GAO Review on the Combined Federal Campaign

GAO Review on the Combined Federal Campaign

This is in response to the MSNBC Article on CFC

The report on the CFC is factually inaccurate in at least three critical areas. The sensational headline and lead in fails to report adequately the steps taken to assure contributors that their hard-earned money is well spent.

First and foremost, the Combined Federal Campaign makes no decisions about where the money we collect is spent. Every one of those decisions is made by individual donors. We screen thousands of charities every year so local employees can support the best of the best. Based on the audit findings, we now have processes in place that require us to take additional steps to verify that the information presented in the applications is valid. Of more than 2,200 charities in our local campaign this year, we have frozen fund distribution to just one charity which did not pass the IRS database test. This agency's failure was not due to back taxes, but because they were actually a unit of a local city-government, which is not allowed under CFC regulations, but is acceptable through IRS donation purposes. NBC failed to report those steps and many others which were taken in the six months since the report was issued.

Also included in the report on MSNBC.COM, is the following: "What's more troubling, Kutz said, is that the CFC's minimal screening process opened the door wide for a fake charity to con its way on to the authorized list. Kutz said the GAO actually created a fake charity itself -- and then applied to three local CFC campaigns for money, all of which sent checks." (Emphasis added)

Au contraire! None of the charities received any payments. The truth is this was a test by GAO of the application system. Charities have to pass a stringent 16-part application in order to get into the CFC. GAO committed a fraud by submitting forged IRS letters and audits with the fictitious applications. Based on those actions, we now take steps to screen charities against the IRS database. The end result is that we have frozen funds to any organization not verified by the IRS database. Only if they can get their IRS application in order, will we release those funds.

Finally, they reported the audit was released in July. Wrong again. It was released in May. Reporting the news in this sensational way when no CFC organization has ANY access to IRS tax databases is unfair and potentially harmful during this season when giving to the overwhelmingly legitimate, legal and honest organizations is so important.

While this has been a difficult story to have been reported, the Heartland CFC believes this shows the true value and accountability of the CFC. No private donor, nor individual giving through an employee work place campaign, has the ability to see if the charities which they wish to support are paying their payroll taxes. Because this has be brought to light through the review of the CFC process, the general public will now be aware of the agencies which have these problems. Please read OPM's statement below.

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OPM Statement to NBC on CFC Story

The Office of Personnel Management is concerned that the NBC "Fleecing of America" story on the Combined Federal Campaign which aired tonight gives undue and unfair attention to charities which are the exception rather than the rule. The CFC is the world’s largest and most successful annual workplace charity campaign, with more than $260 million in pledges in 2005. Of the more than 22,000 charities which participate in the CFC, only slightly more than 100 (less than one percent) have been cited for not documenting their tax status and have been suspended from the program. OPM has and will continue to make every effort to screen charities so that Federal employees can continue to have confidence in the CFC.

Statement sent to NBC previously on December 4, 2006 Regarding CFC

The Office of Personnel Management (OPM) has taken steps to ensure all 2005 and 2006 CFC participating charities have a tax exempt status. Of the 22,000 charities participating in the CFC, only 132 are not completely verified, and those have been suspended.

We will reinstate these charities if they submit proof they have reestablished tax exempt status with the IRS under Section 501 c 3.

In the meantime, OPM is working with the IRS to establish a more efficient process of ensuring participating charities are indeed tax exempt, and we have adopted GAO recommendations for the current campaign.

Federal law, however, does not allow OPM to screen charities for Federal tax compliance.

The following statement can be found at http://www.opm.gov/news/statement-to-nbc-on-cfc-story,1123.aspx