oversight

Procedures and Practices for Employment of Consultants and Experts Need Improvement

Published by the Government Accountability Office on 1971-04-01.

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

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                                     LM095675




Proced u res And Practices
For Employment Of
Consultants And Experts
Need Improvement 6-164031~7~
Department of Health, Education,
  and Welfare
Civil Service Commission




BY THE COMPTROLLER GENERAL
OF THE UNITED STATES



                             APRIL    12371
              COMPTROLLER     GENERAL      OF      THE   UNITED   STATES
                            WASHINGTON.     D.C.     20548




B-164031(1)




To the Secretary     of Health, Education,
and Welfare   and the Chairman,     Civil
Service  Commission:

         This is our report         on the need for improvement        in the
procedures      and practices        for employment     of consultants    and
experts.     The significant        contents  of the report   are summa-
rized in the digest which           is bound in the report.

         Copies of this report are being sent to the Senate and
House Committees       on Post Office   and Civil Service;      the
Senate and House Committees         on Government      Operations;
the Senate and House Committees         on Appropriations;       Repre-
sentative    Edith Green; and the Director,    Office of Manage-
ment and Budget.




                                          Comptroller             General
                                          of the United           States




          50 TH ANNIVERSARY               1921- 1971
I
I        * COMP+ROLLER GENERAL'S                              PROCEDURESAND PRACTICES FOR
 I         REPORT TO THE SECRETARY OF                         EMPLOYMENTOF CONSULTANTS AND
II         HEALm, EDUCATION, AND WELFARE                      EXPERTS NEED IMPROVEMENT
 I         AND THE CHAIRMAN,                                  Department    of Health, Education,
 I
 II        CIVIL SERVICE COMMZSSION                           and Welfare
                                                              Civil  Service Commission B-164031

I
I         DIGEST
          ------
t

I
          WHY THE REVIEW WAS MADE
1
;               This review was made because of the increasing                   use of consultants         and
    I
    I           experts  by Federal departments and agencies.

                The General Accounting     Office  (GAO) has selected  the Department   of
                Health,  Education,  and Welfare    (HEW) for its examination   because, of
                all Government agencies,      HEW has had the greatest   number of consultants
                and experts  on its rolls.

                The review included    only       those HEW consultants   and experts paid by the
                day.   It did not include         consultants and experts   hired to perform spe-
                cific  tasks for specific         sums of money.    (See p. 6.)

                Because the Civil        Service Commission has responsibility      for overseeing
                agencies'   employment of such individuals,      GAO also has reviewed the
                procedures    followed     by the Commission in overseeing     department   and
                agency practices       to prevent misuse of the consultant      and expert   appoint-
                ment authority.

    1
    I
    I     FINDINGS AND CONCLUSIONS
    I1
     I           HEW qualified 9,075 individuals for service  as consultants                        or experts
    II
                 during the 15-month period ended April  5, 1969.  Less than                        half of
     I           them received  compensation.
     I
                 Of those     who received   compensation

                       --3,697  received    less than $1,000,
                       --575 received    over $1,000 but less       than     $5,000,     and
                       --132 received    $5,000 or more.

                 About $3 million      was paid    to consultants          and experts     during    this   period.
                 (See p. 10.)

                 GAO chose for review 10 cases in which the consultant    or expert had re-
                 ceived full-time  or nearly full-time compensation  during his period of
    I
    ‘
    I     Tear Sheet
                                                                                                       I

service.   GAO's selection     was made on the premise that these cases'                           s   :
would best test HEW's procedures       for limiting the hiring  of consul-
tants and experts   to situations    in which the circumstances   conformed
to the requirements   of law and the Civil Service Commission.
Seven of the 10 persons subsequently   accepted regular       Government posi-
tions in which they performed  duties  identical     or similar   to those that
they performed as consultants  or experts.       (See p. ~0.)

GAO concluded that all 10 had performed worthwhile               services,  but the
data accumulated    by GAO indicated      that in eight cases there were devia-
tions from the laws and Civil       Service    instructions      in the type of ap-
pointment,   length of appointment,      services     performed,     or a combination
of the foregoing.     According   to data accumulated         by GAO:

  --Six    consultants        engaged in work which was more operational         than ad-
     visory,    despite       Civil   Service instructions     prohibiting   the use of
     consultants      for     operational    duties.     (see PP. 12 to 15.)

   --Five    consultants      or experts    occupied full-time   continuing     positions,
      although    instructions     required    that these positions     be filled     with
      civil   service    employees.      (See PP* 16 to 18.)

  --Three  consultants          or experts were employed longer than was permit-
     ted under Civil          Service  instructions.  (See pp. 19 and 20.)

  --Two were employed as experts  without   sufficient               evidence    in HEW
     files that they possessed the superior    skills              required.     (See
     PP. 20 and 21.)

HEW indicated      that two experts   who were appointed     to full-time  con-
tinuing   positions     had been urgently    needed to staff   new programs and
that,   because of Civil     Service instructions,     they could not have been
appointed    as regular    Government employees.      (See P. 18.)

GAO concluded that many of the persons who hired the consultants       and
experts  were not sufficiently   familiar  with the requirements applicable
to the employment of consultants     and experts.

HEW staff    members did        not seem to understand     that:

  --There     was a difference  between consultants   and experts in that                  con-
     sultants    may only advise whereas experts    may perform operating                  func-
     tions.

  --The use of persons appointed   as consultants              and experts      in full-
     time continuing positions  was prohibited.

  --Persons      appointed      as experts  must be more than merely qualified
     individuals;      they     must possess superior  skills in their fields.
         --The Civil  Service Commission had procedures            available for filling
            urgent needs for personnel  or requirements          for persons with rare
            skills.  (See pp. 22 and 23.)

      The Civil     Service Commission enters into written         agreements with Fed-
      eral agencies , under which it authorizes          the agencies to appoint    con-
      sultants     and experts    without  prior  approval  by the Commission.     At the
      time of GAO's review,        the Commission monitored     the agencies'  use of
      this authority       by reviewing   appointment   documents that described    the
      duties    that the consultants      or experts were being hired to perform.

      In HEW's case the Commission's    monitoring  method was not effective
      because the duties described    in many of the documents that GAO reviewed
      were not the same as the persons'     actual duties.    Review of the docu-
      ments would not, therefore,    always reveal violations     of laws and in-
      structions.

      Over half the persons qualified     for employment as consultants     and ex-
      perts by HEW either   did not perform any services    or did not receive
      any compensation.    The time spent by Commission personnel      in reviewing
      appointment  documents for such persons served little     useful   purpose.
      ISee PP. 27 to 29.)

      Because GAO's sample included       consultants  and experts who had received
      full-time    or nearly  full-time   pay, it could not be considered  as typi-
      cal, nor could GAO's findings       in these 10 cases be considered  as rep-
      resentative    of what would be found if a review were made of all HEW's
      appointments    of consultants    and experts.

      These cases have shown, however, that neither           HEW's procedures     for
      controlling       the hiring   and use of consultants   and experts    nor the
      Civil    Service Commission's      procedures  for monitoring   other agencies'
      procedures       are effective   enough to ensure that laws and instructions
      governing      the employment of consultants      and experts  are,being   complied
      with.

      Therefore   GAO believes     that a more complete review of HEW's appoint-
      ments of consultants       and experts  likely     would reveal    a significant
      number of additional       cases in which the appointments         did not comply
      with all the laws and instructions          governing     such appointments.       GAO
      expects that this would be especially           likely    for the 48 additional
      cases not included      in its review,    in which individuals        employed as
      consultants     or experts   were subsequently       appointed   to regular     Govern-
      ment positions.

      To advise HEW and the Civil   Service   Commission of its findings    at an
      early date, GAO is reporting   on the 10 cases without    doing the addi-
      tional  work necessary to establish   the full   scope of the problem.


Tear Sheet
                                                                                            I




RECOMMENDATIONSOR SUGGESTIOXS

     Compliance with the laws and instructions          governing  the employment of
     consultants      and experts  protects   the civil  service  system which,   in.
     turn,   protects    both the Government and its employees by ensuring        a
     stable   career work force for the Government and job stability          and
     related    benefits    for the employees.

    The Secretary     of HEW should    provide   all   agencies   of the Department
    with:

       --A clear explanation   of the distinction    between consultants and ex-
          perts and of the types of positions     to which each can be appointed.

       --A statement   explaining that persons appointed           as consultants     and
          experts  are not to hold full-time  continuing          positions.

       --A requirement     that,  prior   to the employment of an individual      as
          an expert,   positive   determination    be made and documented in the
          files   that the individual     actually  does possess superior   skill    in
          his field.

       --A statement     explaining   the special procedures       which the Civil
          Service Commission can employ to fill       urgent      needs for personnel
          or requirements     for persons with rare skills.

    The Secretary    should provide     also for periodic     administrative reviews
    of the records of consultants         and experts  employed by HEW agencies,     to
    determine   whether applicable      laws and instructions     are being complied
    with.    (See p. 25.)

    The Chairman,    Civil   Service   Commission,should:

       --Amend the Commission's       agreement with HEW to require   HEW to make
          periodic administrative      reviews of its use of consultants    and ex-
          perts and to provide     for examination   of the results  by the Civil
          Service Commission.     (See p. SD,)

       --Amend the Commission's    instructions       to clarify  how different      two
          assignments   must be to justify     continued    or second-year    appoint-
          ments.    (See pp. 25 and 26.)

       --Consider      earnings    data and other statistical-sampling      methods, as
          appropriate,       in the Commission's   review of expert and consultant
          appointments       and should give special     consideration   to consultants
          and experts      earning substantial    sums.     (See P. 30.)

AGEflCY ACTIOJW AND UNRESOLmD ISSUES

     The Civil  Service COmmiSSion     agreed with GAO's recommendations     and
     advised that appropriate      changes would be made in its instructions     and



                                            4
I      1
I           operating  practices.   Representatives  of HEW indicated   that GAO recom-
            mendations would receive   consideration   in planned changes in their
            procedures  designed to improve HEW's control     over the use of consul-
            tants and experts.    (See pp. 25 and 29.)

I
I




    Tear Sheet
                           Contents
                                                                    Page

DIGEST                                                                1

CHAPTER

  1        INTRODUCTION                                               6
               Requirements governing employment of
                 consultants  and experts                             6
               Significance  of requirements  applicable
                 to employment of consultants   and ex-
                 perts                                                8

  2        REQUIREMENTSFOR EMPLOYMENT           OF CONSULTANTS
           AND EXPERTSNOTFOLLOWED                                    10
               Consultants       used to perform operating
                 functions                                           12
               Consultants       and experts employed to
                 fill    full-time     continuing   positions        16
               Length of employment longer than per-
                 mitted by law and applicable            instruc-
                 tions                                               19
               Qualifications        of experts not documented       20
               Agency comments and our evaluation                    22
               Conclusions                                           23
               Recommendations to the Secretary of
                 Health, Education,          and Welfare             25
               Recommendations to the Chairman of the
                 Civil Service Commission                            25

  3        NEED FOR IMPROVEMENTIN h@NITORINGOF CON-
           SULTANT AND EXPERTAPPOINTMENTS                            27
               Civil Service Commission comments                     29
               Recommendations to the Chairman of the
                 Civil Service Commission                            30

           SCOPEOF REVIEW                                            31
APPENDIX
  I        Employment data on consultants        and experts
             included in GAO review                                  35
                      ABBREVIATIONS

GAO   General Accounting    Office

HEW   Department   of Health,   Education,   and Welfare
COMPTROLLER GENERAL'S                            PROCEDURESAND PRACTICES FOR
REPORTTO THE SECRETARYOF                         EMPLOYMENTOF CONSULTANTS AND
HEALTH, EDUCATION,AND WELFARE                    EXPERTS NEED IMPROVEMENT
AND THE CHAIRMAN,                                Department    of Health, Education,
CIVIL SERVICE COMMlSSION                         and Welfare
                                                 Civil  Service Commission B-164031(1)


DIGEST
------

WHYTHE REVIEWWASMADE
     This review was made because of the increasing              use of consultants        and
     experts  by Federal departments and agencies.

     The General Accounting     Office  (GAO) has selected  the Department   of
     Health,  Education,  and Welfare    (HEW) for its examination   because, of
     all Government agencies,      HEW has had the greatest   number of consultants
     and experts  on its rolls.

     The review included    only    those HEW consultants    and experts paid by the
     day.   It did not include      consultants and experts    hired to perform spe-
     cific  tasks for specific      sums of money.    (See p. 6.)

     Because the Civil        Service Commission has responsibility      for overseeing
     agencies'   employment of such individuals,      GAO also has reviewed the
     procedures    followed     by the Commission in overseeing     department   and
     agency practices       to prevent misuse of the consultant      and expert appoint-
     ment authority.


FINDINGS AND CONCLUSIONS
     HEW qualified 9,075 individuals for service  as consultants                  or experts
     during the 15-month period ended April  5, 1969.  Less than                  half of
     them received  compensation.

     Of those   who received   compensation

         --3,697  received    less than $1,000,
         --575 received    over $1,000 but less       than   $5,000,   and
         --132 received    $5,000 or more.

     About $3 million    was paid    to consultants      and experts     during    this   period.
     (See p. 10.)

     GAO chose for review 10 cases in which the consultant    or expert had re-
     ceived full-time   or nearly full-time compensation during his period of
service.   GAO's selection     was made on the premise that these cases                         ,
would best test HEW's procedures       for limiting      the hiring of consul-
tants and experts   to situations    in which the circumstances       conformed
to the requirements    of law and the Civil       Service Commission.

Seven of the 10 persons subsequently   accepted regular       Government posi-
tions in which they performed  duties  identical     or similar   to those that
they performed as consultants  or experts.       (See p. 10,)

GAO concluded that all 10 had performed worthwhile            services,  but the
data accumulated    by GAO indicated     that in eight    cases there were devia-
tions from the laws and Civil       Service instructions      in the type of ap-
pointment,   length of appointment,      services  performed,     or a combination
of the foregoing.     According   to data accumulated      by GAO:

  --Six    consultants         engaged in work which was more operational         than ad-
     visory,    despite        Civil   Service instructions     prohibiting   the use of
     consultants      for      operational    duties.     (See PP. 12 t0 15.)

  --Five    consultants      or experts    occupied full-time    continuing      positions,
     although    instructions     required     that these positions     be filled      with
     civil   service    employees.      (See PP. 16 to 18.)

  --Three  consultants           or experts were employed longer than was permit-
     ted under Civil           Service instructions.   (See pp. 19 and 20.)

  --Two were employed as experts  without   sufficient                evidence    in HEW
     files that they possessed the superior    skills               required.     (See
     PP. 20 and 21.)

HEW indicated      that two experts who were appointed       to full-time  con-
tinuing   positions     had been urgently    needed to staff   new programs and
that,   because of Civil     Service  instructions,    they could not have been
appointed    as regular    Government employees.      (See P. 18.)

GAO concluded that many of the persons who hired the consultants       and
experts  were not sufficiently   familiar  with the requirements applicable
to the employment of consultants     and experts.

HEW staff    members did not seem to understand             that:

  --There was a difference   between consultants              and experts in that           con-
     sultants may only advise whereas experts               may perform operating           func-
     tions.

  --The use of persons appointed   as consultants               and experts      in full-
     time continuing positions  was prohibited.

  --Persons       appointed      as experts  must be more than merely qualified
     individuals;       they     must possess superior  skills in their fields.




                                         2
  --The Civil  Service Commission had procedures           available for filling
     urgent needs for personnel  or requirements         for persons with rare
     skills.  (See pp. 22 and 23.)

The Civil     Service Commission enters into written         agreements with Fed-
eral agencies , under which it authorizes          the agencies to appoint    con-
sultants     and experts    without  prior  approval  by the Commission.     At the
time of GAO's review,        the Commission monitored     the agencies'  use of
this authority       by reviewing   appointment   documents that described    the
duties    that the consultants      or experts were being hired to perform.

In HEW's case the Commission's     monitoring method was not effective
because the duties  described   in many of the documents that GAO reviewed
were not the same as the persons'     actual duties.    Review of the docu-
ments would not, therefore,    always reveal violations     of laws and in-
structions.

Over half the persons qualified     for employment as consultants     and ex-
perts by HEW either   did not perform any services    or did not receive
any compensation.    The time spent by Commission personnel      in reviewing
appointment  documents for such persons served little     useful   purpose.
(See PP* 27 to 29.)

Because GAO's sample included      consultants     and experts who had received
full-time    or nearly full-time   pay,'it    could not be considered  as typi-
cal, nor could GAO's findings      in these 10 cases be considered     as rep-
resentative    of what would be found if a review were made of all HEW's
appointments    of consultants   and experts.

These cases have shown, however, that neither           HEW's procedures    for
controlling       the hiring   and use of consultants   and experts   nor the
Civil    Service Commission's      procedures  for monitoring   other agencies'
procedures       are effective   enough to ensure that laws and instructions
governing      the employment of consultants      and experts  are being complied
with.

Therefore   GAO believes     that a more complete review of HEW's appoint-
ments of consultants       and experts  likely    would reveal a significant
number of additional       cases in which the appointments        did not comply
with all the laws and instructions          governing    such appointments.     GAO
expects that this would be especially          likely    for the 48 additional
cases not included      in its review,    in which individuals       employed as
consultants     or experts   were subsequently      appointed   to regular   Govern-
ment positions.

To advise HEW and the Civil   Service   Commission of its findings    at an
early date, GAO is reporting   on the 10 cases without    doing the addi-
tional  work necessary to establish   the full   scope of the problem.




                                   3
RECOMMENDATIONSOR SUGGESTIONS

     Compliance with the laws           and instructions    governing  the employment of
     consultants      and experts     protects    the civil  service  system which, in
     turn,   protects    both the     Government and its employees by ensuring        a
     stable   career work force        for the Government and job stability       and
     related    benefits    for the    employees.

     The Secretary     of HEW should      provide   all   agencies   of the Department
     with:

       --A clear explanation   of the distinction    between consultants and ex-
          perts and of the types of positions     to which each can be appointed.

       --A statement   explaining that persons appointed  as consultants                 and
          experts  are not to hold full-time  continuing positions.

       --A requirement     that,  prior   to the employment of an individual       as
          an expert,   positive   determination    be made and documented in the
          files   that the individual     actually  does possess superior    skill    in
          his field.

       --A statement     explaining   the special procedures          which the Civil
          Service Commission can employ to fill       urgent         needs for personnel
          or requirements     for persons with rare skills.

    The Secretary     should provide       also for periodic     administrative reviews
    of the records of consultants            and experts  employed by HEW agencies      to
    determine    whether applicable        laws and instructions     are being complied
    with.     (See p. 25.)

     The Chairman,    Civil   Service     Commission,should:

       --Amend the Commission's       agreement with HEW to require   HEW to make
          periodic administrative      reviews of its use of consultants    and ex-
          perts and to provide     for examination   of the results  by the Civil
          Service Commission.     (See p, 30.)

       --Amend the Commission's    instructions       to clarify   how different     two
          assignments   must be to justify     continued    or second-year     appoint-
          ments.    (See pp. 25 and 26.)

       --Consider      earnings    data and other statistical-sampling      methods, as
          appropriate,      in the Commission's    review of expert and consultant
          appointments      and should give special      consideration   to consultants
          and experts      earning    substantial sums.     (See P. 30.)

AGENCY ACTIONS AND lJNRE3OLVEDISSUES

     The Civil  Service Commission agreed with GAO's recommendations      and
     advised that appropriate   changes would be made in its instructions     and



                                               4
operating  practices.   Representatives  of HEW indicated   that GAO recom-
mendations would receive consideration     in planned changes in their
procedures  designed to improve HEW's control     over the use of consul-
tants and experts.    (See pp* 25 and '29.)




                              5
                             CHAPTER1

                           INTRODUCTION

       The General Accounting Office has reviewed the prac-
tices of the Department of Health, Education,        and Welfare in
employing consultants    and experts who were paid by the day
(per diem basis).     Consultants    or experts hired to perform
specific   tasks for specific     sums of money were not included
in the scope of our review.        The review was made because of
the increasing    use of consultants    and experts by agencies of
the Federal Government,       The scope of our review is described
on page 31.
        Our review included an evaluation       of the effectiveness
of the practices      followed by HEW in employing consultants
and experts on a per diem basis and a determination              of
whether the practices        conformed to laws and instructions
governing such employment.          Because the effectiveness       of
such procedures and practices         was more likely    to be tested
by cases in which consultants         and experts were employed on a
full-time    or nearly full-time      basis, our efforts,     for the
most part, were concentrated         on such cases,    We also consid-
ered the effectiveness        of procedures followed by the Civil
Service Commission in overseeing the Federal agencies8 use
of consultants    and experts.

REQUIREMENTSGOVERNINGEMPLQYMENT
(PF CQNSULTANTS AND EXPERTS

       Under the United States Code (5 U.S.C. 3109), HEW, along
with other Government agencies, has authority           to hire consul-
tants and experts without regard to Civil Service laws.
Such authority     is subject to a specific     authorization   in ap-
propriation    acts or other statutes.      This authorization    has
been included in HEW's annual appropriation          acts,

      Responsibility     for controlling   the employment of consul-
tants and experts by Government agencies is vested in the
Civil Service     Commission which has issued instructions    sup-
plementing the requirements       of the law cited above.




                                   6
      Under Civil Service instructions,         a distinction      is
drawn between consultants      and experts.      Consultants     are de-
fined as persons who serve an officer         or instrumentality       of
the Government in an advisory capacity.           Ordinarily,     a con-
sultant may be expert in a certain       field,    but he need not be
a specialist.     The main requirement      is that his ability       and
knowledge will make his advice of distinctive            value to an
agency.     An expert, on the other hand, must be a person hav-
ing unusual competence and skill       in his particular       field.
He must clearly     possess skills  superior to those usually pos-
sessed by persons with ordinary      competence in that activity.

       The distinction    between a consultant      and an expert is
of importance because, under Civil Service instructions,               con-
sultants   can only advise.       They are prohibited     specifically
from performing      or supervising   operating   functions.      There
is no such prohibition      on the employment of experts.

        Further,    5 U.S.C. 3109 and Civil Service instructions
limit    the authority     to hire both consultants          and experts to
situations       in which certain    specific     conditions    exist.   Some
of the more important        conditions     follow.

      1. The authority to hire a consultant    or expert may not
         be used if the job calls for full-time    continuing
         employment.

      2. If employment is on a temporary basis (over 130 days
         in a year), the consultant's       or expert's   tenure can-
         not exceed 1 year.    Full-time     employment under a
         succession of short-term      contracts   is also limited
         to 1 year.   (28 Comp. Gen, 670)
      3. If employment is on an intermittent        basis (not more
         than 130 days' work in a year), there is no limit to
         the consultant's   or expert's     tenure, but the work
         must be occasional   or irregular.

      HEWhas issued to its employees instructions     which do
not differ  materially from the instructions   issued by the
Civil Service Commission.




                                      7
SIGNIFICANCE OF REOUIREMENTSAPPLICABLE
TO EMPLOYMENT OF CONSTJLTANTS
                            AND EXPERTS
       Information    obtained from the Civil Service Commission
indicated     that the civil     service system had been created to
protect    the job tenure of Government employees when politi-
cal changes occurred and, in this way, to ensure that such
jobs would have enough stability           to attract career employees.
Those who choose Government service as a career have defi-
nite rights      and privileges    which afford them job stability
and an attractive       retirement    program.
        Equally important      is the function     of the Civil Service
Commission to ensure that all citizens             have equal opportu-
nity to obtain Government jobs and that those chosen are the
most qualified       persons available      for the positions        to be
filled.     For most administrative,         technical,     and professional
positions,     career    employees    are appointed      under   the General
Schedule.      Positions    under the General Schedule are graded
according to the difficulty           and responsibility       involved.
The grades are designated as GS grades which currently                   run
from GS-1 at a starting          salary of $4,326 to GS-18 at a sal-
ary of $36,000.

        Compliance with the laws and instructions     governing the
employment of consultants      and experts is deemed of particular
importance by the Civil Service Commission in maintaining
the integrity     of the civil  service system.   Individuals
hired as Federal Government employees under the civil          service
system generally     are chosen on a competitive   basis, and such
qualifications     as education and experience are considered.

        Unless the rules relating          to employment of consultants
and experts are followed,           consultants   and experts may be ap-
pointed to fill     positions       that should be filled     by regular
civil    service employees.         Such action not only tends to de-
stroy the morale of career Federal employees but also by-
passes the competitive        civil     service procedures established
to give every citizen       equal opportunity        to secure career
civil    service positions.        Moreover, when an employee is em-
ployed as a consultant        or an expert to fill       what should be a
regular Government position,            he does not get the job protec-
tion afforded by the civil           service system nor does he par-
ticipate     in the Government retirement         program.

                                     8
        Since the instructions     governing the hiring  of consul-
tants and experts were designed to protect both the Govern-
ment and its employees, it is important that these instruc-
tions be complied with.        If they are not, consultant   and ex-
pert appointments could be made to such an extent that the
effectiveness    of the civil     service system could be seriously
affected.
       Another effect of failing     to adhere      to the requirements
regarding    the hiring of consultants      and    experts is the ten-
dency to obscure the agencies'       status   in    relation  to person-
nelceilingsimposed      by congressional     or    executive  action.
                              CHAPTER2

                  REQUIREJ%EmSFOR EMPLOYMENT
                                           OF

             CONSULTANTSAND EXPERTSNOT FOLLOJJ'&D

       During the l5-month period ended April 5, 1969, 9,075
persons were qualified    by HEW for employment as consultants
or experts on a per diem basis.      Of these, over half, or
4,671, received no compensation and thus either were not
used by HEW or rendered services without compensation,         Of
the remainder, 3,697 received less than $1,000 each, or a
total of about $1 million,    and the remaining 707 received
a total of about $2 million.     A listing    of the number of
consultants   in various pay categories    for the 15-month pe-
riod follows.

                  Pay category                  Number

              No compensation                    4,671
              $      1 to $    999               3,697
                1,000 to    4,999                   575
                5,000 to    9,999                    91
               10,000 to 14,999                      33
               15,000 or more                         8

                   Total                          9,075


        We selected for review 10 cases in which the consul-
tant or expert had received what appeared to be full-time
or nearly full-time        compensation during the 15-month period
or in which the consultant         or expert had been converted to
civil    service status during this period, after receiving
full-time     or near full-time     compensation prior to being
converted.      In making our selection,      we concentrated  on the
consultants     and experts that received the highest total
compensation and those that ultimately          became regular Gov-
ernment employees.         Thus the 10 cases included seven of the
55 instances      in which persons who worked as consultants      or
experts during all or part of the period of our review be-
came full-time      regular employees of HEW.



                                 10
  .


      In eight of the 10 selected cases, the evidence which
we compiled indicated    that HEWhad not complied with one or
more of the requirements     for employment of consultants or
experts.    We found that:    '

      --Six persons employed as consultants    were engaged in
         work which we believe was more operational      than ad-
         visory,  despite the Commission's instructions      pro-
         hibiting  consultants from performing   operational
         duties.

      --Five persons employed as consultants      and/or experts
         occupied what the record indicated   were full-time
         continuing  positions, although the instructions      re-
         quired that full-time  continuing  positions   be filled
         with regular Government employees.

      --Two persons were employed as experts,    although their
         personnel files contained no evidence that they pos-
         sessed the superior  skills.required for such appoint-
         ments.

      --Three persons were employed as consultants     or experts
         longer than was permitted under the instructions.

       Although the appointments     of eight of the 10 consultants
or experts were improper in one respect or another,          our re-
view of the files    indicated   that all the consultants     and ex-
perts had performed valuable       services for the Government
during their periods of employment.         Therefore we are not
questioning    their competence br diligence      but instead we are
questioning    their appointments' compliance with employment
requirements.

     A listing   of the 10 consultants'   and experts' periods
of employment and the pay that they received is presented
in the appendix.    Details of our findings   follow.




                                 11
CONSULTANTSUSED TO PERFORM
OPERATINGFUNCTIONS

       Civil Service instructions     prohibit   the hiring of con-
sultants    and experts for performing regular operating duties.
Of the 10 persons included in our sample, eight were em-
ployed as consultants      (one of the eight was appointed as a
consultant    and later as an expert).       The information    that
we obtained on the duties of six of the eight consultants
indicated    that they had performed operating       functions,   de-
spite the specific     prohibition  in Civil Service instructions
against consultants     performing  operating    functions.     A
brief description     of the work done by these six consultants
is presented below.
     Consultant    1 did work involved in programming a com-
     puter to solve medical care problems.       The HEW em-
     ployee to whom she reported stated that the consultant
     was a regular employee in all respects and that her
     duties were necessary in the day-to-day      operations of
     his division.      He also stated that it was more expedi-
     ent for the consultant      to both analyze and do the work,
     rather than advise someone else on how to do the work
     after analyzing     the data.

     Consultant 2 worked on a task force studying prescrip-
     tion drugs.   The director   of the division which em-
     ployed him acknowledged that his duties were opera-
     tional rather than advisory.

     Consultant  3 worked as a consultant    during fiscal    year
     1967 and as an expert during fiscal     year 1968 until his
     appointment as a GS-14 on March 24, 1968. He partici-
     pated in community organization     and program-planning
     activities  relating   to the development of programs for
     older persons and in the administration      of a new
     formula grant program for older Americans.       His supervi-
     sor informed us that the regular Government position
     assumed by this individual    was created in 1965 and that
     his period of employment in the agency as a consultant
     had provided him with the necessary experience to qual-
     ify for this position.     He added that the difference
     between the duties performed by this individual       as a
     consultant  and those performed by him as a regular

                                 12
     Government employee was very small and that the duties
     performed by the individual    as a consultant were, in
     his opinion, no different   from those performed by reg-
     ular Government employees on the staff in similar    ca-
     pacities.

     Consultant 4 was initially    used to help establish    an
     HEWmagazine.     We were informed that this work had
     lasted only a few months of the year during which he
     was employed as a consultant.     During the year he also
     wrote speeches, rendered other editorial    services,     and
     coordinated  selected public information   projects   in-
     volving two or more agencies of HEW. We were told
     that his duties were the same after he was employed
     as a regular Government employee as they had been
     during his year as a consultant.

     Consultant 5 analyzed costs under the Medicare program.
     She informed us that a regular employee previously       had
     done the work that she did as a consultant      and that
     she was developing    and analyzing, not advising.    She
     stated that her duties were operational    and an integral
     part of the division.
     Consultant 6's duties included preparing    indexes for,
     and reviewing supplements to, various manuals to en-
     sure correctness.   The consultant  informed us that
     these duties were necessary to the operation     of the
     division  for which he worked.

      All of these six consultants  ultimately were hired     as
regular Government employees, and we were informed that       they
had continued   to do the same or very similar work.

      In commenting to us on these cases, HEW stated that in
its view the appointments     of the six persons as consultants
represented  a proper use of the authority     under which the
appointments had been made. It stated, however, that in
some cases the functions     had changed and that the persons
appointed as consultants     perhaps should have been called
experts as these terms were defined by the Civil Service
Commission.    HEWstated also that the failure      to change the
designation  from consultant     to expert did not make the ap-
pointments  improper.

                                13
      We do not agree with HEN's position.        We agree that the
appointment documents indicate       that the duties of each of
the six persons could be consulting       duties.   We learned
from interviews     with the persons involved,    however, that for
the most part these documents had not fully or adequately
described the duties that these consultants        were to actually
perform.    In four cases the documents indicated       that HE.34had
considered    appointing   the persons either as regular Govern-
ment employees or as consultants       but had decided to hire
them as consultants.      We were informed by HEWofficials
that the reasons for hiring      these four persons as consultants
instead of as regular Government employees were as follows:
      --;   Tn two cases, the persons expressed     a preference   for
            appointments as consultants.
      --    In two cases the persons did not meet Civil Service
            requirements  for the positions     as GS employees; one
            had not passed the Federal entrance examination and
            the other lacked sufficient     years of experience.

 In the fifth    case, the person was hired as a consultant          to
fill  a position    formerly filled     by a regular Government em-
ployee.     So far as we could determine,       the appointment was
made without any consideration         having been given to employ-
ing this person as a regular Government employee instead of
as a consultant.       In the remaining case the person was hired
to do work that appeared to be more operational            than that
done by a consultant      but actually     did consultant   work for a
few months before assuming the operational           duties for which
he had been hired,

        Moreover, we do not agree with HEW that these six per-
sons should have been considered to be experts instead of
consultants     and that the appointments      therefore    were not
improper.     Civil Service instructions       do not permit changing
the designations     of persons from consultants         to experts at
will.     The requirements     for consultants    and experts are dif-
ferent.     Unlike consultants,      experts must be persons pos-
sessing superior      skills   in their professions.       As we inter-
pret this requirement,       the Civil Service is attempting        to
limit the hiring of experts who may engage in operating
functions    and who may compete with civil        service employees


                                   14
to those individuals clearly of superior ability whom the
Government might not be able to employ as permanent employ-
ees.
        The HEWpersonnel files       for the six consultants   indi-
cated that they were skilled         professional persons but did
not show that they possessed superior skills          or otherwise
qualified     as experts.     Therefore we do not believe that HEW
has properly      applied the Civil Service requirements      which
state that, to qualify        as an expert, superior   skills  are
required.      Instead,   from HEW's comments we concluded that
HEW tended to consider anyone as an expert if he possessed
a skill    that HEW employees did not possess.
CONSULTANTSAND EXPERTSEMPLOYEDTO,FILL
FULL-TIME CONTINUINGPOSITIONS

      Section 3109, Title 5, United States Code, restricts
the employment of consultants     and experts to s?n intermit-
tent or a temporary basis.     Inherent in this restriction       is
a prohibition   on the hiring of experts and consultants
when the jobs to be performed call for full-time       continuing
employment.    As discussed below, we found considerable       evi-
dence that, of the persons included in our review, five who
were appointed as consultants    or experts had been hired to
fill positions   which were expected to be full-time     continu-
ing positions,

     Consultant   1's supervisor    informed us that repeated
     attempts had been made to induce her to accept a reg-
     ular GS position    but that she would accept employment
     only as a consultant.      After she 'had performed as a
     consultant   for a year, she accepted a permanent ap-
     pointment at the GS-14 level,        Her supervisor stated
     that the duties that she performed were necessary and
     important functions    in day-to-day    operations.  From
     the record it appears that the Social Security Admin-
     istration  fully intended to employ her as a full-time
     continuing  employee from the start of her employment.

     There was a regular Government position          available    at
     the GS-14 level that had been created in 1965 to which
     consultant-expert     3 was ultimately     appointed;    but, at
     the time that the position       was created, he did not
     qualify    under Civil Service requirements       because he
     lacked sufficient     years of experience.       Consultant-
     expert 3's assignment was to help devise and adminis-
     ter a new program, which there was no reason to be-
     lieve would not be a continuing        one, for which
     consultant-expert     3's services would be needed indefi-
     nitely.

     Upon completion of his assignment to work on the devel-
     opment of a general-interest        magazine, consultant   4,
     still    as a consultant,     assumed the duties of a former
     regular employee, which involved writing          speeches and
     editorial    services.     After performing   for about 1 year
     as a consultant,       he assumed a regular position

                                 16
.


    involving   the performance of the same duties as those
    performed throughout most of the period that he had
    served as a consultant.     Evidence in his personnel
    file indicated   that the position     occupied by this in-
    dividual  was a full-time   continuing    position rather
    than a temporary one.

    We were informed that consultant           6 had been employed
    by the Social Security Administration            to update and
    prepare indexes for manuals and to review supplements
    to various manuals.          He was employed as a consultant
    for nearly 3 consecutive         years within the same agency.
    Administration      representatives     informed us that per-
    sonnel ceilings      had not been a compelling       factor in
    not offering      consultant    6 a GS position.     They stated
    that the compelling factor had been that they could
    not hire him at the GS-11 or GS-12 level because he
    had not qualified       through the Civil Service Commission
    for an appointment at those levels.            Consultant   6 was
    appointed to a GS-12 position          after he had passed the
    necessary Civil Service Connnission examination and
    after he had been employed on a full-time            basis as a
    consultant     for about 3 years.

    Expert 8 was hired to help develop and participate             in
    a new program for the Social Security Administration.
    Administration    officials    informed us that initially
    they had attempted to employ him in a GS position             but
    that he could not qualify        at the proper level.      l-hey
    stated that they felt that his position         had justified
    a GS-12 rating.       Expert 8 was on the Civil Service
    register    for positions    at the GS-13 level and above,
    but we were informed that he had not been on the reg-
    ister for GS-12's and that, at the time of 'his appoint-
    ment, the appropriate       examination   for a GS-12 rating
    was not being offered by the Civil Service Commission.
    We were also informed that expert 8 subsequently             had
    passed the examination and that, at the conclusion             of
    his appointment as an expert, he had been given a
    GS-12 position    doing essentially     the same work.       From
    the record there is little        doubt that the Administra-
    tion intended to hire expert 8 as a permanent full-
    time employee and that the use of the expert author-
     ity to appoint him was inappropriate.

                                17
        We believe that HEWneeds to establish       more stringent
controls    to prevent the filling   of full-time    positions     with
consultants     and experts.   HEW advised us that its authority
for appointing     experts had been used in two of the cases
 (experts 3 and 8) because qualified      persons had been ur-
gently needed to staff new programs and because HEWhad
been blocked by Civil Service instructions        from hiring the
persons selected.       So far as we could ascertain,      however,
HEWdid not take advantage of special procedures whic'h the
Civil Service Commission informed us were available            for
filling   urgent needs for personnel or for offering         higher
salaries    to persons with rare skills.




                                  18
LENGTHOF EXPLQYWNT LONGERTHAN PERMITTED
BY LAW ANB APPLICABLE INSTRUCTIONS
      Civil Service instructions       state that consultants   and
experts employed for not more than 130 working days a year
are intermittent     employees and can be employed indefinitely
in that capacity.      If, however, a consultant     or an expert
works for more than 130 days a year, he is considered a
temporary employee and, as such, cannot work for more than
1 year.1     In three of the cases that we reviewed, the evi-
dence that we obtained indicated        that these requirements
had not been followed.       Cur findings    in these three cases
are presented below.
     Consultant-expert    3 was employed full time for 21 con-
     secutive months by the Social and Rehabilitation       Ser-
     vice.    During that time he was paid for 460 days and
     earned about $25,000.     At the conclusion   of the 21-
     month period, he accepted a GS-14 position      with the
     Service, and an HEWofficial     advised us that he had
     continued to perform the same duties as those per-
     formed while he had been a consultant-expert.
      Consultant 6 worked full time for the Social Security
      Administration from January 30, 1967, until his ap-
      pointment as a GS-12 on January 28, 1970. During the
      3 years he was paid for 760 days and earned about
      $40,000.
      Expert 7 worked for about 3 weeks longer than a year
      because of an administrative  oversight,  at which time
      he took a position  with a non-Government organization.
       The record indicates    that HEWwanted to hire the indi-
viduals as permanent GS employees, except in the case of
expert 7 whose too lengthy employment was attributed        to ad-
ministrative    oversight,   but could not because the individ-
uals lacked sufficient      experience to qualify  under Civil
Service requirements,      had not passed the Civil Service en-
trance examination,      or did not qualify  for similar reasons.

l-A temporary consultant     who has served for a year may be
  rehired as an intermittent     consultant but, as such,.cannot
  work for more than 130 days a year.


                                 19
      In commenting upon our findings,  HEWacknowledged
that expert 7 had been employed for a few weeks too long
but indicated   that it considered the other two cases to be
appropriate   because of changes in the positions occupied by
the consultants   or experts.

        We believe that the changes in the duties performed
by the two individuals          were not extensive enough to warrant
renewing their appointments.              Admittedly,    the law and Civil
Service instructions         are not clear on this point,         A strict
interpretation       of the law would prohibit         an agency from
rehiring     a temporary consultant          or expert after he had
worked for a year, regardless             of a change in duties,     except
on an intermittent        basis (not more than 130 days' employ-
ment a year).        A liberal     interpretation,     in our view, could
permit reappointments          provided that the duties changed
enough to constitute         a change in the individual's        position.
In the two cases mentioned above, however, the changes were
relatively     slight and the persons involved worked in the
same general capacities,in            the same agencies, in the same
locations,     and on the same or closely related programs
after their reappointments.

       To permit slight changes in duties to justify        reap-
pointments of consultants      or experts is to countermand the
 law itself.     In this respect most jobs, including     those to
which GS employees are assigned, change slightly        from year
to year.     Thus to permit small changes in job requirements
to justify    reappointments   of consultants  or experts is to
make it possible to reappoint      them continually   and retain
them indefinitely.

QUALIFICATIONS OF EXPERTS
NOT DOCUMENTED

        Civil Service instructions     require that an agency's
files contain a standard application          form for Government
employment or another written       statement showing the quali-
fications     and background of the individual       which satisfy
requirements     to employ him as an expert.        To qualify   as an
expert under Civil Service instructions,           an individual   must
possess skills      superior to those possessed by persons with
ordinary     competence in that activity.        In the case of the
three persons employed as experts,        HEWfiles contained


                                  20
documents evidencing    their past work    history,   but the docu-
ments for two of the persons--experts        3 and 8--did not show
that they possessed superior     skills   in their particular
fields  of endeavor.    They had skills    which HEW lacked, but
their expertise   in their fields was     not established.

     The files     indicated   that expert 3 had experience work-
     ing with the aged, a skill which none of HEW's regular
     employees possessed and which HEWneeded.          Although
     the files     showed that expert 3 was a competent indi-
     vidual in his field,        they did not show that he possessed
     superior     skills   in this field.   Moreover, his rela-
     tively    few years of experience     in the area of work in-
     volved would seem to raise doubt that he was an expert.

     According to Social Security Administration       personnel,
     expert 8 was hired because he had experience       in insur-
     ance claims --a type of experience which the Administra-
     tion lacked.    Expert 8 described his duties as princi-
     pally involving    the negotiation   of contracts  and
     leases with Blue Cross associations      and plans through-
     out the country.      Although his file indicated    that he
     was competent, it did not show that he possessed supe-
     rior skill   in his field.

       In commenting on these cases, HEW acknowledged that
there may be a question of whether the appointments     of ex-
perts 3 and 8 were appropriate.     It stated, however, that
it considered   their appointments  necessary because their
services were urgently   needed.

       We believe that HEWdid not comply with Civil Service
instructions     in these cases because it did not document, as
required,    that these individuals  were in fact experts as de-
fined by Civil Service instructions.       The fact that HEWmay
have needed these persons for urgent work would not seem to
relieve    HEWof the responsibility    to comply wifh Civil Ser-
vice instructions.




                               21
AGENCYCOMMENTS
             AND OUR EVALUATION

        HEM stated that it believed that, in each of the 10
cases, the initial      appointment was proper.        HEW also pointed
out that in the past decade it had been given responsibil-
ity for many new programs and that these programs often had
been of an experimental        or innovative   nature.     HEW stated
that in many cases the knowledge and expertise             of the per-
sons in the existing      work force had not been adequate to
fulfill     the new responsibilities      and that, to meet these re-
sponsibilities,      HEWhad made increasing       use of consultants
and experts, many of whom were not available            for, or were
not interested     in, full-time     permanent employment.      HEW also
pointed out that the great majority          of its consultants     and
experts had been employed for only a few days a year.

      HEW stated that, at the time of the employment of a
consultant    or an expert,    it was not always possible      to de-
termine when the need for his services would terminate and
that in very few cases a program official,         because of the
pressures in carrying      out assigned responsibilities,       would
inadvertently    use a consultant     or an expert in a way not
contemplated    at the time of his appointment.         HEWpointed
out that this was not done deliberately         to circumvent Civil
Service and classification       laws, but reflected,     on the part
of program officials,      a lack of awareness of the significance
of these laws and a failure        to recognize the significance      of
an evolutionary    change in the nature of the services per-
formed by consultants      and experts.

        HEW stated also that it could find no evidence of in-
tent to circumvent the usual employment and pay laws and
that it did not believe that the appointments represented            a
violation    of its appointment authority.        HEW stated further
that some of the actions represented         a lack of proper admin-
istrative    controls    and that steps had been taken to remedy
this.     According to HEW, each of its agencies is developing
new procedures to provide for more careful          reviews of ini-
tial appointments       of experts and consultants,     checks on the
time worked by them, and periodic        reviews of the duties that
they are performing.        HEW stated that it now had the capabil-
ity, through its automated payroll        and personnel data system,
to notify    appointing    authorities  on a regular basis of the
number of days that consultants        or experts performed ser-
vices.
                                   22
       We concur in HEW's position    that new programs have in-
creased its needs for knowledge and expertise        and that this
has led to increased use of consultants       and experts.     As we
explained earlier,    our review included those cases in which
consultants    and experts had been compensated on a full-time
or nearly full-time    basis because we felt that such cases
would best test the effectiveness       of the administrative      con-
trols over the use of the authority       to appoint consultants
and experts.
       We concluded that many of the persons who hired these
consultants    and experts were not sufficiently     familiar    with
the requirements.     Moreover, by its connnents HEW indicates
that it does not differentiate      between consultants     and ex-
perts, although there is an important distinction          as pre-
viously explained.      In the cases that we reviewed, we be-
lieve that the persons who made the appointments often did
not have a clear understanding      of Civil Service instruc-
tions governing the employment of consultants        and experts.
We believe also that, in some cases, when a new employee
was needed, he was hired as a consultant        or expert because
the use of this hiring authority      was considered more expe-
dient than the procedure required for hiring        a GS employee.
      We believe that, because there appears to be some lack
of understanding    of the requirements,   the measures that HEW
proposes to take should help to provide appropriate       correc-
tive action.     We believe,  however, that the measures could be
made more effective     if supplemented by certain additional
measures mentioned below.
CONCLUSIONS

      Because each of the 10 consultants   and experts in-
cluded in our sample received full-time    or nearly full-time
pay, the group could not be considered as typical,     nor could
our findings  in these 10 cases be considered as representa-
tive of what would be found if a review were made of all
HEW's appointments of consultants    and experts.   These cases
have shown, however, that HEW's practices    for controlling   the
hiring and use of consultants   and experts are not effective
enough to ensure that laws and Civil Service instructions
governing the employment of consultants    and experts will be
followed.


                                   23
       Therefore we believe that a more complete review of
HEW's appointments of consultants       and experts likely    would
reveal a significant       number of cases in which the appoint-
ments did not comply with all the laws and Civil Service in-
structions    governing such appointments.     We expect that this
would be especially      likely  for the 48 additional    cases in
which individuals      employed as consultants    or experts were
subsequently    appointed to regular Government positions.

       To advise HEW and the Civil Service Commission of our
findings   at an early date, we are reporting   our findings on
the 10 cases without doing the additional     work necessary to
determine the full scope of the problem.




                                24
RECOMMENDATIOtiS
               ;rO THE SECRETARYOF
HEALTH, EDUCATION. AND WELFARE

       We recommend that the Secretary of HEW issue addi-
tional   instructions    to HEW agencies, which will clarify
certain matters relating      to the appointment and use of con-
sultants    and experts.    Such instructions   should include:
     --A clear explanation   of the distinction      between con-
        sultants and experts and of the types       of positions
        to which each can be appointed.

     --A statement explaining     that consultants     and experts
        are not to hold full-time     continuing   positions.

     --A requirement    that, prior to the employment of an
        individual   as an expert , positive   determination     be
        made and documented in the files     that the individual
        actually   does possess superior skill     in his field.

     --A statement explaining   the special procedures which
        the Civil Service Commission can employ to fill    ur-
        gent needs for personnel or requirements   for persons
        with rare skills.

     We recommend also that the Secretary provide for peri-
odic administrative  reviews of the records of consultants
and experts employed by HEW agencies, to determine whether
laws and Civil Service instructions  are being complied with.



      HEW representatives     indicated   that our recommendations
would receive consideration       in planned changes in their
procedures designed to improve HEW's control over the use
of consultants   and experts.
RECOMMENDATIONS TO THE CHAIRMAN
OF THE CIVIL SERVICE COMMISSION
       We recommend that the Chairman, Civil Service Commis-
sion, amend Civil Service instructions    to clarify     how dif-
ferent two assignments must be to justify    considering     a con-
sultant   or expert as having a new appointment,     rather than
a continued or second-year appointment to the same position.

                                 25
       Although Civil Service instructions       are silent   on this
point,    it has been established,    in general,   that a temporary
consultant    or expert may be reappointed     after a year but
only to a different     position   (28 Comp. Gen. 670).     It is
not clear, however, how extensive a change in duties must
be to constitute    a new position.




                                26
                              CHAPTER3

             NEED FOR IMPROVEMENTIN MONITORINGOF

              CONSULTANTAND EXPERTAPPOINTMENTS

      The Civil Service Commission is responsible        for ap-
proving the appointments of consultants       and experts by Gov-
ernment agencies.     To avoid requiring    agencies to submit
each case for approval prior to appointment,         the Commission
enters into written    agreements with agencies, whereby the
agencies may appoint consultants      and experts without the
Commission's specific    prior authorization;     however, after
the appointments are made, they are subject to review for
conformity  with applicable    laws and regulations,      HEW has
such an agreement with the Commission.
      Prior to 1967 the Civil Service Commission reviewed
the appointments     of currently    employed consultants     and ex-
perts on a sampling basis as a part of its periodic            general
inspections    of the Federal departments and agencies.           In
1967, to improve the efficiency        of these reviews,     the Com-
mission's    personnel management specialists      began reviewing
all the appointments      of experts and consultants,        From
April 1967 through December 1968, such reviews covered ap-
proximately    90 percent of all consultants      and experts em-
ployed during this period.        Although procedural     errors were
found, relatively     few instances were found of improper use
of authority     to appoint experts and consultants.

       In view of the results    of its reviews in 1967 and 1968,
the Commission decided that the intensive           review it had been
making was not a profitable      use of its limited       resources,
and on February 27, 1969, it adopted a policy of reviewing
agency appointment action reports.         Under this system each
agency having an agreement with the Commission is required
to submit to the Commission a quarterly          report supplying     in-
formation on all new appointments       of consultants       and experts
involving    more than 30 calendar days and on the reappoint-
ments of all consultants      and experts whose service years
ended during the quarter.       The Commission then makes a
loo-percent    audit which consists    primarily      of a review of
appointment documentation.       The Commission, however, retains
the right to make onsite inspections.

                                  27
       In HEW's case we question whether the Commission's
procedure is as effective      as might be devised to deal with
this problem.    As explained in chapter 2, over half, or
4,671,of   the persons qualified    by HEW for employment as con-
sultants   and experts during the 15-month period received no
compensation during that period.         To the extent that post-
audits are made of the records of consultants          or experts
who are appointed but who receive no compensation,           the ef-
fort will serve little     purpose.    In addition,    we found that,
in the 10 cases reviewed in detail,        the written    description
of the position    often had not accurately      described the ac-
tual job that the person was performing.          Thus, a review
of the appointment documents would not always provide accu-
rate information    on the position    that the consultant      or ex-
pert was hired to fill.

         For example, the appointment document for     consultant      5
stated     that her duties would be as follows:

         "S Pecial project assignments in health insurance
         research and translation   and interpretation of
         documents necessary for comparative studies."

The consultant    subsequently   described   her primary   responsi-
bilities  as follows:

     qq*** It is my responsibility   to provide current
     statistics,  tables,  charts, graphs depicting
     trends in medical care costs.     **Jr I am respon-
     sible for regular reports on changes in medical
     care prices as well as articles     and memoranda in
     the general field.

     Iq*** A second area of responsibility is the
     study of reasonable charges as defined under the
     Supplementary Medical Insurance Program."

      Similarly,    expert 8's appointment folder indicated     that
he was to develop standards and criteria       to evaluate the
performance of insurance carriers       and to conduct studies of
contracts   to determine whether they were consistent      with
the spirit    of the health insurance law. Expert 8 described
his duties as negotiating     contracts   with insurance carriers
and resolving    questions and problem areas involving     such
contracts.

                                 28
       To help ensure that its instructions           governing the em-
ployment of consultants        and experts are being complied with,
we believe that the Civil Service Commission, in its evalua-
tion of appointments,       should concentrate       more on those con-
sultants   and experts who receive sizable sums of money for
their services.      It is these consultants         and experts who
are most apt to be improperly         occupying full-time        continuing
positions   or to be employed longer than is permitted,                More-
over, we believe that consultants          receiving    large sums of
money are more apt to be performing operating              functions
than those receiving      smaller sums sporadically,          since an
operating   function    usually   requires employment on a more or
less continual     basis.
      As indicated previously,   only 132, or about l-1/2 per-
cent, of the consultants    and experts employed by HEW during
the 15-month period covered by our review earned $5,000 or
more, and 707 earned $1,000 or more.

      We believe that, in addition,to   evaluating the appoint-
ments of consultants   and experts earning large sums, the
Civil Service Commission should review, on a statistical-
sampling basis, appointments of others earning smaller sums.
CIVIL SERVICE COMMISSIONCOMMENTS
       The Director   of the Commission's Bureau of Personnel
Management Evaluation,      in a letter    dated September 11, 1970,
advised us that the procedure for loo-percent               review of
agency appointment reports was a trial           procedure and that,
although under this procedure there had been some success,
the Bureau was not satisfied        with it.     The Director       advised
us also that during the past year much thought had been de-
voted to devising a more effective         and efficient        procedure,
The result    of this effort,     the Director     stated, was a revi-
sion to chapter 304 of the Federal Personnel Manual, which
was then in the final stages of completion              and nearing pub-
lication.     The Director    advised us further        that discussions
with our representatives       had been helpful       in formulating
those new procedures , particularly        with respect to using
earnings as a means of identifying         situations       for detailed
scrutiny.



                                     29
RECOMMENDATIONSTO THE CHAIRMAN
OF THE CIVIL SERVICE COMMISSION

       We recommend that the Chairman, Civil Service Commis-
sion, in revising     the Federal Personnel Manual and the Com-
mission's    system for monitoring  agency appointments  of con-
sultants   and experts,   consider:

     --Amending the agreement with HEW, under which HEW de-
        rives its authority    to appoint consultants   and ex-
        perts, to require HEW to make periodic      administra-
        tive reviews of the use of consultants      and experts by
        its various constituent    agencies and to provide for
        the Commission's examination of the results       of such
        reviews.

     --Providing    for consideration  of data on payments
        to consultants   and experts and other statistical-
        sampling methods, as appropriate,     in the Commissionqs
        review of appointments of consultants      and experts
        and for special consideration    of those consultants
        and experts earning substantial    sums (perhaps $5,000
        or more annually).




                               30
                           CHAPTER4

                       SCOPEOF REVIEW

      We examined personnel and pay records for consultants
and experts employed by HEW. We reviewed pertinent        laws
and instructions     issued by the Civil Service Commission and
HEW and decisions      of the Comptroller General of the United
States.    In addition,    we interviewed officials of the Civil
Service Commission and HEW and the consultants      and experts
selected for review and their supervisors.




                                 31
APPENDIX
                                                          EMPLOYMENTDATA ON CONSULTANTSAND EXPERTS
                                                                     INCLUDED IN GAO REVIEW



                                                             Number of
                                                           days for which
P                                                            consultant
9                                                            or expert          Gross
    Number Employed as            Period    employed          was paid         earnings            Employing      ags
        1       Consultant   7-12-67 to         7-11-68              240             $18,000   Social Security          Admin-
                                                                                                 istration
        2       Consultant   7- 3-67 to         6-22-68              259              15,540   Social Security          Admin-
                                                                                                 istration
        3       Consultant   6-20-66 to         6-30-67        270          14,254             Social     and Rehabilita-
                Expert       7- 3-67 to         3-23-68       -190 k60      11,180    25,434     tion     Service
        4       Consultant   2-27-67 to         2- 9-68              247              19,000   Office of the Secre-
                                                                                                  tary, HEW
        5       Consultant   l-    3-67 to 12-29-67'                 260              13,000   Social Security       Admin-
                                                                                                 istration
        6       Consultant   l-30-67       to   l-27-68        260          12,873
                             l-28-68       to   l-22-69        250          13,438             Social Security       Admin-
                             l-28-69       to   l-27-70       -250   760    13,860   40,171      istration
        7       Expert       2-10-68 to         3- 1-69              263              22,000   Office    of the Secre-
                                                                                                 tary,    HEW
        8       Expert       5- 8-67 to         4-21-68              262              11,000   Social Security       Admin-
                                                                                                 istration
       9       Consultant    3-14-66 to         7-25-70       (note a)         (note a)        Nattonal     Institutes
                                                                                                 Health

      10       Consultant    5- 8-66 to         6- 4-67               78               5,300   Public    Health    Service
                             6- 5-67 to         6- 4-68              209              14,630
                             8- 6-68 to         4- 5-69             121              9,075     Various    HEW agencies
                             4- 6-69 to         7-25-70       (note a)         (note a)


    aIntermittent    (no more than 130 days a year)          employee.