Audit: Millions Given to Federal Charity Were Misspent

Monday, 04 Aug 2014 08:45 PM

By John Blosser

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A scathing federal audit discovered that millions of dollars in contributions to a government charity fund were diverted to buy fancy meals, neck massages, pricey trips to resort areas, first class air flights, hotel room service and other luxuries, rather than going to help those in need.

The Washington Examiner, reporting on a 2012 investigative audit by the Office of Personnel Management's inspector general of expenses between 2005-2012, noted that at least half of $4 million in expenses charged by California branch of the Combined Federal Campaign (CFC), administered by the Sacramento Metropolitan Arts Partnership (MAP) was spent inappropriately, for items that even included buying, renting and selling a house. 

In Washington, federal auditors found that federal workers and contractors with Global Impact, administrator of the CFC there, spent over $1 million on items such as in-office neck massages to "alleviate stress,” a private box at the Washington Nationals stadium, hiring a jazz band to play at a leadership conference, hosting a tour of Mardi Gras in New Orleans and a "Washington By Night Tour" for "loaned executives," or full-time, taxpayer-paid federal employees on loan to the charity, the Examiner reports.

Other expenses involved dry cleaning bills and even an $80 gift of flowers for an employee.

The Examiner quoted the audit report as stating, "Expenses revealed a culture within the LFCC (Local Federal Coordinating Committee) and (Global Impact) where the charging of meals as part of the normal course of business was considered to be an acceptable expense to the campaign.

"Every dollar spent on a bureaucrat's dinner was one that didn't go to the charity for which it was intended.

"It has taken the position that any event where campaign business is conducted or where campaign staff is involved constitutes a 'campaign event,' the expenses of which are chargeable to the campaign. The OIG finds this approach to the administration of a campaign extremely disturbing and suspects that most donors would as well."

MAP, auditors found, charged nearly $2 million in administrative expenses above the expense accounts reported, including $770,216 in unallowable costs. The Examiner reported that MAP withdrew $190,000 to make a $112,000 down payment on a house in 2010, but told auditors they did not know what happened to the other $78,000. MAP sold the house, at a profit, but the auditors report that the down payment and profit have not been returned to the CFC.

Further, the IG report states, "we could not determine whether 98 percent of the expenses were legitimate CFC costs due to a complete lack of documentation."

Yet when OPM attempted to impose reforms designed to cut back waste, the Examiner reported that 1,300 comments were received from contractors and "loaned executives" opposing the changes, and Global Impact even hired lobbyists to press to keep things just the way they are.

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