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