Rule2024-29992
Combined Federal Campaign: Authorization of Short-Term Regulatory Variation
Primary source
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Published
December 18, 2024
Effective
December 18, 2024
Issuing agencies
Personnel Management Office
Abstract
The Office of Personnel Management (OPM) is providing notice that the Acting Director is authorizing a variation from the regulatory public accountability standards to relieve practical difficulties and unnecessary hardships in complying with the strict letter of the regulation. The Acting Director has found that such a variation is within the spirit of the regulations and will ensure the achievement of campaign objectives. Specifically, for an 18-month period, OPM is modifying certain revenue thresholds for the various public accountability standards for charities participating in the Combined Federal Campaign (CFC).
Full Text
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<title>Federal Register, Volume 89 Issue 243 (Wednesday, December 18, 2024)</title>
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[Federal Register Volume 89, Number 243 (Wednesday, December 18, 2024)]
[Rules and Regulations]
[Pages 102696-102697]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-29992]
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 950
Combined Federal Campaign: Authorization of Short-Term Regulatory
Variation
AGENCY: Office of Personnel Management.
ACTION: Notification.
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SUMMARY: The Office of Personnel Management (OPM) is providing notice
that the Acting Director is authorizing a variation from the regulatory
public accountability standards to relieve practical difficulties and
unnecessary hardships in complying with the strict letter of the
regulation. The Acting Director has found that such a variation is
within the spirit of the regulations and will ensure the achievement of
campaign objectives. Specifically, for an 18-month period, OPM is
modifying certain revenue thresholds for the various public
accountability standards
[[Page 102697]]
for charities participating in the Combined Federal Campaign (CFC).
DATES: The authorization of short-term regulatory variation standards
are effective on December 18, 2024.
FOR FURTHER INFORMATION CONTACT: Keith Willingham, Director, Office of
the CFC, <a href="/cdn-cgi/l/email-protection#4c2729253824623b25202025222b242d210c233c21622b233a"><span class="__cf_email__" data-cfemail="1b707e726f73356c72777772757c737a765b746b76357c746d">[email protected]</span></a>, 202-606-2564.
SUPPLEMENTARY INFORMATION: The CFC is the world's largest and most
successful annual workplace charity campaign, with 35 CFC campaign
zones throughout the country and overseas and raising millions of
dollars each year. Pledges made by Federal civilian, retiree, postal,
and military donors during the campaign season support non-profit
organizations that meet CFC regulations and provide health and human
welfare benefits throughout the world.
To provide public accountability, OPM generally requires
participating charities to undergo a third-party audit of their
finances. In a 1995 rulemaking, OPM exempted local charities from the
audit requirement if they had annual revenue of less than $100,000. In
2014, OPM eliminated the distinction between ``local'' and ``national''
charities and expanded the exemption to all charities with revenue of
less than $100,000. See 5 CFR 950.203(a)(2)(i). In that rulemaking, OPM
also added a second tier, allowing charities with revenue of $100,000
to under $250,000 to participate without an audit but with a review by
an independent certified public accountant instead. See 5 CFR
950.203(a)(2)(ii).
Participation by charities in the CFC dropped precipitously over
the last decade, however. Charities have explained that the audit
requirement serves as a barrier to participation. Revenue reported by
charities has increased, and more than 75 percent of charities now
exceed the current audit threshold of $250,000 in reported revenue. At
the same time, costs of audits have risen dramatically and now often
exceed the value of donations collected through the CFC. Audit services
can now range from $15,000-$30,000. Accordingly, a charity cannot
justify the expense of the audit, which yield a net loss to the
charity.
The mission of the CFC is to promote and support philanthropy
through a program that is employee-focused, cost-efficient, and
effective in providing all Federal employees the opportunity to donate.
The CFC provides employees with an easy way to contribute to their
charities of choice; so, when employees no longer find their favorite
charity on the CFC list, they may not give as much or as often.
Therefore, to attract more donors to the CFC and to retain and attract
a more diverse group of charities, OPM is adjusting the audit
requirements in an 18-month pilot program.
OPM's CFC regulations authorize the Director of OPM to ``waive any
of these [public accountability] standards and certifications upon a
showing of extenuating circumstances.'' 5 CFR 950.203(e). In addition,
the Director may ``exercise general supervision over all operations of
the CFC and take all necessary steps to ensure the achievement of
campaign objectives.'' 5 CFR 950.102(c). Recognizing that the financial
thresholds have not been adjusted in over ten years (and that the
$100,000 threshold is almost 20 years old), OPM finds that immediate
steps are warranted to facilitate participation by charities in the
CFC.
Based on the feedback OPM has received from charities, the Acting
Director has found that the current financial thresholds present
extenuating circumstances that impair the achievement of campaign
objectives as the thresholds have not been adjusted for inflation in
over 10 years. Furthermore, the thresholds are inconsistent with the
standards applied by other areas of the government. For example, the
Office of Management and Budget currently requires audits for
organizations that expend $750,000 or more in Federal funds. See 2 CFR
part 200, subpart F. Similarly, many similar state programs have raised
their audit thresholds to $1,000,000. Because the existing regulatory
thresholds are having a negative impact on the effectiveness of the CFC
and revised thresholds would provide some necessary financial relief,
the Acting Director finds that a limited waiver is appropriate.
Specifically, waiving the audit requirement for charities with annual
revenue of $1 million or less, and waiving the requirement for an
independent review of financial statements for charities with annual
revenue above $1 million but that receive less than $750,000 in CFC
pledges will help address the extenuating circumstances of the
increased revenues received by charities combined with the increased
costs of financial auditing and review services without commensurate
inflationary adjustments to the regulatory thresholds.
Accordingly, OPM provides notice that, for the 18-month period
after December 18, 2024, OPM will waive the regulatory thresholds for
audits and/or reviews of financial statements for organizations with
annual reported revenue of $1,000,000 or less on its IRS Form 990 or
pro forma IRS Form 990 and will waive the regulatory thresholds for
audits of financial statements for organizations with annual reported
revenue above $1,000,000 and with less than $750,000 coming from CFC.
Details are available at <a href="https://cfccharities.opm.gov/app/#!/home">https://cfccharities.opm.gov/app/#!/home</a>.
All other organizations (e.g., an organization with annual reported
revenue above $1,000,000 and with $750,000 or more coming from CFC)
continue to be required to undergo an annual financial statement audit
for CFC purposes. The organization must account for its funds based on
generally accepted accounting principles. A copy of the audited
financial statements and auditors report must be included with the
application. See 5 CFR 950.203(a)(2)).
Next Steps
OPM plans to update its regulations governing the CFC (RIN 3206-
AO66). OPM will assess the effectiveness of this waiver in terms of
encouraging charity participation in CFC and whether there is a
resultant increase in employee participation. OPM will also assess the
extent to which these pilot programs affect the number of charities
participating in CFC and which charities meet these proposed
thresholds. OPM charity application reviewers at the local national,
and international levels will study the audits and financial reviews
submitted with applications to ensure that these thresholds are
providing appropriate levels of accountability.
Office of Personnel Management.
Kayyonne Marston,
Federal Register Liaison.
[FR Doc. 2024-29992 Filed 12-17-24; 8:45 am]
BILLING CODE 6325-58-P
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