oversight

Reemployment of Retirees: Six Agencies' Use of Dual Compensation Waiver Authority is Limited

Published by the Government Accountability Office on 2012-09-10.

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

United States Government Accountability Office
Washington, DC 20548




          September 10, 2012

          The Honorable Joseph Lieberman
          Chairman
          The Honorable Susan M. Collins
          Ranking Member
          Committee on Homeland Security and Governmental Affairs
          United States Senate

          The Honorable Darrell E. Issa
          Chairman
          The Honorable Elijah Cummings
          Ranking Member
          Committee on Oversight and Government Reform
          House of Representatives

          Subject: Reemployment of Retirees: Six Agencies’ Use of Dual Compensation Waiver
          Authority is Limited

          This report formally transmits a briefing we provided to the U.S. House of Representatives,
          Committee on Oversight and Government Reform on May 31, 2012, and to the U.S. Senate,
          Committee on Homeland Security and Governmental Affairs on June 5, 2012, which we have
          revised to reflect technical comments made in response to a draft of this report (see enc. I).
          We developed this briefing in response to a requirement in section 1123 of the National
          Defense Authorization Act (NDAA) for fiscal year 2010, which requires us to provide
          information on the use of agencies’ authority to grant NDAA waivers to Civil Service
          Retirement System and Federal Employment Retirement System reemployed annuitants.
          During our briefings to your offices, it was agreed that the work we conducted to date on
          agencies’ use of the NDAA waiver authority was sufficient to respond to the mandate.

          The federal government has faced challenges in hiring and retaining talented workers, which
          are exacerbated by increased retirements in the federal workforce. To address these
          challenges, agencies have sought to rehire retired federal employees. Generally, when
          agencies rehire retirees their salary is subject to a deduction (offset) in the amount of the
          annuity. 1 Section 1122 of the NDAA for fiscal year 2010 gives agencies the authority to waive
          this requirement on a temporary basis to allow for dual compensation of the salary and
          annuity as necessary; to fulfill functions critical to the mission of the agency; and to assist in




          1
          See, 5 U.S.C. §§ 8344 and 8468.


                                                                       GAO-12-855R Reemployment of Retirees
the development, management, or oversight of agency procurement actions; among other
purposes. 2

To respond to the NDAA mandate for information on federal agencies’ use of NDAA waivers
for Civil Service Retirement System and Federal Employment Retirement System reemployed
annuitants in fiscal years 2010 and 2011, we attempted to obtain and analyze government-
wide dual compensation reemployment data from the Office of Personnel Management
(OPM); however, agency-reported data were insufficient to definitively determine the number
of NDAA waivers the agency issued. Thus, we obtained data directly from a nongeneralizable
sample of selected agencies.

In the absence of reliable government-wide information, this report provides data directly from
selected agencies and addresses the experience of selected agencies in using NDAA waiver
authority to rehire retired Civil Service Retirement System and Federal Employment
Retirement System annuitants. To do this, we selected a nongeneralizable sample of six
agencies to review. We selected four Chief Financial Officer Act agencies 3—Nuclear
Regulatory Commission (NRC), Small Business Administration, U.S. Agency for International
Development, and Department of the Treasury—because they appeared to have the highest
use of dual compensation waivers based on available data. We also selected U.S. Postal
Service, a non-Chief Financial Officer Act agency, because it has a large number of
employees, and because its increase in the use of part-time staff to address its financial
insolvency indicated that it may have used a large number of NDAA waivers. Finally, we
included OPM, a Chief Financial Officer Act agency, because it maintains executive agencies’
dual compensation reemployment data, and during the course of the review we inquired
about OPM’s use of NDAA waiver authority. We obtained and reviewed data and conducted
interviews with officials from these six agencies about their use of dual compensation waiver
authorities. We determined that the agencies’ NDAA waiver data and information we used
were sufficiently reliable given the extensive discussion and follow-up we conducted with
them about the requested data.

We conducted this performance audit from January 2012 through September 2012 in
accordance with generally accepted government auditing standards. These 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.

In summary, the six agencies we reviewed made very little use of the NDAA waiver authority
in fiscal years 2010 and 2011. The Department of Treasury made the most, although still very
little, use of the waiver authority in both fiscal years—167 waivers in fiscal year 2010 and 214
waivers in fiscal year 2011. Agency officials told us that their agencies used a combination of
NDAA and other waiver authorities already in place when hiring retired workers. For example,
during our review we found that the NRC used the waiver authority provided to it in the
2
  Pub. L. No. 111-84, § 1122, div. A. title XI, 123 Stat. 2190, 2505-09 (Oct. 28, 2009). While this
authority applies across the government (executive, legislative, and judicial branches), the Department
of Defense and our agency are excluded from this authority since we both have separate authority
permitting the reemployment of annuitants without subjecting salaries to offset. NDAA waivers are
limited to annuitants who work no more than: 520 hours during the first 6 months of their retirement,
1,040 hours during any 12-month period, or 3,120 hours total during their reemployment.
3
There are 24 agencies subject to the Chief Financial Officer Act, listed at 31 U.S.C. § 901.


Page 2                                                   GAO-12-855R Reemployment of Retirees
Energy Policy Act of 2005, and used the NDAA authority to rehire an annuitant for purposes
not available in the Energy Policy Act. 4 None of the agencies reported that they exceeded the
threshold imposed by the NDAA, 1 percent of their full-time employees, thus they were not
required to prepare succession plans, as would have been required under the act.

Agency Comments and Our Evaluation

We provided a draft of this report to OPM, NRC, the Department of the Treasury, Small
Business Administration, U.S. Agency for International Development, and U.S. Postal Service
for review and comment. All agencies agreed with our findings, and NRC was the only agency
that provided written comments. The other agencies responded, but had no additional
comments on our draft report.

In an August 16, 2012 letter (enc. II), NRC generally concurred with our finding that agencies
made very limited use of the NDAA waiver authority during fiscal years 2010 and 2011, and
stated that our report accurately reflected NRC’s use of the authority. NRC provided clarifying
and technical comments to the report, which we incorporated as appropriate. In commenting
on its use of the NDAA waiver authority, NRC stated that it appreciated the flexibility under
the authority to waive pension offset to fulfill functions critical to the mission of the agency or
any component of the agency; develop, manage, or oversee agency procurement actions; or
promote appropriate training or mentoring of employees; among other reasons. NRC stated
that it hopes that the authority will be extended.

                                              -----

We are sending copies of this report to the appropriate congressional committees. We are
also sending copies to OPM, NRC, the Department of the Treasury, Small Business
Administration, U.S. Agency for International Development, and U.S. Postal Service. This
report will also be available at no charge on our website at http://www.gao.gov.

Should you or your staff have questions concerning this report, please contact me at (202)
512- 6806 or mihmj@gao.gov. Contact points for Offices of Congressional Relations and
Public Affairs may be found on the last page of this report. Lisa Pearson, Assistant Director;
Sara Daleski; Pawnee A. Davis; Karin Fangman; Rebecca Shea; and Greg Wilmoth made
significant contributions to this report.




J. Christopher Mihm
Managing Director, Strategic Issues

Enclosures—2




4
 42 U.S.C. § 2210c. This waiver authority may be used when a temporary emergency hiring need
exists or when there is exceptional difficulty recruiting or retaining a qualified employee.


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Enclosure I




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Enclosure I




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Enclosure I




Page 13       GAO-12-855R Reemployment of Retirees
Enclosure II


               Comments from the Nuclear Regulatory Commission




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Enclosure II




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Enclosure II




(450957)



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