oversight

Semi-annual report: Apr-Sep 2014

Published by the Equal Employment Opportunity Commission, Office of Inspector General on 2014-10-31.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

U. S. Equal Employment
Opportunity Commission




   Office of Inspector General




   Semiannual Report to Congress

   April 1, 2014 – September 30, 2014

                     Milton A. Mayo Jr.
                     Inspector General
       OFFICE OF INSPECTOR GENERAL

                         VISION
    Agents Igniting Change and Fostering Accountability,
       Effectiveness, and Efficiency in Government




                        MISSION
To detect and prevent waste, fraud, and abuse; and to promote
 economy, efficiency, and effectiveness in Agency programs
                       and operations.
CONTENTS


A Message from the Inspector General                                         4

Executive Summary                                                            5

Introduction                                                                 7

The Audit and Evaluation Program                                             10
Completed Projects
New and Ongoing Audit and Evaluation Projects
Audit Follow-up

The Investigation Program                                                    24
Investigative Inquiries
Completed Investigative Activities
Ongoing Investigative Activity

Appendixes                                                                   27
Appendix I. Final Office of Inspector General Audit and Evaluation Reports
Appendix II. Index of Reporting Requirements
Appendix III. Single Audit Act Reports
This page intentionally left blank
                        Equal Employment Opportunity Commission



                                  A MESSAGE FROM
                                        THE
                                 INSPECTOR GENERAL




In accordance with the Inspector General Act of 1978, as amended, I herewith submit
the Office of Inspector General (OIG) Semiannual Report to Congress for the period
April 1, 2014, through September 30, 2014. The Semiannual Report summarizes the
major activities of the OIG’s office for the reporting period. Additionally, Section 5 of
the Inspector General Act requires the Chair to transmit this report to the appropriate
committees or subcommittees of Congress within 30 days of its receipt. Submission of
this report satisfies all of the stated requirements.

We thank the Honorable Jacqueline A. Berrien for her dedicated service to the EEOC
during her tenure as Chair. The entire OIG staff extends its best wishes to former
Chair Berrien.

We congratulate the Honorable Jenny R. Yang, on her appointment as the new Chair of
the EEOC. We look forward to working with Chair Yang, Agency senior leadership,
the Commissioners, and the EEOC community at-large as we all work to enhance
EEOC’s ability carry out its mission to stop and remedy unlawful employment
discrimination.

Respectfully,




Milton A. Mayo Jr.
Inspector General
October 31, 2014




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                  OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                        Equal Employment Opportunity Commission

EXECUTIVE SUMMARY

This Semiannual Report is issued by the U.S. Equal Employment Opportunity
Commission’s (EEOC’s) Office of Inspector General (OIG) pursuant to the Inspector
General Act of 1978, as amended. It summarizes the OIG’s activities and
accomplishments for the period April 1, 2014, through September 30, 2014.

During the reporting period, the OIG issued five final audit/evaluation reports,
completed three investigations, and received 638 hotline inquiries. A total of 243 were
charge processing issues, 317 were Title VII complaints, and 26 were investigative
allegations. The remaining 52 hotline inquiries were general inquiries.

Significant accomplishments include the following:

    OIG reported that the Agency complied with the Improper Payments Information
     Act (IPIA), as amended by the Improper Payments Elimination and Recovery
     Act of 2010 (IPERA). The Agency conducted an agency wide risk assessment
     of vendor and travel payments made in FY 2013.

    OIG reported that there were no Agency efforts to prevent or hinder OIG
     activities.   Additionally, there were no closed investigations, audits or
     evaluations that had not been disclosed to the public.

    OIG reported on the results of its review of the Agency’s Personnel Security
     Program. OIG’s contractor Williams, Adley & Company-DC, LLP determined
     that although EEOC has designed an overall compliant personnel security
     program, there were areas in which improvements are needed in the
     implementation of the program to achieve optimum effectiveness and efficiency.

    OIG issued a Results in Brief update for its Cooperative Audit Resolution and
     Oversight Initiative (CAROI) Pilot Program. The update stated that the OIG’s
     goal for this pilot program is to use CAROI as a method to improve resolution of
     recommendations contained in reports that require audit follow-up. Since the
     OIG began implementing CAROI in 2012, it has achieved significant results,
     including improved communication with a key program office.

    OIG contracted with Brown and Company CPAs, PLLC to perform an
     independent evaluation of EEOC's information security program compliance
     with the Federal Information Security Management Act of 2002 (FISMA) for
     FY-2014.




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                  OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                    Equal Employment Opportunity Commission

 OIG contracted with the Urban Institute to conduct an evaluation of the Agency’s
  Outreach and Education Program. The objective of this evaluation is to assess
  the program’s efficiency and effectiveness. The results will be included in the
  Performance and Accountability Report.

 OIG contracted with the public accounting firm of Harper, Rains, Knight &
  Company (HRK), P.A., to conduct the Agency’s 2014 financial statement audit,
  which is required by the Accountability of Tax Dollars Act of 2002. Fieldwork
  is ongoing, and the results will be included in the Performance and
  Accountability Report.

 OIG is conducting an independent assessment to determine if the Agency’s
  management control evaluation process was conducted in accordance with Office
  of Management and Budget (OMB) standards. The results will be included in the
  Performance and Accountability Report.

 OIG reported that there were a total of 57 open and unimplemented
  recommendations as of September 30, 2014. Further, the OIG identified the
  most urgent recommendations to be: (1) the EEOC update its control over the
  maintenance of its official personnel files, (2) the EEOC identify and update all
  policies and procedures impacted by the implementation of the Financial Cloud
  Solution (FCS), and (3) that the EEOC perform further analysis on its
  government charge card operations to identify all controls that should be
  implemented per Office of Management and Budget (OMB) directives.

 OIG completed investigations regarding ethical misconduct and purchase card
  fraud. The OIG has ongoing investigations in several field offices involving
  ethics violations, conflicts of interest, fraud, mismanagement, falsification of
  government records, impersonation of a Federal official, misuse of travel and
  purchase cards, theft of government property, misuse of computers, and threats
  against the Agency.




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              OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                        Equal Employment Opportunity Commission

INTRODUCTION

The Equal Employment Opportunity Commission

The Equal Employment Opportunity Commission (EEOC) is the Federal agency
responsible for enforcement of Title VII of the Civil Rights Act of 1964, as amended;
the Equal Pay Act of 1963; the Age Discrimination in Employment Act of 1967;
Section 501 of the Rehabilitation Act of 1973 (in the Federal sector only); Title I of the
Americans with Disabilities Act of 1990 and Americans with Disabilities Act
Amendments Act of 2008; the Civil Rights Act of 1991; the Lilly Ledbetter Fair Pay
Act of 2009; and the Genetic Information Nondiscrimination Act of 2008 (P.L. 110-233
Stat 881), also referred to as GINA. These statutes prohibit employment discrimination
based on race, sex, color, religion, national origin, age, disability, or genetic
information.

The EEOC is also responsible for carrying out Executive Order 12067, which promotes
coordination and minimizes conflict and duplication among Federal agencies that
administer statutes or regulations involving employment discrimination.

The EEOC is a bipartisan commission composed of five presidentially appointed
members, including a Chair, a Vice Chair, and three Commissioners. The Chair is
responsible for the administration and implementation of policy and for the financial
management and organizational development of the Commission. The Vice Chair and
the Commissioners equally participate in the development and approval of the policies
of the EEOC, issue charges of discrimination where appropriate, and authorize the
filing of lawsuits. Additionally, the President appoints a General Counsel, who is
responsible for conducting litigation under the laws enforced by the Commission.

During the reporting period, Chair Jacqueline A. Berrien’s term expired and she
declined reappointment to a second term as the head of the Agency. In September 2014
President Barack Obama appointed the Commission’s Vice Chair to succeed former
Chair Berrien.

The Office of Inspector General

The U.S. Congress established the Office of Inspector General (OIG) at the EEOC
through the 1988 amendments to the Inspector General Act of 1978, which expanded
the authority of designated Federal entities to create independent and objective OIGs.
Under the direction of the Inspector General (IG), the OIG meets this statutory
responsibility by conducting and supervising audits, evaluations, and investigations
relating to the programs and operations of the Agency; providing leadership and



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                  OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                        Equal Employment Opportunity Commission

coordination; and recommending policies for activities designed to promote economy,
efficiency, and effectiveness in the administration of programs and operations.

In October 2008, Congress passed the Inspector General Reform Act of 2008, which
generally buttressed the independence of IGs, increased their resources, and held them
more accountable. The OIG is under the supervision of the Inspector General (IG), an
independent EEOC official subject to general supervision by the Chair. The IG must
not be prevented or prohibited by the Chair or any other EEOC official from initiating,
carrying out, or completing any audit, investigation, evaluation, or other inquiry or
from issuing any report.

The IG provides overall direction, coordination, and leadership to the OIG; is the
principal advisor to the Chair in connection with all audit and investigative matters
relating to the prevention, identification, and elimination of waste in any EEOC
program or operation; and recommends the proper boundaries of audit and investigation
jurisdiction between the OIG and other EEOC organizations. The IG also develops a
separate and independent annual budget for the OIG; responds directly to inquiries from
the public, Congress, or the news media; and prepares press releases, statements, and
other information about the OIG’s activities.

The Deputy Inspector General (DIG) serves as the alter ego of the IG and participates
fully in policy development and in management of the diverse audit, investigation,
evaluation, and support operations of the OIG.

The Counsel to the Inspector General (CIG) is the sole legal advisor in the OIG. The
CIG provides day-to-day guidance to the OIG’s investigation team and is the primary
liaison with Agency legal components and the Department of Justice.

In addition to these positions, the OIG staff includes a chief technology officer, an
evaluator, two auditors, two criminal investigators, an administrative specialist, and a
confidential support assistant.

OIG was granted authority to hire and is currently recruiting to fill the positions of the
DIG and a staff auditor. These positions were not filled during the fiscal year. We will
continue to pursue efforts to fill these vacancies in FY 2015.

During this reporting period, the OIG continued to develop its information
technology infrastructure to improve its business processes, practices, planning,
collaboration, and products.




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                  OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                       Equal Employment Opportunity Commission



Work currently under way includes the following:

    The OIG’s newly designed website (OIG.EEOC.GOV) has been completed
     and is scheduled to launch during the next reporting period. It will be used as
     a mechanism to provide: (1) greater transparency in the operations of the OIG
     by enhancing access to audit and evaluation reports and other public
     documents; (2) an improved electronic portal for the public to use in reporting
     fraud, waste, and abuse; and (3) a medium to implement the use of social
     media to enhance our ability to reach and inform our stakeholders about the
     OIG’s vision, mission, and operations.

    The OIG is implementing a network infrastructure to support its information
     technology requirements using a Federal Risk and Authorization Management
     Program (FedRAMP)-approved cloud provider. Full implementation should be
     completed by the third quarter of fiscal year 2015.




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                 OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                        Equal Employment Opportunity Commission

                 THE AUDIT AND EVALUATION PROGRAM

                 The Audit and Evaluation Program supports the OIG’s strategic goal
                 of improving the economy, efficiency, and effectiveness of EEOC
                 programs, operations, and activities.



COMPLETED PROJECTS

Compliance with the Improper Payments Elimination and Recovery Act (IPERA)

On April 15, 2014, the OIG reported that the Agency complied with the Improper
Payments Information Act (IPIA), as amended by IPERA. The Agency conducted an
agency wide risk assessment of vendor and travel payments made in FY 2013.
Additionally, the Agency relied on internal controls currently in place relating to
payments and indicated it would utilize the U.S. Treasury’s FedDebt system to
recapture any potential improper payments.

Report to Congress on Open and Unimplemented Inspector General Recommendations

On July 21, 2014, the OIG reported to Congress that there were a total of 57 open and
unimplemented recommendations as of March 31, 2014. Further, we identified the
most urgent recommendations to be: (1) the EEOC update its control over the
maintenance of its official personnel files, (2) the EEOC identify and update all policies
and procedures impacted by the implementation of the FCS, and (3) that EEOC
perform further analysis on its government charge card operations to identify all
controls that should be implemented per OMB directives.

Performance Audit of the Agency’s Personnel Security Program

On September 15, 2014, the OIG’s contractor, Williams, Adley & Company-DC, LLP
issued its final report regarding the Performance Audit of the Agency’s Personnel
Security Program. Williams, Adley & Company-DC, LLP determined that, although
EEOC has designed an overall compliant personnel security program, there are areas in
which improvements are needed in the implementation of the program in order to
achieve optimum effectiveness and efficiency. These areas are:

      1.     Classified Information Management,
      2.     Suitability Determinations, and
      3.     Physical Security and Credentialing



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                  OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                        Equal Employment Opportunity Commission

Williams, Adley & Company-DC, LLP made seventeen recommendations calling for
management to develop or update policies and procedures, to implement those policies
and procedures, to adhere to the requirements already in place, to address staffing
concerns within the Office of the Chief Human Capital Officer (OCHCO), and to
complete risk designations, reinvestigations, and OPM reporting in accordance with
established requirements.

According to the report, without these improvements, EEOC runs the risk of
insufficient oversight, inadequate practices, and unauthorized disclosure of classified
information. Also, not implementing these improvements to the personnel security
program may result in individuals holding positions for which they are not suitable, and
limiting EEOC’s ability to protect national security, and privacy-related information.
The conditions noted were caused by a lack of EEOC policies and procedures for
classified information and ineffective implementation of established requirements.

Cooperative Audit Resolution and Oversight Initiative (CAROI)

The OIG issued a Results in Brief report for its CAROI Pilot Program. The Results in
Brief update stated that the OIG’s goal for this pilot program is to use CAROI to
improve resolution of recommendations contained in reports that require audit follow-
up. Since the OIG began using CAROI in 2012, it has achieved significant results,
including improved communication with a key program office, and identified a
significant audit follow-up process glitch. In addition, recommendations are resolved in
less time than would have been the case without the use of CAROI.

The update also found that:

   1. CAROI is a valuable tool for identifying anomalies and systemic flaws in an
      organization’s audit follow-up and resolution process. The use of CAROI can
      remedy such issues, resulting in improved audit resolution program efficiency
      and effectiveness, and improvement in overall program operations.

   2. The use of CAROI can reduce the potential for the auditee’s unwise investment
      of valuable resources that would be used in developing and implementing
      Corrective Action Plans (CAPs) that are complex and perhaps misguided, or
      implementing CAPs designed to correct problems that do not exist or have been
      resolved.




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                  OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                        Equal Employment Opportunity Commission

   3. The CAROI paradigm is a preemptive and preventative audit resolution
      methodology. It is well suited to avert recurring instances of internal control
      failures, thereby improving the system of internal control and fostering greater
      trust and improved collaboration among and between the audit organization, the
      auditee, and the audit resolution function.

NEW AND ONGOING AUDIT AND EVALUATION PROJECTS

FY-2014 Federal Information Security Management Act Independent Evaluation

During the reporting period OIG contracted with Brown and Company CPAs, PLLC to
perform an independent evaluation of EEOC's information security program
compliance with the Federal Information Security Management Act of 2002 (FISMA)
for FY-2014. Fieldwork is under way and is scheduled to be completed in order to
meet the Office of Management and Budget’s Cyberscope reporting deadline.

Evaluation of Outreach and Education

During the reporting period OIG contracted with Urban Institute to conduct an
evaluation that assesses the management, efficiency and effectiveness of the Agency’s
Outreach and Education Program. It will generally assess outreach and education
efforts, focusing on areas where gains in efficiency and effectiveness may be obtained.
Draft and final products are planned for the third quarter of FY 2015.

Open Government and Transparency Progress Review

On December 8, 2009, the OMB issued Memorandum M10-06, known as the “Open
Government Directive” (OGD). The Memorandum requires executive agencies to take
specific actions to implement the principles of transparency, participation, and
collaboration that form the cornerstone of open government as set forth by the
President. On July 15, 2011, the OIG issued a management advisory on EEOC’s Open
Government activities. OIG’s management advisory focuses on EEOC’s Open
Government Initiative and related activities from July 16, 2011, to the present. In July
2014, the EEOC issued a major update to its Open Government Plan. OIG plans to
issue an updated progress report in the second quarter of FY 2015.

FY 2014 Audit of the Consolidated EEOC Financial Statements

The public accounting firm of Harper, Rains, Knight & Company (HRK), P.A., is
performing the 2014 financial statement audit of the EEOC, which is required by the
Accountability of Tax Dollars Act of 2002. To ensure that the OIG meets its mandated
reporting deadline requirements, fieldwork is ongoing, and the audit opinion will be


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                  OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                              Equal Employment Opportunity Commission

included in the Agency’s 2014 Performance and Accountability Report. The auditor
will issue a management letter report identifying any internal control weaknesses
shortly thereafter.

Agency Compliance with the Federal Managers’ Financial Integrity Act (FMFIA)

EEOC Order 195.001, Internal Control Systems, requires the OIG to annually provide
the Chair with a written advisory addressing whether EEOC’s management control
evaluation process complied with OMB guidelines. The OIG’s independent assessment
is to determine if the Agency’s management control evaluation process was conducted
in accordance with the Office of Management and Budget (OMB) standards. Fieldwork
is underway to ensure that OIG meets its mandated reporting deadline requirement.
Evaluation results will be included in the Performance and Accountability Report.

Significant Management Challenge

In FY 2014, the EEOC learned that Global Computer Enterprises (GCE), its financial
services provider, would likely file for bankruptcy and cease providing the EEOC with
essential financial services (e.g., recording obligations, making payments, etc.). As a
result, the Agency was forced to find another vendor to provide the services and to
begin the task of migrating its data, preparing new business processes, and training its
staff for the new system. The Agency chose the Department of Interior/Interior
Business Center (DOI/IBC) and paid an installment of over $600,000 to begin
providing these services in FY 2015. In addition to paying DOI/IBC the $600,000,
EEOC paid $1.7 million to the General Services Administration (GSA)1 to provide
access, for one year (September 18, 2014 - September 17, 2015), to essential financial
system data that GCE previously maintained for EEOC.

The unanticipated FY 2015 financial system migration presents a technical challenge
and a potential financial challenge. The EEOC FY 2015 budget request is $365.5
million, a minor $1.5 million dollar increase over its FY 2014 budget. Thus, any
additional significant unanticipated costs associated with the migration to DOI/IBC may
substantively adversely impact the EEOC’s resources. Therefore, the EEOC needs to
implement thorough planning, including contingency planning, to account for
unanticipated cost increases driven by the migration, and related matters.

The OIG will continue to monitor the process through its completion.




1
 The U.S. Department of Labor, through the General Services Administration, acquired certain assets of GCE
which contained data owned by the EEOC.


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                       OIG Semiannual Report to Congress       April 1, 2014 –September 30, 2014
                        Equal Employment Opportunity Commission

AUDIT FOLLOW-UP

Audit follow-up is an integral part of good management and is a shared responsibility of
Agency management officials and auditors. Corrective action taken by management to
resolve findings and recommendations is essential to improving the effectiveness and
efficiency of Agency operations.

As part of the Audit Follow-up process, Section 5(a)(1) of the Inspector General Act of
1978, as amended, requires that semiannual reports include a summary description of
significant problems, abuses, and deficiencies relating to the Agency’s administration of
programs and operations disclosed by the OIG during the reporting period. As
summarized in the following tables, five new reports were issued during this reporting
period (April 1, 2014–September 30, 2014); one of those reports contained
recommendations (OIG Report: 2013-08-PSA – Performance Audit of the Agency’s
Personnel Security Program, issued 9/15/2014).




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                  OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                        Equal Employment Opportunity Commission

                     Reports Issued During This Reporting Period

    Fiscal Year    Report Number                Report Title                   Date Issued
       2014            N/A                  Compliance with the                 4/15/14
                                            Improper Payments
                                        Elimination and Recovery
                                                     Act
       2014              N/A                Report on Open and                   7/21/14
                                            Unimplemented OIG
                                            Recommendations to
                                                  Congress
       2014              N/A                Report to Congress                   6/19/14
                                        Concerning Information on
                                           Attempts by Agency to
                                        Prevent, Delay, otherwise
                                          Impede Activities of the
                                             Inspector General
       2014         2013-08-PSA          Performance Audit of the                9/15/14
                                        Agency Personnel Security
                                                  Program
       2014       2013-03-CAROI              Cooperative Audit                   9/23/14
                                         Resolution and Oversight
                                         Initiative (CAROI) Pilot
                                                  Program

As required by Section 5(a)(3) of the Inspector General Act of 1978, as amended,
semiannual reports shall provide an identification of each significant recommendation
described in previous semiannual reports on which corrective action has not been
completed. OIG staff met with Agency follow-up officials in September 2014. The OIG
is reporting a total of 16 views with a total of 49 open recommendations for this
reporting period. The following table shows those recommendations for which
corrective actions have not been completed.




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                  OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                          Equal Employment Opportunity Commission

Recommendations for Which Corrective Actions Have Not Been Completed

  Fiscal
  Year       Report Number                         Report Title                             Date Issued
  2014         2013-FIN-01            FY 2013 Financial Statement Audit                      12/16/13

                                  Open Recommendations:
     EEOC should update and revise the manner in which it controls the maintenance of
      its official personnel files. Additionally, management should perform a thorough
      review of its employees’ personnel files to ensure that documentation is current and
      complete.

  Fiscal
  Year       Report Number                         Report Title                             Date Issued
  2014         2013-02-FIN        FY 2013 Financial Statement Management                     1/31/14
                                               Letter Report

                                        Open Recommendations:
          EEOC should update and revise the manner in which it controls the maintenance of
           its official personnel files. Additionally, management should perform a thorough
           review of its employees’ personnel files to ensure that documentation is current and
           complete.
          EEOC should work towards prompt resolution of these differences as this is an
           essential component of financial data integrity, and its absence compromises the
           integrity of the financial reporting.
          EEOC should update the FCS software to calculate depreciation of EEOC assets on a
           monthly basis.
          EEOC management should consistently review and approve all documents as
           prescribed by its policies and procedures. Policies and procedures should be
           reviewed and updated to ensure they reflect the most current protocol.
          EEOC should discontinue its use of a “zero” object class when recording its
           transactions.
          EEOC should ensure that its property records contain accurate and complete
           property information. A review of property records and property inventory should
           be conducted at least annually, but preferably semi-annually.
          EEOC should establish and implement controls to prevent waste, fraud, and misuse
           in the credit card program. On an annual basis, EEOC should review and update the
           Charge Card Program Guide for substantial changes. Additionally, EEOC should
           monitor the controls to ensure that they are working effectively.




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                    OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                          Equal Employment Opportunity Commission



Fiscal
Year       Report Number                          Report Title                             Date Issued
2014           2013-05-             FY 2013 Federal Information Security                    12/10/13
                FISMA                    Management Act Report

                                    Open Recommendations:
        The OIG recommends that the EEOC Office of Information Technology (OIT) define
         the configuration items (hardware/software inventory) for the information system
         within the Configuration Management Plan. The OIG recommends that OIT should
         document the hardware/software inventory in the Configuration Management Plan or
         provide a direct reference to where the current hardware/software inventory lists are
         located.
        The OIG recommends that the EEOC Office of the Chief Financial Officer, Central
         Services Division update EEOC Order 370-002 Security Plan to reflect consideration
         of updated authorities.
        The OIG recommends the EEOC OIT implement multifactor authentication for
         remote access. The OIG further recommends the EEOC should use multifactor
         authentication where one of the factors is provided by a device separate from the
         computer gaining access.
        The OIG recommends that the OIT ensure all configuration change request forms are
         signed to document review and approval.
        The OIG recommends that the EEOC OIT include an option box or a check box in
         the Change Request forms for emergency changes to ensure the Change
         Configuration Board (CCB) approvers have enough information pertaining to the
         type of change request.
        The OIG recommends that the EEOC Office of Chief Human Capital Officer work
         with EEOC Headquarters’ Administrative Officers and District Directors regarding:
         (1) Implementing procedures to ensure compliance with EEOC Order 501.006
         Clearance Procedures; and (2) Implementing procedures to ensure that all
         separated/terminated EEOC employees complete the EEOC Exit Questionnaire and
         EEOC Form 470, Contractor and Employee Clearance Record




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                   OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                          Equal Employment Opportunity Commission

Fiscal
Year       Report Number                          Report Title                             Date Issued
2013        2012-09-REV                     Review of Evaluations                          04/09/2013

                                    Open Recommendations:
        EEOC should further standardize intake procedures across field offices.
        EEOC should document criteria for determining Category C charges.
        EEOC should continue efforts to develop a national approach for addressing and
         eliminating systemic discrimination.
        EEOC should continue to review the range of information obtained during intake
         interviews and review the manner in which the intake information is stored in the
         Integrated Mission System (IMS).
        EEOC should investigate the merits of expanding the information it obtains related to
         employee hiring and terminations.

Fiscal
Year       Report Number                          Report Title                             Date Issued
2013         2012-01-FIN         FY 2012 Financial Statement Audit Report                  11/16/2012

                               Open Recommendations:
   EEOC should update and revise the manner in which it controls maintenance of
    personnel files and perform a thorough review of employees’ personnel files to
    insure that documentation is current and complete.
   EEOC should document and monitor implementation of all complementary user
    control considerations.
   EEOC should implement stringent reconciliation and resolution procedures for the
    reconciliation of management reports and sub-ledgers to FCS general ledger data.

Fiscal
Year       Report Number                          Report Title                             Date Issued
2013           2012-03-             FY 2012 Federal Information Security                   11/14/2012
                FISMA                    Management Act Report

                               Open Recommendations:
   EEOC should implement multifactor authentication for network access to non-
    privileged and privileged accounts.
   EEOC management should ensure that all network users have read and signed
    acknowledgment of receipt of the Information Security Responsibilities of EEOC
    System Users and that forms are managed in a centralized location.




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                   OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                      Equal Employment Opportunity Commission

   EEOC management should revise the Agency’s policy to correctly reflect the entire
    severity rating list published by the United States Computer Emergency Readiness
    Team (US-CERT).

Fiscal
Year     Report Number                        Report Title                             Date Issued
2013      2012-02-FIN        FY 2012 Financial Statement Management                    12/19/2012
                                          Letter Report

                             Open Recommendations:
   EEOC should document and monitor implementation of all complementary user
    control considerations.
   EEOC should implement stringent reconciliation and resolution procedures for
    reconciliation of management reports and sub-ledgers to FCS general ledger data.
   EEOC should calculate and record depreciation in FCS on a monthly basis.

Fiscal
Year     Report Number                        Report Title                             Date Issued
2013     2012-10-PMEV      Evaluation of EEOC’s Performance Measures                   03/21/2013

                                 Open Recommendations:
   EEOC should expand the new Strategic Enforcement Plan (SEP) requirement for
    quarterly reviews. EEOC management would likely benefit considerably from the
    implementation of quarterly data-driven reviews such as those required by large
    Federal agencies.
   EEOC should provide its Commissioners and managers with easy access to relevant
    disaggregation of outcome values. Outcome data would be broken out by such
    characteristics as priority level, industry, and key characteristics of charging parties.

Fiscal
Year     Report Number                        Report Title                             Date Issued
2013       2012-08-          Performance Audit of EEOC Charge Card                     03/28/2013
           PURCH                           Program

                               Open Recommendations:
   EEOC should perform further analysis on the government charge card operations to
    identify the controls to be implemented in compliance with OMB directives.
    Specifically, the EEOC must review and update the identification of procedures
    performed using the new accounting system (FCS) as well as the current duties of
    personnel interacting with the system. The EEOC should meet with all process lead


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               OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                    Equal Employment Opportunity Commission

    personnel to determine what controls are or should be in place to ensure that fraud,
    waste, abuse, and misuse are not present in the charge card program. The EEOC
    should identify all requirements in OMB Circular A-123, Appendix B, and determine
    the procedures necessary to comply with the requirements and ensure that policies
    and procedures are reviewed on an annual basis, or more frequently, if substantial
    changes have occurred in EEOC’s systems or laws and regulations have been issued
    This will help to ensure that policies and procedures are appropriate for the current
    environment.
   EEOC should develop a system to (1) identify and track all charge card activity,
    including open accounts, closed accounts, cardholder approver levels, and
    cardholder training; (2) perform an evaluation of service providers’ controls over the
    charge card program to ensure that controls are appropriate and operating
    effectively; and (3) monitor all controls, whether performed at EEOC or at a service
    provider, at least annually, to ensure that controls remain adequate and continue to
    operate effectively.
   EEOC should develop policies and procedures to identify and track all cardholder-
    required training. Documentation should be maintained following National Archives
    and Records Administration (NARA) requirements for cardholders who have
    successfully completed training requirements.
   EEOC should develop controls over the retention of application documents for
    charge card accounts.
   EEOC should monitor controls over transaction approval, whether performed at
    EEOC or at a service provider.
   EEOC should implement policies and procedures regarding record retention for
    purchase and travel card transactions.
   EEOC should develop and implement policies to require reviews of total cardholder
    activity to ensure compliance with monthly spending authority for all cardholders.
    Documentation of authority to exceed cardholders’ spending limits should be
    maintained by management. Penalties for exceeding authorized spending limits
    should be established and enforced.
   EEOC should develop and implement policies and procedures to use data mining to
    monitor charge card activity.




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              OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                      Equal Employment Opportunity Commission

Fiscal
Year     Report Number                        Report Title                             Date Issued
2012       2011-05-        Federal Information Security Management Act                 11/17/2011
            FISMA                             Report

                               Open Recommendations:
   EEOC should implement multifactor authentication for network access to non-
    privileged and privileged accounts.

Fiscal
Year        Report                            Report Title                             Date Issued
           Number
2010     2010-04-FIN             FY 2010 Financial Statement Audit                     02/07/2011
                                    Management Letter Report

                                Open Recommendations:
   EEOC should implement and document the implementation of all applicable client
    control considerations provided by the service provider. The documentation should
    be readily available for review and shared with all relevant EEOC offices.

Fiscal
Year     Report Number                        Report Title                             Date Issued
2010       2010-07-        Federal Information Security Management Act                 11/01/2010
            FISMA                             Report

                           Open Recommendations:
   EEOC should implement multifactor authentication.

Fiscal
Year     Report Number                        Report Title                             Date Issued
2009      2009-05-FIN          FY 2009 Financial Statement Audit           01/12/2010
                                   Management Letter Report
                               Open Recommendations:
   EEOC should ensure that all users’ accounts are (1) assigned to a unique individual;
    (2) ensure that all data network and e-mail accounts are created and authorized in
    accordance with EEOC policies and procedures; (3) disable network and e-mail
    accounts that have not been used within the past 30 days, as mandated by the Office
    of Information Technology’s (OIT’s) controls for creating, changing, and
    terminating system accounts policy; and (4) ensure that all offices comply with the


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               OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                     Equal Employment Opportunity Commission

    required annual user account confirmation procedures listing within the EEOC OIT
    policy on creating, changing, and terminating system accounts. (Finding repeated in
    FY 2010 management letter.)
   EEOC should update the network vulnerability scan policies and procedures to
    ensure that the volume of medium- and high-risk vulnerabilities identified as a result
    of scanning is in accordance with industry standards. (Finding repeated in FY 2010
    management letter.)
   EEOC management should develop and implement policies and procedures for
    outsourced applications to ensure that application security violations are
    appropriately reviewed and reported. (Finding repeated in FY 2010 management
    letter.)

Fiscal      Report
Year       Number                        Report Title                 Date Issued
2008     2008-12-AEP     FY 2008 Independent Audit of EEOC Privacy     09/30/2008
                                          Program
                               Open Recommendations:
   EEOC should continue with the planned action to implement two-factor
    authentication together with the implementation of badges per Homeland Security
    Presidential Directive 12.


Fiscal      Report
Year        Number                     Report Title                     Date Issued
2008     2008-03-AMR      Oversight of Federal Agency Reporting         09/26/2008
                         Management Directive 715 (MD-715) and
                                      Related Topics
                            Open Recommendations:
   EEOC should require Federal agencies to submit Part G of their Equal Employment
    Opportunity assessment with their annual EEOC Management Directive MD-715
    submissions.




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               OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                         Equal Employment Opportunity Commission

  Fiscal
  Year     Report Number                         Report Title                             Date Issued
  2008        2007-11-         Performance Audit of the Equal Employment                  08/26/2008
              RFPERF              Opportunity Commission’s Education,
                               Training, and Technical Assistance Program
                                             Revolving Fund

                                      Open Recommendations:
      EEOC should approve the establishment of the EEOC Training Institute Steering
         Committee.
      EEOC should update the Revolving Fund Business Plan to reflect the Agency’s
         strategic direction, vision, and goals over the next three to five years.
      EEOC should seek professional assistance to develop a more effective budgeting
         method to project financial information in order to plan training events and monitor
         goals.
As required by Section 5(a) (10) of the Inspector General Act of 1978, as amended,
semiannual reports shall include a summary of each audit report issued before the start
of the reporting period for which no management decision has been made by the end of
the reporting period. The OIG has no audit or evaluation reports that were issued
before the reporting period began for which no management decision has been made.




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                  OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
        Equal Employment Opportunity Commission

THE INVESTIGATION PROGRAM

The Investigation Program supports the OIG’s strategic goal of
focusing limited investigative resources on issues that represent the
greatest risk and offer the maximum opportunity to detect and prevent
fraud, waste, and abuse in EEOC programs and operations.

        INVESTIGATIVE INQUIRIES

         Investigative Inquires Received
        April 1, 2014 – September 30, 2014

          Allegations                   Number

Charge Processing
                                                    243
Other Statutes                                       54

Title VII                                           317

Mismanagement                                          1

Ethics Violations                                      5

Backgrounds                                            3

Theft                                                  3

Threats                                                2

Fraud                                                  2

Other Criminal Allegations                             8

Congressional Inquiries                                2

Total                                               638




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 OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                        Equal Employment Opportunity Commission

INVESTIGATIONS

Ethical Misconduct

The OIG completed an investigation of ethical misconduct. In March 2014, in an
attempt to assist her daughter in obtaining a place to live, an EEOC employee copied
and edited another employee’s Earnings and Leave statement to reflect that her
daughter was employed by the Equal Employment Opportunity Commission.

OIG found that the employee violated: 1) The Standards of Ethical Conduct for
Employees of the Executive Branch Subpart A- General Provisions § 2635.101(14)
which establishes as a basic obligation of public service that employees are charged to
endeavor to avoid any actions creating the appearance that they are violating the law or
the ethical standards set forth in this part, and 2) §2635.704(a) Use of Government
Property. OIG referred this matter to management for action, as it deems appropriate.

Purchase Card Fraud

The OIG completed the investigation of an employee who made personal purchases
using a government Citibank purchase card. The OIG found that beginning on or about
November 23, 2011, and continuing through August 28, 2013, the employee, while
acting in her official capacity, purchased American Express Gift Cards with the
government purchase card under the pretense of paying for authorized Agency litigation
services. Over the course of the employee’s scheme, she used government funds to
purchase a total of 23 American Express Gift Cards, which were used to make
payments on a timeshare, vacations, a car, phone service, and storage, as well as
numerous local retail purchases. The employee used fraudulent obligation documents,
invoices, and receipts to cover up a scheme of defrauding the Agency of $59,000.

The employee entered a guilty plea in the local court system and was sentenced to six
years of probation and required to pay restitution of $59,000 to the Agency.

Filing of a Fraudulent EEOC Complaint

The OIG completed a joint investigation with the Department of Homeland Security
(DHS), Homeland Security Investigations (HSI), involving a complainant filing a
fraudulent charge of discrimination with the EEOC claiming that a manager sexually
harassed her. During the course of the investigation, it was revealed that the alleged
sexual harasser actually conspired with the complainant and at least one other employee
to extort money from the employer as part of a fraudulent sexual harassment scheme.
Both the complainant and manager were



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                  OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                        Equal Employment Opportunity Commission



fired by the employer, and were arrested. Both were indicted for violating 18 U.S.C.
1349 Conspiracy to commit mail fraud. The complainant was also indicted for violating
18 U.S.C. 1001 by making false statements. The disposition of these charges is
pending.

ONGOING INVESTIGATIVE ACTIVITY

The OIG has ongoing investigations in several field offices involving ethics violations,
conflicts of interest, fraud, mismanagement, falsification of government records,
impersonation of a Federal official, misuse of travel and purchase cards, theft of
government property, misuse of computers, and threats against the Agency. Status
updates of the ongoing investigations will be provided in future semiannual reports
following the completion of the individual investigation.




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                  OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                      Equal Employment Opportunity Commission

APPENDIX I. FINAL OFFICE OF INSPECTOR GENERAL AUDIT AND
EVALUATION REPORTS



                                                                 Funds Put
                                                Questioned                      Unsupported
       Report Title            Date Issued                        to Better
                                                  Costs                            Costs
                                                                     Use

 Performance Audit of the
Agency’s Personnel Security
         Program                9/15/2014                   $0            $0             $0




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                OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                          Equal Employment Opportunity Commission

APPENDIX II. INDEX OF REPORTING REQUIREMENTS


Inspector General
                                       Reporting Requirements                                Page
   Act Citation

Section 4(a)(2)      Review of Legislation and Regulations                                  N/A
Section 5(a)(1)      Significant Problems, Abuses, and Deficiencies                         10–26
                     Recommendations for corrective action with Respect to
Section 5(a)(2)                                                            10–12
                     Significant Problems, Abuses, and Deficiencies
                     Significant Recommendations Included in Previous
Section 5(a)(3)      Reports on Which Corrective Action Has Not Been 14-23
                     Completed
Section 5(a)(4)      Matters Referred to Prosecutorial Authorities                          N/A
Section 5(a)(5)      Summary of Instances Where Information Was Refused                     N/A
Section 5(a)(6)      List of Audit Reports                                                  15
Section 5(a)(7)      Summary of Significant Reports                                         10–12
Section 5(a)(8)      Questioned and Unsupported Costs                                       27
Section 5(a)(9)      Recommendations That Funds Be Put to Better Use                        27
                     Summary of Audit Reports Issued Before the
Section 5(a)(10)     Commencement of the Reporting Period for Which No 15
                     Management Decision Has Been Made
                     Significant Management Decisions That Were Revised
Section 5(a)(11)                                                        N/A
                     During the Reporting Period
                     Significant Management Decisions with Which the
Section 5(a)(12)                                                     N/A
                     Office of Inspector General Disagreed




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                    OIG Semiannual Report to Congress   April 1, 2014 –September 30, 2014
                        Equal Employment Opportunity Commission

APPENDIX III. SINGLE AUDIT ACT REPORTS

The Single Audit Act of 1984 requires recipients of Federal funds to arrange for audits
of their activities. Federal agencies that award these funds must receive annual audit
reports to determine whether prompt and appropriate corrective action has been taken
in response to audit findings. During the reporting period, the OIG received no audit
reports issued by public accounting firms concerning Fair Employment Practice
Agencies (FEPAs) that have work-sharing agreements with EEOC.




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      Equal Employment Opportunity Commission




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