oversight

Audit Of The 2008 and 2009 Greater Rochester Combined Federal Campaigns Rochester, New York

Published by the Office of Personnel Management, Office of Inspector General on 2012-03-28.

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

                                                      U.S. OFFICE OF PERSONNEL MANAGEMENT
                                                            OFFfCE OF THE INSPECTOR GENERAL
                                                                             OFFICE OF AUDITS




Final Audit Report
Subject:


                     AUDIT OF THE 2008 AND 2009 

                       GREATER ROCHESTER 

                   COMBINED FEDERAL CAMPAIGNS 

                      ROCHESTER, NEW YORK 





                                            Report No. 3A-CF-00-11 -04.1


                                            Date: March 28, 2012




                                                             --CAUTION-
T his audil report hu i>ftl1 dislributtd to Felleral omd.l~ who II rt responsible rOt Ihe administration or the audited program. This aud it
report may conrain proprieUl1')' dill which i$ protected by Fedulilla w (18 U.S.c. 1905). ThtteJore, whilt lhil audit report is Iwaililble
undtr Ihf Fr«dom uflnformalion Act ~ nd made luitwbl~ to Iht public on Il'Il' O IG we-bpagr, clio tioll needs 10 be exercised bdore
rdcasing Ihe report to the gener.l public liS it may con fain proprietary information Ihlll WIS ndafled from the publicI), distributed tnp}'.
                                                        umTED STATES 

                                             OFFICE O F PERSONNEL MANAGEMENT 

                                                          WASHINGTON , DC 204 UJ· l100 



        Of"FlCE OF
'THE INSPECTOR CENERAL




                                                                AUDIT REPORT



                                             AUDIT OF THE 2008 AND 2009 

                                               GREATER ROCHESTER 

                                           COMBINED FEDERAL CAMPAIGNS 

                                              ROCHESTER, NEW YORK 



                  Report No. 3A-C F-OO-II-1J41                                                  Date: March 28, 20 1 2




                                                                                                  Michael R. E!!ser
                                                                                                  Assistant I.nspector General
                                                                                                    for Audits



                                                                       -CAUTION-
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                           UN IT ED STATES OFF ICE OF PERSO NNEL MANAG EMENT
                                                  Washingh)n. DC '20415

   OOiceorlhc
Inspec tor Gcl1crnl




                                        EXECUTIVE SUMMARY 





                                  AUDIT OF THE 2008 AND 2009 

                                    GREATER ROCHESTER 

                                COMBINED FEDERAL CAMPAIGNS 

                                   ROCHESTER, NEW YORK 



                  Report No. 3A-CF-OO-II-041                          Date: March 28 , 2012

       The Office of the Inspector General has completed an audit of the 2008 and 2009 Greater
       Rochester Combined Federal Campaigns (CFe). The United Way of Greater Rochester
       (UWGR). located in Rochester, New York, served as the Principal Combined Fund Organization
       (PCFO) during both campaigns. Our main objective was to determine if the Greater Rochester
       CFC was in compliance with Title 5, Code of Federal Regulations, Part 950 (5 CFR 950),
       including the responsibilities of both the PCFO and the Local Federal Coordinating Committee
       (LFCC). The audit identified 11 instances of non·compliance with the regulations (5 CFR 950)
       governing the eFe.

       Please note that 2011 was the last active campaign for the Greater Rochester CFC, since it has
       been merged with the Niagara Frontier eFe. As a result of this merger, our final report offers no
       recommendations on audit issues that could only be remedied if the Greater Rochester e FC
       continued as an active campaign.

       The fo ll owing findings represent the results of our audit work as of the date of this report.

                                           AUDIT GUIDE REVIEW

       •    Agreed-Upon Procedures not in Compliance with the Audit Guide                        Procedural

            The Independent Public Accountant (lPA) did not complete all of the agreed-upon
            procedures in accordance with the Audit Guide.




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                          BUDGET AND CAMPAIGN EXPENSES

•   PCFO’s Application was Missing Required Statements                              Procedural

    The UWGR’s application to serve as the PCFO did not include two signed statements
    required by the regulations.

•   Unauthorized Reimbursement of Campaign Expenses                                 Procedural

    The LFCC did not approve or authorize the PCFO’s reimbursement of campaign expenses.

•   IPA Expenses Charged to the Wrong Campaign                                      Procedural

    The PCFO incorrectly charged the 2009 campaign $2,050 for IPA expenses related to the
    2007 campaign.

                     CAMPAIGN RECEIPTS AND DISBURSEMENTS

•   PCFO did not Properly Train Keyworkers                                          Procedural

    The PCFO did not properly train its keyworkers to verify calculations and ensure the pledge
    cards were legible.

•   Pledge Form was not Consistent with Regulations                                 Procedural

    The PCFO did not prepare the 2009 pledge forms consistent with the CFC regulations and
    instructions by the Director.

•   PCFO did not Distribute all CFC Receipts as Required                            Procedural

    The PCFO withheld $28,248 in CFC receipts from the first quarterly disbursement to cover
    expenses reimbursed during the second disbursement. Additionally, the PCFO withheld
    $8,992, $12,332, and $12,076 from the next three quarterly disbursements instead of
    distributing all CFC receipts on hand.

•   Un-Cashed Check Policies and Procedures                                         Procedural

    The PCFO’s policies and procedures for un-cashed checks do not conform to the
    requirements of Memorandum 2006-5 issued by the Office of the Combined Federal
    Campaign.

•   PCFO did not Keep and Maintain an Interest-Bearing Bank Account                 Procedural

    The PCFO did not keep and maintain an interest-bearing account for the CFC funds received
    during the 2009 Campaign.


                                               ii
•   Unauthorized One-Time Disbursements                                                 Procedural

    There was no support showing that the LFCC determined and authorized a $500 threshold for
    one-time disbursements to organizations receiving minimal donations from Federal
    employees.

                                          ELIGIBILITY

•   Untimely Notice of Eligibility Decisions                                            Procedural

    The LFCC did not issue notice of its eligibility decisions for organizations seeking local
    eligibility in the CFC within 15 business days of the closing date for receipt of applications.

                                  PCFO AS A FEDERATION

Our review of the PCFO’s activities as a federation showed that it complied with the applicable
provisions of 5 CFR 950.

                                      FRAUD AND ABUSE

Our review of the PCFO’s anti-fraud policies and procedures indicated that they appeared
reasonably sufficient to detect and deter potential fraud and abuse activities.




                                                 iii
                                                     CONTENTS
                                                                                                                            PAGE

       EXECUTIVE SUMMARY ............................................................................................. i

  I.   INTRODUCTION AND BACKGROUND .................................................................... 1

 II.   OBJECTIVES, SCOPE, AND METHODOLOGY ......................................................... 3

III.   AUDIT FINDINGS AND RECOMMENDATIONS ...................................................... 7

       A. AUDIT GUIDE REVIEW ......................................................................................... 7

            1. Agreed-Upon Procedures not in Compliance with the Audit Guide ................... 7

       B. BUDGET AND CAMPAIGN EXPENSES ............................................................. 8

            1. PCFO’s Application was Missing Required Statements ..................................... 8
            2. Unauthorized Reimbursement of Campaign Expenses........................................ 9
            3. IPA Expenses Charged to the Wrong Campaign ................................................ 10

       C. CAMPAIGN RECEIPTS AND DISBURSEMENTS .............................................. 11

            1.   PCFO did not Properly Train Keyworkers ......................................................... 11
            2.   Pledge Form was not Consistent with Regulations............................................. 12
            3.   PCFO did not Distribute all CFC Receipts as Required ..................................... 14
            4.   Un-Cashed Check Policies and Procedures ........................................................ 15
            5.   PCFO did not Keep and Maintain an Interest-Bearing Bank Account ............... 16
            6.   Unauthorized One-Time Disbursements............................................................. 17

       D. ELIGIBILITY ........................................................................................................... 18

            1. Untimely Notice of Eligibility Decisions ........................................................... 18

       E. PCFO AS A FEDERATION .................................................................................... 18

       F. FRAUD AND ABUSE ............................................................................................. 18

IV.    MAJOR CONTRIBUTORS TO THIS REPORT ........................................................... 19

       APPENDIX             (The PCFO and the LFCC’s response to the draft report, dated
                            February 2, 2012)
                    I. INTRODUCTION AND BACKGROUND
INTRODUCTION

This report details the findings and conclusions resulting from our audit of the 2008 and 2009
Greater Rochester Combined Federal Campaigns (CFC). The audit was performed by the Office
of Personnel Management’s (OPM) Office of the 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. In 2009, it consisted of 226 separate local campaign organizations located throughout
the United States, including Puerto Rico and the Virgin Islands, as well as overseas locations.
The Office of the Combined Federal Campaign (OCFC) at OPM has the responsibility for
management of the CFC. This includes publishing regulations, memoranda, and other forms of
guidance to federal offices and private organizations to ensure that all campaign objectives are
achieved.

Each CFC is 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; encouraging federal agencies to appoint Loaned
Executives to assist in the campaign; ensuring that employees are not coerced in any way in
participating in the campaign; and acting upon any problems relating to a voluntary agency’s
noncompliance with the policies and procedures of the CFC. Loaned Executives are federal
employees who are temporarily assigned to work directly on the CFC.

The primary goal of the PCFO is to administer an effective and efficient campaign in a fair and
even-handed manner aimed at collecting the greatest amount of charitable contributions possible.
Its responsibilities include training loaned executives, coordinators, employee keyworkers and
volunteers; maintaining a detailed schedule of its actual CFC administrative expenses; preparing
pledge cards and brochures; distributing campaign receipts; submitting to an audit of its CFC
operations by an Independent Certified Public Accountant (IPA) in accordance with generally
accepted auditing standards; cooperating fully with the 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 the LFCC. The PCFO
is also responsible for establishing and maintaining a system of internal controls.




                                               1
This represents our first audit of the Greater Rochester CFC. The initial results of our audit were
discussed with PCFO and LFCC officials during an exit conference held on May 27, 2011. A
draft report was provided to the PCFO and the LFCC for review and comment on
January 3, 2012. The PCFO and LFCC’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 Greater Rochester CFC was in
compliance with 5 CFR 950, including the activities of both the PCFO and the LFCC. Our audit
objective for the 2008 campaign was:

   Audit Guide Review
   • To determine if the IPA completed the Agreed-Upon Procedures (AUP) as outlined in the
      CFC Audit Guide.

Additionally, our audit objectives for the 2009 campaign were as follows:

   Budget and Campaign Expenses
   • To determine if the PCFO solicitation, application, campaign plan, and budget were in
      accordance with the regulations.
   • To determine if the expenses charged to the campaign were actual, reasonable, allocated
      properly, approved by the LFCC, and did not exceed 110 percent of the approved budget.

   Campaign Receipts and Disbursements
   • To determine if the pledge card format was correct and if the pledge card report agrees
      with the actual pledge cards.
   • To determine if incoming pledge monies were allocated to the proper campaign year and
      that the net funds (less expenses) were properly distributed to member agencies and
      federations.
   • To determine if the member agencies and federations were properly notified of the
      amounts pledged to them and that donor personal information was only released for those
      who requested the release of information.

   Eligibility
   • To determine if the charity list (CFC brochure) was properly formatted and contained the
       required information; if the charitable organization application process was open for the
       required 30-day period; if the applications were appropriately reviewed, evaluated, and
       approved; if the applicants were notified of the eligibility decisions timely; and if the
       appeals process for denied applications was followed.

   PCFO as a Federation
   • To determine if the amounts received by the PCFO as a federation reconciled to those
     disbursed by the CFC; if the PCFO properly distributed funds to its federation members;
     if expenses charged by the PCFO (to its federation members) were documented properly;
     and if the disbursements made to the federation members were accurate.

   Fraud and Abuse
   • Determine what policies and procedures the PCFO has in place relating to detecting and
      preventing fraud and abuse and if they are adequate.


                                               3
SCOPE AND 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.

The audit covered campaign years 2008 and 2009. The United Way of Greater Rochester
(UWGR), located in Rochester, New York, served as the PCFO during both campaigns. The
audit fieldwork was conducted at the offices of the PCFO from May 23 through 27, 2011.
Additional audit work was completed at our Cranberry Township, Pennsylvania, and
Washington, D.C. offices.

The Greater Rochester CFC received campaign pledges, collected campaign receipts, and
incurred campaign administrative expenses for the 2008 and 2009 campaigns as shown below.

    Campaign               Total                     Total                Administrative
      Year                Pledges                   Receipts                Expenses
       2008              $203,216                   $190,205                 $50,422

       2009              $171,150                   $165,651                 $51,534

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 the 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 tests of accounting records and such other auditing
procedures as we considered necessary to determine compliance with 5 CFR 950 and CFC
Memoranda issued by the OCFC.

To accomplish our objective concerning the 2008 campaign (Audit Guide Review), we reviewed
the CFC Audit Guide and completed the AUP checklist to verify that the IPA completed and
documented the AUP steps.

In regard to our objectives concerning the 2009 campaign budget and campaign expenses, we
accomplished the following:

   •   Reviewed the PCFO’s application to verify if it was complete.



                                               4
   •   Reviewed a copy of the public notice to prospective PCFOs and the 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 the PCFO’s budgeted expenses, the LFCC’s approval of the budget, and
       matched actual expenses to supporting documentation. Instead of selecting a sample, we
       reviewed all 12 expenses, totaling $51,534.

   •   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.

To determine if the 2009 campaign’s receipts and disbursements were handled in accordance
with CFC regulations, we reviewed the following:

   •   A judgmental sample of 35 pledge cards totaling $24,323 (out of a universe of 897 pledge
       cards totaling $171,150) from the PCFO’s campaign Pledge Card Report and compared
       the pledge information from the report to the actual pledge cards. Specifically, we
       judgmentally selected 5 pledge cards with the highest designated cash donation, 5 pledge
       cards with the highest undesignated cash donation, 15 pledge cards with the highest
       designated payroll deduction, 4 pledge cards with the highest undesignated payroll
       deduction, and 6 pledge cards that had 5 or more agency designations listed.

   •   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.

   •   Pledge Notification Letters to verify that the PCFO notified the CFC agencies of the
       designated and undesignated amounts due them by the date required in the regulations.

   •   Donor letters sent by the PCFO to organizations to verify that the letters properly notified
       the organization of the donors who wished to be recognized.

   •   CFC receipts and distributions from the PCFO’s campaign bank statements, campaign
       receipts and agency disbursements, and campaign expense support to verify whether the
       PCFO accurately recorded and disbursed all campaign receipts and disbursements.



                                                5
   •   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.

To determine if the LFCC and PCFO were in compliance with CFC regulations regarding
eligibility for the 2009 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.

   •   Campaign charity lists to determine if they contained all required information.

   •   The process and procedures for the application evaluation process.

   •   Eligibility letters to verify that 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 (UWGR)
for the 2009 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 UWGR did not disburse any funds to
       member agencies not participating in the CFC.

   •   The UWGR’s agreements with its member agencies to determine if member fees were
       reasonable and supported.

Finally, to determine if the policies and procedures related to the detection and prevention of
fraud and abuse were adequate, we reviewed the PCFO’s responses to our fraud and abuse
questionnaire.

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.




                                                 6
              III. AUDIT FINDINGS AND RECOMMENDATIONS
Please note that 2011 was the last active campaign for the Greater Rochester CFC, since it has
been merged with the Niagara Frontier CFC. As a result of this merger, our final report offers no
recommendations on audit issues that could only be remedied if the Greater Rochester CFC
continued as an active campaign.

A.   AUDIT GUIDE REVIEW

     1.    Agreed-Upon Procedures not in Compliance with the Audit Guide             Procedural

           The IPA utilized by the PCFO and the LFCC to complete the AUP audit did not
           complete its review in accordance with the requirements of the Audit Guide.

           The Audit Guide contains specific procedures to be followed during the examination
           by the IPA, with the primary objective of determining the LFCC’s and the PCFO’s
           compliance with 5 CFR 950 and OPM guidance.

           During our review of the IPA’s AUP audit of the 2008 CFC, we found that the IPA
           did not follow the AUP for reviewing pledge cards. The IPA selected a sample of
           100 pledge cards, as required by the AUP, but only traced and verified a single pledge
           from each of the pledge cards instead of all pledges included on the pledge form.

           Chapter III of the Audit Guide, Pledge Form Tracking System section, step one (b),
           requires the IPA to select a sample of 100 pledge cards with 75 selected from the
           pledge tracking system and traced to the pledge cards, and 25 selected from the
           pledge cards and traced to the pledge tracking system. Step two requires the IPA to
           trace and determine that the following information from each pledge form agrees to
           the PCFO’s automated system or pledge records:

           a) Donor Name,

           b) Each Charity Code Number and Amount Donated,

           c) Total Amount Donated, and

           d) Donor’s Choice to Release or Not to Release Name, Home Address, Home Email
              Address and/or Pledge Amount.

           Out of the 100 pledge cards sampled, 43 had more than one pledge listed on the form.
           Each charity code and amount donated on the sample of 100 pledge card forms
           should have been traced and verified to the pledge tracking system. We informed the
           IPA of the error when we were on site. The IPA responded that it misunderstood the
           instructions on how to select and review the pledge card samples.




                                               7
          Because the IPA did not follow the AUP for reviewing pledge cards, there is an
          increased risk that the IPA failed to identify errors where the PCFO may not have
          properly recorded and honored each federal employee’s pledge from the 2008 CFC.

          PCFO and LFCC’s Comments

          The PCFO and LFCC agree with the finding. The IPA interpreted the agreed-upon
          procedures differently and now understands OPM’s interpretation and will perform
          the procedures in accordance with the regulations for the 2010 audit. The IPA will
          ask questions if they are unsure of how to complete any of the Audit Guide steps for
          the 2010 audit.

          Recommendation 1

          We recommend that the OCFC ensures that the LFCC meets with the IPA prior to
          and during the AUP engagement to discuss the Audit Guide steps, and encourages the
          IPA to ask questions of the LFCC or the OCFC if it is unsure of how to complete any
          of the required procedures.

B.   BUDGET AND CAMPAIGN EXPENSES

     1.   PCFO’s Application was Missing Required Statements                           Procedural

          The UWGR’s 2009 PCFO application, which was accepted by the LFCC, did not
          include all of the statements required by Federal regulations.

          5 CFR 950.105(c)(2) states that the PCFO’s application must include a statement
          signed by the applicant’s local director or equivalent pledging to:

          (i)    administer the CFC fairly and equitably;

          (ii)   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

          (iii) abide by the directions, decisions, and supervision of the LFCC and/or Director.

          In addition, 5 CFR 950.105(c)(3) states that the PCFO’s application must include a
          statement signed by the applicant’s local director or equivalent acknowledging that
          the applicant is subject to the provision of 5 CFR 950.603.

          We reviewed the UWGR’s 2009 PCFO application to determine if each of the
          statements required by Federal regulations were included. Our review found that the
          UWGR’s application was missing two signed statements. The first missing statement
          was a pledge to administer the CFC fairly and equitably, to conduct campaign
          operations separate from the applicant’s non-CFC operations, and to abide by the



                                                 8
     directions, decisions, and supervision of the LFCC and/or Director. The second
     missing statement was an acknowledgment that the applicant is subject to the
     provision of 5 CFR 950.603.

     When we notified the PCFO of the missing statements, the PCFO reported that a new
     staff member changed the language in the 2009 application, and inadvertently omitted
     the statements required by 5 CFR 950.105(c)(2) and 5 CFR 950.105(c)(3).

     By accepting an application that did not include all of the required statements, the
     LFCC approved a PCFO which did not pledge to abide by all requirements of the
     Federal regulations.

     PCFO and LFCC’s Comments

     “The PCFO and LFCC agree with the finding. For the 2012 CFC, a new PCFO and
     LFCC will be coordinating the campaign since the Greater Rochester CFC merged
     with the Niagara Frontier CFC. We will not have an opportunity to correct this
     finding.”

     OIG Comments

     Since the PCFO and LFCC no longer administer the Greater Rochester CFC, which
     was merged with the Niagara Frontier CFC, we are not making a recommendation for
     this finding.

2.   Unauthorized Reimbursement of Campaign Expenses                             Procedural

     Our review of the 2009 campaign expenses found that the LFCC did not approve or
     authorize the PCFO’s reimbursement of campaign expenses.

     5 CFR 950.104(b)(17) states that it’s the responsibility of the LFCC to authorize the
     PCFO’s reimbursement of only those campaign expenses that are legitimate CFC
     costs and are adequately documented.

     In addition, 5 CFR 950.106(a) states that the PCFO shall recover from the gross
     receipts of the campaign its expenses, approved by the LFCC, reflecting the actual
     costs of administrating the local campaign.

     Finally, CFC Memorandum 2008-09 explains that the approval of actual expenses by
     the LFCC is separate from the approval of budgeted expenses. The LFCC must
     review actual expenses, authorize full or partial reimbursement, and document its
     authorization in its meeting minutes.

     Our review of the LFCC meeting minutes did not identify where the LFCC discussed,
     reviewed, or approved the reimbursement of the 2009 campaign expenses to the
     PCFO. After talking with the PCFO, we determined that both parties were unaware



                                          9
   of their responsibilities regarding reimbursement of CFC expenses. The PCFO stated
   that it was not aware that the actual expenses needed to be approved as long as they
   remained within the budget. The PCFO also explained that the actual expenses for
   the 2009 campaign were presented and reviewed with the 2010 budget, but were not
   officially approved in the meeting minutes.

   As a result of not reviewing and approving the reimbursement of the 2009 campaign
   expenses, the LFCC ran the risk of unrelated expenses being charged to the agencies
   and federations in the campaign, thus reducing the amounts due to them.
   Additionally, by not submitting its expenses for approval before its reimbursement,
   the PCFO did not allow the LFCC to exercise its authority over the campaign to
   ensure that only legitimate CFC costs are charged to the campaign.

   PCFO and LFCC’s Comments

   “The PCFO and LFCC agree with the finding. The PCFO’s reimbursement of
   campaign expenses was approved by the LFCC for the 2010 campaign prior to
   making reimbursement of those expenses.”

   Recommendation 2

   We recommend that the OCFC ensures that the LFCC knows and understands its
   responsibility to authorize and approve the PCFO’s reimbursement of actual
   campaign expenses for the 2011 campaign.

   Recommendation 3

   We recommend that the OCFC ensures that the PCFO has instituted procedures
   requiring it to submit its expense reimbursement requests to the LFCC for review and
   approval prior to making reimbursement of those expenses.

3. IPA Expenses Charged to the Wrong Campaign                              Procedural

   The PCFO incorrectly charged the 2009 campaign $2,050 for IPA fees related to the
   2007 campaign.

   5 CFR 950.106(b) states that the PCFO may only recover campaign expenses from
   receipts collected for that campaign year. In addition, CFC Memorandum 2008-9
   states that expenses incurred for the audit of a campaign must be paid from funds
   from the campaign being audited. Because this cost is paid after the close of the
   campaign, the amount should be accrued and withheld from the last distribution. The
   OCFC encourages campaigns to negotiate a fixed cost agreement with the IPA so that
   the actual amount can be known prior to the close of the campaign. If campaigns are
   unable to negotiate a fixed cost agreement, an estimated amount should be withheld
   based on prior experience and discussion with the auditor.




                                      10
          During our review of the PCFO’s 2009 campaign expenses, we indentified two
          invoices, totaling $2,050, for IPA services rendered in connection with an audit of the
          2007 campaign and for preparation of the 2007 CFC report. Both of these expenses
          related to the 2007 campaign and should not have been paid using 2009 CFC funds.
          When asked about the improper allocation of IPA expenses, the PCFO explained that
          it was not aware of the requirements of CFC Memorandum 2008-9.

          As a result of charging IPA expenses to the wrong campaign year, the net
          designations due to charities for the 2009 campaign were inappropriately reduced.

          PCFO and LFCC’s Comments

          “The PCFO and LFCC agree with the finding. The PCFO’s understanding was that
          the audit fees incurred in the current year were to be reimbursed from the campaign
          expenses. Since the 2009 campaign has already been completely paid out, we do not
          have an opportunity to move these expenses to another year. We will ensure that the
          2010 IPA expenses are matched with the related campaign year.”

          Recommendation 4

          We recommend that the OCFC and the LFCC work with the PCFO to implement
          procedures to properly match expenses with the related campaign year.

          Recommendation 5

          We recommend that the OCFC ensures that the PCFO correctly implements these
          new procedures for the active campaign and provides guidance to the PCFO
          regarding audit fees received related to the closed campaigns.

C.   CAMPAIGN RECEIPTS AND DISBURSEMENTS

     1.   PCFO did not Properly Train Keyworkers                                     Procedural

          The PCFO did not properly train keyworkers to review and verify calculations on
          pledge forms to ensure that donations are accurate and legible.

          5 CFR 950.105(d)(3) states that the PCFO should ensure that keyworkers are trained
          to check and ensure that pledge forms are legible, that arithmetic calculations are
          verified, and that the block on the pledge form concerning the release of an
          employee’s name and contact information is completely filled out.

          We reviewed a sample of 35 pledge forms to determine if the donor information was
          correctly entered into the PCFO’s pledge card database. We compared the actual
          pledge forms to the database and determined if the following items were entered
          correctly: donor name, charity codes, amount donated, total amount donated, and the




                                              11
     donor’s choice to release personally identifiable information. Our review identified
     the following errors:

     •   One pledge form was missing the donation amount. The PCFO explained that it
         received two envelopes from two different locations and an excel spreadsheet
         with the donor’s name and amount donated. After identifying the donor’s name,
         the PCFO filled in the amount according to the information provided by the
         agency. The PCFO did not advise its keyworkers that they were responsible for
         ensuring that all pledge cards were properly completed by the donors before any
         were forwarded to the PCFO for processing.

     •   One pledge form had the charity codes copied over. The PCFO stated that the
         internal auditor used a pen to trace three designations that were written outside the
         charity code boxes. Because the charity code numbers were hard to see on the
         pledge form, retracing over the numbers aided the data entry worker in entering
         the designations into the pledge card system.

     Because the PCFO did not properly train its keyworkers, 2 of the 35 pledge forms
     sampled were incomplete and illegible. Instead of returning the pledge form to the
     keyworkers for correction, the PCFO made changes to the pledge form on its own,
     thereby increasing the risk of misinterpreting Federal employee designations.

     PCFO and LFCC’s Comments

     “The PCFO and LFCC agree with the finding. For the 2012 CFC, a new PCFO and
     LFCC will be coordinating the campaign since the Greater Rochester CFC merged
     with the Niagara Frontier CFC. We will not have an opportunity to correct this
     finding.”

     OIG Comments

     Since the PCFO and LFCC no longer administer the Greater Rochester CFC, which
     was merged with the Niagara Frontier CFC, we are not making a recommendation for
     this finding.

2.   Pledge Form was not Consistent with Regulations                             Procedural

     The PCFO did not prepare the 2009 pledge forms consistent with the CFC regulations
     and instructions by the Director. Modifications required by CFC Memoranda 2009-5
     and 2008-4 were not followed, and the PCFO modified the revised date of its 2009
     pledge form without requesting approval from OPM.

     The following three regulations hold the PCFO responsible for preparing pledge
     forms:




                                          12
•   5 CFR 950.105(d)(5) states that the PCFO’s responsibilities include preparing
    pledge forms consistent with the CFC regulations and instructions by the Director.

•   5 CFR 950.402(a) states that the Director will make available at least one model
    pledge form for each campaign period, which shall be reproduced at the local
    level.

•   5 CFR 950.402(b) states that no further modifications to the pledge form are
    permitted unless approved in advance by the Director.

CFC Memorandum 2009-5 contained the 2009 CFC Model Pledge Form and
guidance for use by all local campaigns. The memorandum required the following
modifications to the 2009 CFC pledge form:

•   The “Recognition Options” section required the donor to check off the
    recognition options of their choice.

•   The Revised Date in the lower right corner was changed from March 2008 to
    March 2009.

•   Under the contribution section, a new line was added to record the “Date of
    Contribution” and the Other Cash and Check lines were combined to Check/Cash.

•   Under the payroll deduction section, the “Other” line was expanded to include a
    space for Check No.

In addition, CFC Memorandum 2008-4 required the following modifications to the
PCFO’s pledge form in 2008:

•   Under the “DESIGNATED GIFT” section, “that appear on the list provided” has
    been removed.

•   Under the “Military Payroll” deduction, a line was added that asks “Branch of
    Service?”

We reviewed the PCFO’s 2009 pledge form to determine if it was properly updated to
reflect the changes required in Memoranda 2009-5 and 2008-4. During our review,
we identified the following six errors:

•   Under “DESIGNATED GIFT”, the PCFO did not remove the phrase “that appear
    on the list provided.”

•   Under “Military Payroll” deduction, the PCFO did not add the line or the words,
    “Branch of Service?”




                                    13
     •   Under the “Recognition Options” section, the PCFO did not add three boxes so
         the donor can check off three recognition options of their choice.

     •   The revised date (Rev) in the lower right corner of the pledge form was not
         changed from March 2008 to March 2009. Instead, the PCFO changed the
         revised date to June 2009, without obtaining approval from OPM.

     •   Under the contributions section, the PCFO did not add the line “Date of
         Contribution.”

     •   Under the payroll deduction section, the “Other” line was expanded, but it did not
         include a space for “Check No.”

     Because the PCFO did not prepare the 2009 pledge form in accordance with Federal
     regulations and Memoranda 2009-5 and 2008-4, improvements made by the OCFC to
     help operate a more efficient campaign, and to obtain the greatest amount of
     donations, were not implemented.

     PCFO and LFCC’s Comments

     “The PCFO and LFCC agree with the finding. For the 2012 CFC, a new PCFO and
     LFCC will be coordinating the campaign since the Greater Rochester CFC merged
     with the Niagara Frontier CFC. We will not have an opportunity to correct this
     finding.”

     OIG Comments

     Since the PCFO and LFCC no longer administer the Greater Rochester CFC, which
     was merged with the Niagara Frontier CFC, we are not making a recommendation for
     this finding.

3.   PCFO did not Distribute all CFC Receipts as Required                        Procedural

     The PCFO did not distribute all CFC receipts with each quarterly disbursement.

     5 CFR 950.901(i)(2) states that the PCFO will distribute all CFC receipts beginning
     April 1, and quarterly thereafter.

     We reviewed the PCFO’s CFC bank account to determine if all receipts were
     distributed with each quarterly disbursement. During our review, we found that the
     PCFO withheld $28,248 in receipts from the first quarterly disbursement to help pay
     for its CFC expenses, which were reimbursed during the second quarterly
     disbursement. The PCFO was not aware that it could request partial expense
     reimbursements when approved by the LFCC. As a result, $28,248 was left idle in
     the account instead of being distributed to participating agencies or used as a partial
     reimbursement of campaign expenses.


                                          14
             In addition to not distributing all CFC receipts with the first quarterly disbursement,
             the PCFO withheld $8,992, $12,332, and $12,076 from the next three quarterly
             disbursements instead of distributing all CFC receipts on hand. These amounts were
             calculated based on the account balance from the month prior to each distribution.
             Because the PCFO failed to distribute all CFC receipts with each quarterly
             disbursement, participating agencies did not receive Federal employee donations in a
             timely manner.

             PCFO and LFCC’s Comments

             The PCFO and LFCC agree with the finding 1. The funds in question that were not
             distributed in the first disbursement should have been paid to the United Way of
             Greater Rochester, Inc. to cover a portion of the PCFO’s administrative costs. For the
             2011 CFC, the PCFO will request approval from the LFCC to allow a partial expense
             reimbursement for any funds remaining after paying the one-time only distributions
             to agencies.

             Recommendation 6

             We recommend that the OCFC and the LFCC ensure that the PCFO distributes all
             CFC receipts with each quarterly disbursement. Each quarterly disbursement should
             be based on the prior month’s reconciled bank statement.

      4.     Un-Cashed Check Policies and Procedures                                                 Procedural

             The PCFO’s policies and procedures for un-cashed checks do not conform to the
             requirements of Memorandum 2006-5 issued by the OCFC.

             Section C of Memorandum 2006-5 states that the PCFO must develop and follow
             policies and procedures regarding un-cashed checks. The OCFC recommends that
             this policy be documented and implemented after a check has gone un-cashed for six
             months. The procedures should include at least three documented follow-up attempts
             to reach the payee by phone and e-mail. If it’s determined that the payee is no longer
             active, the funds must be disbursed among the remaining organizations of that
             campaign as undesignated funds.

             The PCFO’s current policies and procedures for un-cashed checks require it to return
             un-cashed checks to the State of New York after five years, instead of disbursing the
             funds to the CFC after six months. This policy does not comply with Memorandum
             2006-5 and was only implemented under state law for unclaimed property. The
             PCFO said it was not aware of the requirements of Memorandum 2006-5 and agree
             that the policy needs to be revised to comply with CFC regulations and Memorandum
             2006-5.

1
  The PCFO and LFCC agree with the finding as it relates to the first quarterly disbursement. The draft report only
questioned the first quarterly disbursement since it was the greatest amount withheld. The recommendation remains
the same for each disbursement since the PCFO should distribute all receipts on hand.


                                                        15
     As a result of not following the procedures set by the OCFC in Memorandum 2006-5,
     the PCFO is not ensuring, to the best of its ability, that donor monies are distributed
     to the designated agencies, or, if not possible, that the funds are distributed as
     undesignated funds.

     PCFO and LFCC’s Comments

     “The PCFO and LFCC agree with the finding. The PCFO has updated its policies to
     indicate that after follow-up attempts, un-cashed checks for CFC funds older than 6
     months will be returned as undesignated funds and remitted according to the
     regulations.”

     Recommendation 7

     We recommend that the OCFC and the LFCC ensure that the PCFO updated its
     policies and procedures for un-cashed checks so that funds are disbursed to the CFC
     after six months in accordance with CFC memorandum 2006-5.

5.   PCFO did not Keep or Maintain an Interest-Bearing Bank Account Procedural

     The PCFO did not keep or maintain an interest-bearing bank account for the CFC
     funds received during the 2009 Campaign.

     According to 5 CFR 950.105(d)(8), the PCFO is responsible for keeping and
     maintaining CFC financial records and interest-bearing bank accounts separate from
     the PCFO’s internal organizational financial records and bank accounts. Interest
     earned on all CFC accounts must be distributed in the same manner as undesignated
     funds.

     Based on our review of the PCFO’s bank statements, the checking account used for
     depositing the CFC funds was not an interest-bearing bank account. The PCFO
     reasoned that an interest-bearing bank account would cost more in fees than the
     amount of interest that can be earned on the money deposited. Although the PCFO
     reasonably saw no benefit in opening an interest-bearing bank account, the PCFO did
     not seek approval from the OCFC in forgoing the Federal regulations.

     As a result of not adhering to the Federal regulations, potential interest earned from
     idle campaign funds was lost.

     PCFO and LFCC’s Comments

     “The PCFO and LFCC agree with the finding. The PCFO will apply to OCFC to
     allow a non-interest bearing and no fee account to remain as the interest would not
     exceed the fees associated with an interest bearing account.”




                                          16
     Recommendation 8

     We recommend that the OCFC ensure that the PCFO keeps and maintains an interest-
     bearing bank account so that CFC funds can earn investment income payable to
     agencies participating in the CFC. If the cost to maintain an interest-bearing bank
     account is greater than the amount of earnable interest, the PCFO should obtain
     approval from the OCFC to deviate from 5 CFR 950.105(d)(8).

6.   Unauthorized One-Time Disbursements                                     Procedural

     There was no support showing that the LFCC determined and authorized a $500
     threshold for one-time disbursements to organizations receiving minimal donations
     from Federal employees.

     5 CFR 950.901(i)(3) states that the PCFO may make one-time disbursements to
     organizations receiving minimal donations from Federal employees. The LFCC must
     determine and authorize the amount of these one-time disbursements.

     We reviewed the LFCC meeting minutes for the 2009 campaign to determine if the
     LFCC set the threshold for one-time disbursements and approved those disbursements
     to agencies and federations that receive minimal donations. There was no
     documentation showing the LFCC’s review and approval of one-time disbursements.
     According to the PCFO, the ceiling amount and approval of one-time disbursements
     were approved by the LFCC, but the approvals were not documented in the meeting
     minutes.

     Because the PCFO could not provide support showing the authorization of one-time
     disbursements and the approved amount, we were unable to complete our review of
     one-time disbursements.

     PCFO and LFCC’s Comments

     “The PCFO and LFCC agree with the finding. The LFCC began rotating who took
     minutes for the meetings and it was not documented in the meeting minutes. The
     PCFO will ensure before the 2011 disbursements are made that the LFCC approves
     and documents the recommended one-time disbursement amount.”

     Recommendation 9

     We recommend that the OCFC ensures that the PCFO understands that the LFCC
     must determine and authorize the amount of one-time disbursements before the
     payments are actually made.

     Recommendation 10

     We recommend that the OCFC require the LFCC to document its approval of one-
     time disbursements in its meeting minutes.


                                        17
D.   ELIGIBILITY

     1.   Untimely Notice of Eligibility Decisions                                    Procedural

          The LFCC did not issue notices of its eligibility decisions for organizations seeking
          local eligibility in the CFC within 15 business days of the closing date for receipt of
          applications.

          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. The closing
          date for the 2009 campaign was March 6, 2009.

          We reviewed a sample of eligibility decisions to determine if the LFCC sent the
          notifications within 15 business days of the application closing date. From our
          review, we determined that the LFCC issued notices of its eligibility decisions on
          April 27, 2009, which was after the March 27, 2009 deadline (15 business days after
          March 6, 2009).

          As a result of issuing late eligibility decisions, agencies and federations were not
          notified of their participation in the CFC in a timely manner or given sufficient time
          to appeal unfavorable decisions.

          PCFO and LFCC’s Comments

          “The PCFO and LFCC agree with the finding. For the 2012 CFC, a new PCFO and
          LFCC will be coordinating the campaign since the Greater Rochester CFC merged
          with the Niagara Frontier CFC. We will not have an opportunity to correct this
          finding.”

          OIG Comments

          Since the PCFO and LFCC no longer administer the Greater Rochester CFC, which
          was merged with the Niagara Frontier CFC, we are not making a recommendation for
          this finding.

E.   PCFO AS A FEDERATION

     Our review of the PCFO’s activities as a federation showed that it complied with the
     applicable provisions of 5 CFR 950.

F.   FRAUD AND ABUSE

     Our review of the PCFO’s fraud and abuse policies and procedures indicated that they
     appeared reasonably sufficient to detect and deter potential fraud and abuse activities.




                                               18
             IV. MAJOR CONTRIBUTORS TO THIS REPORT
Special Audits Group

              , Auditor-In-Charge


                 , Group Chief,

              , Senior Team Leader




                                     19
                                                                 75 College Avenue    _
                                                          20 12 f~~~~~~~;3or014607-1 009
                                                                 Fax (585) 242-6500
Combined Federal Campaign
of Greater Rochester




     February 2,2012



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




     Enclosed are the comments and corrective action plan for the audit of the 2008 and 2009
     Greater Rochester combined Federal Campaigns (CFC). We have enclosed a hard copy of our
     comments and an electronic copy on a CD in Microsoft Word.

    Please let us know if you need anything further.


    ~i:ereh)
   ~V~
    Ignatius Vaccaro 

    LFCC Chair 
                                                Relationship Manager
PCFO/LFCC Response to Draft Report
2008 & 2009 Greater Rochester CFC
February 2,2012

A.   AUDIT GUIDE REVIEW

     1.   Agreed-Upon Procedures Not in Compliance with the Audit Guide                Procedural

          Recommendation 1
          We recommend that the Office of the Combined Federal Campaign (OCFC) and the
          LFCC ensure that the IPA contracted by the PCFO fully understands the CFC and its
          related regulations so that it may complete the Audit Guide's AUPs accurately and
          completely.

          Response
          The PCFO and LFCC agree with the finding. The IPA, Bonadio & Co., LLP,
          interpreted the agreed-upon procedures differently and now understands OPM's
          interpretation and will perform the procedures in accordance with the regulations for
          the 2010 audit.

          Recommendation 2
          We recommend that the OCFC ensures that the LFCC and the PCFO encourage the
          IP A to ask questions of the PCFO or the OCFC if it is unsure of how to complete any
          of the Audit Guide steps for future AUP audits.

          Response
          The PCFO and LFCC agree with the finding. The IPA, Bonadio & Co., LLP, will ask
          questions if they are unsure of how to complete any of the Audit Guide steps for the
          2010 audit.

B.   BUDGET AND CAMPAIGN EXPENSES

     1.   PCFO's Application was Missing Required Statements                           Procedural

          Recommendation 3
          We recommend that the OCFC ensures that the LFCC reviews future PCFO
          applications, verifying that all required language is included and correct for future
          campaigns.

          Response
          The PCFO and LFCC agree with the finding. For the 2012 combined federal
          campaign, a new PCFO and LFCC will be coordinating the campaign since the
          Greater Rochester CFC merged with the Niagara Frontier CFC. We will not have an
          opportunity to correct this finding.

     2.   Unauthorized Reimbursement of Campaign Expenses                             Procedural

          Recommendation 4
PCFO/LFCC Response to Draft Report
2008 & 2009 Greater Rochester CFC
February 2,2012

         We recommend that the OCFC ensures that the LFCC knows and understands its
         responsibility to authorize and approve the PCFO' s reimbursement of actual
         campaign expenses for all future CFC campaigns.

         Response
         The PCFO and LFCC agree with the finding. The PCFO's reimbursement of
         campaign expenses was approved by the LFCC for the 2010 campaign.

         Recommendation 5
         We recommend that the OCFC ensures that the PCFO has instituted procedures
         requiring it to submit its expense reimbursement requests to the LFCC for review and
         approval prior to making reimbursement of those expenses.

         Response
         The PCFO and LFCC agree with the finding. The PCFO' s reimbursement of
         campaign expenses was approved by the LFCC for the 2010 campaign prior to
         making reimbursement of those expenses.

    3.   IP A Expenses Charged to the Wrong Campaign                                  $2,050

         Recommendation 6
         We recommend that the OCFC and the LFCC work with the PCFO to implement
         procedures to properly match expenses with the related campaign year.

         Response
         The PCFO and LFCC agree with the finding. The PCFO's understanding was that
         the audit fees incurred in the current year were to be reimbursed from the campaign
         expenses. Since the 2009 campaign has already been completely paid out, we do not
         have an opportunity to move these expenses to another year. We will ensure that the
         2010 IPA expenses are matched with the related campaign year.

         Recommendation 7
         We recommend that the OCFC ensures that the PCFO correctly implements these
         new procedures for the active campaigns and provides guidance to the PCFO in
         regards to audit fees received related to closed campaigns.

         Response
         The PCFO and LFCC agree with the finding. The PCFO will ensure that the 2010
         IPA expenses are matched with the related campaign year.




                                            2
PCFO/LFCC Response to Draft Report
2008 & 2009 Greater Rochester CFC
February 2,2012



                                 Deleted by the OIG
                           Not Relevant to the Final Report




                                         3
PCFO/LFCC Response to Draft Report
2008 & 2009 Greater Rochester CFC
February 2,2012

C. CAMPAIGN RECEIPTS AND DISBURSEMENTS

     1.   PCFO did Not Properly Train Kevworkers                                    Procedural

          Recommendation 10
          We recommend the OCFC and the LFCC ensure that the PCFO properly trains its
          keyworkers to ensure that donor forms are complete, accurate, and legible prior to
          sending them to the PCFO.

          Response
          The PCFO and LFCC agree with the finding. For the 2012 combined federal
          campaign, a new PCFO and LFCC will be coordinating the campaign since the
          Greater Rochester CFC merged with the Niagara Frontier CFC. We will not have an
          opportunity to correct this finding.

          Recommendation 11
          We recommend that the OCFC and the LFCC ensure that the PCFO adopts a new
          policy that requires the PCFO to contact the keyworker if any pledge forms are
          incomplete, inaccurate, or illegible and have them make the appropriate corrections.

          Response
          The PCFO and LFCC agree with the finding. For the 2012 combined federal
          campaign, a new PCFO and LFCC will be coordinating the campaign since the
          Greater Rochester CFC merged with the Niagara Frontier CFC. We will not have an
          opportunity to correct this finding.

    2.    Pledge Form was Not Consistent with Regulations                           Procedural

          Recommendation 12
          We recommend that the OCFC and the LFCC ensure that the PCFO prepares future
          pledge forms consistent with CFC regulations and Memorandums.

          Response
          The PCFO and LFCC agree with the finding. For the 2012 combined federal
          campaign, a new PCFO and LFCC will be coordinating the campaign since the
          Greater Rochester CFC merged with the Niagara Frontier CFC. We will not have an
          opportunity to correct this finding.

          Recommendation 13
          We recommend that the OCFC and the LFCC ensure that the PCFO receives approval
          from OPM prior to making any of its own modifications to the pledge forms.

          Response
          The PCFO and LFCC agree with the finding. For the 2012 combined federal
          campaign, a new PCFO and LFCC will be coordinating the campaign since the

                                              4
PCFO/LFCC Response to Draft Report
2008 & 2009 Greater Rochester CFC
February 2, 2012

          Greater Rochester CFC merged with the Niagara Frontier CFC. We will not have an
          opportunity to correct this finding.

     3.   PCFO did Not Distribute all Receipts at Close of First                     Procedural
          Disbursement Period

          Recommendation 14
          We recommend that the OCFC and the LFCC ensure that the PCFO distributes all
          CFC receipts at the close of each disbursement period so that its CFC account has a
          balance of zero.

          Response
          The PCFO and LFCC agree with the finding. The funds in question that were not
          distributed should have been paid to the United Way of Greater Rochester, Inc. to
          cover a portion of the PCFO's administrative costs. For the 2011 combined federal
          campaign, the PCFO will request approval from the LFCC to allow a partial expense
          reimbursement for any funds remaining after paying the one-time only distributions
          to agencies.

     4.   Un-Cashed Check Policies and Procedures against Regulation               Procedural

          Recommendation 15
          We recommend that the OCFC and the LFCC direct the PCFO to update its policies
          and procedures for un-cashed checks so that funds are disbursed to the CFC after six
          months in accordance with CFC memorandum 2006-5.

          Response
          The PCFO and LFCC agree with the finding. The PCFO has updated its policies to
          indicate that after follow-up attempts, un-cashed checks for CFC funds older than 6
          months will be returned as undesignated funds and remitted according to the
          regulations.

    5.    PCFO did Not Keep or Maintain an Interest Bearing Bank Account Procedural

          Recommendation 16
          We recommend that the OCFC ensure that the PCFO keeps and maintains an interest­
          bearing bank account that CFC funds can earn investment income payable to agencies
          participating in the CFC. If the cost to maintain an interest-bearing bank account are
          greater than the amount of earnable interest, the PCFO should obtain approval from
          the OCFC to deviate from 5 CFR 950.l05(d)(8).

          Response
          The PCFO and LFCC agree with the finding. The PCFO will apply to OCFC to
          allow a non-interest bearing and no fee account to remain as the interest would not
          exceed the fees associated with an interest bearing account.

                                               5
PCFO/LFCC Response to Draft Report
2008 & 2009 Greater Rochester CFC
February 2, 2012


     6.   Unauthorized One-Time Disbursements                                        Procedural

          Recommendation 17
          We recommend that the OCFC ensures that the PCFO understands that the LFCC
          must determine and authorize the amount of one-time disbursements before the
          payments are actually made.

          Response
          The PCFO and LFCC agree with the finding. The LFCC began rotating who took
          minutes for the meetings and it was not documented in the meeting minutes. The
          PCFO will ensure before the 2011 disbursements are made that the LFCC approves
          and documents the recommended one-time disbursement amount.

          Recommendation 18
          We recommend that the OCFC require the LFCC to document its approval of one­
          time disbursements in its meeting minutes.

          Response
          The PCFO and LFCC agree with the finding. The LFCC began rotating who took
          minutes for the meetings and it was not documented in the meeting minutes. The
          PCFO will ensure before the 2011 disbursements are made that the LFCC approves
          and documents the recommended one-time disbursement amount. I

D.   ELIGIBILITY

     1.   Untimely Notice of Eligibility Decisions                                   Procedural

          Recommendation 19
          We recommend that the OCFC ensures that the LFCC issues notices of its eligibility
          decisions within 15 days of the closing date for receipt of applications in compliance
          with 5 CFR 950.801(a)(5).

          Response
          The PCFO and LFCC agree with the finding. For the 2012 combined federal
          campaign, a new PCFO and LFCC will be coordinating the campaign since the
          Greater Rochester CFC merged with the Niagara Frontier CFC. We will not have an
          opportunity to correct this finding.




                                               6