US OFFICE OF PERSONNEL MANAGEMENT 

OFFICE OF THE INSPECTOR GENERAL 

OFFICE OF AUDITS 

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Rep~rt No. 3A-CF':OO-~8~038

Date: October 29, 2008

--CAUTION-­

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reportma)'con taillpro prieta ry da ("whie h is II rolceted byfede raJ law (18 u.s.C. ]905); therefore, wb ire. this aLidi! report is ava ita ble 

under th'eFreedoolofinronnation Act, cllutioll needs to be extrcised before releasiug the report to the general pliblic. 
UNITED STATES OFFICE OF PERSONNEL MANAGEMENT
 

Washingtoll, DC 20415
 

Office of the 

Inspector General 

AUDIT REPORT 

THE 2006 COMBINED FEDERAL CAMPAIGN
 

ACTIVITIES OF THE
 

EARTH SHARE FEDERATION
 

BETHESDA,MARYLAND
 

Report No. 3A-CF-OO-08-038 Da~:Qctober 29, 2009 

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
 

THE 2006 COMBINED FEDERAL CAMPAIGN
 

ACTIVITIES OF THE
 

EARTH SHARE FEDERATION
 

BETHESDA,MARYLAND
 

Report No. 3A-CF-OO-08-038 Dah:October 29, 2008 

The Office of the Inspector General has completed a perfOlmance audit of the 2006 Combined 

Federal Campaign (CFe) activities ofthe Emih Share Federation. The primary objective of the 

audit was to detennine if the Earth Share Federation's eFe activities were in compliance with 

Title S, Code of Federal Regulations, Part 950 (5 CFR 950). The audit was conducted in 

Bethesda, Maryland from July 21 through July 25,2008. 

The audit showed that the 2006 eFC activities of the Earth Share Federation were administered 

in compliance with 5 CPR 950. 

www.opt11.gov www.usajobs.gov 
CONTENTS
 

PAGE 

EXECUTIVE SUMMARY : : i
 

1. fNTRODUCTION AND BACKGROUND 1
 

n. OBJECTIVES, SCOPE, AND METHODOLOGY 3
 

Ill. AUDIT RESULTS , :, 5
 

IV. MAJOR CONTRIBUTORS TO THIS REPORT 6
 
I. INTRODUCTION AND BACKGROUND
 

Introduction 

c , 

As authorized by the Inspector General Act of 1978, as amended, we conducted an audit of the 

2006 Combined Federal Campaign (CFC) activities ofthe Earth Share Federation (Federation). 

The audit field work was conducted at the Federation's headquarters in Bethesda, Maryland, 

from July 21 through 25,2008. Additional audit work was completed at our Washington, D.C. 

office. 

Background 

Executive Orders 12353 and 12404 and Public Law 100-202 established a system for 

administering the 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.. 

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

the world. It consists of 278 local campaigns. The Office of Personnel Management (0PM) has 

the overall responsibility for managing the CFC. This includes publishing regulations and 

providing guidance to Federal officials and private organizations to ensure that all campaign 

objectives are achieved. ' 

The CFC organizational structure consists of a Local Federal Coordinating Committee (LFCC), a 

Principle Combined Fund Organization (PCFO), federations, and the individual charities. The 

LFCC is responsible for organizing the local CFC, determining eligibility of local charities, 

supervising the activ,ities of the PCFO, and acting upon any problems relating to a local charity's 

noncompliance with the policies and procedures of the CFC. The PCFO conducts the actual 

campaign and collects the funds. The PCFO is responsible for training key workers and 

volunteers, preparing pledge cards and brochures, distributing campaign materials, collecting and 

distributing campaign contributions, and maintaining a detailed schedule of CFC administrative 

expenses incurred during the campaign. Charities can either belong to a federation or they can 

be unaffiliated. 

National federations are responsible for administering applications for their membership, acting 

as a fiscal agent for their members, and making sure that donor designations are honored. 

Organizations are prohibited from using consultants in their CFC operations to perform policymaking or decision-making functions. To participate in the CFC, a federation consents to allow 

the Director ofOPM complete access to its CFC records, as well as its members' CFC records. 

A federation must have 15 or more member charities that meet eligibility requirements contained 

in 5 CFR 950.202 and 950.203. After obtaining status as a national federation, it must 

re-establish eligibility each year and certify and/or demonstrate that its members meet all 

eligibility requirements expressed in 5 CFR 950.301(e). The Director may elect to review and 

accept or reject the national federation's eligibility certifications made on behalf of its members. 

The Director may request additional information from the federation. 
The previous audit of the Federation (Report No. 3A-CF-OO-OO-062, dated December 5, 2000), 

covering campaign years 1997 and 1998, reported that the Federation complied with all 

applicable laws and regulations. 

2
 
II. OBJECTIVES, SCOPE, AND METHODOLOGY
 

Objectives 

The purpose of the audit was to determine if the Federation's eFe activities during the 2006 

campaign were in compliance with 5 eFR 950, the regulations goveming ere operations. The 

specific audit objectives were to: 

Local Eligibility 

•	 Detennine the adequacy of the Federation's review of applications for 

membership in the Federation and the level of compliance with the regulations-. 

5 CFR 950.202, 203, and 301. 

Administrative Expenses' 

•	 Determine if the Federation has agreements in place with the member agencies 

concerning the amount of dues/fees/expenses to be charged. 

•	 Determine if the Federation charges its member agencies any additional 

dues/fees/expenses other than that prescribed by the agency agreement. 

•	 Verify that dues/fees/expenses are accurately reported and agree to the 

Federation's arumal report. 

Govemance Structure 

•	 Detennine compliance with 5 eFR 950.203 by reviewing the Federation's 

bylaws, board tenus/appointment dates/termination dates, board minutes, ethics 

policy, conflict of interest statements, and the most recent IRS 990 fonn. 

Distribution of Funds 

•	 Detennine if the Federation's procedures for processing and tracking receipts are 

reasonable. 

•	 Determine if the Federation's eFC disbursement policy is reasonable and that the 

initial distributions to member agencies were timely for the 2006 campaign. 

•	 Determine if the Federation's deposited amounts agree to the check amounts in 

the audited PCFO records. 

•	 Detel111ine ifthe Federation is maintaining CFe financial records and interestbearing bank. accounts separate from the other internal organization records and 

bank accounts. 

•	 Detemline if checks disbursed to agencies agree with the amounts on rhe 

Federation's distribution list and that all checks were timely distributed in 

accordance with the regulations. 

SCOlle and Methodology 

We conducted this performance audit in accordance with generally accepted govenmlent 

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

sufficient, 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 year 2006. The Federation served as a national eFe federation 

during this campaign. The Federation rep0l1ed that it received $4,258,670 for its member 

agencies for the 2006 campaign. 

The audit fieldwork was conducted in Bethesda, Maryland, from July 21 through 25,2008. 

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

In conducting the audit, we relied to varying degrees on computer-generated data provided by 

the Federation. Due to time constraints, we did not verify the reliability of the data generated by 

the Federation's information system. However, in utilizing computer-generated data during our 

audit testing, nothing came to our attention to cause us to doubt its reliability. We believe the 

data was sufficient to achieve the audit objectives. 

To accomplish the audit objectives, we performed the audit procedures listed below: 

•	 We reviewed the Federation's policies and procedures for receiving, recording, and 

distributing funds. 

•	 We reviewed documentation supporting campaign expenses, cash receipts, and cash 

disbursements. 

•	 We reviewed the Federation's member applications for inclusion in the CPC. 

•	 We interviewed the Federation officials. 

We sampled documentation for review and testing on a judgmental basis. To test payments to 

member agencies we used a judgmental sampling method to select 6 out of 57 Federation 

member agencies from the 2006 campaign based on the highest dollar amount paid. Because the 

sample was not statistically based, the results could not be projected to the universe taken as a 

whole". 

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

procedures were mainly substantive in nature, although we did gain an understanding of 

management procedures and controls to the extent necessary to achieve our audit objectives. 

Our audit included such tests of the accounting records and such other auditing procedures as we 

considered necessary under the circumstances to determine compliance with 5 CFR 950 and erc 

memorandums. 

The initial results of our audit were discussed with the Federation during an exit conference at 

the end of our on-site work. We did not issue a draft report for review and comment since the 

Federation's eFe activities "vere conducted in accordance with applicable regulations and aPM 

guidance. 

4
 
III. AUDIT RESULTS
 

Based on our review of local eligibility, governance structure, administrative expenses, and 

distribution of funds, we found that the Federation's 2006 CFC activities were administered,in . 

accordance with Federal regulations 5 CFR 950 and applicable CFC memorandums. 

5
 
IV. MAJOR CONTRIBUTORS TO THIS REPORT 

Special Audits Group 

Auditor 

Auditor-In-Charge 

Group Chief 

Senior Team Leader 

6