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Board Report: 2014-FMIC-B-009 June 30, 2014

The Board Should Enhance Its Policies and Procedures Related to Conference Activities

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Appendix C: Managementís Response


DATE:        June 23, 2014

TO:            Melissa Heist, Associate Inspector General for Audits and Evaluations

FROM:      Michell Clark, Director, Management Division /signed/

                  William Mitchell, Director and CFO, Division of Financial Management /signed/

                  Robert Frierson, Secretary of the Board, Office of the Secretary /signed/

SUBJECT: Combined Divisions' Response to OIG Audit of Board-Sponsored Conference                    Activities

We have reviewed your report entitled "The Board Should Enhance Its Policies and Procedures Related to Conference Activities" and appreciate the opportunity to provide comments on the report's findings and recommendations.

Finding 1:  Procurement section should ensure that requirements are met for conference-related purchases of $25,000 to $49,999


We recommend that the Director of the Division of Financial Management

  1. Ensure that a written solicitation of bids is obtained for conference-related single purchases of $25,000 to $49,999.

Division of Financial Management's (DFM) Response

The division generally concurs with this recommendation.  Conferences and related expenses present a unique challenge to the standard process of obtaining three written quotes due to the dynamic nature of conference scheduling.  Issuing a written SOA is not always optimal; time constraints may necessitate an alternative approach, such as obtaining oral quotes, and the availability of a specific date may eliminate all but one bidder. 

Procurement staff are currently reviewing the Acquisition Policy and procedures to identify opportunities to streamline the process; clarify areas that have not been well-defined; ensure adherence to policy and procedures; and improve customer service.  As part of this review, Procurement will work closely with the Office of the Secretary and other stakeholders to develop additional guidelines specific to conference planning.  This is likely to result in a more simplified approach with appropriate controls that may adjust the current requirement of written solicitation of bids.  It will not, however, eliminate our commitment to maintaining accountability and control of procurement actions and decisions. 

Finding 2:  The Board should clarify guidance on recordkeeping for conference-related expenses


We recommend that the Secretary of the Board

  1. Provide additional clarity on divisions' responsibilities for maintaining records and supporting documentation related to Board-sponsored conference activities.

Office of the Secretary's (OSEC) Response

OSEC concurs with this recommendation.  The division has prepared additional guidance for divisions on managing event-planning records, including receipts and financial documents related to an event, on its internal web site.  Based on feedback from the divisions, OSEC will take any additional steps to implement the recommendation. 

Finding 3:  The Board should update the Food and Beverage Request Form and clarify the Official Meals Expenses Policy


We recommend that the Director of the Management Division

  1. Coordinate with Visitor Services to clarify in the Official Meals Expenses Policy the process divisions should follow to request approval to use non-Board facilities.  The updated guidance should identify:
    1. information to be included in the request.
    2. responsibility for retaining the supporting documentation.
  2. Amend the food and beverage request form to include fields for the following information: 
    1. the date the form was submitted.
    2. a list of invitees.
  3. Update the Official Meals Expenses Policy to include the following requirements:
    1. if circumstances necessitate the extension of alcohol service beyond the 90-minute limit, Food Services or the division hosting the event should document the reason for the extension and document that proper approval was obtained.
    2. specify who has the authority to approve the extension of alcohol service beyond the 90-minute limit.

Management Division's Response

The Management Division concurs with the intent of recommendations three and five.   Currently, Food Services in collaboration with OSEC, DFM and the Legal is reviewing and revising the Official Meals Expenses Policy.  These recommendations will be incorporated into the finalized policy and the related food and beverage request form. 

Concerning recommendation four, the present food and beverage request form is automated and consequently documents the submission date.  In the future, the form will be modified to include fields for indicating the presence of external attendees and attaching a related listing.  There will not be a requirement to submit lists of internal attendees.