Office of Inspector General Safeguarding Corporation Funds Demystifying the OIG

Office of Inspector General 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

Office of Inspector General 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.

Office of Inspector General 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.

Office of Inspector General What the OIG Does Not Do Manage or direct Agency programs or operations

Office of Inspector General Key OIG Activities Two operational units  Audits  Investigations

Office of Inspector General AUDITS

Office of Inspector General 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.

Office of Inspector General 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.

Office of Inspector General 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

Office of Inspector General 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).

Office of Inspector General 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.

Office of Inspector General Avoiding Common Audit Problems (cont’d)  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.

Office of Inspector General Avoiding Common Audit Problems (cont’d)  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

Office of Inspector General Avoiding Common Audit Problems (cont’d)  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.

Office of Inspector General Avoiding Common Audit Problems (cont’d)  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?

Office of Inspector General Avoiding Common Audit Problems (cont’d)  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

Office of Inspector General Avoiding Common Audit Problems (cont’d)  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.

Office of Inspector General 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

Office of Inspector General INVESTIGATIONS

Office of Inspector General QUESTION How important is the AmeriCorps program in your community?

Office of Inspector General Common Investigations  Embezzlement  Misuse of grant funds  Improper use of members  Displacement  Time sheet fraud

Office of Inspector General 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.

Office of Inspector General Embezzlement Red Flags  Members and staff are not being paid  Payments are made to “ghost members”  Frequent use of white out, changes or additions  Missing documents or fabricated receipts

Office of Inspector General Misuse of Grant Funds Red Flags  Grant 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.

Office of Inspector General 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

Office of Inspector General Displacement Red 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

Office of Inspector General 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 verified  Timesheets pre-dated or completed in advance  Members serving from home  Staff time inaccurately allocated

Office of Inspector General Fewer Opportunities Less Rationalization Reduced Pressure Results Opportunity Rationalization Pressure Causes Management Oversight Strong Internal Controls Training The Fraud Triangle

Office of Inspector General 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.

Office of Inspector General 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.

Office of Inspector General QUESTIONS

Office of Inspector General Contact the OIG Your identity can be kept

Office of Inspector General #CNCSOIG Report suspected fraud, waste, or abuse Information is confidential You may remain anonymous or Visit us at