OFFICE OF

INSPECTOR GENERAL

Semiannual Report to Congress 

April 1, 2001 - September 30, 2001 

Federal Election Commission

999 E Street, N.W., Suite 940

Washington, D.C. 20463

202-694-1015 - Toll-Free: 1-800-424-9530

e-mail address: oig@fec.gov

website address: http://www.fec.gov/fecig.htm

November 2001 
Special Message of Condolence 

The Federal Election Commission, Office of Inspector 

General wishes to express deep sorrow and heartfelt 

condolences to all those who have experienced traumatic 

injuries, as well as the loss of family, friends and coworkers in the great tragedy that took place in our nation 

on Tuesday, September 11, 2001 - a day forever etched in 

our memory. 

We would also like to pay tribute to the firefighters, police 

and rescue workers for their incredible bravery in the 

effort to save lives, they are the true heroes. Although a 

disaster of this magnitude leaves us all grieving, this is the 

foremost opportunity for all American citizens to unite and 

interact for a common cause. This is one of the greatest 

challenges we will face, by standing together as a nation, 

we draw the strength to endure. 
TABLE OF CONTENTS 

SUBJECT PAGE 

EXECUTIVE SUMMARY....................................................... 1

FEDERAL ELECTION COMMISSION................................. 9

AUDIT REPORTS................................................................... 11

AUDIT FOLLOW-UP.............................................................. 13

INSPECTION REPORTS........................................................ 15

INVESTIGATIONS................................................................. 29

ADDITIONAL OFFICE OF INSPECTOR GENERAL

ACTIVITY......................................................................... 30

ECIE AND PCIE ACTIVITY................................................... 38

REPORTING REQUIREMENTS............................................ 40

TABLE I - QUESTIONED COSTS.......................................... 41

TABLE II - FUNDS PUT TO BETTER USE........................... 42

TABLE III - SUMMARY OF AUDIT REPORTS WITH

CORRECTIVE ACTIONS OUTSTANDING

FOR MORE THAN SIX MONTHS..................... 43

FEC/OIG STRATEGIC PLAN.................................................. 44

CONTACTING THE OFFICE OF INSPECTOR

GENERAL......................................................................... 45

April 1, 2001 - September 30, 2001 
EXECUTIVE SUMMARY 

This semiannual report covering the period April 1, 2001 through 

September 30, 2001, is submitted pursuant to the Inspector General Act of 

1978, as amended. This Executive Summary provides a brief synopsis of 

accomplishments and general activities pertaining to the Office of Inspector 

General (OIG). 

The Office of Inspector General released three inspection reports 

during this reporting period. Inspection of the Commission’s Web Site 

Privacy Practices (OIG-01-02 - May, 2001), the first to be released, was 

initiated as a result of a statutory requirement regarding Section 646 of the 

Treasury and General Government Appropriations Act of 2001. The Act 

requires each Federal Inspector General to submit a report to Congress on 

their agency’s Internet site privacy practices. 

The primary objectives of the inspection were to evaluate the 

Commission’s Web site privacy practices to: 1) determine whether the 

Commission utilizes Internet cookies or Web bugs, and whether applicable 

Federal guidelines are being followed; and 2) evaluate the Commission’s Web 

site privacy policy in accordance with Federal guidelines. To complete the 

inspection, various steps were performed including meetings with several 

April 1, 2001 - September 30, 2001 Page 1 
divisions relating to the FEC’s Web site privacy practices, and reviewing the 

accuracy and adequacy of the FEC’s Web site privacy statement. 

The OIG concluded that the Commission is in compliance with 

applicable Office of Management and Budget guidelines on Web site privacy. 

In addition, the OIG found the Commission is adhering to the stated Web site 

privacy policy. However, our inspection report contained six suggestions for 

improvement, five have been implemented and one remains outstanding. 

Significant information regarding this inspection is located on page 15, the 

section entitled Inspection Reports. 

The second report entitled, Inspection of the Commission’s 

Compliance with the Federal Managers’ Financial Integrity Act 

(FMFIA) of 1982 (OIG-01-03 - June, 2001), was performed to assess the 

Commission’s program for meeting the requirements of the Act. The 

objectives were to: 1) evaluate the Commission’s compliance with the 

provisions of the Federal Managers’ Integrity Act of 1982, General Accounting 

Office (GAO) Standards, Office of Management and Budget (OMB) policies, 

and Commission directives; 2) determine whether the Commission 

adequately implemented agency policies and procedures to assess, as well as 

strengthen the internal control environment; 3) determine whether the 

Commission’s Annual FMFIA report for Fiscal Year 2000 to the President and 

Congress accurately represented the adequacy of the review process within 

April 1, 2001 - September 30, 2001 Page 2 
the Commission; and 4) follow up on issues addressed during the 1991 review 

of the Commission’s FMFIA program. 

The OIG found the Commission’s FMFIA review process to be 

inadequate. Several examples of noncompliance with OMB and Commission 

policies were identified and conveyed to management. The FMFIA review 

process lacked documentation, management control plans and the required 

assurance statements. Page 19 contains more information in reference to 

this report. 

Inspection of the Commission’s Westlaw Database Service (OIG01-05 - July, 2001), the third and final inspection report released during this 

reporting period, was conducted after the OIG discovered that a separated 

employee’s Westlaw account remained open several months after the 

employee left the agency. The objectives of the inspection were to: 1) ensure 

that the Westlaw accounts of separated employees are properly canceled; and 

2) review and evaluate the payment process of the Westlaw service. 

Overall, the OIG found weaknesses in the management of the 

Westlaw service. In addition, the OIG discovered a pattern of improper 

payments occurred over a specified period of time. The OIG concluded the 

weaknesses were the result of inadequate internal controls of the Westlaw 

program and the improper payments were inadvertent errors and not the 

April 1, 2001 - September 30, 2001 Page 3 
result of fraud or abuse. Additional information pertaining to this report can 

be found on page 25. 

Follow-up work on the audit entitled Agency Year 2000 

Renovations - OIG-98-08, was conducted during this reporting period. The 

original audit, released May 1999, was performed to assess the reported 

progress of the FEC to convert and implement Y2K repairs on its computer 

systems. The report included nine audit recommendations to management, 

three were closed during a previous reporting period, the other six remained 

open. 

The OIG recognized that the outstanding Y2K audit recommendations 

presented a unique situation, and as such the audit follow-up process was 

modified. Since the audit recommendations were directed to a specific point 

in time (January 1, 2000), the OIG has chosen to close the six outstanding 

recommendations contained in the original audit report. The Audit Followup section, located on page 13, contains more information on the follow-up 

work conducted. 

During this semiannual period the Office of Inspector General 

completed a peer review entitled, Peer Review of the Federal Housing 

Finance Board (FHFB) (OIG-01-08 - September, 2001). The objectives of 

the peer review were to determine whether the FHFB OIG’s internal quality 

April 1, 2001 - September 30, 2001 Page 4 
control system is designed to provide a reasonable assurance that the audits 

it performs, and the audits conducted by nonfederal auditors of FHFB 

programs and activities, are carried out in accordance with Government 

Auditing Standards. Detailed information regarding the peer review is 

discussed on page 34. 

The OIG also initiated a special project pertaining to staff retirement. 

The purpose of the retirement project is to provide an analysis of the FEC’s 

projected employee retirements. The OIG analysis will include statistics on 

employee retirements within a time period of five, seven, and ten years. 

More information relating to this special project is located on page 35. 

During a previous reporting period, the Office of Inspector General 

initiated an audit entitled, Procurement Operations (OIG-00-03). The 

primary reason for conducting the audit is to see if the FEC has implemented 

the key acquisition reforms contained in the Federal Acquisition 

Streamlining Act (FASA) of 1994. The primary objectives of the audit are to: 

1) determine whether or not the Commission has an efficient and effective 

procurement system in place; and 2) determine whether the Commission’s 

procurement process complies with statutory and regulatory requirements. 

Specific steps have been taken to complete the audit such as reviewing 

records and selecting the audit sample, however, due to several time 

April 1, 2001 - September 30, 2001 Page 5 
sensitive projects, minimal progress was made towards completing the audit 

before the end of this reporting period. Additional information regarding this 

audit can be found in the Audit Reports section, located on page 11. 

Listed below are highlights of additional activities conducted by the 

Office of Inspector General during this reporting period. Items are described 

in greater detail, starting on page 30, the section entitled Additional Office 

of Inspector General Activity. 

• On October 30, 2000, President Clinton signed into law the FY 2001 

Defense Authorization Act (P.L. 106-398) including Title X, subtitle 

G, Government Information Security Reform Act (GISRA also 

referred to as The Security Act). The Security Act amends the 

Paperwork Reduction Act (PRA) of 1995 by enacting a new 

subchapter on Information Security, which primarily addresses the 

program management and evaluation aspects of security This Act 

applies to all agencies covered by the PRA. 

Since GISRA amends the Paperwork Reduction Act (PRA) and the 

FEC is exempt from PRA, the OIG worked with its counsel to 

ascertain whether the FEC has any responsibility under GISRA. 

The OIG also contacted an OMB representative to determine 

whether an expectation exists for the FEC to follow GISRA. After 

April 1, 2001 - September 30, 2001 Page 6 
numerous conversations, the OIG was informed by the OMB 

representative and the IG Counsel that the agency is exempt from 

GISRA, therefore, the FEC and the FEC OIG are not required to 

submit reports. 

• The Chairman of the House Committee on Government Reform 

asked the U.S. General Accounting Office (GAO) to study the 

possible effects of: 1) converting some inspectors general in 

designated federal entities to appointment by the President; 2) the 

consolidation of IG offices; and 3) changes to the President’s Council 

on Integrity and Efficiency (PCIE) and the Executive Council on 

Integrity and Efficiency (ECIE). As part of the study, the views of 

all federal IG’s were requested, the survey covered all of the areas 

listed above. The IG responded to the survey, along with additional 

detailed comments. In reference to the response of this survey, see 

page 32 for more information. 

• The Special Assistant to the Inspector General is assigned the 

responsibility of conducting unannounced cash counts of the FEC’s 

imprest fund. During this time frame two cash counts were 

performed (OIG-01-06, and OIG-01-07). The purpose of the cash 

count is to investigate the cash management and internal controls 

of the agency imprest fund. 

April 1, 2001 - September 30, 2001 Page 7 
The results of our cash counts revealed that all cash was accounted 

for and disbursements from the imprest fund were reasonable and 

consistent with FEC imprest fund policy. However, effective 

October 1, 2001, Federal agencies are no longer required to 

maintain imprest funds. Refer to page 36, which contains detailed 

information on the cash counts, as well as the decision to abolish 

the imprest funds. 

April 1, 2001 - September 30, 2001 Page 8 
THE FEDERAL ELECTION COMMISSION 

The Federal Election Commission (FEC) is an independent, 

regulatory agency responsible for administering and implementing the 

Federal Election Campaign Act (FECA). The FEC is composed of six 

Commissioners who are appointed for six year terms by the President of the 

United States, with the advice and consent of the Senate. The FECA 

likewise established the positions of Staff Director and General Counsel, who 

are appointed by the Commissioners. 

OFFICE OF INSPECTOR GENERAL 

The Federal Election Commission is one of the thirty-three designated 

agencies required to have an Inspector General under the 1988 amendments 

to the Inspector General Act of 1978 (P.L. 100-504). 

The responsibilities of the Inspector General as stated in P.L. 100-504 

are as follows: 

• conduct and supervise audits and investigations relating to 

the Federal Election Commission’s programs and operations; 

April 1, 2001 - September 30, 2001 Page 9 
• provide leadership, coordination, and to recommend policies 

for activities designed to promote economy, efficiency and 

effectiveness in the administration of Commission programs 

and operations. To prevent and detect fraud, waste and 

abuse in these programs and operations, and; 

• keep the Commissioners and Congress fully and currently 

informed about problems and deficiencies and the need for 

and progress of corrective actions. 

The OIG is under the supervision of the Inspector General who 

provides overall direction to the staff. The OIG staffing level for FY 2002 is 

four (4) full time employees. The staff consists of the Inspector General, the 

Special Assistant to the Inspector General and two Senior Auditors. 

April 1, 2001 - September 30, 2001 Page 10 
AUDIT REPORTS 

TITLE: Procurement Operations

ASSIGNMENT #: OIG-00-03

RELEASE DATE: In Progress

PURPOSE: The primary objectives of this audit are to: 1)

determine whether or not the FEC has an efficient and effective procurement

system in place; and 2) determine whether the FEC’s procurement process

complies with statutory and regulatory requirements.

The audit is being performed to determine if the Commission has 

implemented the key acquisition reforms contained in the Federal 

Acquisition Streamlining Act (FASA) of 1994. Other issues relating to the 

audit include determining if the goods and services are delivered in a timely 

manner; would it be helpful to provide written guidelines on how to order 

good and services; and is it necessary for staff to obtain additional training to 

address the procedures for acquiring goods and services. 

Specific steps taken to obtain the audit objectives involved reviewing 

records, selecting the audit sample, and soliciting feedback from FEC 

divisions on the positive and negative aspects of the agency’s process to 

purchase goods and services. In addition, the OIG sent an e-mail survey to 

April 1, 2001 - September 30, 2001 Page 11 
Audit Reports (continued) 

managers to assess their satisfaction and experience with the commission’s 

procurement process. 

Despite the fact that during a previous reporting period specific steps 

had been taken to complete the audit, due to the continuance of several timesensitive projects, minimal progress was made towards completing the audit 

before the end of this reporting period. 

April 1, 2001 - September 30, 2001 Page 12 
AUDIT FOLLOW-UP 

TITLE: Agency Year 2000 Renovations 

ASSIGNMENT #: OIG-98-08 

RELEASE DATE: May, 1999 

(audit report) 

WEBSITE ADDRESS: http://www.fec.gov/fecig/Y2K.pdf 

PURPOSE: The purpose of conducting this audit follow-up was 

to determine whether management had taken corrective action to resolve the 

outstanding recommendations contained in the report. The original audit 

was performed to assess the reported progress of the FEC to convert and 

implement Y2K repairs on its computer systems. The audit was completed 

and released on May 4, 1999, and included a considerable amount of postaudit work throughout 1999 to monitor the FEC’s progress at addressing the 

year 2000 computer issues. The report included nine recommendations to 

management. Three of the recommendations were closed during a previous 

reporting period, the other six recommendations remained outstanding. 

The OIG recognized the outstanding Y2K audit recommendations 

presented a unique situation, and as such, the audit follow-up process was 

modified. Since the audit recommendations were directed to a specific project 

April 1, 2001 - September 30, 2001 Page 13 
Audit Follow-up (continued) 

with a specific point in time (January 1, 2000), the OIG has chosen to close 

the six outstanding recommendations contained in the original audit report. 

April 1, 2001 - September 30, 2001 Page 14
INSPECTION REPORTS 

TITLE: Inspection of the Commission’s Web Site 

Privacy Practices 

ASSIGNMENT #: OIG-01-02 

RELEASE DATE: May, 2001 

WEBSITE ADDRESS: http://www.fec.gov/fecig/internet.pdf 

PURPOSE: The Office of Inspector General (OIG) conducted 

this inspection as a result of Federal legislation enacted in December, 2000. 

The legislation, titled the Treasury and General Government Appropriations 

Act of 2001, Section 646, required each Federal Inspector General to 

determine whether the agency or any third parties, including other 

governmental agencies, are obtaining personal information relating to any 

individual’s access of an agency’s Internet site. The Act further states that 

each Federal Inspector General is to submit a report to Congress on agency 

Internet site policy and privacy practices with respect to the use of Internet 

cookies or Web bugs, technology used to monitor and/or collect personal 

information about users who visit a Web site on the Internet. 

The primary objectives of the inspection were to evaluate the 

Commission’s Web site privacy practices to: 1) determine whether the 

Commission utilizes Internet cookies or Web bugs, and whether applicable 

April 1, 2001 - September 30, 2001 Page 15 
Inspection Reports (continued) 

Federal guidelines are being followed; and 2) evaluate the Commission’s Web 

site privacy policy in accordance with Federal guidelines. The Federal 

Election Commission’s (FEC) Web site provides the public with access to 

information on the mission of the Commission, such as the FEC’s 

enforcement of the Federal Election Campaign Act (FECA) and the disclosure 

of campaign finance information. To instill confidence in the technology and 

encourage the use of Federal Web sites, appropriate privacy policies and 

practices must be in place to ensure that users’ right to privacy is protected. 

Internet cookies and Web bugs are methods used by some Web sites to 

track and/or record personal information about Web users. There are two 

forms of Internet cookies: persistent cookies and session cookies. Persistent 

cookies track information over time, and across different Web sites, and 

remain stored on a user’s computer hard drive until the specified expiration 

date. Session cookies are used only during a single Web browser session and 

do not raise privacy concerns, according to the Office of Management and 

Budget. 

Web bugs are similar to Internet cookies, and are capable of 

monitoring who is viewing a Web page or e-mail message. Web bugs are 

very small graphic images on a Web page, or in an e-mail message and are 

April 1, 2001 - September 30, 2001 Page 16 
Inspection Reports (continued) 

often invisible. Web bugs are used by some Web sites to track Web usage for 

advertising purposes, and to provide an independent accounting of how many 

users visited a particular Web site. 

The OIG used specialized computer software to determine whether or 

not the Commission’s Web site uses Internet cookies or Web bugs. The OIG 

tested the entire fec.gov Web site for the use of Internet cookies. Testing of 

the FEC’s other Web servers used for campaign finance disclosure and testing 

for Web bugs was performed on a limited basis. To further assist with the 

completion of the inspection, additional steps were performed including 

conducting meetings with specific FEC staff. The OIG also reviewed the 

contracts of two contractors who provide Web related services to the 

Commission in order to determine whether or not the contracts included 

language to address the non-disclosure of confidential or sensitive 

information. The OIG found both contracts contained language that address 

the non-disclosure of sensitive or confidential information. 

The results of the inspection revealed no evidence that Internet cookies 

or Web bugs are used on the FEC Web sites, which is consistent with the 

FEC’s privacy policy. However, a by-product of our testing of the FEC Web 

site revealed several of the non-FEC Web sites utilized both persistent 

April 1, 2001 - September 30, 2001 Page 17 
Inspection Reports (continued) 

and session cookies. The FEC Web site provides links to other non-FEC Web 

sites containing information that is related to the FEC mission. For example, 

the FEC Web site provides links to several state government Web sites, and 

to a software company that provides software necessary to view certain files 

available on the FEC Web site. 

Privacy policies of non-FEC Web sites may differ from the FEC, as we 

found during our testing. The FEC’s practice of linking to other Web sites, 

some of which utilize cookies, is not a violation of any know Federal policy or 

regulation and does not violate the FEC’s privacy policy. However, it is 

possible users of the FEC Web site may click with their computer mouse on 

non-FEC links without realizing the link is associated with another 

organization that may or may not use persistent cookies or Web bugs. 

Our inspection report contained six suggestions for improvement, with 

which management concurred. Prior to the end of this reporting period, five 

suggestions had been implemented and one remains outstanding. On May 

30, 2001, our report was sent to the Subcommittee on Treasury and General 

Government and the Subcommittee on Treasury, Postal Service and General 

Government. 

April 1, 2001 - September 30, 2001 Page 18 
Inspection Reports (continued) 

TITLE: Inspection of the Commission’s Compliance 

with the Federal Managers’ Financial 

Integrity Act (FMFIA) of 1982 

ASSIGNMENT #: OIG-01-03 

RELEASE DATE: June, 2001 

WEBSITE ADDRESS: http://www.fec.gov/fecig/fmfia.pdf 

PURPOSE: The purpose of conducting the inspection was to 

primarily assess the Commission’s program for meeting the requirements of 

the Federal Managers’ Financial Integrity Act of 1982. The Act requires 

Federal managers to establish a continuous process for evaluating, 

improving, and reporting on the internal controls and accounting systems for 

which they are responsible. 

The primary objectives of the inspection were to: 1) evaluate the 

Commission’s compliance with the provisions of the FMFIA Act of 1982, GAO 

Standards, OMB policies, and Commission directives; 2) determine whether 

the Commission adequately implemented agency policies and procedures to 

assess, as well as strengthen the internal control environment; 3) determine 

whether the Commission’s Annual FMFIA report of Fiscal Year 2000 to the 

President and Congress accurately represented the adequacy of the review 

process within the Commission; and 4) follow-up on issues addressed during 

April 1, 2001 - September 30, 2001 Page 19 
Inspection Reports (continued) 

the 1991 audit of the Commission’s FMFIA program. 

The FMFIA was enacted in response to continuing disclosures of waste, 

loss, unauthorized use, and misappropriation of funds or assets associated 

with weak internal controls and accounting systems. It establishes 

requirements with regard to management accountability and controls. This 

law encompasses program, operational, and administrative areas as well as 

accounting and financial management. The Act further states that agency 

heads must submit an annual statement of assurance to the President and 

Congress on the adequacy of internal controls and actions taken to correct 

identified weaknesses. Each annual statement prepared must also include a 

report on whether the agency’s accounting system conforms to the principles, 

standards, and other related FMFIA requirements. 

The OMB issued implementing guidance Circular A-123 Revised, 

Management Accountability Control, dated June 21, 1995. The Circular 

provides detailed guidance to Federal managers on improving the 

accountability and effectiveness of Federal programs and operations by 

establishing, assessing, correcting, and reporting on management controls. 

The A-123 Circular defines management controls as the organization’s 

policies and procedures used to ensure that: 1) programs achieve their 

April 1, 2001 - September 30, 2001 Page 20 
Inspection Reports (continued) 

intended results; 2) resources are used consistent with agency mission; 3) 

laws and regulations are followed; 4) programs and resources are protected 

from waste, fraud, and mismanagement; and 5) reliable and timely 

information is used for decision making. 

At the Commission, the FMFIA program requirements were 

implemented through Commission Directive 53 Revised, Implementation of 

A-123: Internal Control Review, dated September 17, 1993 and Commission 

Directive 57, Implementation of A-127: Financial Management System 

Section of Federal Managers’ Financial Integrity Act (FMFIA), dated 

September 17, 1993. The Commission’s FMFIA assessment program relies 

upon the results of the informal vulnerability assessments conducted by the 

program/office heads of their respective program functions. 

Commission Directive 57 states that the FEC shall develop and 

maintain effective systems of financial management to assure management 

control over Commission program operations and administrative functions. 

This directive established the following OMB required actions into 

Commission policy: 1) establish financial management system and issue 

operating policies; 2) inventory and evaluate agency systems; and 3) develop 

an agency financial management system plan. The annual statement to the 

April 1, 2001 - September 30, 2001 Page 21 
Inspection Reports (continued) 

President must include an assurance that the Agency’s financial management 

systems complies with government wide standards and requirements as set 

forth in A-127. 

To accomplish the inspection objectives, the applicable laws, 

implementing guidance, Commission Directives, as well as the prior audit 

report entitled Audit of the Federal Election Commission’s Federal Managers’ 

Financial Integrity Act Program (OIG-91-02) were reviewed. The OIG also 

reviewed results of financial system evaluations performed by the Accounting 

manager, current (FY 2000) and prior years (FY 1995, 1998 & 1999) 

assurance statements and the available documentation. Our inspection also 

included discussions with the FMFIA program manager and other 

Commission managers with FMFIA assessment responsibilities. Due to the 

limited scope of this inspection, actual testing of internal controls techniques 

were not considered. Therefore, we did not address the adequacy of internal 

control measures with FEC components on an individual basis. Rather, we 

addressed the FEC’s program for evaluating and reporting on internal 

controls. 

The OIG found the Commission’s FMFIA review process to be 

inadequate. Several examples of noncompliance with OMB and Commission 

policies were identified and conveyed to management. The FMFIA review 

April 1, 2001 - September 30, 2001 Page 22 
Inspection Reports (continued) 

process lacked documentation, management control plans, and the required 

assurance statements. We also found that managers had not received the 

required training nor was a monitoring system in place to track the 

progression of the annual assessment process. A five year Financial 

Management System plan, as required by OMB, was not prepared. 

Furthermore, we discovered that management failed to fully implement an 

agreed upon recommendation made during the 1991 review of the 

Commission’s FMFIA program. Due to the insufficient review process, the 

OIG could not attest to the accuracy of the Commission’s FY 2000 FMFIA 

report to the President and Congress. 

Although the inspection report did not include any formal 

recommendations to management, the report did include suggestions to: 1) 

fully implement established program procedures; 2) rewrite position 

descriptions to include the required internal control element; and 3) develop a 

five year Financial Management System Plan as required by OMB. 

Management agreed to implement established FMFIA review procedures and 

to revise the inaccurate position descriptions. Nonetheless, they believed 

that it would be redundant to produce a five year financial plan because the 

information is contained in the Commission’s IT Strategic Plan. However, 

the Commission’s IT Strategic Plan does not incorporate the strategies and 

April 1, 2001 - September 30, 2001 Page 23 
Inspection Reports (continued) 

tactical initiatives required by OMB. Management stated that this issue will 

be reviewed further to determine applicability to the FEC. 

April 1, 2001 - September 30, 2001 Page 24
Inspection Reports (continued) 

TITLE: Inspection of the Commission’s Westlaw 

Database Service 

ASSIGNMENT #: OIG-01-05 

RELEASE DATE: July, 2001 

WEBSITE ADDRESS: http://www.fec.gov/fecig/westlaw.pdf 

PURPOSE: The Office of Inspector General (OIG) initiated this 

inspection after discovering a separated employee’s Westlaw account 

remained open several months after the employee left the agency. The two 

primary objectives for conducting the inspection were to: 1) ensure that the 

Westlaw accounts of separated employees are properly canceled; and 2) 

review and evaluate the payment process of the Westlaw service. 

Westlaw provides FEC staff with on-line access to legal and business 

databases, and information like Federal court decisions, Congressional 

information and Federal statutes. The FEC contracts with West Group, a 

division of the Thomson Corporation, to receive the Westlaw research service. 

Management approves access for Commission staff whose jobs would benefit 

from the Westlaw database service, such as attorneys in the Office of 

General Council (OGC). As long as a user has access to the Internet, 

regardless of location, the Westlaw service, including premium services, are 

accessible with a valid user account. 

April 1, 2001 - September 30, 2001 Page 25 
Inspection Reports (continued) 

The Office of General Counsel’s Library Office is primarily responsible 

for administration of the FEC’s Westlaw program. Management of the 

Westlaw program includes the following responsibilities: 1) negotiation of 

the annual contract fees with the West Group vendor; 2) training of 

Commission staff on the use of the Westlaw service, or coordination of 

training provided by West Group; 3) notifications to add or remove employee 

Westlaw user accounts; and 4) review and approve receiving reports to 

ensure proper billing and payment for services rendered. 

During the course of the inspection, the OIG held several meetings 

with internal and external individuals, including West Group vendor 

employees, the FEC Accounting Officer, the FEC Administrative Officer, and 

the FEC Library Director. The inspection included reviewing documents 

such as Westlaw invoices, purchase and receiving orders, active Westlaw 

user list and Westlaw database usage reports, FEC employee clearance forms 

of separated staff, FEC current employee list and separation dates of prior 

staff, and the U.S. Department of Treasury Financial Manual. The 

aforementioned documents were reviewed to identify whether an appropriate 

process is in place to ensure Westlaw user accounts are canceled upon an 

employee’s separation from the FEC. Current Westlaw user accounts found 

assigned to separated staff were further reviewed to determine whether the 

April 1, 2001 - September 30, 2001 Page 26 
Inspection Reports (continued) 

accounts were accessed after the employees left the FEC, and whether the 

access resulted in authorized charges billed to the FEC. 

As a result of the inspection, the OIG found weaknesses in the 

oversight of the Westlaw service. Although a pattern of improper payments 

occurred over a four year period, all duplicate payments were subsequently 

recovered from the vendor. In addition, the OIG found inadequate 

management of user accounts. Over forty-two percent of all current accounts 

were assigned to separated FEC staff. This weakness created an 

unnecessary financial exposure to the FEC due to the potential for separated 

staff to access premium databases billed to the FEC. 

Our inspection further revealed that user accounts of former 

employees were accessed after the employees’ separation from the FEC. The 

OIG could not determine whether the separated employees were the 

individuals who actually accessed the accounts. However, it is possible 

current employees who inherited the personal computers of the separated 

employees, may have been able to use the separated employees’ accounts. 

Nevertheless, all access occurred in the “fixed rate” databases, therefore no 

additional expenses were found as a result of the unauthorized access. 

April 1, 2001 - September 30, 2001 Page 27 
Inspection Reports (continued) 

Furthermore, the OIG concluded the weaknesses were the result of 

inadequate internal control of the Westlaw program. The OIG also concluded 

the four improper duplicate payments were the result of ineffective internal 

controls since a system was not in place to track ongoing, open purchase 

orders. The payments were inadvertent errors, and not the result of fraud or 

abuse. 

Management took appropriate steps to cancel all user accounts of 

separated employees and agreed to cancel user accounts of separating 

employees in the future. To ensure the prompt cancellation of accounts, as 

an additional measure, quarterly reports will be provided to the General 

Counsel detailing Westlaw user account cancellations of departing employees. 

April 1, 2001 - September 30, 2001 Page 28 
INVESTIGATIONS 

In the previous semiannual report, the OIG noted the assistance 

provided to the U.S. Postal Inspection Service, concerning an FEC employee. 

Since the last reporting period, the employee pled guilty and has resigned his 

position with the FEC. The OIG considers this matter closed. 

April 1, 2001 - September 30, 2001 Page 29 
ADDITIONAL OFFICE OF INSPECTOR GENERAL ACTIVITY 

All legislation, as compiled by the Commission’s Congressional Affairs 

Office, was reviewed by the Inspector General, as required by the Inspector 

General Act of 1978, as amended. The Inspector General reviews and 

comments, when appropriate, on all legislation provided by the PCIE 

Legislative Committee. In addition, the Inspector General routinely reads all 

Commission agenda items and attends Finance Committee meetings. 

• On October 30, 2000, President Clinton signed into law the FY 

2001 Defense Authorization Act (P.L. 106-398) including Title X, 

subtitle G, Government Information Security Reform Act 

(GISRA also referred to as The Security Act). The Security Act 

amends the Paperwork Reduction Act (PRA) of 1995 by enacting 

a new subchapter on Information Security, which primarily 

addresses the program management and evaluation aspects of 

security. This Act applies to all agencies covered by the PRA. 

The Act became effective on November 29, 2000, and sunsets in 

two years. It seeks to ensure proper management and security 

for the information resources. The Act requires: 1) annual 

agency program reviews; 2) annual Inspector General (IG) 

evaluations; 3) agency reporting to OMB the results of IG 

April 1, 2001 - September 30, 2001 Page 30 
evaluations; and 4) an annual OMB report to Congress 

summarizing the material received from agencies. As part of 

the budget process, agencies were required to submit this 

information beginning in 2001. The role of the agency Inspector 

General essentially codifies the existing requirements of OMB 

Circular A-130, Appendix III, “Security of Federal Automated 

Information Resources.” The Act also requires agencies to 

incorporate security into the life cycle of agency information 

systems. 

Since GISRA amends the Paperwork Reduction Act (PRA) and 

the FEC is expressly exempt from PRA, the OIG worked with its 

counsel to ascertain whether the FEC has any responsibility 

under GISRA. The OIG also contacted an OMB representative 

to determine whether an expectation exists for the FEC to 

follow GISRA. After numerous conversations, the OIG was 

informed by the OMB representative and OIG Counsel that the 

agency is exempt from GISRA, therefore, the FEC and the FEC 

OIG are not required to submit reports. 

Although the FEC is not required to follow GISRA, the OIG 

plans to incorporate information technology audits and 

April 1, 2001 - September 30, 2001 Page 31 
inspections into our audit plans to continue our oversight of the 

agency’s information technology. 

• The Chairman of the House Committee on Government Reform 

asked the U.S. General Accounting Office (GAO) to provide 

assistance in the oversight work of the Committee. According to 

the Chairman of the Committee on Government Reform, several 

bills were introduced in the last Congress that would amend the 

Inspector General Act of 1978. Although the Chairman felt each 

bill had merit, it was apparent that none of them fully addressed 

the issues of concern as it relates to the Committee. 

The IGs, established over 20 years ago through the IG Act, as 

amended, provide a valuable service to the federal government 

through audits and investigations. The Committee was 

interested in exploring improvements to the IG offices that 

address overall IG effectiveness and enhancements to their 

independence. Concerns about IG effectiveness, including 

independence, quality of work, and the use of government 

resources, have been raised in the past with no clear resolution. 

In order to address these concerns, the Chairman of the House 

Committee on Government Reform asked the U.S. General 

Accounting Office (GAO) to study the advantages and 

April 1, 2001 - September 30, 2001 Page 32 
disadvantages of: 1) converting some inspectors general in 

designated federal entities to appointment by the President; 2) 

the consolidation of IG offices; and 3) changes to the President’s 

Council on Integrity and Efficiency (PCIE) and the Executive 

Council on Integrity and Efficiency (ECIE). As part of the 

study, the views of all federal IGs were requested. 

The survey covered all of the areas listed above. One of the 

issues raised involved the FEC OIG being consolidated with the 

IG office at the General Services Administration. The IG 

responded to the survey and her concerns at being consolidated 

were strongly expressed. Consolidating the DFE IGs could 

seriously impair the oversight of agencies and may result in less 

coverage should they be merged into the larger operations of 

existing presidentially-appointed IGs. Presidentially-appointed 

IGs also have resource limitations, which can make it difficult to 

meet all of their mandates, let alone be able to devote resources 

or personal attention to new areas outside of mainstream 

operations. Thus, the perceived benefits from consolidation may 

well result in the unintended consequences of requiring more 

training, longer audit and investigations cycles, and less IG 

oversight of DFE programs and operations. 

April 1, 2001 - September 30, 2001 Page 33 
• During the time frame of this reporting period, a peer review 

was conducted. The Office of Inspector General completed the 

review entitled Peer Review of the Federal Housing Finance 

Board (FHFB) (OIG-01-08). The objective of the peer review 

program is to foster quality audits by OIG’s through an 

independent assessment of the effectiveness of the internal 

quality control system in providing reasonable assurance that 

applicable audit standards and requirements are being followed. 

The General Accounting Office’s Government Auditing 

Standards, “Yellow Book,” requires an external quality review, 

called a peer review, to be conducted every three years on 

organizations that conduct government audits. A peer review, 

by definition, is a review of an audit organization by an 

organization not affiliated with the audit organization being 

reviewed. Prior to the start of this peer review, a Memorandum 

of Understanding (MOU) was developed to assure that there is a 

mutual understanding between the two OIGs regarding the 

fundamental aspects of the review. 

While performing the peer review, various documents like 

FHFB’s previous peer review report conducted by the Federal 

Maritime Commission, the Guide for Conducting External 

April 1, 2001 - September 30, 2001 Page 34 
Quality Control Reviews of the Audit Operations of Offices of the 

Inspector General, and the listing of completed audits issued by 

the FHFB OIG during the period of the scope, were reviewed in 

order to determine whether the OIG’s audits comply with 

Government Auditing Standards. Interviews were are also 

conducted with the audit manager to inquire about general 

office procedures, including training and supervision. 

• The OIG also initiated a special project pertaining to staff 

retirement. The purpose of the retirement project is to provide 

an analysis of the FEC’s projected employee retirements. The 

OIG analysis will include statistics on employee retirements 

within a time period of five, seven, and ten years. According to 

remarks at a Senate hearing on May 18, 2000, approximately 

thirty-two percent of the entire Federal workforce will be 

eligible for regular retirement by the year 2004, and another 

twenty-one percent will be eligible for early retirement. 

To assist with the special project, the OIG has conducted a 

meeting with the Director of Personnel, requested retirement 

reports from both the Data Systems Division Director and the 

Personnel office. In addition, the OIG has read reference 

material, and reviewed the work completed to date. We 

April 1, 2001 - September 30, 2001 Page 35 
anticipate the completion of this project during the next 

reporting period. 

• The Special Assistant to the Inspector General has the 

responsibility of conducting unannounced cash counts of the 

FEC’s imprest fund. The purpose of the cash count is to: 1) 

verify all imprest funds are properly accounted for; 2) the 

amount of the fund is not in excess of the cash requirements; 

and 3) disbursements from the fund are reasonable in amount 

and purpose. 

Two cash counts were performed (OIG-01-06, and OIG 01-07) 

during this reporting period. The results of the cash counts 

revealed that all cash was accounted for and disbursements 

from the fund were reasonable and consistent with FEC imprest 

fund policy. 

The Financial Management Service (FMS) issued a directive 

announcing the elimination of the imprest fund. Treasury 

Financial Manual (TFM), Part 4, Section 3000, Imprest Fund 

Policy Directive, requires all Federal agencies to eliminate 

imprest funds by October 1, 2001. In accordance with the 

Treasury Policy Directive, the FEC Accounting Officer notified 

April 1, 2001 - September 30, 2001 Page 36 
the OIG that a deposit of $2,500, the total amount maintained 

in the imprest fund, was made to a specified financial institute, 

consequently terminating the use of the FEC imprest fund. 

• During the course of this reporting period, the OIG initiated 

a new procedure to monitor the status of outstanding 

recommendations contained in audit reports released by the 

OIG. The Outstanding Audit Recommendation Follow-Up Log 

was created to remind management, mid-way through the six 

month reporting process, that there are outstanding audit 

recommendations which have not been implemented and will be 

reported in the next semiannual report if they are not closed 

prior to the end of the reporting period. Included in the log are 

the title, number, and release date of the report; a summary of 

the recommendations; whether or not management agreed with 

the recommendations; whether or not the recommendations 

have been closed; and the division responsible for action. The 

OIG believes this new procedure will be useful in helping both 

management and the OIG staff monitor outstanding 

recommendations. 

April 1, 2001 - September 30, 2001 Page 37 
ECIE AND PCIE ACTIVITY 

The Executive Council on Integrity and Efficiency was established by 

Executive Order on May 11, 1992. It consists of Designated Federal Entity 

Inspectors General and representatives of the Office of Government Ethics, 

the Office of Special Counsel, the Federal Bureau of Investigation and the 

Office of Management and Budget. 

The Inspector General (or staff) attended the following training, 

programs and/or conferences during this reporting period: 

• ECIE - Monthly Meetings 

• PCIE/ECIE - Joint Quarterly Meeting 

• PCIE/ECIE - Joint Retreat 

• ECIE - OIG Community Discussion 

• U.S. Department of Agriculture - Certified Internal Audit 

Examination Review 

• Academy of Personnel Law & Administration - Basic non-criminal 

Investigation Conference 

• High Tech Crime Investigations Association - Computer Crime 

Training Symposium 

• Association of Government Accountants - Professional Development 

Conference, Managing in the 21st Century 

• Inspector General Auditor Training Institute - Writing Successful 

Audit Reports 

April 1, 2001 - September 30, 2001 Page 38 
• Management Concepts - Plain Language, Writing for Success 

• Council of Counsels (CCIG) - Conference, Legal Issues Associated 

with Information Technology 

• Federal Election Commission - Computer Information Security 

Training 

• Federal Election Commission - Administrative Liaison Meeting 

April 1, 2001 - September 30, 2001 Page 39 
IG ACT REPORTING REQUIREMENTS PAGE 

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

the Inspector General Act Amendments of 1988 are listed below: 

Section 4(a)(2) Review of Legislation-----------------------------------------------30 

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-----------------------------------------------43 

Section 5(a)(4) Matters Referred to Prosecutive 

Authorities---------------------------------------------------------None 

Section 5(a)(5) Summary of Instances Where Information 

was Refused-------------------------------------------------------None 

Section 5(a)(6) List of Audit Reports---------------------------------------------- 11 

Section 5(a)(7) Summary of Significant Reports------------------------------ 11 

Section 5(a)(8) Questioned and Unsupported Costs------------------------- 41 

Section 5(a)(9) Recommendations that Funds be put 

to Better Use-------------------------------------------------------- 42 

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 

April 1, 2001 - September 30, 2001 Page 40 
TABLE I 

INSPECTOR 

WITH 

DOLLAR VALUE (in thousands) 

QUESTIONED UNSUPPORTED 

NUMBER COSTS COSTS 

GENERAL ISSUED REPORTS 

QUESTIONED COSTS 

A. For which no management 0 0 [0] 

decision has been made by 

commencement of the reporting 

period 

B. Which were issued during the 0 0 [0] 

reporting period 

Sub-Totals (A&B) 0 0 [0] 

C. For which a management 0 0 [0] 

decision was made during 

the reporting period 

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

costs 

(ii) Dollar value of costs 0 0 [0] 

not disallowed 

D. For which no management 0 0 [0] 

decision has been made by the 

end of the reporting period 

E. Reports for which no management 0 0 [0] 

decision was made within 

six months of issuance 

April 1, 2001 - September 30, 2001 Page 41 
TABLE II 

INSPECTOR 

RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE 

NUMBER DOLLAR VALUE 

(in thousands 

GENERAL ISSUED REPORTS WITH 

A. For which no management 

decision has been made by 

the commencement of the 

reporting period 

B. Which were issued during 

the reporting period 

C. For which a management 

decision was made during 

the reporting period 

(i) dollar value of 

recommendations 

were agreed to by 

management 

based on proposed 

management action 

based on proposed 

legislative action 

(ii) dollar value of 

recommendations 

that were not agreed 

to by management 

D. For which no management 

decision has been made by 

the end of the reporting period 

E. Reports for which no 

management decision 

was made within six months 

of issuance 

0 0 

0 0 

0 0 

0 0 

0 0 

0 0 

0 0 

0 0 

0 0 

April 1, 2001 - September 30, 2001 Page 42 
TABLE III 

SUMMARY OF AUDIT REPORTS WITH CORRECTIVE ACTIONS 

OUTSTANDING FOR MORE THAN SIX MONTHS 

Recommendations 

Report Issue 

Report Title Number Date Number Closed Open 

Agency Year 2000 98-08 05/99 9 9 0

Renovations

Agency Controls 00-01 09/00 7 3 4

Governing the Process

for Procurement of Vendor

Training Services

April 1, 2001 - September 30, 2001 Page 43
FEC / OIG Strategic Plan

OIG Products: To provide products and 

services that promote positive change in 

FEC policies, programs, and operations. 

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, Congress, 

and Management. 

Strategy: Perform work that supports; 

- Federal Election Commission and Congressional 

priorities; 

- National Performance Review objectives; 

- 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. 

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. 

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. 

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: Maintain a dynamic strategic 

planning process. 

Strategy: 

- periodically review and update the strategic plan 

address changing OIG and FEC priorities; and, 

-

develop short and long term plans to address them. 

to 

identify factors that influence organizational change and 

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 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; and, 

- 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. 

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. 

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: 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: 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: 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 communications between employees is open; and, 

- provide employees with the tools and incentives they need to 

adequately 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. 

April 1, 2001 - September 30, 2001 Page 44 
CONTACTING THE OFFICE OF INSPECTOR GENERAL 

The success of the OIG mission to prevent fraud, waste, and abuse depends 

on the cooperation of FEC employees (and the public). There are several 

ways to report questionable activity. 

Call us at 202-694-1015 or toll-free 1-800-424-9530. A confidential or 

anonymous message can be left 24 hours a day / 7 days a week. 

Write or visit us - we are located at: Federal Election Commission 

Office of Inspector General 

999 E Street, N.W., Suite 940 

Washington, DC 20463 

Mail is opened by OIG staff members only. 

You can also contact us by e-mail at: oig@fec.gov. 

Individuals may be subject to disciplinary or criminal action for knowingly 

making a false complaint or providing false information. 

April 1, 2001 - September 30, 2001 Page 45