oversight

Audit of 2006 & 2007 Fort Hood CFC in Killeen, Texas

Published by the Office of Personnel Management, Office of Inspector General on 2010-03-11.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                     u.s. OFFICE OF PERSONNEL MANAGEMENT
                                                                OFFICE OF THE INSPECTOR GENERAL
                                                                                 OFFICE OF AUDITS




Final Audit Report
Subject:


                    AUDIT OF THE 2006 AND 2007

                           FORT HOOD

                  COMBINED FEDERAL CAMPAIGNS

                        KILLEEN, TEXAS





                                          Report No. 3A-CF-OO-09-040


                                          Date:         March 11,2010




                                                          --CAUTION-­
This audit report has been distributed to Federal officials who are responsible for the administration of the audited program. This audit
report may contain proprietary dala which is protected by Federal law (18 U.s.c. 1905). Therefore, while this audit report is available
dnder the Freedom of Intcrmatlon Act and made available 10 the public on the OIG webpage, caution needs to be exercised before
releasing the report to the general public as it may contain proprietary information that was redacted from the publicly distributed copy.
                          UNITED STATES OFFICE OF PERSONNEL MANAGEMENT

                                               Washington, DC 20415



  Office of the
Inspector General




                                           AUDIT REPORT


                                 AUDIT OF THE 2006 AND 2007

                                        FORT HOOD

                               COMBINED FEDERAL CAMPAIGNS

                                      KILLEEN, TEXAS



                  Report No. 3A-CF-OO-09-040                      Da~: March    11   ;
                                                                                         2010




                                                                   Michael R. Esser
                                                                   Assistant Inspector General
                                                                     for Audits




        www.opm.gov                                                                             www.usajobs.gDv
                            UNITED STATES OFFICE OF PERSONNEL MANAGEMENT

                                                 Washington, DC 20415


  Office of the
Inspector General




                                        EXECUTIVE SUMMARY





                                   AUDIT OF THE 2006 AND 2007

                                          FORT HOOD

                                 COMBINED FEDERAL CAMPAIGNS

                                       KILLEEN, TEXAS



                    Report No, 3A-CF-OO-09-040                      Da~:   March 11, 2010

       The Office of the Inspector General has completed an audit of the 2006 and 2007 Fort Hood
       Combined Federal Campaigns (CFC). The United Way ofthe Greater Fort Hood Area
       (UWGFHA), located in Killeen, Texas, served as the Principal Combined Fund Organization
       (PCFO) during both campaigns. Our main Objective was to determine if the Fort Hood CFC was
       in compliance with Title 5, Code of Federal Regulations, Part 950 (5 CFR 950), including the
       responsibilities of both the PCFO and Local Federal Coordinating Committee (LFCC). The
       audit identified seven instances of non-compliance with the regulations (5 CFR 950) governing
       theCFC.

       The following findings represent the results of our audit work as of the date of this report.

                                   BUDGET AND CAMPAIGN EXPENSES

       •    Campaign Expenses Charged to the Incorrect Campaign Year

            The PCFO charged the 2007 campaign for expenses related to the 2006 and 2008 campaigns.

       •    Campaign Expense Reimbursement Not Approved by the LFCC

            The PCFO did not request approval from the LFCC prior to reimbursing itself for 2007
            campaign expenses.



                                                         I

        www.opm.gov                                                                             www.usajebs.gcv
•	 PCFO Application Not in Compliance

   The UWGFHA's PCFO application did not include all of the statements required per the
   Federal regulations.


                     CAMPAIGN RECEIPTS AND DISBURSEMENTS


•	 CFC Receipts Applied to the Incorrect Campaign Year

   The PCFO did not use proper procedures to determine the campaign year funds belong to.
   As a result, the funds designated by Federal employees were not properly accounted for and
   disbursed according to the donor's wishes.

•	 Incorrect Pledge Loss Applied to One-Time Disbursements

   The PCFO did not apply the appropriate pledge loss percentage to agencies and federations
   receiving one-time disbursements.

•	 Pledge Card Errors

   The PCFO incorrectly input two pledge cards which resulted in a misapplied designation and
   the improper release of donor information.


                                         ELIGIBILITY


•	 Local Eligibility Notification Letters Mailed Untimely

   The LFCC did not mail local agency and federation eligibility letters to applicants of the
   2007 campaign by the date required in the Federal regulations.

                                 PCFO AS A FEDERATION

Our review of the PCFO' s activities as a federation did not identify any problems.

                                   AUDIT GUIDE REVIEW

Our review of the agreed-upon procedures as performed by the PCFO's Independent Public
Accountant did not identify any problems.




                                                II
                                       CONTENTS

                                                                                     PAGE


       EXECUTIVE SUMMARY	                                                                   i


 I.    INTRODUCTION AND BACKGROUND	                                                         1


II.    OBJECTIVES, SCOPE, AND METHODOLOGy	                                                  3


III.   AUDIT FINDINGS	                                                                      7


        A.	   BUDGET AND CAMPAIGN'EXPENSES                                                  7


              1. Campaign Expenses Charged to the Incorrect Campaign year	                  7

              2. Campaign Expense Reimbursement Not Approved by the LFCC                    8

              3. PCFO Application Not in Compliance	                                        9


        B.	   CAMPAIGN RECEIPTS AND DISBURSEMENTS                                           10


              L CFC Receipts Applied to the Incorrect Campaign Year                         10

              2. Incorrect Pledge Loss Applied to One-Time Disbursements	                   11

              3. Pledge Card Errors	                                                        11


        C.	   ELIGIBILITY                                                                   12


              1. Local Eligibility Notification Letters Mailed Untimely	                    12


        D.	   PCFO AS A FEDERATION                                                          13


        E.	   AUDIT GUIDE REVIEW                                                            13


IV.    MAJOR CONTRIBUTORS TO THIS REPORT	                                                   14


       APPENDIX	       (The PCFO and LFCC's response, dated October 22,2009, to the draft
                       audit report.)
                    I. INTRODUCTION AND BACKGROUND


Introduction

This report details the findings and conclusions resulting from our audit of the Fort Hood
Combined Federal Campaigns (CFC) for 2006 and 2007. The audit was performed by the Office
of Personnel Management's (OPM) Office ofthe Inspector General (OIG), as authorized by the
Inspector General Act of 1978, as amended.

Background

The CFC is the sole authorized fund-raising drive conducted in Federal installations throughout
the world. It consists of 260 separate local campaign organizations located throughout the
United States, including Puerto Rico, the Virgin Islands, and foreign assignments. The Office of
Combined Federal Campaign Operations (OCFCO) at OPM has the responsibility for
management of the CFC. This includes publishing regulations, memorandums, and other forms
of guidance to Federal officials and private organizations to ensure that all campaign objectives
are achieved.

CFC's are conducted by a Local Federal Coordinating Committee (LFCC) and administered by a
Principal Combined Fund Organization (PCFO). The LFCC is responsible for organizing the
local CFC, determining the eligibility of local voluntary organizations, selecting and supervising
the activities of the PCFO, and acting upon any problems relating to a voluntary agency's
noncompliance with the policies and procedures of the CFC. The PCFO is responsible for
training employee key-workers and volunteers; preparing pledge cards and brochures;
distributing campaign receipts; submitting to an extensive and thorough audit of its CFC
operations by an Independent Certified Public Accountant (IPA) in accordance with generally
accepted auditing standards; cooperating fully with OIG audit staff during audits and
evaluations; responding in a timely and appropriate manner to all inquiries from participating
organizations, the LFCC, and the Director of OPM; and consulting with federated groups on the
operation of the local campaign.

Executive Orders No. 12353 and No. 12404 established a system for administering an annual
charitable solicitation drive among federal civilian and military employees. Title 5, Code of
Federal Regulations Part 950 (5 CFR 950), the regulations governing CFC operations, sets forth
ground rules under which charitable organizations receive federal employee donations.
Compliance with these regulations is the responsibility of the PCFO and LFCC. Management of
the PCFO is also responsible for establishing and maintaining a system of internal controls.

All findings from our previous audit of the Fort Hood CFC (Report Number 3A-CF-OO-OI-041)
dated May 31, 2001) covering the 1998 and 1999 campaign years have been satisfactorily
resolved.

The initial results of our audit were discussed with PCFO and LFCC officials during an exit
conference held on June 19,2009. A draft report was provided to the PCFO and the LFCC on




                                                1

October 5, 2009, for review and comment. The PCFO's response to the draft report was
considered in preparation of this final report and is included as an Appendix.




                                             2

              II. OBJECTIVES, SCOPE, AND METHODOLOGY


OBJECTIVES

The primary purpose of our audit was to determine if the Fort Hood CFC was in compliance with
5 CFR 950, including the activities of both the PCFO and LFCC. Our specific audit objectives
for the 2007 campaign were as follows:

       Budget and Campaign Expenses
          •	 To determine if the PCFO's budget was in accordance with the regulations.
          •	 To determine if expenses charged to the campaign were actual, reasonable, did
              not exceedl IO percent of the approved budget, and were properly allocated.

       Campaign Receipts and Disbursements
          •	 To determine if the total amount of funds received for the campaign, plus interest
             income and less expenses, was properly distributed to the designated
             organizations.
          •	 To determine if the total amount of undesignated funds was properly allocated
             and distributed to the various CFC participants.

       Eligibility
           •	 To determine ifthe charitable organization application process was open for the
               required 30 day period; if applications were appropriately reviewed, evaluated,
               and approved; and if the appeals process for rejected applicants was followed.

       PCFO as a Federation
          • . To determine if the PCFO distributed funds only to member agencies.
          •	 To determine if the PCFO charged its member agencies for expenses in a
              reasonable manner.

Additionally, our audit objective for the 2006 campaign was:

       Audit Guide Review
          •	 To determine if the IPA completed the Agreed-Upon Procedures (AUP) as
              outlined in the CFC Audit Guide (For Campaigns with Pledges $150,000 to
              $999,999).

SCOPE Al'lD METHODOLOGY

We conducted this performance audit in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the audit to obtain
sufficient and appropriate evidence to provide a reasonable basis for our findings and
conclusions based on the audit objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on the audit objectives.




                                               3

The audit covered campaign years 2006 and 2007. The United Way of the Greater Fort Hood
Area (UWGFHA), located in Killeen, Texas, served as the PCFO during both campaigns. The
audit fieldwork was conducted at the offices of the PCFO from June 15 through June 19,2009.
Additional audit work was completed at our Washington, D.C. office.

The Fort Hood CFC received campaign pledges, collected campaign receipts, and incurred
campaign administrative expenses for the 2006 and 2007 campaigns as shown below:

    Campaign               Total                      Total                Administrative
      Year                Pledges                    Receipts                Expenses
      2006               $717,282	                   $644,018                 $105,524
      2007               $586,885	                   $513,977                 $ 94,851

In conducting the audit we relied to varying degrees on computer-generated data. Our review of
a sample of campaign expenses and supporting data, a sample of pledge card entries, and the
distribution of campaign contributions and related bank statements, verified that the computer­
generated data used in conducting the audit was reliable. Nothing came to our attention during
our review of the data to cause us to doubt its reliability.

We considered the campaign's internal control structure in planning the audit procedures. We
gained an understanding of management procedures and controls to the extent necessary to
achieve our audit objectives. We relied primarily on substantive testing rather than tests of
internal controls. The audit included such tests of the accounting records and such other auditing
procedures as we considered necessary to determine compliance with 5 CFR 950 and CFC
Memorandums.

In regard to our objectives concerning the 2007 campaign's budget and campaign expenses, we
accomplished the following:
    •	 Reviewed the PCFO application to verify if it was complete.
    •	 Reviewed a copy of the public notice to prospective PCFOs and LFCC meeting minutes
        to verify that the PCFO was selected timely.
    •	 Traced and reconciled amounts on the PCFO's Schedule of Actual Expenses to the
        PCFO's general ledger.
    •	 Reviewed supporting documentation for expense transactions included in the sample of 6
        out of 14 campaign expense reimbursement payments to the PCFO to verify that the
        expenses were allowable. We judgmentally selected the largest five reimbursement
        checks. We also judgmentalJy selected one additional check because the timing of the
        reimbursement appeared odd.
    •	 Reviewed the LFCC meeting minutes and verified if the LFCC authorized the PCFO's
        reimbursement of campaign expenses.
    •	 Compared the budgeted expenses to actual expenses and determined if actual expenses
        exceeded 110 percent of the approved budget.




                                                4

To determine if the 2007 campaign's receipts and disbursements were handled in accordance
with CFC regulations, we reviewed the following:

   •	 A judgmental sample of35 out o.f7,830 pledge cards from the 2007 PCFO's Donor
      Pledge Campaign Report (starting with page 25, selected highest contributor listed on
      every 25 th page for a total of35) and compared pledge information from the report to the
      actual pledge card.
   •	 Cancelled distribution checks to verify that the appropriate amount was distributed in a
      timely manner.
   •	 One-time disbursements to verify that the PCFO properly calculated pledge loss and
      disbursed the funds in accordance with the ceiling amount established by the LFCC.
   •	 The PCFO's most recent listing of outstanding checks to verify that the PCFO was
      following its policy for such checks.
   •	 The Pledge Notification Letters to verify that the PCFO notified the CFC agencies ofthe
      designated and undesignated amounts due them by the date required in the regulations.
   •	 The donor list letters sent by the PCFO to organizations to verify the letters properly
      notify the organization of the donors who wish to be recognized.
   •	 Forms 1417 provided by the PCFO and the OCFCO to identify material differences.
   •	 CFC receipts and distributions from the PCFO's campaign bank statements, campaign
      receipt, agency disbursement and campaign expense support to verify whether the PCFO
      accurately recorded and disbursed all 2007 campaign receipts and disbursements.
   •	 All bank statements used by the PCFO to verify that the PCFO was properly accounting
      for and distributing funds.
   •	 The PCFO's cutoff procedures and bank statements to verify that funds were allocated to
      the appropriate campaign year..
   •	 The General Designation Options and Undesignated Funds Spreadsheet and the
      Allocations and Disbursements Spreadsheet to verify disbursements were accurate and
      proportionate to the PCFO's allocation rates.

In order to determine that the LFCC and PCFO were in compliance with CFC regulations in
regards to eligibility for the 2007 campaign, we reviewed the following:
    •	 The public notice to prospective charitable organizations to determine if the LFCC
        accepted applications from organizations for at least 30 days.
    •	 The process and procedures for the application evaluation process.
    •	 Sample eligibility letters to verify they were properly sent by the LFCC.
    •	 The LFCC's processes and procedures for responding to appeals from organizations.

To determine if the PCFO was in compliance with the CFC regulations as a federation
(UWGFHA) for the 2007 campaign, we reviewed the following:
   •	 Data reported on the CFC Receipts Schedule with supporting documentation to verify
       whether receipts were properly recorded.
   •	 The CFC Distribution Schedule to ensure that the UWGFHA did not disburse any funds
       to member agencies not participating in the CFC.
   •	 The UWGFHA contract with its member agencies to determine if the fees were

       reasonable and supported.





                                               5
The samples, mentioned above, that were selected and reviewed in performing the audit were not
statistically based. Consequently, the results could not be projected to the universe since it is
unlikely that the results are representative of the universe taken as a whole.

Finally, to accomplish our objective for the Audit Guide Review, we reviewed the CFC Audit
Guide (for campaigns with pledges $150,000 to 999,999) and completed the AUP checklist to
verify that the IPA completed and documented the AUP steps.




                                               6

                                III. AUDIT FINDINGS


A.   BUDGET AND CAMPAIGN EXPENSES

     1.   Campaign Expenses Charged to the Incorrect Campaign Year

          The PCFO recovered $74,273 in campaign expenses related to either the 2006 or
          2008 CFCs from receipts ofthe 2007 campaign.

          5 CFR 950.106 (b) states that "The PCFO may only recover campaign expenses from
          receipts colIected for that campaign year. Expenses incurred preparing for and
          conducting the CFC cannot be recovered from receipts col1ected in the previous
          year's campaign. The PCFO may absorb the costs associated with conducting the
          campaign from its own funds and be reimbursed, or obtain a commercial loan to pay
          for costs associated with conducting the campaign. If the commercial loan option is
          used, the amount of a reasonable rate of interest is an allowable campaign expense,
          subject to approval of the LFCC when the PCFO budget is submitted."

          We reviewed a sample of campaign expense reimbursements for the 2007 campaign
          to determine if the costs were properly supported and ifthey were related to the 2007
          campaign. During our review, we noticed that the PCFO paid for CFC related
          expenses directly out of the CFC bank account as the expenses were incurred and did
          not, as the regulation states, absorb the costs of the campaign from its own funds or
          obtain a commercial loan to cover those costs.

          Expenses related to any campaign year are typically incurred fully prior to the
          beginning of disbursements to the member agencies and federations. For the 2007
          campaign, the period for most expenses would be approximately March 2007 to
          February 2008.' However, our review found that the PCFO charged the 2007
          campaign $74,273 in expenses related to other campaigns.

          Specifical1y, we identified $67,573 in expenses incurred in March 2008 (and later)
          that relate to the 2008 campaign year. During this same period, we also identified
          $6,700 in expenses for the IPA AUP audit of the 2006 campaign.

          During the period March through September of any campaign year, there are no
          campaign receipts available to offset CFC expenses incurred. With this in mind the
          regulations [5 CFR 950.106 (b)] cal1 for the PCFO to do one of two things:
              1. To absorb the costs of the CFC expenses upfront and be reimbursed later; or
             2. To obtain a commercial loan to pay for the costs associated with the
                  campaign.
          Rather than use either of these options, the PCFO chose to use receipts related to the
          2007 campaign to pay for 2006 and 2008 campaign expenses. As a result of not
          properly matching campaign expenses with receipts, the 2007 campaign was
          overcharged $74,273.




                                               7
     PCFO and LFCC's Comments:

     The LFCC and PCFO agree with the finding and state that they will comply with the
     regulations in the future. They also stated that although most of their activities from
     March through December are oriented toward the new campaign, that the PCFO staff
     does work on the prior campaign reconciling receipts and disbursements of CFC
     funds during that same period. To help rectify the situation, the PCFO will obtain a
     commercial loan to defray campaign cost until CFC funds are available.

     Recommendation 1

     We recommend that the OCFCO direct the LFCC to require the PCFO to adhere to
     the requirements of5 CFR 950.106 and properly offset campaign expenses with that
     campaign's receipts.

2.   Campaign Expense Reimbursement Not Approved by the LFCC

     The PCFO did not submit, nor did the LFCC approve, a request for the

     reimbursement of 2007 campaign expenses to the PCFO.


     5 CFR 950.106 (a) states that the PCFO shall recover campaign expenses, approved
     by the LFCC, which reflect the actual costs of administering the campaign.

     Our review of LFCC meeting minutes did not identify where the LFCC discussed,
     reviewed, or approved the reimbursement of 2007 campaign expenses to the PCFO.
     Additionally, discussion with the PCFO and LFCC determined that both parties were
     unaware of their responsibilities regarding CFC expenses. We informed both the
     LFCC and PCFO that prior to reimbursement of expenses the LFCC must give
     authorization to the PCFO to do so.

     As a result of not submitting its expenses for approval before their reimbursement, the
     PCFO'sreimbursement was not authorized as required by the regulations.
     Additionally, by not reviewing and approving the reimbursement of2007 campaign
     expenses, the LFCC runs the risk of improper expenses being charged to the
     campaign, as identified in the previous finding.

     PCFO and LFCC's Comments:

     The PCFO and LFCC agree with the finding and state that the PCFO will document
     LFCC approval prior to reimbursement for campaign expenses. The PCFO and
     LFCC also stated that they believe the use of a commercial loan will simplify the
     process for approval prior to reimbursement.




                                          8

     OIG Comments:

     Obtaining a commercial loan mayor may not simplify the campaign expense
     approval process. The approval process, whether a loan is obtained or not, should
     involve the same basic steps.' The PCFO must provide all expenses incurred in the
     operation of the campaign (in detail) to the LFCC. The LFCC should then review
     those expenses and supporting documentation to ensure the accuracy and applicability
     to the campaign year in question. Finally, the LFCC must compare total expenses
     against the approved budget to ensure they are no more than I 10 percent of the
     approved budget.

     Additionally, the comments noted that the PCFO would document the LFCC's
     approval of the expenses. The LFCC should be the one to document both its review
     of the expenses and its approval of the reimbursement in its meeting minutes.

     Recommendation 2

     We recommend that the DCFCO direct the PCFO to submit its expenses to the LFCC
     prior to reimbursement and that the LFCC approve only those expenses related to that
     campaign year.

3.   PCFO Application Not in Compliance

     The UWGFHA's application for PCFO did not include all of the statements required
     per the Federal regulations.

     5 CFR 950.105 (c) (2) (ii) requires the PCFO application to include a statement
     signed by the local director pledging to "conduct campaign operations, such as
     training, kick-off and other events, and fiscal operations, such as banking, auditing,
     reporting and distribution separate from the applicant's non-CFC operations."
     Additionally, (iii) requires the local director to "abide by the directions, decisions,
     and supervision of the LFCC and/or Director."

     We reviewed the application to determine if it included all of the required
     information, Additionally, we reviewed the cover letter of the application to
     determine if all of the required statements were included. Our review identified two
     statements that were not included in the application cover letter that are required by
     the regulations. Specifically, the following statements were not included or were
     incomplete:
         •	 The Jetter did not include the statement to "conduct campaign operations, such
             as training, kick-off and other events, and fiscal operations, such as banking,
             auditing, reporting and distribution separate from the applicant's non-CFC
             operations," and
         •	 The letter left off the fact that the PCFO must adhere to the directives of "the
             LFCC and/or Director."




                                           9
          By not including all of the required statements in the application letter, the PCFO is
          not stating that it will abide by those things required in the Federal regulations.

          PCFO and LFCC's Comments:

          The PCFO and LFCC agree with the finding and state that future applications will
          include all required language and statements as required per the Federal regulations.

          Recommendation 3

          We recommend that the OCFCO direct the LFCC to ensure that its review ofPCFO
          applications verifies that all of the language and statements required by Federal
          regulations are included.

B.   CAMPAIGN RECEIPTS AND DISBURSEMENTS

     1.   CFC Receipts Applied to the Incorrect Campaign Year

          The PCFO did not use proper procedures to determine the campaign year that CFC
          receipts belong to. As a result, the funds designated by Federal employees were not
          properly accounted for and disbursed according to the donor's wishes.

          CFC Memorandum 2006-5 states that beginning with the 2005 campaign, all
          campaigns should track receipts by payroll office to determine which campaign year
          funds received belong to. If questions arise they should be directed to the specific
          payroll office or the OCFCO.

          We reviewed the CFC bank statements for January 2008 and 2009, to determine how
          the PCFO accounts for CFC receipts during the payroll year change-over. Our review
          of the PCFO's bank statements determined that it did not attempt to track CFC
          receipts by payroll office. Instead, the PCFO's procedure was to apply all receipts
          after the first of the year to the next campaign year. The PCFO stated that this was
          done for convenience as the information included on the bank statement does not
          provide sufficient means for determining what year the funds belong to.

          As a result of not tracking the CFC receipts by payroll office, the PCFO did not
          adhere to the Federal donor's wishes related to the disposition of their donated
          monies.

          PCFO and LFCC's Comments:

          The LFCC and PCFO agree with the finding and state that they will apply receipts
          with complete fidelity to the campaign year.




                                               IO

     Recommendation 4

     We recommend that the OCFCO and LFCC direct the PCFO to develop procedures to
     ensure that all CFC payroll office receipts are individually tracked to determine the
     campaign year to which they belong according to the guidance outlined in CFC
     Memorandum 2006-5.

2.   Incorrect Pledge Loss Applied to One-Time Disbursements

     The PCFO did not properly apply pledge loss to those agencies receiving one-time
     disbursements from the 2007 campaign.

     5 CFR 950.901 (i) (3) states that the PCFO may deduct the proportionate amount of
     each organization's share of the campaign's administrative costs and the average of
     the previous three years pledge loss from the one-time disbursement.

     We reviewed the one-time disbursements made by the peFO for the 2007 campaign
     to determine if they were properly approved, were disbursed to the appropriate
     agencies, and appropriately applied the correct pledge loss percentage. Using the
     pledge loss figures from the 2004 through 2006 campaigns we calculated the average
     pledge loss during those years to be 11.44 percent. However, a review of the one­
     time disbursements made by the PCFO determined that only a three percent pledge
     loss was applied to those agencies receiving one-time disbursements for the 2007
     campaign. The PCFO stated that the pledge loss percentage used was obtained from
     a calculation from its Cam~aign Assistant software.

     As a result of applying an incorrect pledge loss percentage, the PCFO reduced the
     amount of monies available to the agencies not receiving one-time disbursements.

     PCFO and LFCC's Comments:

     The PCFO and LFCC agree with the finding and state that they will develop manual
     procedures to verify that the pledge Joss applied to the one-time disbursements is
     accurate.

     Recommendation 5

     We recommend that the OCFCO and LFCC ensure the PCFO has put procedures in
     place to ensure that the pledge loss allocated to agencies and federations receiving
     one-time disbursements is correctly calculated.

3.   Pledge Card Errors

     The PCFO incorrectly input two pledge cards into its database, which resulted in a
     misapplied designation and an improper release of donor information.




                                         11

          5 CFR 950.105 (d) (1) states that itis the responsibility of the PCFO to honor the
          employee designations. Additionally. 5 CFR 950.105 (d) (6) states that it is the
          responsibility of the PCFO to honor the request of employees who indicate they do
          not want personally identifiable information released to organizations they donate to.

          We reviewed a sample of35 pledge cards to determine if the following areas were
          correctly input into the pledge card system by the PCFO: a) donor name, b) amount
          donated to each agency. c) agency codes donated to. d) total amount donated. and e)
          donor's choice to release information. Our review identified two pledge card errors.
          Specifically. we identified:
              •	 One pledge card where the PCFO misapplied a designation by inputting the
                  wrong agency code; and
              •	 One pledge card where the PCFO released a donor's personally identifiable
                  information without the donor giving permission to do so on the pledge card.

          As a result of misapplying a designation, the PCFO inadvertently applied the
          donation of an employee to the wrong agency code. Additionally, by releasing the
          personally identifiable information of a donor against their wishes, the PCFO risked
          the donor receiving unwanted contact from the agencies donated to.

          PCFO and LFCC's Comments:

          The PCFO and LFCC agree with the finding and state that the PCFO will revise its
          procedures to ensure the accuracy of both donor pledge card designation entries and
          the release of information indications.

          Recommendation 6

          We recommend that the OCFCO ensure that the PCFO has put adequate procedures
          in place to improve its pledge card data entry so that errors are corrected prior to
          distribution of funds and donor information to agencies and federations.

C.   ELIGIBILITY

     1.   Local Eligibility Notification Letters Mailed Untimely

          The LFCC did not mail local agency and federation eligibility letters to applicants of
          the 2007 campaign by the date required in the Federal regulations.

          5.CFR 950.801 (a) (5) states that the LFCC "must issue notice of its eligibility
          decisions within 15 business days of the closing date for receipt of applications."

          We reviewed the LFCC's local agency and federation application process to
          determine if it mailed its local eligibility decision letters by the date required in the
          Federal regulations. The LFCC's application period closed on April] I, 2007.
          According to the regulations, the letters announcing eligibility decisions were due 15



                                                12

           business days later on May 2, 2007. Our review found that the eligibility notification
           letters were mailed by the LFCC on May 7, 2007.

           As a result, agencies and federations were not notified of the LFCC's eligibility
           decisions in a timely manner.

           PCFO and LFCC's Comments:

           The PCFO and LFCC agree with the finding and state that the PCFO will facilitate
           ensuring that the LFCC notifies all applicant agencies and federations of its eligibility
           determinations within 15 business days of the close of the application period as
           required by the regulations.

           Recommendation 7

           We recommend that the OCFCO ensure that the LFCC has procedures in place to
           notify all applicant agencies and federations of its eligibility determinations within 15
           business days of the close of the application period, as required by the regulations.

D.	   PCFO AS A FEDERATION

      OUfreview of the PCFO's activities as a federation did not identify any problems.

E.	   AUDIT GUIDE REVIEW

      Our review of the agreed-upon procedures as performed by the PCFO's Independent Public
      Accountant did not identify any problems.




                                                13

             IV. MAJOR CONTRIBUTORS TO THIS REPORT

Special Audits Group

                  Auditor-In-Charge


                  Group Chief

                  Senior   Team.




                                      14

                                                                                                 APPENDIX



~
                                   DEPARTMENT OF THE ARMY

                             u.s. ARMY tNSTALLATlON MANAGEMENT COMMAND

t~     t .
~
                        HEADQUARTERS, UNITED STATES ARMY GARRISON, FORT HOOD

                                    FORT HOOD, TEXAS 76644.$002
         RePLY TO                                                                                '09 NOV 2 RCVD
         ATTENtION OF




 Greater Fort Hood Area .                                                    October 22, 2009
 Local Federal Coordinating Committee (LFCC)
 Combined Federal Campaign
 78th St. Building 4230 Room 135
 Fort Hood, Texas 76544

 Report No. 3A-CF-00-09-040

 Office ofPersonnel Management
 Office ofthe Inspector General
 Attention:
 1900 E Street, NW, Room 6400
 Washington, DC 20415-1100

 Dear_

 Enclosed is our response to your draft report regarding the results of the 2006 and 2007 Fort
 Hood Combined Federal Campaigns (CFC) Audit. We are in general concurrence with the
 findings and recommendations noted by your audit team.

 Respectfully,




                     LFCC Chair                                             ExecutiveDirector
 Directorate of Emergency Services                     t
                                                            p~       ... •
                                                                           nd Organization
 Building 23020                                       United Way of the Greater Fort Hood Area
 Room 103A                                            208 West Avenue A
 Fort Hood, Texas 76544-5000                          Killeen, Texas 76541
                                Fort Hood Area CFC

                                  PCFO Reponses

Recommendation 1
We recommend that the Office of Combined Federal Campaign Operations (OeFeO) Require
the PCFO to adhere to- the requirements of 5 CFR 950.106 and properly offset campaign
expenses with that campaign's receipts.

Response
5 CFR 950.106 states: The PCFO may only recover campaign expenses from receipts collected
for that campaign year. Expenses incurred preparing for and conducting the CFC cannot he
recovered from receipts collected in the previous year's campaign. LFCC activities conducted
 between March and December are mostly oriented towards preparing and conducting the new
campaign. However, staff time is split between supporting the LFCC campaign planning and
reconciling the receipt of and distribution of funds. New campaign supply and event costs have
always been absorbed by the PCFO until new campaign receipts can be recovered for
reimbursement. We understand OPM's clarification on the interpretation of this requirement and
will comply accordingly.




                                DELETED BY OPM OIG

                            NOT RELEVANT TO TBE REP.ORT

                               DELETED BY OPM OIG

                           NOT RELEVANT TO THE REPORT





RecommendationS
We recommend that the DeFCO direct the PCFO to submit its expenses to the LFCC prior to
reimbursement for approval.

Response

We concur. PCFO will document LFCC approval prior to reimbursement for expenses.



Recommendation6
We recommend that the DeFeO and LFCC direct the peFO to ensure that future applications 10
serve as PCFO include all the statements required per the Federal regulations.

Response

We concur. PCFO will ensure that future applications include all required language and
statements as per Federal regulations.



Recommendation 7
We recommend that the DeFCO and LFCC direct the PCFO to begin tracking all CFC payroll
office receipts individually to determine the campaign year to which they belong according to the
guidance outlined in CFC Memorandum 2006-5.                                   .

Response
We concur and will apply receipts with complete fidelity to the campaign year.


                                  DELETED BY aPM DIG

                              NOT RELEVANT TO TIlE REPORT

 Recommendation8
 We recommend that the OCFCO and LFCC require the PCFO to put procedures in place to
 ensure that the pledge loss allocated to agencies and federations receiving one-time
 disbursements correctly calculated.

 We concur. We previously relied solely on the Campaign Assistant software to calculate and
 apply pledge loss prior to disbursements. PCFO will develop manual procedures



 Recommendation 9
 We recommend that the OCFCO direct the PCFO to ensure that all donor designations are
 honored.


 Response
 We concur. PCFO Will revise procedures to include verification of the accuracy of all donor
 designation pledge card entries.



 Recommendation 10
 We recommend that the OCFCO and LFCC require that the PCFO only release the requested
 information for those donors who indicate on their pledge card that they wish to release
 information.

  Response
. We concur. PCFO will revise procedures to ensure the accuracy of donor pledge card release of
  information indications. (See response above.)



Recommendation 11
We recommend that the OCFCO ensure that the LFCC notifies all applicant agencies and
federation of its eligibility determinations within 15 business days of the close of the application
period as required by the regulations.
Response

We concur. PCFO will facilitate ensuring that LFCC notifies all applicant agencies and
federation of its eligibility determinations within 15 business days of the close of the application
period as required by the regulations.