Berry: OPM did not authorize CFC meals, entertainment expenses

Wednesday - 3/28/2012, 8:35am EDT

Office of Personnel Management Director John Berry issued a directive today saying his agency had never authorized the Combined Federal Campaign to charge for meals and entertainment expenses for special events or other occasions.

Berry was responding to a March 12 final audit report from OPM's Inspector General Office detailing thousands of dollars in questionable charges made by Principal Combined Fund Organizations (PCFOs) and Local Federal Coordinating Committees (LFCCs) while executing CFC campaigns and campaign operations.

John Berry, director, OPM

The report found from 2007-2009 PCFO had overcharged for travel expenses by $40,081 for such things as meals and appreciation lunches.

"In past guidance, OPM has instructed that meals served in conjunction with a campaign event (such as a kickoff rally, victory celebration, or awards ceremony) could be charged as an expense of the campaign, subject to the review of the LFCC Chair for its propriety," Berry said. However, he went on to say that this was not meant to authorize an expenditure of funds meant for charitable means to pay for meals served as a convenience to LFCC's members, PCFO employees or CFC volunteers.

The CFC is a charitable organization funded by federal employees and military members and overseen by OPM.

The IG identified $764,069 in expenses that it said could have been put to better use for the charity's campaigns.

The report also stated that PCFO overcharged for campaign expenses by $268,739 for the same three-year period. Questioned expenses (see table below) included a Washington by Night Tour for $1,159; a private box, group tickets and mascot visit for a Washington Nationals baseball game for $11,315; a jazz band that played at a leadership conference for $1,500; and chair massages performed by an outside contractor at a Wellness Fair for $280.

Questioned Expenses
Expense Category 2007 Campaign 2008 Campaign 2009 Campaign
Meals provided during routine CFC business activities $18,764 $36,919 $28,660
Loaned executive tour of Washington $1,159
Campaign kick-off event $11,315
Jazz band at CFC Leadership Conference $1,500
Training/Conferences $169
Questionable allocation methods $5,439 $584
Chair massages $280
Other costs not beneficial to campaign $43,183 $43,870 $76,897
Totals $81,640 $80,958 $106,141

In its response to the IG report, PCFO asserted that its expenses were allowable under law. It quoted OPM's "Proven Practices and New Innovations" memo, which states:

"A meal served in conjunction with a campaign event is an allowable expense that may be paid from campaign receipts. The cost would be included in campaign expenses. The LFCC Chair makes decisions about the appropriateness of CFC-sponsored dinners and luncheons."

PCFO also argued that CFC campaign volunteers donated their time and services and therefore "should be recognized, honored, thanked, and motivated to continue to put forth their best efforts in soliciting potential donors to make financial contributions to participating charities." It added that providing meals and entertainment were "critically important" for the execution of a successful campaign.

In responding to PCFO's argument, the IG determined that a "campaign event" was something special or out-of-the-ordinary.

"Consequently, based on this definition of campaign event, we maintain our position that these meetings do not constitute 'campaign events' and the meals included as part of these routine meetings should not be paid for with campaign dollars," the IG report stated.

Regarding PCFO's argument that campaign volunteers needed to be motivated or honored, the IG claimed PCFO misunderstood the role federal employees played as campaign volunteers.

"Federal employees serving as LFCC members or Loaned Executives are not 'donating' their time and services," the report said. " To the contrary, their work on the CFC is considered part of their official duties for which they receive their federal salaries. Consequently, the argument that the additional motivation of which the PCFO speaks is 'critically important' is without merit."

"The purpose of the CFC is and always has been to collect the greatest amount of contributions possible, and to direct those contributions to the charities that participate in the campaign," Berry said.

In light of the report, Berry's directive rescinded OPM's prior guidance relating to the expenditure for meals. He instructed that LFCCs were no longer allowed to approve nor were PCFOs allowed to incur "any expenses for food, beverages or entertainment, and no such expenses are to be charged against the proceeds of the campaign."

He went on to direct the LFCC to establish policies and practices to regularly review costs incurred by PCFO.