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Findings & Fraud Awareness Corporation for Public Broadcasting - - PowerPoint PPT Presentation

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Findings & Fraud Awareness Corporation for Public Broadcasting Office of Inspector General 2017 The CPB/OIG was created by Congress in 1988 to promote the efficiency, effectiveness, and integrity of CPB by conducting audits, investigations,

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Findings & Fraud Awareness Corporation for Public Broadcasting Office of Inspector General 2017

The CPB/OIG was created by Congress in 1988 to promote the efficiency, effectiveness, and integrity of CPB by conducting audits, investigations, and other evaluations of CPB initiatives and operations. To report potential fraud, waste, or abuse in CPB initiatives and operations, please call 800-599-2170 or go to www.cpb.org/oig/contact.php

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CPB/OIG

Created by Congress in 1988 Reports to CPB Board and to Congress Oversight over CPB initiatives & operations

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Inspector General Act

Promote economy, efficiency, effectiveness, and integrity.

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OIG website reports page

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OIG hotline

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Audit engagement letter

  • Scope of work
  • Information before entrance conference

– chart of accounts – trial balances – cross walk from AFR to general ledger – transaction details for revenues & CPB grant expenditures – access to IPA work papers

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Field work – documentation, interviews, analysis

– source docs for revenues, expenses, compliance – delegations of authority – risk assessments & IPA management letters – articles of incorporation & bylaws – accounting manual & org chart

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OIG written products

  • Preliminary observations – condition, criteria,

cause, effect

  • Draft report

– 30 days to respond – Response in final report

  • Final report

– Issued to CPB, Board, Congress – Posted to website w/in 3 days

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Audit resolution

  • CPB management determination, 180 days
  • CPB may request additional info
  • Auditee may appeal decision, 30 days

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Communications Act Compliance

1) Open meetings 2) Open financial records 3) CAB 4) EEO reporting 5) Donor lists & political activities

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Compliance important to Congress

Not included in original statute in 1967 Congress added in 1978 Open stations to public scrutiny Foster greater public participation Encourage more diverse staff

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No compliance, no CSG

“Funds may not be distributed pursuant to this subsection . . . To the licensee or permittee of any public broadcast station . . .” that does not comply with each of these 5 requirements.

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Compliance important to CPB

  • Yearly certification by 2 different officials
  • Subject to False Claims Act
  • Non-compliance policy
  • Compliance alerts

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FY17 Radio CSG Certification of Eligibility

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Compliance important to OIG

Examined in every station audit 10-year summary report (FY2005-15) 69 licensees 22% rate of noncompliance

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Non Federal Financial Support

CPB Financial Reporting Guidelines – reporting NFFS on AFR or FSR

– Contributions v. payments – NFFS criteria (recipient, form, source, purpose) – Federal funds – Policy restrictions re certain revenues – Underwriting/in-kind contributions – Indirect administrative support

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Most common NFFS audit findings

  • In-kind contributions
  • Exchange transactions
  • Federal or public broadcasting revenues
  • Auction/special fundraising costs
  • Uncollectible underwriting

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Other CPB grants

CPB Terms & Conditions for TV, Radio, & Other Media Production Grants

  • changes to budget need CPB approval
  • maintain records to permit effective audit

– verify all direct, overhead, administrative costs – trace CPB funds to general ledger – disclose total costs & funding & use of CPB funds – support labor costs w/contemporaneous docs.

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Most common other audit findings

  • Indirect costs not supported
  • Inaccurate financial reporting
  • Expenses exceed budgeted line items
  • Inaccurate reporting of ancillary revenues
  • No documentation to support labor charges

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Vulnerability of nonprofits

  • Oversight thinner, limited staff
  • Inadequate financial management resources
  • Control structures weaker
  • Supervisors more trusting/mission focused
  • Lack of board financial oversight expertise
  • Nonreciprocal transactions (donations) easier to steal

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Impact of fraud

Destroys morale public trust public support

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Impact of fraud

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$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 2002 2003

National Capital Area United Way Revenue

Millions

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Most frequent fraud scheme – asset misappropriation

revenue & cash receipts/collections purchasing & cash disbursement payroll & employee expense reporting noncash asset misappropriation

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Fraud triangle

Opportunity

lax controls/oversight, “rubber stamp” approvals

Rationalization

undercompensated, not treated fairly

Pressure

personal issues, too much work

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Employee red flags

Living beyond means Financial difficulties Too close with vendor Unwilling to share duties

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Organization red flags

  • Lax tone at the top
  • Lack of/overriding policies & procedures
  • Lack of/overriding internal controls
  • Lack of segregation of duties
  • No management reviews
  • No timely reconciliations

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Deterring fraud

Threat of detection is one of the most powerful deterrents.

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Deterring fraud

Exercise healthy skepticism Establish culture of honesty & integrity Ensure good communication

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Contacting OIG

  • http://www.cpb.org/oig/contact.php – online

complaint form

  • 202-879-9728 or 800-599-2170 – telephone
  • 202-879-9699 – fax
  • oigemail@cpb.org – email
  • Corporation for Public Broadcasting

Office of Inspector General 401 Ninth Street, NW Washington, DC 20004-2129

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