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 email@example.com. 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. Page 3 GAO-12-855R Reemployment of Retirees Enclosure I Page 4 GAO-12-855R Reemployment of Retirees Enclosure I Page 5 GAO-12-855R Reemployment of Retirees Enclosure I Page 6 GAO-12-855R Reemployment of Retirees Enclosure I Page 7 GAO-12-855R Reemployment of Retirees Enclosure I Page 8 GAO-12-855R Reemployment of Retirees Enclosure I Page 9 GAO-12-855R Reemployment of Retirees Enclosure I Page 10 GAO-12-855R Reemployment of Retirees Enclosure I Page 11 GAO-12-855R Reemployment of Retirees Enclosure I Page 12 GAO-12-855R Reemployment of Retirees Enclosure I Page 13 GAO-12-855R Reemployment of Retirees Enclosure II Comments from the Nuclear Regulatory Commission Page 14 GAO-12-855R Reemployment of Retirees Enclosure II Page 15 GAO-12-855R Reemployment of Retirees Enclosure II (450957) Page 16 GAO-12-855R Reemployment of Retirees This is a work of the U.S. government and is not subject to copyright protection in the United States. 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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)