[Federal Register: June 29, 2006 (Volume 71, Number 125)]
[Proposed Rules]
[Page 37003-37014]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29jn06-12]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
[[Page 37003]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 950
RIN 3206-AL05
Solicitation of Federal Civilian and Uniformed Service Personnel
for Contributions to Private Voluntary Organizations--Eligibility and
Public Accountability Standards
AGENCY: Office of Personnel Management.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Office of Personnel Management (OPM) is issuing proposed
changes in eligibility requirements and public accountability
standards, and to several other parts of the regulations, for the
Combined Federal Campaign (CFC). These proposed changes are intended to
streamline the significant eligibility requirements and public
accountability standards and other administrative areas to reduce the
burden on applicant charitable organizations seeking to qualify for the
CFC, simplify the administrative process of determining whether
charitable organizations are eligible to participate in the CFC and
facilitate modernization of the CFC program.
DATES: We will consider comments received by August 14, 2006.
ADDRESSES: You may submit comments, identified by RIN number, by any of
the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: cfc@opm.gov. Include ``RIN 3206-AL05'' in the
subject line of the message.
Fax: (202) 606-0902.
Mail: Mara T. Patermaster, Director, Office of CFC
Operations, U.S. Office of Personnel Management, Room 5450, 1900 E
Street, NW., Washington, DC 20415.
Hand Delivery/Courier: Director, Office of CFC Operations,
U.S. Office of Personnel Management, Room 5450, 1900 E Street, NW.,
Washington, DC 20415.
FOR FURTHER INFORMATION CONTACT: Mark W. Lambert, Senior Compliance
Officer for the Office of CFC Operations, by telephone on (202) 606-
2564, by FAX on (202) 606-0902, or by e-mail at cfc@opm.gov.
SUPPLEMENTARY INFORMATION: The CFC regulations were last revised more
than 10 years ago. OPM is issuing proposed changes to its regulations
governing the solicitation of Federal civilian and uniformed services
personnel at the workplace for contributions to private non-profit
organizations through the CFC under the authority of Executive Order
12353 (March 23, 1982). OPM has plenary authority under 5 CFR part 950
to administer the CFC in compliance with legal standards. Public Law
(Pub. L.) 100-202 Sec. 101(m), requires OPM to maintain certain
eligibility criteria for CFC participation by organizations and
federations as well as public accountability standards similar to those
that were in effect between 1984 and 1987. These CFC criteria were
designed to offer donors assurances of the integrity of the program's
participating charitable organizations. However, assuring compliance
has created a burdensome application and review process for charitable
organizations, locally within each campaign for Local Federal
Coordinating Committees (LFCC) and within OPM. At the time when the CFC
was established in the 1960s, OPM filled a regulatory void by setting
standards for evaluating the fiscal accountability and governance of
charitable organizations. Today, this role is better served by the
industry, its oversight organizations and the Internal Revenue Service
Division of Tax Exempt and Government Entities. The changes proposed
will put more responsibility on the donor to perform research on
charitable organizations and to utilize industry oversight groups to
ensure that their donations are being used effectively and efficiently
by these organizations.
There are currently 16 core standards of eligibility and public
accountability and 3 core administrative requirements that a charitable
organization must satisfy in order to participate in the CFC. These
appear in the form of certifications in the annual application. Many
require documentation, such as audited financial statements and an
annual report to demonstrate compliance. The proposed changes to these
regulations remove eight of the standards, including the requirement
that participating organizations' administrative and fundraising
expenses not exceed 25 percent of its total revenue. As a service to
donors, OPM will still require the applicant to calculate the
administrative and fundraising rate (AFR) and report it to donors. Some
of the remaining standards will be modified to eliminate documented
proof of compliance. OPM will retain the right to request documented
evidence of compliance with CFC regulations from any applicant or
participating organization. Failure to provide evidence of compliance
that is satisfactory to OPM may result in a denial to participate in
the CFC or removal from the CFC. OPM will retain eight of the standards
and three core administrative requirements for applicant organizations.
The standards and administrative requirements that will be retained are
as follows:
1. 5 CFR 950.202(a)--National List Eligibility Requirements--
Certify that it provides or conducts real services, benefits,
assistance, or program activities, in 15 or more different states or a
foreign country over the 3 year period immediately preceding the start
of the year involved. The regulations will be clarified to indicate
that a detailed schedule is required as part of the application that
describes activities in each state or foreign country in each year.
2. 5 CFR 950.202(b)--National List Eligibility Requirements--
Certify that it is recognized by the Internal Revenue Service as tax-
exempt under 26 U.S.C. 501(c)(3) and to which contributions are tax-
deductible pursuant to 26 U.S.C. 170(c)(2). OPM proposes to clarify
that these organizations must be public charities, not private
foundations.
3. 5 CFR 950.203(a)(1)--Public Accountability Standards--Certify
that the organization is a human health and welfare organization
providing services, benefits, or assistance to, or conducting
activities affecting, human health and welfare. No changes are proposed
to this standard.
4. 5 CFR 950.203(a)(2)--Public Accountability Standards--Certify
that it accounts for its funds in accordance with generally accepted
accounting
[[Page 37004]]
principles (GAAP) and that an audit of the organization's fiscal
operations is completed annually by an independent certified public
accountant in accordance with generally accepted auditing standards
(GAAS). This standard will be revised to apply only to organizations
which report $250,000 or more in revenue on the organization's IRS Form
990. If an organization indicates revenue of less than $250,000 on its
IRS Form 990, then it will be required to certify that it has controls
in place to ensure that funds are properly accounted for and that it
can provide accurate timely financial information to interested
parties. OPM proposes to raise the revenue threshold amount to reduce
unnecessary administrative burdens and expenses to otherwise
financially accountable organizations with smaller budgets. Such
applicants will no longer be required to submit a copy of a recent
audit with their application. However, OPM retains the right to request
a copy of the audit and to sanction or penalize the organization if it
does not timely produce an acceptable copy.
5. 5 CFR 950.203(a)(3)--Public Accountability Standards--Provide a
completed copy of the organization's IRS Form 990, including signature,
with the application regardless of whether or not the IRS requires the
organization to file this form. OPM proposes to revise this standard to
make it a certification. OPM will continue to require a copy of the
completed IRS Form 990 together with supplemental statements and
Schedule A to be included with the application. If the organization
does not file an IRS Form 990, OPM will nonetheless require submission
of a pro forma IRS Form 990, page 1 only. OPM will no longer routinely
check to determine whether the IRS Form 990 revenues and expenses
reported reconcile with the audited financial statements. This
reconciliation is required to be performed on the IRS Form 990 in Parts
IV-A and IV-B by the organization. OPM strongly encourages Federal
donors to utilize the variety of reports and information on
participating CFC charities which is publicly available, through the
Internet and other sources, to satisfy themselves regarding the
financial accountability of any given organization.
6. 5 CFR 950.203(a)(4)--Public Accountability Standards--Provide a
computation of the organization's percentage of total support and
revenue spent on administrative and fundraising. This percentage shall
be computed from information on the IRS Form 990, submitted pursuant to
Sec. 950.203(a)(3), by adding the amount spent on ``management and
general'' (line 14) to ``fundraising'' (line 15) and then dividing the
sum by ``total revenue'' (line 12). No changes are proposed to this
standard, but references to specific lines of the IRS Form 990 will be
removed in anticipation of future changes to the Form.
7. 5 CFR 950.203(a)(5)--Public Accountability Standards--Certify
that the organization is directed by an active and responsible
governing body whose members have no material conflict of interest and
a majority of which serve without compensation. No changes are proposed
to this standard.
8. 5 CFR 950.203(a)(8)--Public Accountability Standards--Certify
that contributions are effectively used for the announced purposes of
the charitable organization. No changes are proposed to this standard.
9. 5 CFR 950.203(a)(12)--Public Accountability Standards--Provide a
statement that the certifying official is authorized by the
organization to certify and affirm all statements required for
inclusion on the national list. No changes are proposed to this
requirement.
10. 5 CFR 950.203(a)(13)--Public Accountability Standards--Provide
a statement in 25 words or less describing the program activities of
the charitable organization. This will be removed as a standard, but it
is retained as an administrative requirement in 5 CFR 950.401(g)(2) and
will be required from each charitable organization completing the CFC
application.
11. 5 CFR 950.605--Sanctions Compliance Certification--Each
federation, federation member and unaffiliated organization applying
for participation in the CFC must, as a condition of participation,
complete a certification that it is in compliance with all statutes,
Executive orders, and regulations restricting or prohibiting U.S.
persons from engaging in transactions and dealings with countries,
entities or individuals subject to economic sanctions administered by
the U.S. Department of the Treasury's Office of Foreign Assets Control
(OFAC). No changes are proposed to this certification.
The eight standards that will be removed are:
1. 5 CFR 950.202(c)--National List Eligibility Requirements--
Certify that the organization has no expenses connected with lobbying
and attempts to influence voting or legislation at the local, State, or
Federal level or alternatively, that those expenses would classify the
organization as a tax-exempt organization under 26 U.S.C. 501(h). OPM
proposes to remove this standard because it is already a requirement
for charitable organizations to qualify as a tax-exempt entity under
section 501(c)(3) of the Internal Revenue Code and to maintain that
status with the IRS. In addition, some applicant organizations have
misinterpreted the standard to mean that no lobbying is permitted,
when, in fact, lobbying is permissible if consistent with Internal
Revenue Code requirements.
2. 5 CFR 950.203(a)(4)(i)--Public Accountability Standards--If an
organization's administrative and fundraising expenses exceed 25
percent of its total support and revenue, it must certify that its
actual expenses for administration and fundraising are reasonable under
all the circumstances presented. It must provide an explanation with
its application and also include a formal plan to reduce these expenses
below 25 percent. OPM proposes to remove the 25 percent threshold for
administrative and fundraising rates because Federal employees
participating in the CFC should be knowledgeable donors and may consult
a variety of publicly available reports and publications, many on the
Internet, to learn about the administrative and fund raising status of
charities they are considering for their donations. Federal donors also
can and should review the annual CFC brochure itself which will
continue to report the administrative and fundraising rate of all
participating charities to determine whether an organization's
administrative and fundraising rate is acceptable to that donor. OPM
encourages Federal donors to be as knowledgeable as possible about the
organizations which they support.
3. 5 CFR 950.203(a)(4)(ii)--Public Accountability Standards--The
Director may reject any application from an organization with
fundraising and administrative expenses in excess of 25 percent of
total support and revenue, unless the organization demonstrates to the
satisfaction of the Director that its actual expenses for those
purposes and its plan to reduce them are reasonable under the
circumstances. OPM believes that Federal employees should have an
opportunity to donate to a wide range of charitable organizations and
should not be limited in their choice to those charities with
particular administrative and fundraising rates deemed acceptable to
OPM, so long as the rate information is available to them to make an
informed decision. In addition, this requirement conforms to the
proposed removal of 5 CFR 950.203(a)(4)(i). As in other proposed
regulatory changes, OPM encourages Federal donors to be
[[Page 37005]]
knowledgeable about those charities to which they choose to donate.
4. 5 CFR 950.203(a)(6)--Public Accountability Standards--Certify
that the organization's fundraising practices prohibit the sale or
lease of its CFC contributor lists. This standard applied only when a
donor authorized the release of his or her contact information to the
organization. Although this standard is being removed, the requirement
for a donor to authorize his or her contact information will be
retained. If a donor does not authorize this release, then his or her
contact information will be kept confidential by the Principal Combined
Fund Organization (PCFO) as proprietary information as required by 5
CFR 950.601(c). OPM believes that once a donor authorizes the release
of his or her contact information, the use of this information,
including whether it may be sold or be subject to other commercial
activity, is an issue between the donor and the charitable organization
and not one that OPM can track or enforce. OPM looks forward to
comments on this proposed change to consider steps OPM might take to
increase potential donor awareness of the possible implications of
releasing donor information to a charity.
5. 5 CFR 950.203(a)(7)--Public Accountability Standards--Certify
that its publicity and promotional activities are based upon its actual
program and operations, are truthful and non-deceptive, and make no
exaggerated or misleading claims. OPM believes this standard is
redundant and is adequately safeguarded by enforcement of other public
accountability standards.
6. 5 CFR 950.203(a)(9)--Public Accountability Standards--Certify
under which governmental entity the charitable organization is
chartered, incorporated or organized (congressionally chartered or the
state in which it is registered). OPM believes this information is not
required to enforce and monitor public accountability, particularly in
view of appropriate presentation of IRS employer identification
numbers.
7. 5 CFR 950.203(a)(10)--Public Accountability Standards--Certify
that the organization has received no more than 80 percent of its total
support and revenues from government sources as computed by dividing
line 1c by line 12 from the IRS Form 990 submitted pursuant to Sec.
950.203(a)(3). The IRS already requires charitable organizations to
meet a public support test in order to obtain and maintain its
501(c)(3) tax-exempt status. Therefore, this standard is duplicative of
5 CFR 950.202(b).
8. 5 CFR 950.203(a)(11)--Public Accountability Standards--Certify
that the organization prepares and makes available to the public upon
request an annual report that includes a full description of the
organization's activities and supporting services and identifies its
directors and chief administrative personnel. The significant
information sought in the annual report is already certified to or
obtained from application of other eligibility requirements and public
accountability standards contained in 5 CFR 950.202(a) and 5 CFR
950.203(a)(3). In addition, OPM will encourage donors to obtain an
annual report directly from the charity, if the donor would like to
seek further information on the charity.
Corresponding changes will be made to the local list eligibility
requirements and national and local federation standards contained in 5
CFR 950.204, 950.301, and 950.303. However, national, international and
local federations will still be required to submit evidence of
compliance with the audit, financial, governance and annual report
requirements. These requirements will be clarified in 5 CFR
950.301(e)(2) and 950.303(e)(2). Federations provide services to 15 or
more member organizations. Services include the receipt and
distribution of funds through the CFC. Because federations handle
approximately 80 percent of all funds distributed through the CFC, the
documented evidence of compliance for federations will continue to be
required.
In addition to the changes described above, OPM is proposing 35
other administrative regulatory changes to clarify information and
processes within the CFC, address areas of concern noted over the years
by OPM and stakeholders, and to recognize the use of electronic
technology in the administration of the CFC program. These
administrative regulatory changes are:
1. OPM proposes changes throughout many sections of 5 CFR part 950
to modify references associated with the use of paper-based information
and processes such that these new terms apply within an electronic CFC
environment. Examples include the replacement of the term ``brochure''
with ``charity list'', ``pledge card'' with ``pledge form'' and
``campaign materials'' with ``campaign information.''
2. 5 CFR 950.102(a) limits the solicitation of donors to a six week
period between September 1 and December 15. OPM proposes to eliminate
the restriction on the six week period and allow local campaign
leadership to determine the length of the solicitation that may occur
between September 1 and December 15.
3. 5 CFR 950.102(c) states that the Director exercises general
supervision over all operations of the CFC, and takes all necessary
steps to ensure the achievement of campaign objectives. OPM proposes to
clarify and specifically articulate its authority to perform audits and
investigations of all CFC activities and stakeholders and resolve any
identified issues resulting from these audits and investigations.
4. 5 CFR 950.103(f) describes a six week period for soliciting
donors similar to that described in item (2) above. Corresponding
changes are proposed.
5. 5 CFR 950.103(g) defines the types of personnel that can be
solicited and contribute to the CFC. The regulation states that
contractor personnel, credit union employees and other persons employed
on Federal premises, as well as retired Federal employees can
contribute, but may not be solicited. This has led to much confusion
about how to approach, but not solicit, these non-Federal employees
working on Federal premises and retirees. The change proposed removes
the restriction that these non-Federal employees not be solicited, but
maintains that they be present on Federal premises to contribute to the
CFC.
6. 5 CFR 950.103(h) states that a Federal employee may participate
in a particular CFC only if that employee's official duty station is
located within the geographic boundaries of that CFC. OPM proposes to
allow for contributions to organizations outside of an employee's
official duty station in the cases of emergencies and disasters as
defined in 5 CFR 950.102(a) upon approval by OPM's Director. OPM
proposes to remove geographic restrictions on giving completely upon
implementation of appropriate technology. Because OPM anticipates
elimination of these geographic restrictions on giving, local
eligibility based on adjacency and statewide presence will no longer be
necessary and are eliminated commencing with implementation of
electronic technology that removes geographic restrictions on giving as
announced by the Director. Also see changes proposed to Sec.
950.204(b)(1).
7. 5 CFR 950.104(b)(6) encourages local Federal agencies to appoint
loaned executives to assist in the campaign and grant administrative
leave to all loaned executives appointed. OPM proposes to correct this
error and clarify that Federal agencies should not place loaned
executives on administrative leave since
[[Page 37006]]
the CFC activities are to be considered part of the official duties of
the Federal employee loaned to assist in the CFC.
8. 5 CFR 950.104(c) states that the LFCC must annually solicit
applications for the PCFO via public notice. OPM proposes to remove the
requirement for an annual application and allow LFCC's to enter into
multi-year agreements, at their discretion. OPM also proposes the
removal of the requirement to solicit the PCFO applications via a
public notice and provide the LFCC discretion as to how to announce the
solicitation as long as it reaches the audience of prospective
applicants.
9. 5 CFR 950.106(a) states the amount a PCFO may recover for
campaign expenses shall not exceed 10 percent of the estimated budget.
OPM proposes to correct the error in this subsection, which should
refer to 110 percent of the estimated budget.
10. 5 CFR 950.109 describes certain conflicts of interest for
Federal employees who serve as a LFCC member or fundraising
coordinator. OPM proposes to add to the description a noted instance
addressed via CFC Memorandum 2002-15.\1\
---------------------------------------------------------------------------
\1\ OPM issues policy and administrative guidance to campaigns
through numbered memoranda.
---------------------------------------------------------------------------
11. 5 CFR 950.201(a)(1) and (2) discuss eligibility for national
organizations to be included on a national list. OPM proposes adding
references for international organizations, which must also meet these
criteria and clarifying the Director's ability to consider corrective
action regarding any prior violation of regulation or directive,
sanction, or penalty, as appropriate, prior to determining eligibility.
12. 5 CFR 950.204(b)(1) is modified to eliminate adjacency and
statewide presence eligibility requirements commencing with the
implementation of electronic technology that removes geographic
restrictions on giving as announced by the Director. Also see changes
proposed to Sec. 950.103(h). In addition, OPM clarifies this
subsection to define an adjacent local campaign.
13. 5 CFR 950.204(b)(2)(iii) is a newly proposed regulation that
may recognize financial relationships between national organizations
and their bona fide local affiliates depending on how they are
structured. The proposed regulation considers two types of structures
for the national and local affiliated organization relationships. The
first is when there is a relationship between the national organization
and local affiliate based on an IRS group tax-exemption determination.
The second considers a relationship between a national organization and
local affiliate when there is not an IRS group tax-exemption
determination. Under both scenarios, the proposed regulation removes
the requirement for the local affiliate to maintain its own audited
financial statements, provided its financial activities are included in
the national organization's audited financial statements. If a local
affiliate is covered by an IRS group tax-exempt determination, the
local affiliate may additionally rely on an IRS Form 990 group return
filed by the national organization on its behalf and submit a pro forma
IRS Form 990, page 1, prepared for the local affiliate with its own
information. The pro forma 990 is used by OPM to calculate an
administrative and fundraising rate.
14. OPM proposes adding a subsection 5 CFR 950.204(g) that
clarifies the LFCC's ability to consider corrective action regarding
any prior violation of regulation or directive, sanction, or penalty,
as appropriate, prior to determining eligibility of local
organizations.
15. 5 CFR 950.301(a) states that the Director may recognize
national and international federations that conform to eligibility and
accountability standards. OPM proposes clarifying the Director's
ability to consider corrective action regarding any prior violation of
regulation or directive, sanction, or penalty, as appropriate, prior to
determining eligibility of national and international federations.
16. 5 CFR 950.301(c) states that an organization may apply for
inclusion as a national federation to participate in the CFC if the
applicant has 15 or more member charitable organizations that meet the
eligibility criteria of Sec. Sec. 950.202 and 950.203. A national
federation must provide copies of applications for all of its members
in the initial year that it applies as a federation, but only at OPM's
request after the initial year. OPM proposes to add clarifying language
that the federation, itself, does not count among the 15 or more
members required to receive federation status. OPM proposes to instruct
federations to provide OPM with applications for any former or new
member organizations that were not CFC participating members of that
federation in the previous year's campaign.
17. 5 CFR 950.301(d) discusses the role of national and
international federations. OPM will make a terminology change to
conform to a terminology change proposed in 5 CFR 950.603(a).
18. 5 CFR 950.301(e)(2) requires national and international
federations to certify that their financial activities conform to GAAP
and that they are annually audited by an independent certified public
accountant in accordance with GAAS. It further requires a copy of the
audit and that the audit must verify that the federation is honoring
designations made to each member organization. Finally, the current
regulation waives the audit requirement for newly created federations
operating for less than a year. OPM proposes to clarify and simplify
the language such that it applies all eligibility requirements and
public accountability standards, contained in 5 CFR 950.202 and 950.203
and required of independent organizations and federation members, to
the national and international federations. OPM does not view this as a
substantive change.
19. 5 CFR 950.301(e)(2)(iii) requires national and international
federations to disclose important administrative expense information to
the CFC and donors in its annual report.
20. 5 CFR 950.303(a) states that the LFCC must approve local
federations that conform to eligibility and public accountability
standards. OPM proposes to clarify the LFCC's ability to consider
corrective action regarding any prior violation of regulation or
directive, sanction, or penalty, as appropriate, prior to determining
eligibility of local federations.
21. 5 CFR 950.303(c) is the same requirement for local federations
as that described in item 16 above for 5 CFR 950.301(c). The changes
described for the national and international federations also are
proposed for local federations.
22. 5 CFR 950.303(d) discusses the role of local federations. OPM
will make a terminology change to conform to a terminology change
proposed in 5 CFR 950.603(a).
23. 5 CFR 950.303(e)(2) is the same requirement for local
federations as that described in item 18 above for 5 CFR 950.301(e)(2).
The changes described for the national and international federations
also are proposed for local federations.
24. 5 CFR 950.303(e)(2)(iii) is the same requirement for local
federations as that described in item 19 above for 5 CFR
950.301(e)(2)(iii). The changes described above for national and
international federations also are proposed for local federations.
25. 5 CFR 950.401(g)(3) states that each national and international
federation and charitable organization will be assigned a code number
by OPM and each local federation and local charitable organization will
be assigned
[[Page 37007]]
code numbers by the LFCC. OPM proposes to modify this regulation to
facilitate alternative mechanisms by which OPM may assign charity
codes.
26. 5 CFR 950.601 provides a process for authorizing the release of
donor names and addresses and for the transmittal of this information
to charities to which the donors designated. OPM proposes changing the
terms ``names and address'' to ``information.'' This change enables OPM
to allow other donor information to be released, such as contribution
amount and home email address. Donors have indicated that they would
like the option to release additional information such as the amount
contributed to charities, along with their names and addresses. OPM
looks forward to comments on this proposed change to assure itself that
we are changing the regulation in a manner consistent with Federal
donor views.
27. 5 CFR 950.604 specifies that federations, PCFO's and other
participants shall retain documents pertinent to the campaign for three
campaign years. OPM proposes to clarify that three campaign years is
actually three completed campaign periods and is not based on calendar
years.
28. 5 CFR 950.801(a)(1) specifies that during a 30 calendar day
period between January and March, as determined by the Director, OPM
will accept applications from organizations seeking to be listed on the
national and international list. OPM proposes to modify this section to
remove the defined period of a 30-calendar day period between January
and March and replace it with a period determined by the Director. OPM
will create, maintain, and issue a calendar of events each year to
define the applicable period. Initially, OPM will provide for a
specific 60-calendar day period between December and February as the
period during which OPM will accept applications.
29. 5 CFR 950.801(a)(2) states that within 35 calendar days of the
closing of the receipt of applications, the Director will notify each
national and international applicant of the results of the application
review. OPM proposes to remove the defined 35 day requirement and will
publish an anticipated date for notification on the calendar of events
that OPM will maintain.
30. 5 CFR 950.801(a)(3) states that the LFCC must select the PCFO
no later than March 15. OPM proposes to remove the reference to March
15 and state that the LFCC must select the PCFO no later than a date to
be determined by OPM. OPM will provide the date in its calendar of
events and initially set the date as February 15 to allow campaigns to
begin early planning for the upcoming campaign.
31. 5 CFR 950.801(a)(4) requires the Director to issue a national
and international list of eligible organizations by June 30. OPM
proposes to remove the specific date and state by a date determined by
the Director.
32. 5 CFR 950.801(b) requires the Director to annually issue a
timetable for accepting and processing national and international
applications. OPM proposes to modify this section to specify that the
Director will create, maintain and issue a calendar of events with
specific dates that include the accepting and processing of national
and international applications as well as other significant CFC dates.
33. 5 CFR 950.901(f)(1) requires the remittance check sent by
payroll offices to the PCFO each pay period to be accompanied by a
statement identifying the agency, the dates of the pay period and the
total number of employee deductions. OPM proposes to add the pay period
number to the information required to be on this statement. PCFOs often
have trouble determining when they have received the complete number
(12 or 26 pay periods) of employee deductions from payroll offices.
Adding the pay period number will assist PCFOs with this determination.
34. 5 CFR 950.901(i)(1) and (i)(2) each contain dates for the PCFO
to notify charitable organizations of the amount of pledged
contributions (no later than February 15) and to begin its periodic
distributions to charitable organizations. OPM proposes to remove the
specific dates referenced in the regulation and state that these
actions will occur no later than a date determined by OPM. OPM will
publish the dates in its calendar of events. Initially, OPM will extend
the notification date to March 15. OPM proposes to remove the
requirement for monthly payments and allow all campaigns to make
quarterly payments beginning no later than April 1.
35. 5 CFR 950.105(e), 950.302(c), 950.302(d), 950.304(c),
950.304(d), 950.403, and 950.603 all provide for certain penalties and
sanctions for federations, unaffiliated organizations, and PCFOs. OPM
proposes to clarify and combine these penalties and sanctions into 5
CFR 950.603 and remove the other references from the regulations.
In an effort to develop eligibility and public accountability
standards and administrative processes that serve both the public
interests and meets the needs of the stakeholder community, including
CFC charitable organization applicants and Federal donors, comments are
now being solicited for consideration prior to the 2007 CFC and
subsequent Campaigns.
Comments are invited on what issues, if any, are presented by the
approach proposed by OPM for the 2007 and subsequent campaigns in light
of the current CFC eligibility and public accountability standards in 5
CFR 950.201, 950.202, 950.203, 950.204, 950.301 and 950.303 and other
current administrative terms and processes discussed throughout 5 CFR
part 950. Comments on proposed regulatory changes that affect the
potential use of donor information, such as that in section
950.203(a)(6), and the expansion of donor information to include home
email address, such as in 950.601, especially are encouraged. OPM also
seeks comments from charitable organizations participating in the
Combined Federal Campaign as well as from Federal donors. It is noted
that some CFC application and reporting forms may need to be revised as
a result of these proposed regulatory changes. Any such changes will be
publicly announced prior to an applicant charity's need to use such
forms.
Waiver of 60-Day Comment Period for Proposed Rulemaking
Pursuant to 5 U.S.C. 553(b)(3)(B), I find that good cause exists to
waive the 60-day comment period for general notice of proposed
rulemaking. Limiting the comment period for the proposed regulations to
45 days will enable OPM to issue final regulations in 2006,
sufficiently in advance of the 2007 CFC to enable charitable
organizations and the Government to benefit from the streamlined
eligibility and public accountability requirements for purposes of the
2007 CFC. A longer comment period may result in significant additional
costs to the Government as well as for national and international
organizations and federations, caused by potential confusion over what
regulations are in effect during the earliest stage at which charities
begin to put together their CFC applications. While the CFC begins in
the fall of the campaign year, charities, especially those that apply
through a federation, begin the application process late in the year
preceding the campaign. Any confusion over which CFC regulations are in
effect at the time organizations are preparing their applications for
the CFC could result in frustration with the application process as
well as denials of applications, appeals, potential litigation, and bad
will toward the CFC itself.
[[Page 37008]]
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities. Charitable
organizations applying to the CFC have an existing, independent
obligation to comply with the eligibility and public accountability
standards contained in current CFC regulations. Streamlining these
standards will be less burdensome.
Executive Order 12866, Regulatory Review
This rule has been reviewed by the Office of Management and Budget
in accordance with Executive Order 12866.
List of Subjects in 5 CFR part 950
Administrative practice and procedures, Charitable contributions,
Government employees, Military personnel, Nonprofit organizations and
Reporting and recordkeeping requirements.
U.S. Office of Personnel Management.
Linda M. Springer,
Director.
Accordingly, OPM is proposing to amend 5 CFR part 950 as follows:
PART 950--SOLICITATION OF FEDERAL CIVILIAN AND UNIFORMED SERVICE
PERSONNEL FOR CONTRIBUTIONS TO PRIVATE VOLUNTARY ORGANIZATIONS
1. The authority citation for part 950 continues to read as
follows:
Authority: E.O. 12353 (March 23, 1982), 47 FR 12785 (March 25,
1982), 3 CFR, 1982 Comp., p. 139. E.O. 12404 (February 10, 1983), 48
FR 6685 (February 15, 1983), Pub. L. 100-202, and Pub. L. 102-393 (5
U.S.C. 1101 Note).
2. Amend part 950 as follows:
a. Remove the words ``brochure'' and ``brochures'' and add in their
place ``Charity List'' and ``Charity Lists'', respectively, wherever
they appear;
b. Remove the words ``card'' and ``cards'' and add in their place
``form'' and ``forms'', respectively, wherever they appear; and
c. Remove the words ``materials'', ``pamphlet'', and ``pamphlets''
and add in their place ``information'' wherever they appear.
3. In Sec. 950.101 remove the definition of Campaign Year and add
the definitions of Campaign Period, Charity List, and Independent
Organization in alphabetical order and in the definition of
International General Designation Option remove the word ``campaign''
to read as follows:
Sec. 950.101 Definitions.
* * * * *
Campaign Period means generally a 24 month period beginning with
the selection of the Principal Combined Fund Organizations (PCFO) or
renewal of the PCFO's agreement and ending with final disbursements to
charitable organizations.
* * * * *
Charity List means the official list of charities approved by OPM
for inclusion in the CFC within a given geographic solicitation area.
* * * * *
Independent Organization means a charitable organization that is
not a member of a Federation for the purposes of the Combined Federal
Campaign.
* * * * *
4. In Sec. 950.102 amend paragraph (a) by removing the text ``6
week'' from the second sentence, and amend paragraph (c) by adding two
sentences at the end of the paragraph to read as follows:
Sec. 950.102 Scope of the Combined Federal Campaign.
* * * * *
(c) * * * OPM has the authority to audit, investigate, and report
on the administration of any campaign, the organization that
administers the campaign, and any national, international and local
federation, federation member or independent organization that
participates in the campaign for compliance with these regulations. The
Director resolves any issues reported and determines sanctions or
penalties, as warranted under Sec. 950.603.
5. In Sec. 950.103, revise paragraphs (f), (g) and (h) to read as
follows:
Sec. 950.103 Establishing a local campaign.
* * * * *
(f) Each year the LFCC must establish the time period to solicit
employees. The solicitation may not begin before September 1 and in no
event will it extend beyond December 15 of each year.
(g) Current Federal civilian and active duty military employees may
be solicited for contributions using payroll deduction, checks, money
orders, or cash, or by electronic means, including credit cards, as
approved by the Director. Contractor personnel, credit union employees
and other persons present on Federal premises, as well as retired
Federal employees, may make single contributions to the CFC through
checks, money orders, or cash, or by electronic means, including credit
cards, as approved by the Director.
(h) A Federal employee whose official duty station is outside the
geographic boundaries of an established CFC may not be solicited in
that CFC. A Federal employee may participate in a particular CFC only
if that employee's official duty station is located within the
geographic boundaries of that CFC. This restriction is discontinued
upon implementation of electronic technology that removes geographic
restrictions on giving as announced by the Director. At the discretion
of the Director, and upon showing of extraordinary circumstances,
Federal employees may contribute in support of victims in cases of
emergencies and disasters defined in Sec. 950.102(a) outside the
geographic boundaries of their participating CFC. Such contributions
can be check, money order, or cash or by electronic means, including
credit cards, as approved by the Director, but shall not be made
through payroll deduction.
6. Amend Sec. 950.104 as follows:
a. In paragraphs (b)(4) and (b)(5), remove the word ``local''; and
b. Revise paragraphs (b)(6) and (c) to read as follows:
The amendments to Sec. 950.104 read as follows:
Sec. 950.104 Local Federal Coordinating Committee responsibilities.
* * * * *
(b) * * *
(6) Encouraging local Federal agencies to appoint loaned executives
to assist in the campaign. CFC loaned executives' time should be
charged to regular working hours. It is not appropriate to place a CFC
loaned executive on administrative leave, leave without pay, or annual
leave. Federal loaned executives are prohibited from working on non-CFC
fundraising activities during duty hours.
* * * * *
(c) The LFCC must select a PCFO to act as its fiscal agent and
campaign coordinator on the basis of presentations made to the local
committee as described in Sec. 950.105(c). The LFCC may, at its
discretion select a PCFO for up to three campaign periods, subject to
renewal each year following a review of performance as defined in Sec.
950.105. The LFCC must consider the capacity of the organization to
perform an efficient and effective campaign and its history of public
accountability, use of funds, truthfulness and accuracy in
solicitations, and sound governance and fiscal management practices as
the primary factors in selecting a PCFO. The LFCC must solicit
applications on a competitive basis for the PCFO no later than a date
to be determined by OPM and, if it exercises discretion to enter into a
multi-year arrangement, upon completion of the multi-year term. The
LFCC shall solicit applications via outreach activities including:
Public
[[Page 37009]]
notice in newspapers, postings on Web sites, advertising in trade
journals, dissemination among participating CFC organizations and
federations, and/or outreach through local or state nonprofit
associations and training centers, among others. The PCFO application
period must be open a minimum of 21 calendar days. Costs incurred for
soliciting applications must be added to the PCFO budget as an
administrative cost.
Sec. 950.105 [Amended]
7. Amend Sec. 950.105 as follows:
a. In paragraph (b), remove the word ``printed'' in the second
sentence and add in its place the word ``developed'';
b. In paragraph (d)(3), remove the word ``address'' and add in its
place ``contact information'';
c. In paragraph (d)(6), add a comma and the text ``contact
information and contribution amounts'' after the word ``names'';
d. In paragraph (d)(10), remove the word ``reprinting'' and add in
its place ``reproduction and/or reissuing'' and remove the number
``10'' and add in its place ``110''; and
e. Remove paragraph (e).
Sec. 950.106 [Amended]
8. In Sec. 950.106, amend paragraph (a) by removing the number
``10'' and adding in its place ``110.''
Sec. 950.109 [Amended]
9. In Sec. 950.109, amend the first sentence by adding the text
``serve in any official capacity in any organization that serves as the
PCFO of the local CFC, or'' before the word ``participate''.
10. Amend Sec. 950.201 as follows:
a. Revise the section heading;
b. In paragraph (a)(1), add the text ``and international'' after
the word ``national''; and
c. Revise paragraphs (a)(2) through (b) to read as follows:
Sec. 950.201 National and International list eligibility.
(a) * * *
(2) Determine which organizations among those that apply qualify to
be part of the national and international lists and then provide these
lists of qualified organizations to all local campaigns. In order to
determine whether an organization may participate in the campaign, the
Director may request evidence of corrective action regarding any prior
violation of regulation or directive, sanction, or penalty, as
appropriate. The Director retains the ultimate authority to decide
whether the organization has demonstrated, to the Director's
satisfaction, that the organization has taken appropriate corrective
action. Failure to demonstrate satisfactory corrective action or to
respond to the Director's request for information within 10 calendar
days of the date of the request may result in a determination that the
organization will not be included in the national and international
list.
(b) These lists of national and international charities shall be
included in all local Charity Lists in accordance with these
regulations. These lists will include each organization's CFC code.
These CFC codes must be faithfully reproduced in the local Charity
Lists.
* * * * *
11. Revise Sec. 950.202 to read as follows:
Sec. 950.202 National and International list eligibility
requirements.
(a) Certify that it provides or conducts real services, benefits,
assistance, or program activities, in 15 or more different states or a
foreign country over the 3 year period immediately preceding the start
of the year involved. This requirement cannot be met on the sole basis
of services provided through an ``800'' telephone number or by
disseminating information and publications via the U.S. Postal Service,
the Internet, or a combination thereof. A schedule listing a detailed
description of the services in each state (minimum 15) or foreign
countries (minimum 1), including the year of service, must be included
with the application. The schedule must make a clear showing of
national or international presence. Broad descriptions of services and
identical repetitive narratives will be disregarded at the discretion
of OPM if they do not allow OPM to adequately determine that real
services were provided or to accurately determine the individuals or
entities who benefited. Providing listings of affiliated groups does
not sufficiently demonstrate provision of real services by the
applicant. Location of residence of organization members or location of
residence of visitors to a facility does not substantiate provision of
services in the location of residence. However, organizations that
issue student scholarships or fellowships must indicate the state in
which the recipient resides, not the state of the school or place of
fellowship. Mere dissemination of information does not demonstrate
provision of real services. While it is not expected that an
organization maintain an office in each state or foreign country, a
clear showing must be made of the actual services, benefits, assistance
or activities provided in each state or foreign country. De minimus
services, benefits, assistance, or other program activities in any
State or foreign country will not be accepted as a basis for
qualification as a national or international organization.
(b) Certify that it is an organization recognized by the Internal
Revenue Service as tax exempt under 26 U.S.C. 501(c)(3) to which
contributions are deductible under 26 U.S.C. 170(c)(2) and that the
organization is further classified as a public charity under 26 U.S.C.
509(a). A copy of the letter(s) from the Internal Revenue Service
granting tax exempt and public charity status must be included in the
organization's application.
12. Amend Sec. 950.203 as follows:
a. Remove paragraphs (a)(6), (a)(7), (a)(9) through (a)(11), and
(a)(13) and redesignate paragraph (a)(8) as (a)(6) and paragraph
(a)(12) as (a)(7), respectively;
b. In paragraph (a), add the text ``or international'' after the
word ``national'' in the first sentence;
c. In paragraph (a)(1), remove the second sentence;
d. Revise paragraphs (a)(2) through (a)(4) ;
e. In the newly redesignated paragraph (a)(7), add the text ``or
international'' after the word ``national''.
The amendments to Sec. 950.203 read as follows:
Sec. 950.203 Public accountability standards.
(a) * * *
(2) Certify that the organization:
(i)(A) Indicates total revenue of $250,000 or more on its most
recent IRS Form 990 or pro forma IRS Form 990 submitted to the CFC, if
it is not required by the IRS to file an IRS Form 990, covering a
period not more than 18 months prior to the January of the campaign
year to which the organization is applying;
(B) Accounts for its funds on an accrual basis (cash, modified
cash, modified accrual and any other methods of accounting are not
acceptable) in accordance with generally accepted accounting
principles; and
(C) Has an audit of its fiscal operations completed annually by an
independent certified public accountant in accordance with generally
accepted auditing standards; or
(ii)(A) Reports total revenue of less than $250,000 on its most
recent IRS Form 990 covering a period not more than 18 months prior to
the January of the campaign year to which the organization is applying;
and
(B)Has controls in place to insure funds are properly accounted for
and that it can provide accurate timely financial information to
interested parties.
(3) Certify that it prepares and submits to the IRS a complete copy
of
[[Page 37010]]
the organization's IRS Form 990 or that it is not required to prepare
and submit an IRS Form 990 to the IRS. Provide a completed copy of the
organization's most recent IRS Form 990 submitted to the IRS, including
signature, supplemental statements and Schedule A, with the
application, or if not required to file an IRS Form 990, provide a pro
forma IRS Form 990 page 1 only. IRS Forms 990EZ, 990PF, and comparable
forms are not acceptable substitutes.
(4) Provide a computation of the organization's percentage of total
support and revenue spent on administrative and fundraising. This
percentage shall be computed from information on the IRS Form 990
submitted pursuant to Sec. 950.203(a)(3).
* * * * *
13. Amend Sec. 950.204 as follows:
a. In paragraphs (a) and (b), remove the word ``local'';
b. Revise paragraph (b)(1);
c. Remove paragraph (b)(2)(ii) and redesignate paragraph
(b)(2)(iii) as (b)(2)(ii);
d. Add new paragraphs (b)(2)(iii) and (b)(2)(iv);
e. In paragraph (f), remove the word ``print'' from the first
sentence and add in its place ``produce'' and remove the word
``campaign'' from the first sentence; and
f. Add new paragraph (g).
The amendments to Sec. 950.204 read as follows:
Sec. 950.204 Local list eligibility.
* * * * *
(b) * * *
(1) An organization must demonstrate to the satisfaction of the
LFCC, that it has a substantial local presence in the geographical area
covered by the local campaign, a substantial local presence in the
geographical area covered by an adjacent local campaign, or substantial
statewide presence. Eligibility to participate in an adjoining campaign
on the basis of adjacency or statewide presence is discontinued upon
implementation of electronic technology that removes geographic
restrictions on giving as announced by the Director.
(i) Substantial local presence is defined as a staffed facility,
office or portion of a residence dedicated exclusively to that
organization, available to members of the public seeking its services
or benefits. The facility must be open at least 15 hours a week and
have a telephone dedicated exclusively to the organization. The office
may be staffed by volunteers. Substantial local presence cannot be met
on the basis of services provided solely through an ``800'' telephone
number or the U.S. Postal Service or a combination thereof.
(ii) An adjacent local campaign is defined as a local campaign
whose geographic border touches the geographic border of another local
campaign. Participation in a local campaign via an adjacency
determination does not grant the organization a substantial local
presence in the adjacent local campaign and participating via adjacency
cannot be used to establish adjacency to local campaigns bordering the
adjacent campaign area. In addition, an organization must first be
determined eligible to participate in the local campaign area where it
has a substantial local presence before it may be determined eligible
to participate in an adjacent local campaign. An organization cannot
otherwise qualify as an eligible organization in an adjacent local
campaign.
(iii) Substantial statewide presence is defined as providing or
conducting real services, benefits, assistance or program activities
over the 3 year period immediately preceding the start of the
application year covering 30 percent of a state's geographic boundaries
or providing or conducting real services, benefits, assistance or
program activities affecting 30 percent of a state's population.
Substantial statewide presence cannot be met on the basis of services
provided solely through an ``800'' telephone number or the U.S. Postal
Service or a combination thereof. This subsection is eliminated upon
implementation of electronic technology that removes geographic
restrictions on giving as announced by the Director.
* * * * *
(2) * * *
(iii) A local charitable organization covered by a 26 U.S.C.
501(c)(3) group exemption that can demonstrate it provides services as
a separately incorporated local bona fide chapter or affiliate in good
standing of a national tax-exempt organization under 26 U.S.C.
501(c)(3) does not need to maintain its own independent IRS
determination letter, audited financial statements and IRS Form 990 for
CFC purposes. These local charitable organizations must provide a
certification signed by either the Chief Executive Officer (CEO) or CEO
equivalent of the national organization stating that the local
charitable organization is covered under the national organization's
tax-exempt status and financial accountability and reporting controls,
and that the local organization's financial activities are included in
the national organization's audited financial statements. The local
charitable organization must provide a copy of the national
organization's IRS group tax-exemption determination, including the
most recent IRS approval of subordinates covered by the group
exemption, a copy of the IRS letter assigning the local charitable
organization an Employer Identification Number (EIN) and a copy of its
IRS Form 990 filed with the IRS. If the organization is covered by a
group return on IRS Form 990 filed by the national organization, the
local organization must provide a copy of the complete group return on
IRS Form 990 along with a pro forma IRS Form 990 (page 1) prepared for
the local charitable organization for CFC purposes only. In either
case, the IRS Form 990 must cover a period ending not more than 18
months prior to the January of the campaign year to which the
organization is applying. The local charitable organization must
certify and demonstrate that it independently meets all other
applicable local eligibility requirements and public accountability
standards included in Sec. Sec. 950.204(b)(1) and 950.204(b)(2).
(iv) A local charitable organization that can demonstrate it
provides services as a separately incorporated local bona fide chapter
or affiliate in good standing of a national tax-exempt organization
under 26 U.S.C. 501(c)(3), but is not covered by a 26 U.S.C. 501(c)(3)
group exemption does not need to maintain its own independent audited
financial statements for CFC purposes. These local charitable
organizations must provide a certification signed by either the Chief
Executive Officer (CEO) or CEO equivalent of the national organization
stating that the local charitable organization operates as a bona-fide
chapter or affiliate in good standing of the national organization and
is subject to the financial accountability and reporting controls of
the national organization, and that the local organization's financial
activities are included in the national organization's audited
financial statements. Upon certification, the local organization must
provide a copy of an IRS tax-exemption determination letter that
includes appropriate taxpayer identification information obtained from
the IRS and a completed copy of its Form 990 filed with the IRS. The
local charitable organization must certify and demonstrate that it
independently meets all other applicable local eligibility requirements
and public accountability standards included in Sec. Sec.
950.204(b)(1) and 950.204(b)(2).
* * * * *
[[Page 37011]]
(g) In order to determine whether an organization may participate
in the campaign, the LFCC may request evidence of corrective action
regarding any prior violation of regulation or directive, sanction, or
penalty, as appropriate. The LFCC will decide whether the organization
has demonstrated, to the LFCC's satisfaction, that the organization has
taken appropriate corrective action. Failure to demonstrate
satisfactory corrective action or to respond to the LFCC's request for
information within 10 calendar days of the date of the request may
result in a determination that the organization will not be included in
the local list.
Sec. 950.205 [Amended]
14. In Sec. 950.205, amend paragraph (c)(4) by removing the word
``and'' and adding to the end of the sentence the text ``and supporting
information to justify the reversal of the original decision.''
15. Amend Sec. 950.301 as follows:
a. Revise the section heading and paragraph (a);
b. Revise paragraph (c);
c. In paragraph (d), remove the word ``decertification'' in the
last sentence and add in its place the text ``withdrawal of federation
status''; and
d. Revise paragraph (e)(2).
The amendments to Sec. 950.301 read as follows:
Sec. 950.301 National and International federations eligibility.
(a) The Director may recognize national and international
federations that conform to the requirements and are eligible to
receive designations. The Director may from time to time place a
moratorium on the recognition of national and international
federations. In order to determine whether the Director will recognize
a national or international federation, the Director may request
evidence of corrective action regarding any prior violation of
regulation or directive, sanction, or penalty, as appropriate. The
Director retains the ultimate authority to decide whether the
federation has demonstrated, to the Director's satisfaction, that the
federation has taken appropriate corrective action. Failure to
demonstrate satisfactory corrective action or to respond to the
Director's request for information within 10 calendar days of the date
of the request may result in a determination that the federation will
not be included in the national and international list.
* * * * *
(c) An organization may apply to the Director for inclusion as a
national or international federation to participate in the CFC if the
applicant has, as members of the proposed federation, 15 or more
charitable organizations, in addition to the federation itself, that
meet the eligibility criteria of Sec. Sec. 950.202 and 950.203. The
initial year an organization applies for federation status, it must
submit the applications of all its proposed member organizations in
addition to the federation application. Federations must re-establish
eligibility each year, however only the applications of its new and
former members that were not within their federation, as a CFC
participant, in the previous year's campaign need accompany the annual
federation application once an organization has obtained federation
status, unless additional member applications are requested by the
Director.
* * * * *
(e) * * *
(2) That it meets the eligibility requirements and public
accountability standards contained in Sec. Sec. 950.202 and 950.203.
The federation can demonstrate that it has met the eligibility
requirement in Sec. 950.202(a) either through its own services,
benefits, assistance or program activities or through its 15 members'
activities.
(i) The federation must complete the certification set forth at
Sec. 950.203(a)(2) without regard to the amount of revenue reported on
its IRS Form 990 and must provide a copy of its audited financial
statements. The audited financial statements provided must verify that
the federation is honoring designations made to each member
organization by distributing a proportionate share of receipts based on
donor designations to each member. The audit requirement is waived for
newly created federations operating for less than a year as determined
from the date of its IRS tax-exemption letter to the closing date of
the CFC application period.
(ii) The federation must provide a listing of its board of
directors, beginning and ending dates of each member's term of office,
and the board's meeting dates and locations for the previous year.
(iii) The federation must certify that it prepares and makes
available to the public, upon request, an annual report that includes a
full description of the organization's activities and supporting
services and identifies its directors and chief administrative
personnel. The federation must provide a copy of its most recently
completed annual report covering the fiscal year ending not more than
18 months prior to January of the campaign year to which the federation
is applying or the preceding calendar year. The annual report must also
include an accurate description of the federation's membership dues
and/or service charges received by the federation from the charitable
organizations participating as members. The information must clearly
present the amounts raised, the sources of contributions, the cost of
fundraising, and how costs are recovered from donations.
* * * * *
16. In Sec. 950.302, revise the section heading, remove paragraphs
(c) through (e), and add a new paragraph (c) to read as follows:
Sec. 950.302 Responsibilities of national and international
federations.
* * * * *
(c) Each federation, as fiscal agent for its member organizations,
must ensure that Federal employee designations are honored in that each
member organization receives its proportionate share of receipts based
on the results of each individual campaign. The proportionate share of
receipts is determined by donor designations to the individual member
as compared to total campaign designations.
17. Amend Sec. 950.303 as follows:
a. Revise paragraph (a);
b. Revise paragraph (c);
c. In paragraph (d), remove the word ``decertification'' in the
last sentence and add in its place the text ``withdrawal of federation
status''; and
d. Revise paragraph (e)(2).
The amendments to Sec. 950.303 read as follows:
Sec. 950.303 Local federations' eligibility.
(a) LFCC's must approve local federations that meet the applicable
requirements, except that in order to determine whether the LFCC must
recognize a local federation, the LFCC may request evidence of
corrective action regarding any prior violation of regulation or
directive, sanction, or penalty, as appropriate. A local federation
that has been notified that it will not be included on the local list
because of failure to correct a prior violation may appeal the LFCC's
decision to the Director in accordance with Sec. 950.205(b). The
Director retains the ultimate authority to decide whether the local
federation has demonstrated, to the Director's satisfaction, that the
local federation has taken appropriate corrective action. Failure to
demonstrate satisfactory corrective action or to respond to a request
by the LFCC or Director for information within 10 calendar days of the
date of the request
[[Page 37012]]
may result in a determination that the local federation will not be
included in the local list.
* * * * *
(c) An organization may apply to the LFCC for inclusion as a local
federation to participate in the CFC if the applicant has as members of
the proposed federation 15 or more charitable organizations, in
addition to the federation itself, that meet the eligibility criteria
of Sec. Sec. 950.202, 950.203 and 950.204. The initial year an
organization applies for federation status, it must submit to the LFCC
applications of all its proposed member organizations in addition to
the federation application. Federations must re-establish eligibility
each year, however only the applications of its new and former members
that were not within their federation, as a CFC participant, in the
previous year's campaign need accompany the annual federation
application once an organization has obtained federation status, unless
additional member applications are requested by the LFCC.
* * * * *
(e) * * *
(2) That it meets the eligibility requirements contained in Sec.
950.204 (including eligibility requirements and public accountability
standards of Sec. Sec. 950.202 and 950.203 that are incorporated by
reference). The federation can demonstrate that it has met the
eligibility requirement in Sec. 950.204(b)(1) either through its own
services, benefits, assistance or program activities or through its 15
members' activities.
(i) The federation must complete the certification set forth at
Sec. 950.203(a)(2) without regard to the amount of revenue reported on
its IRS Form 990 and must provide a copy of its audited financial
statements. The audited financial statements provided must verify that
the federation is honoring designations made to each member
organization by distributing a proportionate share of receipts based on
donor designations to each member. The audit requirement is waived for
newly created federations operating for less than a year as determined
from the date of its IRS tax-exemption letter to the closing date of
the CFC application period.
(ii) The federation must provide a listing of its board of
directors, beginning and ending dates of each member's term of office,
and the board's meeting dates and locations for the previous year.
(iii) The federation must certify that it prepares and makes
available to the public, upon request, an annual report that includes a
full description of the organization's activities and supporting
services and identifies its directors and chief administrative
personnel. The federation must provide a copy of its most recently
completed annual report covering the fiscal year ending not more than
18 months prior to January of the campaign year to which the federation
is applying or the preceding calendar year. The annual report must also
include an accurate description of the federation's membership dues
and/or service charges received by the federation from the charitable
organizations participating as members. The information must clearly
present the amounts raised, the sources of contributions, the cost of
fundraising, and how costs are recovered from donations.
* * * * *
18. In Sec. 950.304, remove paragraphs (c) through (e), and add a
new paragraph (c) to read as follows:
Sec. 950.304 Responsibilities of local federations.
* * * * *
(c) Each federation, as fiscal agent for its member organizations,
must ensure that Federal employee designations are honored in that each
member organization receives its proportionate share of receipts based
on the results of each individual campaign. The proportionate share of
receipts is determined by donor designations to the individual member
as compared to total campaign designations.
19. Amend Sec. 950.401 as follows:
a. In paragraph (a), remove the word ``printed'' in the second
sentence and add in its place ``developed'';
b. In the first sentence of paragraph (e), add the text ``source
of'' after the word ``official'', remove the word ``package'', and add
the text ``either in hard copy or electronic format'' after the word
``available'';
c. In paragraph (f), remove the word ``package'' in the first and
second sentences and add in its place ``design'';
d. Revise the introductory paragraph of (g)(1);
e. Revise paragraphs (g)(2), (g)(3), and (h); and
f. In paragraph (k), remove the word ``year'' and add in its place
``period'', and add to the end of the sentence the text ``or if the
campaign can demonstrate to the satisfaction of the Director that it
can make the same information available electronically without
disrupting donor opportunities to contribute.''
The amendments to Sec. 950.401 read as follows:
Sec. 950.401 Campaign and publicity materials.
(g) * * *
(1) OPM will include in the annual distribution of the National and
International Lists explicit instructions for the production of the
Charity Lists and language to be reproduced verbatim in the
introductory section. The general information provided will include:
* * * * *
(2) Following the introductory section, the Charity List will
consist of three parts--the national, the international, and the local.
The order of these three parts will be annually rotated in accordance
with OPM instructions. In 1996 the Local part will be first followed by
the National and finally the International. The national and
international lists will consist of faithful reproductions of the lists
of national and international organizations, including federations,
provided by OPM. The third part, the local list, is determined by the
LFCC. The order of listing of the federated and independent
organizations within the three separate parts will be determined by
random drawing. The order of organizations within each federation will
be determined by the federation. The order within the national,
international and local independent groups will be alphabetical. Absent
specific instructions from OPM to the contrary, each participating
organization and federated group listing must include a description,
not to exceed 25 words, of their services and programs, plus a
telephone number for the Federal donor to request further information
about the group's services, benefits, and administrative expenses. Each
listing will include the organization's administration and fundraising
percentage as calculated pursuant to Sec. 950.203(a)(4). Neither the
percentage of administrative and fundraising expenses, nor the
telephone number count toward the 25-word statement.
(3) Each federation and charitable organization will be assigned a
code in a manner determined by the Director. At the beginning of each
federated group's listing will be the federation's name, code number,
25-word statement, percentage of administrative and fundraising
expenses, and telephone number. The sections of the Charity Lists where
the independent organizations are listed will begin with the titles
National Independent Organizations, International Independent
Organizations and Local Independent Organizations respectively.
(h) Omission of an eligible charitable organization from the
Charity List may
[[Page 37013]]
require that all Charity Lists be reproduced and reissued. Such
omissions must be reported to OPM immediately upon discovery. The
Director or LFCC may direct that the cost of such reproduction and
reissue be borne by the PCFO or charged to CFC administrative expenses.
* * * * *
20. Amend Sec. 950.402 as follows:
a. In paragraph (a), remove the word ``year'' and add in its place
``period'';
b. In paragraph (c), add to the end of the second sentence a comma
followed by the text ``except in cases of emergencies or disasters as
approved by the Director. This restriction does not apply upon
implementation of electronic technology that removes the geographic
restrictions on giving as announced by the Director.'' and
c. In paragraph (d), revise the last sentence.
The amendments to Sec. 950.402 read as follows:
Sec. 950.402 Pledge card.
* * * * *
(d) * * * For example, if an employee indicates a total gift of
$100 on the pledge form, but designates $50 to one organization and $25
to each of three other organizations, the PCFO must adjust the pledges
proportionately by entering a pledge of $40 to the first organization
and $20 to each of the three other organizations.
Sec. 950.403 [Removed]
21. Remove Sec. 950.403.
22. Revise Sec. 950.601 to read as follows:
Sec. 950.601 Release of contributor information.
(a) The pledge form, designed pursuant to Sec. 950.402, must allow
a contributor to indicate if the contributor does wish his or her name,
contribution amount, and home contact information forwarded to the
charitable organization or organizations designated. A PCFO's failure
to honor a contributor's wish may result in the PCFO being sanctioned
or penalized as provided for in Sec. 950.603(a).
(b) The pledge form shall permit a contributor to specify which
information, if any, he or she wishes released to organizations
receiving his or her donations.
(c) It is the responsibility of the PCFO to forward the contributor
information for those who have indicated that they wish this
information released to the recipient organization directly, if the
organization is independent, and to the organization's federation if
the organization is a member of a federation. The PCFO may not sell or
make any other use of this information.
23. In Sec. 950.602, revise paragraph (b) to read as follows:
Sec. 950.602 Solicitation methods.
* * * * *
(b) Special CFC fundraising events, such as raffles, lotteries,
auctions, bake sales, carnivals, athletic events, or other activities
not specifically provided for in these regulations are permitted during
the campaign period if approved by the appropriate agency head or
government official, consistent with agency ethics regulations. CFC
special fundraising events should be undertaken in the spirit of
generating interest in the CFC and open without regard to whether an
individual makes a contribution. Chances to win should be disassociated
from amount of contributions, if any. Raffle prizes should be modest in
nature and value. Examples of successful raffles have included
opportunities for lunch with Agency Officials, parking spaces for a
week, and holiday turkeys. Any special CFC fundraising event and prize
or gift should be approved in advance by the Agency's ethics official.
* * * * *
24. In Sec. 950.603, revise the section heading and paragraph (a)
to read as follows:
Sec. 950.603 Sanctions and penalties.
(a)(1) The Director may impose sanctions or penalties on a
federation, charitable organization or PCFO for violating these
regulations, other applicable provisions of law, or any directive or
instruction from the Director. The Director will determine the
appropriate sanction and/or penalty, up to and including expulsion from
the CFC. In determining the appropriate sanction and/or penalty, the
Director will consider previous violations, harm to Federal employee
confidence in the CFC, and any other relevant factors. The Director may
bar a federation or charitable organization from serving as PCFO, for a
period not to exceed one campaign period, if it is determined that that
the federation or charitable organization has violated any provisions
of these regulations. A federation, charitable organization or PCFO
will be notified in writing of the Director's intent to sanction and/or
penalize and will have 10 calendar days from the date of receipt of the
notice to submit a written response. The Director's final decision will
be communicated in writing to the federation, charitable organization,
or PCFO, with a copy to the appropriate LFCC.
(2) The Director may withdraw federation status with respect to a
national, international or local federation that makes a false
certification or fails to comply with any directive of the Director, or
to respond in a timely fashion to a request by the Director or LFCC for
information or cooperation, including with respect to an investigation
or in the settlement of disbursements. The LFCC may recommend the
withdrawal of federation status with respect to a local federation. As
stated in Sec. Sec. 950.301(d) and 950.303(d), failure to meet minimum
federation eligibility requirements shall not be deemed to be a
withdrawal of federation status subject to a hearing on the record.
Eligibility decisions shall follow the procedures in Sec. Sec.
950.301(f) and 950.303(f). A federation will be notified in writing of
the Director's intent to withdraw federation status for a period of up
to one campaign period and will have 10 calendar days from the date of
receipt of the notice to submit a written response. On receipt of the
response, or in the absence of a timely response, the Director or
representative shall set a date, time, and place for a hearing. The
federation shall be notified at least 10 calendar days in advance of
the hearing. A hearing shall be conducted by a hearing officer
designated by the Director unless it is waived in writing by the
federation. After the hearing is held, or after the Director's receipt
of the federation's written waiver of the hearing, the Director shall
make a final decision on the record, taking into consideration the
recommendation submitted by the hearing officer. The Director's final
decision will be communicated in writing to the federation, with a copy
to the appropriate LFCC.
(3) A federation, charitable organization or PCFO sanctioned or
penalized under any provision of these regulations must demonstrate to
the satisfaction of the Director that it has taken corrective action to
resolve the reason for sanction and/or penalty and has implemented
reasonable and appropriate controls to ensure that the situation will
not occur again prior to being allowed to participate in subsequent
CFCs and/or serving as a PCFO for a campaign.
* * * * *
25. Revise Sec. 950.604 to read as follows:
Sec. 950.604 Records retention.
Federations, PCFO's and other participants in the CFC shall retain
documents pertinent to the campaign for at least three completed
campaign
[[Page 37014]]
periods. For example, documentation regarding the 2006 campaign, which
would include selection of the PCFO in March of 2006 through the final
distribution of contributions in approximately March 2008, must be
retained through the completion of the 2007, 2008 and 2009 campaign
periods (i.e. until approximately March 2011). Documents requested by
OPM must be made available within 10 business days of the request.
26. Amend Sec. 950.801 as follows:
a. In paragraph (a)(1), remove the text ``one 30-day calendar day''
and add in its place the word ``a'', remove the text ``January and
March'' and add in its place the text ``December and January'', and add
the text ``and international'' to the last sentence after the word
``national'';
b. Revise paragraph (a)(2);
c. In paragraph (a)(3), remove the date ``March 15'' and add in its
place ``a date to be determined by OPM. The date will be part of the
annual timetable issued by the Director under Sec. 950.801(b).'';
d. In paragraph (a)(4), remove the text ``June 30'' and add in its
place ``a date to be determined by OPM. The date will be part of the
annual timetable issued by the Director under Sec. 950.801(b).''; and
e. In paragraph (b), add the text ``and international'' in the
first sentence after the word ``national'', and add a second sentence
to read as follows: ``The Director will issue the timetable for a
campaign period no later than October 31 of the year preceding the
campaign period.''
The amendments to Sec. 950.801 read as follows:
Sec. 950.801 Campaign schedule.
(a) * * *
(2) The Director will determine a date after the closing of the
receipt of applications by which the Director will issue notices to
each national and international applicant organization of the results
of the Director's review. The date will be part of the annual timetable
issued by the Director under Sec. 950.801(b).
* * * * *
27. Amend Sec. 950.901 as follows:
a. In paragraph (c)(1), remove the text ``printed or purchased from
a central source'' and add in its place ``reproduced'', and remove the
word ``distributed'' and add in its place ``made available'';
b. In paragraph (c)(2), add the word ``paper'' after the word
``each'', and add the text ``or an acceptable electronic version''
after the word ``authorization'';
c. In paragraph (f)(1), add the text ``pay period number,'' after
the word ``period,''; and
d. Revise paragraphs (i)(1) and (i)(2) .
The amendments to Sec. 950.901 read as follows:
Sec. 950.901 Payroll allotment.
* * * * *
(i) * * *
(1) The PCFO shall notify the federations, national and
international organizations, and local organizations as soon as
practicable after the completion of the campaign, but in no case later
than a date to be determined by OPM, of the amounts, if any, designated
to them and their member agencies and of the amounts of the
undesignated funds, if any, allocated to them. The date will be part of
the annual timetable issued by the Director under Sec. 950.801(b).
(2) The PCFO is responsible for the accuracy of disbursements it
transmits to recipients. It shall transmit disbursements at least
quarterly, minus the approved proportionate share for administrative
cost reimbursement and the PCFO fee set forth in Sec. 950.106. It
shall remit the contributions to each organization or to the
federation, if any, of which the organization is a member. The PCFO
will distribute all CFC receipts beginning April 1, and quarterly
thereafter. At the close of each disbursement period, the PCFO's CFC
account shall have a balance of zero.
* * * * *
[FR Doc. 06-5795 Filed 6-26-06; 1:37 pm]
BILLING CODE 6325-46-P