenses were charged to the incorrect campaign year. We have provided additional 

information below on each expense questioned to further illustrate the problem: 

Auditing Expenses 

Any audits, either of financial statements or AUPs, completed during the 2005 campaign 

had to be related to a prior campaign. Our review determined that the costs charged to 

the 2005 campaign were incurred during the campaign; therefore, it is our opinion that 

these costs could not be related to or chargeable to the 2005 campaign. Per discussion 

with the OCFCO, this has been a topic ofdiscussion with PCFOs during accounting 

training sessions at CFC workshops in the past. 

Donor Recognition Awards 

The 2005 campaign was charged for personalized awards in March 2005 (first month of 

the 2005 campaign). These awards were purchased by the PCFO before the donation 

solicitation period for the 2005 campaign; therefore, it is highly unlikely they were for 

the 2005 campaign. 

Recommendation 3 

We recommend that the OeFCO direct the PCFO to reimburse the agencies ofthe 2005 

campaign $36,504 for inappropriate administrative charges. 

8
 
Recommendation 4 

We recommend that the OCFCO require the LFCC to ensure that the PCFO properly 

match expenses to the appropriate campaign year when reimbursing itselffor the 

actual costs of administering the local campaign in future years, as required by 

5 CFR 950.106 (a). 

2. Campaign Expense Reimbursement Not Authorized 

The PCFO reimbursed itself for 2005 campaign expenses without receiving the 

authorization ofthe LFCC as required by the Federal regulations. As a result, the PCFO 

could have been reimbursed for expenses not related to CFC activities and/or reimbursed 

itselfmore than the maximum allowed amount (110 percent or the approved budget 

amount). 

5 CFR 950.104 (b) (17) states that it is the responsibility ofthe LFCC to authorize the 

PCFO reimbursement of only campaign expenses that are related to the CFC and are 

adequately documented; and to ensure that the total reimbursed expenses do not exceed 

the approved campaign budget by more than 10percent. 

5 CFR 950.1 06 (a) states that the PCFO may only recover campaign expenses approved 

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

To determine ifthe LFCC properly approved the PCFO reimbursement we reviewed the 

LFCC meeting minutes and did not identify anything in those minutes authorizing the 

reimbursement of CFC expenses to the PCFO. 

As a result of not reviewing and approving the PCFO's campaign expense 

reimbursement, the LFCC is at risk ofnon-CFC related expenses being charged to the 

campaign. Inclusion of non-CFC related expenses will reduce disbursements to member 

charities. 

PCFO and LFCC's Comments: 

The PCFO and LFCC state that the PCFO receives "a letter at the beginning of each 

campaign year where it states that expenses will be allocated as approved in the budget." 

The PCFO took this letter as written approval of the expenses. 

They also indicate that they will "add more documentation to the budget approval 

process" and "will incorporate the approval ofthe budget in the LFCC meeting agenda 

and record it in the minutes." 

DIG Response: 

Based on our review ofthe PCFO and LFCC's response to the finding, it is apparent that 

they do not understand the expense approval process and their related responsibilities. 

9
 
In their response, they have associated the approval of campaign expenses with the 

approval ofthe campaign budget. This thinking is incorrect. Although the end of one 

campaign period and the beginning of the next occur almost simultaneously, the approval 

of campaign expenses and the approval ofthe campaign budget are not related. 

Campaign expenses that the PCFD wishes to have reimbursed should-be specifically 

requested by the PCFO and approved by the LFCC per the Federal regulations. The 

approval of expenses should also include a review by the LFCC to determine if the 

expenses were actual, necessary, reasonable, and related to the campaign year in 

question. The approval should occur prior to the actual expense reimbursement and be 

documented by the LFCC. 

Recommendation 5 

We recommend that the DCFCO direct the LFCC to review and document all PCFO 

reimbursement requests, verify that the requests are properly supported, and authorize 

only those expenses which are actual, necessary, reasonable, and related to the campaign 

year in question. 

Recommendation 6 

We recommend that the DCFCO ensure that the LFCC understands its responsibilities 

related to campaign expense reimbursement stipulated by 5 CFR 950.1 04 (b) (17). 

3. Untimely PCFO Selection 

The LFCC did not select the PCFO by the date set forth in the Federal regulations for the 

2005 campaign year. 

5 CFR 950.801(a) (3) states that the "Local Federal Coordinating Committees must 

select a PCFO no later than March 15." 

Based on our review of the LFCC's PCFO selection notification letter, we determined 

that the LFCCs decision to select its PCFO for the 2005 campaign year was made 

March 31, 2005, 16 days after the date required by the Federal regulations. 

Although the regulation requiring the March 15th due date for PCFO selection changed 

in 2006 to state that the due date is now determined by DPM on a yearly basis, it is 

important that the LFCC adhere to due dates set by OPM. Not adhering to due dates, 

especially the selection of the PCFO, can set the entire campaign behind from the start 

and result in delays in other CFC-related activities. 

10
 
PCFO and LFCC's Comments: 

The PCFO and LFCC agree with the finding and state that they will work together to 

ensure that the PCFO selection documentation is processed by the LFCC in a more 

timely manner to meet the deadline requirements. 

Recommendation 7 

We recommend that the OCFCO ensure that the LFCC understand its responsibilities and 

select the PCFO by the date required per 5 CFR 950.801(a) (3). 

C. CASH RECEIPTS AND DISBURSEMENTS 

1. Uncashed CFC Distribution Checks 

The PCFO did not redistribute 16 uncashed CFC distribution checks for the 2005 CFC 

Campaign, totaling $910, to charities as required by the OCFCO. 

CFC Memorandum 2006-5 requires the PCFO to develop and follow policies and 

procedures regarding uncashed checks. It also states that this policy should be 

documented and implemented after a check has gone uncashed for six months and that 

the procedures include at least three documented follow-up attempts to reach the payee 

by phone and e-mail. Ifit is determined that the payee is no longer active, the funds 

must be distributed among the remaining organizations for that campaign as 

undesignated funds. 

Our review identified 16 CFC distribution checks, totaling $910, that were outstanding 

six months or more and have not been redistributed to the remaining charities as 

undesignated funds. 

The PCFOs procedures related to outstanding checks did not encompass all of the 

procedures required by the OCFCO in CFC Memorandum 2006-5. 

PCFO and LFCC's Comments: 

The PCFO and LFCC agree with the finding and state that there is now a formal process 

of following up on uncashed checks. They also state that additional steps are being taken 

to further improve the uncashed checks process. 

Recommendation 8 

We recommend that the DCFCO ensure that the uncashed check procedures 

implemented by the PCFO fully meet the requirements outlined in Cf'C Memorandum 

2006-5. 

11
 
Recommendation 9 

We recommend that the DCFCO direct the PCFO to redistribute $910 to the charities of 

the 2005 CFC campaign as undesignated funds. 

2.	 Inaccurate Release of Donor Information 

The PCFO allowed personally identifiable information ofindividual donors to be
 

released to participating agencies against their wishes.
 

5 CFR 950.l05(d)(6) states that the PCFO is responsible for honoring the request of 

donors who indicate on the pledge card that their names not be released to the 

organization(s) that they designate. 

We selected and reviewed a judgmental sample of 25 out of 17,916 pledge cards for the 

2005 campaign. All pledge cards, with the exception ofthe following, were processed in 

accordance with the PCFO's pledge card procedures and 5 CFR 950. 

During our review ofthe pledge cards selected, we noted three errors where personally 

identifiable information was released to participating agencies against the wishes ofthe 

donor, indicating a weakness in the controls over pledge card processing: 

•	 In two instances, the donor only designated their name to be released; however, 

the PCFO released their home address and e-mail address as well. 

•	 In one instance, the donor did not want any information released; however, the 

PCFO released their name and e-mail address. 

Releasing names and addresses of donors against their wishes can subject those donors to 

'unwanted solicitation from member agencies and make their participation in a
 

subsequent CFC campaign less likely.
 

PCFO and LFCC's Comments: 

The PCFO and LFCC agree with the finding and stated that they will modify their
 

training and verification procedures to ensure compliance with the donor intent.
 

Recommendation 10 

We recommend that the DCFCO and LFCC ensure that the PCFO has implemented 

procedures safeguarding personally identifiable information of donors and to only 

release the information that the donors agree to. 

12
 
3. Cutoff Procedures 

The PCFO incorrectly used January 31st as a cut-off date for CFC receipts instead of 

tracking the receipts by payroll office, as recommended by the OCFCO. 

CFC Memorandum 2003-11 states, "Any checks received on or before January 31 

without supporting documentation should be applied to the prior campaign. Checks 

received after January 31 should be applied to the current campaign." 

Additionally, as a result ofimprovements made in the reporting ofinformation by payroll 

offices, the OCFeO issued CFC Memorandum 2006-5 to update its recommendation. 

Memorandum 2006-5 states that "For the 2005 campaign, all campaigns should be 

tracking receipts by payroll office. Discrepancies should be brought to the attention of 

thepayroll office and/or OCFeo as soon as possible so that resolutions can be made in a 

timely manner." 

For the 2005 CFC campaign, the PCFO used January 31st as a cutoff date regardless of 

the documentation provided with payroll disbursements. The PCFO stated that it used 

this date because the payroll offices do not provide the documentation needed to 

determine the appropriate campaign year to which the distributions belong. 

As a result of not tracking each receipt by payroll office as recommended by the 

OCFCO, the peFO runs the risk ofmisapplying incoming CFC payroll receipts to the 

wrong campaign year. 

PCFO and LFCC's Comments: 

The PCf'O and LFCC agree with the finding and state that they will work with the 

payroll offices and the OCFeO to specifically identify which campaign year 

contributions are intended for. 

Recommendation 11 

We recommend that the OCFCO ensure that the procedures implemented by the PCFO 

are adequate to properly allocate Cf'C receipts to the correct campaign year. 

D. LOCAL ELIGIBILITY 

1. Agency Application Evaluation Process 

The local agency and federation application screening procedures applied by the PCFO 

and LFCe do not account for all requirements outlined in the Federal regulations. As a 

result, there is a risk that local agencies andlor federations that do not meet requirements 

outlined in the regulations could be approved for inclusion in the Cf'C Campaign. 

13 
5 CFR 950.104(b) (3) states that the LFCC is responsible for "Determining the eligibility 

oflocal organizations that apply to participate in the local campaign." 5 CFR 950 

sections 202, 203, and 204 detail the approval requirements for federations and local 

agencies. 

We reviewed the LFCC evaluation process for approving 2005 local agency and 

federation applications. Using the Federal regulations, we compiled a checklist that 

encompasses all ofthe agency and federation requirements in 5 CFR 950. Our review 

consisted ofcomparing the LFCC application checklists used in the local 

agency/federation approval process to the DIG checklists. 

Our comparison of the local agency checklists showed that the LFCC's screening 

checklist did not account for 25 areas specified in 5 CFR 950. A similar comparison of 

the local federation checklists identified 36 areas of discrepancy. 

Consequently, the checklists used by the LFCC to review applications did not encompass 

all ofthe requirements necessary for an agency to be listed in the campaign brochure. 

For local agencies to be listed, the eligibility requirements set forth in 5 CFR 950.204 

must be met. For local federations to be included, the eligibility requirements set forth in 

5 CFR 950.303 must be met. We provided the PCFO with a copy ofthe OIG checklist 

and suggested that the LFCC use it, or a similar checklist, in the future to document the 

eligibility review process. 

As a result ofthe local agency and local federation eligibility checklists not including all 

ofthe information necessary for determining eligibility, there is a risk that ineligible 

agencies and/or federations could be included in the CFC campaign. 

PCFO and LFCC~s Comments: 

The PCFO and LFCC agree with the finding and stated that steps are now being 

implemented to amend their eligibility checklist to include all criteria outlined in the OIG 

checklist. 

Recommendation 12 

We recommend that the OeFCO ensure that the procedures implemented by the LFCC 

in its local agency and federation approval process take all applicable Federal regulations 

(5 CFR sections 202, 203, 204, and 303) into account. 

E. PCFO AS A FEDERATION 

1. Campaign Receipts Not Distributed $4,025 

The PCFO did not distribute $4,025 received from other participating CFCs to the 

member agencies for the 2005 campaign. 

14 
5 CFR 950.302 (e) states that "Each Federation, as fiscal agent for its member 

organizations, must ensure that Federal employee designations are honored in that each 

member organization receives its proportionate share of receipts based on the results of 

each individual campaign." 

During our review of the PCFO's operations as a federation, we identified funds received 

from the Orange County and Ventura County CFC that were not disbursed to the PCFO's 

member agencies. We informed the PCFO of this error and it verified that this was an 

oversight on its part. The PCFO stated that "in complying with the CFC audit currently 

taking place, we have learned the CFC funds received from another United Way and 

applied to our General Fund were actually to have been partially distributed amongst 

certain agencies in our area." 

We have verified that the $4,025 was properly distributed to the member agencies as of 

June 8, 2007. As a result of this error, the agencies in question did not receive funds in a 

timely manner and Federal employee designations were not properly distributed. 

PCFO and LFCC's Comments: 

The PCFO and LFCC agree with the finding and state that procedures will be 

implemented to prevent this situation from recurring in the future. 

Recommendation 13 

We recommend that the OCFCO ensure that the procedures implemented by the PCFO 

properly account for and distribute all CFC funds received to its member agencies. 

15
 
IV. MAJOR CONTIUBUTORS TO THIS REPORT 

Special Audits Group 

Auditor-In-Charge 

Group Chief 

__Senior Team Leader 

Office of Management 

Jill Henderson, Deputy Assistant Inspector General for Management 

Internal Audits Group 

Group Chief 

16
 
APPENDIX
 

United Way, Inc.
 

Corrective Action Plan
 

(dated August 1,2008 and sent via e-mail)
 

A. AGREED UPON PROCEDURES 

Finding 1: Agreed Upon Procedures not in Compliance 

The Principal Combined Fund Organization's PCFO's Independent 

Public Accountant (IPA) audit of the 2004 campaign did not comply with 

all aspects of the January 2006 Audit Guide for campaigns $1 Million 

and greater Agreed Upon Procedures (AUP). 

The Audit Guide states that the IPA performs "specified agreed-upon 

procedures (AUP) over the PCFO's compliance with CFC regulations 

and OPM guidance, and the effectiveness of the PCFO's internal 

controls over its compliance as of the end of the Fall 2004 campaign 

period ... " Chapter III of the Audit Guide outlines the specific AUP steps 

for the IPA to perform. 

We reviewed the IPA working papers related to the 2004 campaign 

AUPs to determine if the IPA complied with the Audit Guide 

requirements. We identified two AUP steps where the IPA did not fully 

comply with the requirements of the Audit Guide. Specifically we noted 

the following: 

a) We identified one instance where the AUP step was completed, 

however, the IPA did not report a finding identified in its working 

papers. 

•	 PCFO Budget and Administrative Expenses step six required 

the IPA to report all instances where the PCFO is not properly 

matching campaign receipts and expenses. Our review found 

that the IPA noted in its work papers that some expenses were 

included in the incorrect campaign year. However, these 

instances were not reported by the IPA. Discussions with the 

PCFO's Comptroller verified that certain expenses (specifically 

the auditing fees) were not matched to the correct campaign. 

For instance, the IPA expenses for the 2003 campaign would 

not be known or billed until July 2005. The PCFO Comptroller 

did not understand that this wasn't allowed, but stated that the 

expense would be properly matched in the future. 

b) We also found that in one instance where the documentation 

maintained by the IPA was not sufficient for us to determine if the 

AUP step was completed correctly. 
APPENDIX 

•	 PCFO Budget and Administrative Expenses step five required 

the IPA to report all instances where the PCFO's actual 

expenses did not agree to the general ledger. However, there 

was no documentation included to support these adjustments 

and, consequently; we could not verify the validity of these 

entries. If the IPA does not complete the AUP as stated in the 

Audit Guide or we are unable to verify the IPA's work and, 

therefore, the ability of the OCFC to monitor the activities of 

the campaign is impaired. 

UWGLA Response: We will work very closely with our IPA to ensure 

that we are meeting all CFC Audit guidelines when conducting our 

audits. 

Finding 2: Financial Statements Not Provided 

The PCFO also was unable to provide support to show that it provided its 

organizational-wide statements to the LFCC as required by the Audit 

guide. In addition, the LFCC did not submit the required audited financial 

statements to OPM as required by the Audit Guide. 

The Audit Guide requires that "the PCFO provide its most recent 

organizational-wide financial statements, as of and for the fiscal year 

ended, that are prepared in accordance with GAAP and audited by an IPA 

in accordance with GAAS. The PCFO must provide the financial 

statements and the related audit reports to the LFCC no later than August 

1,2006. 

Per our review and discussion with the PCFO, the PCFO did not provide 

and was unable to locate documentation to support that the 

organizational-wide financial statements were provided to the LFCC. 

The Audit Guide states that the LFCC provide the required financial 

statements and reports "to OPM no later than September 15, 2006." 

Per the OCFC, the LFCC did not provide any of the reports or financial 

statements required by the 2006 CFC Audit Guide to OPM. 

As a result of the PCFO and LFCG not complying with the requirements of 

the Audit Guide, the OCFC can not provide reasonable assurance that the 

CFC Campaign is being operated in an effective and efficient manner. 

UWGLA Response: UWGLA submitted financial statements by the 

deadline requirements. In the future, we will work directly with the 

LFCC to provide OPM with the financial statements by the deadline. 
APPENDIX
 

B. BUDGET AND CAMPAIGN EXPENSES 

Finding 1: Campaign Expense Reimbursement Not Authorized 

The PCFO reimbursed itself for 2005 campaign expenses 

without receiving the authorization of the LFCC as required by the 

Federal regulations. As a result, the PCFO could have been reimbursed 

for expenses not related to Combined Federal Campaign (CFC) 

activities and/or reimbursed itself more that the maximum allowed 

amount (110 percent of the approved budget amount). 

5 CFR 950.104 (b)(17) states that it is the responsibility of the LFCC to 

authorize the PCFO reimbursement of only campaign expenses related 

to the CFC and are adequately documented; and to ensure that the total 

reimbursed expenses do not exceed the approved campaign budget by 

more than 10 percent. 

5 CFR 950.106 (a) states that the PCFO may only recover campaign 

expenses approved by the LFCC which reflect actual costs of 

administering the campaign. 

To determine if the LFCC properly approved the PCFO reimbursement 

we reviews the LFCC meeting minutes and did not identify anything in 

those minutes authorizing the reimbursements. 

Reimbursements that are not reviewed and authorized by the LFCC 

could result in non-CFC related charges reducing the disbursement 

amounts to member agencies. 

UWGLA Response: We receive a letter at the beginning of each 

campaign year where it states that expenses will be allocated as 

approved in the budget. This letter was taken as written approval. To 

add more documentation to the budget approval process, we will 

incorporate the approval of the budget in the LFCC meeting agenda 

and record it in the minutes. 

Finding 2: Untimely PCFO Selection 

The LFCC did not select the PCFO by the date set forth in the Federal 

regulations for the 2005 Campaign year. 

5 CFR 950.801(a)(3) states that the "Local Federal Coordinating 

Committee must select a PCFO no later than March 15." 

Based on our review of the LFCC's PCFO selection notification letter we 

determined that the LFCC's decision to select its PCFO for the 2005 
APPENDIX
 

campaign year was made March 31,20'05, 16 days after the date 

required by the Federal regulations. 

Although the regulation requiring the March 15th due date for selection 

changed in 2006 to state that the due date is now determined by OPM 

on a yearly basis, it is important that the LFCC adhere to due dates set 

by OPM. Not adhering to due dates, especially selection of the PCFO, 

can set the entire campaign behind from the start and result in delays in 

other CFC related activities. 

UWGLA Response: We will continue to work with the LFCC to ensure 

that the documentation provided is processed by them in a timely 

manner to meet the deadline. 

Finding 3: Improper Matching of Campaign Expense Reimbursement 

The PCFO charged the 2005 CFC Campaign for expenses that were not 

related to that campaign year resulting in $36,504 in inappropriate 

administrative charges. 

5 CFR 950.104 (b)(17) states, "The PCFO shall recover from the gross 

receipts of the campaign its expenses, approved by the LFCC, reflecting 

the actual costs of administering the campaign" from receipts collected 

for that campaign year. 

5 CFR 950.106 (a) states, "The PCFO may only recover campaign 

expenses from receipts collected for that campaign year. Expenses 

incurred preparing for and conducting the CFC cannot be recovered 

from receipts collected 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>" 

Based on our review of the 2005 campaign expenses, we identified 

campaign expenses totaling $36,504 that are related to a previous 

campaign. Specifically, we identified the following: 

•	 THE PCFO charged the 2005 campaign for audit expenses 

related to the 2004 CFC Campaign. This resulted in an 

administrative expense overcharge to the 2005 campaign of 

32,888. 

•	 The PFCO charged the 2005 campaign for donor recognition 

awards related to the 2004 campaign, resulting in an $3,616 

overcharge to the 2005 campaign. 
APPENDIX 

By charging expenses to the incorrect campaign year, the PCFO is not 

matching campaign expense with the receipts for that campaign year as 

required by 5 CFR 950.106(a). In addition, using prior year campaign 

receipts to pay for current year campaign expenses is prohibited by 5 CFR 

950.106(b). As a result, $36,504 was not properly distributed to member 

agencies of the 2005 campaign. 

UWGLA Response: All expenses are posted to the appropriate year 

and reflected in the budgets provided to the LFCC & OPM at the end of 

every campaign year. There have been no instances of overcharging 

any campaign year for related expenses to that particular campaign 

year. 

C. CASH RECEIPTS AND DISBURSEMENTS 

Finding 1: Uncashed CFC Distribution of Checks 

The PCFO failed to redistribute or reissue 16 CFC distribution checks, 

totaling $910, to charities as required by the OCFC. 

CFC Memorandum 2006-5 requires the PCFO to develop and follow 

policies and procedures regarding un-cashed checks. It also states that 

this policy should be documented and implemented after a check has 

gone uri-cashed for six-months and that the procedures include at least 

three documented follow-up attempts to reach the payee by phone and 

e-mail. If it is determined that the payee is no longer active, the funds 

must be distributed among the remaining organizations for that 

campaign as undesignated funds. 

Our review identified 16 FC distribution checks, totaling $910, 

outstanding six months or more that have not been redistributed to the 

remaining charities as undesignated funds. 

The PCFOs procedures related to outstanding checks did not
 

encompass all of the procedures required by the OCFC in CFC
 

Memorandum 2006-5.
 

Adherence to the procedures outlined in the CFC Memorandum is 

imperative to ensure that CFC disbursement checks outstanding six 

months or more are not inadvertently escheated to the state and not 

redistributed to other charities as undesignated funds. 

UWGLA Response: Staff has a formal process of following up on uncashed checks. To better document the process, staff will document 

in writing all communication with agencies regarding un-cashed 
APPENDIX 

checks. Any voided check goes back to the CFC Campaign as 

undesignatedfunds to be redistributed to agencies. 

Finding 2: Inaccurate Release of Donor Information 

The PCFO allowed personally identifiable information of individual 

donors to be released to participating agencies against their wishes. 

5 CFR 950.1 05(d)(6) states that the PCFO is responsible for honoring 

the request of donors who indicate on the pledge card that their names 

not be released to the organization(s) that they designate. 

We reviewed a sample of 25 out of 17,934 pledge cards for the 2005 

campaign. All pledge cards, with the exception of the following, were 

processed in accordance with the PCFO's pledge card procedures and 

5 CFR 950. 

. During our review of the pledge cards selected, we noted three errors 

where personally identifiable information was released to participating 

agencies against the wishes of the donor, indicating a weakness in the 

controls over pledge card processing: 

•	 In two instances, the donor only designated their name to be 

released; however, the PCFO released their home address and 

E-mail address as well. 

•	 In two instances, the donor did not want any information released; 

however, the PCFO released their name and E-mail address. 

Releasing names and addresses of donors against their wishes can 

subject those donors to unwanted solicitation from member agencies 

and make their participation in a subsequent CFC campaign unlikely. 

UWGLA Response: We concur with findings and will modify training 

and verification procedures to ensure compliance with donor intent. 

Finding 3: Cutoff Procedures 

The PCFO incorrectly uses January 31st as a cut-off date for CFC
 

receipts instead of tracking the receipts by payroll office as
 

recommended by the OCFC.
 

CFC Memorandum 2004-11 states, lJ •••Any checks received on or before 

January 31 without supporting documentation should be applied to the 

prior campaign. Checks received after January 31 should be applied to 

the current campaign." 
APPENDIX
 

Additionally, a result of improvements made in the reporting of 

information by payroll offices, the OCFC issued CFC Memorandum 

2006-5 to update its recommendation. Memorandum 2006-5 states that, 

"For the 2005 campaign, all campaigns should be tracking receipts by 

payroll office. Discrepancies should be brought to the attention of the 

payroll office and/or OCFC as soon as possible so that resolutions can 

be made in a timely manner." 

For the 2005 CFC campaign, the PCFO used January 31 et as a cutoff 

date regardless of the documentation provided with payroll 

disbursements. The PCFO stated that it used this date because the 

payroll offices do not provide the documentation needed to determine 

the appropriate campaign year to which the distribution belong. 

As a result of not tracking each receipt by payroll office as 

recommendation by the OCFC, the PCFq runs the risk of misapplying 

incoming CFC payroll receipts to the wrong campaign year. 

UWGLA Response: As previously stated, UWGLA did not receive 

complete information with payroll disbursements and was unable to 

confirm periods for certain disbursements. On a go-forward basis, 

UWGLA will obtain a list of the payroll offices for CFC and create a 

master list of contact data to enable a quick resolution of any 

campaign attribution issues. Further, UWGLA will escalate any 

unresolved issues to OCFO in a timely matter to alert them to any 

resulting issues and to ensure proper allocation of funds received. 

D. LOCAL ELIGIBILITY 

Finding 1: Agency Application Evaluation Process 

The local agency and federation application screening procedures 

applied by the PCFO and LFCC do not account for all requirements 

outlined in the Federal Regulations. As a result, there is a risk that local 

agencies and/or federations that do not meet requirements outlined in 

the regulations could be approved for inclusion in the CFC Campaign. 

5 CFR 950.104(b)(3) states that the LFCC is responsible for 

"Determining the eligibility of local organizations that apply to participate 

in the local campaign." 5 CFR 950 sections 202, 203, and 204 detail the 

approval requirements for federations and local agencies. 

We reviewed the LFCC evaluation process for approving 2005 local 

agency applications. Using the Federal regulations, we compiled a 

checklist that encompasses all of the agency and Federation 

requirements in 5 CFR 950. Our review consisted of comparing the 
APPENDIX
 

LFCC application checklists used in the agency/federation approval 

process to the DIG checklist. 

Our comparison of the local agency checklists showed that the LFCC's 

screening checklist did not account for 25 areas specified in 5 CFR 950. 

A similar comparison of the local federation checklists identified 36 areas 

of discrepancy. 

Consequently, the checklists used by the LFCC to review the 

applications did not encompass all of the requirements necessary for an 

agency to be listed in the campaign brochure. For local agencies to be 

listed, the eligibility requirements se forth in 5 CFR 950.204 must be met. 

For local federations to be included, the eligibility requirements set forth 

in 5 CFR 950.303 must be met. We provided the PCFO (via e-mail on 

7/13/07) with a copy of the DIG checklist and suggested that the LFCC 

use it, or a similar checklist, in the future to document the eligible review 

process. 

As a result of the local agency and local federation eligibility checklists 

not including alt of the information necessary for determining eligibility, 

there is a risk that ineligible agencies and/or federations could be 

included in the CFC campaign. 

UWGLA Response: We will amend our eligibility checklist to include 

all criteria as identified in the OIG checklist. 

D. PCFO AS A FEDERAliON 

Finding 1: Campaign Receipts not Distributed $4,025 

The PCFO did not distribute $4,025 received from other participating 

CFC's to the member agencies for the 2005 campaign. 

5 CFR 950.302 (e) states that "each Federation, as fiscal agent for its 

member organizations, must ensure that Federal employee designations 

are honored in that each member organization receives its proportionate 

share of receipts based on the results of each individual campaign." 

During our review of PCFO's operations as a Federation, we identified 

funds received from the Orange County Combined Federal Campaigns 

that were not disbursed to the PCFO's member agencies. We informed 

the PCFO of this error and it verified that this was an oversight on it's 

part. The PCFO stated that "in complying with the CFC audit currently 

taking place, we have learned the CFC funds received from another 

United Way and applied to our General Fund was actually to have been 

partially distributed amongst certain agencies in our area." We have 
APPENDIX 

verified that the $4,025 was properly distributed to the member agencies 

as of June 8, 2007. 

As a result of this error, the agencies in question did not receive funds in 

a timely manner and Federal employee designations were not properly 

distributed. 

UWGLA Response: We will implement a new procedure to prevent 

this situation from recurring. Staff will verify the checks received 

without supporting documentation and will document the process to 

ensure that the check received is coded to the correct account.