oversight

Federal Employees' Compensation Act: Status of Previously Identified Management Challenges

Published by the Government Accountability Office on 2012-03-21.

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

United States Government Accountability Office
Washington, DC 20548




              March 21, 2012

              Congressional Committees

              Subject: Federal Employees’ Compensation Act: Status of Previously Identified Management
              Challenges

              In 2010, the Department of Labor’s (Labor) Federal Employees’ Compensation Act (FECA) 1
              program paid approximately $2.8 billion in total cash and medical benefits to federal employees
              who sustained injuries or illnesses while performing federal duties. Because the FECA
              program’s benefit structure has not been significantly amended in 38 years, policymakers and
              others have raised concerns related to its efficiency and efficacy. As a result, there have been a
              number of legislative proposals to manage program costs by changing the benefit type or
              amount that employees receive at retirement age and to enact procedures that may enhance
              program administration. Federal agencies’ Inspectors General (IGs) have identified long-
              standing programmatic deficiencies at the department and agency level that may make the
              program vulnerable to fraud and abuse. 2 For this reason, we were asked to review the FECA
              program’s management challenges and determine the extent to which actions have been taken
              to address them.

              To determine the program’s identified management challenges, we reviewed Labor’s
              performance and accountability reports from 2004 to 2010. 3 Using the reports’ themes for the
              FECA program as a framework, we performed a content analysis of 65 reports, issued from
              1994 to 2011—the majority of these reports were issued from 2004 to 2011—by federal IGs and
              others 4 who reviewed the FECA program. We obtained the status for all recommendations in
              these reports from the IGs and conducted more in-depth interviews with officials from Labor and




              1
              Codified at 5 U.S.C. § 8101 et seq.
              2
               We recently reported that although departments and agencies have instituted a variety of promising practices to limit
              fraud, several vulnerabilities still exist. See GAO, Federal Employees’ Compensation Act: Preliminary Observations
              on Fraud Control, GAO-12-402, (Washington, D.C.: Jan. 25, 2012).
              3
               We reviewed the Department of Labor’s 2010 equivalents for its performance and accountability report, the Agency
              Financial Report and its Annual Accountability Report.
              4
               These reports were issued by federal agency IGs, GAO, and consultants writing on behalf of departments and
              federal agencies.




              Page 1                                                            GAO-12-508R Federal Employees’ Compensation Act
select employing agencies to clarify certain recommendations.5 Enclosure I contains a detailed
description of our scope and methodology.

We conducted this performance audit from February 2012 to March 2012 in accordance with
generally accepted government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit objectives.

Background
The Division of Federal Employees’ Compensation in the Office of Workers’ Compensation
Programs within the Labor administers the FECA program, which provides cash benefits and
medical benefits to federal employees who suffer temporary or permanent disabilities resulting
from work-related injuries or diseases. After Labor adjudicates and approves claims submitted
by employees who are injured in the performance of their federal duties, Labor manages
distribution of program benefits in the form of compensation for lost wages, schedule awards
(i.e., other payments made for the loss of, or loss of use of, a body part or function), and
medical benefits. Labor provides these benefit payments from a compensation fund that federal
departments and agencies pay into with operating appropriations.6

To make benefit determinations, claims examiners at Labor are responsible for proactively
managing cases for beneficiaries until the workers either return to work, are found to be entitled
to reduced compensation when they are determined to have a wage-earning capacity, or are
determined to have no reemployment potential for an indefinite period of time. FECA does not
limit total benefits received by the age of the recipient.7

When managing claims, Labor places injured workers, or beneficiaries, into two categories—
claims receiving medical benefits only and claims receiving wage-loss benefits. For the wage-
loss category, Labor has 2 subcategories—long-term rolls or short-term rolls—based on how
long a beneficiary has received benefits. Long-term beneficiaries are those who have been
receiving FECA wage-loss compensation for 90 days or longer. Conversely, short-term
beneficiaries are those who have been receiving FECA wage-loss compensation for less than
90 days.8 Regardless of how long a beneficiary remains on the rolls, eligible workers with
temporary or permanent total disabilities who have no spouse or dependent generally receive
wage--loss compensation equal to 662/3 percent of their salary at injury. Those with a spouse or
dependent receive 75 percent. However, based on various eligibility factors, the amount of


5
 We determined whether recommendations were open, closed and implemented, or closed and not implemented, for
example.
6
 Workers’ compensation costs are assigned to employing agencies annually at the end of the fiscal accounting period
for the program, which runs from July to June. Each year, Labor furnishes each agency with a “chargeback report”
which is a statement of payments made from the fund that accounts for injuries to federal employees. The agencies
include these amounts in their budget requests to Congress. The sums appropriated are deposited into the fund.
7
 The compensation benefits paid to injured workers are not subject to federal taxes and are capped at 75 percent of
the monthly pay of the maximum rate of basic pay for GS-15, step 10. Benefits are subject to an annual cost-of-living
adjustment.
8
 Labor refers to beneficiaries on the rolls 90 days or longer as being on the periodic rolls and less than 90 days as
daily roll beneficiaries. For the purposes of the report, we will refer to periodic rolls beneficiaries as long-term
beneficiaries and daily roll beneficiaries as short-term beneficiaries.




Page 2                                                              GAO-12-508R Federal Employees’ Compensation Act
wage-loss compensation can vary widely. Additionally, an employee may also receive a
schedule award payment even if he or she has returned to full-time work.
One goal of the program is to return beneficiaries to work as soon as possible.9 In order to
continue receiving benefits, injured workers are required to provide each year10 for Labor’s
review documentation that supports their continued disability and benefit level. Labor also
provides vocational rehabilitation11 for those ready to return to work and/or refers injured
workers for second medical opinions to assess continuing disability.

Employing departments and agencies play a critical role in assisting Labor’s management of the
claims for injured workers. For example, as part of their responsibilities, departments and
agencies are to notify employees of their rights under FECA, initiate the FECA claim, and
provide timely notification of the claim to Labor. In this capacity, departments and agencies
serve as the program’s first point of contact with the injured worker. Labor does not usually
assume management of an injured worker’s case until the continuation of pay period has
passed.12 Program regulations allow agencies to challenge an injured worker’s right to certain
benefits, such as continuation of pay, and also to contest facts presented in an injured worker’s
claim for FECA benefits. Once a claim has been accepted by Labor, agencies can no longer
challenge the validity of the claim, but, according to department officials, agencies can submit
additional evidence for consideration by Labor. In this capacity, departments and agencies can
assist Labor in its efforts to return beneficiaries to work when Labor determines that the worker
is able to work.

Agency duties include the following:
    ensuring that agency personnel, such as supervisors, understand their responsibilities under
     FECA;
    providing and tracking COP when employees are unable to work;
    assisting employees with their return to work as soon as possible;
    monitoring the medical status of injured employees to ensure they return to work; and,




9
  According to Labor officials, immediately after an injured worker reports a disability without a return to work date,
Labor places that beneficiary’s claim into its Quality Case Management (QCM) process which consists of a rigorous
series of disability interventions lasting 30 months or until disability ends, whichever is shorter. During this process,
Labor assigns a nurse who can accompany the beneficiary to doctor visits and works collaboratively with Labor’s
claim examiners and employing agency to facilitate a return to work. Nurses are automatically assigned for a 4 month
timeframe and can be extended up to 6 months by the claims examiner. If the original employing agency cannot re-
employ the injured worker or accommodate any physical restrictions resulting from the work injury, Labor may require
that the beneficiary undergo vocational rehabilitation. If no employment is secured during the QCM process, the
beneficiary’s claim then moves to the periodic roll management (PRM) process. Whether the case is in QCM or PRM,
Labor conducts annual reviews to determine continued entitlement.
10
 Labor also reviews documentation semiannually to verify a dependent’s status, including the continued
matriculation of students over 18 years of age.
11
  Labor’s Policy Manual states that only permanently disabled employees may participate in vocational rehabilitation
programs.
12
  If employees are unable to return to their duties as a result of the injury, they are generally entitled to up to 45 days
of continuation of pay (COP), which entails the agency continuing to pay the employee’s regular pay. COP is
authorized for traumatic injury but not for occupational illnesses or other diseases. If employees are still unable to
return to work at the end of the 45 days, they are entitled to begin receiving compensation for lost wages.




Page 3                                                               GAO-12-508R Federal Employees’ Compensation Act
•     ensuring that appropriate costs are charged to the agency by Labor, or verifying the
      accuracy of this process. 13


Results in Brief
Labor and IGs from employing departments and agencies have consistently reported similar
FECA program management challenges, such as oversight and information technology, and
have linked these to increased program costs through improper payments. For example, one IG
reported in 2007 that its department could not appropriately manage its long-term rolls and
contain improper payments because staff assigned to this task spent no more than 10 percent
of their time managing cases. Additionally, citing ongoing program weaknesses—mostly related
to oversight—IGs have reported avoidable costs at employing departments and agencies, which
one department reported were as high as $41 million in 2011. Above and beyond the actions
departments and agencies can take to address these challenges, some IGs have also reported
that legislative reform is necessary to better manage the program. In an effort to alleviate the
impact of management challenges, IGs collectively made over 200 recommendations since
1994, mainly to improve FECA’s oversight, and most of these recommendations have been
implemented.

Prior FECA Reports Have Identified Four Areas of Management Challenges
        Oversight
Beginning with its 2004 Performance and Accountability Report and every year since, Labor has
indicated that adequately overseeing the FECA program was one of its chief management
challenges. Specifically, Labor cited oversight difficulties such as verifying beneficiaries’
program eligibility, managing payments while balancing timeliness and accuracy, and
communicating with employing departments and agencies.

Consistent with Labor’s focus on oversight, 52 of the 65 reports we reviewed focused on the
need to strengthen oversight of the program at the department or agency level. Among the 52
reports, IGs most often reported that certain policies and procedures did not exist, or when they
did exist, they were not always followed. When departments and agencies did not have
procedures, most often this deficiency was related to a lack of controls that would have enabled
staff to verify beneficiaries’ continued eligibility, monitor chargeback costs submitted by Labor,
recoup payments that should have been charged to third parties, and return employees to work.
For example, Labor’s IG recommended that the FECA program develop a working group whose
purpose would be to determine the readiness of long-term beneficiaries without a wage earning
capacity designation to return to work. While Labor has made progress in this area, 14 in 2010—




13
  Reviewing chargeback reports at the department level provides a quality check on Labor’s assessment.
Departments and agencies failing to perform this critical function may be charged for inappropriate costs.
14
    In 2008, Labor’s IG reported almost twice as many beneficiaries in this category.




Page 4                                                              GAO-12-508R Federal Employees’ Compensation Act
the most recent year for which we have data—over one-third of all long-term disabled workers
(11,058) did not have a current determination of their wage-earning capacity. 15

In over half of the 52 reports that highlighted oversight issues, IGs found that department and
agency staff did not fully understand their roles or Labor’s when administering the program or
that they did not always manage program resources in an effective manner. IGs reported that
workers’ compensation program staff at some agencies did not consistently assess costs
charged to their agency and address errors. Additionally, staff at one agency believed assessing
the costs charged to them was Labor’s responsibility. Some staff at other agencies also told IGs
that they did not have responsibilities for case management. Other reports indicated that staff
have a range of responsibilities, of which monitoring FECA is only one. For instance, one IG
reported in 2007 that staff spent no more than 10 percent of their time managing FECA cases
because managing these cases was not viewed as a priority at that department. As a result of
this and other deficiencies, the IG concluded that the department was unable to appropriately
manage its long-term cases. Several IGs emphasized that providing adequate resources, such
as dedicating staff to a workers’ compensation program and obtaining key data related to
eligibility, is a key practice and has the potential to lessen the likelihood of beneficiaries
inappropriately remaining on the rolls.

Overall, the impact of insufficient oversight at the departmental level has been significant
according to various sources. For instance, one IG reported in 2011 that its department
unnecessarily paid about $41 million each year due to insufficient program oversight. The report
identified deficiencies in how that agency returned injured workers to work, monitored its long-
term rolls, maintained case files, and detected fraud as significant contributors to FECA program
costs. Reports we reviewed concluded that agency oversight could be strengthened with a
variety of techniques including active case management practices such as periodically
reviewing and updating information on long-term disability cases or intervening early through
scheduled interactions when new beneficiaries are placed on the rolls.

      Information Technology
Our review of the IG reports found that information technology was a critical challenge for
agencies, with some reporting they did not have an adequate internal system to administer the
program. Roughly a quarter of the 65 reports we reviewed cited challenges related to deficient
information technology. IGs reported that a few departments and agencies did not have
adequate systems to manage new and existing claims from injured workers. At these
departments, staff responsible for managing claims used paper-based systems to manage
hundreds of files. One agency reported as recently as 2009 that it did not have the software
needed to download and review reports regarding what it owed the compensation fund that
pays out benefits. System inadequacies also contributed to untimely filing of forms and
documentation that Labor needs to adjudicate and manage claims in a timely manner.


15
  According to Labor officials, this is largely due to the fact that the medical evidence does not support that the
injured worker can return to work in any capacity. Alternatively, if partially disabled with some work capacity, the
beneficiary may not have reached maximum medical improvement yet, and Labor may decide to wait before formally
issuing a wage earning capacity determination. Once Labor makes a wage earning capacity determination, that
decision cannot be overturned unless 1) the original rating was made in error; 2) the beneficiary’s medical condition
has materially changed; or, 3) the beneficiary has been vocationally rehabilitated and can earn at least 25 percent
more than the current pay of the job for which the beneficiary was originally rated. Because of this, Labor officials
contend that it is more beneficial and cost-effective for the agency to wait until maximum medical improvement has
been attained so the beneficiary’s wage earning capacity can be set at a higher rate.




Page 5                                                            GAO-12-508R Federal Employees’ Compensation Act
According to one IG, inadequate systems presented problems with knowing the status of a
case, projecting current and future costs associated with that case, and following through on an
employee’s return to work. According to a Labor official, information technology remains a
critical challenge for employing departments and agencies. Because of the cost of information
technology, relatively few departments and agencies are able to develop and maintain their own
systems.

A number of recent developments may lessen the impact of some of the challenges in this area.
To improve its ability to determine claimant eligibility and reduce improper payments, Labor
enhanced its FECA information systems in 2008 to include features that remind claims
examiners when they need to receive status updates, such as changes to income, a
beneficiary’s dependents going to college, or the remarriage of a widow receiving death
benefits. Additionally, to further mitigate information technology deficiencies at the department
and agency level, Labor deployed a new, web-based claims filing system—Employees’
Compensation Operations and Management Portal, or ECOMP—in 2012 that allows federal
departments and agencies to electronically file program claims forms, conduct data mining, and
perform trend analyses. 16

      Legislative Reform
As mentioned previously, Congress is currently considering several legislative proposals that
would reform the FECA program. 17 Twelve of the 65 reports we reviewed suggested that
comprehensive reform of the program is necessary to manage costs and realize greater
program efficiency. Recently, one IG reported that because the program had not been reformed
in over three decades, the program did not include market-based characteristics such as
maximum time and benefit limits, settlement and buyout options, 18 and enhanced return-to-work
and rehabilitation programs that would help manage costs. The IG estimated that because the
program was without such mechanisms, its agency will pay an additional $335 million each
year. In past reports, this IG also indicated that it could potentially realize numerous benefits if it
administered its own workers’ compensation program. Its proposals have included offering the
same compensation rate for all beneficiaries and delaying continuation of pay benefits.

Other reports have concluded that there is a need to eliminate statutory limitations that prohibit
access to the critical federal data needed to better manage claims. 19 According to work
completed by these agencies, data obtained from the Internal Revenue Service, Social Security
Administration (SSA), or Health and Human Services could assist in efforts to verify potential
outside earnings or provide updated eligibility information on beneficiaries. Additionally, we have


16
  Labor will offer ECOMP free of charge to any federal department or agency. The system, as designed, will also
allow employees and employers to upload documents directly to a beneficiary’s file, which may enable Labor to more
quickly adjudicate claims.
17
  For example, H.R. 2465 passed by the House in November 2011, would, among other things, authorize the
Secretary of Labor to require, as a condition of receiving FECA compensation, that a beneficiary consent to the
release of the beneficiary’s Social Security earnings information. S. 1789, reported by the Committee on Homeland
Security and Government Affairs in January 2012, would among other things, set the payment an employee receives
for total disability at retirement age at 50 percent of the pre-injury monthly pay of the employee.
18
 Office of Inspector General, U.S. Postal Service, Postal Service Workers’ Compensation Program, HR-AR-11-007,
Washington, D.C., September, 2011.
19
  For example, according to Labor’s IG, the Privacy Act of 1974 generally prohibits agencies, including SSA, from
disclosing earnings without the beneficiary’s authorization.




Page 6                                                            GAO-12-508R Federal Employees’ Compensation Act
previously reported that providing access to data used to validate external information from
beneficiaries is a key practice that can help reduce program vulnerabilities. Currently, in addition
to its annual verification process, 20 Labor may verify reported incomes by using beneficiaries’
Social Security numbers; and income, if earned, can offset program benefits. However, to
perform this data check, Labor must first obtain permission from the beneficiary. 21 In its 2007
report on automated cross-matching using federal data, SSA found that the absence of access
to key federal data such as Social Security information resulted in injured workers across all
departments and agencies receiving FECA benefits totaling $48.8 million while earning another
$12.6 million in wages unreported to Labor.

      Other Factors
To a lesser extent, Labor and a few IGs identified other factors that challenge departments’ and
agencies’ ability to manage program costs. Labor reported that some of these factors were the
economy, workplace characteristics, and rising medical costs. With regard to the economy,
Labor reported that the impact of a downturn in the economy might directly impair the
effectiveness of program components such as vocational rehabilitation. Specifically, in its 2009
Performance and Accountability Report, Labor said that its ability to return injured workers to the
workplace was influenced by the numbers of claimants, types of jobs available, and skills
required for available federal positions or in the private sector. Additionally, a Labor report noted
that it would be difficult to understand the impact of an economic downturn on Labor’s ability to
return beneficiaries to work in a timely manner. Labor also cited modernization of the workplace
as an impediment to return-to-work efforts. For instance, Labor noted that modernization efforts
at one agency have eliminated many traditional jobs that the agency previously drew upon for
return-to-work efforts. Because of these efforts, the agency has reduced its workforce by 27.5
percent since 2001. Labor also said new compensation claims and the type of care needed
reflect an aging federal workforce. Consequently, the time needed to recover from these injuries
has increased in recent years. Labor also found that it generally is more expensive to pay for
treatments resulting from today’s injuries. In 5 of the 65 reports we reviewed, IGs also described
some of these other factors as those beyond their control or general workplace conditions that
contribute to rising workers’ compensation costs. For example, one agency reported that injuries
sustained by federal workers in health care facilities from violent patients represented as many
as half of all workers’ compensation cases at one regional facility and about 7 percent
department-wide as reported in 2004, with a total cost of $7.2 million each year. While the
department has taken corrective actions to address this issue, our 2011 report provides
evidence that violent patient incidents remain a challenge. 22




20
  Labor currently relies upon self-reported data from claimants to provide information on their continued eligibility for
benefits. In a prior report, we noted this approach was problematic because of the potential to provide erroneous
information, making the program vulnerable to improper payments. See GAO, Federal Workers’ Compensation:
Better Data and Management Strategies Would Strengthen Efforts to Prevent and Address Improper Payments.
GAO-08-284 (Washington, D.C.: Feb. 26, 2008).
21
  We also noted in our 2008 report that, unlike other federal agencies such as SSA or Veterans’ Affairs, Labor does
not conduct a systemic data match of its records against SSA’s wage records to identify unreported earnings.
Instead, Labor conducts matches on an ad hoc basis for individual claims with suspect, unreported earnings.
22
 GAO, VA Mental Health: Number of Veterans Receiving Care, Barriers Faced, and Efforts to Increase Access,
GAO-12-12 (Washington, D.C.: Oct 14, 2011).




Page 7                                                               GAO-12-508R Federal Employees’ Compensation Act
Most Recommendations from Prior FECA Reports Have Been Implemented
Of the 228 recommendations made since 1994, 178 were closed and implemented. Most of the
recommendations made in reports we reviewed were to strengthen oversight—183 in total.
Almost half of these recommendations addressed inadequate or nonexistent internal control
policies; the remainder addressed communication, guidance, and data. Roughly 90 percent of
the recommendations related to internal controls were implemented. While information
technology was the second most discussed deficiency in reports, IGs made far fewer
recommendations in this area. Fourteen of 19 recommendations made were closed and
implemented. Of the 9 recommendations made regarding legislative reform of FECA, 2 have
been closed and implemented. More than half of the 9 recommendations would involve
changing the benefits or structure of the program. Overall, most of the recommendations that
remain open are associated with reports published within the last 5 years. Table 1 provides
more information on the recommendations by program challenge.

Table 1: Status of FECA Recommendations Made since 1994 by IGs and Others, as of March 2012

    Status of recommendations                        Oversight             Information technology   Legislative reform    Other factors
    Closed and implemented                                    148                              14                    2                1
    Closed, partially implemented                                 1                             2                    0                0
    Closed, not implemented                                     11                              0                    1                0
    Open                                                          7                             2                    4                0
    Status not known                                            16                              1                    2                0
                                      a
    Total recommendations                                     183                              19                    9                1
Source: GAO analysis of findings presented by IGs, GAO, and consultants.

Note: Open recommendations are those recommendations where action has not been taken but may be taken in the future, actions
are in the planning stage, or actions have been taken on only part of the recommendation. Recommendations that are considered
“closed, implemented” are those where the action has been fully implemented or action has been taken that essentially meets the
recommendation’s intent, i.e., the action meets the spirit—rather than the letter—of the recommendation, or all parts of the
recommendation have been implemented. A recommendation that is “closed, partially implemented” means that one or some of the
multiple parts of a recommendation have been closed. A recommendation is considered “closed, and not implemented” when the
agency/Congress has no intention of implementing the recommendation or matter for congressional consideration or circumstances
have changed and the recommendation or matter is no longer valid.
a
We classified another 16 recommendations in a miscellaneous category. Of these, 13 were closed and implemented.


Even though the majority of recommendations have been closed, recently issued reports
indicate that the FECA program continues to face management challenges. For example, a
2012 report by Labor’s IG suggests that oversight remains a challenge. 23 The report found that
Labor did not always take timely action to terminate benefits when notified of FECA claimants’
death; had not designed effective procedures to ensure that benefit payments were reduced for
FECA claimants who were collecting SSA retirement benefits; and had not yet implemented
additional training for claims examiners on preventing improper payments by ensuring payment
accuracy. 24 Similarly, in 2012, we reported that limited access to necessary data was potentially
reducing agencies’ ability to effectively monitor claims and wage-loss information, and that the




23
 Labor, OWCP’s Effort to Detect and Prevent FECA Improper Payments Have Not Addressed Known Weaknesses.
DOL-03-12-001-04-431, February 2012.
24
     Labor officials informed us that staff received training on improper payments in January 2012.




Page 8                                                                                   GAO-12-508R Federal Employees’ Compensation Act
agencies’ reliance on self-reported data related to wages and dependent status, among other
things, reduces the program’s ability to prevent and detect fraudulent activity. 25

Agency Comments and Our Evaluations
We provided a draft of this report to Labor for review and comment. Labor provided technical
comments, which we incorporated into the report as appropriate.


As agreed with your offices, unless you publicly announce the contents of this report earlier, we
plan no further distribution until 30 days from the report date. At that time, we will send copies to
the appropriate congressional committees, the Secretary of Labor, and other interested parties.
The report also will be available at no charge on the GAO website at http://www.gao.gov.



If you or your staff members have questions concerning this report, please contact Andrew
Sherrill at (202) 512-7215 or sherilla@gao.gov or Phillip Herr at (202) 512-2834 or
herrp@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs
may be found on the last page of this report. Key contributors to this report are listed in
enclosure II.




Andrew Sherrill
Director,
Education Workforce
 and Income Security Issues




Phillip Herr
Managing Director
Physical Infrastructure Issues

Enclosures: 2




25
 GAO-12-402.




Page 9                                                   GAO-12-508R Federal Employees’ Compensation Act
List of Committees
The Honorable Susan M. Collins
Ranking Member
Committee on Homeland Security
  and Governmental Affairs
United States Senate

The Honorable Thomas R. Carper
Chairman
Subcommittee on Federal Financial
Management, Government Information,
Federal Services and International Security
Committee on Homeland Security
  and Governmental Affairs
United States Senate

The Honorable Claire McCaskill
Chairman
Ad Hoc Subcommittee on Contracting Oversight
Committee on Homeland Security
  and Governmental Affairs
United States Senate

The Honorable Tom Coburn
Ranking Member
Permanent Subcommittee on Investigations
Committee on Homeland Security
  and Governmental Affairs
United States Senate

The Honorable Darrell Issa
Chairman
Committee on Oversight and Government Reform
House of Representatives




Page 10                                        GAO-12-508R Federal Employees’ Compensation Act
Enclosure I: Scope and Methodology

To identify the Federal Employees’ Compensation Act (FECA) program management
challenges, we reviewed the Department of Labor’s (Labor) Performance and Accountability
Reports from 2004 to 2010 and identified common themes from each of these reports related to
the management of the FECA program. 26 Our analysis resulted in four commonly identified
themes for program management challenges. We used these themes as a framework to group
other work developed by Inspectors General (IG) government-wide.

Reviewing the Work of IGs
To identify findings related to the management challenges of the FECA program from the
perspectives of the 75 departments and agencies that participate in FECA, we conducted a
search of all Inspectors General (IG) websites utilizing a web search engine to identify reports
authored by the IGs on the FECA program. To complete this search we used key words such as
“Federal Employees’ Compensation Act,” “workers’ compensation,” “federal workers’
compensation,” and “FECA” to narrow the results of the search. We identified 74 reports issued
since 1994 from these websites. We identified another 4 through other means. We also
contacted departments and agencies with significant FECA costs in chargeback year 2010, as
well as those for which the web search engine failed to identify any publicly available reports on
FECA. There were three departments—Department of Defense, Army, and Air Force—for which
neither the search engine nor officials identified any reports.

Content Analysis
We performed a content analysis on 65 reports identified through our search and other
methods. These reports were issued by IGs, GAO, and consultants writing on behalf of
departments and agencies. To complete the content analysis, reviewers independently read
each report and coded them into separate data collection instruments using the FECA program
challenges framework described above. Reports could be defined by more than one category.
The reviewers later met to discuss their coding and to reach agreement where there were
discrepancies. For each report, reviewers were asked to identify such information as the key
program challenge(s), key practices departments and agencies identified as remedies to the
challenge(s), and the monetary implications of these challenges. Where IGs noted potential
future savings or forfeited savings, reviewers recorded the amount.

To determine what actions have been taken to address the program challenges, we identified
the actions taken by departments and agencies by reviewing the recommendations made in the
reports mentioned above. Reviewers grouped these recommendations using the established
themes for program management challenges. Additionally, we followed up by e-mail and
telephone with each of the IGs issuing reports to determine the status of these
recommendations. We coded the status in terms of “closed and implemented”, “closed and not
implemented,” “closed, partially implemented” and “open.” We used semi-structured interviews
with Department of Labor officials and others to obtain clarification on the status of some
recommendations.




26
  We reviewed the Department of Labor’s 2010 equivalents for its performance and accountability report, the Agency
Financial Report and its Annual Accountability Report.




Page 11                                                         GAO-12-508R Federal Employees’ Compensation Act
We also utilized data from Labor’s claims management system to provide additional detail on
the numbers of claimants on the FECA rolls. We assessed the reliability of these data by (1)
electronically testing required data elements, (2) reviewing existing information about the data
and the system that produced them, and (3) interviewing agency officials knowledgeable about
the data. We determined that the data we reviewed were reliable for the purposes of this report.




Page 12                                               GAO-12-508R Federal Employees’ Compensation Act
Enclosure II: GAO Contacts and Staff Acknowledgments

GAO Contacts
Andrew Sherrill at (202) 512-7215 or sherrilla@gao.gov and Phillip Herr at (202) 512-2384 or
herrp@gao.gov.

Staff Acknowledgments
In addition to the contact named above, key contributors to this report were Patrick DiBattista,
Brandon Haller, Carla Craddock, Michelle Bracy, Tonnye Conner-White, Robert Heilman, David
Forgosh, Elke Kolondinski, Jodi Munson Rodriguez, Erin Cohen, Melinda Cordero, Walter
Vance, James Rebbe, James Bennett, and Kathleen van Gelder.




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Page 13                                               GAO-12-508R Federal Employees’ Compensation Act
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