oversight

Audit of the 2011 and 2012 Long Island Combined Federal Campaigns

Published by the Office of Personnel Management, Office of Inspector General on 2015-02-11.

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 





                                 AUDIT OF THE 2011 AND 2012 

                                       LONG ISLAND 

                               COMBINED FEDERAL CAMPAIGNS 


                                           Report Number 3A-CF-00-14-049 

                                                  February 11,2015 





                                                                 -- CAUTION -­
This audit r epo11 h as been distributed to fede1·al officials who are responsible for t he administration of t he audited program . This audit •·eport may
contain proprietary data which is protected by feder al law (18 U.S.C. 1905). T herefore, while t his audit r epo11 is available unde1· the Freedom of
Information Act and made available to t he public on the OIG webpage (ltttp:/h vww. opm.gov/our-inspector-geu ernl), caution needs to be exer cised
before releasing the r epo1·t to the general p ublic as it may contain proprietary inform ation t hat was redacted from the publicly distJ·ibuted copy.
            EXECUTIVE SUMMARY 

                                 Auditofthe 2011 and 2012 Long Island
                                    Combined Federal C


Why Did We Conduct the Audit?              What Did We Find?

The main objective of the audit was to     We detennined that the PCFO an d LFCC need to strengthen their
detennine if the Long Island CFC was       procedm es and controls related to the Audit Guide, Budget and
administered in compliance with            Campaign Expenses, Campaign Receipts an d Disbmsements, and
5 CFR 950, including the                   Eligibility. Om audit identified 11 areas requiring improvement
responsibilities ofboth the Principal      and one program concern related to the LFCC's lack of oversight
Combined Flmd Organization (PCFO)          and participation in campaign matters. Specifically, we would
and the Local Federal Coordinating         like to highlight the following program concerns identified by om
Committee (LFCC).                          audit.

What Did We Audit?                            • 	 LFCC members sent replacements to attend LFCC 

                                                  meetings instead of attending themselves. 

The Office of the Inspector General           • 	 The LFCC did not respond or provide a con ective action
has completed a perfotmance audit of              plan to the audit issues related to its non-compliance with
the responsibilities of the PCFO and              the CFC regulations.
LFCC in regards to Budget and                 • 	 The LFCC did not review or authorize the PCFO 's 

Campaign Expenses, Campaign                       reimbmsement of actual campaign expenses. 

Receipts and Disbmsements,                    • 	 The LFCC included one member who was not a Federal
Eligibility, the PCFO 's activities as a          employee.
Federation, and Fraud and Abuse for           • 	 We identified $10,791 in unallowable expenses charged to
the 2012 campaign. Additionally, we               the 2012 campaign.
reviewed the Independent Public
                                              • 	 The PCFO incon ectly applied CFC receipts to the wrong
Accountant's Agreed-Upon                          campmgns.
Procedm es audit of the 2011
                                              • 	 The PCFO did not make the initial, one-time disbmsement
campaign. Om audit was conducted
                                                  by the required deadline.
from June 16 through 20, 2014, at the
                                              • 	 The PCFO did not have the required policies and 

PCFO 's offices in Deer Park, New
                                                  procedm es for lm-cashed checks. 

York.




 Michael R. Esser
Assistant Inspector General
for Audits
                   ABBREVIATIONS

5 CFR 950   Title 5, Code of Federal Regulations, Part 950
AUP         Agreed-Upon Procedures
CFC         Combined Federal Campaign
CFR         Code of Federal Regulations
IPA         Independent Public Accountant
LE          Loaned Executives
LFCC        Local Federal Coordinating Committee
NALC        National Association for Letter Carriers
OCFC        Office of the Combined Federal Campaign
OIG         Office of the Inspector General
OPM         U.S. Office of Personnel Management
PCFO        Principal Combined Fund Organization
USPS        United States Postal Service
UWLI        United Way of Long Island




                                   ii
                                TABLE OF CONTENTS 


                                                                                                                                 P age 

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


         ABBREVIATIONS ...................................................................................................... ii 


I. 	     I NTRODUCTION AND BACK GROUND ................................................................. I 


II. 	    OBJECT IVES, SCOPE, AND METHODOLOGY ...................................................3 


III. 	   AUDIT FINDINGS AND RECO MMENDATIONS..................................................8 


         A. AUDIT GUIDE REVIEW ........................................................................................8 

            1. Agreed-Upon Procedm es Not in Compliance with the Audit Guide .................8 


         B. BUDGET AND CAMPAIGN EXPENSES ............................................................. lO 

            1. Unallowable Expenses ....................................................................................... 10 

            2. Missing and Improper PCFO Application Statements ....................................... 13 

            3. Untimely PCFO Solicitation .............................................................................. 14 

            4. Review and Authorization of Expense Reimbmsement .................................... 15 


         C. CAMPAIGN RECEIPTS AND DISBURSEMENTS ............................................. 17 

            1. CFC Receipts Applied to the Wrong Campaigns .............................................. 17 

            2. Policies and Procedm es for Un-Cashed Checks ................................................ 18 

            3. LFCC Used an Incon ect Method to Establish Minimal Donations ................... 19 

            4. Application of Pledge Loss for One-Time Disbmsements ................................20 

            5. Untimely Distribution of One-Time Disbm sements..........................................21 


         D. ELIGIBILITY ..........................................................................................................22 

            1. LFCC Member Not a Federal Employee ...........................................................22 


         E. PCFO AS A FEDERATION ...................................................................................23 


         F. FRAUD AND ABUSE ............................................................................................23 


         G. PROGRAM CONCERN RELATED TO LFCC PARTICIPATION ......................24 


IV. 	    MAJOR C ONTRIBUTORS TO TillS REPORT ....................................................25 


         APPENDIX ...................................................................................................................26 


         REPORT FRAUD, WAST E, AND MISMANAGEMENT ......................................28 

        I. INTRODUCTION AND BACKGROUND 



Introduction
This final rep01t details the findings and conclusions resulting from our audit of the 2011 and
2012 Long Island Combined Federal Campaigns (CFC). The audit was perf01med by the U.S .
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 2012, it consisted of 184 separate local campaign organizations located throughout
the United States, including Pue1to Rico and the Virgin Islands, as well as overseas locations.
OPM's Office of the Combined Federal Campaign (OCFC) has the responsibility for
management of the CFC. This responsibility includes publishing regulations, memoranda, and
oth er fonns 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; dete1mining the eligibility of local volunta1y organizations; selecting and
supervising the activities of the PCFO; encouraging Federal agencies to appoint Loaned
Executives (LE), Federal employees who are temporarily assigned to work directly on the CFC,
to assist in the campaign; ensuring that employees are not coerced to pruticipate in the campaign;
and acting upon any problems relating to noncompliance with the policies and procedures of the
CFC.

The prima1y goal of the PCFO is to administer an effective and efficient campaign in a fair and
even-handed manner aimed at collecting the greatest ammmt of charitable contributions possible.
Its responsibilities include training LEs, coordinators, employee keyworkers and volunteers;
maintaining a detailed schedule of its actual CFC administrative expenses; prepru·ing pledge
f01ms and chru·ity lists; distributing campaign receipts; submitting to an audit of its CFC
operations by an Independent Public Accountant (IPA) in accordance with generally accepted
auditing standai·ds; cooperating fully with the OIG audit staff during audits and evaluations;
responding in a timely and appropriate manner to all inquiries from pruticipating organizations,
the LFCC, and the Director of OPM; consulting with federated groups on the operation of the
local campaign; and for establishing and maintaining a system of intem al controls.

Executive Orders No. 12353 and No. 12404 established a system for administering an annual
chru·itable solicitation drive among Federal civilian and milita1y employees. Title 5, Code of



                                                1                          Rep01t No. 3A-CF-00-14-050
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 previous audit of the Long Island CFC, which covered the 2004 campaign, was not
considered when planning for this audit due to its age.

The initial results of our current audit were discussed with the PCFO during our exit conference
on June 20, 2014. A draft report was provided to both the PCFO and the LFCC for review and
comment on September 24, 2014. Their response to the draft report was considered in
preparation of this final report and is included as an Appendix.




                                                2                          Report No. 3A-CF-00-14-049
 II. OBJECTIVES, SCOPE, AND METHODOLOGY 



Objective 

The primaty pmpose of this audit was to detennine compliance with 5 CFR 950. 


Our audit objective for the 2011 campaign was:
   Audit Guide Review
       • 	 To detennine if the IPA completed the Agreed-Upon Procedures (AUPs) as outlined
           in the CFC Audit Guide.

Additionally, our audit objectives for the 2012 campaign were as follows:
   Budget and Campaign Expenses
       • 	 To detennine if the PCFO solicitation, application, campaign plan, and budget were
           in accordance with the regulations.
       • 	 To determine if the PCFO charged the campaign for interest expenses and if the
           appropriate commercial loan was used.
       • 	 To determine if expenses charged to the campaign were actual, reasonable, did not
           exceed 110 percent of the approved budget, and were properly allocated.

   Campaign Receipts and Disbursements
     • 	 To determine if the pledge f01m fonnat was correct and if the pledge f01m rep01i
         agrees with the actual pledge f01m.
     • 	 To detetmine if incoming pledge monies (receipts) were allocated to th e proper
         campaign and if the net fimds (less expenses) were properly distributed to member
         agencies and federations.
     • 	 To detetmine if the member agencies and federations were properly notified of the
         ammmts pledged to them and that donor personal inf01matio n was only released for
         those who requested the release of infonnation.

   Eligibility
       • 	 To detetmine if the charity list (CFC brochure) was properly f01matted and contained
           th e required inf01mation.
       • 	 To detetmine if the charitable organization application process was open for the
           required 30-day period; if the applications were appropriately reviewed and approved;
           if the applicants were notified of the eligibility decisions in a timely manner; and if
           th e appeals process for denied applications was followed.
       • 	 To detetmine if any non-Federal employees or retirees were members of the LFCC.




                                               3	                          Rep01t No. 3A-CF-00-1 4-049
   PCFO as a Federation
       • 	 To detennine if the ammmts received by the United Way of Long Island (UWLI) as a
           federation reconciled to those disbmsed by the CFC; if the UWLI properly distributed
           funds to its federation members; if expenses charged by the UWLI (to its federation
           members) were documented properly; and if the disbmsements made to the federation
           members were accmate.

   Fraud and Abuse
       • 	 To detennine what policies and procedmes the PCFO has in place related to detecting
           and preventing fraud and abuse and if they are adequate.

Scope and Methodology
We conducted this perfonnance audit in accordance with generally accepted government
auditing stan dards. Those standar ds require that we plan and perf01m the audit to obtain
sufficient and appropriate evidence to provide a reasonable basis for om findings and
conclusions based on the audit objectives. We believe that the evidence obtained provides a
reasonable basis for om fmdings and conclusions based on the audit objectives.

The audit covered campaign years 2011 and 2012. The UWLI, located in Deer Park, New York,
served as the PCFO dming both campaigns. The audit fieldwork was conducted at the PCFO's
office from June 16 through 20, 2014. Additional audit work was completed at om Cranbeny
Township, Pennsylvania, and Washington, D .C. offices.

The Long Island CFC received campaign pledges, collected campaign receipts, and incuned
campaign administrative expenses for the 2011 and 2012 campaigns as shown below.


   Campaign     I          Total                     Total                Administrative
     Year                 Pledges         I         Receipts          I     Expenses
      2011               $719,679                   $705 ,417                $154,750

      2012               $647,074                   $620,535                 $158,199


In conducting the audit, we relied to vmying degrees on computer-generated data. Om review of
a sample of campaign expenses and supp01ting data, a sample of pledge fonn enu·ies, and the
disu·ibutions of campaign conu·ibutions and related bank statements, verifi ed that the computer­
generated data. used in conducting the audit was reliable. Nothing came to om attention dming
om review of the data to cause us to doubt its reliability.

We considered the campaign's internal conu·ol stluctme in plaiiDing the audit procedmes. We
gained an understanding of the management procedmes and conu·ols to the extent necessmy to


                                               4	                         Rep01t No. 3A-CF-00-14-049
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 2011 campaign (Audit Guide Review), we
compared the IPA’s working papers to the requirements of the CFC Audit Guide to verify that
the AUP steps were completed and properly documented.

In regard to our objectives concerning the 2012 campaign’s budget and campaign expenses, we
performed the following procedures:

	 Reviewed the PCFO’s application to verify that it was complete.

	 Reviewed a copy of the public notice to prospective PCFOs, and the LFCC meeting 

   minutes, to verify that the PCFO was selected in a timely manner.


	 Traced and reconciled amounts on the PCFO’s Schedule of Actual Expenses to the PCFO’s
   general ledger.

	 Reviewed the PCFO’s budgeted expenses and the LFCC’s approval of the budget, and

   matched all expenses to supporting documentation.


	 Reviewed the LFCC meeting minutes and verified that the LFCC authorized the PCFO’s 

   reimbursement of campaign expenses.


	 Compared actual expenses to budgeted expenses to determine if they exceeded 110 percent
   of the approved budget.

To determine if the 2012 campaign’s receipts and disbursements were handled in accordance
with CFC regulations, we reviewed the following:

	 A judgmental sample of the top 45 high dollar pledge forms, with pledges totaling
   $107,358, out of a universe of 3,538 pledge forms, with pledges totaling $647,074, from the
   PCFO’s 2012 campaign pledge form detail schedule and compared the pledge information
   from the schedule to the actual pledge forms.

	 Distribution checks for a sample of 10 federations and organizations, totaling $274,197 in
   disbursed funds, out of a universe of 195 federations and organizations, totaling $462,336,
   to verify that the appropriate amount was distributed in a timely manner. We judgmentally


                                                 5	                         Report No. 3A-CF-00-14-049
    selected the 10 agencies receiving the largest total disbursements which happened to include
    the PCFO as a federation.

	 One-time disbursements to verify that the PCFO properly calculated pledge loss and 

   disbursed 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 the guidance issued by the OCFC.


	 A sample of 5 pledge notification and donor letters (from a universe of 71) to verify that the
   PCFO accurately notified the organizations of the amounts due to them and properly
   released the donor information by the date required by the Federal regulations. We
   judgmentally selected this sample by picking the first five organizations from our high
   dollar pledge form sample in which a donor indicated they wanted their contact information
   released.

	 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.


	 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.

To determine if the LFCC and PCFO were in compliance with CFC regulations regarding
eligibility for the 2012 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 PCFO’s responses to questions regarding the process and procedures for the application
   evaluation process.

	 A sample of 8 local organization applications (from a universe of 49 local organization 

   applications) to determine if the organizations met the requirements for participating in the

   CFC and if the LFCC sent the eligibility letters by the date required by the Federal



                                                6	                         Report No. 3A-CF-00-14-049
    regulations. We judgmentally selected the top three local federations (including the PCFO)
    and the top five local independent organizations, based on the amount of payments from the
    Agency Payment Schedule, as designated in the 2012 campaign.

	 The LFCC’s processes and procedures for responding to appeals from organizations.

	 The LFCC member listings to verify that all members were active Federal employees.

To determine if the UWLI was in compliance with the CFC regulations as a federation for the
2012 campaign, we reviewed the following:

	 Data reported on the CFC Receipts Schedule, with supporting documentation, to verify that
   receipts were properly recorded.

	 The CFC Receipts Schedule and the Federation Distribution Schedule, to determine if the
   percentage of receipts assigned to each organization agreed to the percentage of pledges for
   that organization.

	 Distribution checks for a sample of 6 federation member agencies, with disbursements 

   totaling $42,304, out of a universe of 60, totaling $61,492, to verify that the appropriate

   amount was distributed in a timely manner. We judgmentally selected the six federation 

   members with the highest disbursements, excluding the PCFO as a federation. 


	 The PCFO’s annual report and 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.




                                                 7	                         Report No. 3A-CF-00-14-049
     III. AUDIT FINDINGS AND RECOMMENDATIONS 



A.   AUDIT GUIDE REVIEW

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

        The IPA utilized by th e LFCC to complete th e AUP audit of the 2011 campaign did not
        perf01m its review in accordance with the requirements of the Audit Guide.

        The Audit Guide contains specific procedm es to be followed dming the examination by the
        IPA with the primmy objective of dete1mining LFCC and PCFO complian ce with 5 CFR 950
        and OPM guidance.

        We reviewed the IP A's work papers an d rep01i in detail to detennine if th e IPA followed the
        AUPs as stated in th e Audit Guide an d if th e fmdings were properly rep01ied. Om review
        identified two m·eas where th e IPA did not comply with the requir ements of the Audit Guide.
        Specifically, we identified the following issues:

        The IPA did not complete all of the audit steps.

           • 	 P CFO as a Federation, Steps 1-8 were to be completed by the IPA if th e PCFO
               served as a federation, eith er in its own local campaign or in other adjacent
               campaigns dming the 2011 CFC. The IPA did not complete these steps, stating that
               the PCFO did not pa1iicipate as a federation. However, based on om review, we
               found that the PCFO served as a federation in its own local campaign an d three other
               adjacent campaigns.

           • 	 Receipts and Disbursements of Funds, Step 7(a-e) required the IPA to review one­
               time disbmsements and recalculate the 2011 pledge loss. Specifically, th e AUP step
               instructed, "If the campaign made one-time disbmsements, then perfonn the
               following procedm es; othe1w ise, skip to #8 ." The IPA did not complete these steps,
               stating that they were not applicable. However, we found that the 2011 campaign did
               have one-time disbursements.

        The IPA failed to rep01i noncompliance in th e following m·eas:

           • 	 LFCC Processes, Step l (a-c) required the IPA to review the PCFO 's application to
               administer the 2011 campaign for a signed statement by an appropriate official of the
               PCFO that it will administer the CFC fairly and equitably; conduct the applicant's
               non-CFC operations sepm·ately from the campaign operations; an d that it will be


                                                     8	                         Rep01i No. 3A-CF-00-14-049
       subject to the decisions and supervision of the LFCC and/or Director. The IPA’s
       work papers documented that the PCFO’s application included a signed statement
       from the President and Chief Executive Officer that the PCFO would administer the
       CFC appropriately. However, the application did not expressly include the above-
       mentioned required language in the statement. Furthermore, Step 1(d) required the
       IPA to review the PCFO’s application to verify it did not include a statement that the
       PCFO was subject to the provisions of 5 CFR 950.403, as this has been removed from
       the regulations. However, the PCFO’s application included a statement that it was
       subject to the provisions of 5 CFR 950.403.

   	 LFCC Processes, Step 8 required the IPA to obtain a list of LFCC members, their
      agency affiliations, their contact information, and the LFCC meeting minutes for
      calendar years 2011 through 2013 to determine if all LFCC members were current
      Federal employees and were active participants at LFCC meetings. The IPA stated
      that it confirmed that all members listed on the meetings’ minutes were Federal
      employees and, as of the last day of field work, all were deemed to be active
      employees. However, our audit work revealed that one LFCC member had not been a
      Federal employee since 2004.

As a result of not completing the reviews required by the AUP and failing to report instances
of noncompliance, the IPA did not provide OPM’s OCFC and the LFCC with the assurance
that the PCFO was operating the CFC in accordance with the regulations. Additionally,
based on the errors made in its review, the IPA may not have fully understood the CFC and
its related regulations when completing the AUPs.

Recommendation 1

We recommend that the OCFC and the LFCC ensure that the IPA fully understands the CFC
and its related regulations so that it will complete the Audit Guide’s AUPs correctly and
completely.

LFCC and PCFO Response:

The LFCC and PCFO agree that the IPA needs to fully understand the CFC and its related
regulations to complete the Audit Guide’s AUP correctly and completely.

OIG Comments:

To help ensure that the IPA fully understands the CFC and its related regulations, we suggest
that as part of their corrective action plan, the LFCC and PCFO provide the IPA with a copy


                                            9	                         Report No. 3A-CF-00-14-049
     of th e regulations (5 CFR 950) in effect dming the scope of the audit along with copies of
     any relevant memoranda issued by the OCFC.

     Recommendation 2

     We recommend that the OCFC ensmes that the LFCC an d the PCFO meet with the IPA prior
     to an d dming the AUP engagement to discuss the Audit Guide steps, an d encom age the IPA
     to ask questions of the OCFC if it is lmsm e of how to complete any of th e required
     procedm es.

     LFCC and PCFO Response:

     The LFCC and PCFO agree and "will meet with the IPA prior to and dming the AUP
     engagement to make sm e they understand how to complete any of the required procedmes. "

     OIG Comments:

     We want to emphasize that if the PCFO, LFCC, or IPA needs any clarification for CFC
     matters, they should ask for guidan ce from the OCFC.

B. BUDGET AND CAMPAIGN EXPENSES

  1. 	 Unallowable Expenses                                                                 $10,791

     Dm ing om review of campaign expenses, we fmmd that the PCFO inconectly charged
     $10,791 for unallowable expenses th at were eith er lmauth orized, lmreasonable, or did not
     relate to the 2012 CFC. The specific expenses included:

     • 	 $7,056 in unauthorized food and beverage expenses related to meetings and
         training.

        5 CFR 950.105(b) states that the PCFO is responsible for                       The PCFO
        conducting "an effective and efficient campaign in a fair and even­          inappropriately
        handed manner aimed at collecting the greatest amount of                    char~ed the CFC
        charitable conu·ibutions possible."                                        food and beverage
                                                                                    expenses that are
                                                                                       considered
        Additionally, OPM's Directive Prohibiting th e Approval of Costs
                                                                                     unallowable by
        IncmTed for Meals and Ente1iainment, dated March 28, 2012,                       OPM.
        states that past guidan ce did not authorize the expenditm e of funds



                                                 10 	                           Rep01i No. 3A-CF-00-14-049
    for meals served as a convenience to members of the LFCC, the PCFO, loaned

    executives, or CFC volunteers.


    Our review identified three food and beverage expenses related to the September 7, 2012,
    kickoff and training event that amounted to $6,705, three food and beverage expenses
    related to CFC meetings from July through September 2012, totaling $204, and one food
    and beverage expense for $147 related to a second kickoff event held on
    November 20, 2012.

    The PCFO explained that it did not fully understand OPM’s guidance related to meals
    and entertainment expenses.

   $3,125 in unreasonable raffle expenses.

    According to 5 CFR 950.602(b), “Raffle prizes should be modest in nature and value.
    Examples of appropriate raffle prizes may include opportunities for lunch with Agency
    Officials, agency parking spaces for a specific time period, and gifts of minimal financial
    value. Any special CFC fundraising event and prize or gift should be approved in
    advance by the Agency’s ethics official.”

    Notwithstanding the regulation’s explicit statement that raffle prizes should be modest in
    nature and value, raffle prizes were purchased that ranged in price from $515 to $99. The
    items included a flat panel television ($500), notebook computer ($500), gift cards (one
    $515 card, one $200 card, and nine $100 cards), two MP3 players ($165 and $116),
    musical theater tickets ($130), and an eBook reader ($99).

    The PCFO was unaware that these larger prizes would be considered unreasonable and
    emphasized that the LFCC considered the prize amounts to be reasonable.

   $438 in mileage expenses that were attributable to the 2013 campaign.

    5 CFR 950.106(b) states that “The PCFO may only recover campaign expenses from
    receipts collected for that campaign ….” In other words, the PCFO may only be
    reimbursed for its 2012 campaign expenses from the funds received for the 2012
    campaign.

    Our review identified 31 mileage expenses, totaling $438, related to the 2013 campaign
    that were accidently charged to the 2012 campaign. The PCFO explained that the error
    was due to including mileage incurred from April 1, 2013 through June 30, 2013 as part
    of the 2012 campaign expenses, when it should have been charged to the 2013 campaign.


                                            11                          Report No. 3A-CF-00-14-049
   $172 for a Stuff-A-Bus program that was unrelated to the CFC.

    5 CFR 950.106(a) states, that “The PCFO shall recover from the gross receipts of the
    campaign its expenses… reflecting the actual costs of administering the local campaign.”

    The UWLI purchased supplies from Target for its Stuff-A-Bus toy drive and accidently
    charged the amount to the CFC as a PCFO expense. This amount should have been
    charged to the UWLI’s Stuff-A-Bus program since it was unrelated to the CFC.

As a result of charging the CFC these unallowable expenses, $10,791 was not disbursed to
charities participating in the 2012 campaign.

Recommendation 3

We recommend the OCFC and LFCC require the PCFO to distribute $10,791 in unallowable
expenses as undesignated funds to the charities participating in the 2012 campaign and
charge the 2013 campaign $438 for mileage expenses related to the 2013 CFC.

LFCC and PCFO Response:

The LFCC and PCFO agree that the PCFO will distribute $10,791 as undesignated funds to
charities participating in the 2012 campaign and charge the 2013 campaign $438 for mileage
expenses.

Recommendation 4

We recommend that the OCFC and the LFCC instruct the PCFO to stop charging food and
beverages to the CFC in accordance with OPM’s Directive Prohibiting the Approval of Costs
Incurred for Meals and Entertainment.

LFCC and PCFO Response:

The LFCC and PCFO state that “The PCFO… will no longer charge cost of food and
beverages to the CFC.”

Recommendation 5

We recommend that the OCFC and the LFCC ensure that the PCFO develops and
implements policies and procedures to ensure that prizes and gifts are modest in nature and
value in accordance with 5 CFR 950.602(b).


                                           12                          Report No. 3A-CF-00-14-049
   LFCC and PCFO Response:

   The LFCC and PCFO state that “The PCFO has developed policies and procedures to ensure
   that any prize or gift is appropriate in accordance with CFC regulations.”

   OIG Comments:

   We recommend that the OCFC reviews a copy of the PCFO’s updated policies and 

   procedures for prizes and gifts to ensure compliance with CFC regulations.


   Recommendation 6

   We recommend that the OCFC and LFCC require the PCFO to develop and implement
   policies and procedures to ensure that only those expenses related to the CFC are charged to
   the campaign and that the PCFO properly matches expenses to receipts for each campaign
   period.

   LFCC and PCFO Response:

   “The LFCC will ensure that the PCFO implements policies and procedures so that only
   expenses related to CFC are charged to each campaign.”

2. Missing and Improper PCFO Application Statements	                                  Procedural

   The LFCC selected the UWLI as the PCFO for the 2012 campaign even though the PCFO’s
   signed application was missing several pledge statements and contained improper language.

   5 CFR 950.105(c)(2) states that any organization wishing to be selected as the PCFO must
   submit an application that includes “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.”

   Additionally, the PCFO is no longer required to include a statement that it’s subject to the
   provisions of 5 CFR 950.403. Federal Register Vol. 70, published November 20, 2006,
   removed 5 CFR 950.403 from the regulations.


                                               13	                          Report No. 3A-CF-00-14-049
   We reviewed the PCFO’s application to ensure that it was dated prior to the close of the
   announcement, signed by an appropriate official, contained all of the required language per 5
   CFR 950.105(c), and did not include a statement that the PCFO was subject to the provisions
   of 5 CFR 950.403. Our review found that the PCFO’s application language did not include
   the required pledge statements. Additionally, the PCFO’s application included a statement
   that it was subject to the provisions of 5 CFR 950.403, which should have been removed.

   The PCFO stated that it was unaware that specific language had to be used. It was also
   unaware that 5 CFR 950.403 was removed from the regulations. The LFCC did not respond
   to our inquiry on this issue during fieldwork.

   As a result of the missing and improper application statements, the LFCC selected a PCFO
   that did not fully pledge its commitment to administer the campaign according to the Federal
   regulations. Additionally, the PCFO subjected itself to regulations that were no longer
   applicable.

   Recommendation 7

   We recommend that the OCFC ensure that the LFCC understands its responsibilities in
   selecting a PCFO for future campaigns, to include reviewing PCFO applications for
   completeness and verifying that all of the required language is included and accurate.

   LFCC and PCFO Response:

   The LFCC and PCFO agree with our finding and recommendation. The LFCC stated that it
   understands its responsibility in reviewing PCFO agreements, and it will verify that all of the
   required language is included and accurate.

3. Untimely PCFO Solicitation                                                         Procedural

   The LFCC began soliciting PCFO applications after the deadline set by OPM.

   OPM’s 2011/2012 CFC Calendar of Events lists December 15, 2011, as the deadline for the
   LFCC to begin soliciting PCFO applications.

   We reviewed the LFCC’s public notice to solicit PCFO applications for the 2012 campaign
   to determine if the application period was timely and open for the required number of
   calendar days. We found that the LFCC’s solicitation for PCFOs was published on
   December 17, 2011, which was two calendar days after the deadline set by OPM.



                                               14                          Report No. 3A-CF-00-14-049
   The PCFO stated that the employee who places the adve1iisement was out with an illness th at
   week, thereby causing th e delay. The LFCC did not respond to our inquny on this issue
   during fieldwork.

   As a result of not soliciting PCFOs by the deadline published in the CFC Calendar of Events,
   potential applicants may not have read the solicitation and applied to serve as the PCFO.

   Recommendation 8

   We recommend that the OCFC dn·ect the LFCC to develop and implem ent policies and
   procedures for PCFO solicitations that adhere to th e dates set f01ih in the CFC Calendar of
   Events.

   LFCC and PCFO Response:

   The LFCC and PCFO state th at "The PCFO will adhere to th e dates set f01ih in the CFC
   Calendar of Events."

   OIG Comments :

   Because the LFCC and PCFO did not fully address our recommendation, the OCFC should
   verify that the LFCC implements policies and procedures for PCFO solicitations that adhere
   to the dates set f01ih in the CFC Calendar of Events.

4. Review and Authorization of Expense Reimbursement                                 Procedural

   The LFCC did not review or authorize the PCFO 's reimbursement of actual campaign
   expenses.

                       5 CFR 950.104(b)(17) states that it's the responsibility of the LFCC to
    ThePCFO
                       authorize th e PCFO's reimbursement of only those campaign expenses
 reimbursed itself
   for campaign        that are legitimate CFC costs and are adequately documented.
 expenses without
authorization from     Additionally, 5 CFR 950.106(a) states that "The PCFO shall recover
    the LFCC.          fr om the gross receipts of the campaign its expenses, approved by the
                       LFCC, reflecting the actual costs of administering the local campaign."

   Finally, CFC Memorandum 2008-09 states that the approval of actual expenses by the LFCC
   is separate fr om the approval of the expense budget. "The LFCC must review actual



                                               15                          Rep01i No. 3A-CF-00-14-049
expenses, authorize full or partial reimbursement, and document this authorization in its
meeting minutes.”

We reviewed the LFCC’s meeting minutes to determine if the LFCC reviewed and
authorized the PCFO’s reimbursement of legitimate CFC expenses. Our review found that
there was no record of the LFCC reviewing or authorizing the reimbursement of the PCFO’s
2012 CFC expenses.

The PCFO stated that it didn’t realize the reimbursement amounts and dates needed to be
approved by the LFCC and documented in the minutes. The LFCC did not respond to our
inquiry on this issue during fieldwork.

As a result of not reviewing or authorizing the PCFO’s reimbursement of actual campaign
expenses, the LFCC ran the risk of unrelated expenses being charged to the organizations and
federations in the campaign, thereby reducing the contributions due to them.

Recommendation 9

We recommend that the OCFC direct the LFCC to implement policies and procedures to
document its review of the PCFO’s actual campaign expenses, which should be supported by
itemized receipts and invoices, to ensure that the expenses are allowable and applicable to the
campaign.

LFCC and PCFO Response:

“The LFCC will implement policies to document its review of the PCFO’s actual campaign
expenses.”

Recommendation 10

We recommend that the OCFC direct the LFCC to implement policies and procedures to
document its authorization and approval of the PCFO’s reimbursement of actual campaign
expenses.

LFCC and PCFO Response:

“The LFCC will document its authorization and approval of the PCFO’s reimbursement of
actual campaign expenses.”




                                            16                          Report No. 3A-CF-00-14-049
      OIG Comments:

      Because the LFCC did not fully address our recommendation, the OCFC should verify that
      the LFCC implements policies and procedures to ensure that its approval of the PCFO's
      reimbursement of actual campaign expenses is documented in its meeting minutes.

C. CAMPAIGN RECEIPTS AND DISBURSEMENTS

   1. CFC Receipts Applied to the Wrong Campaigns                                        Procedural

      The PCFO inconectly applied $23 ,144 in 2013 CFC receipts to the 2012 campaign and $346
      in 2012 CFC receipts to the 2011 campaign.

      5 CFR 950.901(d) states that the CFC payroll allotments will be authorized in one year
      tenns. The te1m authorizations will be in effect for one full year (26, 24, or 12 pay periods
      depending on the allotter 's pay schedule) stmiing with the first pay period beginning in
      Janumy and ending with the last pay period that begins in December.

      Additionally, CFC Memorandum 2006-5 requires PCFOs to track CFC receipts by payroll
      office to ensure that receipts are credited to the appropriate campaign.

      We reviewed the CFC bank statements to dete1mine if the PCFO properly tracked CFC
      receipts and applied them to the con ect campaign. Our review found that the PCFO
      inconectly applied $23,144 in CFC receipts from the 2013 campaign to the 2012 campaign.
      We also found that the PCFO inconectly applied $3 46 in CFC receipts from the 2012
      campaign to the 2011 campaign. As a result of both actions, the PCFO over-disbursed
      $22,798 in CFC funds during the 2012 campaign .
                                                                               The PCFO over­
                                                                              disbursed $22,798
      Notwithstanding the requirements of 5 CFR 950.901(d) and CFC               in CFC funds
      Memorandum2006-5 , the PCFO inconectly used the end of Janumy             durin2 the 2012
      as the basis to allocate CFC receipts to the 2012 campaign . The       campaign, creating
      PCFO stated that it will be more diligent in recognizing th e               shortages in
      submission timing differences used by the Federal entities, and            disbursements
                                                                                  received by
      appropriately record receipts by campaign year.
                                                                                participants in
                                                                             another campaign.
      As a result of not following the directives issued by the OCFC to
      properly accmmt for receipts by campaign year, the PCFO ended up over-disbursing funds to
      the 2012 campaign and creating a sh01iage in ftmds for other campaigns. We will not
      question the amounts from this fmding since the ftmds were ah·eady disbursed.



                                                  17                           Rep01i No. 3A-CF-00-14-049
   Recommendation 11

   We recommend that the OCFC direct the LFCC to ensure th at th e PCFO develops and
   implements policies an d procedures to begin tracking CFC receipts by payroll office and to
   accurately accmmt for end of the year payroll receipts.

   LFCC and PCFO Response:

   The LFCC and PCFO agree. "The LFCC will ensure th at th e PCFO has policies in place to
   accurately track CFC receipts by payroll office and accurately account for end of year payroll
   receipts."

2. Policies and Procedures for Un-Cashed Checks                                       Procedural

   The PCFO does not have written policies and procedures for un-cashed checks as required by
   CFC Memorandum 2006-5.

   Section C of CFC Memorandum 2006-5 states that the PCFO must develop an d follow
   policies an d procedures regarding un-cashed checks. The policy should 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 or e-mail.

In spite of repeated
IPA warnings in its     During our review of prior audits, we found that the IPA has
 AUP audits of the      continuously reported the PCFO 's failure to adopt policies and
   campaign, the        procedures for un-cashed checks. Our review of the 2012 campaign
 PCFO has still not     confnm ed that the PCFO still doesn 't have written policies and
 developed policies     procedures for un-cashed checks. When we inquired why there was no
and procedures for      documented policy, the PCFO responded, "Since finance hasn ' t
 un-cashed checks
                        experienced a material issue with outstanding checks they did not see a
 as required by the
     re2ulations.       need to develop a fonnal policy."

   By not following th e guidance to develop an d implement procedures for lm-cashed checks,
   we cannot verify or assess how the PCFO handles outstan ding checks. Additionally, there is
   a significant risk th at charities whose checks ar e lost, misplaced, and not cashed will never
   receive ftmds due to inadequate follow-up attempts made by the PCFO, and there is the risk
   that ftmds may not be retmned to the CFC.




                                               18                           Rep01t No. 3A-CF-00-14-049
   Recommendation 12

   We recommend that the OCFC and the LFCC verify that the PCFO documents its policies
   and procedures for un-cashed checks in accordance with CFC memorandum 2006-5.

   LFCC and PCFO Response:

   “The PCFO will develop and document its procedures for un-cashed checks in accordance
   with CFC memorandum 2006-5.”

   OIG Comments:

   We would like to remind the OCFC and LFCC that this has been a finding identified by the
   IPA multiple times. The PCFO has failed to implement a corrective action plan over the last
   several years. If the PCFO continues to show disregard for the regulations governing the
   CFC, then the OCFC and LFCC should take appropriate steps, up to considering terminating
   the PCFO agreement and finding a replacement, or seeking to merge this campaign with
   another campaign.

3. LFCC Used an Incorrect Method to Establish Minimal Donations                     Procedural

   The LFCC incorrectly used net disbursement amounts instead of gross pledges to define
   minimal donations for charities receiving one-time disbursements.

   CFC Memorandum 2008-09 states the sum of the gross pledges determines whether a
   donation is minimal and subject to a one-time disbursement. If campaigns were using a
   different method for determining the minimal donation amount for one-time disbursements,
   then they should have corrected their determinations starting with the 2008 campaign.

   While reviewing the meeting minutes, we found that the LFCC approved one-time
   disbursements to organizations and federations that had a maximum disbursement amount of
   $1,200 during its December 14, 2012 meeting. One-time disbursements should have been
   approved based on gross pledges, not disbursement amounts.

   The PCFO acknowledged that net disbursements were used instead of gross pledges and
   stated that it will work with the LFCC to correct this error. The LFCC did not respond to our
   inquiry on this issue during fieldwork.

   Because the LFCC used an incorrect method to establish minimal donations for one-time
   disbursements, we determined that the PCFO made one-time disbursements to 11 charities


                                              19                          Report No. 3A-CF-00-14-049
   that should have received funds via quarterly or monthly distributions. Additionally, these
   11 organizations had a lower pledge loss withheld from their disbursements than if they
   received quarterly or monthly distributions.

   Recommendation 13

   We recommend that the OCFC direct the LFCC to change its method of defining minimal
   donations for one-time disbursements by basing it on gross pledges instead of net
   disbursement amounts.

   LFCC and PCFO Response:

   “The LFCC will define minimal donations for one-time disbursements based on gross

   pledges.”


4. Application of Pledge Loss for One-Time Disbursements                             Procedural

   The PCFO incorrectly applied pledge loss to the organizations and federations receiving
   one-time disbursements during the 2012 campaign.

   According to 5 CFR 950.901(i)(3), the “PCFO may deduct the proportionate amount of each
   organization’s share of the campaign’s administrative costs and the average of the previous 3
   years pledge loss from the one-time disbursement.”

   Additionally, CFC Memorandum 2008-9 provides guidance and detailed instructions to
   PCFOs regarding the calculation and application of pledge loss to gross pledges, prior to any
   estimated expenses being withheld.

   Using the pledge and receipt totals reported by the PCFO to OPM, we calculated the average
   of the previous three campaigns’ pledge loss and compared our calculation to that of the
   PCFO to determine if its calculation was correct. Overall, we found that the PCFO
   miscalculated the pledge loss that was applied to the organizations and federations receiving
   one-time disbursements by $1,247. The difference was due to the PCFO’s CFC software
   calculating pledge loss net of expenses.

   The effects of applying pledge loss after expenses resulted in higher one-time disbursements
   and lower monthly disbursements. We are not recommending an adjustment for $1,247 since
   pledge loss is an estimated amount and the disbursements already took place.




                                              20                          Report No. 3A-CF-00-14-049
   Recommendation 14

   We recommend that the OCFC and LFCC direct th e PCFO to develop and implement
   policies an d procedm es that incmporate the directives of CFC Memorandum 2008-9
   regar ding the calculation an d application of pledge loss to one-time disbmsements .

   LFCC and PCFO Response:

   The LFCC and PCFO agree. "The PCFO will develop procedm es regar ding the calculation
   and application of pledge loss to one-time disbm sements according to the requirements of
   CFC Memorandum 2008-9."

5. Untimely Distribution of One-Time Disbursements                                    Procedural

   The PCFO did not m ake the initial disbmsement for one-time disbmsements by the deadline
   set in the CFC Calendar of Events.

   The CFC Calendar of Events established a deadline of April 1, 2013 , for all campaigns to
   begin disbmsement of the 2012 campaign funds.

   Additionally, CFC Memorandum 2008-9 states that one-time disbmsements must be made
   with the first distribution for the campaign. If the campaign opts not to mak e one-time
   disbmsements, then all organizations with pledges must receive disbmsements with each
   quruierly or monthly distribution . Campaigns ru·e not permitted to hold disbmsements until
   th e amount reaches a pre-determined "minimum check" ammmt.

   We reviewed the PCFO 's Receipt and Disbmsement Schedule and the disbmsement check
   supp01i to determine if the PCFO m ade the initial distribution by
                                                                                    SomeCFC
   April 1, 2013. Although the PCFO issued its monthly disbmsements            charities were paid
   beginning in March 2013, the one-time disbmsements were not                 six months late due
   distributed until September 2013, five months after the CFC                 to the PCFO's non-
   Calendru· of Events deadline and six months after the initial                 compliance with
   distribution . The PCFO stated th at this en or occmTed as a result of        the Calendar of
                                                                                 Events deadlines
   mislmderstanding OPM 's directive.
                                                                                     for initial
                                                                                  disbursements.
   As a result of the PCFO not distributing the one-time disbmsements
   with the first distribution in Mru·ch 2013, those organizations an d federations receiving
   minimal donations were paid six months late.




                                               21                          Rep01i No. 3A-CF-00-14-049
     Recommendation 15

     We recommend that the OCFC and LFCC require the PCFO to develop and implement
     policies and procedures to ensure adherence to the CFC Calendar of Events deadlines and
     CFC Memorandum 2008-9 for the timely distribution of one-time disbursements.

     LFCC and PCFO Response:

     The LFCC and PCFO state that “The PCFO will adhere to the CFC Calendar of Events
     deadlines as well as CFC Memorandum 2008-9 for one time disbursements.”

     OIG Comments:

     Because the LFCC did not fully address our recommendation, the OCFC should verify that
     the PCFO implements policies and procedures to ensure adherence to the CFC Calendar of
     Events deadlines and CFC Memorandum 2008-9 for the timely distribution of one-time
     disbursements.

D. ELIGIBILITY

   1. LFCC Member Not a Federal Employee                                            Procedural

     We identified one LFCC member listed in both the 2012 CFC Charity List and the LFCC
     roster who was not an active Federal employee.

     5 CFR 950.101 defines the LFCC as the group of Federal officials designated by the Director
     to conduct the CFC in a particular community.

     During our pre-audit review, we obtained a roster from the LFCC to determine if all LFCC
     members were active Federal employees. We then matched this LFCC roster with the list of
     LFCC members included in the 2012 CFC Charity List and found that both lists included one
     LFCC member who was a retired Federal employee since 2004. The list of LFCC members
     that included the non-Federal official was published and distributed across the campaign in
     the 2012 CFC Charity List.

     Without active Federal employees serving as LFCC members, the CFC loses its Federal
     oversight and becomes susceptible to misguided, poor, and uninformed decisions.




                                               22                         Report No. 3A-CF-00-14-049
        Recommendation 16

        We recommend that the OCFC develops and implements regulations and/or memoranda
        which stipulate that LFCC members be comprised of active Federal employees.

        LFCC and PCFO Response:

        Although a response from the LFCC and PCFO was not required for this recommendation,
        they stated that “The NALC is the largest union of federal employees on Long Island and
        their President has always been invited to be part of the CFC in a supportive ad hoc role.
        Retirees will not be a part of the LFCC. NALC will continue to support and work with our
        USPS Division Chair.”

        Recommendation 17

        We recommend that the OCFC direct the LFCC to implement policies and procedures to
        ensure that its members are only active Federal employees.

        LFCC and PCFO Response:

        “The LFCC will ensure its members are active federal employees.”

        OIG Comments:

        Because the LFCC did not fully address our recommendation, the OCFC should verify that
        the LFCC implements policies and procedures to ensure that its members are only active
        Federal employees.

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 policies and procedures for fraud and abuse indicated that they were
     sufficient to detect and deter potential fraud and abuse activities.




                                                    23                         Report No. 3A-CF-00-14-049
G. 	 PROGRAM CONCERN RELATED TO LFCC PARTICIPATION

   In addition to the findings identified in this report, we ar e concemed with the LFCC pa1iicipation
   in CFC matters. Specifi cally, we identified the following problems with the LFCC :

   1. 	 Several LFCC members, who are Federal agency heads and directors , sent replacements to
        attend LFCC meetings instead of attending themselves. As a result, imp01iant decisions and
        votes were not properly recorded during LFCC meetings.

   2. 	 The LFCC was invited to both the entrance and the exit conference, but did not respond to
         these invitations or attend either meeting. The LFCC's lack of
                                                                                    LFCC members
        pmiicipation and communication during our audit led to us relying fully
                                                                                   sent replacements,
        on the PCFO for supp01i .                                                    which may not
                                                                                   have been aware of
   3. 	 The LFCC was sent multiple audit inquiries to help us identify the            the LFCC's
        cause of the findings related to its non-compliance with program           responsibilities, to
        regulations. However, responses were not provided by the LFCC and           attend meetings
                                                                                    where important
        the responsibility was passed on to the PCFO to provide a response and
                                                                                     decisions about
        con ective action plan.                                                    CFC matters were
                                                                                          made.
   Recommendation 18

   As a result of these issues, the OIG (with supp01i from the PCFO) recommends that the OCFC
   replace the LFCC with members who can be actively involved in the CFC. LFCC members do
   not need to be agency heads. Instead, those replacements (Federal employees) that the LFCC
   members sent to attend the LFCC meetings could replace the cmTent LFCC. This will allow
   accurate record keeping and voting related to CFC issues and LFCC meetings.

   LFCC and PCFO Response:

   "The USPS has always been the Chair for the LFCC for the Long Island Combined Federal
   Campaign. They have the most federal employees on Long Island 67% with the next closest
   federal agency having 17%. We traditionally have a Co-Chair from one of the other federal
   agencies. The cmTent Co-Chair is from Veterans Affairs. Due to scheduling difficulties our
   cmTent LFCC Chair was unable to attend the entrance or exit interviews for this audit. This
   should not be taken as a sign of any disrespect for the OPM CFC Audit process or the LFCC's
   role to ensure implementation of the CFC by the PCFO in accordance with all CFC regulations."




                                                   24 	                        Rep01i No. 3A-CF-00-14-049
 IV. MAJOR CONTRIBUTORS TO THIS REPORT 



Special Audits Group

                   Auditor




                 , Group Chief,

               Senior Team Leader




                                    25   Rep01t No. 3A-CF-00-14-049
                                                                                   APPENDIX




November 4, 2014

Deleted by OIG – Not Relevant to Final Report
Special Audits Group
Office of the Inspector General Washington, DC 20415

Deleted by OIG – Not Relevant to Final Report

The following is a joint response from the Long Island Combined Federal Campaign and PCFO
to the draft report we received detailing the results of your 2011 and 2012 audit.

Recommendation 1: We agree that the IPA needs to fully understand the CFC and its related
regulations to complete the Audit Guide's AUP correctly and completely.

Recommendation 2: We agree that the LFCC and PCFO will meet with the IPA prior to and
during the AUP engagement to make sure they understand how to complete any of the required
procedures.
.
Recommendation 3: We agree that the PCFO will distribute $10,791 as undesignated funds to
charities participating in the 2012 campaign and charge the current campaign for $438 for
mileage expenses.

Recommendation 4: Already implemented. The PCFO based on CFC regulations will no longer
charge cost of food and beverages to the CFC.

Recommendation 5: Already implemented. The PCFO has developed policies and procedures to
ensure that any prize or gift is appropriate in accordance with CFC regulations.

Recommendation 6: We agree that the LFCC will ensure that the PCFO implements policies and
procedures that only expenses related to CFC are charged to each campaign.

Recommendation 7: We agree the LFCC does understand its responsibility in reviewing PCFO
agreements and will confirm completeness and verify that all the required language is included
and accurate.

Recommendations 8: Already implemented. The PCFO will adhere to the dates set forth in the
CFC Calendar of Events.

Recommendation 9: We agree the LFCC will implement policies to document its review of the
PCFO's actual campaign expenses.

Recommendation 10: We agree that the LFCC will document its authorization and approval of
the PCFO's reimbursement of actual campaign expenses.




                                               26                         Report No. 3A-CF-00-14-049
Recommendation 11: We agree the LFCC will ensure the PCFO has policies in place to
accurately track CFC receipts by payroll office and accurately account for end of year payroll
receipts.

Recommendation 12: We agree that the PCFO will develop and document its procedures for un-
cashed checks in accordance with CFC memorandum 2006-5.

Recommendation 13: Already implemented. The LFCC will define minimal donations for one-
time disbursements to be based on gross pledges.

Recommendation 14: We agree the PCFO will develop procedures regarding the calculation and
application of pledge loss to one-time disbursements according to the directive of CFC
Memorandum 2008-9.

Recommendation 15: Already implemented. The PCFO will adhere to the CFC Calendar of
Events deadlines as well as CFC Memorandum 2008-9 for one time disbursements.

Recommendation 16: Already implemented. The NALC is the largest union of federal
employees on Long Island and their President has always been invited to be part of the CFC in a
supportive ad hoc role. Retirees will not be a part of the LFCC. NALC will continue to support
and work with our USPS Division Chair.

Recommendation 17: Already implemented. The LFCC will ensure its members are active
federal employees.

The USPS has always been the Chair for the LFCC for the Long Island Combined Federal
Campaign. They have the most federal employees on Long Island 67% with the next closest
federal agency having 17%. We traditionally have a Co-Chair from one of the other federal
agencies. The current Co-Chair is from Veterans Affairs. Due to scheduling difficulties our
current LFCC Chair was unable to attend the entrance or exit interviews for this audit. This
should not be taken as a sign of any disrespect for the OPM CFC Audit process or the LFCC's
role to ensure implementation of the CFC by the PCFO in accordance with all CFC regulations.

Submitted By:




LFCC Chair
District Manager/Executive in Charge United States Postal Service



Theresa A. Regnante, President & CEO
United Way of Long Island


                                               27                          Report No. 3A-CF-00-14-049
                                       Report Fraud, Waste, and 

                                           Mismanagement

                                                  Fraud, waste, and mismanagement in
                                               Government concerns everyone: Office of
                                                   the Inspector General staff, agency
                                                employees, and the general public. We
                                              actively solicit allegations of any inefficient
                                                    and wasteful practices, fraud, and
                                               mismanagement related to OPM programs
                                              and operations. You can report allegations
                                                          to us in several ways:


                     By Internet:                  http://www.opm.gov/our-inspector-general/hotline-to-
                                                   report-fraud-waste-or-abuse


                         By Phone:	                Toll Free Number:                              (877) 499-7295
                                                   Washington Metro Area:                         (202) 606-2423


                           By Mail:                Office of the Inspector General
                                                   U.S. Office of Personnel Management
                                                   1900 E Street, NW
                                                   Room 6400
                                                   Washington, DC 20415-1100




                                                               -- 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 data which is protected by Federal law (18 U.S.C. 1905). Therefore, while this audit report is available under the Freedom of
Information Act and made available to the public on the OIG webpage (http://www.opm.gov/our-inspector-general), 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.

                                                                         28	                                   Report No. 3A-CF-00-14-049