- The Washington Times - Thursday, May 22, 2014

One of the most celebrated civic activities federal workers stage each year is the annual drive to donate parts of their paychecks to their favorite charities. But it turns out the much-celebrated Combined Federal Campaign has been plagued by misspending, lax oversight and abuse, with federal workers diverting money for massages, personal travel and other unauthorized expenses, according to internal audits.

In some cases, the federal workers who run their charity drives in their local communities have failed to impose even the most basic safeguards against fraud to protect the tens of millions of dollars they raise each year, the audits show.

The list of misconduct and waste is diverse, and spread out throughout the country and even internationally.

In Indiana, workers padded their paychecks with $2,400 in “management fees” for helping to run the charity campaign. In Florida, workers paid $650 for tickets to sporting events to reward government workers who brought in the most charity dollars. Employees overseas paid $9,300 for first- and business-class plane tickets. In Louisiana, $322 was spent on flower arrangements.

When faced with an additional $1,413 bill for lunch expenses by the New Orleans campaign, the Office of Personnel Management’s internal inspector general’s office concluded “these were not legitimate CFC expenses since they did not reflect the actual cost of administering the 2009 campaign.”

“Furthermore,” the IG continued, “providing meals during meetings was counterproductive to the CFC’s goal of collecting the greatest amount of charitable contributions possible.”

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Many of the worst details of abuse, based on auditors’ reports from the Office of Personnel Management released in April 2012, were reported on Monday by the Washington Examiner.

The IG’s report identified what auditors said was misspending in the CFC program that occurred between 2007 and 2011. Little information is available yet on whether a similar abuse of funds occurred during more recent fundraising campaigns.

The questionable spending the IG identified wasn’t just cash that could have been given to the charities. The errant expenses that were filed are reimbursed by using funds collected from employees — meaning the questionable spending was essentially – if unintentionally – drawing from federal workers’ money that had been donated to the program.

For misspending money that was supposed to go to charity, the guilty workers who misused the Combined Federal Campaigns win this week’s Golden Hammer, an award given by The Washington Times to mark examples of government waste, fraud and abuse.

The most egregious example of waste occurred between 2007 and 2009 — and was reported by the IG two years ago. “Loaned executives” — agency workers selected to assist the fundraising campaigns — in the Washington, D.C. area spent more than $1,000 on a Christmas party and $400 for chair massages.

Plus, the executives ran up a nearly $4,000 tab for lodging and meal expenses they claimed were related to CFC conferences.

In actuality, they were arriving at the conferences early or extending their stays past when the conference ended — and charging the vacation to the charity program.

And to top it all off, between 2007 and 2009, a group of local D.C. workers on a CFC committee bought themselves breakfast and lunch to the tune of $18,000.

The IG said the spending “revealed a culture … where the charging of meals as part of the normal course of business was considered to be an acceptable expense to the campaign.”

OPM officials told The Washington Times they have worked to correct the mistakes and are set to implement a number of changes that will prevent fraud in future campaigns.

Donors and charities will have easier access to see how much money is going to pay overhead compared to what is being received by the charities. And officials said they have improved the way the money is collected and processed, which they hope will save $10 million a year on expenses.

“The CFC division of OPM has been working diligently over the last few years to bring the program into the 21st century and to address some of the issues raised about the campaign in the past, including excessive overhead costs by some local campaigns,” an OPM spokesman said. “The new rule will go far toward reforming the program and giving it a solid footing for the future, one that federal employees can have confidence in.”

“These changes will also ensure that the greatest amount of contributions go directly to the charities and causes selected by federal donors,” current OPM Director Katherine Archuleta said in a statement in April. “It also will go a long way to ensure that every charitable dollar and campaign expense is visible to charities and donors through every step of the process.”

After the D.C.-area waste was revealed by the IG in 2012, then-OPM director John Berry tried to rein in the excesses that had been uncovered, and sent a letter to the local CFC organizers reminding them that “OPM has never authorized CFC campaigns to charge for the expenses of entertainment, either at special events or on any other occasion.”

Likewise, he said that the program “did not authorize the expenditure of funds that would otherwise go to charity for meals served as a convenience to members” of groups administering CFC programs.

When the money makes it to the charities, auditors say it does good work. In 2012 — the most recent year data is available for — federal employees donated $258.3 million. The money is estimated to help more than 25,000 charities each year.

Since the campaign’s creation in 1961, OPM estimates it has donated more than $7 billion to charities across the country.

Each employee gives money for the region of the country they’re in, and each campaign is run separately by local organizations.

But reviews of the CFC’s operations by federal auditors have been relatively infrequent. In February, the inspector general completed a review of central Pennsylvania, an area it hadn’t evaluated since 1991.

And sometimes even basic controls on the spending was lacking. Auditors found hundreds of thousands of dollars that — while not wasted — was kept so haphazardly that they were being credited to the wrong fiscal years.

Expenses incurred in 2007 were charged to 2008, and expenses from 2008 were charged to 2010.

*An earlier version of this story implied that the OPM IG’s investigation into possible waste in D.C. was ongoing. That is incorrect, as the audit has concluded. Instead, it should have said that oversight of the charity fund-raising campaigns across the country is an area the IG continuously oversees and evaluates.


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