OPM stung by thefts

Former employees admit to stealing funds from Treasury

The Office of Personnel Management recently learned an important lesson about the importance of monitoring for gaps in internal financial controls, a practice that can make it easier to account for agency funds and reduce the risk of fraud.

OPM announced Aug. 10 that two former accounting technicians had pleaded guilty to stealing more than $27,500 from the U.S. Treasury. The employees diverted electronic payments into their personal accounts from July 2006 to January 2007, said Jeffrey Taylor, U.S. attorney for the District of Columbia.

Following the announcement, OPM Director Linda Springer stressed the agency’s commitment and adherence to appropriate financial controls and processes in its daily operations.

“As stewards of the public trust, we have a responsibility to ensure against fraud, and we have checks and balances in place to uphold sound fiscal accountability,” Springer said in a statement.

Under Circular A-123, the Office of Management and Budget requires that agencies implement effective internal controls for financial reporting and continually monitor them. When agencies test those controls, they must also analyze the degree of risk in their accounts, according to the A-123 guidance.

Internal controls include procedures that employees must follow and automated processes in financial systems.

To further improve financial management, OPM has outlined plans to replace its procurement system and two accounting systems. It will begin with a public/private competition for a shared service provider under the Financial Management Line of Business, according to the agency’s postings on the Federal Business Opportunities Web site.

OPM plans to first replace its administrative Government Financial Information System, which is based on CGI Federal’s Momentum, followed by its Procurement Desktop application. Next, OPM will replace its Benefits Financial Management System, a collection of custom and commercial applications, with the first phase of a single integrated system.

When they first noticed the accounting irregularities, OPM officials immediately notified Patrick McFarland, OPM’s inspector general. The agency cooperated fully with the investigation that led to the guilty pleas, an OPM spokesman said, declining to give details because the internal investigation continues. OPM and the IG’s office are working together to review and monitor controls, the spokesman said.

The two employees were acting alone, and their actions did not appear to be part of a larger problem, said Channing Phillips, principal assistant U.S. attorney in the U.S. Attorney’s Office for the District of Columbia.

The two could face as much as 10 years in prison when they are sentenced in November. But based on federal guidelines, they face a likely sentence of at least six months in prison, home confinement and/or a probation period, Taylor said.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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