Federal Election Commission

Office of Inspector General -- Semiannual Report

Period ending September 30, 2003

If you require the entire printed version of this report, contact the Office of Inspector General, Federal Election Commission, 999 E Street, NW, Washington, DC 20463 or call Dorothy Maddox-Holland, Special Assistant, phone: (202) 694-1015, fax: (202) 501-8134, or e-mail: [email protected]

Executive Summary

        In accordance with the requirements of the Inspector General Act of 1978, as amended, I am pleased to submit the Federal Election Commission (FEC), Office of Inspector General (OIG) Semiannual Report to Congress covering the period April 1, 2003 through September 30, 2003.

        The OIG’s mission is to assist in protecting the Agency from fraud, waste, and abuse and to remain current on matters affecting the IG community. To accomplish this mission we have relied on audits and investigations conducted by the OIG staff in an effort to improve the accountability and performance of the Federal Election Commission. The Executive Summary recaps the major accomplishments regarding the operations and activities that are relevant to the Federal Election Commission, Office of Inspector General.

        During a previous reporting period, the Office of Inspector General initiated the audit entitled Audit of the FEC’s Public Disclosure Process – (OIG-02-03). The audit has continued into this reporting period. The purpose of the audit is to review how the Commission carries out its disclosure responsibilities and how the use of technology and controls to monitor and remedy reporting discrepancies can be improved. The objectives of the audit are to: 1) determine the extent, if any, of disclosure differences between candidate contributions reported by political committees and related committee contributions reported received by candidates; and 2) determine whether an adequate process is in place to remedy reporting discrepancies.

        The agency’s public disclosure system is a comprehensive structure. IG staff members have been involved in various meetings and discussions pertaining to the entire public disclosure process during this reporting period. The auditors assigned to this project finalized the process description for the Data Coding and Entry Branch. A computer spreadsheet containing campaign finance data was created to compare differences between contributions reported received by candidates from Political Action Committee’s (PACs), and contributions reported by PACS given to candidates.

        The analysis of annual legislative recommendations relating to monthly filing by principle campaign committees has been documented and the information was summarized and included in the work papers. The OIG produced flowcharts to illustrate the processing and data entry functions of the disclosure process. The OIG also assembled and reviewed FEC information technology (IT) initiatives pertaining to the public disclosure of campaign related information. In addition, the OIG has researched and reviewed suggested Federal Election Campaign Act (FECA) amendments pertaining to the comparison of political committee and candidate data. More information regarding this audit can be found on page 9, the section entitled Audit.

        The OIG commenced a follow-up assessment on the audit entitled Agency Controls for Governing the Process for Procurement of Vendor Training Services (OIG-00-01). Although this audit originated in a prior reporting period, follow-up work was conducted during this period to determine whether corrective action had been taken by Management to address the outstanding audit findings and recommendations included in the original audit report.

        The OIG conducted this audit, which was released September 2000, to asses the effectiveness and efficiency of management controls governing the procedures for the procurement of training services from outside vendors. Management generally agreed with the findings and recommendations made in the report. However, four recommendations remain outstanding. An audit recommendation is resolved when agency management and the OIG reach an agreement on a firm plan of action to correct reported weaknesses. The OIG closes audit recommendations when it determines that corrective actions have been completed by the agency. For additional information see page 12, the Audit Follow-up section of this report.

        The Inspector General Act of 1978, as amended, provides that the Inspector General may receive and investigate complaints or information concerning the possible existence of an activity constituting a violation of law, rules or regulations, mismanagement, waste of funds or abuse of authority. The FEC/OIG hotline was originally established to enable direct and confidential contact with the OIG. Employees and members of the public with information on fraud, waste, and abuse are encouraged to contact the Office of Inspector General. All information received, regardless of the method used, is handled in a prompt and professional manner.

        During the past reporting period the OIG received a hotline complaint from an individual against an agency employee. According to the OIG’s Procedures for Processing Hotline Calls, a preliminary inquiry is conducted on allegations raised in a hotline complaint. If it is determined that a full investigation is necessary, the hotline complaint file is closed and a separate investigative file is opened to document the investigation conducted.

        Prior to the close of the previous reporting period, a preliminary inquiry was initiated as a result of the allegations made by the complainant. After completing the preliminary inquiry, and based on the information received and reviewed, the OIG concluded the allegation did not warrant opening an investigation. Therefore, the OIG considers the matter closed. Starting on page 14, in the section entitled Hotline Complaint, more information can be found regarding this allegation.

        The following section is intended to provide an overview summarizing the general activities of the Office of Inspector General for the six (6) month period ending 09/30/03. The section entitled Additional Office of Inspector General Activities, found on page 16, contains more detailed information pertaining to the additional activities of the OIG.

·   During this reporting period, the OIG has been preparing to meet the challenges associated with the Accountability of Tax Dollars Act of 2002. The Act requires OIGs to audit their agencies financial statements. The OIG plans to contract this function out and because the OIG has never hired a contractor to perform audit services for the office, an e-mail survey regarding audit costs was created and sent to the members of the Executive Council on Integrity and Efficiency (ECIE). The survey included questions regarding the cost of their offices’ most recent financial statement audit, or the amount budgeted for such an audit if an audit had not been done before. The IG office received responses from a number of OIGs. The results were summarized and sent, not only to the ECIE committee members who responded to the survey, but to the Office of Management and Budget who requested a copy of the results.

·   The OIG received and responded to an unsolicited, commercial SPAM e-mail forwarded by FEC management. Due to the contents contained in the e-mail, management requested that the OIG examine the SPAM. The SPAM, allegedly sent on behalf of the Director of Contracts and Finance Allocations for the Federal Ministry of Works and Housing in Nigeria, requested information from the FEC employee to assist with investments in estates or land in the United States. The auditor assigned to this project, researched the issue and provided information to management on how to handle the SPAM message.

·   The Inspector General, as a member of the ECIE, maintains active membership with the Council and its associated activities. During this time frame, the IG served on the ECIE awards panel. The awards panel is responsible for recommending awards for outstanding OIG employees to be presented at the annual October PCIE/ECIE awards ceremony held in Washington, DC.

·   The FEC Staff Director consulted with the Inspector General on an issue regarding appropriated funds. The OIG contacted the ECIE community to obtain feedback on the permissibility of using appropriated funds to subsidize the cost of a government sponsored employee moral and/or welfare activity. The OIG received several helpful responses. After further review, the information was summarized and transmitted to the Staff Director.