text: b' U.S. OFFICE OF PERSONNEL MANAGEMENT\n OFFICE OF THE INSPECTOR GENERAL\n OFFICE OF AUDITS\n\n\n\n\nFinal Audit Report\nSubject:\n\n\n AUDIT OF THE 2009 AND 2010\n SUN COUNTRY\n COMBINED FEDERAL CAMPAIGNS\n EL PASO, TEXAS\n\n\n\n\n Report No. 3A-CF-00-12-048\n\n\n Date: March 18 2013\n\n\n\n\n --CAUTION--\nThis audit report has been distributed to Federal officials who are responsible for the administration of the audited program. This audit\nreport may contain proprietary data which is protected by Federal law (18 U.S.C. 1905). Therefore, while this audit report is available\nunder the Freedom of Information Act and made available to the public on the OIG webpage, caution needs to be exercised before\nreleasing the report to the general public as it may contain proprietary information that was redacted from the publicly distributed copy.\n\x0c AUDIT REPORT\n\n\n\n AUDIT OF THE 2009 AND 2010\n SUN COUNTRY\n COMBINED FEDERAL CAMPAIGNS\n EL PASO, TEXAS\n\n March 18, 2013\n Report No. 3A-CF-00-12-048 Date:\n\n\n\n\n ____________________________\n Michael R. Esser\n Assistant Inspector General\n for Audits\n\n\n\n\n --CAUTION--\nThis audit report has been distributed to Federal officials who are responsible for the administration of the audited program. This audit\nreport may contain proprietary data which is protected by Federal law (18 U.S.C. 1905). Therefore, while this audit report is available\nunder the Freedom of Information Act and made available to the public on the OIG webpage, caution needs to be exercised before\nreleasing the report to the general public as it may contain proprietary information that was redacted from the publicly distributed copy.\n\x0c EXECUTIVE SUMMARY\n\n\n\n\n AUDIT OF THE 2009 AND 2010\n SUN COUNTRY\n COMBINED FEDERAL CAMPAIGNS\n EL PASO, TEXAS\n\n\n Report No. 3A-CF-00-12-048 Date: March 18, 2013\n\nThe Office of the Inspector General has completed an audit of the 2009 and 2010 Sun Country\nCombined Federal Campaigns (CFC). The United Way of El Paso County (UWEPC), located in\nEl Paso, Texas, served as the Principal Combined Fund Organization (PCFO) during both\ncampaigns. Our main objective was to determine if the Sun Country CFC was in compliance\nwith Title 5, Code of Federal Regulations, Part 950 (5 CFR 950), including the responsibilities of\nboth the PCFO and the Local Federal Coordinating Committee (LFCC). The audit identified 17\ninstances of non-compliance with the regulations (5 CFR 950) governing the CFC. In addition,\nwe made two recommendations related to the PCFO\xe2\x80\x99s policies and procedures that will help\nprevent and detect fraud and abuse. Due to the number of findings, the nature of the issues\nidentified in this report, and the LFCC and PCFO\xe2\x80\x99s lack of understanding of the CFC\nregulations, we are recommending that the Sun Country CFC be merged with another campaign.\n\nThe following findings represent the results of our audit work as of the date of this report.\n\n AUDIT GUIDE REVIEW\n\nOur review of the Independent Public Accountant\xe2\x80\x99s examination of the CFC Audit Guide\xe2\x80\x99s\nagreed-upon procedures did not identify any deviations from the required review.\n\n\n\n\n i\n\x0c BUDGET AND CAMPAIGN EXPENSES\n\n\xe2\x80\xa2 PCFO Application Missing Required Statements Procedural\n\n The LFCC accepted and approved a PCFO application for the 2010 campaign that included\n incomplete statements required by the federal regulations.\n\n\xe2\x80\xa2 PCFO Solicitation Procedural\n\n The solicitation for a PCFO was not posted in a timely manner, and the application period\n did not remain open for the minimum number of required days.\n\n\xe2\x80\xa2 Selection of PCFO Procedural\n\n The LFCC did not select the PCFO in a timely manner for the 2010 campaign.\n\n\xe2\x80\xa2 Campaign Expense Reimbursement Approval Procedural\n\n The PCFO recovered campaign expenses that were not authorized or approved by the LFCC.\n\n\xe2\x80\xa2 Expenses Charged to the Wrong Campaign Procedural\n\n The PCFO charged expenses to the 2010 campaign that were related to the 2008 and 2009\n campaigns.\n\n CAMPAIGN RECEIPTS AND DISBURSEMENTS\n\n\xe2\x80\xa2 Pledge Form Errors Procedural\n\n Four pledge forms, with a total of six errors, were accepted by the PCFO as being correct.\n\n\xe2\x80\xa2 Audit Fees Not Accrued Procedural\n\n The PCFO did not accrue monies for the future expense of the audit of the 2010 campaign.\n\n\xe2\x80\xa2 Untimely Initial Disbursement Procedural\n\n The PCFO did not make the initial disbursement for the 2010 campaign by the deadline set in\n the CFC Calendar of Events.\n\n\xe2\x80\xa2 Un-Cashed Check Policies and Procedures Procedural\n\n The PCFO\xe2\x80\x99s un-cashed check policies and procedures do not include all of the requirements\n outlined in CFC Memorandum 2006-5.\n\n\n\n ii\n\x0c\xe2\x80\xa2 Approval of One-Time Disbursements Procedural\n\n There are no meeting minutes or other documentation to show that the LFCC approved or\n authorized the amount of one-time disbursements.\n\n\xe2\x80\xa2 Pledge Loss Calculation and Application Procedural\n\n The PCFO incorrectly calculated and applied pledge loss that was charged to charities\n receiving one-time disbursements during the 2010 campaign.\n\n\xe2\x80\xa2 Late Notification of Designations and Donors Procedural\n\n The PCFO did not notify CFC participating federations and organizations of the amounts of\n designated and undesignated funds due to them, and of the donors who wished their\n information be released, by the date set by OPM in the CFC Calendar of Events.\n\n\xe2\x80\xa2 Release of Donor Information Procedural\n\n The PCFO released a donor\xe2\x80\x99s address to an organization without authorization from the\n donor.\n\n\xe2\x80\xa2 CFC Receipts Applied to the Wrong Campaign Procedural\n\n The PCFO did not properly allocate CFC receipts to the campaign period in which they were\n received, resulting in the disbursement of excess funds to the 2010 campaign charities.\n\n ELIGIBILITY\n\n\xe2\x80\xa2 Local Organization Application Period Procedural\n\n The LFCC accepted applications from local organizations and federations for participation in\n the 2010 campaign beyond the date set in the CFC Calendar of Events.\n\n\xe2\x80\xa2 Local Organization Applications Procedural\n\n The LFCC accepted two family support and youth activities organizations which did not\n include the required certification from the military commander showing that the agencies met\n the CFC requirements.\n\n\xe2\x80\xa2 Local Eligibility Notification Letters Procedural\n\n The LFCC did not issue notice of its eligibility decisions to local organizations within the\n time frames set by federal regulations.\n\n\n\n\n iii\n\x0c PCFO AS A FEDERATION\n\nOur review of the PCFO\xe2\x80\x99s activities as a federation showed that it complied with the applicable\nprovisions of 5 CFR 950.\n\n FRAUD AND ABUSE\n\n\xe2\x80\xa2 Fraud and Abuse Prevention and Detection Improvement Area\n\n The UWEPC has limited policies and procedures in place for preventing and detecting fraud\n and abuse.\n\n DISPOSITION OF THE CAMPAIGN\n\nAs a result of the numerous findings, the nature of the issues identified in this report, and the\nLFCC and PFCO\xe2\x80\x99s lack of understanding of the CFC regulations, it is our opinion that the OCFC\nshould seek to merge the Sun Country CFC with another geographically adjacent campaign,\nadministered and conducted by a new PCFO and LFCC that are more equipped to handle the\nresponsibilities of the CFC.\n\n\n\n\n iv\n\x0c CONTENTS\n PAGE\n EXECUTIVE SUMMARY ............................................................................................i\n I. INTRODUCTION AND BACKGROUND .................................................................. 1\n II. OBJECTIVES, SCOPE, AND METHODOLOGY ...................................................... 3\nIII. AUDIT FINDINGS AND RECOMMENDATIONS .................................................... 7\n A. AUDIT GUIDE REVIEW ...................................................................................... 7\n B. BUDGET AND CAMPAIGN EXPENSES ........................................................... 7\n 1. PCFO Application Missing Required Statements .............................................. 7\n 2. PCFO Solicitation............................................................................................... 8\n 3. Selection of PCFO .............................................................................................. 9\n 4. Campaign Expense Reimbursement Approval.................................................. 10\n 5. Expenses Charged to the Wrong Campaign ...................................................... 12\n C. CAMPAIGN RECEIPTS AND DISBURSEMENTS ........................................... 13\n 1. Pledge Form Errors ........................................................................................... 13\n 2. Audit Fees Not Accrued .................................................................................... 15\n 3. Untimely Initial Disbursement .......................................................................... 16\n 4. Un-Cashed Check Policies and Procedures....................................................... 16\n 5. Approval of One-Time Disbursements ............................................................. 18\n 6. Pledge Loss Calculation and Application ......................................................... 19\n 7. Late Notification of Designations and Donors .................................................. 20\n 8. Release of Donor Information ........................................................................... 21\n 9. CFC Receipts Applied to the Wrong Campaign ............................................... 22\n D. ELIGIBILITY ........................................................................................................ 23\n 1. Local Organization Application Period............................................................. 23\n 2. Local Organization Applications....................................................................... 24\n 3. Local Eligibility Notification Letters ................................................................ 25\n E. PCFO AS A FEDERATION ................................................................................. 26\n F. FRAUD AND ABUSE .......................................................................................... 26\n 1. Fraud and Abuse Prevention and Detection ...................................................... 26\n G. DISPOSITION OF THE CAMPAIGN .................................................................. 27\nIV. MAJOR CONTRIBUTORS TO THIS REPORT ........................................................ 29\n APPENDIX (The PCFO and the LFCC\xe2\x80\x99s amended response to the draft report, dated\n November 5, 2012)\n\x0c I. INTRODUCTION AND BACKGROUND\nINTRODUCTION\n\nThis report details the findings and conclusions resulting from our audit of the 2009 and 2010\nSun Country Combined Federal Campaigns (CFC). The audit was performed by the Office of\nPersonnel Management\xe2\x80\x99s (OPM) Office of the Inspector General (OIG), as authorized by the\nInspector General Act of 1978, as amended.\n\nBACKGROUND\n\nThe CFC is the sole authorized fund-raising drive conducted in federal installations throughout\nthe world. In 2010, it consisted of 209 separate local campaign organizations located throughout\nthe United States, including Puerto Rico and the Virgin Islands, as well as overseas locations.\nThe Office of the Combined Federal Campaign (OCFC) at OPM has the responsibility for\nmanagement of the CFC. This includes publishing regulations, memoranda, and other forms of\nguidance to federal offices and private organizations to ensure that all campaign objectives are\nachieved.\n\nEach CFC is conducted by a Local Federal Coordinating Committee (LFCC) and administered\nby a Principal Combined Fund Organization (PCFO). The LFCC is responsible for organizing\nthe local CFC; determining the eligibility of local voluntary organizations; selecting and\nsupervising the activities of the PCFO; encouraging federal agencies to appoint Loaned\nExecutives to assist in the campaign; ensuring that employees are not coerced in any way in\nparticipating in the campaign; and acting upon any problems relating to a voluntary agency\xe2\x80\x99s\nnoncompliance with the policies and procedures of the CFC. Loaned Executives are federal\nemployees who are temporarily assigned to work directly on the CFC.\n\nThe primary goal of the PCFO is to administer an effective and efficient campaign in a fair and\neven-handed manner aimed at collecting the greatest amount of charitable contributions possible.\nIts responsibilities include training loaned executives, coordinators, employee keyworkers and\nvolunteers; maintaining a detailed schedule of its actual CFC administrative expenses; preparing\npledge forms and charity lists; distributing campaign receipts; submitting to an audit of its CFC\noperations by an Independent Certified Public Accountant (IPA) in accordance with generally\naccepted auditing standards; cooperating fully with the OIG audit staff during audits and\nevaluations; responding in a timely and appropriate manner to all inquiries from participating\norganizations, the LFCC, and the Director of OPM; and, consulting with federated groups on the\noperation of the local campaign.\n\nExecutive Orders No. 12353 and No. 12404 established a system for administering an annual\ncharitable solicitation drive among federal civilian and military employees. Title 5, Code of\nFederal Regulations, Part 950 (5 CFR 950), the regulations governing CFC operations, sets forth\nground rules under which charitable organizations receive federal employee donations.\nCompliance with these regulations is the responsibility of the PCFO and the LFCC. The PCFO\nis also responsible for establishing and maintaining a system of internal controls.\n\n\n\n\n 1\n\x0cAll findings from our previous audit of the campaign (Report # 3A-CF-00-01-052, dated\nSeptember 24, 2001), which covered the 1999 campaign, have been satisfactorily resolved.\n\nThe initial results of our current audit were discussed with PCFO and LFCC officials during an\nexit conference held on June 21, 2012. A draft report was provided to the PCFO and the LFCC\nfor review and comment on September 14, 2012. The LFCC and the PCFO\xe2\x80\x99s amended response\nto the draft report was considered in preparation of this final report and is included as an\nAppendix.\n\n\n\n\n 2\n\x0c II. OBJECTIVES, SCOPE, AND METHODOLOGY\nOBJECTIVES\n\nThe primary purpose of our audit was to determine if the Sun Country CFC was in compliance\nwith 5 CFR 950, including the activities of both the PCFO and the LFCC. Our audit objective\nfor the 2009 campaign was:\n\n Audit Guide Review\n \xe2\x80\xa2 To determine if the IPA completed the Agreed-Upon Procedures (AUP) as outlined in the\n CFC Audit Guide.\n\nAdditionally, our audit objectives for the 2010 campaign were as follows:\n\n Budget and Campaign Expenses\n \xe2\x80\xa2 To determine if the PCFO solicitation, application, campaign plan, and budget were in\n accordance with the regulations.\n \xe2\x80\xa2 To determine if expenses charged to the campaign were actual, reasonable, allocated\n properly, approved by the LFCC, and did not exceed 110 percent of the approved budget.\n\n Campaign Receipts and Disbursements\n \xe2\x80\xa2 To determine if the pledge form format was correct and if the pledge form report agrees\n with the actual pledge form.\n \xe2\x80\xa2 To determine if incoming pledge monies, were allocated to the proper campaign, and that\n the net funds (less expenses) were properly distributed to member agencies and\n federations.\n \xe2\x80\xa2 To determine if the member agencies and federations were properly notified of the\n amounts pledged to them and that donor personal information was only released for those\n who requested the release of information.\n\n Eligibility\n \xe2\x80\xa2 To determine if the charity list (CFC brochure) was properly formatted and contained the\n required information; if the charitable organization application process was open for the\n required 30-day period; if the applications were appropriately reviewed, evaluated, and\n approved; if the applicants were notified of the eligibility decisions in a timely manner;\n and if the appeals process for denied applications was followed.\n \xe2\x80\xa2 To determine if any non-federal employees or retirees were members of the LFCC.\n\n PCFO as a Federation\n \xe2\x80\xa2 To determine if the amounts received by the PCFO as a federation reconciled to those\n disbursed by the CFC; if the PCFO properly distributed funds to its federation members;\n if expenses charged by the PCFO (to its federation members) were documented properly;\n and if the disbursements made to the federation members were accurate.\n\n\n\n\n 3\n\x0c Fraud and Abuse\n \xe2\x80\xa2 Determine what policies and procedures the PCFO has in place related to detecting and\n preventing fraud and abuse and if they are adequate.\n\nSCOPE AND METHODOLOGY\n\nWe conducted this performance audit in accordance with generally accepted government\nauditing standards. Those standards require that we plan and perform the audit to obtain\nsufficient and appropriate evidence to provide a reasonable basis for our findings and\nconclusions based on the audit objectives. We believe that the evidence obtained provides a\nreasonable basis for our findings and conclusions based on the audit objectives.\n\nThe audit covered campaign years 2009 and 2010. The United Way of El Paso County\n(UWEPC), located in El Paso, Texas, served as the PCFO during both campaigns. The audit\nfieldwork was conducted at the office of the PCFO from June 18 through 22, 2012. Additional\naudit work was completed at our Cranberry Township, Pennsylvania, and Washington, D.C.\noffices.\n\nThe Sun Country CFC received campaign pledges, collected campaign receipts, and incurred\ncampaign administrative expenses for the 2009 and 2010 campaigns as shown below.\n\n Campaign Total Total Administrative\n Year Pledges Receipts Expenses\n 2009 $1,400,037 $1,372,841 $98,926\n\n 2010 $1,508,430 $1,432,295 $106,978\n\nIn conducting the audit, we relied to varying degrees on computer-generated data. Our review of\na sample of campaign expenses and supporting data, a sample of pledge form entries, and the\ndistributions of campaign contributions and related bank statements, verified that the computer-\ngenerated data used in conducting the audit was reliable. Nothing came to our attention during\nour review of the data to cause us to doubt its reliability.\n\nWe considered the campaign\xe2\x80\x99s internal control structure in planning the audit procedures. We\ngained an understanding of the management procedures and controls to the extent necessary to\nachieve our audit objectives. We relied primarily on substantive testing rather than tests of\ninternal controls. The audit included tests of accounting records and such other auditing\nprocedures as we considered necessary to determine compliance with 5 CFR 950 and CFC\nMemoranda issued by the OCFC.\n\nTo accomplish our objective concerning the 2009 campaign (Audit Guide Review), we reviewed\nthe CFC Audit Guide to verify that the IPA completed and documented the AUP steps.\n\nIn regard to our objectives concerning the 2010 campaign\xe2\x80\x99s budget and campaign expenses, we\naccomplished the following:\n\n\n 4\n\x0c\xe2\x80\xa2 Reviewed the PCFO\xe2\x80\x99s application to verify that it was complete.\n\n\xe2\x80\xa2 Reviewed a copy of the public notice to prospective PCFOs and the LFCC meeting minutes\n to verify that the PCFO was selected in a timely manner.\n\n\xe2\x80\xa2 Traced and reconciled amounts on the PCFO\xe2\x80\x99s Schedule of Actual Expenses to the PCFO\xe2\x80\x99s\n general ledger.\n\n\xe2\x80\xa2 Reviewed the PCFO\xe2\x80\x99s budgeted expenses, the LFCC\xe2\x80\x99s approval of the budget, and matched a\n sample of actual expenses to supporting documentation. Our sample included 50\n transactions totaling $81,717, from a universe of 433 transactions totaling $110,356, that\n were charged to the 2010 CFC. We judgmentally selected this sample based on transactions\n with high dollar amounts, allocated expenses, audit fees, and expenses with an incorrect\n categorization. The PCFO only claimed $106,978 out of the $110,356 incurred expenses for\n reimbursement.\n\n\xe2\x80\xa2 Reviewed the LFCC meeting minutes and verified that the LFCC authorized the PCFO\xe2\x80\x99s\n reimbursement of campaign expenses.\n\n\xe2\x80\xa2 Compared the budgeted expenses to the actual expenses to determine if the actual expenses\n exceeded 110 percent of the approved budget.\n\nTo determine if the 2010 campaign\xe2\x80\x99s receipts and disbursements were handled in accordance\nwith CFC regulations, we reviewed the following:\n\n\xe2\x80\xa2 A judgmental sample of 75 pledge forms (with total designations of $12,166) out of a\n universe of 9,642 pledge forms (with a total pledged of $1,508,430) from the PCFO\xe2\x80\x99s Donor\n Pledge Form Tracking Report and compared the pledge information from the report to the\n actual pledge forms. The sample was selected by choosing every 171st pledge form from the\n Pledge Form Tracking Report.\n\n\xe2\x80\xa2 Cancelled distribution checks to verify that the appropriate amount was distributed to\n organizations in a timely manner.\n\n\xe2\x80\xa2 One-time disbursements to verify that the PCFO properly calculated pledge loss and\n disbursed funds in accordance with the ceiling amount established by the LFCC.\n\n\xe2\x80\xa2 The PCFO\xe2\x80\x99s most recent listing of outstanding checks to verify that the PCFO was following\n its policy for such checks.\n\n\xe2\x80\xa2 Pledge notification letters to verify that the PCFO notified the CFC agencies of the\n designated and undesignated amounts due them, by the date required in the regulations.\n\n\xe2\x80\xa2 Donor letters sent by the PCFO to organizations to verify that the letters properly notified the\n organization of the donors who wished to be recognized.\n\n\n\n 5\n\x0c\xe2\x80\xa2 CFC receipts and distributions from the PCFO\xe2\x80\x99s campaign bank statements, campaign\n receipts and agency disbursements, and campaign expense support to verify whether the\n PCFO accurately recorded and disbursed all campaign receipts and disbursements.\n\n\xe2\x80\xa2 All bank statements used by the PCFO to verify that the PCFO was properly accounting for\n and distributing funds.\n\n\xe2\x80\xa2 The PCFO\xe2\x80\x99s cutoff procedures and bank statements to verify that funds were allocated to the\n appropriate campaign.\n\nTo determine if the LFCC and PCFO were in compliance with CFC regulations regarding\neligibility for the 2010 campaign, we reviewed the following:\n\n\xe2\x80\xa2 The public notice to prospective charitable organizations to determine if the LFCC accepted\n applications from organizations for at least 30 days.\n\n\xe2\x80\xa2 Campaign charity lists to determine if they contained all required information.\n\n\xe2\x80\xa2 The process and procedures for the application evaluation process.\n\n\xe2\x80\xa2 Eligibility letters to verify that they were properly sent by the LFCC.\n\n\xe2\x80\xa2 The LFCC\xe2\x80\x99s processes and procedures for responding to appeals from organizations.\n\n\xe2\x80\xa2 The LFCC member listings to verify that all members were active federal employees.\n\nTo determine if the PCFO was in compliance with the CFC regulations as a federation (UWEPC)\nfor the 2010 campaign, we reviewed the following:\n\n\xe2\x80\xa2 Data reported on the CFC Receipts Schedule, with supporting documentation, to verify that\n receipts were properly recorded.\n\n\xe2\x80\xa2 The CFC Distribution Schedule to ensure that the UWEPC did not disburse any funds to\n member agencies not participating in the CFC.\n\n\xe2\x80\xa2 The UWEPC\xe2\x80\x99s annual report and agreements with its member agencies to determine if\n member fees were reasonable and supported.\n\nFinally, to determine if the policies and procedures related to the detection and prevention of\nfraud and abuse were adequate, we reviewed the PCFO\xe2\x80\x99s responses to our fraud and abuse\nquestionnaire.\n\nThe samples mentioned above, that were selected and reviewed in performing the audit, were not\nstatistically based. Consequently, the results could not be projected to the universe since it is\nunlikely that the results are representative of the universe taken as a whole.\n\n\n\n 6\n\x0c III. AUDIT FINDINGS AND RECOMMENDATIONS\nIn part G of this section, we recommend the merger of the Sun Country CFC with another\ncampaign that is better equipped and prepared to follow the CFCs regulatory requirements.\nHowever, if OPM\xe2\x80\x99s OCFC chooses not to merge the campaign, we request that it require the\nLFCC and PCFO to provide detailed corrective action plans for each recommendation, including\nspecific procedures on how they will resolve the findings. We are requesting this because the\nresponses received from the LFCC and PCFO, in our opinion, were not adequately detailed in all\ncases.\n\nA. AUDIT GUIDE REVIEW\n\n Our review of the Independent Public Accountant\xe2\x80\x99s examination of the CFC Audit Guide\xe2\x80\x99s\n agreed-upon procedures did not identify any deviations from the required review.\n\nB. BUDGET AND CAMPAIGN EXPENSES\n\n 1. PCFO Application Missing Required Statements Procedural\n\n The LFCC accepted and approved a PCFO application for the 2010 campaign that\n included incomplete statements required by the federal regulations.\n\n 5 CFR 950.105(c)(2) states that any organization wishing to be selected as the PCFO\n must submit an application that includes a \xe2\x80\x9cstatement signed by the applicant\xe2\x80\x99s local\n director or equivalent pledging to:\n\n i. administer the CFC fairly and equitably,\n\n ii. conduct campaign operations, such as training, kick-off and other events, and\n fiscal operations, such as banking, auditing, reporting and distribution separate\n from the applicants non-CFC operations, and\n\n iii. abide by the directions, decisions, and supervision of the LFCC and/or Director.\xe2\x80\x9d\n\n Additionally, 5 CFR 950.105(c)(3) states that the application should include a signed\n statement \xe2\x80\x9cby the applicant\xe2\x80\x99s local director or equivalent acknowledging that the\n applicant is subject to the provision of 950.603.\xe2\x80\x9d\n\n We reviewed the PCFO\xe2\x80\x99s 2010 application to ensure that it was signed by an appropriate\n official and to determine if each of the statements required by the federal regulations\n were included. Our review found that two of the required statements that were included\n in the 2010 PCFO application, and accepted by the LFCC, were incomplete.\n Specifically, we identified the following:\n\n \xe2\x80\xa2 The first incomplete statement is the pledge \xe2\x80\x9cto conduct campaign operations, such as\n training, kick-off and other events, and fiscal operations, such as banking, auditing,\n reporting and distribution separate from the applicant\xe2\x80\x99s non-CFC operations.\xe2\x80\x9d The\n\n\n 7\n\x0c approved application only stated that the PCFO pledged \xe2\x80\x9cto conduct the United Way\n of El Paso County [UWEPC] non-CFC operations separately [from] campaign\n operations,\xe2\x80\x9d which is not the exact language required by federal regulations.\n\n \xe2\x80\xa2 The second incomplete statement is the pledge to \xe2\x80\x9cabide by the directions, decisions,\n and supervision of the LFCC and/or Director.\xe2\x80\x9d The approved application did not\n include \xe2\x80\x9cand/or Director.\xe2\x80\x9d\n\n Finally, we found that the approved application included a reference to 5 CFR 950.403,\n which was removed from the regulations in 2006.\n\n Per the PCFO, the incomplete statements were an oversight on its behalf, and it has taken\n actions to correct the language within the application to comply with 5 CFR 950.105(c).\n According to the LFCC, it approved the application despite the incomplete statements\n because of timeliness issues, a lack of familiarity with the regulations, and because there\n was only one PCFO applicant.\n\n As a result of selecting a PCFO application with incomplete statements, the PCFO never\n pledged its commitment to administer the campaign according to federal regulations and\n never fully understood its responsibilities as PCFO.\n\n Recommendation 1\n\n We recommend that the OCFC ensures that the LFCC reviews the PCFO applications for\n completeness, and verifies that all of the required language is included and accurate\n before selecting a PCFO to administer the campaign.\n\n LFCC and PCFO Comments:\n\n The LFCC and PCFO agree with this finding, and the PCFO states that is has taken the\n necessary steps to update and maintain copies of the federal regulations that show what\n statements and language are required for CFC applications.\n\n2. PCFO Solicitation Procedural\n\n The LFCC began soliciting PCFO applications after the deadline set by OPM, and the\n application period was not open for the minimum number of required days.\n\n OPM\xe2\x80\x99s 2009/2010 CFC Calendar of Events lists December 15, 2009, as the deadline for\n the LFCC to begin soliciting PCFO applications and January 25, 2010, as the deadline for\n the LFCC to stop soliciting PCFO applications. Additionally, 5 CFR 950.104(c) states\n that the PCFO application period must be open for a minimum of 21 calendar days.\n\n We reviewed the LFCC\xe2\x80\x99s public notice to solicit PCFO applications for the 2010\n campaign to determine if the application period was timely and open for the required\n number of calendar days. We found that the LFCC\xe2\x80\x99s solicitation for PCFOs was\n\n\n\n 8\n\x0c published on February 8, 2010, which was 55 calendar days after the deadline set by\n OPM to begin soliciting applications and 14 calendar days after the deadline to stop\n soliciting applications. The application period was open from February 8, 2010 through\n February 26, 2010 (19 calendar days), which did not meet the minimum requirement of\n 21 calendar days.\n\n Discussions with the PCFO determined that the PCFO solicitation was published late\n because the LFCC Executive Committee changed members as of January 1, 2010. The\n current LFCC members are aware of the late PCFO solicitation and will make\n adjustments for future campaigns.\n\n As a result of not soliciting PCFOs in a timely manner and limiting the application period\n to only 19 calendar days, the LFCC did not give applicants sufficient time to apply to be\n PCFO and some potential applicants may have never seen the solicitation since it was\n published after the recommended closing date. Additionally, the delay caused the LFCC\n to miss the PCFO selection deadline set by OPM.\n\n Recommendation 2\n\n We recommend that the OCFC ensures that the LFCC follows the dates set forth in the\n CFC Calendar of Events for all future campaigns as related to the PCFO solicitation.\n\n Recommendation 3\n\n We recommend that the OCFC ensures that the LFCC keeps the PCFO application period\n open for at least the minimum number of calendar days (21) required by the federal\n regulations.\n\n LFCC Comments:\n\n The LFCC agrees with this finding. The LFCC will modify the Sun Country LFCC\xe2\x80\x99s\n governance document to address the adherence to the regulatory deadlines set forth in the\n CFC Calendar of Events. Additionally, the LFCC will reach out to another campaign\xe2\x80\x99s\n LFCC to receive guidance, which it will replicate in part to use with future PCFOs.\n\n OIG Comment:\n\n We accept the LFCC\xe2\x80\x99s response. However, the correct entity for the LFCC to reach out\n to for guidance is the OCFC and not the LFCCs of other campaigns, as there is no\n guarantee that the other LFCC has implemented proper procedures.\n\n3. Selection of PCFO Procedural\n\n The LFCC did not select the PCFO in a timely manner for the 2010 campaign.\n\n\n\n\n 9\n\x0c 5 CFR 950.801(a)(3) and the CFC 2009/2010 Calendar of Events sets February 19, 2010,\n as the deadline for the LFCC to select a PCFO.\n\n We reviewed the LFCC meeting minutes to determine if the LFCC selected the PCFO by\n the date set in the CFC Calendar of Events. Our review found that the LFCC did not\n select a PCFO until May 17, 2010.\n\n Per the PCFO, the LFCC\xe2\x80\x99s new members assumed their roles on January 1, 2010, and the\n first LFCC meeting did not occur until February 11, 2010. Due to scheduling conflicts\n between members of the LFCC, the next meeting did not occur until May 17, 2010. The\n LFCC stated that it was aware of the late selection of a PCFO for the 2010 campaign and\n would make adjustments for future campaigns.\n\n Due to the late selection of a PCFO, the PCFO was not able to solicit local organizations\n within the CFC Calendar of Events time frame, and the LFCC was not able to notify local\n organizations of eligibility decisions by the CFC Calendar of Events deadline.\n\n Recommendation 4\n\n We recommend that the OCFC ensures that the LFCC follows the dates set forth in the\n CFC Calendar of Events for all future campaigns as related to the PCFO selection.\n\n LFCC Comments:\n\n The LFCC agrees with this finding. The LFCC will modify the Sun Country LFCC\xe2\x80\x99s\n governance document to address the adherence to the regulatory deadlines set forth in the\n CFC Calendar of Events. Additionally, the LFCC will reach out to another campaign\xe2\x80\x99s\n LFCC to receive guidance, which it will replicate in part to use with future PCFOs.\n\n OIG Comment:\n\n We accept the LFCC\xe2\x80\x99s response. However, the correct entity for the LFCC to reach out\n to for guidance is the OCFC and not the LFCCs of other campaigns, as there is no\n guarantee that the other LFCC has implemented proper procedures.\n\n4. Campaign Expense Reimbursement Approval Procedural\n\n The PCFO recovered campaign expenses that were not authorized or approved by the\n LFCC.\n\n According to 5 CFR 950.104(b)(17), it is the LFCC\xe2\x80\x99s responsibility to authorize the\n PCFO\xe2\x80\x99s reimbursement of only those campaign expenses that are legitimate CFC costs\n and are adequately documented.\n\n Additionally, 5 CFR 950.106(a) states that the PCFO shall recover campaign expenses,\n approved by the LFCC, which reflect the actual costs of administering the campaign.\n\n\n\n 10\n\x0cWe reviewed the LFCC meeting minutes to determine if the PCFO\xe2\x80\x99s 2010 campaign\nexpenses were authorized and approved by the LFCC. There was no mention in the\nminutes of campaign expenses by either the PCFO or the LFCC.\n\nWhen we contacted the LFCC to determine if the campaign expenses were approved by\nthe LFCC through other means such as email, fax, etc., the LFCC responded that it does\nnot have any documentation that shows the PCFO requested approval of reimbursement\nother than what was presented at the beginning of the campaign year [within the\napproved budget].\n\nThe LFCC did not meet its responsibilities because it did not request the PCFO\xe2\x80\x99s\nexpenses to authorize and approve before the PCFO was reimbursed. The PCFO also\nshould have provided its campaign expenses to the LFCC for authorization and approval\nbefore reimbursement occurred.\n\nDue to the LFCC not authorizing and approving the expenses, the PCFO could have\ncharged expenses that were not CFC-related, or not related to the 2010 campaign.\nAdditionally, by not submitting actual campaign expenses to the LFCC for approval, the\nPCFO did not allow the LFCC to exercise its authority over the campaign to ensure that\nonly legitimate CFC costs were charged to the campaign.\n\nRecommendation 5\n\nWe recommend that the OCFC ensures that the LFCC understands its responsibility to\nauthorize and approve the PCFO\xe2\x80\x99s reimbursement of actual CFC expenses for all future\ncampaigns.\n\nRecommendation 6\n\nWe recommend that the OCFC and LFCC direct the PCFO to institute procedures to\nsubmit its campaign expenses, with sufficient supporting documentation, to the LFCC for\nreview before it reimburses itself in the future.\n\nLFCC and PCFO Comments:\n\nThe LFCC agrees with this finding and will modify its governance document to address\nthe adherence to the mandatory LFCC authorizations required during the campaign.\nAdditionally, the LFCC will reach out to another campaign\xe2\x80\x99s LFCC to receive guidance,\nwhich it will replicate in part to use with future PCFOs. The PCFO did not respond to\nthis finding.\n\nOIG Comment:\n\nWe accept the LFCC\xe2\x80\x99s response. However, the correct entity for the LFCC to reach out\nto for guidance is the OCFC and not the LFCCs of other campaigns, as there is no\nguarantee that the other LFCC has implemented proper procedures. Additionally, we\n\n\n\n 11\n\x0c would ask the OCFC to require the PCFO to provide its corrective action plan to address\n this issue.\n\n5. Expenses Charged to the Wrong Campaign Procedural\n\n The PCFO charged the 2010 campaign $11,752 in CFC expenses that were related to\n either the 2008 or 2009 campaign.\n\n 5 CFR 950.106(b) states that the PCFO may only recover campaign expenses from\n receipts collected for that campaign period. Additionally, CFC Memorandum 2008-9\n (Audit Expense Reimbursement) describes the expense period of a campaign as up to two\n years in length, not just the calendar year.\n\n We reviewed a sample of campaign expenses charged to the 2010 CFC to determine if\n the amounts charged were accurate and reasonable, properly allocated, charged to the\n correct campaign period, and that all expenses had adequate supporting documentation.\n During our review of campaign expenses, we found the following expenses which were\n incorrectly charged to the 2010 campaign:\n\n \xe2\x80\xa2 $7,000 for IPA audit fees. These expenses were the IPA\xe2\x80\x99s charges for the 2008\n campaign audit. During the summer of 2010, the PCFO\xe2\x80\x99s IPA performed the audit\n for the 2008 campaign. This expense should not have been charged to the 2010\n campaign. Instead, the cost for the 2008 IPA audit should have been charged to the\n 2008 campaign. The PCFO acknowledged that it has been expensing the audit fees\n incorrectly.\n\n \xe2\x80\xa2 $4,752 for CFC expenses that were incurred prior to the start of the 2010 campaign.\n According to the CFC Calendar of events, the latest date for the LFCC to choose a\n PCFO for the 2010 campaign was February 19, 2010. Although the LFCC\xe2\x80\x99s decision\n was not made by the appropriate date, we found the PCFO charged the 2010\n campaign 100 percent of its CFC expense incurred before that date.\n\n \xe2\x80\xa2 Additionally, an undeterminable amount was also charged to the 2010 campaign for\n both the closeout of the 2008 campaign (which was still active through March 31,\n 2010) and for the accounting for and disbursement of 2009 campaign receipts which\n occurred throughout all of calendar year 2010. When we inquired about how\n expenses were charged to the campaign, the PCFO indicated that most administrative\n expenses were charged to the campaign on a calendar year basis. However, based on\n the description of the campaign expense period in CFC Memorandum 2008-9, it is\n clear that charging expenses on a calendar year basis is not appropriate for CFCs.\n\n Since a final disbursement has already been made for the 2008 and 2009 campaigns,\n these expenses, totaling $11,752, cannot be refunded to the 2010 campaign from the 2008\n or 2009 campaign funds.\n\n\n\n\n 12\n\x0c As a result of charging CFC expenses on a calendar year basis, a total of $11,752 was not\n properly distributed to charities participating in the 2010 campaign. The PCFO needs to\n institute procedures to submit its campaign expenses, with supporting documentation, to\n the LFCC for approval before reimbursing itself.\n\n Recommendation 7\n\n We recommend that the OCFC and LFCC verify that the PCFO instituted accounting\n procedures to ensure that CFC expenses are allocated to the campaign period to which\n they relate and not merely to the campaign during which they were incurred.\n\n LFCC and PCFO Comments:\n\n The LFCC and PCFO agree with this finding and the PCFO has corrected its accounting\n procedures to ensure that all CFC expenses are charged to the correct campaign.\n\nC. CAMPAIGN RECEIPTS AND DISBURSEMENTS\n\n 1. Pledge Form Errors Procedural\n\n Our review identified four pledge forms with a total of six errors.\n\n We reviewed a sample of 75 pledge forms to determine if the pledge form data matched\n the PCFO\xe2\x80\x99s pledge form report. Specifically, we verified the donor name, charity code\n number and amount donated, total amount donated, and the donor\xe2\x80\x99s choice to release\n their personal information. Our review of the PCFO\xe2\x80\x99s data entry accuracy identified four\n pledge forms containing a total of six errors between them. Specifically, we identified\n the following errors:\n\n \xe2\x80\xa2 Four pledge forms appeared to be altered. Three of the pledge forms in question had\n the \xe2\x80\x9ctotal gift\xe2\x80\x9d amount of the pledge form changed by either the donor or the\n keyworker in charge of distributing and collecting the pledge forms at the federal\n installations. The PCFO stated that the alterations on the pledge forms were sent to\n them in that manner, and they did not verify that the information was correct because\n they assumed the keyworker had made the alterations. The fourth pledge form had an\n undeterminable charity code. The PCFO stated that it read the charity code as 11704,\n an invalid code, and not 11714, which is a valid code. Consequently, because of this\n error, the donation was distributed as undesignated funds, instead of going to the\n charity selected by the donor.\n\n 5 CFR 950.105(d)(1) states that it is the responsibility of the PCFO to honor employee\n designations. Additionally, 5 CFR 950.105(d)(3) states that it is the responsibility of the\n PCFO to train keyworkers to check and ensure the pledge form is legible, to verify\n arithmetical calculations, and to ensure the donor\xe2\x80\x99s release of personal information is\n filled out properly.\n\n\n\n\n 13\n\x0cThe PCFO accepted as accurate pledge forms containing alterations that could not be\nverified without assistance from the keyworkers. It is the PCFO\xe2\x80\x99s responsibility to\nensure that donor designations are honored.\n\nAs a result of these errors, the PCFO risked not meeting its responsibility to honor\nemployee designations.\n\nRecommendation 8\n\nWe recommend that the OCFC direct the PCFO to train its keyworkers to check and\nensure the pledge forms are legible, have accurate charity codes, and verify that\narithmetical calculations and the donor\xe2\x80\x99s release of personal information is properly filled\nout before the pledge forms are submitted to the PCFO.\n\nLFCC and PCFO Comments:\n\nThe LFCC and PCFO agree with this finding and the PCFO states that the agenda of\nkeyworker training has always included a section on keyworker responsibilities regarding\npledge forms. The current training includes a detailed explanation of what each field\nrequires and what the keyworker should verify. In regard to the undeterminable charity\ncode on the pledge form, it could be read either way. The auditor is reading it as 11714\nbecause 11704 is not a valid charity code. The draft report states that the PCFO read the\ncharity code incorrectly. It is the PCFO\xe2\x80\x99s understanding that it is not to assume what\ncharity code the donor meant and often, donors write in incorrect charity codes. The\nPCFO has added a step to the verification process to contact the keyworker if a pledge\nform looks like it has been altered without the donor\xe2\x80\x99s consent.\n\nOIG Comment:\n\nThe PCFO\xe2\x80\x99s verification process should be to have the Keyworker return the pledge form\nto the donor to either verify the changes or to complete a new pledge form without any\nalterations. If, due to time constraints, there is not enough time to send the pledge form\nback for verification, then the PCFO should consider the altered elements of the pledge\nform to be undesignated pledges.\n\n\xe2\x80\xa2 Two pledge forms (which were also in the first group of errors described above)\n where arithmetical corrections were not applied appropriately. We identified two\n pledge forms where the total gift was less than the total of the individual designations\n listed. Rather than proportionately reducing the individual pledges to match the total\n gift, the PCFO reduced only one of the multiple designations listed on the pledge\n form.\n\n5 CFR 950.402(d) states that if the PCFO \xe2\x80\x9creceives a pledge form that has a total amount\npledged that is less than the sum of the individual designations, the PCFO must honor the\ndesignations by assigning a proportionate share of the total gift to each organization\ndesignated.\xe2\x80\x9d\n\n\n\n 14\n\x0c As a result, the PCFO did not properly honor the donor\xe2\x80\x99s designations.\n\n Recommendation 9\n\n We recommend that the OCFO direct the PCFO to institute procedures to ensure that\n when pledge forms with arithmetical errors are received without time for donor\n correction, it adheres to the directives of 5 CFR 950.402(d).\n\n LFCC and PCFO Comments:\n\n The LFCC and PCFO agree with this finding and the PCFO states that its\xe2\x80\x99 policy is to\n follow 5 CFR 950.402(d) \xe2\x80\x9cby assigning a proportionate share of the total gift to each\n organization designated.\xe2\x80\x9d Pledge forms are reviewed and coded prior to data entry and\n then verified after data entry by an individual separate from data entry, but unfortunately,\n some errors are not caught.\n\n OIG Comment:\n\n We acknowledge the PCFO\xe2\x80\x99s response. However, it should be noted that although the\n PCFO states that its policy is to follow 5 CFR 950.402(d), in the two cases identified it\n clearly violated its own internal policy and the regulation.\n\n In addition, we would like to make it clear that when pledge forms are identified with\n mathematical errors the PCFO\xe2\x80\x99s first course of action should be to return the pledge form\n to the donor for correction. However, if time constraints do not permit that course of\n action then, and only then, should the PCFO make changes to the pledge form in\n accordance with 5 CFR 950.402(d).\n\n2. Audit Fees Not Accrued Procedural\n\n The PCFO did not accrue monies for the audit of the 2010 CFC campaign.\n\n CFC Memorandum 2008-9 states that audit expenses must be paid from the funds of the\n campaign being audited. Since this cost is paid after the campaign closes, the funds\n should be accrued and withheld from the last distribution.\n\n We reviewed the PCFO\xe2\x80\x99s receipt and disbursement schedule and determined that the\n PCFO did not withhold funds from the last distribution of the 2010 campaign to account\n for the IPA audit fees for the 2010 campaign. Therefore, the PCFO will have to use\n funds from a future campaign to cover the 2010 campaign IPA audit expense. In a\n conversation with the PCFO, it stated that it did not understand how to account for the\n audit expenses and it acknowledged that it was accounting for the expense incorrectly.\n\n As a result of not accruing or setting aside 2010 campaign receipts to pay for the audit of\n the 2010 campaign, the PCFO will continue to erroneously pay for the current year\xe2\x80\x99s\n audit with funds from future campaigns.\n\n\n\n 15\n\x0c Recommendation 10\n\n We recommend that the OCFC and LFCC verify that the PCFO has instituted procedures\n to withhold funds from the final disbursement of each CFC campaign to pay for the\n future audit costs related to that specific campaign.\n\n LFCC and PCFO Comments:\n\n The LFCC and PCFO agree with this finding and the PCFO states it has corrected its\n procedures to accrue for the campaign audit costs.\n\n3. Untimely Initial Disbursement Procedural\n\n The PCFO did not make the initial disbursement for the 2010 campaign by the deadline\n set in the CFC Calendar of Events.\n\n The CFC Calendar of Events shows a deadline of April 1, 2011, for all campaigns to\n begin disbursement of the 2010 campaign funds. Additionally, 5 CFR 950.901(i)(1)\n states that the PCFO will distribute receipts beginning April 1, and quarterly thereafter.\n\n We reviewed the PCFO\xe2\x80\x99s Receipt and Disbursement Schedule and the disbursement\n check support to determine if the PCFO made an initial disbursement by April 1, 2011.\n A review of the actual disbursement check support showed that the PCFO did not make\n the first disbursement until April 30, 2011, 29 calendar days after the CFC Calendar of\n Events deadline. We inquired as to why the disbursements were sent after the deadline,\n but did not receive a reply.\n\n As a result of the PCFO not distributing the funds by the deadline set by the OCFC, the\n organizations and federations of the 2010 campaign did not receive their initial\n disbursements in a timely manner.\n\n Recommendation 11\n\n We recommend that the OCFC and LFCC require the PCFO to institute procedures to\n ensure that it adheres to the CFC Calendar of Events deadlines for disbursement of\n campaign funds for future campaigns.\n\n LFCC and PCFO Comments:\n\n The LFCC and PCFO agree with this finding, and the PCFO understands the importance\n of timely disbursements and will adhere to CFC guidelines.\n\n4. Un-Cashed Check Policies and Procedures Procedural\n\n The PCFO\xe2\x80\x99s documented un-cashed check policies and procedures do not include all of\n the requirements outlined in CFC Memorandum 2006-5.\n\n\n\n 16\n\x0c We reviewed the PCFO\xe2\x80\x99s policies and procedures for un-cashed checks to determine if\n the procedures were in accordance with those outlined in CFC Memorandum\n 2006-5. Our review determined that the procedures used by the PCFO did not include\n three documented follow-up attempts to reach the payee by phone and e-mail.\n Additionally, the procedures did not cover the potential situation where a payee becomes\n inactive (i.e., goes out of business) and how the funds would then be distributed. The\n procedures merely state that a \xe2\x80\x9creplacement check will be written.\xe2\x80\x9d\n\n CFC Memorandum 2006-5 part C provides direction to PCFOs regarding un-cashed\n checks. Specifically, the memorandum recommends that the PCFO\xe2\x80\x99s policies and\n procedures for un-cashed checks older than six months should \xe2\x80\x9cinclude at least three\n documented follow-up attempts to reach the payee by phone and e-mail.\xe2\x80\x9d The\n Memorandum also directs the PCFOs to distribute funds due to payees that are no longer\n active as undesignated funds.\n\n Although the memorandum uses the term \xe2\x80\x9crecommend,\xe2\x80\x9d it should be noted that the\n memorandum also states that \xe2\x80\x9cThe procedures outlined in this memo should be\n implemented\xe2\x80\xa6\xe2\x80\x9d As such, the memorandum\xe2\x80\x99s recommended three documented follow-\n up attempts should be viewed as the minimum requirement of the PCFO. Additionally,\n the CFC Audit Guide issued by the OCFC directs the IPA to report as a finding all\n instances where the PCFO\xe2\x80\x99s un-cashed check policies and procedures \xe2\x80\x9cdo not include at\n least three documented follow-up attempts to reach the payee.\xe2\x80\x9d 1\n\n According to the PCFO, it was unaware that the CFC Memorandum 2006-5\n recommended three follow-up attempts and felt the two attempts to reach an organization\n were sufficient.\n\n As a result of inadequate un-cashed check procedures, the PCFO runs the risk of not\n making the minimum effort to determine the status of un-cashed checks. In addition, by\n not having un-cashed check procedures regarding potential inactive charities, the PCFO\n runs the risk of CFC funds not being distributed to other CFC charities in a timely\n manner.\n\n Recommendation 12\n\n We recommend that the OCFC and LFCC ensure that the PCFO updates its un-cashed\n check policies and procedures to include all the requirements outlined in CFC\n Memorandum 2006-5.\n\n LFCC and PCFO Comments:\n\n The LFCC and PCFO agree with this finding. The PCFO will revise its un-cashed check\n policy to \xe2\x80\x9cinclude at least three documented follow-up attempts to reach the payee by\n phone and e-mail.\xe2\x80\x9d\n\n1\n During the IPA\xe2\x80\x99s review of the 2009 campaign, the PCFO\xe2\x80\x99s un-cashed check policies and procedures did include\nthree follow-up attempts.\n\n\n 17\n\x0c OIG Comment:\n\n We accept the PCFO\xe2\x80\x99s response. However, the PCFO also needs to update its un-cashed\n check policy to address the distribution of funds due to payees that are no longer active as\n undesignated funds to fully comply with all requirements outlined in CFC Memorandum\n 2006-5.\n\n5. Approval of One-Time Disbursements Procedural\n\n There are no meeting minutes or other documentation to show that the LFCC approved or\n authorized the amount of one-time disbursements.\n\n 5 CFR 950.901(i)(3) states that the PCFO may make one-time disbursements to\n organizations receiving minimal donations, but the LFCC must determine and authorize\n the amount of these one-time disbursements. Additionally, 5 CFR 950.104(b)(1) states\n that it\xe2\x80\x99s the responsibility of the LFCC to maintain meeting minutes.\n\n During our review, we found that one-time disbursements were made to organizations\n and federations in April 2011, but we were unable to identify notations in the meeting\n minutes showing that the LFCC approved or authorized the amount of these one-time\n disbursements. We asked for an explanation from both the LFCC and the PCFO. The\n LFCC stated that it never received documentation from the PCFO stating its intention to\n make one-time disbursements and requesting approval. The PCFO stated that a meeting\n was held with the LFCC on February 24, 2011, to discuss one-time disbursements up to\n $1,000, but the meeting was never documented since only one PCFO member and two\n LFCC members attended.\n\n As a result of not documenting the LFCC\xe2\x80\x99s approval of one-time disbursements, we were\n unable to determine if the disbursements were authorized or the approved amount.\n\n Recommendation 13\n\n We recommend that the OCFC ensures that the LFCC documents its approval and\n authorization of one-time disbursements.\n\n Recommendation 14\n\n Additionally, we recommend that the PCFO obtains written authorization from the LFCC\n showing the approved amount of one-time disbursements prior to distributing any funds.\n\n LFCC and PCFO Comments:\n\n The LFCC and PCFO agree with this finding. The PCFO states that it has a procedure in\n place to request ceiling levels and amounts of one-time disbursements. It was the\n understanding of the PCFO that the LFCC had approved the ceiling limit for one-time\n\n\n\n\n 18\n\x0c disbursements for the 2010 campaign. The PCFO will request the approval in writing for\n future campaigns.\n\n6. Pledge Loss Calculation and Application Procedural\n\n The PCFO incorrectly calculated and applied pledge loss charged to the charities\n receiving one-time disbursements during the 2010 campaign.\n\n According to 5 CFR 950.901(i)(3), the \xe2\x80\x9cPCFO may deduct the proportionate amount of\n each organization\xe2\x80\x99s share of the campaign\xe2\x80\x99s administrative costs and the average of the\n previous 3 years pledge loss from the one-time disbursement.\xe2\x80\x9d Additionally, CFC\n Memorandum 2008-9 provides guidance and detailed instructions to PCFOs regarding\n the calculation and application of pledge loss.\n\n Using the pledge and receipt totals reported by the PCFO to OPM we calculated the\n average of the previous three campaigns\xe2\x80\x99 pledge loss and compared our calculation to\n that of the PCFO to determine if its calculation was correct. In addition, we also\n recomputed the pledge loss applied to all charities of the 2010 campaign to determine if\n the application of pledge loss was correct. Overall, we found that the PCFO applied\n excess pledge loss of $829. Based on our review, we found that the PCFO made the\n following errors when calculating and applying pledge loss in the 2010 campaign:\n\n \xe2\x80\xa2 The PCFO incorrectly calculated each year\xe2\x80\x99s pledge loss percentage. We found that\n the PCFO used differing totals in its calculation from those officially reported to\n OPM, which resulted in incorrect pledge loss calculations.\n\n \xe2\x80\xa2 The PCFO incorrectly calculated the average three years pledge loss. The PCFO\n incorrectly calculated its pledge loss percentage by averaging the yearly percentages\n rather than totaling the three years pledges and receipts and then determining an\n overall average as detailed in CFC Memorandum 2008-9. The overall average\n calculated by the PCFO was 4.89 percent. However, our calculated pledge loss\n percentage was 3.85 percent.\n\n \xe2\x80\xa2 The PCFO incorrectly applied pledge loss. Although the PCFO calculated a pledge\n loss of 4.89 percent, the average pledge loss applied to the charities receiving one-\n time disbursements in the 2010 campaign was 6.28 percent. Additionally, the PCFO\n did not apply pledge loss to the charities at the same percentage. We found that of the\n 156 charities receiving one-time disbursements, 151 had pledge loss applied at\n percentages between 2.04 percent and 6.43 percent. We also found that 4 charities\n had no pledge loss applied and one charity had pledge loss applied at over 66 percent.\n\n As a result of the PCFO\xe2\x80\x99s incorrect calculation and application of pledge loss, the\n charities receiving one-time disbursements had their disbursements reduced by $829. As\n the 2010 campaign is closed and the amount in question is immaterial, we will not\n request that the PCFO redistribute the funds.\n\n\n\n\n 19\n\x0c Recommendation 15\n\n We recommend that the OCFC and LFCC direct the PCFO to institute policies and\n procedures that incorporate the directives of CFC Memorandum 2008-9 regarding the\n calculation and application of pledge loss to one-time disbursements.\n\n LFCC and PCFO Comments:\n\n The LFCC and PCFO agree with this finding. The PCFO states that it was calculating\n pledge loss from the general ledger entries, which had differing numbers. The PCFO will\n correct its procedures for calculating three year average.\n\n7. Late Notification of Designations and Donors Procedural\n\n The PCFO did not notify CFC participating federations and organizations of the amounts\n of designated and undesignated funds due to them, and of the donors who wished their\n information to be released, by the date set by OPM in the CFC Calendar of Events.\n\n The CFC Calendar of Events lists a deadline of March 15, 2011, for PCFOs to notify\n 2010 CFC participating federations and organizations of the total designations, share of\n undesignated funds, and the donor information for the individuals who authorized the\n release of their information.\n\n We obtained and reviewed a sample of the dated designation letters and donor lists to\n determine if they were sent by the date required in the CFC Calendar of Events. Our\n review found that the PCFO sent the designation letters and donor lists on April 15, 2011.\n The PCFO stated that the delay was due to a misunderstanding of who was responsible\n for sending the notifications after it created a new position to assist with the CFC.\n Additionally, the PCFO stated that some federation notification letters contained the\n wrong member agencies, which had to be corrected prior to sending the notifications.\n\n As a result of the late notification of designations and donors, the federations and\n organizations were not given timely information necessary to properly plan and budget\n for the coming year.\n\n Recommendation 16\n\n We recommend that the OCFC and LFCC direct the PCFO to institute policies and\n procedures to ensure it notifies CFC charities of the amounts of designated and\n undesignated funds due to them, and of the donors who wish their information to be\n released, by the dates set by OPM in the CFC Calendar of Events.\n\n LFCC and PCFO Comments:\n\n The LFCC and PCFO agree with this finding and the PCFO states that federal agencies\n did not submit their pledge forms to the PCFO in a timely manner, which hampers the\n\n\n\n 20\n\x0c PCFO\xe2\x80\x99s ability to process pledge forms in a timely manner. The PCFO and LFCC will\n work with keyworkers to ensure timely turn-ins, and the PCFO is strengthening its\n procedures to ensure timeliness of submissions.\n\n OIG Comment:\n\n We respect the PCFO\xe2\x80\x99s willingness to work with the keyworkers on the timely\n submission of pledge forms. However, all of the deadlines within the CFC Calendar of\n Events must still be followed. The PCFO is given several months to process the pledge\n forms and send the notification and donor letters to the participating organizations. Any\n delay in pledge form submission should not limit the PCFO\xe2\x80\x99s ability to meet OPM\xe2\x80\x99s\n deadlines.\n\n8. Release of Donor Information Procedural\n\n The PCFO did not properly release the information of one donor.\n\n 5 CFR 950.601(c) states that it is the responsibility of the PCFO to forward the donor\xe2\x80\x99s\n information for those who have indicated that they wish this information to be released to\n the recipient organization directly, if the organization is independent, and to the\n organization\xe2\x80\x99s federation if the organization is a member of a federation.\n\n From our sample of 75 pledge forms, we selected 10 donors to determine if the PCFO\n properly released donor information to designated charities. Our selection included 8\n donors that authorized the release of their information and 2 donors that chose not to have\n their information released. The pledge forms contain a section where donors can\n authorize their information be released to charities so they can be acknowledged for their\n donation. If a donor checks one or more of the boxes within the Recognition Options\n box, then the corresponding information is authorized to be released to the designated\n charities.\n\n During our review, we found one instance where donor information was not properly\n released. Specifically, the donor wished to release only their name and the amount\n pledged, but the PCFO also released the donor\xe2\x80\x99s address. The PCFO stated that this was\n an oversight.\n\n As a result of incorrectly releasing donor information, the PCFO may have caused the\n donor to be contacted unwillingly by the charity, which may affect the possibility of the\n donor contributing to the CFC in the future.\n\n Recommendation 17\n\n We recommend that the OCFC and LFCC ensure that the PCFO is properly releasing\n contributor information for those who have indicated that they want their information\n released.\n\n\n\n\n 21\n\x0c LFCC and PCFO Comments:\n\n The LFCC and PCFO agree with this finding. The PCFO has a procedure that pledge\n forms are checked and coded before data entry and then verified after data entry by an\n individual separate from data entry. Unfortunately, occasionally some errors are not\n caught. However, the PCFO will make an attempt to verify the donor\xe2\x80\x99s wishes.\n\n OIG Comment:\n\n We respect the PCFO\xe2\x80\x99s attempt to verify the donor\xe2\x80\x99s wishes. However, the PCFO needs\n to institute procedures to ensure it is properly releasing contributor information for those\n who have indicated their information to be released. To ensure the procedures are\n adequate, the PCFO\xe2\x80\x99s procedures should be submitted to the OCFC for review.\n\n9. CFC Receipts Applied to the Wrong Campaign Procedural\n\n The PCFO did not properly allocate CFC receipts to the campaign period to which they\n were received, which resulted in it disbursing $12,103 more than what was actually\n received during the 2010 campaign.\n\n 5 CFR 950.901(d) states that payroll allotments for the CFC will be authorized in one\n year terms. The term authorizations will be in effect for one full year (26, 24, or 12 pay\n periods depending on the allotter\xe2\x80\x99s pay schedule) starting with the first pay period\n beginning in January and ending with the last pay period that begins in December. CFC\n Memorandum 2006-5 requires PCFOs to track CFC receipts by payroll office to ensure\n that receipts are credited to the appropriate campaign.\n\n During our analysis of the 2010 campaign receipts, we reviewed the CFC bank\n statements for the period of the 2010 campaign and individually allocated the deposits,\n interest, and banking fees received to the appropriate campaign. Our review found that\n the PCFO had reported excess receipts for the 2010 campaign of $12,103. Specifically,\n we determined that $11,616 was traceable to the PCFO misapplying deposits received in\n January 2011 to the 2010 campaign. These receipts should have been credited to the\n 2009 campaign since they were from the last pay period that began in December. In\n addition, we were unable to identify any deposits related to the $487 reported as 2010\n campaign funds received in February 2012 by the PCFO.\n\n Due to the fact that the 2010 campaign is now closed and the excess disbursement is less\n than one percent of the total receipts, we will not recommend that the PCFO request\n refunds from the charities of the 2010 campaign.\n\n As a result of misallocating receipts to the 2010 campaign, the PCFO disbursed an excess\n of $12,103 to the 2010 campaign that rightfully belonged to other campaigns.\n\n\n\n\n 22\n\x0c Recommendation 18\n\n We recommend that the OCFC and LFCC require the PCFO to institute procedures to\n allocate all deposits, interest, and fees to the appropriate campaign (especially during the\n period when funds are received from multiple campaigns).\n\n LFCC and PCFO Comments:\n\n The LFCC and PCFO agree with this finding and the PCFO states that for the month in\n question, the applying of funds was delegated to one of the accounting assistants. The\n PCFO will ensure a separate staff person verifies the application of campaign funds.\n\n OIG Comment:\n\n We recognize the PCFO\xe2\x80\x99s additional oversight to verify the application of campaign\n funds. However, the PCFO also needs to institute procedures addressing the\n requirements in CFC Memorandum 2006-5 to ensure that all deposits, interest, and fees\n are allocated to the appropriate campaign.\n\nD. ELIGIBILITY\n\n 1. Local Organization Application Period Procedural\n\n The LFCC accepted applications from local organizations and federations for\n participation in the 2010 CFC beyond the date set in the CFC Calendar of Events.\n\n The CFC 2009/2010 Calendar of Events lists the local application period deadline for the\n 2010 campaign as April 2, 2010.\n\n We reviewed the public notice to local organizations announcing the application period\n for the 2010 campaign to determine if the application period closed by the deadline set in\n the CFC 2009/2010 Calendar of Events. We found that the LFCC accepted applications\n from March 9, 2010 through April 7, 2010, which was five days after the deadline set in\n the CFC Calendar of Events.\n\n According to the PCFO, the February 2010 LFCC meeting ran longer than expected due\n to the number of items that needed to be reviewed and discussed with the new LFCC\n members. As a result, specific deadlines were never formally entered into the LFCC\xe2\x80\x99s\n meeting minutes.\n\n As a result of the LFCC accepting local applications beyond the deadline set by OPM, it\n did not have the appropriate amount of time to review the applications, make eligibility\n decisions, and notify the local organizations of their eligibility decisions.\n\n\n\n\n 23\n\x0c Recommendation 19\n\n We recommend that the OCFC ensures that the LFCC follows the deadlines set in the\n CFC Calendar of Events for all future campaigns as they relate to the local application\n period.\n\n LFCC Comments:\n\n The LFCC agrees with this finding. The LFCC will modify the Sun Country LFCC\xe2\x80\x99s\n governance document to address the adherence to the regulatory deadlines set forth in the\n CFC Calendar of Events. Additionally, the LFCC will reach out to another campaign\xe2\x80\x99s\n LFCC to receive guidance, which it will replicate in part to use with future PCFOs.\n\n OIG Comment:\n\n We accept the LFCC\xe2\x80\x99s response. However, the correct entity for the LFCC to reach out\n to for guidance is the OCFC and not the LFCCs of other campaigns, as there is no\n guarantee that the other LFCC has implemented proper procedures.\n\n2. Local Organization Applications Procedural\n\n The LFCC approved two family support and youth activity organizations which did not\n contain a letter from the military commander certifying that the organizations met the\n special requirements to participate in the 2010 CFC.\n\n According to 5 CFR 950.204(c), a family support and youth activity organization that is\n certified by the commander of a military installation as meeting the eligibility criteria\n contained in 5 CFR 950.204(d) may appear on the list of local organizations and be\n supported by CFC funds.\n\n We reviewed a sample of local agency and federation applications to determine if the\n applications were complete and approved by a member of the LFCC. During our review,\n we found that two of the local agencies were family support and youth activity\n organizations at a military command. The applications contained a letter from the\n commanding officer at Fort Bliss, but the letter did not certify that the organizations met\n the eligibility criteria of 5 CFR 950.204(d). Discussions with the PCFO and LFCC\n revealed that neither party knew that the letter did not contain the required certification.\n\n As a result of the LFCC admitting two agencies into the 2010 campaign that did not\n contain a letter from the military commander certifying that the organizations met the\n special requirements to participate in the 2010 CFC, the campaign was at risk of having\n ineligible organizations receiving federal employee designations.\n\n\n\n\n 24\n\x0c Recommendation 20\n\n We recommend that the OCFC direct the LFCC to institute application review procedures\n that verify all eligibility requirements prior to allowing a local organization or federation\n to participate in the CFC.\n\n LFCC Comments:\n\n The LFCC agrees with this finding. The LFCC will modify the Sun Country LFCC\xe2\x80\x99s\n governance document and will reach out to another campaign\xe2\x80\x99s LFCC to receive\n guidance.\n\n OIG Comment:\n\n We accept the LFCC\xe2\x80\x99s response. However, the correct entity for the LFCC to reach out\n to for guidance is the OCFC and not the LFCCs of other campaigns, as there is no\n guarantee that the other LFCC has implemented proper procedures.\n\n3. Local Eligibility Notification Letters Procedural\n\n The LFCC did not issue notice of its eligibility decisions to local organizations within the\n time frames set by federal regulations.\n\n 5 CFR 950.801(a)(5) states the LFCC must issue notice of its eligibility decisions within\n 15 business days of the closing date for receipt of applications. Additionally, the CFC\n 2009/2010 Calendar of Events lists the deadline for LFCCs to notify local organizations\n of eligibility decisions as April 30, 2010.\n\n We reviewed the public notice detailing the application period for local charities and\n federations for the 2010 campaign to determine the closing date of the application period.\n We then compared the application closing date to the date when eligibility\n announcements were sent out, in order to determine if the notifications were issued\n within 15 business days of the closing date for applications. We found that the LFCC\n accepted local applications through April 7, 2010. However, the initial eligibility\n decision letters were not sent until May 5, 2010, which was 20 business days after the\n application closing period. Additionally, this was after the deadline listed in the CFC\n Calendar of Events. When asked about the late eligibility letters, the PCFO stated the\n letters were sent late due to the fact that the LFCC did not meet until May 3, 2010, to\n review the local applications.\n\n As a result of not issuing the eligibility notifications within the 15 business days required\n by regulations, and by the deadline set in the CFC Calendar of Events, the LFCC ran the\n risk of misleading the local organizations to believe their applications were denied or not\n received by the LFCC. Additionally, local organizations were not given sufficient time\n to appeal unfavorable decisions, and were unable to properly plan for annual cash flows\n and expenditures in a timely manner.\n\n\n\n 25\n\x0c Recommendation 21\n\n We recommend that the OCFC ensures that the LFCC understands its responsibilities and\n sends the local eligibility decisions in accordance with federal regulations and deadlines\n set by the CFC Calendar of Events.\n\n LFCC Comments:\n\n The LFCC agrees with the finding. The LFCC will modify the Sun Country LFCC\xe2\x80\x99s\n governance document to address the adherence to the regulatory deadlines set forth in the\n CFC Calendar of Events. Additionally, the LFCC will reach out to another campaign\xe2\x80\x99s\n LFCC to receive guidance, which it will replicate in part to use with future PCFOs.\n\n OIG Comment:\n\n We accept the LFCC\xe2\x80\x99s response. However, the correct entity for the LFCC to reach out\n to for guidance is the OCFC and not the LFCCs of other campaigns, as there is no\n guarantee that the other LFCC has implemented proper procedures.\n\nE. PCFO AS A FEDERATION\n\n Our review of the PCFO\xe2\x80\x99s activities as a federation showed that it complied with the\n applicable provisions of 5 CFR 950.\n\nF. FRAUD AND ABUSE\n\n 1. Fraud and Abuse Prevention and Detection Improvement Area\n\n The UWEPC has limited policies and procedures in place for preventing and detecting\n fraud and abuse.\n\n During our review, we issued a questionnaire to the PCFO in regards to fraud and abuse\n in order to gain an understanding of the policies and procedures in place at the PCFO.\n While we acknowledge that this area of review is not addressed in or required by the CFC\n regulations, we believe the implementation of the minimum level of controls is important\n because the PCFO is the organization charged with administering the campaign and the\n monies donated by federal employees, and any deficiencies identified could adversely\n affect incoming donations.\n\n Our review of the UWEPC\xe2\x80\x99s responses to our questionnaire resulted in our\n recommending two suggestions for improvement that would not only benefit the CFC,\n but all of its charitable functions. Specifically, we suggest that the UWEPC implement\n the following:\n\n \xe2\x80\xa2 Create a written Anti-Fraud policy statement to be signed by all employees and\n volunteers to help deter misconduct, and\n\n\n\n 26\n\x0c \xe2\x80\xa2 Institute a formal training program on fraud awareness for all employees and\n volunteers to attend and gain a better understanding of what fraud is, how to prevent\n fraud from happening, indicators to detect fraud, and what actions to take if fraud is\n detected.\n\n Recommendation 22\n\n We recommend that the OCFC strongly suggest that the UWEPC, in its role as PCFO,\n implement the suggestions outlined above.\n\n Recommendation 23\n\n We recommend that the OCFC consider a memorandum to all PCFOs requiring the\n implementation of the above suggestions as a minimum requirement in the future.\n\n LFCC and PCFO Comments:\n\n The LFCC and PCFO agree with the recommendations, and the PCFO states that it will\n review its anti-fraud policies.\n\nG. DISPOSITION OF THE CAMPAIGN\n\n Based on the number of findings, the nature of the issues identified in this report, and the\n LFCC and PCFO\xe2\x80\x99s lack of understanding of the CFC regulations, it appears that the LFCC\n and PCFO are not equipped to handle the responsibilities of the CFC.\n\n This report documents numerous instances where both the LFCC and the PCFO did not\n fulfill their responsibilities as outlined in 5 CFR 950. In summary, we noted the following\n eight issues involving the LFCC:\n\n 1. The LFCC accepted and approved a PCFO application that included incomplete\n statements required by the federal regulations;\n 2. The LFCC solicited PCFOs untimely;\n 3. The LFCC selected a PCFO untimely;\n 4. The LFCC did not review or approve the expense reimbursement for the PCFO;\n 5. The LFCC did not authorize or approve one-time disbursements to be made by the\n PCFO;\n 6. The LFCC solicited local applications untimely;\n 7. The LFCC failed to properly approve local applications; and\n 8. The LFCC issued the notices of eligibility decisions late.\n\n Additionally, we noted the following 12 issues related to the PCFO:\n\n 1. The PCFO failed to submit campaign expenses to the LFCC for approval prior to\n reimbursement;\n 2. The PCFO charged campaign expenses to the wrong campaign;\n\n\n 27\n\x0c 3. The PCFO accepted pledge forms with errors;\n 4. The PCFO failed to accrue audit expenses and match them with the proper campaign;\n 5. The PCFO issued the initial disbursement late;\n 6. The PCFO\xe2\x80\x99s policies and procedures for un-cashed checks did not comply with CFC\n Memorandum 2006-05;\n 7. The PCFO did not obtain written authorization for one-time disbursements;\n 8. The PCFO incorrectly calculated and applied pledge loss;\n 9. The PCFO issued designation and donor letters late;\n 10. The PCFO improperly released donor information;\n 11. The PCFO failed to properly account for CFC receipts by campaign; and\n 12. The PCFO has limited policies and procedures to prevent and detect fraud and abuse.\n\nAs a PCFO, the United Way of El Paso County is responsible for conducting an effective and\nefficient campaign, acting as the fiscal agent of the LFCC, and ensuring that donor\ndesignations are honored. The LFCC is responsible for selecting a qualified PCFO,\ncoordinating the local campaign, and being the central point of information regarding the\nCFC among federal employees. To be successful, the PCFO and LFCC must work together\nto establish and implement policies, procedures, and controls necessary to ensure that their\nresponsibilities are carried out in an efficient and effective manner in accordance with federal\nregulations.\n\nAlthough the LFCC and PCFO stated their willingness to institute corrective actions, the\nnumerous errors specifically attributable to each party, and their lack of understanding of the\nCFC regulations, do not make us confident in their ability to conduct an effective and\nefficient campaign.\n\nRecommendation 24\n\nAs a result of the numerous findings, the nature of the issues identified in this report, and the\nLFCC and PCFO\xe2\x80\x99s lack of understanding of the CFC regulations, we recommend that the\nOCFC seek to merge the Sun Country CFC with another geographically adjacent campaign,\nadministered and conducted by a new PCFO and LFCC that are more equipped to handle the\nresponsibilities of the CFC.\n\n\n\n\n 28\n\x0c IV. MAJOR CONTRIBUTORS TO THIS REPORT\nSpecial Audits Group\n\n , Auditor-In-Charge\n\n\n , Group Chief,\n\n , Senior Team Leader\n\n , Senior Team Leader\n\n\n\n\n 29\n\x0c APPENDIX\n\n\n\n\nSun Country\nCombined Federal Campaign\n\n November 5, 2012\n\n\n\n\n Office of Personnel Management\n Office of the Inspector General\n 1900 E. Street, NW, Room 6400\n Washington, DC 20415-1100\n\n Dear\n\n We appreciate the opportunity to respond to the draft report on the Sun Country 2009 and 2010 Combined\n Federal Campaign. We find the draft audit to be accurate and fair. The recommendations have been useful in\n reviewing our procedures to insure that the Sun Country CFC is in compliance with the regulations contained\n with Title 5, Code of Federal Regulations, Part 950.\n\n Attached are our responses to the recommendations contained in the draft audit report.\n\n Sincerely,\n\n\n\n\n Chairperson, Local Federal Coordinating Committee Deborah A. Zuloaga\n CEO, Principal Combined Fund Organization\n\x0c APPENDIX\n 1918 TEXAS AVENUE, P.O. BOX 3488 \xc2\xab EL PASO, TX 79923 \xe2\x80\xa2 (915) 533-2434\n\n\n\n\nSun Country\nCombined Federal Campaign\n\n\n November 5, 2012\n\n\n\n Office of Personnel Management\n Office of the Inspector General\n 1900 E. Street NW, Room 6400\n Washington, DC 20415-1100\n\n\n\n The LFCC is in agreement with the findings and recommendations of the audit report. In an effort to ensure that the LFCC\n understands the extent of its responsibilities we will be modifying the Sun Country LFCC\'s governance document to\n address the adherence to the regulatory deadlines set forth in the CFC Calendar of Events as well as the mandatory LFCC\n authorizations required by the PCFO during the campaign.\n\n The LFCC chairperson reached out to the LFCC of the New Mexico-Central CFC who provided guidance which the Sun\n Country CFC will replicate in part. A similar Memorandum of Understanding will be used with future PCFOs which in turn will\n provide the direction to the PCFO addressing the specific recommendations of this report.\n\n We do not agree with the wording in the second paragraph of the report and hereby request that IG re-phrase the language\n to read "although the area is not specified by the regulations, we provided suggestions for the improvement in the area of\n fraud and abuse prevention and detection".\n\n\n\n\n Chairperson, Local Federal Coordinating Committee\n\n\n\n\n 1918 TEXAS AVENUE, P.O. BOX 3488 \xe2\x80\xa2 EL PASO, TX 79923 \xe2\x80\xa2 (915)533-2434\n\x0c APPENDIX\n\n United Way of United\n El Paso County Way\n\n PCFO response to audit draft report\n\nThe PCFO is in agreement with the findings and recommendations of the audit report. Below are the PCFO\'s\nresponses to each recommendation.\n\n\nRecommendation 1 - The PCFO has taken the necessary steps to update and maintain current Federal regulation\ncopies of required statements and language for CFC purposes.\n\n\nRecommendation 7 - The PCFO has corrected the accounting procedures to ensure all CFC expenses are\ncharged to correct campaign year.\n\n\nRecommendation 8 - The agenda of keyworker training has always included a section on keyworker\nresponsibilities regarding pledge cards. The current training includes a detailed explanation of what each\nfield requires and what the keyworker should verify.\n\n\nRecommendation 9 - The PCFO has added a step to the verification process to contact the keyworker if a pledge\ncard looks like it has been altered without the donor\'s consent.\n\n\nRecommendation 10 - The PCFO\'s policy is to follow 5CFR 950.402(d) "by assigning a proportionate share\nof the total gift to each organization designated." Pledge cards are reviewed and coded prior to data entry\nand then verified after data entry by an individual separate from data entry. Unfortunately, some errors are\nnot caught.\n\n\n Deleted by the OIG\n Not Relevant to the Final Report\n\n\nRecommendation 12 - The PCFO has corrected its procedures for recording and disbursing audit costs.\n\n\nRecommendation 13 - The PCFO understands the importance of timely disbursements and will adhere to CFC\nguidelines.\n\n\nRecommendation 14 - Per CFC recommendations, the PCFO will revise the un-cashed check policy - "include at\nleast three documented follow-up attempts to reach the payee by phone and e-mail."\n\n\nRecommendation 15 - The PCFO has a procedure to submit a request to the LFCC for ceiling levels and amounts\nof one-time disbursements. It was the PCFO\'s understanding that the LFCC had approved the ceiling limit. The\nPCFO will now request the approval in writing.\n\n\n Deleted by the OIG\n Not Relevant to the Final Report\n\n\nRecommendation 16 - The PCFO was calculating pledge loss from of the general ledger entries, which had\ndiffering numbers. The PCFO will correct its procedures for calculating three year average.\n\n\n Deleted by OIG\n Not Relevant to the Final Report\n\x0c APPENDIX\n\n\n\nRecommendation 17 - Unfortunately, several federal agencies did not submit their pledge cards to the PCFO in a\ntimely manner, which hampers the PCFO\'s ability to process pledge cards in a timely manner. The PCFO and\nLFCC are working with keyworkers to ensure timely turn-ins and the PCFO is strengthening its procedures to\nensure timeliness of submissions.\n\n\nRecommendation 18 - The PCFO has a procedure that pledge cards are checked and coded before data entry\nand then verified after data entry by an individual separate from data entry. Unfortunately, occasionally some\nerrors are not caught. In regards to the pledge to 11704 or 11714, the pledge card could be read either way. The\nnumber has a zero with a line through it. The auditor is reading it as 11714 because 11704 is not a valid agency\ncode. The draft audit report states that the PCFO read the code number wrong. It is the PCFO\'s understanding\nthat it is not to assume what agency code the donor meant. Often, donors write in incorrect agency code numbers.\nThe PCFO will make an attempt to verify the donor\'s wishes.\n\n\nRecommendation 19 - For the month in question, the applying of funds was delegated to one of the accounting\nassistants. The PCFO will ensure that a separate staff person will verify the application of campaign funds.\n\nRecommendation 23 - The PCFO will review its anti-fraud policies.\n\x0c'