Office of Inspector General Safeguarding Corporation Funds Demystifying the OIG

Office of Inspector General

SafeguardingCorporation Funds

Demystifying the OIG


Purpose

Understand OIG’s mission Learn to prevent, detect and remedy

problems commonly found in AmeriCorps programs

Know how and when to contact the OIG


OIG Mission: Oversight Improve efficiency and effectiveness of

Corporation programs and operations Prevent and detect waste, fraud and abuse by:

Conducting audits and investigations Recommending policies Keeping the Corporation’s CEO and Congress

informed about deficiencies and the need for/status of corrective action.


OIG Independence By law, OIG is independent of CNCS We report directly to Congress and

administratively to the Corporation’s CEO. Funded by a separate appropriation. OIG personnel must remain objective at all

times in conducting our work and must be free of personal or organizational conflicts of interest with grantees.


What the OIG Does Not Do

Manage or direct Agency programs

or operations


Key OIG Activities

Two operational units

Audits Investigations


AUDITS


Grants Come with Strings

Terms and conditions

Federal law and regulations

Grantees are accountable for complying with these requirements and maintaining records to show that they have done so.


Sound Practices = Integrity and Accountability

Have systems, policies and procedures in place at grant inception to ensure that the organization operates within the rules of its Federal assistance.

Compile and retain full documentation.


Ingredients of Accountability

Strong internal controls

Written procedures and documented systems

Active financial management, review

Accurate, contemporaneous recordkeeping

Following Federal laws, regulations and grant terms

Tone at the top


Common Audit Problems(and how to avoid them)

Account separately for each grant.

Submit Federal Financial Reports (FFRs) on schedule.

Best Practice: Make sure that FFRs reconcile to internal accounting records (general ledger).


Avoiding Common Audit Problems(cont’d)

Staff and member timesheets must be completed accurately, signed and dated by a supervisor after completion, and timely submitted.

Timesheets cannot be based on budgeted amounts—actual work only.

Best Practice: Periodically, conduct your own timesheet review or audit.



National Sex Offender Public Website and Criminal History Checks—conduct thoroughly, timely and document properly, for both staff and volunteers.

Best Practice: Conduct your own review, at beginning of grant.



AmeriCorps members cannot replace staff or perform staff or admin functions—“Members are not cheap labor.”

Grantee, in most cases, may not enroll its employees as AmeriCorps members. No double dipping



Record match dollars in general ledger, with same detail/documentation as for grant expenditures.

Document source of match contributions.

Substantiate market value of in-kind match contributions.



Know what expenses (including personnel) the grant does/does not cover. Best Practice: Review periodically to be sure only allowable expenses are charged to the grant.

Confirm that you have receipts for those expenses.

Do drawdowns meet your immediate cash needs?



Fixed Amount Grants

Track enrollment/retention, draw down funds consistent with it.

Draw only as much as you need for immediate program expenses

Significant share of program expenses must be paid with non-CNCS funds; plan accordingly



If you have an indirect cost rate, know what expenses it includes.

Check to be sure that you are not charging the grant directly for expenses covered by the indirect cost rate.


OMB Grant Reform

Consolidated grant circulars into a single Omni-circular (combining principles for all grant types

2 Code of Federal Regulations (CFR) 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards

Raised the Single Audit Act threshold to $750,000 Many other changes. The proposed rules will become

effective last year All audit reports submitted to the Federal Audit

Clearinghouse must be text searchable and in unencrypted PDF format


INVESTIGATIONS


QUESTION

How important is the AmeriCorps program in your community?


Common Investigations

Embezzlement Misuse of grant funds Improper use of members Displacement Time sheet fraud


Fraud Defined

• An intentional distortion of the truth in an attempt to obtain something of value. Does not have to result in monetary loss.

• Layman’s terms:

Lying, cheating, or stealing.


Embezzlement Red Flags

Members and staff are not being paidPayments are made to “ghost members” Frequent use of white out, changes or additions

Missing documents or fabricated receipts


Misuse of Grant Funds

Red FlagsGrant funds are fully expended early.Unauthorized costs are charged to the grant.Funds are borrowed temporarily to pay for

unauthorized activities.Funds are drawn down on unfilled member slots.Funds are drawn down on terminated slots.Employee claimed under the grant but not

working on the grant.


Improper Use of Members Red Flags

Members used as personal assistant Members not performing service Members serving outside the scope of the grant Team Leaders act in a staff capacity


DisplacementRed Flags

Members assigned to staff positions Staff laid off and replaced by members Employee on leave; member assigned the work Employee resigns; member assigned the work


Timesheet Fraud Red Flags

Recording hours not actually served

Service hours are not properly documented

Member hours are not reasonable or allowable Hours or service not verifiedTimesheets pre-dated or completed in advanceMembers serving from homeStaff time inaccurately allocated


Few

er O

ppor

tuni

ties Less R

ationalization

Reduced Pressure

ResultsOpp

ortu

nity

Rationalization

Pressure

Causes

Management OversightStrong Internal Controls

Training

The Fraud Triangle


Investigations

Program officials allowed member(s) to serve without conducting/completing NSOPW check.

Members serving outside the scope of the grant. Program officials required members to serve as substitute

teachers. Program officials assigned members to staff position(s). Program officials instructed members to forge documents. Executive director used AmeriCorps funds to go on

vacation.


No Reprisals Against Whistleblowers

By law, you cannot be retaliated against for reporting waste, fraud or abuse to OIG.

You may not retaliate against anyone in your organization for reporting to OIG.

Victims of retaliation can make a complaint to OIG, which will investigate.


QUESTIONS


Contact the OIGYour identity can be kept


#CNCSOIG

• Report suspected fraud, waste, or abuse• Information is confidential• You may remain anonymous

1-800-452-8210or

[email protected]

Visit us at www.cncsoig.gov

Documents

Office of Inspector General Safeguarding Corporation Funds Demystifying the OIG