Washington, D.C.:

"As Director of the Office of Personnel Management (OPM) and administrator of the Combined Federal Campaign (CFC), I am today expressing my assurance that the CFC remains a program that Federal employees can support with confidence.

"OPM has taken steps to strengthen our ability to ensure CFC accountability.  Each charity which participates in the CFC must meet stringent eligibility and public accountability requirements.  A participating charity must:

1. Certify and demonstrate that it is an IRS recognized 501(c)(3) tax-exempt public charity.  OPM compares applicants against an IRS database to verify this certification.

2. Certify and demonstrate that it prepares and submits to the IRS a Form 990, the annual tax form for non-profits.

3. Certify and demonstrate that it provides or conducts real services, benefits, assistance, or program activities in 15 or more different states or a foreign country over a three year period prior to the annual CFC for which it is applying.

4. Certify and demonstrate that the organization is a human health and welfare organization.

5. Certify and demonstrate that it accounts for its funds in accordance with generally accepted accounting principles (GAAP) and has an audit in accordance with generally accepted auditing standards (GAAS). A copy of the most recent annual audited financial statement must be included with the application for all national and international charities or those charities with over $250,000 in revenues.

6. Compute the organization's percentage of total support and revenue spent on administrative and fundraising to determine an administrative and fundraising rate (AFR).

7. Certify that the organization is directed by an active and responsible governing body with no material conflict of interest and a majority of which serve without compensation.

8. Certify that the organization's fundraising practices prohibit the sale or lease of its CFC contributor lists.

9. Certify that its publicity and promotional activities are based upon its actual program and operations, are truthful and non-deceptive, and make no exaggerated or misleading claims.

10. Certify that contributions are effectively used for the announced purposes of the charitable organization.

11. Certify that it is in compliance with all statutes, Executive Orders, and regulations restricting or prohibiting U.S. persons from engaging in transactions and dealings with countries, entities or individuals subject to economic sanctions administered by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC).

"Concerns have been raised about the elimination of the 25% administrative and fundraising rate (AFR) requirement.  In the past, numerous organizations have participated in the CFC with AFRs in excess of 25% with an accepted explanation and plan to reduce the AFR.

"OPM will continue to calculate AFRs for all participating charities and publish this information in the annual catalog, thereby allowing Federal employees to make informed decisions about how they contribute their money.  The transparency in this process enables employees to draw distinctions between the charities and their operational practices and promotes control over fundraising and administrative costs.

"Combined with the eleven requirements listed above, we believe that CFC charities are receiving appropriate scrutiny. 

"Regarding the requirement of financial audits, the submission of financial data did not change for national and international applicants.   Local charities must meet these same standards, with a few exceptions.  For example, charities with less than $100,000 annual revenue do not need an audited financial statement but still must certify that they have adequate controls in place to ensure that funds are properly accounted for. Local charities with revenue between $100,000 and $250,000 must certify that they account for their funds in accordance with GAAS/GAAP procedures, but they do not need to submit the audit unless requested to do so by OPM or the local Local Federal Coordinating Committee (LFCC).

"And to those who express concern with the CFC's replacement of its numbering system, the number of charitable organizations participating in the CFC continues to grow and we are simply running out of four-digit numbers.  The assignment of new, unique five-digit code numbers will also enable OPM to improve the efficiency and effectiveness of the CFC through the use of electronic giving technology."