Semiannual Report to Congress 

October 1, 2010 – March 31, 2011 

May 2011 

Federal Election Commission - Office of Inspector General 

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

October 1, 2010 - March 31, 2011 

May 19, 2011 

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, 2010 through March 31, 2011. 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, 2010, and 

the related Statements of Net Costs, Changes in Net Position, Budgetary Resources, and 

Custodial Activity for the year then ended. This marks the second 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 12, 2010. 

During the semiannual period, the OIG completed, with the assistance of contract 

auditors, the 2010 Follow-Up Audit of the Commission’s Privacy and Data Protection. This 

follow-up audit was released in March 2011 and identified 15 findings. Management’s 

responses to the findings and recommendations are discussed in detail in that follow-up audit 

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, 

Cynthia L. Bauerly 

Chair 

Enclosure 

FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

OFFICE OF THE CHAIRMAN 

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Office of Inspector General Semiannual Report to Congress 

MANAGEMENT REPORT ON 

INSPECTOR GENERAL ISSUED REPORTS WITH QUESTIONED COSTS 

FOR THE SIX­MONTH PERIOD ENDING MARCH 31, 2011 

Number of Reports Questioned Costs Unsupported 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] 

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October 1, 2010 - March 31, 2011 

MANAGEMENT REPORT ON 

INSPECTOR GENERAL ISSUED REPORTS WITH 

RECOMMENDATIONS TO PUT FUNDS TO BETTER USE 

FOR THE SIX­MONTH PERIOD ENDING MARCH 31, 2011 

Number of Reports Funds to be 

Put 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 

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October 1, 2010 - March 31, 2011 

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, 2010 – March 31, 2011. 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). It has been another fruitful six months for the 

Office of Inspector General. I would like to commend all of the staff for the effort they 

have expended in accomplishing our goals so far this fiscal year. 

The annual financial statement audit, with the assistance of contract auditors, was 

completed and the FEC received an unqualified opinion. The OIG completed a follow-up 

audit, 2010 Follow-up Audit of Privacy and Data Protection, which was conducted to 

ascertain whether the FEC had implemented the recommendations, contained in previous 

OIG audit and inspection reports. We also conducted a peer review of another OIG 

office and participated in the entrance conference for the peer review being conducted on 

my office. At the end of this period, the fieldwork had been completed. 

I would like to express my thanks to the staff of the OIG as they continued to produce 

significant work that will have a positive impact on the FEC. Towards the end of this 

reporting period our senior auditor, Irene Porter, resigned to accept an opportunity at 

another federal OIG. Irene was an important member of the OIG team and her insight 

and work ethic will be greatly missed. We all wish her success in her new endeavor. 

With that being said, the OIG is down a staff position and I have indicated to the 

Commissioners that I hope to fill that slot as soon as possible. 

Lynne A. McFarland 

Inspector General 

Federal Election Commission 

April 25, 2011 

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October 1, 2010 - March 31, 2011 

Table of Contents
�

Executive Summary 

The Federal Election Commission 

OIG Audit Activity 

OIG Audit Follow-up Activity 

OIG Peer Review Activity 

OIG Hotline Information 

OIG Investigations 

Additional OIG Activity 

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

OIG Contacts 

List of Training, Meetings and Conferences Attended by OIG Staff 

Reporting Requirements 

Table I – Questioned Cost 

Table II – Funds Put To Better Use 

Table III – Summary Of Audit Reports With 

Corrective Actions Outstanding For More Than Six Months 

Appendix A: Peer Review Results 

1 

3 

5 

7 

10 

12 

13 

14 

15 

16 

17 

19 

20 

21 

22 

23 

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October 1, 2010 - March 31, 2011 

Executive Summary
�

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. 

The OIG completed the 2010 Financial Statement 

Audit in November. The audit was conducted by 

Leon Snead & Company (LSC) under a contract with 

the OIG. As part of the process and for inclusion in 

the Performance and Accountability Report (PAR), 

the OIG compiled what we consider the most significant challenges facing management. The three 

management and performance challenges included 

in the FY 2010 PAR were: 

a Governance Framework 

a Human Capital Management 

a Information Technology Security 

The OIG removed a fourth management challenge, 

Financial Reporting, which had been reported 

as a challenge since FY 2004. Although all financial management weaknesses have not been fully 

addressed, the OIG has acknowledged that the FEC 

has made significant progress to address the many 

challenges in this area. Based on the FEC’s progress 

and achievements over the last seven years, the OIG 

has concluded that Financial Reporting is no longer 

a management challenge for FY 2010. 

LSC audited the balance sheet of the FEC as of 

September 30, 2010 and the related statements of 

net cost, changes in net position, budgetary resources, and custodial activity (the financial statements) 

for the year then ended and LSC expressed an unqualified opinion on those statements. 

For detailed information regarding the above audit, 

see the section entitled OIG Audit Activity (starting 

on page 5). 

The OIG also contracted with the IPA firm Cherry, 

Bekaert, and Holland (CBH) to conduct a follow-up 

audit on a previously completed OIG audit, 2007 

Performance Audit of Privacy and Data Protection 

- OIG-07-02. The contract focused on determining 

whether the FEC has implemented audit recommendations contained in previously issued OIG audit/ 

inspection reports on privacy. The follow-up audit 

showed only three (3) of the nineteen (19) previous recommendations were closed and sixteen (16) 

remain open. The final report for the follow-up audit 

includes thirteen (13) findings and forty-five (45) recommendations. Ten (10) of the thirteen (13) findings 

were repeated from prior audits, two (2) were modified repeat findings similar to prior audit findings, and 

there is one (1) new finding. 

As noted in the 2007 Performance Audit of Privacy 

and Data Protection, the contract auditors for the 

2010 follow-up audit identified the primary reason for 

failure to progress privacy and data protection activities at the FEC is the continued use of a shared approach to privacy management and accountability. 

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Office of Inspector General Semiannual Report to Congress 

Also since the 2007 audit, management continues 

to disagree with the recommendation of assigning a 

single Chief Privacy Officer (CPO) to ensure direct 

responsibility and accountability for privacy activities. Management believes that a single CPO is 

not necessary, and having two CPOs is beneficial 

because it affords the opportunity of having differing expertise and backgrounds amongst the privacy 

team. 

Based on the 2007 Performance Audit of Privacy 

and Data Protection, the 2010 Follow-up Audit of 

Privacy and Data Protection, and the OIG’s internal 

knowledge of the agency’s progress of the privacy 

program, the OIG believes the approach of shared 

responsibilities, along with the CPOs’ full-time responsibilities, prevent efficient and effective progress 

of the privacy and data protection program. In the 

response to the current follow-up audit report, management did not concur with eight (8) of the fortyfive (45) recommendations, and concurred in part 

with twenty (20) of the forty-five (45) recommendations. For detailed information pertaining to the 

follow-up audit, see the section entitled OIG Audit 

Follow-up Activity (starting on page 7). 

During this semiannual reporting period, no new 

hotline complaints were opened, one (1) hotline 

complaint, which required a significant number of interviews, was closed with no further action. The OIG 

has one (1) open hotline complaint as of the close 

of this reporting period. 

In addition, there is one (1) open investigation, and 

one (1) investigation was closed. The closed investigation involved allegations that an employee’s government email account had been breached and that 

a member of the employee’s family had received 

harassing telephone calls. For more information pertaining to hotline and investigation topics, see the 

sections entitled OIG Hotline Information (page 

12) and OIG Investigations (page 13). 

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October 1, 2010 - March 31, 2011 

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 – Cynthia L. 

Bauerly, Chair; Caroline C. Hunter, Vice Chair; and 

Commissioners Donald F. McGahn II; Matthew S. 

Petersen; Steven T. Walther; and Ellen L. Weintraub. 

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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. 

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October 1, 2010 - March 31, 2011 

OIG Audit Activity
�

Audit of the Federal Election Commission’s 

Fiscal Year 2010 Financial Statements 

Assignment Number: OIG – 10-01 

Status: Released November, 2010 

http://www.fec.gov/fecig/financial10.pdf 

The Chief Financial Officers Act of 1990 (Public Law 

101-576, commonly referred to as the “CFO Act”), 

as amended, requires the FEC Office of Inspector 

General or an independent external auditor, as 

determined by the Inspector General, to audit the 

agency financial statements. Under a contract monitored by the OIG, Leon Snead & Company (LSC), 

an independent certified public accounting and management consulting firm was awarded a five year 

contract to audit the FEC’s financial statements beginning in FY 2009. 

LSC was contracted to conduct the financial 

statement audit following Generally Accepted 

Government Auditing Standards (GAGAS) and OMB 

Bulletin No. 07-04, Audit Requirements for Federal 

Financial Statements, as revised. The audit contract 

requires LSC to issue an opinion regarding whether 

the FEC’s financial statements and supplemental information are fairly presented in all material respects 

in accordance with Generally Accepted Accounting 

Principles. In addition, LSC audits internal controls 

and compliance with laws and regulations for matters relevant to the financial statements. The audit 

is completed in four phases: planning; review and 

evaluation; testing (interim and final); and reporting 

and work paper delivery. 

The OIG is responsible for oversight of the financial statement audit, which includes: 1) reviewing 

the auditors’ approach and planning of the audit; 2) 

evaluating the qualifications and independence of 

the auditors; 3) monitoring the work of the auditors 

activity; 4) examining audit documents and reports to 

ensure compliance with GAGAS, and OMB Bulletin 

No. 07-04; and 5) other procedures the OIG deems 

necessary to oversee the contract and audit. 

The audit entrance conference was held on May 5, 

2010. Representatives from the OIG, LSC, and FEC 

attended the entrance conference and discussed 

the audit scope, objectives, and ways to ensure an 

efficient and effective audit process. An audit timeline was established, along with requests to management for necessary documentation and information concerning the financial statements. The OIG 

reviewed LSC’s audit planning methodology and interim audit testing results and provided comments to 

LSC. The OIG also coordinated and attended meetings with LSC and the FEC’s Chair and Vice Chair 

to discuss the audit objectives and progress of the 

audit. At the completion of final testing the OIG reviewed LSC’s final testing workpapers and provided 

documented comments. 

LSC prepared several notices of findings and recommendations (NFRs) which were reviewed by the OIG 

and then issued to FEC management for a response. 

During the audit, the OIG coordinated and attended 

regular biweekly audit status meetings with LSC and 

FEC management; weekly meetings were held in the 

month of October as the audit neared completion. 

The exit conference was held November 8, 2010. 

During the exit conference, LSC discussed with 

management the finalized issues that would be presented in the 2010 financial statement audit report. In 

addition, LSC finalized the 2010 financial statement 

audit report - the report was issued November 12, 

2010. The FEC received an unqualified opinion. 

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Office of Inspector General Semiannual Report to Congress 

Audit of the Federal Election Commission’s 

Fiscal Year 2011 Financial Statements 

Assignment Number: OIG – 11-01 

Status: In Progress 

The Office of Inspector General has begun the planning process for the Federal Election Commission’s 

annual financial statement audit. The OIG has exercised another option year with Leon Snead & Co. 

to conduct the FEC’s 2011 financial statement audit. The OIG has confirmed and approved the audit 

team with LSC for the 2011 financial statement audit 

and has scheduled the entrance conference for April 

27, 2011. 

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October 1, 2010 - March 31, 2011 

OIG Audit Follow-up Activity
�

2010 Follow-Up Audit of Privacy and Data 

Protection 

Assignment Number: OIG – 10-03 

Status: Released March, 2011 

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

documents/2010PrivacyReport.pdf 

In September 2010, the OIG awarded a contract to 

the IPA firm Cherry, Bekaert & Holland (CBH) LLP to 

conduct a follow-up audit on a previously completed 

OIG audit, 2007 Performance Audit of Privacy and 

Data Protection – OIG-07-02 and a 2006 inspection 

of personally identifiable information within the FEC 

which was conducted by an IPA under contract with 

the OIG. The 2010 contract focused on determining 

whether the FEC has implemented audit recommendations contained in previously issued OIG audit/inspection reports on privacy. 

The 2006 Inspection Report on Personally 

Identifiable Information provided FEC management with thirteen (13) recommendations to correct 

privacy weaknesses identified during the review. In 

addition, in 2007 the OIG contracted with a different 

IPA to conduct a performance audit of privacy and 

data protection policies and procedures and, specifically, to determine if the FEC is complying with 

privacy requirements contained in section 522 of the 

Consolidated Appropriations Act, 2005. 

The 2007 audit identified seven (7) significant issues 

and made thirteen (13) recommendations to address the audit findings, however FEC management 

did not agree with two (2) findings (six (6) recommendations) included in the report. Also, the 2007 

audit included a follow-up review of the thirteen (13) 

prior-year recommendations contained in the OIG’s 

2006 Inspection Report on Personally Identifiable 

Information; the auditors determined that seven (7) 

recommendations from the 2006 inspection were fully implemented (closed) and six (6) remained open. 

The OIG held a meeting with the CBH contractors on 

September 27, 2010 to discuss the general working 

arrangements and provide background information 

for the follow-up audit. A formal entrance conference 

with key FEC personnel responsible for privacy activities was held on October 13, 2010. The contractor 

submitted a formal audit plan and the OIG approved 

the plan on October 27, 2010. Based on the approved 

plan, the contractors requested interviews with personnel responsible for privacy activities as well as 

various documents that define and support FEC privacy management. 

During the audit, the contractor met with both CoChief Privacy Officers, and other members of the privacy team to discuss the status of recommendations 

and privacy initiatives since the prior audits. The contractors reviewed a number of documents relating to 

privacy and data protection to include: 

a	 FEC privacy and data protection policies, procedures, standards, guidelines and bulletins; 

a	 Privacy reports produced by the FEC and provided to the Office of Management and Budget 

(OMB) as part of the annual privacy reporting 

requirements; 

a	 Risk assessments performed on FEC systems 

that may contain PII; 

a	 PII inventories of FEC divisions produced by a 

contractor in 2008 and 2009, and the associated report assessing controls over PII for each 

division; 

a	 Legal assessments conducted by the 

FEC Office of General Counsel on OMB 

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Office of Inspector General Semiannual Report to Congress 

memorandum released since December 2007 

on privacy and data protection; 

a	 Annual Privacy and IT Security training provided to employees and contractors; and 

a	 Specialized training provided to FEC managers 

on Systems of Records Notification (SORN) reporting requirements for systems containing PII 

Further, an after-hours walkthrough was conducted 

by CBH and OIG to determine whether physical 

records containing PII and agency assets such as 

desktop and laptop computers, which could access PII, were adequately secured. Based on the 

results of the walkthrough, the contractors communicated the results to the Co-Chief Privacy Officers, 

the Information System Security Officer, and the 

Physical Security Officer, recommending immediate 

corrective action to secure PII and computers. 

A discussion meeting was held with FEC personnel responsible for privacy activities on December 3, 

2010 to communicate the initial results of the followup audit. Following completion of fieldwork in early 

January 2011, notices of findings and recommendations (NFRs) were provided to management January 

6th, 13th and 20th. An exit conference was held 

February 7, 2011 and, based on management’s written and verbal responses to the NFRs, amendments 

were made to the draft report. A draft report was provided to management on March 2, 2011 and official 

management response was received on March 16, 

2011. The final report was completed March 31, 2011 

and made public on the FEC OIG internet website. 

The 2010 contracted follow-up audit determined that 

management had not fully implemented the outstanding agreed upon actions included in the 2007 

Performance Audit of Privacy and Data Protection 

and the 2006 Inspection Report on Personally 

Identifiable Information. The follow-up audit showed 

only three (3) of the nineteen (19) previous recommendations were closed and sixteen (16) remain 

open. The final report for the follow-up audit includes 

thirteen (13) findings and forty-five (45) recommendations. Ten (10) of the thirteen (13) findings were 

repeated from prior audits, two (2) were modified repeat findings similar to prior audit findings, and there 

is one new finding. 

As noted in the 2007 Performance Audit of Privacy 

and Data Protection, the contract auditors for the 

2010 follow-up audit identified the primary reason for 

failure to progress privacy and data protection activities at the FEC is the continued use of a shared 

approach to privacy management and accountability. Also since the 2007 audit, management continues to disagree with the recommendation of assigning a single Chief Privacy Officer (CPO) to ensure 

direct responsibility and accountability for privacy 

activities. Management believes that a single CPO 

is not necessary, and having two CPOs is beneficial 

because it affords the opportunity of having differing expertise and backgrounds amongst the privacy 

team. In the response to the current follow-up audit 

report, management did not concur with eight (8) 

of the forty-five (45) recommendations, and concurred in part with twenty (20) of the forty-five (45) 

recommendations. 

Based on the 2007 Performance Audit of Privacy 

and Data Protection, the 2010 Follow-up audit of 

Privacy and Data Protection, and the OIG’s internal 

knowledge of the agency’s progress of the privacy 

program, the OIG believes the approach of shared 

responsibilities, along with the CPOs’ full-time responsibilities, prevent efficient and effective progress of the privacy and data protection program. 

Without one full-time person committed to ensuring 

1) proper handling of PII within the agency; 2) the 

FEC adheres to all required federal regulations; and 

3) adequate oversight and monitoring of the privacy 

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October 1, 2010 - March 31, 2011 

and data protection program, the FEC will continue 

to face greater challenges and continuous risk to 

the agency, which is reflected throughout the issues 

identified in the follow-up audit report. 

2010 Follow-up Audit of Procurement and 

Contract Management 

Assignment Number: OIG – 10-02 

Status: In Progress 

In September 2010, the OIG awarded a contract to 

the IPA firm of Cherry, Bekaert & Holland (CBH) 

LLP to conduct follow-up audits on a previously 

completed audit 2008 Audit of Procurement and 

Contract Management - OIG-08-02. The objective of 

the audit follow-up review was to determine whether 

management implemented the agreed actions for 

each of fifteen (15) recommendations and whether 

each of the nine (9) audit findings had been fully 

resolved. 

The OIG held a meeting with the CBH contractors 

on September 27, 2010 to discuss the general working arrangements and provide background information for the follow-up audit. A formal entrance 

conference with key FEC personnel responsible 

for procurement activities was held on October 14, 

2010. Since then CBH staff has 1) reviewed current 

and prior FEC procurement policies and procedures; 

2) interviewed the FEC Contracting Officer on several occasions; and 3) reviewed a sample of procurement files in order to gain an understanding of current procurement processes and develop a detailed 

audit plan. The contractor submitted draft audit plans 

to the OIG and a final audit plan was approved on 

March 3, 2010. 

The contractors selected an initial audit sample 

and have commenced detailed testing to determine 

whether the recommendations have been fully implemented. CBH has also held interviews with FEC 

employees who are identified as Contracting Officer 

Technical Representatives (CoTRs) and Points of 

Contact (POCs) regarding their specific roles and 

responsibilities for FEC contracts included in their 

sample selection. The procurement follow-up audit 

is scheduled to be completed no later than May 31, 

2011. 

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Office of Inspector General Semiannual Report to Congress 

OIG Peer Review Activity
�

Peer Review of the U.S. Commodity Futures 

Trading Commission (CFTC) OIG 

Assignment Number: OIG – 10-04 

Status: Completed March, 2011 

Inspectors General conduct audits in accordance 

with Generally Accepted Government Auditing 

Standards. Audit organizations conducting audits 

in accordance with GAGAS are required to have an 

independent peer review every three years. The objective of the peer review program is to ensure an 

audit organization’s internal quality control system 

adequately provides reasonable assurance that applicable auditing standards, policies, and procedures 

are being followed. 

The peer review entrance conference was held on 

July 16, 2010 - fieldwork was performed August 3 

through 20, 2010. After the completion of fieldwork, 

the FEC Deputy IG and FEC OIG peer review team 

held a discussion meeting with the CFTC IG and 

staff on August 27, 2010 to communicate the initial 

findings noted during the peer review. The FEC OIG 

prepared the draft report and comment letter and 

provided the final drafts to CFTC OIG on December 

9, 2010. 

The exit conference for the peer review was held 

January 7, 2011 to discuss the draft report provided to CFTC OIG on December 9, 2010. The CFTC 

OIG provided written comments and suggested 

changes to the draft report on January 14, 2011. The 

FEC OIG reviewed the comments and suggested 

changes provided by CFTC OIG and made appropriate adjustments to the draft report based on the 

documentation and evidence reviewed and meetings held during the peer review. The FEC OIG finalized the report and comment letter and provided the 

final documents to CFTC OIG on February 9, 2011. 

The CFTC OIG provided an official written response 

to the FEC OIG on March 14, 2011. The FEC OIG 

reviewed the CFTC OIG’s responses to the final 

draft report and provided final comments. The FEC 

OIG finalized the report and provided the final peer 

review report and comment letter to CFTC OIG on 

March 31, 2011. The final peer review report contained 29 suggested recommendations for CFTC 

OIG to improve their system of quality control. 

Peer Review of the Federal Election 

Commission OIG 

Assignment Number: N/A 

Status: In Progress 

In accordance with the Council of Inspectors 

General on Integrity and Efficiency (CIGIE) Audit 

Peer Review schedule, the Federal Maritime 

Commission (FMC) Office of Inspector General 

is scheduled to perform a peer review of the 

Federal Election Commission OIG for 2011. The 

entrance conference for the peer review was held 

on February 17, 2011. The FEC OIG completed 

Appendix A: Policies and Procedures and provided 

the completed schedule and reference documents 

to FMC OIG for their review on February 18, 2011. 

The FMC OIG requested the workpapers from the 

peer review team who conducted the FEC OIG’s 

prior peer review in 2008. The FEC Inspector 

General provided approval to the prior peer review 

team to release the 2008 peer review workpapers 

to FMC OIG for their review. The FMC OIG conducted fieldwork at the FEC on March 22-23, 2011. 

During fieldwork, the FMC OIG selected and reviewed the FEC OIG’s Audit of the Commission’s 

Property Management Controls and the OIG’s 

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October 1, 2010 - March 31, 2011 

monitoring documentation of the 2010 Federal 

Election Commission Financial Statement Audit. 

At the end of this semiannual reporting period, the 

FMC OIG was finalizing their analysis of the FEC 

OIG’s audit assignments and policies and procedures to provide the FEC OIG with a draft peer review report. 

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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. The OIG hotline 

consists primarily of a telephone number and email 

address, although the OIG may also be contacted 

through other means, such as the U.S. Mail, facsimile, inter-office mail, and in-person visits to the 

OIG suite. 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, no new 

hotline complaints were opened and one (1) hotline 

complaint, which required a significant number of interviews, was closed with no further action. The OIG 

has one (1) open hotline complaint as of the close 

of this reporting period. 

The OIG frequently receives reports and allegations 

which are misdirected complaints that should have 

been routed to the 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 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 processed through OGC; still, the 

OIG regularly receives complaints of alleged FECA 

violations, many of which are not statutorily compliant. 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 has created a category for “hotline inquiries” that do not meet the criteria for hotline complaints. For this reporting period, the OIG received 

thirty-four (34) hotline inquiries. Fifteen (15) of the 

hotline inquiries were referred or redirected to other 

FEC offices, and ten (10) were referred or redirected 

to other agencies, including two (2) that were also 

referred or redirected to other FEC offices. No further action was taken in eleven (11) of the hotline inquiries, including those in which the OIG was merely 

copied in on emails, where no specific allegation or 

complaint was made, or where another agency was 

already aware of and handling the issue. 

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October 1, 2010 - March 31, 2011 

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. 

The OIG conducts a detailed examination or inquiry 

into issues brought to our attention by various sources. 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, 

there is one (1) open investigation, and one (1) investigation was closed. The closed investigation 

involved allegations that an employee’s government 

email account had been breached and that a member of the employee’s family had received harassing telephone calls. Based on the initial information, 

it appeared that the subject or subjects may have 

been other FEC employees. Complainant and witness interviews were conducted, relevant records 

were reviewed and government computing and mobile communications devices of several employees 

were seized and analyzed. 

The investigation was unable to substantiate the allegation concerning the harassing telephone calls, 

and revealed that the complainant may actually have 

been the one who breached the employee’s government email account, may have attempted to breach 

the employee’s government email account once before, and may have provided false and misleading 

information to OIG investigators. 

The Department of Justice declined to prosecute the 

matter, and a Report of Investigation was issued to 

the Commission 

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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: 

a During this reporting period, the OIG completed several internal projects such as updating 

and finalizing the OIG Audit Manual; the OIG’s 

revised Telework Policy was also updated. In 

addition, the OIG completed its documentation 

of the OIG Records Management Process. The 

Records Management Process is a document 

the OIG utilizes to prepare OIG records for 

proper shipping to National Archives Records 

Administration for proper storage and/or destruction of official files/records. 

a The OIG met with representatives from the 

Office of Government Ethics (OGE) to discuss their review of the Federal Election 

Commission Ethics program; also reviewed 

final report from the OGE on the FEC Ethics 

program. 

a The IG accompanied four other IGs to Walter 

Reed Hospital to participate in the Wounded 

Warrior program. There they met with servicemen who had been injured and were in various 

stages of recovery and rehabilitation. A tour of 

the facilities was given, and participants were 

shown some of the equipment/programs used 

to assist in the recovery of injuries. 

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October 1, 2010 - March 31, 2011 

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 

Chairmen, 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 standing up of the CIGIE and the training academies. The Council meets monthly to discuss issues that will affect CIGIE. 

The Inspector General also Co-Chairs the Inspector 

General Candidate Recommendation Panel with the 

Justice Department Inspector General. 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 also 

chaired and participated in interview panels to select the Executive Director of CIGIE and the Training 

Director of the CIGIE Training Academies. 

15 
 

 

 

 

 

Office of Inspector General Semiannual Report to Congress 

OIG Contacts
�

personal visits to the OIG. 

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

past six months – October 1, 2010 through March 31, 2011. 

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

Total 

Contacts 

OIG 

Action 

No Action 

Necessary 

Forwarded 

for Action 

1,089 42 1,007 40 

16 
 

 

 

October 1, 2010 - March 31, 2011 

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, 2010 – March 31, 2011: 

MEETINGS: 

Host / Sponsor Topic / Subject 

Council of Inspectors General on 

Integrity and Efficiency 

Monthly Meetings 

Executive Council Meetings 

Strategic Planning Session 

Professional Development Committee Meetings 

Annual Awards Ceremony 

Council of Counsels to the Inspectors General Monthly Meetings 

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 

Disaster Recovery Plan for OIG Meeting 

Town Hall Meeting 

FEC / Office of Inspector General 

Bi-weekly Staff Meetings 

Financial Statement Audit:

 Status Meeting

 Exit Conference

 Lessons Learned Meeting 

Entrance Conference - Follow-up Audits:

 Procurement and Contract Management

 Privacy and Data Protection 

Entrance Conference - Peer Review 

Exit Conference – 2010 Follow-up Audit of Privacy 

and Data Protection 

17 
 

Office of Inspector General Semiannual Report to Congress 

TRAINING/CONFERENCES:
�

Host / Sponsor Topic / Subject 

U.S. Postal Service / OIG 2010 Biennial National Procurement and Grant Fraud 

Conference 

Federal Audit Executive Council 

Procurement Training Conference 

Grant Fraud and National Procurement Fraud Task 

Force and Overview of Government Suspension and 

Debarment Process 

CCH Group TeamMate User Forum Conference 

Virginia Certified Public Accountants Ethics and Standards of Conduct for Virginia CPAs 

Training 

Council of Inspectors General on 

Integrity and Efficiency 

OIG Suspension and Debarment Workshop/Training 

Introductory Auditor Training 

CIGIE/GAO Annual Financial Statement Audit Conference 

General Services Administration GSA Appropriations Law Training 

Executive Women in Government Annual Summit Conference/Our History is our Strength 

Institute of Internal Auditors Auditing your HR Function: Assessing Risks and 

Developing Internal Controls Training 

U.S. Department of Agriculture Increasing Personal Effectiveness Training 

Federal Election Commission 

Generating Creative and Innovative Ideas:

 Enhancing your Creativity Training 

Leadership Essentials: Creating your own

 Leadership Development Plan 

Leading without Authority Training 

Challenges of the 21st Century Training 

Building your Influence as a Leader 

FEC Systems Access Workflow System

 Refresher Training 

Mandatory Ethics Training 

Civility in the Workplace Presentation 

Women’s History Month Presentation 

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October 1, 2010 - March 31, 2011 

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 15 

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) 

22 

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) 20 

Section 5(a)(9) Recommendations that Funds be put to Better Use (Table II) 21 

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 

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Office of Inspector General Semiannual Report to Congress 

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 

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October 1, 2010 - March 31, 2011 

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 

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Office of Inspector General Semiannual Report to Congress 

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 

PII Inspection Report1 OIG-06-04 11/06 6 1 5 

2007 Performance Audit of 

Privacy and Data Protection2 OIG-07-02 12/07 13 2 11 

2008 Audit of Procurement and 

Contract Management3 OIG-08-02 09/09 15 0 15 

Audit Follow-up Review of the 

FEC’s Employee Transit Benefit 

Program 

OIG-08-03 07/09 51 0 51 

Audit of the Commission’s 

Property Management Controls 

OIG-09-02 03/10 36 0 36 

1 The 5 open recommendations are included in the recent 2010 Follow-up Audit of Privacy and Data Protection. 

2 The 11 open recommendations are included in the recent 2010 Follow-up Audit of Privacy and Data Protection. 

3 An audit follow-up of the 15 open recommendations is currently in progress. 

22 
 

 

 

 

October 1, 2010 - March 31, 2011 

APPENDIX A: PEER REVIEW RESULTS 

Peer Review Conducted by Date Report Issued Recommendations FEC OIG 

Commodity Futures Trade March 31, 2011 29 

Commission (CFTC) OIG 

The FEC OIG is currently undergoing a peer review being conducted by the Federal 

Maritime Commission OIG. 

23 
 

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