Federal Election Commission

Office of Inspector General -- Semiannual Report

Period ending March 31, 1999

If you require the entire printed version of this report, contact the Office of Inspector General, Federal Election Commission, 1050 First Street NE, Washington, DC 20463 or call Dorothy Maddox-Holland, Special Assistant, phone: (202) 694-1015, fax: (202) 501-8134, or e-mail: dmaddox@fec.gov.

Executive Summary

This report is submitted pursuant to the Inspector General Act of 1978, as amended, and includes a summary of the Office of Inspector General's (OIG) activities for the period October 1, 1998 through March 31, 1999.

During this reporting period, one audit report and one audit follow-up report were released and two cash counts of the Federal Election Commission’s (FEC) imprest fund were conducted. The Office of Inspector General also initiated an audit during this reporting period of the Agency Year 2000 Renovations. We are conducting this audit to verify whether progress reported by the FEC for resolving the Y2K problem, matches its actual state of preparation. The audit will also evaluate compliance with applicable laws and regulations. The draft report of the audit was released on March 31, 1999. We anticipate releasing the final audit report during the next reporting period. The audits and follow-up report are summarized below:

Audit of Commission’s Management of Computer Software - OIG 98-05, was released March, 1999. The primary objectives were to 1) verify that the Commission’s computer software is in compliance with applicable copyright laws and commission policies and procedures; 2) determine that adequate policies and procedures are in place to prevent unauthorized software use by Commission employees; and 3) ensure that adequate controls are in place to detect and prevent computer viruses. During the audit, the OIG performed an unannounced inspection of Commission computers. The unannounced inspection was based on a random sample of computers. The purpose of the inspection was to document the computer software programs installed on Commission computers, and to verify that anti-virus software was installed and active on the computers. We concluded that adequate policies and procedures are in place to prevent unauthorized software use by Commission employees. We provided management with several suggestions for improvement. Our audit contained one finding and three recommendations which are detailed in the audit section of this report.

A Follow-up report to the audit of the Review of the Commission’s Employee Appraisal Process - OIG 97-02, was conducted this reporting period. The original audit was released in January, 1998. The primary objectives of the audit were to 1) determine whether the Commission’s Employee Appraisal Process was in compliance with applicable federal regulations and commission personnel instructions; and 2) determine whether the Commission’s monetary incentive process is in compliance with applicable Federal Regulations and Commission Personnel Instructions. Four audit recommendations were contained in the original report. Management agreed with all the recommendations made in conjunction with the findings. However, after our review we found that the Personnel office has not resolved the four audit recommendations. The details of the follow-up report are discussed in the audit follow-up section of this report.

Audit of Agency Year 2000 Renovations - OIG 98-08, is currently in progress. The primary objectives of this audit are to 1) verify the reported progress of the FEC’s Y2K renovation project; and 2) to evaluate compliance with applicable laws & regulations. Throughout the audit, we regularly updated the Y2K team on all project risk that we identified during our audit fieldwork and provided specific recommendations to reduce exposure to those risks. We anticipate releasing the audit during the next reporting period. Further details concerning this audit are discussed in the audit section of this report.

Our office, along with the Inspector General from the Equal Employment Opportunity Commission, conducted a peer review of the Panama Canal Commission’s Office of Inspector General. The objectives of the peer review were to determine 1) whether or not the audit organization’s internal control system is adequate and operating effectively; and 2) whether or not established policies, procedures, and applicable Government Auditing Standards are being followed in practice. The scope of the review included: 1) reports and working papers for four audits listed in semiannual reports for the October 1, 1997 through September 30, 1998 period; 2) OIG Audit and Investigative Work Plan and Strategic Plan; 3) job descriptions and documents describing auditor experience and training; 4) OIG Procedures Manual and 5) employee confirmation of independence statements. Additionally, appropriate members of the audit staff were interviewed to verify the actual practice of quality control and follow-up procedures. The draft report has been issued to the Inspector General of the Panama Canal Commission.

To enhance the effectiveness of the Office of Inspector General and to ensure effective audit coverage of the Commission’s programs and operations, the OIG developed a strategic plan covering fiscal year 1999-2004. The OIG strategic plan will continue to evolve and will be reviewed and updated as necessary to ensure maximum effectiveness in meeting the changing needs of the FEC, consistent with the OIG’s statutory responsibilities. The Strategic Plan can be found in Appendix A.