oversight

CFC of Greater SoCal 2014 and 2015 campaigns by United Way of Greater Los Angeles in Los Angeles, CA

Published by the Office of Personnel Management, Office of Inspector General on 2017-10-12.

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 Combined Federal Campaign
              of Greater SoCal for the
        2014 and 2015 Campaign Periods
           Report Number - 3A-CF-00-17-023
                   October 12, 2017
             EXECUTIVE SUMMARY 

                  Audit of the Combined Federal Campaign of Greater SoCal for the
                                  2014 and 2015 Campaign Periods
Report No. 3A-CF-00-17-023                                                                      October 12, 2017


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

The objective of our limited scope        Our limited scoped audit of the CFC of Greater SoCal for the 2014
audit was to determine if the Principal   and 2015 campaign periods disclosed no findings pertaining to
Combined Fund Organization (PCFO)         campaign receipts, disbursements or expenses.
complied with Title 5, Code of Federal
Regulations, Part 950 (the Federal        Accordingly, this final report contains no recommendations.
regulations governing Combined
Federal Campaign operations), in
regards to campaign receipts,
disbursements and expenses.

What Did We Audit?

The Office of the Inspector General
has completed a limited scope audit of
the Combined Federal Campaign
(CFC) of Greater SoCal for the 2014
and 2015 campaign periods. During
this time, the United Way of Greater
Los Angeles served as the PCFO for
the CFC of Greater SoCal. Our
limited scope audit included reviews
of the PCFO’s tracking of campaign
receipts, disbursements to charities,
and expenses. Our audit was
conducted from June 5 through 9,
2017, at the PCFO’s office in
Los Angeles, California. Additional
audit work was completed at our
offices in Washington, D.C. and
Cranberry Township, Pennsylvania.


 _______________________
 Michael R. Esser
 Assistant Inspector General
 for Audits
                                                       i
                 ABBREVIATIONS

5 CFR 950   Title 5, Code of Federal Regulations, Part 950
CFC         Combined Federal Campaign
CP          Campaign Period
LFCC        Local Federal Coordinating Committee
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




                                  ii
IV. MAJOR CONTRIBUTORS TO THIS REPORT
          TABLE OF CONTENTS

                                                                                                                         Page 

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


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


  I.	     BACKGROUND ..........................................................................................................1 


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


  III.	   RESULTS OF THE AUDIT .......................................................................................6 


          REPORT FRAUD, WASTE, AND MISMANAGEMENT

IV. MAJOR CONTRIBUTORS
            I. BACKGROUND
                       TO THIS REPORT

This report details the results of our limited scope audit of the Combined Federal Campaign
(CFC) of Greater SoCal for campaign periods (CP) 2014 and 2015. The audit was performed 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.

The CFC is the world’s largest and most successful annual workplace charity campaign. In
2015, it consisted of 137 separate local campaign organizations located throughout the United
States, including Puerto 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 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, Federal employees who are temporarily assigned to work directly on the CFC, to
assist in the campaign; ensuring that employees are not coerced to participate in the campaign;
and acting upon any problems relating to noncompliance with the policies and procedures of the
CFC.

The primary goal of the PCFO is to administer an effective and efficient campaign in a fair and
impartial manner aimed at collecting the greatest amount of charitable contributions possible.
Some of its responsibilities include:

   	 Training Loaned Executives, coordinators, employee keyworkers and volunteers;

   	 Maintaining a detailed schedule of its actual CFC administrative expenses;

   	 Preparing pledge forms and charity lists;

   	 Distributing campaign receipts;

   	 Submitting to an audit of its CFC operations by an Independent Public Accountant in
      accordance with generally accepted auditing standards;

                                                  1	               Report No. 3A-CF-00-17-023
   	 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; 


   	 Consulting with federated groups on the operation of the local campaign; and

   	 Establishing and maintaining a system of internal controls.

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.

Our previous audit of the CFC of Greater SoCal (Report No. 3A-CF-00-07-037), conducted in
2007, covered CPs 2004 and 2005. We did not rely upon the prior audit for leads due to the
length of time since the last audit. All findings from the prior audit have been resolved.

The results of our audit were communicated to the PCFO and LFCC via email on June 15, 2017.
Since our limited scope audit concluded that the PCFO was in compliance with 5 CFR 950, in
regards to campaign receipts, disbursements and expenses, we did not issue a draft report.




                                               2	                   Report No. 3A-CF-00-17-023
IV. OBJECTIVES,
II.  MAJOR CONTRIBUTORS
                SCOPE, ANDTO THIS REPORT
                          METHODOLOGY

 OBJECTIVES

 The purpose of our limited scope audit was to determine if the PCFO complied with the
 regulations governing the CFC (5 CFR 950), in regards to campaign receipts, disbursements and
 expenses.

 Specifically, our audit objectives for the 2014 and 2015 CPs included the following:

 Campaign Receipts Review
   	 To determine if the campaign receipts were recorded accurately and applied to the correct
      campaign.

 Campaign Disbursements Review
   	 To determine if the charity disbursements were paid at the appropriate ratio (percentage
      of gross designations).

    	 To determine if the disbursement amounts reported by the PCFO were accurate.

    	 To determine if all funds received for the campaign were fully disbursed.

 Campaign Expenses Review
   	 To determine if the amount reimbursed for campaign expenses reconciles to the actual
      expenses reported in the general ledger.

    	 To determine if the PCFO’s total expenses were applied to the charities at the proper ratio
       (percentage of gross designations).

    	 To determine if all expenses charged to the campaign were CFC related.

    	 To determine whether total actual expenses of the campaign did not exceed total 

       budgeted expenses by more than 10 percent.





                                                 3	                 Report No. 3A-CF-00-17-023
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 CPs 2014 and 2015, during which the United Way of Greater Los Angeles,
located in Los Angeles, California, served as the PCFO. The audit fieldwork was conducted at
the PCFO’s office from June 5 through 9, 2017. Additional audit work was completed at our
Washington, D.C. and Cranberry Township, Pennsylvania offices.

The CFC of Greater SoCal received campaign pledges, collected campaign receipts, and incurred
campaign administrative expenses for the 2014 and 2015 campaigns, as shown below.

               Campaign             Total             Total          Administrative
                Period             Pledges           Receipts          Expenses
                 2014             $3,921,109        $3,696,806         $486,519
                  2015            $3,409,967        $3,273,389          $439,948

In conducting the audit, we relied to varying degrees on computer-generated data. Our review of
campaign expenses with supporting data, and the distributions of campaign contributions with
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.




                                                4                   Report No. 3A-CF-00-17-023
To determine whether the PCFO complied with the Federal regulations governing CFC
operations, we performed the following audit steps for CPs 2014 and 2015:

Campaign Receipts Review
   We traced all receipts from the bank statements to the totals reported by the PCFO to
     determine if all CFC funds were properly recorded and applied to the correct campaign.

Campaign Disbursements Review
   For each CP, we randomly selected 20 percent of the charities to determine if the charity
     disbursements were paid at the appropriate ratio and if the disbursement amounts
     reported by the PCFO were accurate. Our samples were selected using Microsoft Excel’s
     random number generator and sorted by the numbers from low to high, selecting the
     lowest numbers. Our samples were not statistically selected, and therefore are not
     representative of the universe as a whole and will not be projected. Specifically, we
     reviewed:

          o	 For the 2014 CP we selected 145 charities with gross designations of $965,830,
             out of a total of 723 charities with gross designations of $3,921,109.

          o	 For the 2015 CP we selected 130 charities with gross designations of $523,673,
             out of a total of 650 charities with gross designations of $3,409,967.

   	 We verified that all campaign funds were disbursed.

Campaign Expenses Review
   We reviewed the bank statements for all reimbursements to the PCFO for campaign
     expenses to determine if the amount reimbursed reconciled to the actual expenses
     reported in the general ledger.

   	 We reviewed all campaign expense line items to determine if any expenses charged to the
      campaigns were unrelated to CFC operations.

   	 We compared the PCFO’s actual expenses to the approved budgets to determine if the
      actual expenses exceeded the budget by more than 10 percent.

   	 Utilizing the charities selected for review in the disbursements section, we verified the
      PCFO’s calculation of expenses charged to each charity to verify that the expenses were
      charged at the same ratio as their gross designations.



                                               5	                 Report No. 3A-CF-00-17-023
                 III. RESULTS OF THE AUDIT

Overall, we concluded that the CFC of Greater SoCal was in compliance with 5 CFR 950 in
regards to campaign receipts, disbursements and expenses for CPs 2014 and 2015. Specifically,
we concluded that:

   Receipts were accurately recorded and applied to the correct campaign. 


   Disbursement amounts reported by the PCFO were accurate and applied at the correct ratio.


   All funds received for the campaign were fully disbursed. 


   All expenses charged to the campaign were CFC related and reconciled to the General 

    Ledger.

   CFC expenses did not exceed total budgeted expenses by more than 10 percent.

   Campaign expenses were applied to the charities at the proper ratio.

Because our audit disclosed no findings, this final report contains no recommendations.




                                                6                  Report No. 3A-CF-00-17-023
                                                                              



               Report Fraud, Waste, and
                   Mismanagement 

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




                                                                 Report No. 3A-CF-00-17-023