Semiannual Report to Congress

October 1, 2011 – March 31, 2012

May 2012

Federal Election Commission - Office of Inspector General

999 E Street, N.W. Suite 940, Washington, D.C. 20463

i

October 1, 2011 - March 31, 2012

FEDERAL ELECTION COMMISSION

WASHINGTON, D.C. 20463

OFFICE OF THE CHAIR

May 21, 2012

The Honorable John A. Boehner

Speaker of the House of Representatives

Washington, D.C. 20515

Dear Mr. Speaker:

Pursuant to the Inspector General Act of 1978, as amended, the Federal Election 

Commission submits the Office of Inspector General’s Semiannual Report to Congress. The 

report summarizes the activity of the FEC Office of Inspector General (“OIG”) from October 1, 

2011 through March 31, 2012. During this reporting period, the FEC’s Inspector General 

completed, with the assistance of contract auditors, the annual audit of the FEC’s financial 

statements. 

We are pleased to report that the Commission received an unqualified (or clean) opinion 

on the required statements: the FEC’s Balance Sheet as of September 30, 2011, and the related 

Statements of Net Costs, Changes in Net Position, Budgetary Resources, and Custodial Activity

for the year then ended. This marks the third consecutive year with no material weaknesses 

identified. The auditors observed, however, two deficiencies in internal controls. The response 

of FEC management to the issues noted by the auditors appears in the report, which was issued 

on November 14, 2011. 

During the semiannual period, the OIG also completed an inspection of the FEC’s 

building security system. The inspection report was released in December 2011 and identified 

four findings. Management’s responses to the findings and recommendations are discussed in 

detail in that inspection report.

The Commission appreciates and shares the Inspector General’s commitment to sound 

financial and management practices, and looks forward to continuing its cooperative working 

relationship as management takes appropriate measures to improve operations of the 

Commission. Copies of the Semiannual Report to Congress are being provided to the Chairmen 

and Ranking Members of the FEC’s oversight committees.

On behalf of the Commission,

Caroline C. Hunter

Chair

Enclosure
ii

Office of Inspector General Semiannual Report to Congress

MANAGEMENT REPORT ON 

INSPECTOR GENERAL ISSUED REPORTS

WITH QUESTIONED COSTS

FOR THE SIX-MONTH PERIOD ENDING MARCH 31, 2012

Number of Questioned Unsupported

 Reports Costs Costs

A. Reports for which no management decision

 has been made by commencement of the

 reporting period 0 0 [0]

B. Reports issued during the reporting period 0 0 [0]

Subtotals (A + B) 0 0 [0]

C. Reports for which a management decision 

 was made during the reporting period 0 0 [0]

 (i) Dollar value of disallowed costs 0 0 [0]

 (ii) Dollar value of costs not disallowed 0 0 [0]

D. Reports for which no management decision has

 been made by the end of the reporting period 0 0 [0]

E. Reports for which no management decision

 was made within six months of issuance 0 0 [0]
iii

October 1, 2011 - March 31, 2012

MANAGEMENT REPORT ON 

INSPECTOR GENERAL ISSUED REPORTS WITH

RECOMMENDATIONS TO PUT FUNDS TO BETTER USE

FOR THE SIX-MONTH PERIOD ENDING MARCH 31, 2012

Number of Funds to be Put

 Reports To Better Use

A. Reports for which no management decision

 has been made by the commencement

 of the reporting period 0 0

B. Reports issued during the reporting period 0 0

C. Reports for which a management decision

 was made during the reporting period 0 0

 (i) Dollar value of recommendations that were

 agreed to by management 0 0

 - Based on proposed management action 0 0

 - Based on proposed legislative action 0 0

 (ii) Dollar value of recommendations that were

 not agreed to by management 0 0

D. Reports for which no management decision

 has been made by the end of the reporting period 0 0

E. Reports for which no management decision

 was made within six months of issuance 0 0
iv

Office of Inspector General Semiannual Report to Congress

This Page Intentionally Left Blank
v

October 1, 2011 - March 31, 2012

FEDERAL ELECTION COMMISSION 

 WASHINGTON, D.C. 20463 

 Office of Inspector General

A Message from the Inspector General

This report summarizes the work completed by the Office of Inspector General (OIG) for the 

semiannual reporting period October 1, 2011 – March 31, 2012. The activities highlighted in 

this report demonstrate our continuing commitment to the promotion of integrity, 

accountability, efficiency and effectiveness in the programs and operations of the Federal 

Election Commission (FEC). We have devoted a significant amount of resources this 

reporting period in attempting to improve the FEC’s closing of recommendations contained 

in OIG audit reports. The OIG has instituted a policy of meeting quarterly with the 

management officials responsible for implementing the actions contained in their respective 

Corrective Action Plans (CAP). During these meetings we discuss the actions contained in 

the CAPs management has taken or intends to take and the time frame expected to fulfill the 

recommendations in our audit reports. We also use this time to close those recommendations 

that we feel have been properly addressed. The OIG intends to present the results of these 

meetings to the Commission and use this opportunity to make the Commission aware of any 

concerns we may have in this area. 

While making follow-up of audit recommendations a priority this reporting period, we have 

also undertaken several other projects contained in our annual work plan to cover various 

areas of the FEC, in addition to conducting an investigative peer review of another Office of 

Inspector General. The results of these efforts are contained in this report. 

The staff of the OIG has also been active in furthering their knowledge and experience 

through various training initiatives and participating in Council of Inspectors General on 

Integrity and Efficiency’s (CIGIE) committees and workshops. 

Lynne A. McFarland 

Inspector General 

Federal Election Commission 

April 27, 2012
vi

Office of Inspector General Semiannual Report to Congress

This Page Intentionally Left Blank
vii

October 1, 2011 - March 31, 2012

Executive Summary 1

The Federal Election Commission 3

Office of Inspector General 4

OIG Audit Activity 5

OIG Audit Follow-up Activity 7

OIG Inspections 10

OIG Hotline Information 12

OIG Investigations 13

Additional OIG Activity 14

Council of the Inspectors General on Integrity and Efficiency (CIGIE) Activity 15

OIG Contacts 16

List of Training, Meetings and Conferences Attended by OIG Staff 17

Reporting Requirements 20

Table I – Questioned Cost 21

Table II – Funds Put To Better Use 22

Table III – Summary Of Audit Reports With 23

Corrective Actions Outstanding For More Than Six Months

Appendix A: Peer Review Results 24

Appendix B: OIG Fiscal Year 2012 Work Plan 25

Table of Contents
Office of Inspector General Semiannual Report to Congress

This Page Intentionally Left Blank
1

October 1, 2011 - March 31, 2012

Executive Summary

to the Audit of the FEC’s Fiscal Year 2011 Financial 

Statements, see the section entitled OIG Audit 

Activity (starting on page 5).

In addition to the financial statement audit, the OIG 

conducted an inspection of the FEC’s Kastle Key 

System (OIG 11-02). The Kastle key program provides FEC employees and contractors with access to 

the main building entrance, FEC garage, elevators, 

and access to restricted offices (i.e. computer rooms, 

Finance Office). For detailed information pertaining 

to the OIG’s Kastle Key Inspection, see the section 

entitled OIG Inspections (starting on page 10).

The OIG continued work on an inspection of the 

FEC’s Security Contract (OIG-11-03). The inspection commenced during the last reporting period. 

Physical security and access control for the FEC 

Building at 999 E Street, NW, Washington, DC is 

covered by a contract (the “Contract”) with a contract 

guard company. The purpose of this inspection is 

two-fold. The first purpose is to review the Contract, 

policies and procedures, standing orders, and guard 

facilities to clarify responsibilities and authorities. 

This goal is informational and intended to provide 

FEC management with information on the responsibilities and authorities of the parties to and beneficiaries of the Contract. The second purpose is to 

determine compliance with selected Contract provisions, policies and procedures. The OIG anticipates 

completing the inspection and releasing the final report during the next reporting period. 

The OIG also conducted follow-up work for prior audits with outstanding audit recommendations. In an 

effort to ensure audit recommendations are being 

properly implemented in a timely manner, the OIG 

started conducting quarterly meetings with management to discuss the status of management’s corrective actions for the outstanding audit recommendations. During this reporting period the OIG held 

The Inspector General Act of 1978, as amended, states that the Inspector General is responsible for conducting audits, inspections, investigations, and recommending policies and procedures 

that promote economic, efficient, and effective use 

of agency resources and programs that prevent 

fraud, waste, abuse, and mismanagement. The 

IG Act also requires the Inspector General to keep 

the Commission and Congress fully and currently 

informed about problems and deficiencies in the 

Commission’s operations and the need for corrective 

action.

This semiannual report includes the major accomplishments of the Federal Election Commission 

(FEC) Office of Inspector General (OIG), as well as 

relevant information regarding additional OIG activities. The executive summary highlights the most 

significant activities of the OIG. Additional details 

pertaining to each activity (audits, hotline, and investigations) can be found in subsequent sections of 

this report.

In November 2011, the OIG completed the Audit of 

the FEC’s Fiscal Year (FY) 2011 Financial Statements 

(OIG-11-01). Under contract with the OIG, the independent public accounting firm Leon Snead & 

Company (LSC) conducted the audit and issued an 

unqualified (clean) audit opinion. LSC also issued 

a report on internal controls that contained several 

audit recommendations to address two (2) significant 

deficiencies, which were: (1) information technology 

security control weaknesses; and (2) internal control 

weaknesses related to financial reporting. Lastly, the 

results of LSC’s tests of compliance with laws and 

regulations described in their audit report disclosed 

no instance of noncompliance with laws and regulations that are required to be reported under U.S. generally accepted government auditing standards or 

OMB guidance. For detailed information pertaining 
2

Office of Inspector General Semiannual Report to Congress

separate meetings with management in regards to: 

1) the 2010 Follow-up Audit of Procurement and 

Contract Management; 2) the 2010 Follow-up Audit 

of Privacy and Data Protection; 3) Audit Followup of the FEC’s Transit Benefit Program; and 4) the 

Audit of the Commission’s Property Management 

Controls. For details regarding the OIG’s audit 

follow-up work, see the section entitled OIG Audit 

Follow-up Activity (starting on page 7).

In addition to the OIG’s audit and inspection work, 

there was activity during the reporting period on 

hotline and investigative matters. The evaluation 

process of hotline complaints are conducted by the 

Chief Investigator and the Deputy Inspector General. 

During this semiannual reporting period, the OIG 

opened two (2) new hotline complaints in which one 

(1) hotline complaint was closed, and one (1) complaint was merged into an investigation. Further, the 

OIG has three (3) open hotline complaints as of the 

end of this reporting period, including one (1) that 

was opened prior to the current semiannual reporting period. For details regarding the OIG’s hotline 

complaints, see the section entitled OIG Hotline 

Information (starting on page 12).

Regarding OIG investigations, the OIG closed one 

(1) investigation during this timeframe. The investigation involved allegations that an employee 

violated criminal ethics laws and regulations governing standards of conduct for federal executive 

branch employees. For further details regarding the 

OIG’s investigations, see the section entitled OIG 

Investigations (starting on page 13).

Lastly, the OIG completed a voluntary investigative 

peer review of the Federal Trade Commission (FTC) 

OIG on March 28, 2012. The review was conducted 

at the FTC headquarters office in Washington, DC, 

where we interviewed OIG investigative personnel and reviewed FTC OIG investigative policies 

and procedures. Additionally, we sampled four (4) 

case files for investigations closed during the previous 12-month period and reviewed the case files 

for compliance with the quality standards for investigations. We determined that the system of internal safeguards and management procedures for the 

investigative function of the FTC OIG in effect for 

the time period examined was in compliance with 

the quality standards established by the Council 

of Inspectors General on Integrity and Efficiency 

(CICIE). For further details regarding the investigative peer review, see Appendix A: Investigative 

Peer Review Results (starting on page 24).
3

October 1, 2011 - March 31, 2012

The federal election commission

In 1975, Congress created the Federal Election 

Commission to administer and enforce the Federal 

Election Campaign Act (FECA). The duties of the 

FEC, an independent regulatory agency, are to disclose campaign finance information; enforce the provisions of the law; and oversee the public funding of 

Presidential elections.

The Commission consists of six members who are 

appointed by the President and confirmed by the 

Senate. Each member serves a six-year term, and 

two seats are subject to appointment every two 

years. By law, no more than three Commissioners 

can be members of the same political party, 

and at least four votes are required for any official Commission action. The Chairmanship of the 

Commission rotates among the members each year, 

with no member serving as Chairman more than 

once during his or her term. Currently the FEC has 

a full complement of Commissioners – Caroline 

C. Hunter, Chair; Ellen L. Weintraub, Vice Chair; 

and Commissioners Cynthia L. Bauerly; Donald 

F. McGahn II; Matthew S. Petersen; and Steven T. 

Walther. 
4

Office of Inspector General Semiannual Report to Congress

Office of Inspector General. 

The Inspector General Act of 1978 (P.L. 100-504), 

as amended, states that the Inspector General is responsible for: 1) conducting and supervising audits 

and investigations relating to the Federal Election 

Commission’s programs and operations; 2) detecting and preventing fraud, waste, and abuse of 

agency programs and operations while providing 

leadership and coordination; 3) recommending policies designed to promote economy, efficiency, and 

effectiveness of the establishment; and 4) keeping 

the Commission and Congress fully and currently 

informed about problems and deficiencies in FEC 

agency programs and operations, and the need for 

corrective action. 
5

October 1, 2011 - March 31, 2012

Audit of the FEC’s Fiscal Year 2011 Financial 

Statement Audit

Assignment Number: OIG-11-01

Status: Released November 2011

http://www.fec.gov/fecig/documents/Final_FY2011_

Financial_Statement_Audit_Report.pdf

The Office of Inspector General (OIG) exercised 

another option year with Leon Snead & Company 

(LSC) to conduct the Federal Election Commission’s 

(FEC) annual financial statement audit. The entrance conference was held on April 27, 2011 and 

audit fieldwork commenced on May 16, 2011. 

The OIG approved LSC’s planning documents and 

audit program for the 2011 financial statement audit. The planning phase consisted of LSC briefing 

the OIG on any changes to the audit plan from the 

prior year, new or additional audit steps included in 

the audit plan, and any changes made due to new 

requirements and/or audit standards for the 2011 

financial statement audit. For FY 2011, the auditors included a more detailed review of the FEC’s 

Intragovernmental Receipts and Reconciliations to 

adhere to the Treasury Financial Manual Bulletin No. 

2011-04. In addition, LSC also added audit testing 

steps to review the FEC’s controls over copyright 

applications and software. 

During the review and evaluation phase, LSC followed up with management regarding the status of 

prior year findings and recommendations. Further, 

LSC reviewed FEC’s compliance with applicable 

laws and regulations and the existence and effectiveness of internal controls. During the audit, biweekly status meetings were held with the auditors, 

OIG and FEC management to discuss audit issues 

and provide an update of the audit process. 

OIG Audit Activity

The OIG provided assistance to the LSC auditors to 

complete new audit steps for reviewing the controls 

over copyright applications and software. The OIG 

assisted in retrieving the proper audit documentation from management for the auditors to review. In 

addition, the auditors met with the Chair and Vice 

Chair of the Commission to fulfill the requirements of 

SAS 114: Communication with Those Charged with 

Governance. The auditors provided the Chair and 

Vice Chair with an explanation of their audit role and 

responsibilities, an update regarding the progress of 

the audit, and the audit issues identified and provided to management. 

Upon completion of the interim testing phase, the 

OIG reviewed LSC’s interim audit workpapers. The 

OIG also reviewed the notice of findings and recommendations (NFR) prior to distribution to management. The review and evaluation phase and interim 

testing phase identified twelve (12) audit issues that 

were provided to management as NFRs. 

Final audit testing began in October and status 

meetings were held weekly during that month. There 

were no additional NFRs issued to management as 

a result of the final audit testing. The auditors provided the final draft audit report with management comments to the OIG for review and the final audit report 

was released on November 14, 2011. The auditors 

issued an unqualified (clean) audit opinion. In addition, testing of internal controls identified no material 

weaknesses. The auditors did identify one (1) significant deficiency in internal controls over financial 

reporting, and one (1) significant deficiency related 

to internal controls for the FEC’s agency-wide information technology security program. The results 

of the tests of compliance with certain provisions 

and laws and regulations disclosed no instance of 

noncompliance that is required to be reported under 

Government Auditing Standards.
6

Office of Inspector General Semiannual Report to Congress

Quality Assessment Review of the FEC Audit 

Division 

Assignment Number: OIG-12-01

Status: In Progress

The quality control assessment audit of the FEC 

Audit Division commenced during this reporting 

period. The FEC Audit Division (AD) is responsible 

for conducting audits of political committees, and 

presidential campaigns and convention committees that accept public funds. In addition, the AD is 

responsible for evaluating the Presidential primary 

candidates’ applications for matching funds and determining the amount of contributions that may be 

matched with federal funds. 

The primary objective of the audit is to ensure that 

the FEC Audit Division’s quality control system is 

suitably designed and consistently complied with to 

the extent necessary to reasonably ensure compliance with professional audit standards (best practices) and policies. This audit is intended to model a 

peer review, a review commonly performed on both 

federal and non-federal audit departments. When 

assessing AD’s system of quality control, we considered best practices based on applicable standards included in Generally Accepted Government 

Auditing Standards (GAGAS) and/or Generally 

Accepted Auditing Standards (GAAS) established by the American Institute of Certified Public 

Accountants. 

During our audit, we interviewed AD personnel to 

obtain an understanding of the nature of the AD 

organization and the audit process used to conduct committee audits. Based on this initial assessment, we selected a sample of audits completed 

during the established audit period. The scope of 

audits tested entailed an examination of the related 

audit workpapers and reports to ensure auditors 

consistently adhere to applicable auditing standards 

and policies; audit conclusions are properly supported with sufficient and competent evidence; supervisory review of audits is timely throughout the conduct of audits; and other requirements that contribute 

to quality audits. In addition, to ensure conformity 

with professional standards related to continuing 

professional education (CPE), we performed testing 

to determine if the audit staff regularly obtains adequate training to ensure audits are conducted in accordance with professional auditing standards (best 

practices). 

The OIG held a preliminary exit conference with the 

AD on March 28, 2012 to discuss potential audit issues and audit testing was completed on March 30, 

2012. The OIG is currently drafting the notice of findings and recommendations (NFR) to be distributed 

to AD management for review and comment, which 

will then be incorporated into the draft report. 

We anticipate issuing the final report during the next 

reporting period. The OIG is confident this audit will 

prove to be valuable to the Commission as the OIG 

determines whether the AD’s system of quality control and audit processes are operating effectively. 
7

October 1, 2011 - March 31, 2012

OIG Audit Follow-up Activity

2010 Follow-up Audit of Procurement and 

Contract Management

Assignment Numbers: OIG-10-02

Status: On-Going, Continuous Monitoring

In June 2011, the Office of Inspector General (OIG) 

released the 2010 Follow-up Audit of Procurement 

and Contract Management report. The purpose 

of the 2010 audit was to conduct a follow-up review 

of the 2008 Audit of Procurement and Contract 

Management - OIG-08-02 to determine whether management implemented the agreed actions 

for each of the fifteen (15) recommendations and 

whether each of the nine (9) audit findings contained in the 2008 audit report had been fully resolved. The 2010 follow-up audit was awarded to 

and conducted by the audit firm Cherry, Bekaert & 

Holland (CBH) LLP. 

Based on the audit firms’ review, the auditors determined that twelve (12) of the fifteen (15) previous 

recommendations remained open, and the auditors identified seventeen (17) new recommendations, for a total of twenty-nine (29) recommendations. Management prepared a corrective action 

plan (CAP) to detail the plans to implement the 

audit recommendations. The OIG initiated during 

this reporting period quarterly meetings with management to discuss the status of outstanding audit 

recommendations. 

The OIG held quarterly meetings with the Chief 

Financial Officer (CFO) on December 13, 2011 

and March 28, 2012 to determine the status of 

the outstanding audit recommendations. During 

the December 2011 meeting, the CFO stated that 

all recommendations were still open and would 

not be completed until Directive 66 (planned 

procurement policy) was finalized and approved by 

the Commission. When the OIG met with the CFO in 

March 2012, it was determined that limited progress 

had been made and all twenty-nine (29) recommendations are still outstanding. The CFO continued 

to report that progress on outstanding audit recommendations had been delayed pending the approval of the new procurement directive, as well as 

a vacancy in the Procurement Director position and 

other staffing gaps. 

Audit Follow-up Review of the FEC’s Transit 

Benefit Program

Assignment Number: OIG-08-03

Status: On-Going, Continuous Monitoring

In July 2009, the OIG released the Audit Followup Review of the FEC’s Employee Transit Benefit 

Program audit report. The purpose of the audit was 

to verify whether management had adequately 

implemented the OIG’s recommendations included in the 2006 Audit of the FEC’s Employee Transit 

Benefit Program - OIG-06-01 audit report released 

February 2007. During the 2009 follow-up review, 

the OIG also assessed the adequacy of program 

policies and operating procedures, verified employee compliance with program participation requirements, and ensured that appropriate internal controls were in place.

The 2009 audit follow-up determined that twentyone (21) of the twenty-five (25) previous recommendations from the 2006 audit were still open and the 

OIG identified thirty (30) new recommendations that 

would help strengthen the FEC’s internal controls 

over transit benefits, for a total of fifty-one (51) recommendations. Management provided a revised 
8

Office of Inspector General Semiannual Report to Congress

corrective action plan (CAP) in September 2009 and 

has been required to provide semiannual status updates to the Commission on their progress in implementing the outstanding audit recommendations. In 

addition, the OIG has implemented quarterly meetings with management to discuss the status of the 

outstanding audit recommendations. 

The OIG met with the Transit Benefit program manager on December 7, 2011 to verify if management 

had adequately implemented the recommendations. 

The Transit Benefit program manager provided supporting documentation and information to support 

their implementation for several of the audit recommendations. The OIG reviewed and assessed the 

information provided, followed up with additional 

questions, and received additional information from 

the Transit Benefit program manager on tasks that 

had been completed since the December 2011 

meeting. The OIG held another quarterly meeting 

with the Director of the Office of Human Resources 

(OHR) on March 29, 2012 to provide an update to 

management of the OIG’s follow-up review, obtain 

an official status of the outstanding recommendations, and identify additional supporting documentation that could be used to verify if any of the 

open audit recommendations have been properly 

implemented. 

Out of the fifty-one (51) audit recommendations 

included in the CAP, the OIG was able to close 

twenty-six (26) based on a combination of system 

enhancements to the SmartBenefits program which 

has further automated the transit benefits process, 

as well as implementation of system controls and 

monitoring controls implemented by the Transit 

Benefit program management team. 

The OIG intends to obtain and review additional 

documentation from the OHR staff related to twelve 

(12) of the twenty-five (25) open recommendations 

which, once confirmed, should then be subsequently closed. 

Audit of the Commission’s Property 

Management Controls

Assignment Number: OIG-09-02

Status: On-Going, Continuous Monitoring

In March 2010, the OIG released the Audit of the 

Commission’s Property Management Controls audit 

report. During this audit, the OIG reviewed the use 

of agency issued personal communications devices 

(PCDs) (Blackberry phones), government vehicles, 

and agency charge cards. PCDs are managed by 

the FEC Office of Information Technology (OIT) and 

the government vehicles and charge cards are managed by the FEC Administrative Services Division 

(ASD). 

The audit identified five (5) findings and the OIG 

made thirty-six (36)1 audit recommendations that 

would help strengthen the FEC’s internal controls 

over property. Management provided their initial corrective action plan (CAP) in May 2010 and 

has been required to provide semiannual status 

updates to the Commission on their progress in 

implementing the outstanding audit recommendations. The OIG met with the ASD manager 

and the Deputy Chief Information Officer (CIO) of 

Operations December 13, 2011 to verify if management had adequately implemented the recommendations contained in the audit report. The ASD 

manager and the Deputy CIO of Operations provided supporting documentation and information to 

1 Ten (10) audit recommendations relate to government 

vehicles and charge cards; the remaining twenty-six (26) 

recommendations are related to PCDs.
9

October 1, 2011 - March 31, 2012

support their implementation for several of the audit 

recommendations. 

For the audit recommendations related to FEC’s 

government vehicles and charge cards, the OIG 

reviewed the information provided, followed up with 

additional questions, and received additional information from ASD on tasks that had been completed 

since the December meeting. The OIG scheduled 

the next quarterly meeting with the ASD manager 

on March 28, 2012 to provide an update to management of the OIG’s review and give an official status 

of the outstanding recommendations. Out of the ten 

(10) audit recommendations that ASD is responsible 

for implementing, the OIG was able to close four (4) 

based on adequate implementation. The status of 

the remaining six (6) audit recommendations will be 

reviewed by the OIG during the next quarterly meeting in June 2012.

For those audit recommendations related to agency issued PCD’s, the OIG is still working with the 

Deputy CIO of Operations and his staff to receive 

additional information and documentation to verify 

that audit recommendations have been properly 

implemented.

2010 Follow-up Audit of Privacy and Data 

Protection

Assignment Number: OIG-10-03

Status: On-Going, Continuous Monitoring

In March 2011, the OIG released the 2010 Followup Audit of Privacy and Data Protection audit report. The OIG contracted with Cherry Bekaert & 

Holland (CBH) to perform the follow-up audit on 

the findings and recommendations identified in the 

2006 Inspection Report on Personally Identifiable 

Information and the 2007 Performance Audit of 

Privacy and Data Protection. The objective of the 

2010 follow-up audit was to assess the FEC privacy 

team’s implementation of the agreed upon audit recommendations and determine whether each audit 

finding had been fully resolved from the two (2) prior 

reports.

The 2010 audit follow-up identified thirteen (13) audit findings and forty five (45) new and repeat audit 

recommendations. The FEC’s privacy team provided 

their initial corrective action plan (CAP) in May 2011. 

The OIG met with the privacy team on December 

12, 2011 to discuss the outstanding audit recommendations. After the meeting, the privacy team 

provided several emails and documents to support 

the corrective actions that the privacy team had 

implemented to support closing the audit recommendations. The OIG reviewed the information 

and has scheduled a meeting in May 2012 with the 

FEC privacy team to discuss the outstanding audit 

recommendations. 
10

Office of Inspector General Semiannual Report to Congress

Kastle Key Inspection 

Assignment Number: OIG – 11-02

Status: Released December 2011

http://www.fec.gov/fecig/documents/

KastleKeyInspectionReport.pdf

The OIG completed an inspection of the FEC’s 

Kastle Key system. Kastle is the building security 

system that is utilized to control physical access to 

the FEC building during non-working hours. This inspection was based upon the OIG’s annual workplan and previous OIG audits and investigations that 

identified weaknesses with the Kastle Key system. 

The purpose of this inspection was to identify any 

management processes or controls concerning the 

FEC’s Kastle Key system that can be improved, and 

provide management with recommendations to help 

strengthen this function. 

The scope of the inspection included a review of the 

controls over the Kastle Key system and the overall 

process for managing Kastle keys. The inspection 

included a review of the adequacy of policies and 

procedures for managing access to the building with 

the Kastle keys, and performing tests to determine if 

current management control activities are operating 

effectively. 

The OIG held an entrance conference to provide 

management with an understanding of the purpose, scope, and inspection plan for the Kastle Key 

Inspection. The OIG reviewed applicable policies 

and procedures and completed detailed testing to 

assess the accuracy of the agency’s Kastle records 

and the effectiveness of their overall business process. On October 13, 2011 the OIG held a status 

meeting with the Administrative Services Division 

(ASD) to discuss potential issues. On November 

OIG Inspections

21, 2011 the OIG provided ASD with four (4) notice 

of findings and recommendations (NFR) for their 

review and response. Management provided their 

response to the NFRs on December 7, 2011 and the 

OIG incorporated management’s response in the 

draft inspection report and provided the complete 

draft report to management for review and comment. 

Management provided their comments to the draft 

report and the final Kastle Key Inspection report was 

released December 29, 2011. The inspection resulted in four (4) findings and fifteen (15) recommendations to improve the internal controls of the Kastle 

Key system. 

2011 Security Inspection 

Assignment Number: OIG – 11-03

Status: In Progress

The inspection of the FEC’s Security Contract commenced during the last reporting period. Physical 

security and access control for the FEC Building at 

999 E Street, NW, Washington, DC is covered by a 

contract (the “Contract”) with a contract guard company. The purpose of this inspection is two-fold. 

The first purpose is to review the Contract, policies 

and procedures, standing orders, and guard facilities to clarify responsibilities and authorities. This 

goal is informational and intended to provide FEC 

management with information on the responsibilities 

and authorities of the parties to and beneficiaries of 

the Contract. The second purpose is to determine 

compliance with selected Contract provisions, policies and procedures. 

The inspection field work and document review was 

completed during this reporting period, and encompassed a review of the Contract; relevant policies, 

procedures, and standing orders concerning the 

Contract, types of routine and incident logs, forms 
11

October 1, 2011 - March 31, 2012

and reports kept or filed by the guards, training of the 

guards, duties, responsibilities and authority of the 

guards, including lines of authority and communication, and the roles and responsibilities of FEC offices 

and personnel and non-FEC entities concerning the 

guards and Contract. 

The inspection did not entail a technical review to 

determine whether the Contract, policies and procedures are adequate, appropriate, and meet federal, 

legal and industry standards. Further, the inspection 

did not include a comprehensive review of the FEC 

building’s physical security, instead it was limited to 

those aspects of building security as they pertain to 

the goals and objectives of the inspection. Future inspections may address these areas. 

The 2011 Security Inspection report is in the drafting 

stage and is expected to be issued during the next 

reporting period.
12

Office of Inspector General Semiannual Report to Congress

 OIG hotline Information

The OIG hotline exists to enable FEC employees, 

FEC contractors, and the public to have direct and 

confidential contact with the OIG. All allegations or 

referrals of fraud, waste, abuse, mismanagement, 

and misconduct involving FEC employees, contractors, programs, operations, property, or funds received through any means are termed “hotline complaints” per OIG policy. Once a hotline complaint 

has been received, a preliminary inquiry is conducted to determine whether the hotline complaint will 

be closed with no further action taken, referred to 

management or another agency, or an investigation 

will be initiated. 

The OIG considers many factors when evaluating 

whether to open an investigation based on a hotline complaint, and acknowledges that every hotline 

complaint received by the OIG cannot be investigated and in many cases do not merit investigation. OIG policy requires that hotline complaints be 

evaluated on certain criteria, including the merits of 

an allegation, the availability of evidence, and the 

existing priorities, commitments, and resources of 

the OIG. Under this policy, hotline complaints are 

classified as either high or low priority complaints. 

High priority complaints are investigated and low 

priority complaints are either closed with no action 

or referred to the appropriate official for possible further review. Hotline evaluation decisions are made 

by the Chief Investigator, with concurrence from the 

Deputy IG.

During this semiannual reporting period, two (2) 

new hotline complaints were opened and one (1) 

hotline complaint was closed; one (1) hotline was 

closed and merged into an investigative case. The 

OIG has three (3) open hotline complaints as of the 

close of this reporting period, including one (1) that 

was opened prior to the beginning of this reporting 

period.

The OIG frequently receives reports and allegations 

which are misdirected complaints that should have 

been routed to the FEC Office of Complaints and 

Legal Administration within the Office of General 

Counsel (OGC), are outside the jurisdiction of the 

OIG or the FEC, or are facially unsubstantiated, 

meritless or invalid. For example, Section 437g 

of the Federal Election Campaign Act of 1971, as 

amended (FECA), sets forth strict requirements 

for reporting alleged violations of FECA, and FEC 

regulations direct that such complaints be filed directly by the complainant and processed through 

OGC; still, the OIG regularly receives complaints 

of alleged FECA violations, many of which are not 

statutorily compliant. In some cases, such as with 

complaints alleging FECA violations, a response 

is sent to the individual referring him or her to the 

proper office or other agency. In other cases, such 

as questions concerning the FEC that do not pertain 

to the OIG, the inquiry may be redirected and sent 

to the appropriate office or agency directly from the 

OIG. Reviewing and, where appropriate, responding 

to these reports and allegations when aggregated 

can entail a significant amount of staff time and effort, despite the fact that they are not valid hotline 

complaints.

In order to capture and document these hotline 

contacts, the OIG created a category for “hotline 

inquiries” that do not meet the criteria for hotline 

complaints. For this reporting period, the OIG received one hundred and four (104) hotline inquiries. Ninety-eight (98) of the hotline inquiries were 

referred or redirected to other FEC offices, and two 

(2) were referred or redirected to another agency. 

No further action was taken in four (4) of the hotline 

inquiries.
13

October 1, 2011 - March 31, 2012

OIG investigations

OIG investigations seek out facts related to allegations of wrongdoing. OIG investigations may 

address administrative, civil, and criminal violations of laws and regulations. The subject of an 

OIG investigation can be any agency employee, an 

FEC contractor, consultant, or a person or entity 

involved in alleged wrongdoing affecting FEC programs and operations.

As discussed in OIG Hotline Information, all hotline 

complaints are evaluated to determine if they warrant an investigation. If an investigation is opened, 

the hotline complaint is closed and merged into the 

investigative file. OIG investigations involve a detailed examination or inquiry into issues brought to 

our attention by various sources, and may include 

interviews of relevant witnesses and subjects, 

document reviews, and computer forensic examinations. At the conclusion of an OIG investigation, 

the OIG prepares a report that sets forth the allegations and an objective description of the facts 

developed during the investigation.

As of the end of the semiannual reporting period, 

one (1) investigation, opened during the prior reporting period, was closed. The closed investigation involved allegations that an employee violated criminal ethics law and regulations governing 

standards of conduct for federal executive branch 

employees. The allegations were not substantiated, the Office of the United States Attorney for 

the District of Columbia declined prosecution, 

and a report of investigation was issued to the 

Commission.
14

Office of Inspector General Semiannual Report to Congress

Additional OIG Activity

Besides conducting audits, inspections, and investigations, the OIG performs, and is involved in an array of additional projects and activities. As required 

by the Inspector General Act of 1978, as amended, all legislation compiled by the Commission’s 

Congressional Affairs office is reviewed by the 

Inspector General.

The Inspector General also reviews and provides 

comments, when appropriate, on legislation provided by the Council of Inspectors General on Integrity 

and Efficiency (CIGIE) Legislative Committee. In 

addition, the Inspector General routinely reads all 

Commission agenda items. Listed below are examples of the OIG’s additional activities: 

•	 The OIG completed the Improper Payments 

Elimination Recovery Act (IPERA) report 

which was submitted to the Commission and 

Congress. The IPERA will complement and 

help implement the Administration’s campaign 

against improper payments. Specifically, the 

bill will improve agency efforts to reduce and 

recover improper payments in several ways including: 1) identification and estimation of improper payments; 2) payment recapture audits; 

3) use of recovered improper payments; and 4) 

compliance and non-compliance requirements. 

•	 The OIG reviewed and provided FEC management with the annual Management Challenges 

for inclusion in the FEC’s 2011 Performance 

and Accountability Report.

OIG Employee Award

The Chief Investigator/Counsel to the IG (below) 

received an award from the Council of Counsels to 

the Inspectors General (CCIG) for his Outstanding 

Contribution to the Inspector General Community. 

James Cameron Thurber,

Chief Investigator/Counsel to the IG
15

October 1, 2011 - March 31, 2012

Council of the Inspectors General on 

Integrity and Efficiency (cigie) Activity

The Inspector General continues to be very involved 

in CIGIE. She is a member of the Executive Council, 

which is composed of the Chair, Vice Chair, the past 

Vice Chair of the PCIE, all Committee Chairs, and 

one member appointed by the Chair. The Executive 

Council provides guidance on CIGIE initiated projects, the operating plans for each fiscal year, and 

the general business of CIGIE. The Council meets 

monthly to discuss issues that will affect CIGIE.

The Inspector General also chairs the Inspector 

General Candidate Recommendation Panel. This 

panel is charged with making recommendations of 

qualified candidates to the White House and heads 

of various federal agencies to be considered for vacant Inspector General positions.

The Inspector General is Vice Chair of the 

Professional Development Committee. This committee is charged with ensuring there is strong, relevant 

training for the Inspector General community. Part of 

the charge of the committee, is to establish training 

academies for each of the professional designations 

in the IG community. This is an on-going project.

During this semiannual reporting period, the IG responded to a questionnaire from CIGIE Legislative 

Committee concerning whistleblower protection for 

contract employees; the IG also provided CIGIE 

with comments to the draft Progress Report to the 

President for FY 2011; provided comments to CIGIE 

for the annual business plan; and continues to receive and forward applications for IG positions to remaining members of the CIGIE panel.

The IG participated in a conference call with the 

Chair and Vice Chair of CIGIE concerning a request from an IG nominee; the IG also conducted 

a conference call with IGs at U.S. Postal Service 

and Commerce Department and met with a representative from the White House Office of Personnel 

and Chair of CIGIE to discuss candidates for 

Presidentially appointed positions.
16

Office of Inspector General Semiannual Report to Congress

The table below indicates the total amount of contacts received by the Office of Inspector General for the past 

six months – October 1, 2011 through March 31, 2012. 

These contacts were made through various sources such as telephone calls, e-mails, faxes, U.S. mail, and personal visits to the OIG. 

Total

Contacts

OIG

Action

No Action

Necessary

Forwarded 

for Action

2,108 28 2,053 27

OIG Contacts
October 1, 2011 - March 31, 2012

17

List of Training, Meetings

and Conferences

The chart listed below depicts training, meetings, programs, seminars, and/or conferences attended by the 

Inspector General and/or the OIG staff for the period October 1, 2011 – March 31, 2012:

MEETINGS:

Host / Sponsor Topic / Subject

Council of Inspectors General on

Integrity and Efficiency 

Monthly Meetings

Executive Council Meetings

Professional Development Committee Meetings

Strategic Planning Session

Annual Awards Ceremony

Council of Counsels to the Inspectors General Monthly Meetings

CCIG 2011 Awards Ceremony

Assistant Inspector General for Investigations Quarterly Meetings

Financial Statement Audit Network Monthly Meetings

Federal Election Commission

Weekly Director’s Meetings

Finance Committee Meetings

Administrative Liaison Group Meetings

Town Hall Meeting 

Commission Hearing

Employee Recognition Awards Ceremony

FEC / Office of Inspector General

Bi-weekly Staff Meetings

Annual Risk Assessment Meeting

Financial Statement Audit:

 Status Meeting

 Exit Conference
Office of Inspector General Semiannual Report to Congress

18

TRAINING/CONFERENCES:

Host / Sponsor Topic / Subject

Association of Government Accountants Federal Financial Systems Summit Training

CCH Group 2011 TeamMate Conference

Executive Women in Government 9th Annual Summit and Training Conference

Federal Audit Executive Council Improper Payments and Analysis of Recipient Information 

and Reporting

Federal Election Commission

Retirement Seminars (FERS & CSRS)

Advanced Excel Training

COTR Training

Inspector General Criminal Investigator Academy Training Officers Seminar

Institute of Internal Auditors Positioning your Audit Shop for Success

Auditing the Control Environment 

American University New Leadership Development Program (2nd session)

Council of Inspectors General on Integrity and 

Efficiency

OIG Suspension and Debarment Conference

Human Capital Framework Training

Human Resources Evaluator Training

Audit Peer Review Training

Association of Certified Fraud Examiners 

Data Mining and Predictive Analytic Tools in Preventing/

Detecting Fraud Training

Social Media and Implications to the Fraud Community 

Training

John E. Reid & Associates The Reid Technique of Interviewing and Interrogation 

Training

Management Concepts Internal Controls: Meeting Federal Requirements for 

Accountability
19

October 1, 2011 - March 31, 2012

Host / Sponsor Topic / Subject

SkillPath/Rockhurst University

Secrets of Successful Critical Thinking and Creative 

Problem Solving

Creating a Professional Development Plan

Developing your Emotional Intelligence

2012 Women’s Conference

The Extraordinary Assistant

Administrative Assistants Conference

USDA Graduate School Proofreading Training

Managing Multiple Priorities

U.S. Department of Justice Privacy Act and Freedom of Information Act Training
20

Office of Inspector General Semiannual Report to Congress

Reporting Requirements

Reporting requirements required by the Inspector General Act of 1978, as amended by the Inspector 

General Act Amendments of 1988 are listed below:

 IG ACT DESCRIPTION PAGE

Section 4(a)(2) Review of Legislation 14

Section 5(a)(1) Significant Problems, Abuses, and Deficiencies None

Section 5(a)(2) Recommendations with Respect to Significant Problems, Abuses,

and Deficiencies None

Section 5(a)(3) Recommendations Included in Previous Reports on Which Corrective 

Action Has Not Been Completed (Table III) 23

Section 5(a)(4) Matters Referred to Prosecuting Authorities None

Section 5(a)(5) Summary of Instances Where Information was Refused None

Section 5(a)(7) Summary of Significant Reports 5

Section 5(a)(8) Questioned and Unsupported Costs (Table I) 21

Section 5(a)(9) Recommendations that Funds be put to Better Use (Table II) 22

Section 5(a)(10) Summary of Audit Reports issued before the start of the Reporting Period 

for which no Management Decision has been made N/A

Section 5(a)(11) Significant revised Management Decisions N/A

Section 5(a)(12) Management Decisions with which the Inspector General is 

in Disagreement None
21

October 1, 2011 - March 31, 2012

TABLE I

INSPECTOR GENERAL ISSUED REPORTS WITH QUESTIONED COSTS

(DOLLAR VALUE IN THOUSANDS)

Number Questioned 

Costs

Unsupported 

Costs

A. For which no management decision has been made 

by commencement of the reporting period

0 0 0

B. Which were issued during the reporting period 0 0 0

Sub-Totals (A&B) 0 0 0

C. For which a management decision was made during 

the reporting period

 0 0 0

(i) Dollar value of disallowed costs 0 0 0

(ii) Dollar value of costs not disallowed 0 0 0

D. For which no management decision has been made 

by the end of the reporting period

0 0 0

E. Reports for which no management decision was 

made within six months of issuance

0 0 0
22

Office of Inspector General Semiannual Report to Congress

TABLE II

INSPECTOR GENERAL ISSUED REPORTS WITH RECOMMENDATIONS THAT 

FUNDS BE PUT TO BETTER USE

Number Dollar Value

(In Thousands)

A. For which no management decision has been made by the 

commencement of the reporting period

0 0

B. Which were issued during the reporting period 0 0

C. For which a management decision was made during the reporting period

0 0

(i) dollar value of recommendations were agreed to by 

management

0 0

based on proposed management action 0 0

based on proposed legislative action 0 0

(ii) dollar value of recommendations that were not agreed to 

by management

0 0

D. For which no management decision has been made by the 

end of the reporting period

0 0

E. Reports for which no management decision was made within 

six months of issuance

0 0
23

October 1, 2011 - March 31, 2012

TABLE III

SUMMARY OF AUDIT REPORTS WITH CORRECTIVE ACTIONS OUTSTANDING FOR 

MORE THAN SIX MONTHS

Recommendations

Report Title Report 

Number

Issue Date Number Closed Open

Audit Follow-up Review of the 

FEC’s Employee Transit Benefit 

Program

OIG-08-03 07/09 51 26 25

Audit of the Commission’s 

Property Management Controls 

OIG-09-02 03/10 36 4 32

Federal Election2 Commission 

2011 Financial Statement Audit

OIG-11-01 11/11 20 0 20

2010 Follow-up Audit3 of 

Procurement and Contract 

Management

OIG-10-02 06/11 29 0 29

2010 Follow-up Audit4 of 

Privacy and Data Protection

OIG-10-03 03/11 45 0 45

2 Follow-up on the 20 open recommendations will be a part of the FEC’s 2012 Financial Statement Audit.

3 The 29 open recommendations include 12 of the 15 recommendations from the 2008 Procurement and Contract Management 

Performance Audit, OIG-08-02. Three recommendations were closed from the 2008 audit.

4 The 45 open recommendations include 16 of the 19 recommendations from the 2006 Inspection Report on Personally Identifiable 

Information, OIG-06-04, and 2007 Performance Audit of Privacy and Data Protection, OIG-07-02. In total, three recommendations were 

closed from the 2006 inspection and 2007 audit.
24

Office of Inspector General Semiannual Report to Congress

APPENDIX A:

INVESTIGATIVE PEER REVIEW RESULTS

In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Section 989C 

of P.L. 111-203), which amended Section 5 of the Inspector General Act of 1978, OIGs are required to include 

in their semiannual reports (SAR) to Congress the results of peer reviews of their offices, as well as outstanding and not fully implemented recommendations from peer reviews the OIG received from another OIG, and 

outstanding and not fully implemented recommendations the OIG made in any peer review it performed for another OIG.

The FEC OIG completed a voluntary investigative peer review of the Federal Trade Commission (FTC) OIG on 

March 28, 2012. The review was conducted at the FTC headquarters office in Washington, DC, where we interviewed OIG investigative personnel and reviewed FTC OIG investigative policies and procedures. Additionally, 

we sampled four (4) case files for investigations closed during the previous 12-month period and reviewed the 

case files for compliance with the quality standards for investigations.

We determined that the system of internal safeguards and management procedures for the investigative function of the FTC OIG in effect for the time period examined was in compliance with the quality standards established by the CIGIE. These safeguards and procedures provide reasonable assurance of conforming to professional standards in the planning, execution and reporting of its investigations.
October 1, 2011 - March 31, 2012

25

Federal Election Commission 

Office of Inspector General 

Fiscal Year 2012 

Work Plan

Lynne A. McFarland 

Inspector General

APPENDIX B:
Office of Inspector General Semiannual Report to Congress

26

 TABLE OF CONTENTS

A Message from the Inspector General-------------------------------------------- 1 

The Federal Election Commission--------------------------------------------------- 3 

Office of Inspector General------------------------------------------------------------ 3 

OIG Strategic Planning----------------------------------------------------------------- 4 

Annual Planning and Methodology Strategies---------------------------------- 5 

OIG 2012 Work Plan-------------------------------------------------------------------- 6 

 Audits/Inspections/Reviews-------------------------------------------------- 6 

 

 Investigative Program--------------------------------------------------------- 9 

 Special Projects------------------------------------------------------------------ 10 
October 1, 2011 - March 31, 2012

27

FEDERAL ELECTION COMMISSION 

 WASHINGTON, D.C. 20463 

 Office of Inspector General

A Message from the Inspector General 

I am pleased to present to the Commission the Office of Inspector General’s 

(OIG) fiscal year (FY) 2012 Annual Work Plan. This work plan includes a 

description of audit, inspections, investigative and special projects planned for the 

FY. This plan also sets forth the OIG’s formal strategy for identifying priority 

issues and managing its workload and resources for FY 2012. Successful execution 

of this plan will enable the OIG to provide the highest quality work products to our 

stakeholders and to assist the FEC in meeting its strategic mission, goals and 

objectives. 

The OIG substantially completed the work planned for FY 2011 in the audit 

and investigative programs, as well as special projects, notwithstanding the 

resignation of the OIG’s Senior Auditor in March 2011. Among the audits 

completed in FY 2011 were the FY 2010 annual financial statement audit, and two 

follow-up audits of procurement and privacy practices. These three audits yielded a 

combined total of 85 audit recommendations to improve FEC programs and 

operations. An audit peer review of my office was also conducted in FY 2011 and 

resulted in a pass rating, and my office also conducted a peer review of another 

federal OIG. Lastly, the OIG finalized a new audit manual in FY 2011. 

In addition to the accomplishments in the audit program, the investigative 

program accomplished all of the work planned for 2011, to include responding to 

hotline complaints, OIG briefings to all FEC staff and the implementation of a new 

hotline service, among other projects. In addition to the investigative program, the 

OIG staff was actively involved in several professional working groups during the 

FY, to include the Council of the Inspectors General on Integrity and Efficiency 

Professional Development Committee, the Inspector General (IG) Candidate 

Recommendations Panel Committee, the IG Council of Counsels, among others. At 

the start of FY 2012, the OIG is fully staffed with six professional staff members, 

and therefore I anticipate the OIG will successfully complete the FY 2012 work plan 

that follows. 

The U.S. Federal Election Commission’s (FEC) mission statement is “to 

prevent corruption in the Federal campaign process by administering, enforcing and 

formulating policy with respect to Federal campaign finance statutes.”1 The OIG is 

committed to ensuring the integrity of FEC programs and operations. The 

development and continual updating of the OIG’s work plan is a critical aspect of 

accomplishing the OIG’s objectives to promote economy and efficiency in FEC 

1

 Federal Election Commission, Fiscal Year 2012 Congressional Budget Justification (Washington, DC, February 

14, 2011), 3. 
Office of Inspector General Semiannual Report to Congress

28

programs and to detect and prevent fraud, waste and abuse. Effective work 

planning ensures that audit and investigative resources are used effectively and 

efficiently. I look forward to a successful year of providing the highest quality of 

audit and investigative support and service to our stakeholders. 

Lynne A. McFarland 

Inspector General 

Federal Election Commission 

October 3, 2011

2
October 1, 2011 - March 31, 2012

29

3

The Federal Election Commission 

In 1975, Congress created the Federal Election Commission (FEC) to 

administer and enforce the Federal Election Campaign Act (FECA). The duties of 

the FEC, an independent regulatory agency, are to disclose campaign finance 

information; enforce the provisions of the law; and oversee the public funding of 

Presidential elections. 

The Commission is made up of six members, who are appointed by the 

President and confirmed by the Senate. Each member serves a six-year term, and 

two seats are subject to appointment every two years. By law, no more than three 

Commissioners can be members of the same political party, and at least four votes 

are required for any official Commission action. The Chairmanship of the 

Commission rotates among the members each year, with no member serving as 

Chairman more than once during his or her term. Currently the FEC has a full 

complement of Commissioners – Chair Cynthia L. Bauerly; Vice-Chair Caroline C. 

Hunter; Matthew S. Petersen; Ellen L. Weintraub; Steven T. Walther; and Donald 

F. McGahn, II.

Office of Inspector General 

The Inspector General Act of 1978 (P.L. 100-504), as amended, states that the 

Inspector General is responsible for: 1) conducting and supervising audits and 

investigations relating to the Federal Election Commission’s programs and 

operations; 2) detecting and preventing fraud, waste, and abuse of agency programs 

and operations while providing leadership and coordination; 3) recommending 

policies designed to promote economy, efficiency, and effectiveness of the 

establishment; and 4) keeping the Commission and Congress fully and currently 

informed about problems and deficiencies in FEC agency programs and operations, 

and the need for corrective action. The OIG budget request for FY 2012 was 

$ 1,062,237, an amount necessary to cover salaries and related expenses for six staff 

members, to include audit contracts and training. Exhibit 1 on the following page 

contains the OIG’s organizational chart. 
Office of Inspector General Semiannual Report to Congress

30

Exhibit 1: FEC - OIG Organizational Chart

Lynne A. McFarland

Inspector General

Jon Hatfield

Deputy Inspector 

General 

Dorothy Maddox-Holland

Special Assistant to the 

Inspector General

Shellie Purnell-Brown

Senior Auditor

Mia Forgy

Staff Auditor 

J. Cameron Thurber

Counsel to the Inspector 

General/Chief Investigator

OIG Strategic Planning 

Strategic Plan 

To enhance the effectiveness of the OIG and to ensure effective audit and 

investigative coverage of the Commission’s programs and operations, the OIG has a 

strategic plan that covers the period 2010 through 2015. Three major categories of 

OIG-wide goals and objectives are included in the strategic plan, which are as 

follows: 

• OIG Products: To provide products and services that promote positive 

change in FEC policies, programs, and operations. 

• OIG Processes: To develop and implement processes, policies, and 

procedures to ensure the most effective and appropriate use of OIG resources 

in support of our people and products. 

• OIG Staff: To maintain a skilled and motivated work force in an 

environment that fosters accountability, communications, teamwork, and 

personal and professional growth. 

4
October 1, 2011 - March 31, 2012

31

5

In addition, strategies and performance measures for each objective are 

included in the strategic plan. For example, an OIG performance measure for 

audits includes using feedback from stakeholder surveys to continually improve the 

OIG’s audit process. At the conclusion of each audit/inspection/review, the OIG 

distributes a stakeholder survey to the program officials to solicit their feedback on 

the usefulness of the completed OIG assignment and their overall satisfaction with 

the process. 

The OIG strategic plan will continue to evolve and will be reviewed and 

updated as necessary to ensure maximum effectiveness in meeting the changing 

needs of the FEC, consistent with the OIG’s statutory responsibilities. A detailed 

illustrative version of the OIG’s strategic plan can be found as an attachment of this 

Annual Work Plan. 

Annual Planning and Methodology Strategies

The planning methodology that we have adopted is built around the OIG staff 

brainstorming sessions held annually each summer, as well as soliciting and 

receiving feedback and ideas from stakeholders throughout the year. The annual 

work plans will, of course, require periodic updates to reflect changes, such as new 

priorities, as well as any changes in OIG resources. In the summer of 2011, the 

OIG conducted our fourth annual all-day brainstorming session. Similar to prior 

years, the ideas and suggestions generated from the 2011 brainstorming session 

were separated into categories to include audits, inspections, investigative program, 

and special projects, and then ranked (i.e., high, medium and low) according to 

priority. 

In anticipation of the OIG annual brainstorming sessions, the OIG sends an 

e-mail to all FEC staff seeking input in formulating the OIG’s work plans. 

Historically, the OIG receives useful audit suggestions from FEC staff which are 

then considered during the annual planning process. 

The OIG planning process is designed to yield work assignments that will 

identify opportunities for economy, efficiency and effectiveness in FEC programs 

and operations; and detect and prevent fraud, waste, abuse and mismanagement. 

The priority for conducting work assignments is based on (1) mandatory legislative 

requirements; (2) emphasis by the President, Congress, and the Commission; (3) a 

program’s susceptibility to fraud, manipulation, or other irregularities; (4) dollar 

magnitude or resources involved in the proposed area; (5) management needs 

identified through consultation with primary organization heads; (6) newness, 

changed conditions, or sensitivity of an organization; (7) the extent of outstanding 

issues resulting from prior audit coverage or review by the OIG or other oversight 

body; and (8) the adequacy of internal control systems in place for the program or 

other factors. 
Office of Inspector General Semiannual Report to Congress

32

6

Based on the results of the OIG’s planning process, the OIG’s annual work 

plan is divided into three primary categories: 

(1) Audits/Inspections/Reviews; 

(2) Investigative Program; and 

(3) Special Projects. 

OIG 2012 Work Plan 

AUDITS/INSPECTIONS/REVIEWS 

 

The term “audit” is used to describe work performed by auditors in examining 

financial statements, as well as work performed in reviewing compliance with 

applicable laws and regulations, the economy and efficiency of operations, and the 

effectiveness in achieving program results. These audits are prepared in accordance 

with generally accepted government auditing standards and vary in scope and 

complexity. Inspections and reviews are conducted in accordance with quality 

standards issued by the federal Inspector General community. 

For fiscal year 2012, the following audit related assignments are planned:

1. Audit of the Federal Election Commission’s 2011 and 2012 Financial 

Statements. 

In accordance with the Accountability of Tax Dollars Act of 2002, the FEC is 

required to prepare annual financial statements in accordance with Office of 

Management and Budget (OMB) Circular No. A-136, Financial Reporting 

Requirements. The Chief Financial Officers Act of 1990, as amended, 

requires the FEC Inspector General, or an independent external auditor 

selected by the IG, to audit the agency financial statements.

We will oversee the audit conducted by the OIG’s independent public 

accounting firm Leon Snead & Company. The OIG is responsible for 1) 

reviewing the auditor’s approach and planning of the audit; 2) evaluating the 

qualifications and independence of the auditors; 3) monitoring the work of 

the auditors; 4) examining audit documents and reports to ensure compliance 

with government auditing standards, and OMB Bulletin No. 07-04, Audit 

Requirements for Federal Financial Statements, as revised; and 5) other 

procedures the OIG deems necessary to oversee the contract and audit. 

Planned period of audit: May 2011 – November 2011; 

May 2012 – November 2012. 
October 1, 2011 - March 31, 2012

33

7

2. Quality Control Assessment of the FEC Audit Division. 

The OIG will conduct a quality control assessment audit of the FEC Audit 

Division. The primary objectives of the audit will be to ensure that the FEC 

Audit Division’s quality control system is suitably designed and consistently 

complied with to the extent necessary to reasonably ensure compliance with 

audit standards and policies. For example, the audit will include a review of 

the Audit Division’s audit workpapers and reports to ensure that auditors 

consistently adhere to applicable auditing standards and policies; audit 

conclusions are properly supported with sufficient and competent evidence; 

auditors are properly trained; supervisory review of audits is timely 

throughout the conduct of audits; and other requirements that contribute to 

quality audits. Consistent with professional auditing standards and best 

practices, external quality control assessments should be conducted on a 

regular schedule, generally every three to five years, to ensure effective and 

efficient audit practices and adherence to applicable audit standards by the 

audit unit. 

The FEC Audit Division is responsible for conducting audits of political 

committees, and presidential campaigns and convention committees that 

accept public funds. In addition, the Audit Division is responsible for 

evaluating the Presidential primary candidates’ applications for matching 

funds and determining the amount of contributions that may be matched 

with federal funds. 

Planned period of audit: November 2011 – February 2012. 

3. Audit of the Federal Election Commission’s Human Resources Office. 

The OIG is planning to conduct a performance audit of the FEC’s Human 

Resources (HR) Office during fiscal year (FY) 2012. The HR Office is a critical 

component of the agency and is responsible for several important functions, to 

include recruitment and retention of qualified staff; employee-employer 

relations; administration of employee benefits; maintenance and processing of 

personnel records; training; among other responsibilities. The Office of 

Personnel Management (OPM) conducted a Human Capital Management 

Evaluation of the FEC in 2009 and reported numerous weaknesses and 

deficiencies. The purpose of the OIG’s audit will be to follow-up on the 

weaknesses identified by OPM to ensure appropriate corrective action has been 

taken by the FEC; and also focus on additional high-risk areas not covered by 

the 2009 OPM evaluation. 

Planned period of audit: March – June 2012. 

4. On-Going Audit Follow-up. 
Office of Inspector General Semiannual Report to Congress

34

8

An important responsibility of the OIG is to follow-up on previously issued 

audit reports with outstanding audit recommendations. At the beginning of 

FY 2012, there were 130 outstanding audit recommendations representing 

four OIG audits. On-going audit follow-up during FY 2012 will consist of the 

following responsibilities: (1) review implemented audit recommendations to 

ensure the audit finding has been resolved; (2) review and comment on 

management’s corrective action plans that detail plans for resolving 

outstanding audit recommendations; and (3) conduct regular meetings 

throughout the FY with management to discuss progress to implement audit 

recommendations. 

Planned period of audit followup: On-going throughout FY 2012. 

5. Limited Scope Inspections. 

The OIG is planning to conduct four limited scope, or short-term, inspections 

of FEC programs during FY 2012. The goal of the short-term inspections will 

be to focus OIG resources on high-risk areas and provide rapid, up-to-date 

information to FEC management and the Commission on the efficiency and 

effectiveness of FEC programs. Two inspections started in FY 2011 on 

building security and internal controls over Kastle Keys will be completed in 

early FY 2012. In addition to these two inspections, an additional four 

inspections are planned for FY 2012. 

Planned period of inspections: FY 2012. 

6. Additional Work Assignments. 

Additional work assignments may be undertaken during FY 2012 based on 

available OIG resources, benefit to the agency, and other relevant factors. 

Priorities may be adjusted to reflect emerging issues during the FY.

 
October 1, 2011 - March 31, 2012

35

9

INVESTIGATIVE PROGRAM 

The OIG’s investigative program is intended to add value to the agency’s 

programs and operations by identifying and investigating allegations of fraud, 

waste, abuse and misconduct leading to criminal, civil, and administrative penalties 

and recoveries. Investigations typically originate as hotline complaints and may 

result in formal investigations if the OIG believes an investigation is warranted. 

The OIG’s investigative program also provides for initiatives designed to monitor 

specific high-risk areas within FEC programs and operations in order to proactively 

identify vulnerabilities in order to prevent fraud, waste and abuse. 

For fiscal year 2012, the following investigative assignments are planned:

1. Manage Hotline Complaints and Investigation Caseload. 

The OIG will respond to hotline complaints during the FY and report in a 

timely manner to the appropriate officials on the resolution of hotline 

complaints and investigations. 

2. Proactive Investigative Initiatives. 

The OIG will initiate proactive reviews involving high-dollar and high-risk 

programs and operations of the agency. In addition, the OIG has identified 

several agency data systems, such as financial related systems, and is 

pursuing direct read-access for OIG personnel as part of the OIG’s proactive 

initiatives to prevent fraud, waste, abuse and misconduct. 

3. Investigative Peer Reviews. 

The OIG will conduct an investigative peer review of another federal OIG in 

FY 2012. The objective of the peer review is to determine whether internal 

control systems are in place and operating effectively to provide reasonable 

assurance that professional investigative standards are being followed. 

Specifically, the FEC OIG peer review team will analyze existing policies and 

procedures, conduct interviews with selected OIG management officials and 

the investigative staff, and sample closed investigative files and other 

administrative records, as warranted. 

Planned period of peer review: January – March 2012.

In addition to a peer review of another OIG, the FEC OIG will participate in 

the Council of Inspectors General on Integrity and Efficiency voluntary peer 

review program for smaller OIGs, and the FEC OIG will be peer reviewed 

during FY 2012. 

Planned period of peer review: April – June 2012. 
Office of Inspector General Semiannual Report to Congress

36

10

4. Outreach. 

In FY 2011, the OIG conducted a series of OIG briefings with FEC division 

management and staff. The briefings were intended to educate FEC staff 

about the mission and authority of the OIG, and how to report fraud, waste, 

abuse or mismanagement to the OIG. In FY 2012, the OIG will continue our 

outreach program and conduct fraud briefings. The fraud briefings will 

provide information on the potential for fraud in FEC programs, such as 

travel, workers compensation, time and attendance, and government charge 

card activity. Discussion and education on fraud will help employees to 

identify and report suspected fraud and help reduce the number of fraud 

cases. The briefings will also discuss the OIG’s new hotline service launched 

in late fiscal year 2011. 

In addition, the OIG will continue the new employee orientation program to 

meet with all new employees to discuss the purpose and mission of the OIG. 

Lastly, the OIG will review and revise, as necessary, the OIG’s FECNet 

(intranet) site, public Web site, OIG brochure, fraud poster, and other 

outreach initiatives. 

SPECIAL PROJECTS 

 In addition to the OIG’s audit and investigative responsibilities, the OIG will 

be responsible for numerous additional projects and activities during FY 2012. For 

example, as required by the Inspector General Act of 1978, as amended, all 

legislation compiled by the Commission’s Congressional Affairs Office is reviewed 

by the Inspector General. The Inspector General and staff also participate in 

several federal Inspectors General community working groups on topics related to 

law, audits, and investigations. All of these activities contribute to the success and 

mission of the OIG. Additional special projects will arise throughout the FY and the 

OIG will prioritize our workload to respond to the additional requirements. 

For fiscal year 2012, the following are examples of the special projects and activities

planned by the OIG:

1. Participate and Attend Professional Working Group and Other 

Meetings. 

The Inspector General or OIG staff will regularly attend the following 

Council of the Inspectors General on Integrity and Efficiency (CIGIE) 

professional working group meetings: CIGIE; Executive Council of CIGIE; 

CIGIE Professional Development Committee; IG Candidate 

Recommendations Panel Committee; IG Council of Counsels; Assistant 

Inspector General for Investigations; Federal Audit Executive Council; and 

Financial Statement Audit Network Group. 
October 1, 2011 - March 31, 2012

37

11

In addition to CIGIE professional working group meetings, the Inspector 

General or staff will regularly attend FEC weekly senior level meetings, and 

quarterly management and FEC town-hall meetings during the FY. 

2. Semiannual and Quarterly Reporting. 

In accordance with the Inspector General Act of 1978, as amended, the OIG 

will prepare and transmit to the Congress semiannual reports on the 

activities of the OIG. Semiannual reports summarize OIG activities during 

the immediately preceding six-month periods ending March 31st and 

September 30th of each year. OIG semiannual reports are also provided to 

the Commission. The OIG will also report on a quarterly basis to the 

Commission on the activities of the office. 

3. Professional Development and Training. 

The goal of the OIG’s training program is to provide cost effective training to 

increase professional knowledge and proficiency, and ensure staff meet 

continuing professional educational requirements. As a result, the OIG staff 

will attend professional training and conferences during the fiscal year to 

maintain and improve their knowledge, skills and abilities. 
Office of Inspector General Semiannual Report to Congress

38

12

FEC / OIG Strategic Plan - Fiscal Years 2010 - 2015

OIG Products: To provide products

and services that promote positive

change in FEC policies, programs, and

operations.

OIG Process: To develop and implement

processes, policies, and procedures to ensure

the most effective and appropriate use of OIG

resources in support of our people and

products.

Objective A: Deliver timely, high-quality

products and services that promote

positive change.

Strategy:

- establish common OIG standards for communicating

results;

- conduct quality assurance programs;

- solicit appropriate internal and external review and

comment;

- comply with applicable statutory guidelines and

standards;

- set realistic and appropriate milestones.

Objective B: Address priority issues

and concerns of the Commission,

Management, and Congress.

Strategy: Perform work that supports;

- Federal Election Commission and Congressional

priorities;

- Strategic Management Initiative efforts;

Focus OIG attention in the following areas of

emphasis:

- managing change;

- resource allocation in relation to policy objectives;

- delivery of client service;

- causes of fraud and inefficiency; and,

- automation and communication.

OIG Staff: To maintain a skilled and motivated

work force in an environment that fosters

accountability, communications, teamwork, and

personal and professional growth.

Objective A: Maintain a dynamic strategic

planning process.

Strategy:

- periodically review and update the strategic plan to

address changing OIG and FEC priorities; and,

- identify factors that influence organizational change

and develop short and long term plans to address them.

Objective A: Attract and retain well-qualified,

diverse and motivated employees.

Strategy:

- develop and implement a comprehensive recruiting program

that attracts a broad population with the knowledge, skills,

abilities, and expertise necessary to make meaningful

contributions to the OIG;

- assess employee satisfaction and develop strategies to

address employee concerns;

- identify reasons for staff departures and develop plans to

foster greater staff retention; and,

- adhere to EEO principles and strive to maintain a diverse work

force.

Objective B: Plan and conduct costeffective work that address critical issues

and results in positive change.

Strategy:

- solicit FEC and Congressional input in planning OIG

activities;

- develop internal planning mechanisms to support FEC

goals and priorities;

- ensure that priorities of IG are effectively

communicated; and,

- identify specific targets for OIG review that are the most

cost-effective

Objective B: Provide training and

developmental opportunities to employees.

Strategy:

- assess training needs in relation not only to employee but also

office needs as well;

- ensure that Government Auditing Standards in relation to

training are adhered to; and,

- maintain a reporting system to ensure that educational

requirements are met.

Objective C: Follow-up and evaluate

results of OIG products and services to

assess their effectiveness in promoting

positive change.

Strategy:

- Identify, as appropriate, lessons learned to improve

timeliness and quality; and,

- conduct follow-up reviews to determine if intended

results have been achieved.

Objective D: Satisfy customers,

consistent with the independent nature

of the OIG.

Strategy:

- establish professional communication and

interaction with customers to promote the open

exchange of ideas;

- incorporate customer feedback, as appropriate; and,

- be open to customer-generated solutions and

options.

Objective C: Identify customer needs and

provide products and services to meet

them.

Strategy:

- establish new customer feed back mechanisms;

- consider and evaluate customers feedback when

planning and developing products and services;

- respond to Congressional inquires and request for

briefing and testimony;

- promote open exchange of ideas and information

through outreach and through use of e-mail; and,

- receive, evaluate, and respond, as appropriate, to

information received through the OIG hotline and other

sources.

Objective D: Implement efficient, effective,

and consistent resolution and follow-up

procedures.

Strategy:

- ensure that IG follow-up procedures are followed and

that management is aware of their role in the process;

- establish common OIG standards for terminology, date

maintenance and communications.

Objective E: Establish a positive and

productive working environment.

Strategy:

- reengineer or streamline OIG procedures to achieve the

most effective use of resources; and,

- ensure that necessary technologies, evolving and

otherwise, are made available to staff as needed.

Objective C: Assess, recognize, and reward,

when possible, performance that contributes to

achieving the OIG mission.

Strategy:

- develop and articulate expectations for each employee's

performance, including contributions in meeting the mission &

goals of the OIG; and,

- ensure that rewards, when possible, are given in recognition of

exceptional employee performance.

Objective D: Create and maintain a working

environment that promotes teamwork and

effective communication.

Strategy:

- ensure that communication between employees is open;

- provide employees with the tools and incentives they need to

adequately perform their duties.

Performance Measures: Determine the

timeliness and quality of products and

services; their effectiveness in

promoting positive change; and, reach

agreement with management on at least

90% of recommendations within six

months of the report issue date.

Performance Measures: An annual audit

plan is issued; strategic plan is periodically

reviewed; and, necessary technology is

provided to staff to enable them to most

efficiently perform their duties.

Performance Measures: All employees meet

the training requirements; all employees have

performance standards; and all employees

meet the basic requirements for the position in

which they were hired to perform.
or toll free at 1-800-424-9530 (press 0; then dial 1015) 

Fax us at 202-501-8134 or e-mail us at oig@fec.gov 

Visit or write to us at 999 E Street, N.W., Suite 940, Washington DC 20463 

Federal Election Commission 

Office of Inspector General 

Individuals including FEC and FEC contractor employees are encouraged to alert the OIG to 

fraud, waste, abuse, and mismanagement of agency programs and operations. Individuals 

who contact the OIG can remain anonymous. However, persons who report allegations are encouraged 

to provide their contact information in the event additional questions arise as the OIG evaluates the 

allegations. Allegations with limited details or merit may be held in abeyance until further specific details 

are reported or obtained. Pursuant to the Inspector General Act of 1978, as amended, the Inspector 

General will not disclose the identity of an individual who provides information without the consent of that 

individual, unless the Inspector General determines that such disclosure is unavoidable during the course 

of an investigation. To learn more about the OIG, visit our Website at: http://www.fec.gov/fecig/fecig.shtml 

Together we can make a difference. 

Fraud Hotline 

202-694-1015