CFC MEMORANDUM 2002-13

FROM:
KAY COLES JAMES
DIRECTOR

SUBJECT: CFC Audit Guidelines and Oversight

The U.S. Office of Personnel Management's Inspector General has released the findings of a special audit conducted on the Washington, D.C., Metropolitan Area Combined Federal Campaign managed by the National Capital Area United Way. The audit examined widely reported management issues involving donor contributions.

Of particular interest, the audit documents instrances of inadequate accounting procedures and observance of CFC regulations. It also points out the need for more specific guidelines to promote increased accountability of CFC donor contributions.

To provide Federal donors with complete accountability, I have requested our Inspector General to work with OPM staff to draft new audit guidelines tailored to the CFC program. The guidelines will outline additional procedures for use by Independent Public Accountants to identify instances of PCFO noncompliance with 5 CFR Part 950 and OPM guidance, the existence of any ineffective internal controls, and innacurate PCFO disbursement practices.

To ensure total transparency in the conduct of campaign practices, all local and national federations will now be required to include in their CFC applications details regarding member dues and/or service fees they receive from member charities. Federations also will be required to include this information as part of the annual report made available to the public. This requirement will becombe effective immediately for the 2003 application period. In addition, I have instructed the Office of CFC Operations to develop proposals to ensure that the process of selecting PCFOs nationwide is open and competitive. Proposed guidelines and regulatory changes, if neccessary, will be circulated to all LFCC members for comment prior to implementation.

I also wish to remind you that CFC regulations require that CFC funds be maintained in separate accounts at all times. Separate accounts are required to ensure that Federal employee designations are honored. This means that under no circumstances are loans permitted that may involve CFC contributions. This practice would clearly place CFC funds at risk.

The regulations governing the CFC exist to ensure that fiscal integrity and accountability of the workplace fundraising process. As members of the Local CFC Federal Coordinating Committee, your leadership is vital to assure donors that their contributions are being safeguarded and distributed in accordance with their wishes and CFC regulations. This includes the promulgation and verification of accounting procedures sufficient to safeguard the finances of the CFC, the review of disbursement controls through LFCC approval, the constant monitoring of the budget ans actual expenses, and critical review of financial reports. Ensuring the integrity of membership on a LFCC was the reason I recently issued a memorandum reminding LFCC members that it was an inherent conflict of interest to serve on a PCFO board of directors.

The CFC is a success, in large part, due to the commitment of people like you who give generously not only of their resources, but of their time. Your efforts are greatly appreciated no only by me, but by the millions of beneficiaries of the CFC as well.

I look forwared to working with you in sustaining the high standards of the CFC.