The Public Service: Issues Affecting Its Quality, Effectiveness, Integrity, and Stewardship

Published by the Government Accountability Office on 1990-09-13.

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

                          United   States   General   Accounting   Office

                          Report to Designated Congressional
                          Committees and the Director, Office of
                          Personnel Management

i: September
                          THE PUBLIC
                          Issues Affecting Its
                          Quality, Effectiveness,
                          Integrity, and
      United States
GAO   General Accounting  Office
      Washington, D.C. 20548

      General Government    Division


      September 13,199O

      The Honorable John Glenn
      Chairman, Committee on
        Governmental Affairs
      United States Senate

      The Honorable William D. Ford
      Chairman, Committee on Post Office
        and Civil Service
      House of Representatives

      The Honorable Constance Newman
      Director, Office of Personnel

      This report is submitted in response to Title I of the Civil Service Reform Act of 1978, which
      requires us to report annually on the significant activities of the Office of Personnel
      Management (OPM). With the intent of enhancing its usefulness, we have expanded the report
      to include a discussion of key issues affecting the federal public service as identified from
      our reports and testimonies issued in fiscal year 1989. Many of these issues involve concerns
      raised by the National Commission on the Public Service.

      The need for federal pay reform is the most critical current issue that we reported on during
      fiscal year 1989. Federal pay currently lags far behind private sector pay in many important
      occupational areas. With uncompetitive pay rates, the government is unlikely to be able to
      attract and retain the good people it needs.

      We are particularly pleased that the current OPM director is taking actions to address most of
      the recommendations we made to OPM in fiscal year 1989 aimed at improving OPM'S
      stewardship of the federal public service, including actions on the results of our recent
      management review of OPM. Sustained effort will be required to achieve lasting
      improvements, however. In addition, OPM will need the support of Congress, the President,
      and other executive branch agencies if serious governmentwide human resource
      management problems are to be adequately resolved. We plan to continue to monitor OPM'S
      efforts to make lasting improvements.

      We are sending copies of this report to the President of the United States; the Director, Office
      of Management and Budget; the President of the Senate; the Speaker of the House of
      Representatives; and other parties interested in the federal public service. Copies will be
      made available to others upon request.
Page 3
Principal Findings

Assuring the Quality of   Achieving a high-quality workforce requires a concerted and continuing
                          effort by the federal government. GAO'S reports showed that agencies
the Public Service        generally continued to experience (1) staffing shortages that impeded
                          the efficient and effective accomplishment of their missions; (2) recruit-
                          ment and retention problems, including ineffective affirmative action
                          programs; and (3) negative effects from compensation programs that do
                          not adequately meet agency and employee needs.

                          GAO'S June 1989 public service report discussed how staffing shortages
                          were affecting mission effectiveness in the air traffic control system of
                          the Federal Aviation Administration (FAA), the automated data
                          processing (ADP) operations of the Social Security Administration (SSA),
                          and the Superfund program of the Environmental Protection Agency
                          (EPA). In fiscal year 1989, GAO again reported on similar problems in the
                          same three agencies, plus four others: the Food and Drug Administration
                          (FDA), the Centers for Disease Control, the Department of Commerce’s
                          export promotion programs, and the Nuclear Regulatory Commission’s
                          licensing and inspection program for the use of radioactive materials.
                          (See pp. 19 to 30.)

                          GAO'S June 1989 public service report also pointed out personnel recruit-
                          ment and retention problems that had raised concerns about mission
                          accomplishment in scientific and engineering occupations and in four
                          agencies--EPA, FAA, the Internal Revenue Service, and USA.GAO reported
                          on similar problems in fiscal year 1989 in federal ADP occupations and at
                          FDA and the U.S. Park Service. In another report, GAO discussed the
                          major challenges faced by the Bureau of the Census in acquiring and
                          retaining a sufficient number of competent temporary employees to take
                          the 1990 census. (See pp. 30 to 34.)

                          The federal government must pay competitive salaries and benefits to
                          recruit and retain a quality workforce in a competitive labor market.
                          GAO'S work addressed why federal pay reform has become such a
                          serious topic, types of locality pay systems the government could adopt,
                          compensation policies and practices in several agencies for employees
                          not covered by the standard federal pay program, and federal retire-
                          ment issues. As of January 1990, the gap between federal and private
                          sector pay for comparable jobs averaged about 25 percent. This gap
                          resulted from presidential decisions to grant federal pay raises at lesser

                          Page 6                                      GAO/GGD90.103Public Service Issues
                             Executive Summary

                             was not sufficient to assure uniform application of disciplinary penal-
                             ties. (See pp. 62 to 67.)

Enhancing the Integrity of   The government’s administration and enforcement of ethics laws were
                             the subjects of many GAO reviews. Although improvements have been
the Public Service           made in the public financial disclosure systems in the legislative branch
                             and the Department of the Navy, GAO found that procedures for
                             reviewing individual financial disclosure reports could be further
                             strengthened. The Department of Defense (DOD) needed to more aggres-
                             sively enforce compliance with post-DOD employment reporting require-
                             ments. GAO supported the establishment of a statutory requirement for
                             early screening and resolution of conflicts of interest for members of
                             advisory committees. Two instances of possible violations of ethics laws
                             were referred to appropriate investigative authorities. Further, GAO
                             urged the Office of Government Ethics to correct shortcomings in its
                             policy implementation-for     example, by issuing final regulations to
                             establish a confidential financial disclosure system that Congress pro-
                             vided the authority for in December 1985. (See pp. 68 to 77.)

                             GAO also examined the integrity of administrative   procedures or man-
                             agement practices in several agencies. Inappropriate, insufficient, or
                             questionable agency actions were identified concerning (1) management
                             retaliation against certain agents in the Immigration and Naturalization
                             Service, (2) improper salary payments in the Department of Justice, (3)
                             reliability of Internal Revenue Service data on alleged employee miscon-
                             duct, (4) identification and reporting of consulting services in DOD, and
                             (5) special air transportation services provided to a manager at the Ten-
                             nessee Valley Authority. (See pp. 85 to 89.)

Strengthening the            Governmentwide human resource problems are serious. A GAO manage-
                             ment review of OPM found that OPM needed to provide agencies greater
Stewardship of the Public    leadership. Specifically, OPM needed to make numerous improvements in
Service                      workforce planning, staffing, performance management, oversight, and
                             its internal operations. The current OPM director has initiated action on
                             most of GAO'S management review recommendations; however, OPM will
                             need to sustain its efforts in each area to achieve lasting improvements.
                             (See pp. 98 to 105.)

                              Because this report summarizes reports GAO has already issued, it con-
Recommendations               tains no new recommendations.

                              Page 7
                            Congress Should Take Actions to Improve the                            54
                                  Executive Exchange Program
                            Congress Should Reconsider the Uses and Purposes of                    56
                                  the Intergovernmental Personnel Act Mobility
                          Strengthening Employee Training and Development                          58
                             Improvements Are Needed in FAA’s Controller and                       58
                                  Aviation Safety Inspector Training
                            Agency Compliance With Training Requirements of the                    60
                                  Computer Security Act of 1987
                             Implementation of a Professional Development                          61
                                  Program for Members of the Foreign Service
                          Enhancing Performance of the Federal Workforce                           62
                             Extension of the Performance Management and                           62
                                  Recognition System
                             Two Agencies’ Experiences in Dealing With Poor                        64
                             Disciplinary Policies and Practices in the U.S. Postal                66

Chapter 4                                                                                          68
Enhancing the             Administration of Ethics Laws and Regulations                            69
                            Legislative Branch Systems for Financial Disclosure                    69
Integrity of the Public          Have Improved But Can Be Further Strengthened
Service                     Navy’s System of Public Financial Disclosure Generally                 70
                                 Works Well But Can Be Improved
                            DOD Revolving Door Processes Have Improved, But                        71
                                 Post-DOD Employment Reporting Remains Low
                            Possible Violation of the Post-DOD Employment Statute                  73
                                 by a Former U.S. Air Force Colonel
                            Possible Violations of Post-Employment Statutes by a                   74
                                 Former HUD Official
                            Resolution of Potential Conflicts of Interest of                       75
                                 Presidential AIDS Commission Members
                            Functions Not Fully Implemented by the Office of                       76
                                 Government Ethics
                          Discrimination and Equal Employment Opportunity                          77
                            Underrepresentation of Minorities and Women in the                     78
                                 Foreign Service and the Voice of America
                            Use of Special Authorities to Hire Disabled Veterans                   80
                            Appointments of Women Administrative Law Judges                        82
                            SSA’s Hiring of Hispanics                                              83

                          Page 9                                     GAO/GGD!W103 Public Service Issues

                         Oversight of the Intergovernmental Personnel Act                     112
                             Mobility Program
                         Federal Suggestion Programs                                          112
                         Federal Employees Health Benefits Program                            113
                       Other Agencies’ Administration of Selected Personnel                   118
                           Management Functions
                         Compensation for Work-Related Injuries and                           118
                         Central Oversight of Federal Drug Testing Efforts                    121
                         FLRA Met Its Responsibilities at Fort Leavenworth,                   124

Appendixes             Appendix I: Fiscal Year 1989 Reports With Open                         126
                           Recommendations to Congress on Public Service
                       Appendix II: Management Review Recommendations to                      127
                           the Office of Personnel Management (OPM)

Related GAO Products                                                                          130

Tables                 Table 1.1: Merit System Principles                                      15
                       Table 1.2: Prohibited Personnel Practices                               16
                       Table 2.1: History of General Schedule Pay Adjustments                  36
                           (1978 to 1990)
                       Table 2.2: Pay Comparison of Selected Federal and                       37
                            Private Sector Occupations (1988)
                       Table 3.1: Actions Congress Should Take to Improve                      56
                            Implementation of the President’s Commission on
                            Executive Exchange Program

                        Page 11                                   GAO/GGNJ@-103Public Sewice Issues
Page 13   GAO/GGlMO-103Public Service Issues
                                     Chapter 1

Table 1.1: Merit System Principles
                                     Personnel practices and actions in the federal government require
                                     - recruitment from all segments of society and selection and advancement on the basis of
                                           ability, knowledge, and skills under fair and open competition;
                                     -     fair and equitable treatment in all personnel management matters, without regard to
                                           politics, race, color, religion, national origin, sex, manta1 status, age, or handicapping
                                           condition and wrth proper regard for individual pnvacy and constitutional rights;
                                     -     equal pay for work of equal value, considering both national and local rates paid by
                                           private employers, with incentives and recognition for excellent performance;
                                     -     hrgh standards of integrity, conduct, and concern for the public interest;
                                           efficient and effective use of the federal workforce;
                                     -      retenhon of employees who perform well, correcting the performance of those whose
                                           work is Inadequate, and separation of those who cannot or will not meet required
                                     -      improved performance through effective education and training;
                                     -      protection of employees from arbitrary action, personal favoritism, or political coercron;
                                     -      protection of employees agarnst reprisal for lawful disclosures of information.

                                     Notwithstanding OPM’S critical leadership role, federal agencies bear pri-
                                     mary responsibility for personnel management. In enacting CSRA, Con-
                                     gress intended that OPM provide federal agencies with more personnel
                                     management authority and flexibility. The Senate Report accompanying
                                     CSRAdescribed agencies’ intended roles:

                                      “Decentralization       is in keeping with the delegation      practices that private    companies
                                      use, allowing     the decisionmaking       process to work at a level where decisions       are
                                      most effectively      made. Authority       for personnel   management    will be fixed at the
                                      level responsible     for the effectiveness      of programs   and accomplishment      of

                                      The effectiveness of OPM as a central management agency and OPM’S rela-
                                      tionship with line agencies have been continuing concerns of ours since
                                      the passage of CSRA.In January 1989 we reported on our management
                                      review of OPM.’ The report, discussed in chapter 5, covered (1) planning
                                      for future workforce needs, (2) acquiring a high-quality workforce, (3)
                                      improving individual and organizational performance, and (4) ensuring
                                      the protection of merit and oversight of personnel activities. In addition
                                      to the management review, we issued a variety of reports on OPM’S and
                                      agencies’ performances in managing various aspects of the civil service
                                      during fiscal year 1989.

                                         ‘Mana   in Human Resources: Greater OPM Leadership   Needed to Address Critical Challenges (GAO/
                                         &d&,        Jan. 19,1989)

                                         Page 16                                                  GAO/GGBBO-103Public Service Issues

National Commission on   In March 1989 the National Commission on the Public Service presented
                         its summary report and recommendations for public service improve-
the Public Service       ments to the President and Congress. The Commission consisted of 36
                         eminent men and women. The summary report, Leadership for America:
                         Rebuilding the Public Service, proposed 15 goals along with 45 specific
                         recommendations for achieving them. In April 1989 testimony before
                         the House Post Office and Civil Service Committee, we provided our
                         views on each of the Commission’s goals and recommendations.” We
                         agreed with the thrust of almost all the recommendations. We testified
                         that the Commission’s work provides an excellent framework for the
                         changes needed to restore vitality and credibility to the public service.

                         The objective of this report was to summarize our fiscal year 1989
Objective, Scope,and     reports and testimonies that focus on the condition of the federal public
Methodology              service to enhance their usefulness to Congress and the President and
                         help maintain the impetus for public service improvements called for by
                         the National Commission on the Public Service. Overall, 93 such prod-
                         ucts are discussed in this report.

                         In specifying that we report on significant actions of OPM, CSRArequires
                         us to analyze whether the actions are in accord with merit system prin-
                         ciples and free from prohibited personnel practices. The reports we
                         issued during fiscal year 1989 discuss the effects of such significant
                         activities when appropriate and are presented in the context of merit
                         system principles and prohibited personnel practices. These reports con-
                         stitute our compliance with Title I of CSRA.

                         Title I also requires us to assess the effectiveness and soundness of fed-
                         eral personnel management and to review executive branch compliance
                         with federal employment laws, rules, and regulations as directed by any
                         committee of either house of Congress. The vast majority of the fiscal
                         year 1989 reports pertaining to employment in the public service were
                         done at the direction of one or more congressional committees or mem-
                         bers. Only one report was initiated and issued under our basic legislative
                         responsibilities to evaluate issues that will assist Congress. This report
                         was our management. review of OPM, issued in January 1989 and dis-
                         cussed in chapter 5 We issued two other reports in response to specific
                         statutory direction that requires us to (1) issue an annual report on the
                         federal payment to the District of Columbia Police Officers and
                         Firefighters’ Retirement Fund (see ch. 2) and (2) regularly determine

                         “Report of the National Crrmme.%m
                                                         on the Public Service(GAO/T-GGD-X9-19,Apr. 27, 1989).

                         Page 17                                              GAO/GGD-W-103Public Service Issues
Chapter 2

Assuring the Quality of the Public Service

                        Our work during fiscal year 1989 shows that government agencies con
                        tinue to experience (1) staffing shortages that impede the efficient and
                        effective accomplishment of their missions, (2) recruitment and reten-
                        tion problems, and (3) negative effects from compensation programs
                        that do not adequately meet agency and employee needs.

                        Merit principles require that federal employees be used effectively and
Staffing Shortages      efficiently. If this is to be achieved, federal managers must know how
Continue to Affect      many and what types of people they need to accomplish their programs’
Mission Effectiveness   objectives. Linking mission accomplishment with personnel require-
                        ments requires good planning systems and sound workforce informa-
                        tion. Determining accurate staffing needs is important because
                        overstaffing can lower productivity, while understaffing can cause
                        unfulfilled program objectives, curtailed services, work backlogs, unnec-
                        essary overtime, and low responsiveness and morale. Effective agency
                        planning systems and sound workforce information are not enough,
                        however. Congress and the President must also support sound personnel
                        management practices if agencies are to maintain sufficient staffing
                        levels to properly carry out government services and programs.

                        Our last public service report discussed how staffing shortages were
                        affecting mission effectiveness in the air traffic control system of the
                        Federal Aviation Administration (FAA), the automated data processing
                        (ADP) operations of the Social Security Administration (SSA), and the
                        Superfund program in the Environmental Protection Agency (EPA). In
                        fiscal year 1989, we reported on similar problems in the Food and Drug
                        Administration (FDA), the Centers for Disease Control (cm), the Depart-
                        ment of Commerce’s export promotion programs, and the Nuclear Regu-
                        latory Commission’s (NRC) licensing and inspection program for the use
                        of radioactive materials. We also reported again in 1989 on shortages in
                        the FAA,SSA, and EPA’S Superfund program. On the other hand, we
                        reported that a 3-percent reduction in the Army Audit Agency’s staffing
                        for fiscal year 1989, which was comparable to an Armywide reduction,
                        would probably not significantly affect the Agency’s audit coverage.

Food and Drug           In September 1989 we reported that FDA should determine its staffing
Administration          needs through a comprehensive assessment of all FDA activities.’ The
                        report was requested by the Senate Appropriations Subcommittee on

                        ‘FDA Resources:ComprehensiveAssessmentof Staffing, Facilities,and EquipmentNeeded (GAO/
                              9_142, Sept.15, 1989).

                        Page 19                                              GAO/GGDCIO-103
                                                                                          Public service Issues
                      Chapter 2
                      Assuring the Quality of the Public Service

                      requirements, and (3) handle responsibilities related to AIDS and the reg-
                      ulation of medical devices. While it appears that FDA needs more staff,
                      we found it difficult to substantiate FDA’S estimate for at least 2,000
                      more staff because FDA lacks uniformity in its internal management
                      information systems. Its estimate was based on partial information com-
                      piled from the judgmental estimates of senior FDA officials and from a
                      variety of time and activity reporting systems. We recommended that
                      Congress require FDA to determine its staffing needs through a compre-
                      hensive assessment of all FDA activities, as it did in 1975. In December
                       1989, an Advisory Committee on FDA was established by the Secretary
                      of the Department of Health and Human Services (HHS) to examine the
                      mission, responsibilities, and structure of FDA and make recommenda-
                      tions on strengthening the agency.

                      Difficulties FDA reported in recruiting and retaining staff are discussed
                      later in this chapter.

Centers for Disease   During fiscal year 1989, we issued two reports that addressed staff
Control               shortages at CDC, an agency in HHS. The first report, issued in April 1989,
                      was requested by the House Committee on Energy and Commerce.” The
                      Committee had requested information on the extent to which cnc reallo-
                      cated staff from ongoing programs to support AIDGactivities, as well as
                      the potential effects of these reallocations on CDC’S other public health

                      CM: began its AIDS effort in 1981 by reallocating four staff-years from
                      other programs to work on AIDS. By fiscal year 1988, CDC had a staff-
                      year ceiling overall of about 4,400 and had allocated, since 1981, more
                      than 400 staff-years to its AIDS activities. About 40 percent of these
                      resources were allocated by specific congressional directives, and the
                      remaining 60 percent were allocated by CDC from other programs.

                      We could not identify any specific effects of staff-year decreases on
                      other CDC programs. According to agency officials, staffing limitations
                      had a more adverse effect on the agency’s ability to start and expand
                      programs than on its ability to carry out the missions of existing pro-
                      grams. Officials were concerned that CDC could not start or expand
                      about 50 activities between fiscal years 1982 and 1988. These activities
                      included prevention and control of infectious and chronic diseases, such

                      %blic Health: CentersforJ)iwase Control Staffing for AIDS and Other Program (GAO/HRD-89-66,
                      Apr 27,1989).

                      Page 21                                              GAO/GGBW103 Public Service Issues
                         Chapter 2
                         Assuring the Quality of the Public Service

                         Agency officials believe that they need to hire additional staff to
                         oversee the rapid expansion in federal funding for HIV prevention and to
                         recruit staff with the proper specialized skills, such as expertise in
                         behavioral science and community health education methods. Preven-
                         tion Services has had a continuing problem obtaining enough staff to
                         handle its growing responsibilities. Because of agencywide staffing con-
                         straints, cot has repeatedly been unable to meet staffing requests of
                         Prevention Services. For example, in October 1988 Prevention Services
                         requested 67 additional staff, but CDC approved 24. Prevention Services
                         also encountered difficulties in filling even approved positions because
                         of the need to hire individuals with the requisite specialized skills.

                         In 1989 agency officials reported that staffing shortages continued to
                         hamper their ability to provide AIDSoversight and technical assistance
                         effectively. In February 1989 Prevention Services requested 65 addi-
                         tional positions, which were all approved by CDC. Because of insufficient
                         funds to pay for the positions, however, Prevention Services estimated
                         that only 35 of the positions would be filled. State officials have also
                         reported a need for more federal technical assistance. Other important
                         program monitoring activities, such as evaluating state and local depart-
                         ment nlv-prevention programs, have not been conducted due to staff
                         shortages, according to agency officials.

Department of Commerce   During fiscal year 1989, we issued two reports that described staffing
                         shortages in the Department of Commerce’s export promotion programs.

                         The first report, issued in January 1989, described, among other
                         problems, the decline in the number of Commerce officials to assist US.
                         firms and to undertake export market development activities.” The
                         report was requested by the House Subcommittee on Commerce, Con-
                         sumer and Monetary Affairs, Committee on Government Operations.

                         In April 1980 the Department of Commerce assumed from the Depart-
                         ment of State the responsibility for overseas commercial promotion of
                         U.S. exports in host countries. Previously, State Department officers
                         attached to U.S. embassies carried out this responsibility. At the time of
                         our report, Commerce’s foreign operations consisted of about 150 com-
                         mercial officers in 65 countries, augmented by about 450 non-U.S. citi-
                         zens known as foreign service nationals.

                         $.Export Promotion:Problem MICxmunerce’sPrograms(GAO/NSIAD-89-44,dam.26, 1989).

                         Page 23                                            GAO/GGD-90-103Public Service Issues

                     offices we contacted reported that staff reductions and vacancies have
                     limited the ability of their trade specialists (who are also responsible for
                     creating and updating the system’s files) to assist businesses on many
                     trade matters, such as individual counseling, export licensing, and trade

Nuclear Regulatory   In October 1988 we reported on the NRC'S licensing, inspection, and
                     enforcement program for the use of radioactive materials6 Representa-
Commission           tive Edward Feighan requested the report.

                     NRC is required by law to ensure the safe handling and disposal of radio-
                     active materials. To carry out its responsibilities, NRC issues licenses and
                     conducts inspections to ensure that licensees use the materials safely.
                     However, license renewal problems and inspection backlogs have
                     occurred for years within NRC'S materials licensing program. Past
                     studies have concluded that these problems and backlogs occur because
                     NRC does not have sufficient licensing and/or inspection staff. Our work
                     showed that staffing shortages still exist and contribute to untimely
                     license renewals and inspections. Renewal problems and backlogs can
                     prolong unsafe circumstances. Renewal requests for NRC-specific
                     licenses, which are issued for 5 years, are required to be made 30 days
                     in advance of the expiration date.

                     NRC can take up to a year, and sometimes longer, to renew licenses, pos-
                     sibly allowing licensees to operate in an unsafe manner. Careless or irre-
                     sponsible licensee actions have caused exposures to and releases of
                     radioactive materials. In fiscal year 1987, NRC had 25 full-time staff to
                     review about 700 new and 1,000 renewal applications. NRC historically
                     has license renewal backlogs. For example, in 1987, NRC'S goal was to
                     process license renewals within 120 days; the time to do so averaged
                     between 56 and 370 days in NRC'S five regions. In one case we studied,
                     NRC took 7 years to renew a license.

                     NRC also experienced inspection backlogs. In fiscal year 1987, NRC had 36
                     inspectors to monitor more than 7,700 materials licensees. NRC inspects
                      licensees in the first year; thereafter, inspections are conducted
                      according to a priority system based on the kinds and amounts of mater-
                      ials handled by the licensees. Unexpected events, however, such as the
                      need to recall unsafe devices, cause NRC to change inspection priorities

                      "NuclearRegulation:Stricter~ntrols Neededfor RadioactiveByproduct Material Licenses(GAO/
                  Chapter 2
                  Assuring the Quality of the Public Service

                  Our 1988 survey found agreement between controllers and facility man-
                  agers that experienced controller staffing levels were too low. Overall,
                  85 percent of the controllers we surveyed in 1988 perceived a shortage
                  of experienced controllers, and 67 percent perceived a shortage of devel-
                  opmental controllers. Similarly, 77 percent and 71 percent of supervi-
                  sors and managers, respectively, said that the number of experienced
                  controllers was too low; 63 percent and 50 percent of supervisors and
                  managers, respectively, thought the number of developmentals was too
                  low to meet future controller needs. Many controllers and supervisors
                  said these shortages somewhat hindered their ability to maintain the
                  safety of the air traffic control system.

                  We also testified in May 1989 before the House Subcommittee on Avia-
                  tion, Committee on Public Works, on many issues related to FAA’s effec-
                  tiveness, including numerous FAA recruiting, hiring, and training
                  initiatives to rebuild the workforce.* We observed that these initiatives
                  are long term and will require continued management support if they
                  are to bear fruit. Despite these initiatives and recent progress made in
                  hiring and certifying new controllers, we noted that FAA was not likely to
                  meet staffing goals for experienced controllers. We also expressed con-
                  cern about the growing shortage of maintenance technicians. FAA has yet
                  to develop an adequate pipeline of new hires to replace its existing
                  workforce. This problem is becoming more urgent because more than 50
                  percent of the maintenance workforce is eligible to retire by 1995.
                  Unless enough maintenance technicians are recruited, hired, and
                  trained, FAA may be required to contract for maintenance service, a ser-
                  vice the Senate Committee on Appropriations has viewed as a federal

Social Security   In our last public service report, we noted that SSAdid not have enough
Administration    skilled ADP staff, which hampered its ADP modernization program. In
                  fiscal year 1989, we issued two additional reports describing the effects
                  of major SSA staff reductions. SSAwas then in the fifth year of a 6-year
                  plan to reduce staff by 17,000, or 21 percent, by fiscal year 1990. By the
                  end of fiscal year 1990, the staff cuts will have saved a cumulative total
                  of nearly $2 billion, according to SSA. Both reports were requested by the
                  Appropriations Subcommittees on Labor, Health and Human Services,
                  Education, and Related Agencies in the Senate and the House.

                   XlssuesRelatedto FAA’sEffectiveness(GAO/T-RCED-89-39,May 9, 1989).

                   Page 27                                            GAO/GGIMO-103Public Service Lssues
                    Chapter 2
                    Amwing the Quality of the public Service

                    waste laws; and created three new environmental laws dealing with
                    emergency planning, radon gas and indoor air quality, and Superfund
                    revenue. The reauthorization act set 150 deadlines, with more than half
                    (78) applying to EPA, either alone or with other agencies.

                    About half of the 87 deadlines we examined had been or were antici-
                    pated to be missed, including 23 EPA deadlines. The federal program
                    managers frequently attributed delays to the inadequate resources
                    (staff and funds) committed to the deadlines. For example, EPA missed
                    four deadlines relating to the identification, research, and mitigation of
                    radon. Officials cited heavy work loads and inadequate resources as the
                    causes of the delays.

                    During our review EPA established a central data base of all statutory
                    deadlines imposed on EPA by the 1986 Superfund reauthorization act and
                    other environmental laws. However, because EPA did not include reasons
                    for missing deadlines or for issuing periodic compliance reports to the
                    EPA Administrator, it missed an opportunity to make the data base a
                    useful internal control technique. We recommended that the EPA Admin-
                    istrator direct program managers to include the reasons why Superfund
                    deadlines were missed or are expected to be missed in regular updates of
                    EPA’S newly established statutory deadlines data base. According to an
                    EPA official in May 1990, the Agency has implemented our recommenda-
                    tion for selected high-priority deadlines.

Army Audit Agency   In April 1989 we reported on the effectiveness of the Army Audit
                    Agency.” This was the second in a planned series of reviews of Depart-
                    ment of Defense (DOD) internal audit organizations requested by the
                    House Committee on Armed Services, Subcommittee on Readiness. We
                    reviewed, among other things, the impact of proposed staff reductions
                    on the Agency’s audit coverage.

                    In fiscal year 1988, the Agency had an authorized staffing level of 861
                    and an operating budget of $41 million. In April 1988 the Acting Secre-
                    tary of the Army directed a 13-percent reduction in Agency staffing in
                    fiscal year 1989. An Assistant Secretary told us that budgetary reduc-
                    tions forced the Army to consider staff reductions. Such a reduction
                    would have put audit resources at the lowest level in more than 11 years
                    and could have significantly impaired the internal audit coverage in the
                    Army, where audit work load had expanded during the previous 8 years

                     ‘“Army Audit Agency:__-
                                          Staff Redu~~tions
                                                 ~~~     and Audit Quality Issues(GAO/AFMD-89-1,Apr. 21, 1989).

                     Page 29                                              GAO/GGDOO-103Public service Issues
                   Some candidates told FDA officials they could not afford financially to
                   consider an FDA position. An FDA report described the case of one candi-
                   date who was an associate professor of medicine at an eastern univer-
                   sity. Despite his interest in the position, the candidate withdrew his
                   name from consideration because of (1) the disparity between his uni-
                   versity salary ($91,200) and FDA'S salary offer (about $76,000); (2) the
                   loss of university-provided benefits, such as health insurance and retire-
                   ment, which were completely paid for by the university; and (3) the sig-
                   nificantly higher cost of living in the Washington, DC., area. FDA
                   believed that the quality of candidates applying for positions was lower
                   than that of those in the private sector because of the wide disparities in
                   salary and benefits.

                   FDA has also had a difficult    time retaining scientists and engineers in
                   nine critical specialties-particularly      medical officers. From fiscal years
                   1985 through 1988, FDA lost from 18 to 22 percent of its medical officers
                   each year. Although several factors contributed to the turnover, FDA
                   often cited disparities in salary as a chief reason. A 1987 FDA study, for
                   example, compared salaries for FDA toxicologists with those for similar
                   positions in industry. The study found that industry salaries were 31
                   percent higher at the FDA entry level (a ~-11, Ph.D.), 25 percent higher
                   at the senior management level, and about 40 percent higher for senior
                   executive equivalent positions.

                   The impact of FDA'S personnel and retention problems may worsen
                   during the next decade because about three-fourths of FDA'S senior staff
                   will be eligible to retire.

U.S. Park Police   In September 1989 we reported on the results of our review of recruit-
                   ment and retention in the US. Park Police, the agency in the Department
                   of the Interior responsible for patrolling national parks and other fed-
                   eral lands, primarily in the Washington, D.C., area.‘” This report also
                   described how the pay and benefits package of the U.S. Park Police com-
                   pared with those of other police units in the Washington, D.C., area.,
                   which we discuss later in this chapter. The report was requested by five
                   1J.S.Senators concerned about the Park Police’s possible recruiting and
                   retention problems.

                   “Federal Pay: U.S.Park PoliceCompensationComparedWith That of Other PoliceUnits (GAO/

                   page31                                              GAO/GGD90-103PublicSeniceIssues
                       Assuring the Quality of the Public Service

                       We concluded that unless the problems with pay and personnel manage-
                       ment practices were resolved, the situation could well worsen.

Bureau of the Census   During peak operations in 1990, at a cost exceeding $1 million per hour,
                       more than 300,000 temporary employees working out of nearly 500
                       offices attempted to count all U.S. residents. Few federal domestic activ-
                       ities will have as great an impact as the 1990 decennial census,
                       America’s 21st decennial census. Political power and the distribution of
                       billions of dollars of federal funds are at stake. Among other purposes,
                       the 1990 census will provide the basis for reapportioning the House of
                       Representatives, redrawing state legislative district lines, and allocating
                       federal grant-in-aid funds to state and local governments. In addition,
                       census data are used for scores of other business and research purposes.

                       During fiscal year 1989, we issued two reports to and testified twice
                       before the House Subcommittee on Census and Population, Committee
                       on Post Office and Civil Service, on key issues in the upcoming census.‘”
                       We also testified before the Senate Subcommittee on Government Infor-
                       mation and Regulation, Committee on Governmental Affairs, in May
                       1989 on related issues.” We pointed out that the Bureau of the Census
                       faced, among other things, a major challenge in acquiring and retaining
                       a sufficient number of competent temporary employees to take the 1990

                       To achieve full staffing, the Bureau needed to screen about 1.6 million
                       applicants, or about 3 or 4 applicants per position. The Bureau was
                       encountering difficulties in obtaining and holding a sufficient number of
                       temporary census employees in areas of 11 states when we reviewed
                       recruiting reports for 10 regional census offices for precensus activities
                       in 1988. In addition, almost one-half of the Bureau’s district offices were
                       unable to meet the 1989 recruiting goal of four applicants for every field
                       position during precanvass activities. These activities involved can-
                       vassing urban areas to check the accuracy and completeness of address
                       lists the Bureau purchased from commercial vendors. Staff shortages
                       were the major reason that about 14 percent, or 15 of the 109 district
                       offices, finished the precanvass at least a week behind schedule. Staff

                       “‘Status of Plansfor the 1990Dwenmal Census:An Update(GAO/T-GGD-89.15,Mar. 23, 1989);
                       Expanding the DecennialCensusApplicant Pool(GAO/TGGD89-22, May 23,1989); 1990Census:
                       Overview of Key Issues(GAO/GGD-8%77BR,July 3,1989); 1990Census:Delaysin Completingthe
                       AddressList for Suburbanand Rural Areas(GAO/GGD-89-74,July 10,1989);Statusof 1990Census
                       Promotionand OutreachActivities (GAO/T-GGDSS-40,Sept.20, 1989).
                        ‘;Status of Plans for the 1990Ikvwmial Census(GAO/TGGD-89-20,May 5, 1989).

                        Page 33                                             GAO/GGD-90103Public Service Issues
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                                Assuring the Quality of the Public Service

                                Our work in the area of federal compensation indicates that the federal
Competitive                     government’s pay and benefit structure has serious implications for the
Compensation Is                 quality of the federal workforce. In particular, the federal government
Critical to Maintaining         must pay competitive salaries and benefits to recruit and retain a high-
                                quality workforce in a competitive labor market. This basic tenet of
a Quality Workforce             sound personnel management is recognized in the merit principles,
                                which require that equal pay be provided for work of equal value, with
                                appropriate consideration for national and local rates paid in the private
                                sector and with appropriate incentives and recognition for excellent per-
                                formance. However, a large and growing gap exists between average
                                federal and private sector pay rates for comparable jobs.

                                During fiscal year 1989, we reported and testified on many aspects of
                                the government’s pay and benefit structure. This work addressed why
                                federal pay reform is such a serious issue, types of alternative pay sys-
                                tems the government could adopt, the diversity in agency compensation
                                policies and practices, and federal retirement issues. The federal health
                                benefits program, which is a major component of the government’s com-
                                pensation package, is discussed in chapter 5 under OPM’S performance in
                                administering civil service programs.

Why Federal Pay Reform          In June 1989 we testified before the House Subcommittee on Employ-
HIS Become   Such   a Serious   ment and Housing, Government Operations Committee, on locality pay
                                for federal employees.‘* To explain why federal pay reform has become
Topic                           such a serious topic, we briefly reviewed the history of federal pay

                                Since 1962 the law has required that federal white-collar employee pay
                                rates be set and adjusted on the basis of overall comparability with the
                                private sector. The comparability principle holds that the private sector,
                                through collective bargaining, cost-of-living considerations, pay surveys,
                                and other factors, determines the “going rates” for jobs comparable with
                                those found in the government. The government then is to pay the
                                national average rates paid in the private sector for similar work. In
                                concept, pay comparability was designed to assure federal employees
                                fair pay for the work they do and assure the nation’s taxpayers that
                                federal pay rates are reasonable compared with what others in the
                                country make for similar work.

                                 ‘“Locality Pay for FederalEnrploqees(GAO/T-GGD-89-27,June 26, 1989).

                                 Page 36                                              GAO/GGD90-103Public Service Issues
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Table 2.2: Pay Comparison of Selected
Federal and Private Sector Occupations                                                             Median private                      Median
(1999)                                   Occupation                                                    sector pay                 federal pay’
                                         Key Entry Operator    I                                            $13,311                     $11,970
                                         Key Entry Operator    II                                            17,185                      13,241
                                         Computer Operator      I                                            14,722                      14,863
                                         Computer Operator      V                                            31,022                      22,812
                                         Stenographer I                                                      22,462                      13,241
                                         Stenographer II                                                     23,528                      14,863
                                         Buyer I                                                             21,266                      16,630
                                         Buyer IV                                                            42,533                      30.488
                                         Chemist I                                                           25,694                      16,630
                                         Chemist VII                                                         77,062                      51,347
                                         Systems Analyst I                                                   30,770                      25,199
                                         Systems Analyst VI                                                   76,382                      60.397
                                         Attorney I                                                           31,987                      25,199
                                         Attorney VI                                                         107,207                      60,397
                                         aMedian federal pay was calculated using step 4 of the fiscal year 1988 pay grade specified for that
                                         occupatton by the Presrdent’s Pay Agent
                                         Source. Annual Report of the Presrdent‘s Pay Agent, August 1988.

                                         Another problem with the administration of comparability is its
                                         assumption that private sector pay rates are similar in different parts of
                                         the country. The General Schedule or GS pay system-the primary fed-
                                         eral white-collar pay system-applies nationwide, with every particular
                                         job paid the same regardless of location. An entry-level secretary in New
                                          York is paid the same as an entry-level secretary in Denver or San

                                         In fact, private sector pay rates for the same job and local costs of living
                                         vary substantially across the country. The national average pay used in
                                         the comparability process often has little relevance to local private
                                         sector rates or the compensation needs of federal employees. Currently,
                                         the only systematic way federal white-collar pay rates can vary by
                                         OCCUpatiOn or locality iS if OPM approves special rates to counteract
                                         recruitment and retention problems caused by higher private sector pay.
                                         Employing agencies must certify that they have sufficient funds to pay
                                         the higher amounts before special rates will be approved. OPM has testi-
                                         fied that the special rates program cannot adequately address the need
                                         for variances from the General Schedule.

                                          We further testified that the current uniform Gs pay system can have at
                                          least two negative effects on the federal workforce. Differences in the

                                          Page 37                                                      GAO/GGD-!%%I03
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Assuring the Quality of tbe Public Service

of-living differentials to GS rates for its employees in high cost-of-living
locations. One such location is San Francisco, where Corporation
employees get a 19.4 percent pay differential-the      highest in the
country. In another cost-of-living-based program, civilian employees in
nonforeign areas outside the continental United States, such as Alaska,
Hawaii, and Puerto Rico, receive cost-of-living allowances of up to 25
percent of base pay. The allowances are intended to equalize the
purchasing power of these employees with the purchasing power of
employees in Washington, DC.

The Federal Wage System for blue-collar workers is an example of a
market-based locality pay system. In this system, wage-fixing authori-
ties in each of 135 designated areas throughout the country survey local
private sector employers to determine the prevailing wage rates for
blue-collar jobs comparable with those in the government. Each of the
135 wage areas adjusts its pay structure annually to reflect the average
private sector wage rates in the area. The differences in federal pay for
the same job across the wage areas are substantial. For example, in
fiscal year 1988, federal blue-collar employees at grade 10, step 2, were
paid $9.06 an hour in Columbus-Aberdeen, Mississippi, and $13.46 an
hour in San Francisco-a 49-percent difference.

Nevertheless, the Federal Wage System does not perfectly mirror pri-
vate sector pay. Through appropriation limitations imposed by Congress
during the past several years, pay increases for employees covered by
the wage system have been limited to no more than the percentage pay
raises granted to white-collar employees. Thus, wage system rates in
many areas are now well below the prevailing private sector rates. For
example, federal blue-collar workers at grade 10, step 2, in San Fran-
cisco were paid 15.75 percent less than their private sector counterparts
in fiscal year 1988.

The special rate program is also a form of market-based locality pay
because it uses private sector pay rates as one factor in setting pay for
selected white-collar federal employees. The program does not always
permit special rates high enough, however, to match private sector pay
rates for particular occupations and may not be awarded at all if an
agency is unwilling or unable to absorb the cost of the increase.
Although the special rate program and other locality or market-based
pay initiatives are significant attempts to make white-collar pay more
flexible and market sensitive, they affect only a portion of the federal
white-collar workforce.

Page 39                                       GAO/GGBENHO3   Public Servioe lseuen

                                 Chapter 2
                                 Assuring the Quality of the Public Service

U.S. Park Police                 In September 1989 we reported on a comparison of the pay and benefits
                                 package of the U.S. Park Police with those of other police units in the
                                 Washington, D.C., area.“” This report also described the results of our
                                 review of possible recruitment and retention problems in the Park
                                 Police, which we discussed earlier in this chapter.

                                 While most federal police officers are under the GSsystem, Park Police
                                 are under a different pay system, as were three other federal police
                                 units (Secret Service Uniformed Division, Library of Congress, and U.S.
                                 Capitol) in our comparison. We found that the starting salaries for full
                                 performance level employees at six of eight nonfederal police units with
                                 comparable duties and responsibilities were higher than those for the
                                 Park Police. The six paid starting salaries to full performance level
                                 employees that were from $175 to $2,590 above the Park Police’s
                                 $24,450 salary. In addition to regular pay, Park Police and other police
                                 units with comparable positions paid their officers a longevity bonus,
                                 ranging from 6 percent of the minimum salary for the position after 15
                                 years of service to 20 percent after 30 years.

                                 Generally, Park Police benefits, including retirement, health insurance,
                                 and workers’ compensation, were comparable with, or better than, the
                                 benefits of most police units we reviewed. Life insurance coverage for
                                 Park Police and other federal police officers was more costly to
                                 employees. Park Police provided uniforms, but it did not provide educa-
                                 tion or tuition assistance to its officers as did most of the other police
                                 units reviewed.

Federal Civilian J?irefighters   In September 1989 we reported on the need for Congress and the Secre-
                                 tary of Defense to address aspects of how federal civilian firefighters
                                 are paid.21 The report was requested by the House Subcommittees on
                                 Postal Operations and Services and Compensation and Employee Bene-
                                 fits of the Committee on Post Office and Civil Service. Because DOD
                                 employs more than 80 percent of about 11,000 federal civilian
                                 firefighters, we focused our review on DOD.

                                 Most federal civilian firefighters have a tour of duty of 72 hours per 7-
                                 day workweek, or 144 hours per biweekly pay period. The firefighters
                                 work on a one-day-on/one-day-off basis for a total of three 24-hour

                                 “°FederalPay: U.S.Park PoliceCompensationComparedWith That of Other PoliceUnits (GAO/
                                 “‘Federal Pay:Complexitiesin CalculatingFederalCivilian Firefighters’ Pay (GAO/GGD-89.131,
                                 Sept.29, 1989).

                                 Page 41                                                GAO/GGB90.102Public Service Issues
                                    Assuring the Quality of the Public Service

                                    advantages to all contributions to the plan). We reported on the imple-
                                    mentation of FERSby these agencies in a 1988 report.22

                                    During fiscal year 1989, we reported on several aspects of the govern-
                                    ment’s management of the federal retirement system including the

                                . need for federal agencies and the Thrift Board to encourage greater par-
                                  ticipation in the Thrift Savings Plan,
                                l extensive use of contractors to implement FERS,
                                . effects of early retirements in certain DOD components in fiscal year
                                l preferential retirement benefits to law enforcement personnel, and
                                l duplication of benefits provided federal retirees under the Federal
                                  Employees Health Benefits Program and the Medicare Catastrophic Cov-
                                  erage Act of 1988.

                                    We also reported, as required by law, on the reasonableness of the basis
                                    for the fiscal year 1990 federal payment of about $34 million to the Dis-
                                    trict of Columbia Police Officers and Firefighters’ Retirement Fund.

Greater Participation in the        In July 1989 we testified before the House Subcommittee on Compensa-
Thrift SavingsPlan Should E3e       tion and Employee Benefits, Committee on Post Office and Civil Service,
Encouraged                          on a bill to amend the FEKSAct of 1986.‘:’ As of May 1989, about 800,000
                                    employees covered by FERS and 400,000 employees covered by CSRShad
                                    thrift savings accounts. While FERS,for the most part, has been success-
                                    fully implemented, we testified that agencies and the Thrift Board still
                                    face a challenge in encouraging employees who are not contributing to
                                    make the thrift plan a part of their retirement program.

                                    About 800,000 FERS employees have thrift fund accounts because of the
                                    automatic l-percent government contribution. Less than 400,000 of
                                    these employees, however, were contributing any money of their own
                                    and receiving matching government contributions. Unless noncontrib-
                                    uting employees can be encouraged to participate, when these
                                    employees retire, their benefits will be significantly less than those of
                                    employees covered by CSKS,and by then it will be too late to do anything
                                    about it. This is because the FERS program was designed to provide bene-
                                    fits comparable to CSRS only when employees fully participate in the

                                    “Federal Retirement:Implementationof the FederalEmployeesRetirementSystem(GAO/
                                        88-107, Aug. 4, 1988).
                                    ‘,‘H.R. 2614.FederalRetirementThrift SavingsPlan (GAO/T-GGD-8995,July 25, 1989).

                                    Page 43                                              GAO/GGIWO-103Public Service Issues
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                                      Assuring the Quality of tbe Public Service

                                      more opportunities for employees to participate more fully in the thrift
                                      savings plan by allowing them to invest in whatever investment fund
                                      best meets their personal investment goals.

Extensive Use of Contractors and In February 1989 we reported on the extent that OPM, SSA,and the Thrift
Other AgenciesWasMadeto          Board used contractors and other agencies to assist them in imple-
Implement FEXS                   menting FERS, the cost of these services, and whether the agencies could
                                      have used their own employees and equipment to provide the products
                                      and services in a timely manner.2” The Senate Subcommittee on Federal
                                      Services, Post Office and Civil Service, Committee on Governmental
                                      Affairs, requested the report.

                                      Each of the agencies used the services of other federal agencies and con-
                                      tractors extensively in implementing FERS, as discussed below.

                                  l   OPM paid about $3.8 million (about $2.2 million to other agencies and
                                    about $1.6 million to contractors) primarily to develop and print infor-
                                    mation to help federal employees better understand and compare the
                                    features of FERS and CSRSand to take preliminary steps toward the
                                    design and implementation of an automated FERS recordkeeping system.
                                  . ss~ contracted through the Government Printing Office for an auto-
                                    mated system using machine-readable forms to respond to federal
                                    employees’ requests for Social Security earnings and coverage informa-
                                    tion. The total cost to design, print, and process forms was $621,506.
                                  . The Thrift Board paid about $14.6 million (about $14.3 million to other
                                    agencies and about $0.3 million to contractors) primarily to develop and
                                    operate an automated recordkeeping system and to prepare, print, and
                                    distribute materials and forms.

                                       We concluded that using contractors and other agencies to provide these
                                       products and services was appropriate because (1) the principal agen-
                                       cies’ staffs either were too small or lacked the capability, (2) some prod-
                                       ucts or services were needed on a one-time-only basis, and (3)
                                       government printing regulations restrict agencies from printing large
                                       amounts in-house.

                                       ‘“Federal Retirement:Useof Contractorsto Implementthe FederalEmployeesRetirementSystem
                                       iGAO/GGD89-29, Feb.1, 1989)

                                       Page 46                                             GAO/GGDW-103Public ServicazIssues
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                                      Assuring the Quality of the Public Service

Preferential RetirementBenefits       In February 1989 we reported on the extent to which law enforcement
To Law Enforcement Personnel          personnel receive preferential retirement benefits.27 The report was
                                      requested by the Senate Subcommittee on Federal Services, Post Office,
                                      and Civil Service, Committee on Governmental Affairs, which expressed
                                      concern that agencies may have inappropriately classified jobs in the
                                      law enforcement job category so they could use special retirement provi-
                                      sions to aid in employee recruitment and retention.

                                      Law enforcement retirement benefits are more generous and costly than
                                      such benefits for regular employees. Law enforcement personnel can
                                      retire at age 50 with 20 years of service, whereas other employees must
                                      be at least 55 with 30 years of service. They also accrue annuities at a
                                      faster rate. Under CSRS,the cost for regular pension benefits is estimated
                                      to be 28.7 percent of pay, while the special retirement benefits for law
                                      enforcement personnel are estimated to cost 43.9 percent of pay. Under
                                      FERS, which covered an estimated 25 percent of federal law enforcement
                                      personnel as of July 1988, the cost for pension plan benefits for regular
                                      employees was estimated to cost 13.8 percent of pay, while the cost for
                                      special pension plan benefits for law enforcement personnel was esti-
                                      mated to be 26.7 percent of pay. In fiscal year 1987, law enforcement
                                      personnel retired, on average, at age 53 with 28 years of service. Other
                                      federal employees retired, on average, at age 61 with 29 years of

                                      Baaed on data from OPM, the Departments of Justice and the Treasury,
                                      and the U.S. Customs Service, we discussed the increase in law enforce-
                                      ment employees and positions covered by special retirement benefits,
                                      the extent to which new positions were created to aid in recruiting and
                                      retaining new employees, and the potential effects of related proposed
                                      legislation, as summarized below.

                                  l   As of June 30, 1987,44,646 employees were covered by the law enforce-
                                      ment retirement benefits in 4,114 positions within 245 different occupa-
                                      tional series. The number of law enforcement employees covered
                                      increased 32 percent from December 1982 through June 1987. During
                                      this time, the total number of law enforcement positions approved by
                                      OPM for special retirement benefits in CSRSincreased 44 percent. Agen-
                                      cies attributed these increases to an expansion of the government’s law
                                      enforcement programs.

                                      27FederalWorkforce:PositionsEligible for Law EnforcementOfficer RetirementBenefits(GAO/

                                      Page 47                                               GAO/GGDSO-103Public Service Issues
                                  Chapter 2
                                  Assuring the Quality of tbe Public !+xvice

                                  among other things, our review of the actuarial study on the rebate
                                  amount prepared under contract to OPM and our verification of OPM

Annual Report Required by the     In March 1989 we reported, as required by law, on the reasonableness of
District of Columbia Retirement   the basis for the fiscal year 1990 federal payment of about $34 million
Reform Act                        to the District of Columbia Police Officers and Firefighters’ Retirement
                                  Fund.2QSpecifically, the District of Columbia Retirement Reform Act
                                  requires the Comptroller General to annually determine if the annual
                                  federal payment to the fund should be reduced based on a review of the
                                  disability retirement rate computed by an enrolled actuary. The purpose
                                  of subjecting the payments to a reduction was to encourage the District
                                  government to control disability retirement costs. Our review of the
                                  actuary’s report and other relevant data concluded that no reduction
                                  was required in the fiscal year 1990 payment.

                                  %iitrict’s Workforce:Annual ReportRequiredby the District of ColumbiaRetirementReformAct
                                  (GAO/GGD-89-57,Mar. 22.1989)

                                  Page 49                                              GAO/GGD-90103Public Service Issues
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                            Improving the Effectiveness of the
                            Public Service

Lack of Management          In July 1989 we reported on the need for better management of the Air
                            Force’s modernization of equipment and subsystems in the command
Continuity and              and control center for the North American Aerospace Defense Command
Accountability Hinders an   (NORAD) at the Cheyenne Mountain Air Force Station.’ This command is
Air Force Modernization     responsible for notifying U.S. and Canadian leaders that North America
Effort                      is under air or missile attack. The House Subcommittee on Defense,
                            Committee on Appropriations, requested the report.

                            In 1981 the Air Force began developing five modernization programs to
                            replace or upgrade computer subsystems at the Cheyenne Mountain
                            complex. These programs are still under development, at an estimated
                            total cost exceeding $1.76 billion. The Air Force planned to spend more
                            than $775 million through fiscal year 1989 to modernize and replace the
                            computer and communications subsystems at NORAD’S Cheyenne Moun-
                            tain complex. After almost 9 years of development, none of the five
                            modernization programs is fully operational. The Air Force estimated
                            that it will need several more years to complete the modernization it
                            initially planned to complete by 1987.

                            We reported on several long-standing, unresolved problems that could
                            disrupt the ability of the various modernization initiatives to work
                            together effectively to accomplish NOR&S mission. Among the problems
                            are diffused accountability across a large, multicommand management
                            structure, along with frequent turnover in key command and manage-
                            ment positions. No single, accountable manager beneath the Air Force
                            Chief of Staff has authority, accountability, and responsibility for the
                            total system. Without a single manager at the command level, the
                            responsible Air Force commands have been managing development and
                            integration by consensus, through a proliferation of boards and working
                            groups. The average tenure for the program managers responsible for
                            the five modernization programs has been 22.5 months. In this environ-
                            ment, where authority and responsibility are diffused and management
                            continuity has not been maintained, a practice has evolved of deferring
                            problems to later years of the program and, therefore, to future man-
                             agers, rather than solving them when they arise. When problems are
                             deferred, specific accountability is lost.

                            ‘Attack Waming:Better ManagementRequiredto ResolveNORADIntegration Deficiencies(GAO/
                            I MTEC-RS-26,

                            Page 51                                            GAO/GGD90-103Public Service Issues
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                              Public Service

                      l       A March 1989 report by the National Commission on the Public Service,
                              Leadership for America: Rebuilding the Public Service, said the Presi-
                              dent and Congress must ensure that federal managers receive the added
                              training they need to perform effectively. A Commission task force rec-
                              ommended regular training for all professional federal employees and
                              suggested a minimum of 80 hours of continuous education every 2
                              years. We endorsed this concept.

                              Regarding the usefulness of executive training and development, we
                              reported the following:

                          l Executives generally perceive their training and development exper-
                            iences as moderately to very useful in helping them carry out their SES
                            duties. This was so for experiences both before and after appointment;
                            however, executives from large and medium-sized agencies thought
                            more of their preappointment experiences than did executives from
                            small agencies.
                          . Among the specific benefits their experiences provided, we asked execu-
                            tives if they improved their skills and abilities in the six major compe-
                            tency areas OPM considers essential for executive performance. They
                            often perceived other, greater benefits from their experiences, such as
                            broadening their perspectives of other federal and nonfederal organiza-
                            tions and creating opportunities to change routines and challenge
                          l  Mechanisms OPM requires to enhance the usefulness of executive
                            training and development have not been effectively used. These mecha-
                             nisms include a formal assessment process to identify training needs,
                             individual advisors for SEScandidates, and Executive Resources Boards
                             to give top level direction and oversight.

                              Actions OPM plans to take to address problems highlighted in this report
                              are discussed in chapter 5 in the section on OPM’S performance in
                              administering civil service programs.

Lack of Data on SES           In April 1989 we reported on the lack of readily available data on hard-
Vacancies                     to-fill SESvacancies.:’ The report was requested by the House Post Office
                              and Civil Service Committee, which wanted us to obtain information on
                              SE positions vacant 120 days or more and the reasons for agencies’

                              “SeniorExecutive Service:Data on Hard-m-Fill VacanciesNot ReadilyAvailable (GAO/
                              -,            Apr. 26, 1989).

                               Page 63                                               GAO/GGD-90-103Public Service Issues
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year were paid by their private sector employers rather than by govern-
ment. The act required us to identify the advantages and disadvantages
of the experimental approach and recommend whether it should be

Between October 1970 and February 1989,867 executives participated
in the executive exchange program: 561 from the private sector and 306
from the government. The private sector executives are assigned to a
government agency generally for 1 year, and government executives
spend 1 year in the private sector. Seventy private sector and govern-
ment executives participated in the program in fiscal years 1988 and
1989. Of the 43 private sector executives participating in the exchange
program during this period, 18 were in the experimental component and
were paid their full salaries by their corporate employers; salaries of the
other 25 were paid by the government up to the SESsalary ceiling
($77,500 in October 1987, which was raised to $80,700 in January

Overall, we found that the experimental component has achieved its
objective of facilitating the recruitment of high-level private sector exec-
utives. It has also resulted in other benefits, such as savings to the gov-
ernment and greater agency participation. Views of private sector
executives, their employers, and government hosts are generally posi-
tive toward the experimental component. We found no disadvantages of
the experimental component to the government. The program’s conflict-
of-interest procedures appear to be adequate. We did note, however, an
inequity in the program that should be corrected. While private sector
executives in the program continue to receive most of their fringe bene-
fits from their corporate employers, federal participants are in a leave-
without-pay status, and certain federal employee benefits are reduced
or not available to them.

Table 3.1 lists specific recommendations we made to Congress to
improve implementation of the program. As long as adequate controls
over conflicts of interest remain, we believe the experimental authority
should be extended and expanded to permit more than 10 executives a
year to receive their full salaries. We also believe that federal executives
should continue to receive their employee benefits. This could be done
by detailing the executives to private sector hosts. The government
should absorb the cost of participating federal executives’ benefits, as
do the private sector firms for executives participating in the program.
We do not believe these costs to the government would be significant

Page 65                                      GAO/GGDW103 Public SewIce Issues
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state-local government cooperation by strengthening the personnel capa-
bilities of state and local governments.

We found that the mobility program has benefited both federal agencies
and nonfederal organizations. The program has provided federal agen-
cies with a way to satisfy many personnel needs. Agencies find the pro-
gram beneficial because of the flexibility it offers in obtaining the
temporary services of nonfederal personnel. Also, agencies have used
the program primarily to obtain the services of college and university
personnel. While the act clearly permits agencies to bring personnel into
the federal government from colleges and universities for practically
any purpose and to pay all salary and related assignment costs, such
assignments are to be mutually beneficial to federal and nonfederal
organizations. In addition, costs are to be shared accordingly. The agree-
ments we reviewed, however, indicated that the federal government is
often the primary beneficiary and, consequently, absorbs most-and
many times all-assignment costs.

While federal agencies are using the mobility program in accordance
with the act and finding their current mobility assignments beneficial,
the main use of the program today differs substantially from the basic
purpose set forth in the 1970 act. Considering this and the fact that
other programs for grants, training, and technical assistance authorized
under the act have been discontinued, Congress may want to reassess
and clarify the primary purpose of the program. Specifically, should the
primary purpose of the program be to improve personnel capabilities of
state and local governments or to help federal agencies by bringing in
personnel from colleges and universities?

Because of the widespread use of mobility assignments among federal
agencies and the importance agencies give the program, Congress may
also want to require OI'M to report periodically on issues like program
costs and benefits, legislative or regulatory compliance, and program
results. Chapter 5 discusses, in a section on OPM's administration of civil
service programs, the need for OPM to strengthen its oversight of the
mobility program.

Page 67                                      GAO/GGIMO-103Public Service Issues
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                                 Public Service

Controller Field Tra,ining       The first report, issued in March 1989, examined FAA’s program for pro-
                                 viding field training to developmental and experienced (full perform-
                                 ance level) controllers.” The report was requested by the House
                                 Subcommittee on Investigations and Oversight, Committee on Public
                                 Works and Transportation.

                                 The National Transportation Safety Board has linked deficiencies in
                                 training to impairments in air traffic safety. We found opportunities to
                                 improve both delivery and oversight of the controller field training pro-
                                 gram. Specifically, we found the following:

                             l On-the-job training provided to developmental controllers at field facili-
                               ties is not standardized despite recent FAA efforts to make it more
                             9 Experienced controllers are receiving only limited amounts of training to
                               maintain and upgrade their knowledge and skills.
                             l FAA does not maintain sufficient data to oversee controller field training.
                             . FAA has not evaluated contractor-provided training at certain centers.

                                 FAA  recognizes the need to improve its field training programs, and in
                                 August 1988, it announced a series of initiatives to improve controller
                                 training. While these initiatives should strengthen FAA’S training pro-
                                 grams, we made specific recommendations aimed at improving both
                                 FAA’s implementation and oversight of controller field training. FAA gen-
                                 erally agreed with our recommendations and is implementing them.

Aviation Safety Inspectors       The second report, issued in September 1989, examined FAA’S training of
                                 its aviation safety inspectors to determine whether the training is what
                                 is needed for their jobs.’ Two House Subcommittees of the Committee on
                                 Public Works and Transportation requested the report.

                                 FAA employs about 2,300 aviation safety inspectors to oversee compli-
                                 ance with air safety regulations. These inspectors are divided into two
                                 groups-operations     inspectors and airworthiness inspectors. Operations
                                 inspectors are pilots employed by FAA responsible for checking pilots to
                                 determine their capability to operate aircraft safely, evaluating air car-
                                 rier operations for compliance with safety regulations, and investigating
                                 accidents and incidents. Airworthiness inspectors are responsible for

                                 “FAA Training: ContinuedImprovementsi%ededin Fk4’s Controller Field Trainmg Program(GAO/
                                 RCXD89_83, Mar. 29,1989).
                                            raining FXA Aviation Safety InspectorsAre A’otReceivinghkded Training (GAO/
                                            68, Sepp

                                  Page 59                                              GAO/GGLWO-103
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                               Chapter 3
                               Improvingthe Effectiveness of the
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                           . Nineteen reported plans to start the required training programs during
                             the period November 1988 through April 1989.
                           l Two reported having none of the required training programs and did not
                             say when they would start. These two agencies were the Commission on
                             Civil Rights and the National Mediation Board.
                           l Fifteen stated they have no computer systems containing sensitive

Implementation of a            In July 1989 we reported on the State Department’s implementation of
                               section 703 of the Foreign Service Act of 1980, which requires the Secre-
Professional Development       tary of State to establish professional development programs for all For-
Program for Members of         eign Service members.!’ The Senate Committee on Foreign Relations
the Foreign Service            requested the report.

                               The 1980 act highlighted the need for training of Foreign Service per-
                               sonnel. The State Department employs the largest number of such per-
                               sonnel with 5,100 Foreign Service officers, who are traditionally
                               considered to be diplomats; and about 4,200 Foreign Service specialists,
                               such as medical doctors, secretaries, and security personnel. The State
                               Department responded to the act by revising many of its training pro-
                               grams and developing new programs. For example, State revised junior
                               officer entry-level training to place more emphasis on assignment-
                               related training rather than on orientation and developed a new mid-
                               level training program. State also integrated its area studies program
                               with its language training t.o more closely coordinate these two aspects
                               of preparing personnel for overseas assignments. State’s fiscal year
                               1989 budget for professional training and development totaled about
                               $45.8 million.

                               We found that the overall amount of training has declined in recent
                               years, and relatively less time is spent on political training than on
                               training for other Foreign Service assignment areas. We concluded that
                               increased management attention to the following factors could result in
                               improved Foreign Service personnel participation in training programs:
                               staff reluctance to attend training; funding and logistical problems,
                               which restrict attendance; and operational pressures, which may pre-
                               vent staff from leaving their jobs for lengthy training courses.

                                “State Department.Professic!rl;dlh$pment   of ForeignServiceEmployees(GAO/NSIAD-89-149,
                                July 26, 1989).

                                Page 61                                               GAO/GGDW103 Public Service Issues
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    We reviewed PMRSshortly after it was established and reported on many
    implementation problems.l” During fiscal year 1989, we issued two addi-
    tional reports in May and September that confirmed the earlier identi-
    fied problems, and we testified in July before the House Subcommittee
    on Compensation and Employee Benefits, Committee on Post Office and
    Civil Service, on options for reauthorizing PMRS.”

    In general, we found that employees covered by PMRSthought that it did
    not fully meet its objectives to motivate and reward them. PMRS’ short-
    comings have been reported as follows:

l performance was not a major determinant of who received performance
l awards were too small to motivate employees;
. performance ratings and awards were inequitable; and
l employees who were rated as fully successful and were in the middle
  third of their pay range received the equivalent of one-third of a step
  increase, whereas similarly situated    employees received one-half of

  an increase. Thus, PMKS employees in this category were unfairly paid
  compared with their General Schedule counterparts.

    With passage of the Performance Management and Recognition System
    Reauthorization Act of 1989, Congress adopted the suggestions we made
    in our July 1989 testimony to (1) correct the pay inequity for certain
    PMRS employees referred to above and (‘2) defer passage of major PMRS
    modifications pending further research and study by OPM. Some major
    modifications being proposed for PMRS included revising the appraisal
    system from a five- to three-tier rating system and establishing agency
    performance review boards to review recommendations and decide who
    should receive a performance reward and for how much. Our testimony
    expressed reservations about these changes and suggested they be con-
    sidered further before implementation.

    Our September 1989 report presented the views of 44 agency personnel
    directors on various aspects of PMRS Although they expressed little
    agreement on how PMRSshould be changed, two suggestions appeared
    most often. About 73 percent wanted increased funding for performance

    “‘Pay for Performance:Implementationof the PerformanceManagementand RecognitionSystem
    (GAO/GGD87-28, Jan 21,lSW).
     “Pay for Performance:interim Reporton the PerformanceManagementand RecognitionSystem
     (GAO/GGD89-69BR,May 18, 1989);Pay for Performance:AgencyPersonnelDirectors’Views
     (GAO/GGD-89-126FS,Sept. 15,1989);Commentson Reauthorizationof the PerformanceManage
     mat and RecognitionSystem(GAO/T&D-89-36, July 18,1989)

     Page 63                                            GAO/GGD-90.103Public Service Issues
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                         of the
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to be placed on a performance improvement plan; the process can be
initiated any time during the appraisal period. The improvement plan
identifies the employee’s deficiencies, what the employee must do to
improve his or her performance, the supervisory assistance to be pro-
vided, and the time period the plan is to remain in effect. %A guidelines
recommend that during the time the performance improvement plan is
in effect the supervisor assist the employee with remedial training, addi-
tional monitoring, and feedback.

While we found that SSA supervisors have had success in dealing with
poor performers, SSA’Ssystem for dealing with poor performers could
improve. Some supervisors were having difficulty using performance
standards to identify poor performance, and they did not always use the
performance improvement plan process. In addition, some supervisors
were reluctant to deal with poor performers because of a perceived lack
of adequate management support or authority to act against poor per-
formers. It was unclear whether these problems reflected a need for pro-
cedural improvements, for improved training in dealing with poor
performers, or for both. Significantly, we found that SSAhas not moni-
tored the effectiveness of its process for identifying and dealing with
poor performers. In our opinion, improved monitoring would help SSA
management identify problems in dealing with poor performers and
seek solutions.

SSAagreed with our recommendations to address these problems but
stated that a need also exists to address the specific problem of man-
agers’ evaluating unacceptable performance as minimally successful or
satisfactory. SSAsaid that increased training, a tightening of current per-
formance standards, and a more visible management commitment would
help achieve the desired results. We agree.

The second report, issued in September 1989, addressed the Federal
Aviation Administration’s process for removing pilot examiners who are
not satisfactorily carrying out their responsibilities.‘” Two Subcommit-
tees of the House Committee on Public Works and Transportation
requested the report. Pilot examiners are private, non-FAA personnel to
whom FAA delegates most of its authority and responsibility for certi-
fying the competency of pilots. FAA has designated about 1,430 pilot
examiners as official representatives of the FAA Administrator. For fees

 ‘“Aviation Safety: FAA HasImpmved Its RemovalProceduresfor Pilot Examiners(GAO/
 Rm _89_199) Sept.8, 1989)

 Page 66                                             GAO/GGD90-103Public Service Iseues
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penalties. The Postal Service believes, and we agree, that supervisors
need flexibility in selecting penalties to account for individual cases, but
rules for disciplining employees and selecting penalties should be uni-
form. However, the Postal Service guidance to supervisors is not suffi-
cient to assure such uniformity.

Craft employees of the Postal Service work under uniform rules and are
paid under uniform schedules, but when behavior requires correction,
disciplinary treatment is not comparably uniform. Procedural require-
ments for disciplinary actions are not sufficiently definitive to promote
consistency so that employees can correct their behavior before being
disciplined and in using an employee’s prior discipline record in selecting
a penalty for current behavior. As a result, employees charged with the
same infractions may or may not be disciplined or may be disciplined
differently. For example, in one region, for absenteeism with one prior
infraction of any kind, one division issued warnings in about 59 percent
of its cases and gave 7-day suspensions in about 39 percent of the cases.
In contrast, another division in the same region issued letters of warning
in about 3 percent of its cases and issued 7-day suspensions in about 79
percent of the cases.

Service data show widespread variances in penalties within and
throughout divisions in cases involving the same infraction and the
same number of infractions. Although we could not determine from the
data how much variation was justified by the circumstances in indi-
vidual cases, we found that supervisors do not have clear guidance on
considering factors inherent to selecting penalties. These factors include
the following: (1) how to consider prior discipline, including whether to
consider only similar past infractions or any past infractions; (2) how
recent the past infractions should be to consider them; and (3) how to
consider past infractions protested through the grievance process and
either not imposed, reduced, or not decided. To make disciplinary
actions consistent, we made recommendations to the Postmaster General
to clarify these factors and strengthen controls over reviews of pro-
posed suspensions and removals. The Postal Service commented on a
draft of our report that it would respond to our recommendations.

Page 67                                      GAO/GGD-90-103Public Service Issues
                           Chapter 4
                           Enhancin(( the hte@ity of the Public Service

                           Beyond testifying on the President’s ethics proposals during fiscal year
Administration of          1989, we reported or testified on the public financial disclosure systems
Ethics Laws and            of the legislative branch and the Department of the Navy, DOD’S
Regulations                revolving door legislation, possible violations of post-employment stat-
                           utes by a former U.S. Air Force Colonel and a former Assistant Secre-
                           tary at the Department of Housing and Urban Development (HUD),
                           compliance of the President’s Commission on AIDSwith conflict-of-
                           interest requirements, and policy-related functions not fully imple-
                           mented by the Office of Government Ethics (OGE).

Legislative Branch         In September 1989 we reported on the progress of the legislative branch
                           in implementing Title I of the Ethics in Government Act of 1978.2 This
Systems for Financial      title of the act requires public financial disclosure by members of Con-
Disclosure Have Improved   gress, other legislative branch officials, and congressional candidates.
But Can Be Further         The act also required us to determine whether Title I has been imple-
Strengthened               mented effectively and whether timely and accurate reports have been
                           filed. The annual reports must disclose income, assets, liabilities, and
                           other financial information prescribed in the act. In a previous report on
                           the legislative branch’s financial disclosure systems in 1981, we con-
                           cluded that Title I was not being effectively implemented and recom-
                           mended ways to improve the systems.

                           Overall, we found that since 1981 the House and Senate have improved
                           their financial disclosure systems. Filing compliance improved as a
                           result of steps taken to detect and reduce reporting errors and to
                           improve follow-up when reports are overdue. Clarified forms and
                           instructions have been issued, and report review checklists developed.

                           On the other hand, candidate filing, while better than in 1980, remains a
                           problem. The Ethics Act defines candidates as persons other than cur-
                           rent members who sought election to Congress. About one-half of the
                           candidates for the House and Senate filed late or not at all in 1986. Ear-
                           lier identification of candidates by the House and Senate and better
                           follow-up (by the House) of delinquent reports, including referrals to the
                           Attorney General when appropriate, could enhance filing compliance.

                           Improved procedures for reviewing requested report corrections could
                           further enhance disclosure systems in the House and Senate. House
                           Ethics Committee staff did not review corrections that had been

                           Page 69                                        GAO/GGDW103 Public Service Ismes
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                          Enhancing the Integrity of the Public Service

                          termination filers can be notified of the reporting requirement and sent
                          the forms and related information. While some reports were filed late,
                          Navy and Marine Corps officials followed up and achieved total compli-
                          ance with the reporting requirement.

                          We also found that some potential conflicts of interest were not being
                          identified and evaluated because some reviewers did not check whether
                          filers were financially involved with affiliates of DOD contractors. We
                          estimated that this resulted in not identifying potential conflicts on
                          about 11 percent of the 1987 reports. We reviewed a sample of the iden-
                          tified potential conflicts and found no real conflicts of interest. As an
                          additional means of detecting potential conflicts of interest, we recom-
                          mended that the Secretary of the Navy have report reviewers check on
                          filers’ financial involvement with affiliates of DOD contractors. We also
                          recommended that the Navy review management controls over the pro-
                          gram as part of its implementation of the Federal Managers’ Financial
                          Integrity Act. The Navy agreed with our recommendations and has
                          acted to implement them.

DOD Revolving Door        Congress has had a long-standing concern about people moving from
ProcessesHave Improved,   government to private employment, and vice versa, under circumstances
                          that may create real or apparent conflicts of interest-the      so-called
But Post-DODEmployment    “revolving door.” Congress has been especially concerned about DOD mil-
Reporting Remains Low     itary officers and high-level civilian employees who may have been
                          involved in procurement working for defense contractors, fearing this
                          situation could lead to conflicts of interest or loss of public confidence in
                          government. These concerns led to legislation (10 U.S.C. 2397) requiring
                          former DOD personnel to disclose employment with defense contractors.
                          The legislation was initially enacted in 1969 and amended in 1985.

                          Currently, this legislation requires former DOD employees to report sub-
                          sequent employment if (1) they were military officers at grades 0 to 4
                          (major or Navy lieutenant commander) and above with 10 years of
                          active service or civilian employees paid at or above a GS-13 rate and (2)
                          they were paid any time during the year at an annual rate of $25,000 or
                          more from a major defense contractor (one with at least $10 million in
                          DOD contracts). Further, the 1985 amendments now require DOD to
                          ensure compliance with the law and review disclosure reports for poten-
                          tial conflicts of interest (previously, DOD only collected the disclosure
                          reports, provided copies to Congress, and did not review the reports).

                          Page 71                                         GAO/GGIMO-103Public Semlce Issues
                            we recommended that the Secretary of Defense begin requiring individ-
                            uals to report positively or negatively if they worked on major defense
                            systems while at DOD or at the defense contractor. In a January 1990
                            response, DOD said it would consider making this change when it revises
                            its individual reporting form.

                            DOD has done little to enforce the reporting requirement. Although DOD
                            has been required to enforce the reporting requirement since November
                            1986, it essentially took no enforcement action until March 1989 when it
                            wrote to some individuals who should have reported. This lack of action
                            may have made former DOD employees think DOD was not serious about
                            the law. We recommended that the Secretary of Defense direct the Stan-
                            dards of Conduct Office to take specific actions to more aggressively
                            enforce compliance with the reporting requirement. In response, DOD
                            plans to turn over to its Office of Inspector General the names of those
                            who do not respond appropriately for investigation and possible admin-
                            istrative action.

Possible Violation of the   In April 1989 we reported on our review of an allegation that a former
Post-DODEmployment          U.S. Air Force Colonel violated conflict-of-interest laws while procuring
                            crash damage kits for the repair of C-5 aircraft6 The House Subcom-
Statute by a Former U.S.    mittee on Oversight and Investigations, Committee on Energy and Com-
Air Force Colonel           merce, requested the report.

                            The allegation concerned contacts the former Colonel made with Lock-
                            heed Aeronautical Systems Company about future employment before
                            his retirement, creating a potential conflict of interest. Also of concern
                            were the Colonel’s approval of the requirement for the C-5 crash
                            damage kits on April 25,1986; was he influenced by prospects of future
                            employment at Lockheed, the manufacturer of the kits? About 7 months
                            after his July 1, 1986, retirement from the Air Force, the Colonel began
                            working for Lockheed.

                            Although the Colonel had contact with Lockheed about future employ-
                            ment before his retirement, we did not find any evidence that his official
                            actions regarding the purchase of kits for the C-5 aircraft were influ-
                            enced by the contact with Lockheed. His major involvement with the
                            procurement occurred before any identified contacts with Lockheed
                            about employment. However, in our opinion, he did not comply with

                            “Air ForceLogistics:Ckmtlictof Interest in Procurementof C-5CrashDamageKits (GAO/

                            Page 73                                               GAO/GGB90-103Public Service Issues
                           Chapter 4
                           Enhancing the Integrity of the Public Service

                           Our review also showed that HUD did not adequately control or monitor
                           the former Assistant Secretary’s activities as a HUD consultant. HUD offi-
                           cials did not request her to disclose the names of her clients. Also, in
                           hiring the former Assistant Secretary as a consultant, HUD did not
                           require her to file a financial disclosure report as required by HUD'S
                           Standards of Conduct regulations. In addition, HUD did not, in our
                           opinion, exercise adequate control over her specific work assignments
                           because it did not instruct or direct her in her duties for HUD while she
                           conducted private business on her own behalf. The Committee’s
                           November 1989 report recommended that Congress consider amending
                           the Ethics in Government Act to deal with individuals subject to post-
                           employment ethics restrictions who become consultants to their former

Resolution of Potential    In October 1988 we reported on the process the White House used to
Conflicts of Interest of   identify and resolve any potential or actual conflicts of interest of mem-
                           bers of the Presidential Commission on the Human Immunodeficiency
Presidential AIDS          Virus Epidemic-commonly      known as the AIDS Commission.” The Senate
Commission Members         Committee on Governmental Affairs requested the report.

                           The President established the Commission by Executive Order 12601,
                           dated June 24, 1987, to advise him on the public health dangers of AIM.
                           The original Commission had 13 members, including its Chairman, who
                           were sworn in on September 9, 1987. On the basis of published biograph-
                           ical information, it appeared that at least 10 of the Commissioners were
                           affiliated with entities that could have financial interests in matters
                           before the Commission. Under the conflict-of-interest provisions of 18
                           USC. 208, these Commissioners would not have been able to partici-
                           pate, even generally, in any matter affecting the interests of their orga-
                           nizations unless the interests were determined to be insubstantial and
                           waivers were granted under 18 U.S.C. 208(b). The Counsel to the Presi-
                           dent did not grant the original Commissioners such waivers upon

                           The need to grant Commissioners waivers from the conflict-of-interest
                           provisions of 18 U.S.C. 208 was identified by an HHS ethics official who
                           met with the Commissioners on October 15, 1987, to brief them on fed-
                           eral ethics requirements and other matters. At the meeting several Com-
                           missioners raised concern about the effect that 18 U.S.C. 208 could have

                           “FederalAdvisory Committw Art: PresidentialCommissionon AIDS ComplianceWith the Act
                           (GAOIGGD-89-17,Oct. 19. 1988).

                           Page 76                                             GAO/GGIHtO-103Public Service Issues
                     Enhancing the Integrity of the Public Servim

                     We found OGE needed to do more to implement these functions and made
                     specific recommendations to the oGE Director to address each function.
                     For example, we recommended that OGE issue final regulations estab-
                     lishing a confidential financial disclosure system that Congress (in Dec.
                     1986) provided the President specific authority to create. Since
                     December 1986 and at the time of our review, OGE had been evaluating
                     comments from agencies on proposed regulations. OGE had not issued the
                     regulations in final form when we prepared this report.

                     Merit system principles require, among other things, that federal
Discrimination and   employees be recruited from all segments of society and selection and
Equal Employment     advancement be determined solely on the basis of relative ability,
Opportunity          knowledge, and skills after fair and open competition. Further, it is a
                     prohibited personnel practice for a manager to discriminate for or
                     against any employee or applicant for employment on the basis of race,
                     color, religion, sex, national origin, age, marital status, political affilia-
                     tion, or handicapping condition.

                     The Civil Rights Act of 1964, as amended by Congress in 1972, is a spe-
                     cific statute requiring most federal agencies to maintain affirmative
                     action programs to ensure implementation of EEO policies. In January
                     1979 the responsibility for overseeing federal EEO efforts was trans-
                     ferred from the Civil Service Commission, now OPM, to the Equal
                     Employment Opportunity Commission (EEOC) making it the principal
                     agency for EEO enforcement. EEOCprovides affirmative action guidance,
                     monitors the hiring and promotion of minorities by sex, and oversees the
                     discrimination complaint processes for both the public and private

                     EEOC requires that federal agencies compare each minority group’s
                     employment rate in specific agency employment categories (job series
                     and grade levels) to each group’s rate of availability in the appropriate
                     civilian labor force-the national, regional, or local labor force from
                     which an agency recruits to fill specific positions. Agencies may need to
                     initiate actions for recruitment and for analyzing barriers to minority
                     employment and promotion when the minority group’s employment rate
                     within an agency or agency component divided by the appropriate
                     civilian labor force rate is significantly less than 100 percent. EEOCpub-
                     lishes statistics that agencies must use in comparing rates. The statistics
                     cover professional, administrative, clerical, technical, and all other job
                     categories combined. They also cover national and regional rates of

                     Page 77                                        GAO/GGD3@103Public Service Issues
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  Enhancing the Intedty   of the Public Service

  fared as well as Foreign Service officers. Women (both minority and
  white) made little progress in either administrative or technical posi-
  tions. Black and Hispanic women are underrepresented in Foreign Ser-
  vice clerical positions.

  We also found that the State Department has not had an effective
  affirmative action plan for overcoming the underrepresentation in the
  Foreign Service. Specific goals and timetables for hiring and advancing
  minorities and women have not been established, as required by EEOC
  guidelines. In addition, State has not adequately reviewed its personnel
  processes for possible barriers to hiring minorities and advancing minor-
  ities and white women.

  To address this situation, we recommended that the Secretary of State

. establish numerical goals for hiring and advancement by race, ethnic
  origin, and gender;
. compile information needed to monitor the implementation and progress
  of affirmative action efforts, such as the race, ethnic origin, and gender
  of applicants for Foreign Service specialist positions; and
. analyze personnel processes for artificial barriers that hinder the hiring
  and advancement of women and minorities in the Foreign Service and
  eliminate any barriers found.

  In its March 1989 comments on our report, the State Department indi-
  cated that it had taken or would take corrective actions.

  In July 1989 we reported on the underrepresentation of minorities and
  women in the U.S. Information Agency’s VOA.‘~ As discussed later in the
  section on agency compliance with appointment and employment con-
  trols, this was one of several VOA personnel issues that warrant con-
  tinued management attention.

  We found that VOA had not met its affirmative action goals for broad-
  casters, radio broadcast technicians, and radio electronic technicians.
  For example, since 1984 women broadcasters increased from 24 to 27
  percent; however, women radio broadcast technicians decreased from 5
  to 3 percent, and women radio electronic technicians decreased from 1
  to 0 percent. The goal for these categories was for women to represent
  between 42 and 43 percent. Also, our analysis of VOA’s grade structure

  ‘3Voiceof America:SelectedPersonnelPracticesWarrant ManagementAttention (GAO/
  NSIAD-89-160,July 12, 1989)

  Page 79                                             GAO/GGD-90103    Public Service Issues
Under the provisions of Executive Order 11521, incorporated by refer-
ence in 38 USC. 20 14 (b), a federal agency may use a “veterans read-
justment appointment” to hire a Vietnam-era veteran without
 competition if the veteran agrees to participate in a program of educa-
 tion and training. The program did not apply to nondisabled Vietnam-
era veterans with more than 14 years of education. Vietnam-era vet-
 erans who are receiving disability compensation or were discharged
 because of service-cotmtacted disabilities are eligible for the program
 regardless of their edilcation. During fiscal years 1983 through 1987, 15
 percent of all disabled \:cteran new hires entered federal service through
 veterans readJustmerIt appointments. From the program’s inception in
  1970 through fiscal ytbar 1987, 279,228 such appointments were made.

Another special appomtmg authority, contained in 5 USC. 3112, is lim-
ited to veterans who are :30 percent or more disabled. A veteran who
has a service-connected disability of 30 percent or more may receive a
noncompetitive temporary appointment in a federal agency if the vet-
eran meek the approF)riate qualification standard. This appointment
may lead to subsequcln t (‘1mversion to career employment. Such noncom-
p&tlve appointments acrounted for 66 percent of all new hiring of 30
pcarc.c*ntor more disabled veterans during fiscal years 1983 through
 1987 and more l.han 2’; percent of all disabled veteran new hirings
durmg this period.

Together. veterans rt%adJrlstmentappointments and noncompetitive
aypomtmcnts f’or 30 pt~t~nt or more disabled veterans accounted for
rn()W ! hati 42 percent ot’ n(w hirings of disabled veterans govern-
mctntwidt* l’rom 1983 through 1987. An agency-by-agency delineation of
the use 01 t hr special appointing authorities for fiscal years 1984, 1985,
 1986, and 1987 rrvc~akd that DOD and VA made 92 percent of all veterans
rc;rd,justtrlrnt appomttrrents of disabled veterans and 92 percent of all
nc)nc,c,tnp~,iitivc~appointmt~nts made for 30 percent or more disabled vet-
t’rans l’trt~ f’ive agenclc+ in our review hired fewer than the govern-
m(‘nl wide, l)er(‘cxntage (11’SIW~ hirings using special hiring authorities.

As 1~ tt o! our r(x\ ww. .vc’surveyed and got responses from all 61 coor-
dinat ors of the aft’irmar ivchaction program for disabled veterans in the
five agemtcbs. They reporl.c*d contacting many organizations to locate
qualified ~lisabled \‘c’tcblans for employment. The most useful sources
rYr(q(l‘i*.y‘r+’1111,~‘f~t~~r.atlYu~hprc)sentativesfunded by the Department of
i,;ri)l)~ iri : ‘6%
                  41:I. t’ c,tnpLI.LI Icsntoffices. Although these representatives
shelrliti km)\%-1ho rnosl ;: bout 1he employment needs and employability of

 Pag” Y1                                        GAO/GGD90-103Public Service Issues
                           Chapter 4
                           Enhancing the Integrity   of the Public Service

                           judge examination. While female nonveterans from the 1984 competi-
                            tion scored higher, on average, than male veterans on the examination,
                           they received lower average final ratings after OPM added veterans’
                            preference points to the scores as required by law.

                           A conflict between veterans’ preference and equal employment opportu-
                           nity is not new. In a 1977 report, we noted that giving unlimited lifetime
                            employment preference to veterans conflicted with EEO for all federal
                           job applicants and that veterans’ preference particularly deterred
                            women because few were veteransL”

SSA’sHiring of Hispanics   In January 1989 we reported on SSA’S hiring of Hispanics and service to
                           Hispanic clientsI The report was requested by the House Select Com-
                           mittee on Aging, which noted, among other things, concerns about SSA’S
                           compliance with EEOCguidelines in its hiring of Hispanics nationwide
                           and the number of SSA employees who speak fluent Spanish and can deal
                           effectively and efficiently with Hispanics.

                            In general, the employment of Hispanics in SSAcompares favorably to
                           the appropriate regional and national civilian labor forces for the three
                           job series that we reviewed. For example, as of September 30, 1987,
                           SSA’Soverall employment rate of Hispanics was 6.4 percent, which
                            equaled the national rate of availability of Hispanics in the civilian labor
                            force. Hispanic men, however, are not fully represented in all job series
                            in 7 of the 10 SSAregional offices. Factors contributing to the low
                            employment rates of minority men in these three regions were,
                            according to s% officials, the reluctance of men to work in SSA clerical
                           jobs, the relatively low grades of entry-level positions in SSA’S
                            workforce, and inability to hire many new employees because of
                            workforce reductions. SSAhas directed its organizational units to
                            address the employment of Hispanic men in their affirmative action

                           Nearly 70 percent of Hispanics at SSAwere employed in one of three civil
                           service job series that primarily work with the public in SSA district and
                           branch offices, providing information and assisting with benefit claims.
                           According to SSArecords, as of January 1988, approximately 8.2 percent
                           of all %A field office employees were certified by SSA,through interview,

                            “‘Conflicting CongressionalPolicies Veterans’Preferenceand Apportionment vs. Equal Employment
                            17SocmlSecurity: Employmentof and Serviceto Hispanics(GAO/HRD89-35, Jan.30,1989).

                            Page 83                                                GAO/GGDIXX103    Public Service Issues
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                               Enbmcing the Integrity of the Public Service

                         .     Labor, with about 18,000 permanent, full-time employees, paid about
                               $244,000 for 7 cases in 1987, and $50,000 for 3 cases in 1988.
                             . The Securities and Exchange Commission, with about 2,100 permanent,
                               full-time employees, paid about $40,000 for 1 case in 1987, and
                               $147,000 for 2 cases in 1988.

                               Merit principles require that employees maintain high standards of
Integrity of Various           integrity and conduct and concern for the public interest. Specific
Administrative                 requirements are defined in administrative systems and procedures gov-
Systems and                    erning the merit system and are enforced by management in various
                               ways throughout the government. In fiscal year 1989, we made several
Management Practices           reviews in federal agencies in response to concerns about the integrity
                               of agency administrative systems or management practices. As dis-
                               cussed in the following the sections, these reports or testimonies
                               addressed specific concerns about

                             . management retaliation    against certain Immigration and Naturalization
                               Service (INS) agents,
                               internal controls over the Department of Justice’s payroll system,
                               the reliability of IRSdata on alleged employee misconduct,
                               DOD’S use of consulting services in weapons system acquisition, and
                               special air transportation services provided to TVA'S manager of nuclear

Allegation of Management       In May 1989 we reported on alleged retaliation taken by INS management
Retaliation Against Agents     officials against eight anti-smuggling agents from the Service’s Houston
                               District Office.‘” The report was requested by Congressman Jack Brooks,
of the Immigration and         who expressed concern that Houston INS officials may have retaliated
Naturalization Service         against these agents and their immediate supervisors because of the
                               agents’ efforts to communicate with members of Congress.

                               In September 1987 the eight agents wrote to members of the Texas con-
                               gressional delegation alleging that District management acted improp-
                               erly regarding the management of their anti-smuggling unit. These
                               allegations concerned, among other things, using anti-smuggling agents
                               for other activities without proper authority. A Member of Congress
                               sent a copy of their letter to a Regional Commissioner, whose office
                               made an internal investigation. At different times after the letter was

                               ‘%migration Service Allegation of AdverseActions TakenAgainst INS Agents(GAO/GGD-SY-70,
                               May 1,1989).

                                Page 85                                           GAO/GGLMO-103Public !kvice Issues
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                             records to his timekeeper, with the result that the supervisor failed to
                             detect multiple preparation errors that the timekeeper made. These
                             errors resulted in improper salary payments totaling more than $6,000
                             during several months to the employee.

                             To correct these problems, Justice agreed to act to strengthen its payroll
                             system internal controls in response to our recommendations. Its actions
                             included (1) revising a departmental order on time and attendance
                             reporting that includes, among other things, a specific prohibition for
                             supervisors to delegate authority to certify and sign time and attend-
                             ance reports to timekeepers; and (2) preparing a detailed procedures
                             manual as a reference source for timekeepers and as a basic training
                             guide by the Department’s Training Center.

Questionable Validity and    In November 1988 and July 1989, we issued a report and testified on the
Reliability of IRS Data on   validity and reliability of IRSdata on its investigations of alleged
                             employee misconduct involving crimes such as bribery and embezzle-
Alleged Employee             ment2’ The House Subcommittee on Commerce, Consumer, and Mone-
Misconduct                   tary Affairs, Committee on Government Operations, requested both

                             We were asked to review the nature and results of 3,861 IRS investiga-
                             tions of alleged employee misconduct that IRSclosed between 1984 and
                             1987. Our analyses were to provide a broad perspective on the types of
                             employees and violations being investigated and the punishments that
                             resulted. However, our review of these data raised serious questions
                             about its validity and reliability. For example, we could not identify the
                             results of prosecution (e.g., guilty, case dismissed) for 83 percent of
                             more than 2,600 cases in which the investigator believed enough specific
                             and reliable information existed to open a case. We concluded that the
                             data had limited value in describing the nature and results of the

                             When we prepared this report, IRS was developing and testing a new
                             system to improve its investigation data.

                             “Tax Administration: IRS’Dataon Its Investigationsof EmployeeMisconduct(GAO/GGDBS-13,
                             Nov. 18, 1988);IRSDataon Investigationsof AllegedEmployeeMisconduct(GAO/T-GGD8938,
                             July 27, 1989).

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Special Air Transportation   In September 1989 we reported on several aspects of TVA’S arrangement
                             to provide special air transportation services to TVA’S Manager of
Services Provided to TVA’s   Nuclear Power from October 2, 1987, to September 30, 1988.z4The
Manager of Nuclear Power     report was requested by the House Subcommittee on Environment,
                             Energy, and Natural Resources, Committee on Government Operations,
                             and was to describe the purpose, nature, and costs of the air transporta-
                             tion services and whether the benefits received were potentially subject
                             to individual federal income taxes.

                             TVA spent $172,700 to provide the TVA Manager of Nuclear Power air
                             transportation services between his TVA office in Chattanooga, Ten-
                             nessee, and his home in Charlottesville, Virginia. His wife accompanied
                             him on three of these flights. The air transportation was provided as an
                             incentive to retain his services because TVA’S Board of Directors became
                             concerned that his absence from his Charlottesville home would
                             adversely affect his continued availability to TVA.

                             The cost of commuter services was $126,500. We concluded that the fair
                             market value of those services-not necessarily the $126,500 that TVA
                             paid-could be considered taxable compensation to the TVA Manager for
                             Nuclear Power and his wife. We noted, however, that IRSwas the agency
                             that makes such determinations. It has special rules for computing the
                             fair market value of fringe benefit aircraft flights. At the time of our
                             report, we did not know how IRStreated this matter for federal income
                             tax purposes. We did, however, inform the TVA Manager of Nuclear
                             Power of our opinion that the fair market value of the commuter ser-
                             vices he received from TVA could be taxed.

                              The Civil Service Reform Act requires that we review executive branch
Agency Compliance             compliance with federal employment laws, rules, and regulations as
With Appointment or           directed by any committee of either house of Congress. As discussed
Employment Controls           below, we issued to congressional committees 10 reports during fiscal
                              year 1989 that addressed aspects of federal appointment or employment
                              controls. Some of these controls stem from rules or regulations promul-
                              gated by OPM, while others originated from agency regulations or proce-
                              dures In addition, some of the controls provided specific criteria
                              governing agency decisions on employing federal civilian personnel or
                              using alternatives, specifically military or contractor personnel. These
                              reports addressed the following subjects:

                              ‘“Tennesseevalley Authority: SpecialAir Transportation ServicesProvidedto Managerof Nuclear
                              Power(GAO/GGD-AS-117BR,Sept.26, 1989).

                              Page 89                                                GAO/GGDW103 Public Service Issues
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                             We also tested the completeness of information on certain types of con-
                             versions reported to us by 10 agencies for an 18-month period. Our test
                             identified 34 conversions that should have been reported but were not.
                             Other than this limited test, we did not verify the agency information or
                             determine the propriety of the conversions reported.

Temporary Appointments       In February 1989 we reported on our evaluation of the appropriateness
                             of 28 appointments of temporary employees and extensions in four
and Extensions in Selected   Judgmentally selected agencies and their compliance with administrative
Agencies                     requirements.27 The agencies were the Smithsonian Institution; the
                             Indian Head, Maryland, Naval Ordnance Station in the Department of
                             the Navy; and the Bureau of Labor Statistics and the Employment Stan-
                             dards Administration in the Department of Labor. The House Committee
                             on Post Office and Civil Service requested the report.

                             Agencies are allowed under oPM-delegated authority to make competi-
                             tive temporary appointments of 1 year or less from their own registers
                             for grades GS-12 and below and to extend these appointments without
                             OPM approval in increments of up to a year, for a total not to exceed 4
                             years. Agencies must make all temporary appointments above GS-12
                             from OPM registers, and any temporary appointment extensions beyond
                             a total of 4 years requires prior OPM approval. As explained by OPM, the
                             authority helps agencies avoid needlessly using permanent appoint-
                             ments for work that is only temporary in nature. Agencies are not to use
                             the temporary appointment authority to avoid other federal personnel
                             requirements, such as competitive selection procedures, or to accomplish
                             an action otherwise prohibited, such as circumventing employee

                              Our case examinations showed that 19 of the 28 appointments appeared
                              to have been appropriately made to fill a temporary need. However, in
                              four cases the appointments appeared inappropriately made to fill a
                              permanent need, and in five cases the record was not clear enough to tell
                              whether the temporary appointments were proper. We also found
                              instances where administrative errors may have adversely affected
                              implementation of fair and open competition. Further, oversight of the
                              delegated authority was limited.

                              27FederalWorkforce:TemporaryAppointmentsand Extensionsin SelectedFederalAgencies(GAO/
                              m-89-15, Feb.23, 1989).

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SelectedPersonnel                 In July 1989 we reported on a number of personnel issues that warrant
                                  continued management attention at the U.S. Information Agency’s VOA
Practices Warrant                 and Radio Marti, which operates quasi-independently from VOA and
Management Attention at           broadcasts to Cuba.‘!’ The report was requested by the Chairman, House
the Voice of America              Subcommittee on International Operations, Committee on Foreign
                                  Affairs, because of numerous employees’ allegations about the per-
                                  sonnel management practices at VOA and Radio Marti.

                                  VOA,  which broadcasts in English and 42 foreign languages to 127 million
                                  people around the worid, had a staff of about 2,800 at the time of our
                                  report. It was delegated responsibility for its own personnel manage-
                                  ment in 1981. Radio Marti, which began broadcasting in 1985, had an
                                  authorized staffing of 165 positions. Along with a tightened budget that
                                  reduced programs and constrained employees’ advancement opportuni-
                                  ties, the 1980s brought a continuous turnover of key VOA management
                                  positions, including six directors in the past 8 years.

                                  Among the personnel issues that warrant continued                VOA   management
                                  attention were the following:

                          l        The need for Radio Marti’s excepted service hiring authority. Radio
                                   Marti continues to use Schedule B hiring authority (for noncompetitive,
                                   excepted service appointments) to fill 117 positions, even though the
                                   need for this authority to cover some positions is in doubt. This
                                   authority was granted after OPM found that examining applicants for
                                   particular knowledge of Cuba required for certain positions at Radio
                                   Marti would be impractical. Personnel regulations do not protect
                                   Schedule B employees as they do competitive civil service personnel.
                                   Our review of personnel files of 35 employees in the excepted service
                                   showed 5 of them did not have the knowledge of Cuba required by the
                                   Schedule B authority, and an internal VOA report questioned use of the
                                   authority. We recommended that VOA review the use of Radio Marti’s
                                   Schedule B hiring authority with a view toward ensuring that those
                                   hired under that authority have the requisite knowledge of Cuba and
                                   that all the positions designated as covered by the authority are war-
                                   ranted. In response, vol\ said it would annually review all Schedule B
                                   positions to determine it’ successful job performance requires knowledge
                                   of Cuba.
                              l    VOA had inadequate c,ontrols over time and attendance. VOA had not
                                   developed or enforcaed sufficient internal control procedures to ensure

                                   ‘“Voice of America:SelectedPrrsuruwl PracticesWarrant ManagemrntAttention (GAO/
                                   N.     -- 9 160.July 12.19RRI

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                            We found that the Navy did not have complete documentation to sup-
                            port its budget requests for civilian substitutions. Consequently, neither
                            we nor the Navy could determine if funds requested for civilian substi-
                            tution were used for this purpose. Moreover, the Navy had not devel-
                            oped internal control procedures to monitor civilian substitutions or to
                            determine the uses of money requested for this purpose. To resolve
                            these concerns, the House Committee on Appropriations, in its report on
                            the DOD Appropriations Bill, 1989, directed the military services to
                            establish the necessary internal control procedures to permit manage-
                            ment oversight of civilian substitutions and comparisons of planned and
                            actual substitutions. Navy officials expressed concern to us that more
                            detailed recordkeeping and internal control procedures would result in
                            the “micromanagement” of an otherwise highly decentralized civilian
                            personnel operation.

Conversion of Military      In November 1988 we issued a report on the combination of civilian and
Positions to Civilian       military personnel at the Air Force Weapons Laboratory located at Kirt-
                            land Air Force Base, Albuquerque, New Mexico.s’ The report was
Positions at an Air Force   requested by the Senate Subcommittee on Defense Industry and Tech-
WeaponsLaboratory           nology, Committee on Armed Forces, which was concerned about a
                            lower proportion of civilian to military personnel at the Laboratory and
                            the corresponding limitation on career opportunities for civilian engi-
                            neers and scientists.

                            We found that the Air Force has not annually reviewed, as required by
                            its regulations, the military positions at the Laboratory to ensure that
                            they were consistent with the Air Force requirement that they be milita-
                            rily essential or else established as civilian positions. Few of the officer
                            positions that we reviewed met the military essentiality criterion. Of the
                            293 officer positions that were established to require current military
                            experience, only 47 (16 percent) actually required such experience,
                            according to Laboratory division and branch chiefs. Civilians could per-
                            form the duties of the remaining 246 positions, according to these offi-
                            cials. Because so many of the positions did not meet the Air Force’s
                            military essentiality criterion, we recommended that the Air Force,
                            among other things, review each such position at the Laboratory to iden-
                            tify those that are militarily essential and convert positions that are not
                            to civilian positions.

                            “‘Personnel:Civilian/Military PersonnelMix at the Air ForceWeaponsLaboratory (GAO/
                            NSAD-89-13, Nov. 16,15X38).

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federal functions under the direct supervision of federal officials should
be appointed federal employees. We observed that FSLIC'S failure to
appoint them as federal employees circumvented federal civil service
laws and regulations. We also observed that criminal conflict-of-interest
statutes did not apply to those receivership employees who were not
federal employees. We thought some of the employees should be federal
employees and therefore subject to these statutes.

Page 97                                         GAO/GGD90-103Public Service Issues
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        Stre~enlng       the   -hip   of the
        Public Service

l Workforce planning--OPM had not established a systematic effort to
  plan for adjustments to the future workforce due to such events as tech-
  nological and demographic changes. In addition, in response to a clear
  mandate from CSRAto encourage and carry out innovative research and
  demonstration projects, OPMhad approved only four such projects after
  10 years of CSFU.OPMalso had not assumed leadership in promoting
  workforce planning in the agencies.
l Staffing-OPM was undertaking an ambitious program to reform the
  hiring process. This program was needed because OPM’Srole in hiring
  and recruiting had vacillated in the years since CSRA,limiting program
. Performance improvement--OPM developed then abolished programs
  providing assistance to agencies in improving organizational perform-
  ance. Continued problems with performance management systems and
  the agencies’ desire for more performance improvement assistance
  required a stronger OPMleadership role.
  Cversight-OPM had not provided the leadership agencies needed to

  improve or establish their own personnel management evaluation pro-
  grams. This was compounded by problems with OPM’Spersonnel manage-
  ment evaluation program, which had experienced declining resources
  and restructuring for several years. This raised concerns about OPM’S
  ability to protect the merit system and provide useful feedback to
  Internal operations-OPM needed to improve internal operations and

  deal with serious employee morale problems. A decade of fundamental
  policy redirection, reorganizations, and decreased resources had left OPM
  with serious internal problems and a diminished capacity to implement
  its initiatives. For example, in a survey we made of OPMemployees in
  November 198’7, about half reported that budget and staffing con-
  straints had negatively affected their units’ ability to accomplish goals.
  Only 23 percent of OPMemployees thought morale was high, and only 15
  percent thought the agency as a whole was effective to a great extent.

        Our specific recommendations to OPMin the above five areas appear in
        appendix II.

        At the time of our January 1989 report the then director, Constance
        Homer, did not concur with our findings because she believed any just
        assessment of OPM’sleadership would conclude that it had been very
        active and successful in preparing the federal civil service for the
        human resource demands of the next century. We disagreed; we said
        that the government was still not well-postured to meet future chal-
        lenges and was facing serious human resource problems which were

        Page 99                                   GAO/GGBW103   Public Setice   Issues
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           federal workforce with the ultimate objective of providing available
           labor pool information for specific occupations.

           OPM  had also undertaken several compensation studies, including the
           Director’s Task Force on Pay Reform. This group’s work was the foun-
           dation for the administration’s legislative proposal for reform of the
           white-collar pay system. OPM was researching alternative approaches to
           influencing staffing through pay and planned to continue testing
           approaches to pay for performance. As of April 30, 1990, OPM was con-
           ducting seven demonstration projects involving pay system alternatives.

           In the spring of 1989, OPM introduced the quarterly Federal Staffing
           Digest, which is distributed to agency personnel offices and discusses,
           among other things, effective workforce planning practices of the public
           and private sectors. To help agencies meet changing workforce needs,
           OPM has also analyzed agencies’ college relations and recruitment

           OPM   issued a personnel management research agenda in September 1988
           and developed a data base of relevant personnel management research.
           Since our management review was issued, OPM has approved additional
           demonstration projects. OPM also observed that in-house research was
           addressing research agenda items, particularly recruitment and reten-
           tion. This research included recent studies of the federal job information
           centers and a new hiring system for professional and administrative

staffing   OPM  has developed a comprehensive examining program to select candi-
           dates for almost 100 different occupations in federal agencies at the GS-5
           and -7 levels. Recent college graduates beginning a civil service career
           typically fill these positions. Each year 10,000 to 20,000 candidates are
           selected for these jobs. Under the new program, called Administrative
           Careers With America, applicants can qualify for federal employment in
           several ways. They can choose from six automated, written examina-
           tions to evaluate their potential for successful job performance in spe-
           cific occupational areas, or, if they achieved a high college grade-point
           average, agencies can directly recruit and hire them without testing

           OPM has not specifically assessed the cost or effectiveness of delegating
           employment examining authority to agencies. We had urged OPM to
           gather information on the benefits and costs of centralized OPM exam-
           ining as opposed to delegated agency examining because CSRA requires

           Page 101                                    GAO/GGDS@103   Public Service Issues
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            l   OPM administers the Presidential Management Improvement Awards
                Program. Under this program more than 650 civilian and military per-
                sonnel received Presidential letters of commendation and awards for
                achievements that saved the government about $1.6 billion.

                In addition, OPM noted several research and demonstration projects that
                had been initiated or were under discussion to detect and address bar-
                riers to effective performance management systems. Among the identi-
                fied barriers are concerns about (1) the number of rating levels, (2) the
                size of bonus awards, (3) burdensome performance elements and stan-
                dards, (4) the negative effect of individual performance appraisals on
                organizational quality and productivity, and (5) the link between mis-
                sion accomplishment and performance appraisals.

                OPM  also described outreach and clearinghouse activities, including three
                interagency task forces and sponsorship of networks of agency officials
                to exchange information on quality management and productivity
                improvements. Further, OPM was preparing a bibliography on recent per-
                sonnel research findings, beginning with “Job Analysis,” which will
                include “Classification.” As part of the initiative on frontline employees,
                OPM also established a clearinghouse for agency programs for such

Oversight       OPM   noted steps taken to address the following two main concerns about
                its oversight function: (1) the ability to monitor agency personnel
                actions for compliance with regulatory and legal requirements and (2)
                its leadership role in strengthening agency internal Personnel Manage-
                ment Evaluation (PME) programs. On the first concern, OPM initiated a
                new governmentwide evaluation program in 1989 that contains an
                intensive and structured review of agency use of delegated authorities.
                Under this program, OPM staff will visit up to 200 large installations a
                year to examine and evaluate important topics from a nationwide per-
                spective. Eight such topics were to be studied in fiscal year 1989, two
                involving in-depth review of traditional staffing authorities and newly
                delegated ones. In addition, OPM said it increased the number of its on-
                site reviews of specific targeted areas in installations and reviews.

                On the second concern, OPM stressed the importance of agency self-eval-
                uation programs to the viability of its redirected evaluation approach.
                OPM'S approach mainly concentrates on governmentwide issues while
                the agencies focus on case-oriented compliance work. On this matter,
                OPM had done or considered doing the following:

                Page 103                                    GAO/GGB9&103   Public Service 18suea
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                                 strengthening    the stewardship   of the
                                 Public Service

                                 throughout OPM'S administrative network by sponsoring annual confer-
                                 ences to convene central and regional office administrative personnel to
                                 solve common problems. Further, OPM has targeted performance man-
                                 agement for improvement. It has used an automated system for tracking
                                 performance appraisals to improve communication and follow up on
                                 performance management, and the Director has been given status
                                 reports on the status of performance management in each OPM
                         l       OPM expanded training efforts by establishing an office to focus on
                                 employee development and training and earmarking more than
                                 $150,000 in fiscal year 1989 funds to supplement executive and mana-
                                 gerial training. It developed a career management program and
                                 launched a series of agencywide SFS seminars and lunches to improve
                                 camaraderie and communications. Also, it established an intern program
                                 to select and train the next generation of OPM managers. Since June 1989
                                  10 interns were hired nationwide to participate in a 2-year training and
                                  development program. OPM was also providing internally developed per-
                                  formance management training designed and delivered by its personnel
                                  office staff to all OPM managers and supervisors. The training aimed to
                                  help managers and supervisors prepare adequate employee performance
                                  plans and to use the appraisal process to provide appropriate feedback
                                  on performance.
                             l    OPM established an incentive awards program to improve employee
                                  morale and retention. A pilot spot cash award program was imple-
                                  mented to recognize deserving employees. To help alleviate stress for
                                  employees with special family situations, OPM established a free depen-
                                  dent care information and referral service for OPM employees
                             l    OPM's internal personnel office was making an analysis of OPM’S turnover
                                  that was expected to result in an information system that would become
                                  an integral part of OPM's workforce and succession planning program
                                  and serve as a model throughout government.

Related Actions on               Beyond making recommendations to OPM, our management review made
Recommendationsto the            the following recommendations to the President and Congress: (1) the
                                 President should give sustained attention to establishing and main-
President and Congress           taining an environment more conducive to human resource management;
                                 and (2) Congress should make greater use of the oversight and appropri-
                                 ation process to establish a clear record of OPM's plans, programs, and
                                 results and better hold OPM accountable for meeting CSRAgoals. We spe-
                                 cifically urged the President to work with Congress to ensure a competi-
                                 tive federal pay and benefit structure.

                                  Page 106                                   GAO/GGLNl?-103   Public Service Issues
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                         l       imposing a l-year (1991) freeze on cost-of-living adjustments for all fed-
                                 eral civilian retirees, except for permanently disabled annuitants.

                                 We continue to believe that Congress needs to better hold OPM account-
                                 able for meeting CZXAgoals and for establishing a clear record of OPM’S
                                 plans, programs, and results. While we concur with the priority placed
                                 by oversight committees on pay and benefit reforms, greater congres-
                                 sional oversight of OPM’S accomplishments and plans in critical areas,
                                 such as federal workforce planning, staffing, performance improvement,
                                 and evaluation of agency personnel management, is needed to ensure
                                 the appropriate framework for federal workforce improvements. As we
                                 suggested in our OPM management review report, Congress could require
                                 that OPM provide an annual assessment of the federal workforce and a
                                 detailed discussion of OPM’S activities in critical areas.

                                 In addition to being responsible for providing leadership to the federal
OPM’s Performance in             government in human resource management, OPM also is responsible for
Administering Civil              administering programs in specific functional areas. During fiscal year
Service Programs                 1989, we reported on five OPM programs covering its

                             . approach to executive training and development,
                             . oversight of agencies’ programs to hire and advance disabled veterans,
                             l oversight of the mobility program created by the Intergovernmental
                               Personnel Act of 1970,
                             . regulation of the federal employee suggestion program, and
                             l management of the Federal Employees Health Benefits Program.

Executive Training and           In September 1989 we reported on the training and development of
Development                      senior executives.” The House Subcommittee on Civil Service asked that
                                 we evaluate how well OPM has fulfilled its leadership responsibilities for
                                 executive training and development. In chapter 3, we discussed the find-
                                 ings reported to the Subcommittee of a questionnaire administered to a
                                 sample of SEXmembers on the extent and usefulness of their executive
                                 training and development.

                                 In creating the SES, CSIU emphasized the importance of training and
                                 developing these executives and SES candidates by requiring OPM to

                                 %mior Executive Service Training and Developmentof SeniorExecutives(GAO/GGDS9-127,Sept.
                                 29, 1989).

                                 Page 107                                           GAO/GGDSO-103   Public Sewice   Issues
        smngthenIng the stewardship of the
        Public Service

l       the need for certain types and levels of training for new executives, and
l       ways to improve the managerial competency benefits from the training
        and development curriculum.

        We also recommended that OPM address what specific responsibilities
        agencies and OPM should have in the oversight process as well as what
        actions OPM should take to ensure strong oversight. We also urged OPM to
        address related recommendations of the National Commission on the
        Public Service.

        In a December 20, 1989, response to our report, the OPM Director said
        executive training and development was now a top priority since the
        President has a personal commitment to the continued high quality of
        the public service starting with the executive levels. The Director agreed
        with our assessment that OPM needs to seriously examine its training and
        development policies for senior executives and managers and to give
        special attention to its leadership role in providing guidance and tech-
        nical assistance to departments and agencies. While indicating that OPM
        will act further to resolve the problems we identified, the Director noted
        that the following specific actions had already been taken:

    l   OPM recently conducted two conferences for Executive Resources Board
        members and identified a number of concerns the Boards and OPM are
      addressing to improve the Boards’ effectiveness. These were the first
      such conferences conducted in almost 10 years.
    l OPM is establishing an Advisory Committee on Executive Training and
      Development to review and assess a broad range of policies and pro-
      grams for federal executives to, among other things, improve SESpartici-
      pation in training and development. Following the Committee’s
      deliberations, OPM will develop recommendations in the spring of 1990.
    . OPM is working with the Small Agency Council to identify and develop
      particular courses for small agencies whose executive and managerial
      personnel have special job requirements and therefore require more tai-
      lored training programs.

        Page 109                                    GAO/GGD.WlOS   Public Service Issues

l using its reviews of agencies’ plans and accomplishment reports and its
  on-site reviews to evaluate agencies’ progress in meeting program objec-
  tives; and
. citing an individual agency’s progress or lack of progress and program
  effectiveness in the annual report to Congress.

            We also recommended that the five agencies work with OPM to develop
            criteria for measuring disabled veteran employment and advancement
            performance and use the criteria for agency self-assessments.

            In an April 28, 1989, response to our report, the OPM Director recognized
            that OPM could have done more in this program and welcomed our sug-
            gestions. The Director said the employment of disabled veterans in the
            federal government is an important OPM priority and she outlined OPM
            initiatives to improve its ability to locate and place disabled veterans.
            Regarding our specific recommendations on OPM's program oversight
            efforts, the Director made the following points:

    l       OPM believes the indicators used in our report are adequate criteria for
      assessing individual agency and governmentwide performance in dis-
      abled veteran employment and advancement. OPM does not believe that
      it is necessary to provide specific performance standards through
    m OPM was establishing a computerized data base to provide agencies with
      comparisons and trends comparable to the indicators in our report to
      assist them in making further in-depth agency analyses. OPM also
      planned to expand a program of on-site technical assistance reviews.
      Through the use of a combination of review techniques, OPM will be

      better able to identify trends, follow up on specific issues, and assist
      agencies in their self-assessments.
    * OPM should be better able to cite individual agency progress in the
      annual report to Congress upon implementation of the computerized
      data base of performance indicators. OPM believes this will be a major
      motivator for agencies to devote the proper resources and attention to
      their disabled veterans’ programs.

                           Chapter 6
                           Stre&enIng the StewardahIp of the
                           Public Service

                           The Government Employees Incentive Awards Act of 1954 as amended
                           (6 USC. ch. 46) established the federal government’s incentive awards
                           program, including the employee suggestion program. Federal agencies
                           are required to recognize and reward employees for their meritorious
                           achievements or suggestions, encouraging employees to contribute to the
                           efficiency, economy, or improvement of government operations. OPM reg-
                           ulates and oversees the suggestion program, establishing agency

                           Our analysis of private sector and federal monetary awards reported to
                           a national association in 1987 found that private suggestion programs
                           provide greater monetary awards. Specifically, private firms paid about
                           10 percent of savings as awards, while federal agencies paid about 2
                           percent. The average award paid per 100 employees in private firms
                           was $682; in federal agencies it was $299. Private firms paid about
                           $6,000 per 100 employees compared with the $236 that federal agencies

                           Motivational studies show that money is one of the fundamental reasons
                           why employees participate in suggestion programs. Private programs
                           have a more generous award formula than do federal programs. In our
                           opinion, private firms’ greater awards account, at least in part, for the
                           higher employee participation and program savings. To better motivate
                           federal employees to participate in suggestion programs, we recom-
                           mended that OPM adopt a fixed percentage formula for tangible benefit
                           awards of not less than 10 percent, which is the typical industry prac-
                           tice. OPM subsequently informed Congress that it is considering our find-
                           ings and recommendations in the context of a complete revision of
                           guidance for administering the incentive awards program, which was
                           targeted for completion in late fiscal year 1990.

                           We cautioned OPM and other agencies that the benefits of increasing
                           monetary awards may not be realized unless other key factors-man-
                           agement support, continuous publicity, adequate funding and staffing,
                           and responsiveness to suggesters-are also emphasized.

Federal Employees Health   The Federal Employees Health Benefits Program is a major component
Benefits Program           of the government’s compensation package and as such is an important
                           factor in attracting and retaining a high-quality workforce. About 8 mil-
                           lion federal employees, annuitants, and their dependents receive health
                           benefits from the program, which in 1989 was estimated to cost $11.6

                           Page 113                                    GAO/GGD90-103Public Service Issues
                               Chapter 6
                               Stren&henIng the Stewardsldp of the
                               Public Service

                               Since our testimony OPM changed the way administrative expense ceil-
                               ings are set. To illustrate the significance of this change, if the ceilings
                               had been based on OPM’s new formula, administrative expenses for the
                               6-year period would have increased less than 26 percent and would have
                               been $132 million less in 1987. At the Subcommittee’s request, we are
                               further analyzing the program’s administrative expenses, including
                               OPM’S internal controls.

Exemption From Premium Taxes   We subsequently reported in August 1989 that Congress may want to
                               consider exempting the health insurance program from premium taxes.”
                               In 1987,22 of the 26 experience-rated plans charged the health benefits
                               program about $44 million for premium taxes imposed by the 50 states
                               and other governmental entities, including the District of Columbia and
                               the Republic of Panama. These taxes are included in the plans’ pre-
                               miums charged to enrollees and the federal government. In 1980 Con-
                               gress exempted the Federal Employees Group Life Insurance Program
                               premiums from similar premium-based taxes because it considered the
                               program to be self-insured and because states generally do not tax self-
                               insured programs. We stated that if Congress wants to treat premium
                               taxes uniformly in the health and life insurance programs, it may wish
                               to consider amending the Federal Employees Health Benefits Act to
                               expressly prohibit states and other governmental entities from imposing
                               or collecting taxes, fees, or other monetary payments based on the pre-
                               miums paid under the Federal Employees Health Benefits Program.

The Program Is Vulnerable to   We also testified about instances of fraud and abuse identified in at least
Fraud and Abuse                six of the largest plans during the last several years. OPM’S plan audits,
                               which are the primary internal control against fraud and abuse, identi-
                               fied two plans that commingled health benefit and union funds to
                               finance union operations during the 7-year period ending in 1985. The
                               unions later repaid the money, and OPM has issued regulations prohib-
                               iting the commingling of program funds. OPM audits also identified
                               another plan that improperly charged the program about $1 million in
                               1984 for facilities rented to other parties. The plan settled the matter by
                               repaying the funds along with civil penalties after the matter was
                               referred to the Justice Department for prosecution.

                               We found a serious abuse of program funds by one plan, which improp-
                               erly charged the health benefits program more than $7 million for fed-
                               eral income taxes paid on plan profits for 6 years ending in 1987.

                                “FederalCompensation:PremiumTaxesPaid by the Health BenefitsProgram(GAO/GGD-89-102,
                                Aug. 8, 1989).

                                Page 116                                          GAO/GGDOO-103Public Service Issues
                                   Chapter 6
                                   Strengthening the Stewardship
                                                               of the
                                   Public Service

                                   While the contractor concluded that the federal program needs a funda-
                                   mental legislative redesign, it also recommended actions it believed OPM
                                   could implement without legislative changes. The contractor estimated
                                   that these steps would save at least $500 million per year (or about 6
                                   percent of estimated 1988 total program costs of $8.8 billion). Our
                                   December 1988 report reviewed OPM’Splans for addressing seven policy
                                   changes to correct some of the program’s problems that the contractor
                                   thought would not require a legislative change. We did not evaluate the
                                   merits or potential costs of implementing these recommendations.

SomeIndependentAgencies            Because of concern about employees leaving the Federal Employees
Offer Their Own Health Plans       Health Benefits Program to join alternative health plans, the Senate Sub-
                                   committee on Federal Services, Post Office and Civil Service, Committee
                                   on Governmental Affairs, asked us to determine the extent to which
                                   independent agencies are offering alternative plans and what per-
                                   centage of employees participate in such plans.

                                   An independent agency with the authority to fix compensation may
                                   offer an alternative health plan to its employees. Baaed on telephone
                                   surveys we conducted with officials in about 60 independent agencies,
                                   we identified seven agencies that offered alternative health plans. One
                                   of them-TVA-is      not covered by the federal program and has provided
                                   its own health plan since the 1950s.

                                   The other six agencies introduced alternative plans in the 1980s and
                                   also offer federal plans. More than half of the employees in each agency
                                   have joined alternative plans. These agencies, their employee size, and
                                   percentage of employees enrolled in alternative plans were, respectively

                               l   the Federal Deposit Insurance Corporation, 8,500 employees, 85 to 90
                                   percent in an alternative plan;
                               l   the Office of the Comptroller of the Currency, 3,300 employees, 85 per-
                                   cent in an alternative plan;
                               m   the Board of Governors of the Federal Reserve System, 1,500 employees,
                                   70 percent in an alternative plan;
                               .   the Federal Home Loan Bank Board, 1,300 employees, 55 percent in an
                                   alternative plan;
                               .   the Farm Credit Administration, 600 employees, 60 percent in an alter-
                                   native plan; and
                               .   the Overseas Private Investment Corporation, 135 employees, 70 per-
                                   cent in an alternative plan.

                                   Page117                                    GAO/GGDS@lCBPublic !kvice Issues
                                    chapter 6
                                    Strengtheni@ the Stewardship of the
                                    Public Service

                                    30, 1987, a backlog of 11,609 unadjudicated cases, which Labor con-
                                    siders to be a normal inventory of cases, existed.

                                    Regarding the overall size of program costs and the number of employee
                                    injuries, we reported the following:

                                . The cost of the federal workers’ compensation program increased 78
                                  percent from 1979 to 1987. However, when stated in constant 1979 dol-
                                  lars, the program costs increased only 13 percent during the g-year
                                  period. The cost increase occurred during the time Labor was reducing a
                                  large backlog of cases. Labor officials believe the backlog reduction
                                  caused the real increase in program costs.
                                l The trend in work-related injuries and illnesses in the federal workplace
                                  is downward, according to statistics compiled by Labor’s Occupational
                                  Safety and Health Administration. From 1979 to 1987, the incidence of
                                  work-related injuries and illnesses per 100 federal employees declined
                                  from 7.3 to 5.0, or 32 percent.

The Postal Service Experience       With a workforce of about 780,000 career employees as of October 1988,
                                    the Postal Service is one of the nation’s largest employers. During fiscal
                                    year 1988, (1) the Service recorded about 62,000 accidents nationally
                                    and almost 18,000 injuries resulting in one or more lost workdays, (2)
                                    more than 24,000 employees were paid $19.6 million in continuation of
                                    pay benefits, (3) almost 17,000 employees were paid $189.9 million in
                                    compensation benefits, and (4) about 73,000 employees were paid $74.5
                                    million in medical benefits.

                                    In 1978 the Postal Service created a program to comprehensively control
                                    workers’ compensation benefits. Service policy provides division man-
                                    agers considerable discretion in developing procedures for implementing
                                    the program. The Service measures effectiveness of division procedures
                                    to control lost workdays and associated costs through the performance
                                    indicators of the number of lost workdays due to injuries and the
                                    number of continuation of pay hours. Performance among 75 divisions is
                                    ranked according to these and other performance indicators. Since this
                                    program began, the rate of both indicators has declined at least 65 per-
                                    cent. Despite the overall reductions, however, not all divisions are as
                                    successful as others in controlling the rate of lost workdays due to in,ju-
                                    ries and the rate of continuation of pay hours.

                                    We recommended that the Service take the following specific actions to
                                    improve the administration of its program and better control program

                                    Page 119                                    GAO/GGD9&103 Public Service Issues
                                strengthening the Stew~bip   of the
                                Public Service

Central Oversight of            During fiscal year 1989, we issued three reports on federal drug-testing
Federal Drug Testing
Efforts Needed
Federal Agency Plans Vary       The first report was issued in March 1989 at the request of the Senate
Widely                          Subcommittee on Treasury, Postal Service, and General Government,
                                Committee on Appropriations.13 It describes how agency plans for drug
                                testing of federal employees vary widely despite the plans’ adherence to
                                mandatory governmentwide guidelines and applicable law. As part of
                                the Drug Free Federal Workplace Program, President Reagan issued
                                Executive Order 12564 on September 151986, requiring each executive
                                branch agency to establish drug-testing programs for employees in sen-
                                sitive positions. However, because of concerns about aspects of the
                                Executive Order, Congress included provisions in the 1987 Supplemental
                                Appropriations Act (Public Law 100-71, July 11, 1987) that required
                                that certain actions be taken before executive branch agencies could use
                                appropriations for the drug-testing program. Among other things, the
                                act required each agency to develop a drug-testing plan in accordance
                                with the Executive Order and other statutes. It also required HHS to (1)
                                issue mandatory collection and testing guidelines, (2) certify that each
                                agency had developed a plan, and (3) provide Congress with an agency-
                                 by-agency analysis of the plans. HHS published its final guidelines in
                                April 1988 and in May 1988 certified 42 agency drug-testing plans and
                                 gave its analysis to Congress.

                                In general, we found that because of the discretion provided agencies in
                                designing drug-testing programs, agency plans differ and, as a result,
                                employees may face different circumstances depending on where they
                                work. Although such differences might be explained by varying agency
                                circumstances or needs, neither the HHS analysis of the plans nor the
                                plans themselves address the rationale for the differences.

                                More specifically, in the 21 agency plans we reviewed, variations exist
                                among agencies in such aspects as the positions subject to testing, fre-
                                quency of testing, drugs for which agencies plan to test, and potential
                                disciplinary actions, as summarized below.

                            l   The positions subject to random testing, so-called “testing-designated
                                positions,” differ widely among agencies. For example, a clerk-typist at
                                the Department of Commerce in a critical sensitive position is subject to

                                 “‘Drug Testing:FederalAgencyPlansfor Test@ Employees(GAO/GGD&W61,Mar. 1, 1989).

                                 Page 121                                         GAO/GGD90-103Public Service Issues
                              chapter 6
                              strengthening      the s-hip      of tbe
                              Public Service

                              costs. At the time of our report, it was too soon for most agency pro-
                              grams to determine the overall direction and magnitude of program
                              costs in relation to the OMB estimates. WesuggestedCongressdirect
                              agencies to track and report actual program costs in agencies’ annual
                              reports required by Public Law 100-71 if Congress wants to develop
                              accurate cost data on federal drug-testing programs.

NoncomplianceWith Mandatory   The third report was issued in September 1989 at the request of the
Testing Requirements          Senate Subcommittee on Treasury, Postal Service, and General Govern-
                              ment, Committee on Appropriations. I6It discusses the Department of
                              Transportation’s noncompliance with blind performance testing require-
                              ments in HHS’S mandatory guidelines and, therefore, illustrates further
                              the need for centralized oversight of federal drug-testing efforts.

                              From July 1, 1988, through June 30, 1989, Transportation collected for
                              analysis approximately 16,000 employee urine samples, 99 of which
                              tested positive for illegal drugs. To comply with Public Law 100-71 and
                              HHS guidelines, Transportation    should have included 1,250 blind samples
                              along with the real employee specimens as part of the quality assurance
                              program to assess the accuracy of laboratory results. During this period,
                              Transportation did not comply with the blind performance testing provi-
                              sion. Therefore, it could not assure employees subjected to urine testing
                              that its laboratory was meeting all quality control standards required by
                              law and federal guidelines. Transportation officials agreed that the
                              Department had not complied when we discussed our findings with
                              them, and they provided further details discussed in our report. They
                              also said they have begun to comply with HHS guidelines on blind per-
                              formance testing. As a result of our findings, the Senate Committee on
                              Appropriations instructed the Secretary of Transportation to assure
                              that the Department complies fully with HHS guidelines.

                              Transportation’s noncompliance demonstrates the need for continuing
                              oversight and independent monitoring of federal drug-testing programs.
                              We expressed concerns in 1988 congressional testimony about the
                              absence of meaningful governmentwide oversight to ensure compliance
                              with drug-testing program requirements.‘” An HHS official who is prima-
                              rily responsible for the HHS guidelines was unaware of Transportation’s
                              noncompliance until we briefed him. He said his office is normally not
                              aware of difficulties in a drug-testing program unless they are brought

                                                rug Testing: DCJYsLaboratory Quality AssuranceProgramNot Fully Implemented
                                               89-80, Sept.29,1989).
                               ‘“Federal EmployeeDrug Testing CGAO/T-GGD-8%40,
                                                                            June 16,19&3).

                              Page 123                                                   GAO/GGDSO.103    Public Service Issues
chapter 5
strengthening the stewardship of the
Public Service

Although we made no recommendations in this report, in concluding our
work we pointed out to Fort Leavenworth management officials a proce-
dure the U.S. Postal Service used to resolve many of its labor-manage-
ment disputes, thereby avoiding a need for FLRA review. Management
officials said they had not succeeded in proposing such an informal
problem-solving process, but they would try to improve communications
with the union. Also, when we completed our work at Fort Leaven-
worth, FLRA was providing on-site training to improve labor-manage-
ment relations.

 Page 126                                 GAO/GGD90103 Public Service Issues
Appendix II

Management Review Recommendationsto the
Office of Personnel Management (OPM)

                             1. Establish an ongoing, viable planning program to identify and prepare
Workforce Planning           the government for its future workforce needs as an integral part of
                             OPM’s activities. The program should include at a minimum

                     l establishing a continuing effort to identify key emerging demographic,
                       social, and economic trends and changes to the structure of the federal
                     l developing information on the quality of the federal workforce;
                     . enhancing analysis of the staffing implications of the federal pay struc-
                       ture; and
                     l identifying and addressing the potential staffing repercussions of the
                       Federal Employees Retirement System.

                             2. Actively encourage workforce planning in the agencies and provide or
                             help arrange assistance to the agencies if requested.

                             3. Serve as a central clearinghouse for workforce planning practices and
                             trends in the public and private sectors and publicize successful plan-
                             ning efforts.

                             4. Culminate the recently initiated efforts to increase the quantity and
                             quality of personnel management research with a well-defined research
                             strategy and provide usable products to the agencies,

                             5. Make ongoing assessments of OPM’S staffing program that include at a
Staffing                     minimum

                         l   instituting systematic reviews of the effectiveness of delegated exam-
                             ining, including establishing, in consultation with the agencies, measur-
                             able standards for cost, effectiveness, and timeliness; and
                         l   enhancing recruitment feedback mechanisms by seeking continuous
                             input from major recruitment constituencies such as college placement
                             officers, in addition to the agencies.

                             6. Assert more leadership in ensuring that agencies receive the assis-
Performance                  tance they need to improve productivity, quality, and performance,
Improvement                  including enhancing OPM’s capability to provide, or help agencies

                             ‘Source:ManagingHuman Resources:GreaterOPMLeadershipNeededto AddressCritical Challenges
                             (GAO/GGD-89-19,Jan 19. 1989).

                             Page 127                                          GAO/GGD90-103    Public Service Issues
l   ensures senior executives are committed to, and held accountable for,
    improving management in their units and implementing OPM'S long-term
    action plan by including components of the plan in their SEScontracts.

    16. Develop mechanisms to improve communication, including clarifying
    and communicating to all employees the mission, priorities and goals
    and objectives for OPM overall and for each unit; and duties, responsibili-
    ties, and performance expectations for each employee.

    17. Provide supervisors and managers with better training and develop-
    ment experiences to help them improve their skills in communication,
    information sharing, and setting and providing feedback on perform-
    ance expectations.

    18. Assess ways to improve retention and motivation, including     OPM'S
    awards systems and promotion processes.

    19. Develop a workforce planning system to determine needed staffing
    levels and skills, basing staffing and budget requests on workforce plan-
    ning. The system should provide information on what staff are leaving
    and how (or whether) they should be replaced, should take into account
    an analysis and forecast of customers’ demands for services, and should
    provide an assessment of skills and training needs. Particular attention
    should be paid to those functional areas where we found a need for
    increased OPM activity, such as productivity assistance and personnel
    management evaluation.

Related   GAO Products

Status of Plans for the 1990 Decennial Census (GAO/TGGD-89-20,            May 5,

Public Health: Centers for Disease Control Staffing for AIDSand Other
PrOgramS          (GAO/HRD89-65,       Apr. 27,1989).

Aviation Safety: Conditions Within the Air Traffic Control Work Force
(GAO/RCED-89-113F8,         Apr     24,1989).

Army Audit Agency: Staff Reductions and Audit Quality Issues                   (GAO/
AFMD-89-1,    Apr. 21, 1989).

Aviation Safety: Serious Problems Continue to Trouble the Air Traffic
Control Work Force (GAO/RCED-89-112, Apr. 21,1989).

Status of Plans for the 1990 Decennial Census: An Update             (GAO/T-
GGD-89-15,    Mar. 23, 1989).

U.S. Employees Health Benefits: Rebate for Duplicate Medicare Cov-
erage     (GAO/HRD-89-68,         Mar. 23,1989).

District’s Workforce: Annual Report Required by the District of
Columbia Retirement Reform Act (GAO/GGD-89-67, Mar. 22,1989).

 Federal Employees: Early Retirements at the Defense Department in
 Fiscal year I988 (GAO/GGD89-53FS, Feb. 23,1989).

Social Security: Views of Agency Personnel on Service Quality and Staff
Reductions (GAOIHRD-89.37BR, Feb. 10,1989).

 Agency Authority to Pay Lost Earnings on Contributions to Employee
 Thrift Savings Plan Accounts (B-231206, Feb. 3,1989).

 Federal     ADP     Personnel: Recruitment and Retention   (GAO/IMTW89-12BR,
 Feb. 2, 1989).

 Federal Workforce: Positions Eligible for Law Enforcement Officer
 Retirement Benefits (GAO/GGD89-24, Feb. 2, 1989).

 Federal Retirement: Use of Contractors to Implement the Federal
 Employees Retirement System (GAOIGGD-89-29, Feb. 1,1989).

 Page 131
                                                      ~_- --                                                              -
                          Related   GAO Products

                          Senior Executive Service: Data on Hard-to-Fill Vacancies Not Readily
                          Available (GAO/GGD-89.72HR, Apr. 26,1989).

                          Federal Workforce: Implementation of the Executive Exchange Program
                          Vohintary Services Act of 1986 (GAOIGGD-89-62, Mar. 31,1989).

                          EXATraining: Continued Improvements Needed in FAA’SController Field
                          Training Program (Gm+x?ED-89-83, Mar. 29,1989).

                           Computer Security: Compliance With Training Requirements of the
                          -COmpUter %?cUrity  Act of 1987 (GAO/IMTEC-X9-16BR, Feb. 22,1989).

                          Poor Performers: How They Are Identified and Dealt With in the Social
                          gcurity Administratic
                                                   f’GAOGGD-S9-28, Jan. 27,1989).

                          Discrimination Complaints: Payments                   to Employees by Federal Agencies
Integrity of the Public   --             ___---
                          and the Judgement Fund
                                              - .- (GAO/HRD89.141,                Sept. 2.5, 1989).
                          Tennessee Valley Authority:
                                               --     Special Air Transportation Services Pro-
                          vided to Manager of Nuclear Power (GAO/GGD-89.117BR, wept. 2.5,1989).

                          IJnderrepresentation            of .--Minorities   and Women in the Foreign Service
                          &;T-NSIAD-X9-49,          Sepl. 2:‘. I !#a).

                          DODRevolving Door: Processes Have Improved but POSt-DoD
                          -I_-                                                                            Employ-
                          ment Reporting Still
                          ---I___        __-_
                                               Low ~~;AC)~S1AD-89-221, Sept. 13, 1989).

                          Financial Disclosure: Legislative Branch Systems Improved But Can Be
                          Further Strengthened (o 40 ‘fXX)-84-103, Sept.8,1989).

                          IHSData on Investigations of Alleged Employee Misconduct                       (GAO/T-
                          &D-RR     38, Ju1.v 27. 1989).

                          Financial Disclosure: Nav.y’s Public Disclosure System Generally Works
                          Well .----
                               But -Can___Be Improved
                                              ---~    ((~Ao~NSIADHS-194, J&J 27, 1989).

                          Voice of America Selected Personnel Practices Warrant Management
                          Attention (GAO/NSIAD-S~-I(~II. .hily 12, 1989).

                          State Department: Minorities
                                                    - ----
                                                           and Women Are Underrepresented in the
                          Foreign Service (GAOINSIAI l-X!1 146. .Jr~nu 26, 1989).

                          Page IHR                                                   GAO/GGB!%103     Public Senice   Issues
                     Related   GAO Products

                     Federal Workforce: Temporary Appointments and Extensions in
                     Selected Federal Agencies (GAO/GGD-89-15, Feb. 23,1989).

                     Social Security Administration:                Employment of and Service to Hispanics
                     (GAOIHRD-8935,       Jan. 30,1989).

                     Federal Employees: Appointees Converted to Career Positions, July
                     Through September 1988 (GAO/GGDkW38FS, Jan. 13,1989).

                     Navy Manpower: Management’s Oversight of Civilian Substitution
                     Lacking (GAO/NSIAD-89-5. NW. 28,1988).

                     Tax Administration:            IRS’   Data on Its Investigations of Employee Miscon-
                     duct (GAO/GGD89-13,          Nov. 18, 1988).

                     Personnel: Civilian/Military             Personnel Mix at the Air Force Weapons
                     Laboratory (GAO/NSIAD89-13,              Nov. 16,198s).

                     Administrative           Law Judges: Appointment of Women and Social Security
                     Administration           Staff Attorneys (GAO/GGD89-5, Oct. 19,1988).

                     Federal Advisory Committee Act: Presidential Commission on AIDS:Com-
                     pliance With the Act (GAO/GGD-89-17, Oct. 19,1988).

                     Federal Advisory Committees: GSA’s Management Oversight and                          GAO
                     Comments on Proposed Legislative Amendments (S. 2721) (GAO/T-
                     GGD-89-1, Oct. 5, 1988).

                     Ethics: Office of Government Ethics’ Policy Development Role                     (GAO/
                     GGD-89-3, Oct. 5, 1988).

                      Employee Drug Testing: DOT’s Laboratory Quality Assurance Program
Stewardship of the    Not Fully Implemented (GAOIC&D89-80, Sept. 29,1989).
Public Service
                      Senior Executive Service: Training and Development of Senior Execu-
                      tives    (GAO/GGD-89.127,     Sept. 29. 1989).

                      Postal Service Management of Work-Related Injuries                   (GAO/T-GGD-8941,
                      Sept. 28,1989).

                      Federal Workforce: Federal Suggestion Programs Could Be Enhanced
                      (GAO/GGD-89-71,     Aug. 23, 1989).

                      Page 136                                                 GAO/GGB90.103   Public Service Issues
                  ,,                                    .        ., _..-_
                                                                        - .-,-


    The fast five copies of each GAO report are free. Additional  copies
    are $2 each. Orders should be sent to the following address, accom-
    panied by a check or money order made out to the Superintendent
    mailed to a single address are discounted 25 percent.

    U.S. General Accounting Office
    P-0. Box 6015
    Gaithersburg, MD 20877

    Orders may also be placed by calling   (202) 275-6241.

                                                        .    .
           Related   GAO Prcducta

           Federal Compensation: Premium Taxes Paid by the Health Benefits Pro-
           gram (GAOKGD-89-102, Aug. 8,1989).

           Intergovernmental Personnel Act of 1970: Intergovernmental                      Purpose
           No Longer Emphasized (GAO/GGD-89-95, JLUE 19,1989).

           Federal Employee Drug Testing        (GAO/T-GGD88-40,        June 16,198s).

           Employee Drug Testing: Agency Costs May Vary From Earlier Estimates
           (GAO/GGD-89-75,      May 30,1989).

           Federal Employees Health Benefits Program                (GAO/T-GGD89-26,      May 24,1989).

           U.S. Employees Health Benefits: Independent Agencies Offering Their
           Own Health Plans (GAO/HRD-89-49, Mar. 2,1989).

           Drug Testing: Federal Agency Plans for Testing Employees                      (GAO/
           GGD-89-61,    Mar. 1, 1989).

           Disabled Veterans’ Employment: Performance Standards Needed to
           Assess PrOgrZUn Results (GAO/GGD-89-45, Feb. 28,1989).

           Managing Human Resources: Greater           OPM   Leadership Needed to Address
           Critical Challenges (GAO/GGD-89-19, Jan.    19, 1989).

           Labor-Management Relations: Efforts to Resolve DisDutes at Fort Leav-
           enworth, Kansas (GAO/GGD&33BR,  Jan. 4,1989).

            US. Employees Health Benefits: Status of Contractor’s Nonlegislative
            Recommendations to Reduce Costs (GAOIHRD-89-6, Dw. 19,198s).

            Federal Compensation: Recovery of Improper Health Benefits Charges
            Needed (GAOpxM9-27,  D~C.13,198s).

            Federal Workforce: Federal Employees’ Compensation Act Cost Growth
            and workplace  Safety (GAO/GGD-89-4, Oct. 20,1988).

(966402)    Page 136                                           GAO/GGD9@103         Public Service Issues

    Related     GAO F’mducta

    Failed Thrifts: Allegations at Fir&South Receivership in Little Rock,
    Arkansas CGAOiGGD-89-98.
               .              June 16.1989). ,

    Federal Personnel: Defense Department’s Hiring of Teachers for Over-
    SeaS Schools (GAO/GGD89-82, June 14,1989).

    The President’s Ethics Proposals                 (GAO/T-GGD-89-29,   June 13,1989).

    Federal Employees: Appointees Converted to Career Positions, January
    Through February 1989 (GAOIGGD89-89FS, June 13,1989).

    Use of Consulting Services in Defense Acquisition                     (GAO/T-NSIAD-8936,        June
    7, 1989).

    Immigration Service: Allegation of Adverse Actions Taken Against                               INS
    Agents (GAO/GGD-89-70, May 1,1989).

    Post-Employment Activities of Dr. June Q. Koch, Former Assistant Sec-
    retary for Policy Development and Research, Department of Housing
    and Urban Development (GAO/T-RCED-89-19, Apr. 26,1989).

    Federal Employees: Appointees Converted to Career Positions, October
    Through December 1988 (GAO/GGD89-66FS, Apr. 24,1989).

    Air Force Logistics: Conflict of Interest in Procurement C-5 Crash
    Damage Kits (GAO/NSIAD-89-109,  Apr. 12,1989).

    Internal Controls: Justice’s Payroll System Controls Need Strengthening
    (GAO/GGD-89-50,       Mar   28,1989).

    Federal Employees: Supplemental Information on Appointees Converted
    t0 career       POSitiOnS    (GAO/GGD-89.56FS,      Mar. 21,1989).

    Implementation -.of the           DOD   Revolving Door Legislation            (GAO/T-NSIAD-89-17,
    Mar. 16, 1989).

    DOD Revolving Door: Many Former Personnel Not Reporting Defense-
    Related Employment (GAO/NSIAD86-71, Mar. 4,1986).

    Disabled Veterans Employment: Performance Standards Needed to
    Assess Program Results (GAO/GGD-89-45, Feb. 28,1989).

    Page 134                                                      GAO/GGD90.103      Public Service Issues
                       Related    GAO Products

                       Export Promotion: Problems in Commerce’s Programs                           (GAO/NSIAD-89-44,
                       Jan. 26,1989).

                       Superfund: Missed Statutory Deadlines Slow Progress in Environmental
                       PrO@‘FUtIS       (GAO/RCED-89-27,    Nov. 29,1988).

                       Transition Series: The Public Service                 (GAO/OCGSS-2TR,      NOV. 1988).

                       Nuclear Regulation: Stricter Controls Needed for Radioactive Byproduct
                       Material Licenses (GAO/RCED-89-15, Oct. 12,1988).

                       Senior Executive Service: Training and Development of Senior Execu-
Effectiveness of the   tiVt?S
                            (GAO/GGD-89.127, Sept.29,1989).
Public Service
                       Pay for Performance: Agency Personnel Directors’ Views                            (GAO/GGD-126lq
                       Sept. 15,1989).

                       Aviation Training: FAA Aviation Safety Inspectors Are Not Receiving
                       Needed Training (GAO/RCED89-168, Sept. 14,1989).

                       Aviation Safety: FAA Has Improved Its Removal Procedures for Pilot
                       Examiners (GAO/RCED-89-199, Sept. 8,1989).

                       State Department: Professional Development of Foreign Service
                       Employees (GAO/NSIAD89-149, July 26,1989).

                       Comments on Reauthorization of the Performance Management and Rec-
                       Ognition      SySteItI    (GAO/T-GGD-89-36,    July 18,1989).

                       Attack Warning: Better Management Required to Resolve                             NORAD    Integra-
                       tion Deficiencies (GAO/IMTEG-89-26, July 7,1989).

                       The Intergovernmental               Personnel Act Mobility Program               (GAO/TGGD-%-33,
                       June 20,1989).

                       Intergovernmental Personnel Act of 1970: Intergovernmental                               Purpose
                       No Longer Emphasized (GAOIGGD-89-95, June 19,1989).

                       Postal Service: Discipline Practices Vary                 (GAO/GGD89-79,        May 19,1989).

                       Pay for Performance: Interim Report on the Performance Management
                       and Recognition System (GAO/GGD-89-69BR, May 18,1989).

                       Page 132                                                        GAO/GGD9O-103    Public Service   b3BWS
Related GAO Products

                        Federal Pay: Complexities in Calculating Federal Civilian Firefighters’
Quality of the Public   Pay (GAO/GGDSS-131, Sept.29,1989).
                        Federal Pay: U.S. Park Police Compensation Compared With That of
                        Other Police Units (GAOIGGD-89.92, Sept. 25,1989).

                        Status of 1990 Census Promotion and Outreach Activities                           (GAO/T-
                        GGD-89-40,Sept.20, 1989).

                        FDA Resources: Comprehensive Assessment of Staffing, Facilities, and
                        Equipment Needed (GAO/HRD89-142, Sept. l&1989).

                        Export Promotion: Problems With Commerce’s Commercial Information
                        Management System (GAO/NSIAD-89-162, Aug. 31,1989).

                        AIL%Education: Staffing and Funding Problems Impair Progress                                  (GAO/
                        HRD-89.124,    July 28, 1989).

                        H.R. 2514 Federal Retirement Thrift Savings Plan                         (GAO/T-GGD-89-35,      July 26,

                        1990 Census: Delays in Completing the Address List for Suburban and
                        Rural Areas (GAO/GGD-89-74, July 10,1989).

                        1990      CenSUS:   &!erVieW     Of   Key   ISSUeS    (GAO/GGD-89-77BR,       July 3,1989).

                        Locality Pay for Federal Employees                   (GAO/T-GGD-89-27,     June 26,1989).

                        Social Security: Staff Reductions and Service Quality                        (GAO/HRD-89-106BR,
                        June 16, 1989).

                        Serious Problems Continue to Trouble the Air Traffic Control Work
                        Force (GAO/T-RCED-89-44, May 25,1989).

                        Expanding the Decennial Census Applicant Pool                        (GAO/T-GGD-89-22,         May 23,

                        TVA      Management: Information on Compensation for Top Managers                                (GAO/
                        RCED-89-137BR,      May 17, 1989).

                        Issues Related to FAA’s Effectiveness                 (GAO/T-RCED89-39,       May 9,1989).

                        Page 130                                                      GAO/GGD-90-103      Public Service Issues
                   management l&dew Jl.ecommendatlomto
                   the. of6ce   of Personnel   Management   COP&Q

                   acquire, special and technical assistance in areas such as setting per-
                   formance standards or measuring performance and motivation.

                   7. Establish a more aggressive outreach program into the public and pri-
                   vate sectors to learn current practices and trends in performance
                   improvement and quality and productivity management.

                   8. Enhance clearinghouse activities that disseminate information on
                   innovative human resource practices to help agencies wishing to further
                   their performance improvement efforts.

                   9. Initiate additional research and support new demonstration projects
                   to continue the search for ways to remove the barriers which prevent
                   performance management systems from achieving their potential.

                   10. Assess the standards for agency evaluation systems and make
Oversight          changes where needed.

                   11. Establish a clearinghouse on good and innovative evaluation
                   methods, techniques, and plans.

                   12. Develop qualifications for evaluators and assess the training avail-
                   able to them.

                   13. Increase oversight of agency personnel management evaluation pro
                   grams to include more agencies.

                   14. Until agencies improve their programs, OPM should concentrate its in-
                   depth oversight activities on those agencies with weak or nonexistent
                   programs. Once agencies have improved their programs, OPM should
                   reassess its strategy to determine if an enhanced OPM on-site presence is
                   still necessary.

                   15. Initiate an internal management improvement program and ark
Internal OPM       organization development agenda that
               l   includes steps to involve employees in identifying critical areas needing
                   attention, determining causes of problems, and developing a long-term
                   action plan to solve problems and evaluate results; and

                   Page 128                                         GAO/GGD90-103   hblic   Service Issues
Appendix I

F’iscalYear 1989 Reports With Open
Recommendationsto Congresson Public
Service Issues
              ReDoIl                                                                                Chatier
              Managing Human Resources. Greater OPM Leadership Needed to Address
              Critical Challenges (GAO/GGD-89-19, Jan. 19, 1989).                                             5
              Federal Workforce: Implementation of the Executive Exchange Program
              Voluntary Services Act of 1986 (GAO/GGD-89-62, Mar. 31, 1989).                                  3
              Intergovernmental Personnel Act of 1970: Intergovernmental    Purpose No
              Longer Emphasized (GAO/GGD-89-95, June 19, 1989).

              Federal Compensatron. Premium Taxes Paid by the Health Benefits Program
              (GAO/GGD-89-102, Aug. 8, 1989)

              Financial Disclosure: Legislabve Branch Systems Improved But Can Be
              Further Strengthened (GAO/GGD-89-103, Sapt 8, 1989).                                             4
              Federal Pay: Complexitres in Calculating Federal Civilian Firefighters’ Pay
              (GAO/GGD-89-131, Sept. 29, 1989).                                                                2

              Page 126                                                GAO/GGlMW1O3       Public SetvIce &mea
                           Chapter 6
                           Strengthening    the Stewardship   of the
                           Public Service

                           to his attention. He believed Transportation’s     noncompliance with         HHS
                           guidelines to be a serious deviation.

FLRA Met Its               In January 1989 we issued a report evaluating the Federal Labor Rela-
Responsibilities at Fort   tion Authority’s (FIXA ) ability to investigate and resolve unfair labor
                           practices at Fort Leavenworth, Kansas, a IJS. Army installation.‘7 Rep-
Leavenworth, Kansas        resentative Jim Slattrry requested the report.

                           Based primarily on our review of FLRAcase files for 102 charges of
                           unfair labor practices made by the local union during the 12 months
                           ending June 30, 1988. we concluded that FLXAmet its statutory responsi-
                           bilities at Fort Leavenworth. FLRAdid not receive any charges from man-
                           agement at Fort Leavf>nworth during this period. As of July 31, 1988,
                           FLRAhad complet.ed action on 74 of the 102 charges. FLRAissued a
                           formal complaint against management for 1 of the 74 charges, which
                           was settled when management agreed to provide the union with com-
                           plete information used in ranking and rating candidates for job vacan-
                           cies. FLU dismissed 1 of the charges, and the union withdrew the
                           remaining 72 after Fl.Rt’S investigations: 40 because the union generally
                           could not substantiate t,he charges and 32 because union and manage-
                           ment reached a resohltion. Both management and union officials
                           believed that AXA had met, its responsibilities for investigating unfair
                           labor practice charges, facilitating voluntary settlements, and issuing
                           complaints. They expressed no concerns about FIXA’S timeliness

                           While we concluded that FLRA met its responsibilities, we also reported
                           that labor-management difficulties have persisted at Fort Leavenworth,
                           and the number of unfair labor practice charges has increased during
                           the last several years. Our review of FLRA’s records showed that a total
                           of 199 unfair labclr practice charges were levied against Fort Leaven-
                           worth management by the local union during the 45-month period span-
                           ning October 1984 through *June 1988. The number increased from 5 in
                           fiscal year 1985 to 83 during the first 9 months of fiscal year 1988.
                           These 199 charges at Fort Leavenworth accounted for about 7 percent
                           of all charges filed by the Army, but civilian employees at this installa-
                           tion represent less than 1 percent of the Army’s total civilian employee

                           Page 124                                         GAO/GGl%9@103   Public Service Issues
                                 Chapter 5
                                 Strengthen     the Stewardship   of the
                                 Public Service

                               testing, but an employee in a similar position at HHS is not. The propor-
                               tion of the workforce subject to random testing also varied and ranged
                               from less than 1 percent at the Department of the Treasury’s Bureau of
                               Public Debt to 100 percent at the U.S. Marshals Service.
                             . The annual frequency at which employees in testing-designated posi-
                               tions would be tested varies from 4 to 100 percent. While the majority of
                               plans indicate that only applicants for testing-designated positions will
                               be tested, five plans call for the testing of all job applicants, and one
                               plan does not include any applicant testing.
                             l While the majority of agencies plan to test for the five drugs-mari-
                               juana, cocaine, opiates, amphetamines, and phencyclidine (PCP)-spe-
                                cifically authorized in HHS guidelines, random testing at HUD as well as
                                random and applicant testing at HHS and the Department of the Trea-
                                sury’s Savings Bond Division, will be limited to marijuana and cocaine.
                             l  The disciplinary actions that an agency is authorized to take upon the
                                first confirmed determination that an employee uses illegal drugs ranges
                                in severity from a written reprimand to removing the employee from
                                service. The plans of all but one agency did not provide any criteria as
                                to what particular disciplinary action would be taken against an
                                employee on the basis of a first-time, confirmed positive test.

                                 None of the agency drug-testing plans we reviewed discuss how the pro-
                                 gram will be affected by requirements to observe employee rights under
                                 CSRAor the Rehabilitation Act of 1973. Neither the OPM drug-testing
                                 guidelines nor the agency drug-testing plans address the Reform Act’s
                                 stipulation that an agency taking disciplinary action demonstrate a con-
                                 nection between an employee’s off-duty conduct and job performance.

Agency Costs May Vary From        The second report was issued in May 1989 at the request of two Sub-
OMB Estimates                     committees of the House Committee on Post Office and Civil Service.‘”
                                  We analyzed OMB’S cost estimates for the proposed drug-testing pro-
                                  grams of civilian cabinet-level departments.

                                  In May 1988 OMB sent to Congress cost estimates of agency drug-testing
                                  programs. OMB estimated the average yearly costs for 12 civilian cabinet-
                                  level departments at about $7 million. However, our analysis showed
                                  that OMB guidance to departments specifying the dollar amount for esti-
                                  mating certain cost categories may not indicate what some departments
                                  will spend. Further, differences in departmental estimates suggest that
                                  some departments have either overestimated or underestimated their

                                  “%mployee   Dw    Testing: Agency Costs May Vary From Earlier Estimates (GAO/GGD-S9-75,    May

                                  Page 122                                                 GAO/GGD-90-103     Public Service Issues
        Chapter 6
        Strengthening    the Stewardship   of tbe
        Public Service

l      Identify effective control procedures used by more successful divisions,
       disseminate that information to all divisions, and promote greater use of
       those controls for each location. We found the Service’s more successful
       Columbus and Seattle divisions have procedures that effectively control
       costs. Such procedures, if compiled and shared with other divisions,
       may help control the costs of injuries Servicewide.
    . Establish guidelines requiring routine medical monitoring and scheduled
       periodic review of limited duty assignments for possible termination.
       Under Labor’s regulations, limited duty is intended to be temporary, and
       monitoring employees’ medical progress and work duty status should
       facilitate returning limited-duty employees to full productivity as soon
       as medically possible. We found that Servicewide limited-duty guidelines
       did not include criteria for determining the length of an employee’s lim-
       ited duty or the frequency for monitoring an employee’s progress. As a
       result of the lack of guidelines, many employees remained on limited
        duty for extended periods. For example, we found some employees on
        limited duty for as long as 4 years in one division and more than 19
        years, intermittently, in another.
    l   Remind divisions of the importance of the requirement to complete acci-
        dent reports and require divisions to establish a system of control proce-
        dures, such as routine reconciliation of accident reports and medical
        treatment records for occupational injuries and illnesses. We found that
        not all local supervisors report all accidents as required, which could
        result in understating the total number of accidents and noncomparable
        accident statistics. Although not required, some divisions have insti-
        tuted procedures for periodically checking to see that accident reports
        are completed for all accidents involving treatment at the medical unit.
        Such a procedure can make the data more useful to local managers.
     . Issue guidelines for divisions on improving coordination/communication
        between injury compensation and safety staffs and on establishing and
        implementing national reporting verification procedures. We found that
        a lack of coordination/communication      between the injury compensation
         staff and the safety staff led to inaccuracies in reporting accidents
        nationally. In addition, although some divisions use verification proce-
        dures to check the accuracy of national accident data, no verification
        procedures are required Servicewide. To the extent that accident
        reporting is not reliable, management will not have a valid Servicewide
        measure of success in meeting safety objectives, including minimizing
        the number of accidents and the costs of injuries.

         Page 120                                   GAO/GGWlCMO2   Public Service Iames
                                  chapter 6
                                  Strengthening  the Stew&hip   of the
                                  Public Service

                                  Beyond reporting on OPM’S stewardship of human resource management
Other Agencies’                   issues, we addressed other agencies’ administration of specific personnel
Administration of                 management functions in reports on federal compensation for work-
                                  related injuries and disabilities, employee drug testing, and labor-man-
SelectedPersonnel                 agement relations at a U.S. Army installation.

Compensation for Work-            In October 1988 we reported on the program established by the Federal
Related Injuries and              Employees’ Compensation Act to compensate federal employees for dis-
                                  abilities from work-related injuries and occupational diseasesL1 Con-
Disabilities                      cerned about program costs and the number of employee injuries, the
                                  report was requested by the Ranking Minority Member of the Senate
                                  Subcommittee on Federal Services, Post Office, and Civil Service, Com-
                                  mittee on Governmental Affairs. Later, in September 1989 we testified
                                  before the House Subcommittee on Postal Personnel and Modernization,
                                  Committee on Post Office and Civil Service, on our review of the Postal
                                  Service’s policies and procedures for administering and controlling the
                                  costs of its work-related injury compensation program.12

The Governmentwide   Experience   About 3.1 million federal workers are covered by the federal workers’
                                  compensation program. It provides nontaxable payments (periodically
                                  adjusted for cost-of-living increases) as compensation for lost wages,
                                  medical services, vocational rehabilitation, other related expenses, and
                                  awards for specific injuries and survivor benefits. The Department of
                                  Labor’s Office of Workers’ Compensation Programs administers the pro-
                                  gram through its headquarters and 13 district offices. Labor pays bene-
                                  fits to employees from the Employees’ Compensation Fund and is then
                                  reimbursed annually by the employing agency from its appropriated
                                  funds or operating revenues.

                                  Benefits for 226,300 employees or their survivors amounting to about
                                  $1.1 billion were charged back to employing agencies for the year ending
                                  June 30, 1987. Before payments start, employing agencies are required
                                  to continue paying employees their full salaries for up to 45 calendar
                                  days after they sustain work-related injuries. About 72,500 employees
                                  were accordingly paid $58 million during fiscal year 1987. As of June

                                  I lFederal Workforce:FederalEmployees’CompensationAct CostGrowth and WorkplaceSafety
                                  (GAO/GGD-89-4,Oct. 20, 1988).
                                  “Postal ServiceManagementof Work-RelatedInjuries (GAO/TGGD-89-41,Sept.28, 1989).

                                  Page 118                                            GAO/GGIMO-103    Public Service Issues
                                     Chapter 6
                                     Strengthening    the Stewardship   of the
                                     Public Service

                                     Federal procurement regulations expressly prohibit charging federal
                                     income taxes to government contracts. OPM officials did not detect these
                                     improper charges when they reviewed the plan’s accounting statements.
                                     In December 1988, we reported our findings to OPM’S program adminis-
                                     trator and recommended that OPM recover the funds, which it has done.‘O

                                     We also found that, despite the potential for significant losses, OPM had
                                     not required plans to monitor claims to detect provider and enrollee
                                     fraud and abuse. Although OPM intended to insert a clause in its 1990
                                     contracts requiring procedures for detecting fraud and abuse, the type
                                     of monitoring will be the plans’ prerogative. Officials at several of the
                                     largest plans said that their current practice for dealing with suspected
                                     fraud is to closely monitor future claims, but referral for prosecution is
                                     usually not considered.

                                     More effective vulnerability assessments and oversight of the program
                                     could help OPM identify weaknesses in its internal control systems that
                                     have allowed fraud and abuse. In addition, expediting the implementa-
                                     tion of regulations to exclude payments to providers found guilty of
                                     fraud or unethical practices would improve prevention controls. We plan
                                     more work to identify further actions OPM and the plans could take to
                                     prevent fraud and abuse.

Contractor’s   Estimate of Program   OPM contracted with a private firm to comprehensively   examine the fed-
Savings                              eral health benefits program and recommend actions to improve the pro-
                                     gram during the 1990s. The contractor’s report, submitted to OPM in
                                     April 1988, identified major problems in the structure and operation of
                                     the program.

                                     The report concluded that lack of competition to enter the program
                                     results in excessive costs and premiums. Plans are either included by
                                     law or excluded without regard to price, quality, or efficiency considera-
                                     tions. The report also noted that the government does not use its lev-
                                     erage as a large purchaser to negotiate discounts, as large corporations
                                     typically do. It also concluded that problems have occurred because of
                                     the erosion of the principle of group insurance as people representing
                                     the same risk level have congregated in a certain plan or option. This
                                     has reduced the cross-subsidies possible when young and old and sick
                                     and healthy people are in the same plan or option.

                                      ‘“Federal Compensation:Recoveryof Improper Health BenefitsChargesNeeded(GAO/GGD89-27,

                                      Page 116                                           GAO/GGD9@103    Public Service Issues
                                        Chapter 6
                                        Strengthening the Stewardship of the
                                        Public Service

                                        billion in premiums; the government was to pay $8.2 billion, or 71 per-
                                        cent of this cost, with enrollees contributing the remainder.

                                        In May 1989 we testified before the House Subcommittee on Compensa-
                                        tion and Employee Benefits, Committee on Post Office and Civil Service,
                                        on administrative cost trends in the Federal Employees Health Benefits
                                        Program and OPM controls to prevent fraud and abuse.7 Health benefits
                                        are provided through 42 experience-rated plans that base their pre-
                                        miums on past claims experience and 333 community-rated plans, pri-
                                        marily health maintenance organizations. Experience-rated plans
                                        account for about 90 percent of all program expenditures and were the
                                        focus of our work. As requested by the Senate Subcommittee on Federal
                                        Services, Post Office and Civil Service, Committee on Governmental
                                        Affairs, we also reported on (1) a contractor’s recommendations for
                                        reducing program costs and (2) the extent to which independent agen-
                                        cies are offering their own health plans.*

Administrative   Costs Have Risen       In 1987 the experience-rated plans spent about $7 billion. About 90 per-
76 Percentin 6 Years                    cent of this amount was paid to enrollees or their health care providers
                                        for benefit claims. The remainder was for administrative expenses
                                        ($448 million), premium taxes ($44 million), and service charges ($42
                                        million), which are the plans’ profits. At $634 million, these three
                                        administrative items are a significant program cost and, while small in
                                        relation to benefit payments, had escalated rapidly during the 5-year
                                        period from fiscal year 1982 to fiscal year 1987, as follows:

                                    l   The plans’ administrative expenses increased by 75 percent during the
                                        5-year period or about 1.4 times the increase in benefits paid. This
                                        increase cannot be attributed to growth in enrollment, which increased
                                        by less than 2 percent.
                                    l   The administrative expenses would have been somewhat affected by
                                        wage and price inflation as the Employment Cost Index (a federal eco-
                                        nomic indicator of changes in compensation levels for all occupations in
                                        the non-farm economy) rose 21 percent and the Consumer Price Index
                                        grew by 18 percent during the 5-year period.
                                    l   Service charges increased at a much faster rate than administrative
                                        expenses through 1984. Although they have since leveled off, the plans’
                                        profits increased by 77 percent during the 5-year period.

                                        7FederalEmployeesHealth BenefitsProgram(GAO/T-GGD89-26,May 24,1989).
                                        ‘U.S. EmployeesHealth Benefits:Statusof Contractor’sNonlegislativeRecommendations
                                                                                                                        to Reduce
                                        Costs(GAO/mD-89-6, Dec.19, 1988);U.S.EmployeesHealth Benefits:IndependentAgencies
                                        Offering Their Own Health.__
                                                                  Plans(GAO/mD-89-49, Mar. 2,1989).

                                        Page 114                                             GAO/GGL%90-103
                                                                                                         Public Service Issnes
                             chapter   6
                             seengthelllngthe st&.wardship
                                                        of the
                             Public Service

Oversight of the             As discussed in chapter 3, we reported in June 1989 on the IPA mobility
Intergovernmental            program.5 Beyond the need for Congress to reassess and clarify the pri-
                             mary purpose of the program, we reported on the need for OPM to
Personnel Act Mobility       strengthen its program oversight.
                             OPM has exercised minimal guidance and oversight of the program since
                              1982, when OPM limited its involvement in all IPA activities. As a result,
                             OPM has not always obtained information and followed up to ensure that
                             IPA assignments are proper. For example, we found that

                         l   OPM reduced staff committed to the mobility program from five full-time
                           staff in fiscal year 1978 to two as of March 1989;
                         9 since the spring of 1987, OPM has not followed up with all agencies to
                           obtain copies of all mobility assignment agreements, despite the require-
                           ment that agencies furnish OPM with a copy within 30 days after signing;
                         l OPM often did not receive the required evaluation reports from agencies
                           on their use of the mobility program, and OPM has not done any govern-
                           mentwide evaluations of the program since at least the early 1980s; and
                         l agencies were inconsistent in requiring mobility program participants to
                           file confidential financial disclosure reports.

                             To ensure effective use of OPM program resources, we recommended that
                             the OPM Director implement a system to control the receipt of assignment
                             agreements, agency evaluation reports, and other information necessary
                             to effectively review federal agencies’ use of the program. OPM should
                             use this information to direct agencies to make timely corrections of any
                             improper agreements, as provided in current regulations. In April 1990
                             OPM said it agreed with this recommendation and expected action to be
                             completed by October 1990. We also recommended that OPM specify the
                             circumstances under which nonfederal employees on detail to federal
                             agencies should file financial disclosure reports. OPM said in April 1990
                             that it will work with OGE to determine such circumstances.

Federal Suggestion           In August 1989 we reported on key factors contributing to employee
Programs                     participation and savings in a successful suggestion program.6 The
                             House Subcommittee on Civil Service, Committee on Post Office and
                             Civil Service, and Representative John Kasich requested the report.

                                            ental PersonnelAct of 1970:IntergovernmentalPurposeNo LongerEmphasized
                                           89-W, June 19,1989).
                             “FederalWorkforce Federal&!&&ion F’ro@msCouldBe Enhanced(GAO/GGD-89-71,Aug. 23,

                             Page 112                                              GAO/GGDW-103     Public Service Issues
                           chapter 6
                           Streq$hening     the Stewardship   of the
                           Public Service

Oversight of Agencies’     In February 1989 we reported on the effectiveness of the affirmative
                           action program for disabled veterans at five agencies: the Department of
Programs to Hire and       Labor, HHS, NASA, OMB, and OPM.~The report was requested by the House
Advance Disabled           Committee on Veterans’ Affairs, which wanted to know, among other
Veterans                   things, if OPM, as the governmentwide program manager, should improve
                           its oversight of program operations. Chapter 4 discussed the report’s
                           description of the government’s use of special authorities to hire dis-
                           abled veterans.

                           Federal regulation (5 C.F.R. 720.306) requires OPM to monitor agency
                           efforts to hire and advance disabled veterans through review of agency
                           plans and employment data, direct agency contact, and other appro-
                           priate means. OPM is to evaluate on-site program effectiveness, both at
                           agency headquarters and at field installations or operating components.
                           In addition, OPM is required to provide technical assistance, guidance,
                           instructions, data, and other information to supplement and support
                           agencies’ programs and annually report to Congress on the program’s

                           Because performance standards or other criteria for measuring success
                           were not established by law or regulation, it is not possible to conclu-
                           sively determine to what extent agencies’ disabled veterans’ programs
                           have been successful or unsuccessful. A variety of measurements, com-
                           parisons, and analyses that we used, however, suggest that the five
                           agencies could do more to promote the employment and advancement of
                           disabled veterans. Overall, we found mixed results among the five agen-
                           cies. While the Department of Labor and OPM programs were more suc-
                           cessful at employing and advancing disabled veterans than were HHS,
                           M&A, and OMR, all five agencies’ disabled veteran employment rates
                           declined from 1982 to 1987.

                           We recommended that OPM improve its management of the disabled vet-
                           erans’ affirmative action program by

                         . developing, with agency assistance, criteria for measuring agencies’ dis-
                           abled veteran employment and advancement performance;
                         . overseeing agencies’ self-evaluations by helping them with the in-depth
                           data analysis nec*essary to find the causes of problems and ways to
                           improve performance;

                           ‘Disabled Veterans‘Employment:PerformanceStandardsNeededtoAssessProgramResultz,(GAO/
                           GGD-89.45,Feh 28.1989).

                           Page 110                                         GAO/GGD-W-103   Public Service Imwer
    chapter 6
    seengtbening    the stewardship   of the

    direct their systematic and continued training and development. Subse-
    quently, OPM provided agencies with policy guidelines on designing and
    administering executive development programs. Under OPM'S latest gui-
    dance, which became effective in July 1984, OPM views its role as pro-
    viding agencies central leadership and direction by (1) setting policy and
    offering guidance for developing executives, managers, and supervisors;
    (2) monitoring and evaluating the government’s progress toward man-
    agement excellence; and (3) making OPM services and assistance avail-
    able to agencies as needed. Federal agencies are expected to initiate the
    design and administration of their own systematic programs for devel-
    oping supervisors, managers, and executives.

    We found that OPM'S oversight of agency executive development has
    been generally dormant during the past 5 years due to major reorganiza-
    tions and reductions in staff. For example, between December 1981 and
    December 1988, OPM reduced from 19 to 2 the staff in executive and
    management development who were involved with oversight, agency
    assistance, and policy development; most of the reductions occurred in
     1983. In addition, OPM no longer regularly receives information on
    agency executive and management development programs; OPM let
    expire a regulatory requirement that agencies submit program plan
    updates. Consequently, OPM is not in a position to know if effective sys-
    tematic development of executives is occurring. The reorganizations and
    lack of staff, according to OPM officials, have also reduced OPM'S ability
    to provide agencies with guidance and assistance.

    Overall, we concluded that OPM has not effectively fulfilled its leader-
    ship role in executive development since about 1984. However, to its
    credit, OPM began during our review a reexamination of its role and
    responsibilities in executive training and development. An internal rec-
    ommendation urged OPM to take a more active leadership role in
    ensuring that federal managers and executives are developed as effec-
    tively as possible. Specifically, we recommended that OPM, in reassessing
    its roles and responsibilities in this area, examine

l the need for governmentwide requirements for minimal levels of execu-
  tive training and development,
9 the difficulties small agencies face in providing executive training and
l the need to improve the mechanisms for ensuring that executives
  receive appropriate training and development,
l the need to encourage greater support among executives and agencies
  for executive training and development,

    Page108                                     GAO/GGD-9&103   Public Sexvice Issues
    chapter 6
    Stre~ening       the stewardship   of the
    Public Service

    Since issuance of our management review, both the President and Con-
    gress have acted to improve human resource management in the federal
    government. For example, the President proposed and the Senate con-
    firmed an individual who has demonstrated a commitment to the civil
    service as OPM director. As discussed in chapter 4, the Ethics Reform Act
    of 1989 was enacted which, beyond reforming ethics laws, provided pay
    increases to members of Congress as well as to top officials in the execu-
    tive and judicial branches. While these are positive steps forward, the
    President and Congress should do more, particularly in the area of pay
    and benefit reforms for rank-and-file workers.

    As discussed in chapter 2, we strongly endorse federal pay reform
    efforts. Both the President and key congressional committees in both
    houses have proposed legislation to reform the pay-setting principles
    and processes for federal white-collar employees. Such reforms are criti-
    cally needed because of pay disparities with the nonfederal sector. Non-
    competitive salary rates are the major reason for federal recruitment
    and retention difficulties, especially in high-cost, high-paying localities.

    Notwithstanding the lack of current competitive salary rates, President
    Bush, like previous Presidents, decided to grant a 1990 federal pay raise
    at a lesser amount than needed to maintain comparability with private
    sector salaries. To stay even with the average private sector salary
    increase for the previous year, a federal salary increase of 6.4 percent
    for fiscal year 1990 was required. Such an increase would not have
    reduced the gap between average federal and private sector salaries
    that already existed because of smaller raises granted federal employees
    than their private sector counterparts each year since 1978. Neverthe-
    less, the President granted a 3.6-percent increase, thereby lessening gov-
    ernment pay competitiveness with the private sector by almost 3
    percent that year.

    We support efforts of OPM and the congressional committees to reform
    the Federal Employees Health Benefits Program. On the other hand, cer-
    tam proposals in the President’s fiscal year 1991 budget request would
    reduce federal employee retirement benefits and could therefore be con-
    strued as a lessening of the federal compensation package’s competitive-
    ness. Specifically, these proposals call for

l eliminating the lump-sum payment option from civilian employee retire-
  ment programs;
. reducing the CSRScost-of-living adjustments to the Consumer Price Index
  increase minus 1 percentage point; and

    Page 108                                     GA0/GGD9o-103   Public Service J.seues
                              Chapter 6
                              strengthening    the stewardship   of the
                              Public Service

                      l      convened an interagency task force to examine PME program effec-
                        tiveness. The task force was to assess the adequacy of minimum require-
                        ments of agency PME programs in view of the many changes in personnel
                        management since CSRA.It was to also review the qualification standards
                        for agency evaluators and the adequacy of OPM’S PME training courses. In
                        April 1990, OPM said the task force had completed its work and OPM was
                        forming an interagency work group to further address these issues.
                      l OPM developed an inventory of PME plans, methods, and techniques and
                        was establishing a clearinghouse to provide technical information to
                        agencies on request. A catalog of clearinghouse materials was expected
                        to be available to agencies by spring of 1990.
                      9 OPM planned to consider the need for more focus on agencies with
                        weaker internal PME programs identified through OPM’s survey results.
                        In February 1989 OPM completed a survey of the capabilities of agency
                        internal PME programs. Further, OPM planned during fiscal year 1990 to
                        concentrate its discretionary resources on those agencies with weak
                        evaluation programs. Two of the three agencies first selected for
                        agency-specific reviews in fiscal year 1990 (IRS and the National Park
                        Service) were in this category, and OPM also planned to work with the
                        U.S. Customs Service to improve its self-evaluation program.

                              OPM  further noted that agency-led evaluations, many in which OPM had
                              participated, have increased threefold since 1986. OPM viewed this as
                              evidence that oversight programs are seriously trying to protect the
                              merit system as OPM grants agencies greater flexibility in using per-
                              sonnel authorities.

Internal Management           Among the actions OPM said it was taking to revitalize its internal
Improvements                  workforce were the following:

                          l   OPM  was developing management improvement plans throughout the
                              agency. It recruited new personnel to analyze internal functions and
                              revise its administrative policies and procedures. It also created a new
                              office to support management improvement efforts. In January 1990
                              program office executives submitted new and revised performance stan-
                              dards for their organizations to enhance OPM accountability to its cus-
                              tomers and improve organizational performance. OPM also instituted a
                              new planning and budget system that requires associate directors and
                              office heads to develop work plans to be incorporated into their SESper-
                              formance plans.
                          l   OPM prepared and distributed an employee orientation handbook for new
                              employees. It was systematically trying to improve communications

                              Page 104                                     GAO/GGB90103   Public Service Issues

                                  that economy be considered when OPM delegates personnel management
                                  authority to agencies. OPM responded that during the initial years of del-
                                  egated examining following CSRA, it collected cost (direct salary) figures
                                  from agencies. OPM found the data, however, to be unreliable, unsys-
                                  tematically collected, and sometimes estimated. OPM'S position since has
                                  been that agencies’ must judge cost effectiveness when deciding to con-
                                  tinue in voluntary delegations. OPM said agency satisfaction was its best
                                  measure of the program’s effectiveness.

                                  OPM  has established several mechanisms to enhance recruitment,
                                  including a national recruiting symposium, a nationwide college rela-
                                  tions program, a computerized telephone system for job and application
                                  information, and specific recruiting and employment initiatives in con-
                                  junction with other agencies and colleges.

Performance Improvement           Among the many activities OPM noted to provide governmentwide lead-
                                  ership and assistance to agencies to support improved productivity,
                                  quality, and performance were the following:

                          l       had proposed legislation to extend pay for performance for grade 13
                            to 15 supervisors and managers. OPM had also commissioned the
                            National Academy of Sciences to conduct a research project on perform-
                            ance appraisal techniques that will analyze public and private exper-
                            iences with merit pay systems.
                          . OPM was increasing efforts to improve performance management and
                            appraisal training, including course updating, greater review of training
                            materials, and monitoring of classes. Further, OPM had begun providing
                            training programs to develop communications and problem-solving skills
                            of frontline employees and their supervisors to improve government ser-
                            vice involving public contact.
                            OPM was making a governmentwide study at both agency and installa-

                            tion levels to assess improvements in performance management prac-
                            tices and systems. In the summer of 1989, OPM issued revised regulations
                            and guidance to agencies on reductions in grade and removals based on
                            unacceptable performance.
                            OPM performance management liaison staff, including a designated spe-

                            cialist in each OPM regional office, are available daily to discuss agency
                            performance management problems, answer questions on regulatory
                             and policy issues, and provide advice.
                            OPM provided direct technical assistance on using incentive awards to

                             approximately 40 agencies to improve their program results. It devel-
                             oped a sample plan for agencies, as well as guidance on program evalua-
                             tion, promotion, and planning an incentive awards program.

                     chapter   6
                     seengulenhlg the stewardship of the
                     Public Service

                     undermining its ability to serve the public, in part due to a lack of effec-
                     tive OPM leadership.

                     In September 1989 the current director, Constance Newman, provided
                     us with her assessment of OPM policies and programs and an OPM
                     response to our specific recommendations. She pledged to address those
                     problems that have prevented the federal workforce from reaching the
                     high quality it could, and she outlined her immediate priorities for OPM.
                     She said that reform of the Gs pay system and improved public under-
                     standing and support for the public service would be two top priorities
                     for OPM. She also noted a need to restructure the federal health benefits
                     program. She said success in these areas was fundamental to OPM’S long-
                     range strategy of improving other related personnel systems, such as
                     position classification, performance appraisal, pay for performance, and
                     employee training and development.

                     Subsequently, OPM provided congressional oversight committees in April
                     1990 an updated response to the specific recommendations in our Jan-
                     uary 1989 report. While we are pleased OPM has acted on most of our
                     recommendations, we believe that it will need to sustain its effort to
                     achieve lasting improvements. Based on OPM’S September 18, 1989, and
                     April 30, 1990, responses, the following summarizes actions OPM said it
                     was taking to address our findings and recommendations. As we address
                     these subjects in future reports, we will evaluate the effectiveness of
                     OPM’s responses in producing long-term improvements.

Workforce Planning   With a contract for Civil Service 2000 in January 1988,” OPM began ana-
                     lyzing demographic and labor trends and their effect on government
                     staffing. OPM viewed the publication of Civil Service 2000 as the begin-
                     ning of a campaign to alert agencies to changes in the labor market for
                     which planning is essential. To help agencies plan alternative strategies
                     for the issues in Civil Service 2000, OPM was planning to establish a
                     training curriculum to provide agencies with strategic planning skills.

                     OPM began implementing a comprehensive program of workforce quality
                     assessment, which includes long-term studies of trends and changes in
                     the quality of applicants and new hires and immediate studies of the
                     quality of incumbents in critical occupations. OPM was developing the
                     capability to identify and analyze specific demographic trends in the

                     ?his report was preparedfor OPMby the HudsonInstitute and submittedto Congressin June 1988
                     in responseto a congressionalrequirementthat OPMreport “on the long term work force needsof the

                     Page 100                                                GAO/GGB9&103      Public Service Issues
Chapter 5

Strengthening the Stewardship of the
Public Service

                        OPM is responsible for enforcing civil service laws and regulations and
                        for administering civil service benefit programs. While OPM’s role as
                        administrator of the civil service is important, its mission is much
                        broader. As envisioned in the Civil Service Reform Act of 1978, OPM’S
                        mission is to improve the government’s performance by providing lead-
                        ership and expertise in the management and development of the federal
                        government’s most valuable resource-its people.

                        During fiscal year 1989, we completed a special assessment of OPM’S
                        leadership role in managing the government’s human resources since
                        OPM’S establishment in 1979. We also reported on a variety of issues
                        involving OPM’s administration and oversight of civil service operations.
                        Further, we addressed other agencies’ administration of specific human
                        resource programs in reports on federal compensation for work-related
                        injuries or disabilities, federal employee drug testing, and unfair labor
                        practices at a U.S. Army installation.

                        CSRAenvisioned a strong leadership role for OPM and specifically tasked
OPM Needs to            the director with proposing policies to the President to promote an effi-
Enhance Its             cient civil service and the systematic application of merit principles.
Leadership of Federal   Before the current director, Constance Newman, OPM had three direc-
                        ton+-Alan Campbell, Donald Devine, and Constance Homer-each with
Human Resource          a fundamentally different interpretation of OPM’s role. All three had dif-
Management              ferent operating philosophies, and each reorganized the agency. These
                        changes in operating philosophies and organizational structure were
                        accompanied by declining budgets and staffing levels. Our management
                        review of OPM concluded that the culmimation of changes since CSRApas-
                        sage had undermined OPM’s ability to maintain a stable agenda and pro-
                        vide sustained attention to identifying and resolving critical
                        governmentwide problems and preparing for the future.

OPM’s Responseto        In a January 1989 report to Congress, we presented the results of our
Management Review       management review of OPM’S leadership on federal human resource man-
                        agement issues.’ To enable OPM to exercise greater leadership, we made
Findings and            numerous recommendations to the Director in the areas of workforce
Recommendations         planning, staffing, performance improvement, oversight of agency per-
                        sonnel management, and internal operations. Our work in these areas
                        found the following:

                        ‘ManagingHumanResources:GreaterOPMLeade~bip Neededto AddressCritical Chaknges (GAO/
                        GGD89-19, Jan. 19, 19l39~

                        Page 98                                          GAO/GGIMWO3     Public Service Issues
                         We noted at the rim, of our review that the Laboratory had about 49
                         percent civilian employers, compared with about 72 percent at 13 other
                         Air Force laboratc vws (based on fiscal year 1986 data, which were the
                         latest data readil; :I\ ailaNt>).

Receivership Employees   In June 1989 we’ I VIIIlrt ed on our assessment of allegations of wrong-
                         doing concerning I h*t F’eclrral Savings and Loan Insurance Corporation’s
Who Perform Federal      (ELK) FirstSout    I:~YN\ crship in Little Rock, Arkansas.32 As part of our
Functions Should Be      work, we addrr,ssc>lI heaappointment of receivership employees as fed-
Appointed Federal        eral employees ‘I‘ti+,‘+nat t’ Subcommittee on Federal Service, Post
Employees                Office, and Civil +I ‘;!(‘t‘ (:ommittee on Governmental Affairs, requested
                         the report.

                         E’sLIcwas a go\ 1”’!#I’ *‘II! t’orporation that insured deposits in savings and
                         loan institution’s     I ’ (!>I-could also have been appointed as a receiver, a
                         separate and disl in&I Ic><alentity, for liquidating a failed institution. As
                         a receiver, FS1.K +rt s(~sincluded taking legal and physical possession,
                         collecting obligar ii )I L tlr I(‘. disposing of assets, and settling claims against
                         a savings and lo;r!, .rsso~iation. As of April 30, 1989, 99 receiverships
                         were operat,ing wit 1, total assets of $8.6 billion. FirstSouth was a feder-
                         ally insured sav !11Ed HINI I(Ian association put into receivership in
                         December 198C;lV\if 11;tl<ets of almost $1.7 billion.

                         In the past,, fecc I’ L‘ r!~$~~i;\~orschose not to appoint any receivership
                         employees as fcd<~r,rlemployees. During our review, FSLIC moved to
                         place key recci\ wvuip operations under regional federal officials’ con-
                         trol. According (1/‘+I.I( about .50 of the approximately 1,300 employees
                         in receivership ,1(,1I \ itilbs would he appointed as federal employees
                         under an F’SI.ICI a’+’1.1 i1.t11ring plan. In addition, FSLIC told us that receiver-
                         ship employer ~1:<II v.lar cls of conduct, issued in May 1989 during our
                         review, subject ITI ,,~~r,iemployees to the same standards of conduct as
                         all federal emI> g1ii t t .

                         While FSLIC hat 1;Yi :(‘I] :I 1losltivr step by issuing receivership employee
                         standards of (‘(ml I ICit M’Vsaid the measure was not a substitute for
                         appoint,ing as I IY~~S
                                              “‘I! ~~tr~ployeesthose employees who perform federal
                         functions. W(l >’ I ‘11t ‘N 1dr~1that all receivership employees performing

                         Page 96                                           GAO/GGMJO-103Public Service Issues
                              chapter 4
                              Enhancing the Inte@ity of the Public Service

                              that it paid employees only for hours worked. We noted (1) abuses in
                              time and attendance reporting, (2) failure to abide by overtime and com-
                              pensatory time rules, and (3) work scheduling shortcomings. During our
                              review, VOA took several steps to improve control of time and attend-
                              ance, such as establishing a policy of zero tolerance for violation of time
                              and attendance rules and planning a review of the justification for an 8-
                              hour day without a meal break. While we recognized that VOA’S actions
                              appeared remedial, we recommended that VQAfully implement its initia-
                              tives to improve time and attendance control. In October 1989 VQA
                              reported to Congress that it had thoroughly reviewed policies governing
                              overtime and tune and attendance and, among other things, is studying
                              changes to better adapt governmentwide regulations to VOA’S unique
                              operating environment, clarify guidelines, and facilitate enforcement.
                          l   VOA has underrepresentation of women and minorities, which is dis-
                              cussed earlier in this chapter in the discrimination and equal employ-
                              ment opportunity section.

Shortcomings in Navy’s        In November 1988 we reported on the Navy’s practice of substituting
Management Oversight of       civilian positions for military positions.“” The House Subcommittee on
                              Defense, Committee on Appropriations, requested the report.
Civilian Substitution
                              Navy officials stated that civilian substitution is not a program with
                              specific goals and objectives; instead, it is one of several administrative
                              initiatives for the cost-effective use of personnel. Substitutions initially
                              increase the Navy’s personnel costs because civilians must be hired to
                              replace the military personnel who are reassigned. Navy officials told us
                              that, in the long run, as military personnel levels are reduced, it will
                              save money because it generally costs less to employ civilians than mili-
                              tary personnel.

                              DOD policies SUppOrt converting military pOSitiOnS to civilian positions
                              when military staff are not required. The Navy has developed a general
                              position consistent with DOD Directives 1100.4 and 1400.5, which state
                              that civilian personnel are to be employed unless military personnel are
                              required for reasons of law or for other matters, such as combat readi-
                              ness, training, and security. Between fiscal years 1983 and 1988, the
                              Navy planned to convert 4,900 military positions to civil service jobs.

                              “‘Navy Manpower:Management’sOversightof Civilian Substitution Lacking(GAO/NSIAD-89-5,
                              Nov. 28, 1988).

                              Page 94                                             GAO/GGD9O-103Public Service Issues
                            E&,,,cbq the Integrity of the Public Service

Incomplete Hiring Data on   In June 1989 we issued a report on the DOD policies and practices for
                            hiring teachers for its overseas DOD Dependent Schools.zsThe House Sub-
OverseasDOD Dependent       committee on Investigations, Committee on Post Office and Civil Service,
Schoolteachers              requested the report.

                            Civil service positions in the executive branch are generally in the com-
                            petitive service unless the positions have been specifically excepted by
                            law, the President, or OPM.OPMhas excepted teaching positions in DOD
                            schools overseas from the competitive service since 1959. Because they
                            are excepted service appointments, civil service hiring regulations appli-
                            cable to competitive service employees do not apply to overseas
                            teachers. Under its statutory authority to establish personnel hiring pol-
                            icies for teachers, DOD gives preference (1) to teachers residing overseas
                            over those residing in the United States; and, (2) among teachers
                            residing overseas, to dependents of military personnel and federal civil
                            servants stationed overseas.

                            The Subcommittee specifically wanted us, among other things, to iden-
                            tify the total number of teachers hired overseas, as well as those hired
                            in the United States for schools overseas. These data were to be used to
                            determine if DOD was hiring more teachers from overseas than from the
                            United States and agency officials’ rationale for using temporary
                            appointments for some teachers residing overseas. DOD officials told us
                            that DOD makes temporary appointments of overseas personnel to pro-
                            vide flexibility in staffing needed for fluctuations in troop levels, stu-
                            dent populations, and teacher requirements. However, based on the data
                            from DOD, we could not determine the total number of teachers nor the
                            source of their appointments. The statistical data we received were
                            incomplete for the 5 school years for which we requested data. Conse-
                            quently, the data were insufficient to evaluate headquarters officials’
                            rationale for appointing teachers hired overseas to temporary positions.
                            DOD officials told us they were developing a computerized system to cap-
                            ture these data beginning with the 1989/1990 school year.

                             “‘Federal Personnel:DefenseDepartment’sHiring of Teachersfor OverseasSchools(GAO/
                             m-89-82, June 14,1989).

                             Page 92                                              GAO/GGD90103 Public Service Issues
                                 Chapter 4
                                 Enhancing the Integrity     of thf? Public Service

                           l conversions of noncareer appointees to career positions,
                           l temporary appointments and extensions in selected agencies,
                           Q hiring of overseas DOD dependent schoolteachers,
                           l selected personnel practices at VOA,
                           9 Navy’s practice of substituting civilian positions for military positions,
                           l Air Force’s criteria for determining a position’s establishment as a
                             civilian or military position, and
                           . receivership employees who perform federal functions.

Conversions of Noncareer         In June 1989 we completed a more than 2-year effort to periodically
Appointees to Career             report to the House Post Office and Civil Service Committee summary
                                 statistical information on the conversions of noncareer appointees to
Positions                        career positions from 60 executive branch departments and agencies,
                                 including the issuance of four fact sheets to the committee in fiscal year
                                 1989.2” Citing the importance to the federal civil service of the merit
                                 principle of fair and open competition, the former Chairwoman of the
                                 House Subcommittee on Civil Service had requested the information to
                                 better understand the conversion process and its possible impact on the
                                 recruitment and retention of a highly competent and motivated career

                                 Overall, 42 of the 60 agencies reported 578 conversions of noncareer
                                 personnel to career status from January 1,1987, through February 28,
                                 1989. Nearly 80 percent of these conversions occurred under competi-
                                 tive appointment authorities. The conversions consisted of appoint-
                                 ments of employees to career positions of any grade from noncareer GS-
                                 12 positions or above, including the SIB. Of the 578 conversions, most
                                 were from the following types of noncareer positions:

                               . temporary appointments (164 or 28 percent),
                               . Schedule A appointments2” (98 or 17 percent), and
                               . expert or consultant appointments (91 or 16 percent).

                                 ““Federal Employees:AppointeesConvertedto CareerPositions,July Throu h September1988
                                 (GAO/GGD89-38W,     Jan. 13,1989); I”
                                 October Through December 1988 (GAT)/GGD-89-66FS,     Apr. 24,1989); Federal Employees:
                                 mental Information on AppointeesConvertedto CareerPositions(GAOjWl%3%6tiFS, Mar. 21,
                                 1989(GAO/GGD-89-8X%,June 13,1989).
                                 21’Theseare appomtmentito positionsat GS-15or below in the exceptedservicefor which it is not
                                 practicableto hold any employmentexamination and is not of a confidential or policyma!&g nature,
                                 such as an attorney   pastion.

                                 Page 90                                                  GAO/GGB9@103      Public Service Issues
                            Chapter 4
                            Enhancing the tntegrity of the Public Service

Identification and          In June 1989 we testified before the House Subcommittee on Investiga-
                            tions, Armed Services Committee, on the use of consultants in the
Reporting of DOD’s Use of   defense acquisition processz3 The testimony was based, in part, on the
Consulting Services in      results of our case study review of the use of consulting services in the
WeaponsSystem               development of three weapons systems from the Army, Navy, and Air
Acquisition                 Force. The testimony also expressed our concern about long-standing
                            and persistent problems DOD has had with identifying and reporting con-
                            sultant services.

                            DOD is required by law to report, as part of its budget submission to Con-
                            gress, the amount it proposes to spend on contracted advisory assistance
                            services. DOD budgeted about $1.6 billion for these services in each of
                            fiscal years 1988, 1989, 1990, and 1991. We found that these figures do
                            not provide an accurate picture of DOD’S use of consulting services, nor
                            do they accurately indicate trends in the use of these services. An even
                            greater problem was the inconsistent interpretations among the Army,
                            Navy, and Air Force of what constitutes a consulting service. Until the
                            Services develop and use clear and specific definitions, Congress will
                            continue to have little assurance that the budget data it receives accu-
                            rately portrays DOn’S expenses for consulting services.

                            We also observed that the Navy recently developed plans to reduce the
                            use of contractors in what it regards as the more critical or sensitive
                            aspects of procurement, including acquisition planning, requests for pro-
                            posals and procurement requests, and the source selection process.
                            Information we obtained from three Navy systems commands indicates
                            that it plans to convert about 2,000 staff-years of contractor support to
                            in-house capability during the next 5 years. Because this proposed
                            reduction lessens the risk of transferring inherently governmental func-
                            tions to the private sector and the risk involved in contractor access to
                            sensitive procurement information, we said it was a positive step. How-
                            ever, we cautioned that the commands will need to implement the
                            appropriate controls to ensure that, as internal resources increase, this
                            reduction in contract or support does occur.

                             %se of ConsultingServicesm Ikfense Acquisition (GAO/T-NSIAD-89-36,June 7,1989).

                             Page 88                                             GAO/GGDOO-103    Public Service Issues
                           chapter 4
                           Enhancbuj the Integrity   of the Public Service

                           received, events occurred that six of the eight agents and their two
                           immediate supervisors believed that the Service retaliated for the
                           agents’ letter. In December 1987 five of the eight agents and their imme-
                           diate supervisors requested the Office of Special Counsel to review their
                           allegation of retaliatory actions. During our review, the Counsel was
                           investigating the allegation.211

                           While we attempted to determine if management officials did retaliate,
                           we did not make a legal determination of retaliation. Based on circum-
                           stantial evidence, we concluded that management officials acted unfa-
                           vorably toward the agents and their supervisors, which might have
                           resulted partly from the letter. It was not clear, however, whether the
                           letter significantly motivated the unfavorable actions or whether they
                           were baaed on management concerns about the agents’ performance and
                           the supervisors’ effectiveness in carrying out assigned tasks. This essen-
                           tially factual determination turns on questions of credibility and can
                           only be resolved through adjudication by MSPB. Regardless of whether
                           retaliation occurred, we concluded some of the management practices
                           were inappropriate. Accordingly, we concurred with recommendations
                           of the Department of Justice’s Office of Professional Responsibility to
                           the INS Commissioner to remedy troublesome management problems in
                           its Houston District.

Internal Controls          In March 1989 we issued a report to the U.S. Attorney General on
                           internal control weaknesses in the Department of Justice’s central pay-
Strengthened Over          roll system.21Our work was done in response to a request by the
Justice’s Payroll System   Chairman, House Post Office and Civil Service Committee.

                           We concluded that Justice’s central payroll system is vulnerable to
                           improper salary payments to employees on extended leave without pay.
                           In nearly half of 72 such leave cases we identified, the documentation
                           necessary to prevent employees from receiving salary payments during
                           their leave status was not prepared. A Justice review showed more than
                           a third of its timekeepers had received no training on preparing time
                           and attendance records. In one case, we found that a supervisor improp-
                           erly delegated his authority to review and approve time and attendance

                            “‘In April 1990the SpecialCounselfiled a formal complaintwith MSPBseekingdisciplinary action
                            againstthree membersof District managementfor a pattern of prohibited personnelpracticesand
                            other violations of law.
                            “Internal Controls:Justice’sPayroll SystemControlsNeedStrengthening(GAO/GGD-89-50,Mar.

                            Page 86                                                 GAO/GGDCJ@103    Public Service Issues
                                 Enhancing the Integrity of the Public Service

                                 as Spanish-speaking. SSAoffices in Chicago, Cleveland, Detroit, Mil-
                                 waukee, and New York City have experienced difficulties in hiring
                                 Spanish- and English-speaking employees for one job series, according to
                                 a May 27,1988, internal SSAmemorandum. Because of this, OPM has con-
                                 ducted special examinations for candidates in these locations, and SsA
                                 offices are recruiting at local colleges and universities for more Spanish-
                                 English-speaking candidates.

Discrimination Complaint         In September 1989 we issued a report on the cost of resolving cases of
                                 discrimination against federal employees because of sex, race, age,
costs                            national origin, religion, or handicaps.18 The Chairman, House Subcom-
                                 mittee on Employment and Housing, Committee on Government Opera-
                                 tions, requested the report.

                                 Federal employees are protected against discrimination by several laws,
                                 including the Equal Pay Act, the Age Discrimination in Employment Act,
                                 the Rehabilitation Act, and the Civil Rights Act of 1964. When discrimi-
                                 nation cases result in monetary relief, the funds come from either an
                                 agency’s appropriation or from the Judgement Fund, a permanent indef-
                                 inite appropriation used to pay certain claims against the federal

                                 Governmentwide, employees were paid $12 million from the Judgement
                                 Fund for 156 discrimination lawsuits filed in fiscal year 1988. The year
                                 before, 144 discrimination cases accounted for $6.5 million in payments
                                 to employees. We found no patterns in monetary payments by federal
                                 agencies from the .Judgement Fund.

                                 When employees win their cases through administrative procedures
                                 within an agency, the agency makes payments from its own appropria-
                                 tions. We found that while each agency compiles and maintains data on
                                 payments, no complete, reliable central data source exists in the federal
                                 government on payments made by agencies in discrimination cases. To
                                 learn about agencies records on the costs of resolving discrimination
                                 complaints, we gathered payment data from three different-sized

                             . Agriculture, with about 89,000 permanent, full-time employees, paid
                               about $806,000 for 50 cases ir, 1987, and $341,000 for 82 cases in 1988.

                                 ‘XDiscriminationComplamts:Paymentsto Employeesby FederalAgenciesand the JudgementFund
                                 (GAO/HRD-89-141,S&t 25. 1989)

                                 Page A4                                            GAO/GGD-90103Public Service Issues
                        Enhancing the Intefjrity of tbr Public Service

                        disabled veterans, more than one-third of the coordinators did not
                        report using these representatives.

                        We recommended that the heads of the five agencies assure that pro-
                        gram coordinators, among other things, (1) be informed about the spe-
                        cial hiring authorities that can be used to employ disabled veterans and
                        (2) establish and maintain contact with veterans’ representatives in
                        state employment offices as a principal recruiting source of qualified
                        disabled veterans.

                        As discussed in chapter 5, we also made recommendations to OPM and
                        the agencies to strengthen their administration of the program.

Appointments of Women   In October 1988 we reported on the progress of federal agencies in
Administrative Law      appointing women to administrative law judge positionsI” Representa-
                        tive Sander M. Levin requested the report.
                        Administrative law judge positions have been established in 30 federal
                        agencies throughout the IJnited States at grade levels GS-15, 16, and 17.
                        In general, these judges preside at formal agency hearings to resolve
                        administrative disputes. As of July 1988, SSAemployed about 650 of the
                        nearly 1,000 administrative law judges in the federal government and
                        SsAhad hired 84 of the last 94 judges appointed from OPM registers. OPM
                        administers a comprehensive examination to determine applicants’ qual-
                        ifications as administrative law judges.

                        During our review, the OPM administrative law judge registers consisted
                         of those qualified in 1984 during an open competition period. Of the 94
                        judges appointed since the 1984 examination, 12 women were certified
                        by OPM as eligible for agency selection as of July 1988, but only 1 woman
                         applicant was selected. As we were completing our report, SSAwas
                         filling up to 65 more administrative law judge positions; 2 women were
                         among 60 applicants who were selected and accepted appointments to
                         begin work in September 1988, according to OPM.

                        Male veterans have dominated the administrative law judge appoint-
                        ments because of veterans’ preference rules. Very few female applicants
                        were entitled to veterans’ preference points in the administrative law

                        “Administrative Law Judges:Appointmentof Womenand SocialSecurityAdministration Staff
                          GO        A /

                        Page 82                                             GAO/GGD90-103Public Service Issues
                             Enhancing the Integrity of the Public Service

                             showed that women and minorities represented about 48 percent of the
                             staff, but women and minorities had only about 18 percent of grade 13
                             or above positions. We recommended that VOA determine if artificial bar-
                             riers are contributing to the underrepresentation of women and minori-
                             ties and then take steps to increase their representation, especially at
                             senior levels. In October 1989 VCJAadvised Congress of several measures
                             taken to implement this recommendation, including the appointments of
                             several women in the past year to senior positions and the vcu Director’s
                             expressed expectation to see more qualified women and minorities rep-
                             resented at senior and middle management levels.

Use of Special Authorities   In February 1989 we reported on the effectiveness of affirmative action
to Hire Disabled Veterans    programs for disabled veterans at five agencies: the Department of
                             Labor, HHS, the National Aeronautics and Space Administration (NASA),
                             OMB, and OPM.‘~ The report was requested by the House Committee on
                             Veterans’ Affairs, which was concerned that federal agencies may not
                             be doing enough to hire and advance disabled veterans.

                             The Vietnam Era Veterans’ Readjustment Assistance Act of 1974
                             requires federal agencies “to promote the maximum of employment and
                             job advancement opportunities within the federal government for quali-
                              fied disabled veterans and veterans of the Vietnam era.” During fiscal
                             years 1982 through 1987, disabled veterans represented from 6.0 to 6.3
                              percent of all federal employees, and from 0.2 to 4.9 percent of the
                              employees in the five agencies we reviewed. The governmentwide
                             employment rate for disabled veterans in 1985 and 1987 was more than
                              five times its percentage share of the national labor force. When sub-
                              tracting from the governmentwide figures the three federal agencies
                              employing the most disabled veterans-the Postal Service, DOD, and the
                              Veterans Administration (VA)---the resulting disabled veteran employ-
                              ment rate for the rest of the government was double the national rate.

                             Disabled veterans constitute a decreasing population. According to
                             Bureau of Labor Statistics’ studies, the number of unemployed but
                             employable disabled male veterans dropped from 99,000 in 1985 to
                             67,000 in 1987. Their unemployment rates, however, were higher than
                             those for all male veterans during the same periods.

                             “Disabled VeteransEmployment:PerformanceStandardsNeededto AssessProgramResults(GAO/
                             (%D-89-46, Feb.28,1989).

                             Page SO                                          GAO/GGDw)-103 Public Service Issues
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                          Enhancing the Integrity of the Public Service

                          availability in the civilian labor force of minority groups, including sepa-
                          rate rates for men and women.

                          During fiscal year 1989, we issued reports and delivered congressional
                          testimony on many discrimination and EEO-related issues at the request
                          of congressional committees or individual members. These reports and
                          testimonies addressed the (1) underrepresentation of minorities and
                          women in the Foreign Service and the Voice of America (VOA), (2) use of
                          special authorities to hire disabled veterans, (3) appointments of women
                          administrative law judges, (4) employment of Hispanics in SSA,and (5)
                          costs of resolving federal employees’ discrimination complaints.

Underrepresentation of    In June 1989 we reported on the underrepresentation of minorities and
Minorities and Women in   women in the Foreign Service.12A December 1987 foreign relations
                          authorization statute directed us to review the Foreign Service’s merit
the Foreign Service and   personnel system.
the Voice of America
                          Specifically, we examined the Department of State’s personnel practices
                          to determine whether minorities and white women in the Foreign Ser-
                          vice were (1) underrepresented and/or (2) receiving disparate treatment
                          in such areas as hiring, assignments, and promotions. We evaluated
                          State’s efforts to comply with EEOC regulations on affirmative action
                          programs but did not determine whether discrimination existed in
                          State’s Foreign Service merit personnel system. When we conducted our
                          review, State employed about 5,100 Foreign Service officers, who are
                          traditionally considered to be diplomats, and about 4,200 Foreign Ser-
                          vice specialists.

                          We found that minorities and women were underrepresented in the For-
                          eign Service workforce when compared with civilian labor force repre-
                          sentation. Between 1981 and 1987, State increased its minority
                          representation from 7 to 11 percent. The representation of white women
                          remained essentially unchanged at about 24 percent.

                          By applying EEOC criteria, we found that State has eliminated entry-level
                          underrepresentation for Foreign Service officers. However, under-
                          representation at the middle and senior levels of the Foreign Service
                          exists, particularly for women. Foreign Service specialists have not

                          “State Department:Minorities and WomenAre Underrepresentedin the ForeignService(GAO/
                          NX4B89-146, June 26,1989);Underrepresentationof Minorities and Womenin the ForeignService
                          (GAO/T-NSLAD-89-49,Sept.22. 1989)

                           Page 78                                            GAO/GGIXMl-103Public Service Issues
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                                Enbancine tbe Integrity of the Public !Wvice

                                on their ability to contribute to the Commission. Later, the HHS official
                                recommended that the Commissioners be granted a waiver, and on
                                October 30, 1987, the Counsel to the President granted the original Com-
                                missioners a limited waiver from 18 USC. 208. The waiver was limited
                                to general policy discussions and recommendations. Commissioners were
                                to avoid any specific matters involving an entity in which the member,
                                his family, or a business associate had a financial interest.

                                Before the limited waivers were granted, the Commissioners had held
                                three public meetings from September 9 to October 30, 1987. Allowing
                                the Commissioners to serve during that period without a waiver
                                exposed them to the risk of possible criminal violations. An individual
                                may be fined up to $10,000 or imprisoned for up to 2 years, or both, for
                                violating 18 USC. 208. In October 1988 testimony before the Senate
                                Governmental Affairs Committee, we supported establishing a statutory
                                requirement for early screening and resolution of conflicts of interest’0
                                We stated that resolving conflicts before advisory committees begin bus-
                                iness is important to ensure their independent operation and to protect
                                Committee members from the risk of acting in ways that could consti-
                                tute criminal offenses.

Functions Not Fully             In October 1988 we reported on policy-related functions OGE had not
Implemented by the Office       fully implemented.ll We agreed with the Senate Subcommittee on Over-
                                sight of Government Management, Committee on Governmental Affairs,
of Government Ethics            to report on these matters directly to the Director, OGE.

                                CGE is responsible for providing uniform, authoritativepolicy guidance
                                on ethics matters within the executive branch. Section 402(b) of the
                                Ethics in Government Act of 1978 outlined several specific policy-
                                related functions of the OGE Director, including

                            l   developing regulations on conflicts of interest and ethics in the execu-
                                tive branch;
                            l   evaluating, with the assistance of the Attorney General, the conflict-of-
                                interest laws and recommending needed amendments; and
                            l   establishing a formal advisory opinion service, whereby opinions are
                                compiled, published, and made available to agency ethics counselors and
                                the public, and providing informal opinions and advice.

                                “‘Federal Advisory Committees:GSA’sManagementOversightand GAO Commentson ProposedLeg-
                                islative Amendments(S. 2721)(GAO/l-GGD-89-1,Oct.5,1988).
                                 “Ethics: Office of GovernmentEthics’ Policy DevelopmentRole(GAO/GGDSS-3,Oct.6, 1988).

                                Page 76                                              GAO/GGDWJ163Public Service Issues
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                               Enhancing the Inte@ity of the Public Service

                               that part of DOD revolving door legislation as stated in 10 U.S.C. 2397a,
                               which relates to private employment contacts between certain DOD pro-
                               curement officials and defense contractors. As a “covered defense offi-
                               cial” who participated in the procurement function, this statute required
                               the Colonel to report contacts concerning employment with a defense
                               contractor to both his supervisor and the designated agency ethics offi-
                               cial and disqualify himself from participation in procurement functions
                               with that contractor. The Colonel did not comply with the reporting
                               requirement nor disqualify himself.

                               We referred our findings in this case to the Secretary of Defense when
                               we issued our report. The Secretary of Defense has the statutory respon-
                               sibility to determine whether persons have failed to file reports
                               promptly or to disqualify themselves if required to do so. The Secretary
                               also has the authority to impose penalties, including an administrative
                               penalty up to $10,000.

Possible Violations of Post-   In April 1989 we provided in testimony before the Employment and
Employment Statutes by a       Housing Subcommittee of the House Committee on Government Opera-
                               tions the results of our review of the (1) propriety and legality of a
Former HUD Official            former HUD Assistant Secretary’s post-employment activities and (2)
                               adequacy of HUD'S oversight of her activities when she was employed as
                               a COIISUka& t0 HUD.’

                               Our review showed that after the Assistant Secretary resigned from HUD
                               a number of her contacts with HUD were for securing meetings and
                               receptions for herself and her clients with members of a visiting Soviet
                               delegation. These contacts appear to have been made to influence HUD
                               personnel and involved particular matters in which HUD had a direct and
                               substantial interest and, in some cases, involved matters that the Assis-
                               tant Secretary had participated in before resigning. As a result, we con-
                               cluded that this be referred to the Department of Justice for further
                               investigation because her contacts appeared in violation of the Ethics in
                               Government Act, which prohibits such activities by former federal
                               employees. In November 1989 the House Committee on Government
                               Operations approved and adopted a Committee report with the same

                                ‘Post-EmploymentActivities of Dr. JuneQ. Koch,FormerAssistantSecretaryfor Policy Development
                                and Research,Departmentof Housingand Urban Development(GAO/TV
                                “Trading on Position and Conflict of Interest by FormerHUD AssistantSecretaryJune Koch,Com-
                                mittee on GovernmentOperations,HouseReport 101.372,November17,1989.

                                Page 74                                                GAO/GGMJO-103Public Service Issues
Enhandng the Integrity of the Public Service

In March 1989 and September 1989, we testified and reported on several
aspects of DOD’S implementation of the revolving door laws4 These
included (1) the extent to which former DOD personnel are reporting
defense-related employment, (2) whether DOD’s report review process
has improved since our 1986 reportP and (3) DOD actions to enforce the
reporting requirement. We prepared the testimony for the House Sub-
committee on Investigations, Armed Services Committee. The report was
requested by the House Subcommittee on Seapower and Strategic and
Critical Materials, Committee on Armed Services; the Senate Subcommit-
tees on Federal Services, Post Office, and Civil Service and on Oversight
of Government Management, Committee on Governmental Affairs; and
Representative Barbara Boxer.

We reported in March 1986 that the reporting requirement was not an
effective disclosure mechanism because many people who leave DOD and
take jobs with defense contractors were exempt from reporting that
employment, and many former DOD personnel who were required to
report did not do so. Since then, the law has been amended to exempt
fewer people from the reporting requirement, but the majority of those
probably required to report do not do so. For example, the Defense Man-
power Data Center estimated that only 30 percent of DOD personnel who
left to work for defense contractors reported defense-related employ-
ment as required by law for fiscal years 1986 and 1987. Consequently,
the reporting system is still not an effective disclosure mechanism.

Since our 1986 report, there have been improvements in both the
amount of information provided by individuals reporting defense-
related employment and DOD’s review of this information. In comparing
fiscal year 1983 reports with reports submitted for fiscal years 1986
and 1987, we found the level of detail had significantly improved. We
reviewed a statistical sample of about 200 reports submitted for fiscal
years 1986 and 1987 and found that about 89 percent were certified as
having sufficient information to meet the statutory requirement. How-
ever, about 34 percent of these did not list major systems on which the
individual worked while employed by DOD or the defense contractor.
This information is important in identifying potential links between the
individual’s work at DOD and work for a defense contractor. Accordingly

41mplementationof the DODRevolvingDoor Legislation(GAO/T-NSIAI.-89-17, Mar. 16, 1989);DOD

‘DOD Revolving Door:Many FormerPersonnelNot ReportingDefenseRelatedEmployment(GAO/
NSIAD-86-71,Mar 4, 1986).

Page 72                                             GAO/GGD90103 Public Service Issues
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                           Enhancing the Integrity   of the Public Service

                           requested for reports filed with the House. The Committee said that
                           after it questions items in the reports, it is the filer’s obligation to
                           explain or revise the report. In contrast, the Senate Ethics Committee
                           reviewed corrections. However, the Committee’s procedures for moni-
                           toring amendments did not always ensure timely corrections.

                           We made several recommendations to the House and Senate Ethics Com-
                           mittees designed to (1) improve filing compliance among certain Senate,
                           House, and legislative agency employees; (2) deal with the late-filing
                            and nonfiling candidates; (3) strengthen review and follow-up proce-
                           dures; and (4) inform the public that reports are under review and sub-
                           ject to change. Senate Ethics Committee officials agreed with the thrust
                            of our recommendations and have acted to fully address most of them.
                            However, the House Ethics Committee has not generally been as

Navy’s System of Public    In July 1989 we reported on the Department of the Navy’s implementa-
Financial Disclosure       tion of the executive personnel financial disclosure system? The House
                           Subcommittee on Commerce, Consumer Protection, and Competitive-
Generally Works Well But   ness, Committee on Energy and Commerce, requested the report.
Can Be Improved
                           High-level Navy and Marine Corps officials are required to disclose cer-
                           tain assets; income sources; transactions, such as purchases, sales, and
                           exchanges of real property or securities; gifts; liabilities; agreements or
                           arrangements with former employers or for future employment; and
                           positions held outside the U.S. government. The reports are to be
                           reviewed by appropriate Navy and Marine Corps officials within 60
                           days of filing. Reviewing officials determine to their satisfaction that
                           each item in the report has been completed and that no interest or posi-
                           tion disclosed violates or appears to violate applicable laws and regula-
                           tions. Our review was to determine whether these disclosure reports
                           were filed on time and adequately reviewed. As requested, however, we
                           did not include in our review financial disclosure reports for presidential
                           appointees who require Senate confirmation.

                            We found that with minor exceptions the Navy and Marine Corps execu-
                            tive financial disclosure reporting system worked well. We did not find
                            evidence of any conflicts of interest. Lists of personnel who are required
                            to file are maintained and updated so that new entrant, incumbent, and

                            “Financial Disclosure:Navy’s Public DisclosureSystemGenerallyWorksWell Rut CanBe Improved
                            (GAO/NSIAD-89-194.July 27. 1989).

                            Page 70                                              GAO/GGD9@103      Public Service Issues
Chapter 4

IZnhmcing the Integrity of the Public Service

                To help restore public confidence in government, President Bush,
                shortly after taking office, established a commission to propose reforms
                to federal ethics laws which issued a report with recommendations in
                March 1989. Subsequently, the President issued Executive Order 12674
                (Apr. 12, 1989) to establish “fair and exacting standards of ethical con-
                duct for all executive branch employees.” In April 1989 the President
                submitted to Congress his proposals for ethics law reform. Among other
                things, the proposals called for strengthening the process of public
                financial disclosure by federal officials and stronger restrictions on post-
                employment and general conflict-of-interest matters.

                In June 1989 we testified on the President’s proposals before the House
                Subcommittee on Human Resources, Committee on Post Office and Civil
                Service.’ We supported many of the President’s proposal for reform,
                such as the proposal to establish civil and misdemeanor penalties for
                violations of conflict-of-interest statutes. On the other hand, we said
                other proposals required further refinement and discussion, such as the
                need to clarify vague areas in the law and administrative shortcomings
                that have created uncertainty and confusion. In November 1989 Con-
                gress passed the Ethics Reform Act of 1989 (P.L. lOl-194), which
                included elements from the President’s and our proposals for ethics law

                Beyond reporting on the administration of ethics laws and regulations,
                our integrity-related work during fiscal year 1989 focused on discrimi-
                nation and equal employment opportunity (Em) issues, various agency
                administrative systems or management practices, and agency compli-
                ance with appointment and employment controls. It is a prohibited per-
                sonnel practice for a manager to discriminate for or against any
                employee or applicant for employment. Merit principles also require
                that employees maintain high standards of integrity and conduct and
                concern for the public interest. CSRA requires us to review executive
                branch compliance with federal employment laws, rules, and regulations
                as directed by any congressional committee.

                ‘The President’s Ethics Proposal (GAO/T-GGD-89-29,   June 13,1989).

                Page 68                                                   GAO/GGB90103 Public Service Issues
                                Imprm’intl the EfTcx%iveness   of the
                                Public Service

                                paid by student pilots, pilot examiners administer oral and flight tests
                                and issue certificates to operate an aircraft.

                                We found that FAAlacked adequate guidance to ensure that a pilot
                                examiner’s due process rights were protected during removal. As a
                                result, FAA had difficulty removing pilot examiners who used unaccept-
                                able pilot certification practices. These unacceptable practices, such as
                                improper flight testing, seriously impair FAA’s ability to ensure that only
                                safe and competent pilots are certified. For example, FAA removed one
                                pilot examiner’s designation following two accidents-with        three fatali-
                                ties-within    a few weeks after he issued the pilots’ certificates. Pilot
                                error was cited as the cause of both accidents. Alleging that FAA did not
                                provide the examiner with a due process hearing prior to removal, the
                                examiner’s attorney threatened to sue FAA. FAA decided to settle the case
                                by agreeing to restore the pilot examiner’s designation provided he not

                                We could not determine the number of pilot examiners FAA has
                                attempted to remove or how many challenged the removal, because FAA
                                does not maintain such data. However, because of the potential safety
                                implications involved, we brought this matter before FAA’S Chief
                                Counsel, who concurred with our findings. In June 1989 FAA issued
                                revised procedures for removing pilot examiners who are not per-
                                forming satisfactorily. FAA believes the revised procedures will help
                                resolve the problem. While we cannot predict whether courts will find
                                that these procedures satisfy due process concerns, the procedures do
                                address issues raised in earlier court decisions. This should, in turn,
                                increase FAA’s ability to ensure that safe and competent pilots receive
                                pilot certificates. Because FAA headquarters acted quickly to resolve this
                                problem, we made no recommendations.

Disciplinary Policies and       In May 1989 we reported on the disciplinary policies and practices in the
practices   in the u s postal   U.S. Postal Service.l” The report was requested by the House Subcom-
                     . .
                                mittee on Postal Personnel and Modernization, Committee on Post Office
Service                         and Civil Service. Concern was expressed that postal employees may be
                                penalized differently for similar infractions and in similar

                                The Postal Service relies on supervisors’ discretion in decisions to for-
                                mally discipline employees and in selecting appropriate disciplinary

                                 ‘4F~                                   (GAO/GGD+W79,     May 19, 1989).

                                 Page 66                                                GAO/GGD-80.103     Public Service Issues
                            Chapter 3
                            Improvingthe Effectiveness of the
                            Public Service

                            awards, and about 48 percent recommended that agencies receive
                            greater flexibility to design a pay-for-performance system that fits
                            agency goals and culture. In total, they made about 30 suggestions to
                            reform PMRS, including the following:

                        l About 39 percent of the directors recommended changing the number of
                          rating levels, but the recommendations were for two, three, and four
                          levels, with no clear majority supporting any one alternative.
                        l About 30 percent wanted to correct the inequity in the merit increase
                          schedule that gives PMRS employees who are rated fully successful and
                          whose salaries are in the middle third of their pay range smaller base
                          salary increases than their      counterparts.

                        . About 23 percent wanted to drop the mandatory 2-percent performance
                          award for those employees rated 2 levels above fully successful.
                        . Only about 4 percent suggested using an award panel process to grant
                          performance awards, and 7 percent said they definitely did not want to
                          use an award panel process.
                        l Other suggestions included eliminating merit increases and reinstating
                            GSstep increases, giving larger merit increases, limiting OPM to an advi-
                          sory rather than a regulatory role, simplifying the system, substituting
                          narratives for summary ratings, and allowing group assessment.

Two Agencies’ Experiences   During fiscal year 1989, we issued two reports describing agency exper-
in Dealing With Poor        iences with poor performers. In the first, issued in January 1989, we
                            discussed how SSA identifies and deals with employees who have
Performers                  received less than fully satisfactory ratings (poor performers).12 The
                            Senate Subcommittee on Federal Services, Post Office, and Civil Service,
                            Committee on Governmental Affairs, requested the report.

                            According to SSAofficials, poor performers should receive every oppor-
                            tunity to improve their performance to the fully satisfactory level. As
                            part of this philosophy, supervisors are expected to identify and inform
                            poor performers of their deficiencies and help them improve. However,
                            supervisors are also expected to take action when attempts to achieve
                            satisfactory performance fail.

                            SSA  requires a performance improvement plan be implemented whenever
                            a supervisor determines that an employee is performing at less than the
                            fully satisfactory level. An employee does not have to be formally rated

                            (GAO/GGD-89.28,Jan    27.1989).

                            Page64                                     GAO/GGB90-103Public Service Issues
                         Chapter 3
                         Improving the Effectiveness       of the
                         Public Service

                         A high-quality organization is constantly seeking to improve the per-
Enhancing                formance of its workforce. Finding ways to enhance the performance of
Performance of the       the federal workforce has been a major thrust of recent civil service
Federal Workforce        reforms and is a continuing responsibility of OPM.

                         In recent years we have reviewed various systems aimed at improving
                         the performance and accountability of the public service in selected
                         agencies. In our last public service report, we described the results of
                         our reviews during fiscal years 1987 and 1988 on the implementation of
                         a revised pay-for-performance system for federal supervisors and man-
                         agers, performance appraisal systems for blue-collar workers, aspects of
                         performance management at SSA,and training activities at EPA and FAA
                         that aim to improve performance. The following sections describe the
                         results of our reviews during fiscal year 1989 concerning (1) congres-
                         sional reauthorization of the pay-for-performance system for federal
                         supervisors and managers, (2) the procedures for dealing with certain
                         poor performers in SSA and FAA, and (3) the disciplinary policies and
                         practices in the IJS. Postal Service.

Extension of the         Paying managers and supervisors in grades 13 through 15 on the basis
Performance Management   of their individual performance was a major part of civil service reform.
                         The system originally set up to do this was called Merit Pay. This system
and Recognition System   was subsequently modified by Congress in 1984 and set up as the Per-
                         formance Management and Recognition System (PMRS) with a scheduled
                         expiration date of September 30, 1989. In September 1989 Congress
                         extended PMRS for an 18-month period. About 130,000 employees par-
                         ticipate in the system.

                         PMRS  is an important program because it is a principal means for pro-
                         viding incentives to motivate and reward federal managers and supervi-
                         sors in grades 13 through 15. Through an annual performance appraisal
                         process, each PMRS employee receives a summary rating based on five
                         levels of performance-fully    successful, two levels above fully suc-
                         cessful, and two levels below fully successful. Employees who are rated
                         fully successful or above receive base salary increases that, for the most
                         part, meet or exceed those available to General Schedule employees. In
                         addition, employees rated two levels above fully successful are guaran-
                         teed a performance award bonus at the end of the rating period, while
                         those rated fully successful or one level above fully successful can
                         receive such bonuses at the agencies’ discretion.

                         Page 62                                     GAO/GGD9@103   Public Service Issues
                             Chapter 3
                             Improving the Effectiveness   of the
                             Public Service

                              evaluating aircraft maintenance programs, inspecting aircraft for
                              safety, and evaluating mechanics and repair facilities.

                              We found that FAA inspectors were not receiving the training that FAA
                              managers say they need to effectively perform their assigned jobs. In
                              1988 less than 40 percent of the operations inspectors received the
                              flight training that FAA says they must have to perform pilot flight
                              checks, and airworthiness inspectors received less than 50 percent of
                              the training that FAA said they needed. FAA recognizes the need to
                              improve its aviation safety inspector program and has started initiatives
                              to improve inspector training. While we believe that FAA is moving in the
                              right direction, further improvements are needed if FAA is to effectively
                              meet its training requirements as the inspector workforce grows to
                              about 3,000 in the early 1990s. FAA has established a new branch to
                              improve oversight of inspector training and set national training

Agency Compliance With        In February 1989 we issued a report describing agencies’ compliance
Training Requirements of      with an OPM requirement to start a computer security training program.R
                              The House Committee on Government Operations and the House Com-
the Computer Security Act     mittee on Science, Space, and Technology requested the report.
of 1987
                              The Computer Security Act (P.L. lOO-235), enacted January 8, 1988,
                              provides for improving the security and privacy of sensitive information
                              in federal computer systems. Section 5(a) of the act requires periodic
                              training in computer security awareness and accepted computer security
                              practice for all employees who are involved with the management, use,
                              or operation of each federal computer system containing sensitive infor-
                              mation within or under the supervision of that agency. Under section
                              5(b), training must start within 60 days of the issuance of the OPM
                              training regulation required in section 5(c). OPM issued its interim
                              training regulation on July 13, 1988.

                              Many agencies have acted to comply with sections 5(a) and 5(b) of the
                              act. The 81 agencies that responded to our questionnaire between
                              October 12 and December 12, 1988, reported as follows:

                            . Forty-five reported having started computer security training programs
                              as required by the act.

                              “ComputerSecurity: ComplianceWith Training Requirementsof the ComputerSecurity Act of 1987
                              (GAO/IMTEC-89-16BR,Frh 22.1989).

                              Page 60                                              GAO/GGD9@103      Public Service Issues
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                            Public Service

                            Training problems continued as one of the many human resource man-
Strengthening               agement issues affecting FAA that we reported on in fiscal year 1989. We
Employee Training           also reported on (1) the extent to which agencies are complying with
and Development             requirements to start computer security training programs and (2) the
                            Department of State’s implementation of a professional development
                            program for members of the Foreign Service.

Improvements Are Needed     Training is critical to an individual’s successful performance as an air
in FAA’s Controller and     traffic controller and to the safety of the nation’s air traffic system. As
                            discussed in chapter 2, we reported and testified in fiscal year 1989 on
Aviation Safety Inspector   several serious problems that continue to trouble the air traffic control
Training                    workforce based on a 1988 survey of more than 5,000 controllers, super-
                            visors, and managers from FAA’S largest facilities. Among other things,
                            the survey solicited their views on the quality of training. Controllers
                            had strong concerns about certain aspects of developmentals’ training.
                            Many supervisors and developmentals shared these concerns, but
                            facility managers did not.

                            Specifically, a majority of experienced controllers and many supervisors
                            surveyed rated the developmentals’ training as “less than adequate” or
                            “poor” in such aspects as using backup systems, emergency procedures,
                            holding patterns, and controlling traffic in bad weather. In contrast,
                            most facility managers rated the same training as “adequate” to “excel-
                            lent.” In addition, many experienced controllers expressed concerns
                            about developmental talents, stating that the developmental.4 work atti-
                            tudes, overall skill levels, and abilities to learn were worse at the time of
                            our 1988 survey than 3 years previously. Further, 31 percent of the sur-
                            veyed controllers said that training involving live traffic before certifi-
                            cation of a controller position was insufficient. One controller described
                            this situation:

                            “Due to pressure,        trainees    are being checked out too soon, then the supervisors
                            put one of the experienced       controllers  in to work the handoff  position for this not-
                            yet-truly-qualified   controller    and tell us to keep an eye on him/her.”

                            In fiscal year 1989, we issued two additional reports that identified
                            improvements needed in FAA’S field training for controllers and training
                            for aviation safety inspectors.

                            Page 68                                                  GAO/GGD-90-103    Pnblic Service Imuea
                                      Chapter 3
                                      Improving the Effectiveness   of the
                                      public Service

                                      because of the small number of federal employees involved in the pro-
                                      gram each year.

to Improve Implementation of the
                                      -   Extend the authonty provrded by Public Law 99-424 to permit private sector executives
President’s Commission on Executive       assigned to government agencres in the program to be paid their full salaries by their
Exchange Program                          corporate employers,
                                      -   Expand the authorrty to permrt more corporate executrves to be pard their full salaries by
                                          their corporate employers.
                                      -   Authorize federal executives assrgned to private sector companres, as part of the
                                          program, to be placed on detail to the private sector dunng the assrgnment. Thus would
                                          allow executives to remarn in federal pay status and contrnue to recerve all benefits that,
                                          as federal employees, they would normally receive.
                                      -   Authorize the corporate host companies to rermburse the sponsorrng federal agencies
                                          for the executives’ salarres.                                                             -.
                                      -   Include in legislation authonzrng this authority a statement that It IS enacted
                                          “notwithstanding any other law” to preclude the need to amend any other existmg
                                          statutes that may apply to the program and for which exemptions for federal participants
                                          may be necessary.
                                      -   Include in legrslatron authorizrng this authority an enumeratron of those statutes that
                                          should continue to apply to the program, such as statutes relatrng to compensation,
                                          benefits, travel and relocatron, conflict of Interest, standards of ethical conduct for
                                          government officers and employees, post-employment restrictions for exchange
                                          executives, and authonty for agencres to accept rermbursements for executives’ salaries
                                          from private sector companies. The applicable statutes should be listed and
                                          incorporated by reference Into the exchande prodram statute

                                      In August 1989 Congress extended the authority for the experimental
                                      component for 1 year. While we anticipate further action on our recom-
                                      mendations, Congress had not acted when we prepared this report.

CongressShould                        At the request of the House Subcommittee on Human Resources and
Reconsider the Uses and               Intergovernmental Relations, Committee on Government Operations, in
                                      June 1989 we reported and testified on the mobility program created by
Purposes of the                       the Intergovernmental Personnel Act (IPA) of 1970.5 The mobility pro-
Intergovernmental                     gram allows federal agencies to temporarily assign personnel to and
Personnel Act Mobility                receive personnel from eligible nonfederal organizations, such as state
Program                               and local governments, institutions of higher education, and Indian
                                      tribes and tribal organizations, as well as other organizations approved
                                      by OPM. The act authorized grants, training, technical assistance, and
                                      mobility assignments. Although Congress has amended the act several
                                      times, the underlying purpose has remained the same: improve federal-

                                      “IntergovernmentalPersonnel Act of 1970:IntergovernmentalPurposeNo LongerEmphasized
                                      (GAO/GGD-89-95, dune 19. 1989);The lntergovemmentalPerso~el Act Mobility Program(GAO/T-
                                      GGD-89-33,June 20, 1989I

                                       Page 66                                                 GAO/GGD90.103      Public Service Issues
                                   Chapter 3
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                                   inability to fill these vacancies sooner to illuminate reports of agencies’
                                   problems recruiting career SIB personnel.

                                   We found that complete, accurate, and current data on career SESvacan-
                                   cies governmentwide were not readily available. Using OPM information,
                                   we identified 319 positions in 13 agencies reporting 10 or more vacan-
                                   cies that were at least 120 days old as of January 3 1,1989. We obtained
                                   the reasons why the vacancies were not filled; however, this informa-
                                   tion probably did not fully reflect agencies’ recruitment problems. It
                                   appeared that this information understated the difficulty some agencies
                                   faced in filling career SES vacancies, particularly those positions
                                   requiring a high level of specialized technical or scientific expertise.

                                   Of the 319 positions, we found that the agencies were actively recruiting
                                   for just 74 SESvacancies. The delays in filling these 74 positions were
                                   attributable to

                               . internal agency processing and selection activities (such as rating appli-
                                 cations, interviewing applicants, or making selection decisions) in 63
                               l applicant security clearance or conflict-of-interest problems in 5
                               m delays in the agency processes for deciding on a position’s duties or its
                                 organizational location in 4 instances; and
                               s too few qualified applicants so agencies elected to readvertise vacancies
                                 after their first announcement in 2 instances.

CongressShould Take                 In March 1989 we reported on the implementation of the Executive
Certain Actions to Impro ,ve        Exchange Program Voluntary Services Act of 1986 (Public Law 99-
                                    424)” The act added an experimental component to the program for
the Executive Exchange              fiscal years 1987 through 1989 to encourage higher level private sector
Program                             executives to participate. Under the program, created by executive
                                    order in 1969, the federal government and the private sector voluntarily
                                    exchange executives on a temporary basis. The private sector host com-
                                    panies pay the salaries of federal participants. Until 1986 the govern-
                                    ment paid the salary of all private sector participants, up to a certain
                                    dollar limit. Under the experimental component, which was to expire on
                                    September 30, 1989, salaries of up to 10 private sector participants each

                                    ‘Federal Workforce:Implementationof the Executive Exchangehogram Voluntary ServicesAct of
                                     1986(GAO/GGD-89-62.Mar 31,1989).

                                    Page 54                                               GAO/GGD9@103     Public Service Issuea
                                   Chapter 3
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                                   Public Service

Extent and Usefulness of           In September 1989 we reported on the training and development of
                                   senior executives.’ Because sufficient information was unavailable, the
Training and Development           House Subcommittee on Civil Service asked that we survey career SES
                                   members of different-sized agencies to obtain their views on their
                                   training and development experiences. As also requested by the Sub-
                                   committee, OPM’S fulfillment of its leadership responsibilities for execu-
                                   tive training and development is discussed in chapter 5 under a section
                                   on OPM’s administration of civil service programs.

                                   As the government’s general managers, the roughly 6,000 career SES
                                   members are responsible for a broad range of essential government
                                   activities, such as acquiring weapon systems and providing accurate and
                                   timely benefits to the elderly. We sent questionnaires to a statistically
                                   valid sample of SES members on the extent and usefulness of their execu-
                                   tive training (such as formal classroom training and seminars) and
                                   development (such as rotational job assignments and task forces). The
                                   responses received are projectable to about 77 percent of the SESmem-
                                   bership as of June 30, 1987.

                                    Regarding executive participation        in training and development, we
                                    reported the following:

                           l     The projected results of our questionnaires showed that about 87 per-
                                 cent of the executives appointed to the      in fiscal year 1982 and

                                 beyond said they received some executive training or development
                                 before appointment. However, the responses also showed that 13 per-
                                 cent received neither, a situation that became somewhat more common
                                 in recent years, with 27 percent in 1986 and 15 percent in 1987
                                 receiving neither.
                               l The percentage of executives without training and development after
                                 SE appointment was nearly double compared with before appointment.
                                 About 23 percent of the executives reported no training or development
                                 since October 1981 or after their appointment date, whichever was
                               . Small agencies, those with up to 50 senior executives, seem to have more
                                 difficulty than larger agencies in providing executives training and
                                 development experiences. For example, the percentage of executives
                                  from small agencies reporting no preappointment experiences was more
                                 than double the percentage of those from larger agencies.

                                    ‘Senior Executive Service Training and Developmentof SeniorExecutives(GAO/GGDW127, Sept.
                                    29. 1989).

                                    Page 62                                              GAO/GGIHO-103   Public Service Issues
Improving the Effectiveness of the
Public Service

                      The effectiveness of the public service in carrying out the complex and
                      varied missions of the federal government depends on many factors.
                      Competent and experienced leadership, effective training and develop-
                      ment, and performance accountability and rewards are all important.

                      The major purpose of CSRAwas to improve the effectiveness and
                      accountability of the public service. This was reflected in the establish-
                      ment of the SESand in requiring performance-based pay for managers
                      and supervisors, as well as in the merit principles that emphasize the
                      need for effectiveness in managing the federal workforce. In addition,
                      the merit principles require that employee pay contains incentives and
                      recognition for excellent performance.

                      Merit principles call for improving performance through effective edu-
                      cation and training. Under these principles, employees should be
                      retained and inadequate performance corrected. Those employees who
                      cannot or will not improve their performance to meet required stan-
                      dards should be separated from service. Merit principles also require
                      that employees be educated and trained in cases where better organiza-
                      tional and individual performance would result.

                      The public service faces critical challenges in the years ahead. The fol-
                      lowing sections discuss these challenges in the context of providing com-
                      petent and experienced leadership, strengthening employee training and
                      development, and enhancing workforce performance.

                      During fiscal year 1989, we reported on the lack of management con-
Providing Competent   tinuity and accountability in certain costly defense programs, the extent
and Experienced       to which career SFS members participated in executive training and
Leadership            development activities and their perceptions of those experiences, and
                      the lack of readily available data on SEJSvacancies. We also reported on
                      many aspects of an executive exchange program (which assigns private
                      sector executives to government agencies) and an intergovernmental
                      mobility program (which has become a primary way that agencies bring
                      college and university personnel into the federal government).

                      Page 60                                      GAO/GGD30-103   Public Service Issues
                                     Chapter 2
                                     Assuring the Quality   of the Public Service

                                   . In the agencies we reviewed, only a small percentage of new employees
                                     had new positions that were covered by the special retirement provi-
                                     sions. As a result, it did not appear that the new positions were being
                                     created to aid in recruiting and retaining new employees.
                                   . Legislation that was proposed but not passed by the 100th Congress
                                     would have increased the number of personnel in the law enforcement
                                     retirement program by approximately 17,000 and cost $1.3 billion for
                                     the extra retirement benefits that would be paid during retirees’
                                     expected lifetimes.

Duplication   of Health Benefits     In March 1989 we reported on the duplication of benefits provided fed-
                                     eral retirees under the Federal Employees Health Benefits Program and
                                     the Medicare Catastrophic Coverage Act of 1988.” The report was
                                     requested by 6 Senators and 44 Representatives before Congress
                                     repealed most provisions of the act in November 1989.

                                     The Federal Employees Health Benefits Program is the largest
                                     employer-sponsored health benefits program in the United States.
                                     Active federal civilian employees, federal retirees with 5 consecutive
                                     years of program coverage immediately preceding retirement, and their
                                     dependents and survivors are eligible to participate. The program pro-
                                     vides health insurance to about 1.6 million retirees. OPM is responsible
                                     for the overall administration of the health benefits program, and
                                     chapter 5 discusses aspects of OPM’s management of the program.

                                     Enacted in July 1988, the Medicare Catastrophic Coverage Act of 1988
                                     (P.L. 100-360) extended catastrophic protection to about 33 million eld-
                                     erly and disabled beneficiaries, including Medicare-eligible federal
                                     retirees, many of whom were enrolled in the federal health benefits pro-
                                     gram. To finance the cost of the new catastrophic benefits, additional
                                     Medicare premiums were imposed. Because federal retirees already paid
                                     premiums for many of these medical costs covered under the program,
                                     OPM was directed to reduce the premiums to prevent federal retirees
                                     from paying twice for the same benefits.

                                     With the principal exception of additional skilled nursing facility bene-
                                     fits, we found that the Catastrophic Act provided few new benefits for
                                     Medicare participants than were already available from the federal
                                     health benefits program. We also found that OPM's $37.20 per year
                                     rebate for 1989 appeared reasonable. These findings were based on,

                                     ‘“U.S. EmployeesHealth Benefits:Rebatefor      DuplicateMedicareCoverage(GAO/HRD-89-68,Mar.

                                     Page 48                                                   GAO/GGBSlTlO3FublicServiceIsmes
                                     Chapter 2
                                     Assuring the Quality of the Public Service

Effects of Early Retirementsin       In February 1989 we reported on DOD’Smanagement of the voluntary
Certain DODComponents                early retirement program resulting from fiscal year 1988 budget reduc-
                                     tions.z” We focused on the cost and possible adverse effect of large num-
                                     bers of DOD civilian employees electing early retirement, as we were
                                     requested by the House Subcommittee on Readiness, Committee on
                                     Armed Services, and the Senate Subcommittee on Federal Services, Post
                                     Office, and Civil Service, Committee on Governmental Affairs. We con-
                                     centrated our review on the Army Materiel Command, two of its
                                     subordinate commands (Aviation Systems Command and Troop Support
                                     Command), and the Air Force Air Logistics Center.

                                     At the Army Materiel Command, including all its subordinate com-
                                     mands, 15,763 employees were eligible for early retirement because of
                                     budget reductions and 2,877 (18 percent) retired. At the Air Force Air
                                     Logistics Center, 2,345 employees were eligible because of budget reduc-
                                     tions and 634 (27 percent) retired. Data we gathered from these compo-
                                     nents and OPM described the effects of these early retirements on budget
                                     savings and employment levels, as summarized below.

                                 . While the Army saved funds, the early retirements caused government
                                   costs to increase. Data from the two subordinate Army commands
                                   showed that the Army achieved budget savings of about $6.6 million
                                   ($23,076 per retiree) in fiscal year 1988 as a result of a total of 288
                                   employees electing early retirement. The savings were achieved by
                                   avoiding salary outlays and agency contributions toward employees’
                                   benefits (retirement and health and life insurance). However, when
                                   budget outlays from the Civil Service Retirement Fund were considered
                                   (lump-sum annual leave, monthly annuity payments, lump-sum retire-
                                   ment payments, and retiree health insurance payments) there was a net
                                   cost to the overall federal budget in fiscal year 1988 of about $2.6 mil-
                                   lion, or $9,146 per retiree.
                                 l The total employment levels in the three Army commands and the Air
                                   Force Center were only temporarily affected by early retirements. As
                                   funds became available, the commands and Center filled all or some
                                   vacancies created by early retirements. For example, during fiscal year
                                    1988, 634 employees elected early retirement at the Center, which lim-
                                   ited hiring to 170 new employees. However, when fiscal year 1989 funds
                                   became available, the Center increased its hiring to reach its pre-1988
                                   levels, hiring 1,282 new employees during the first 3 months of fiscal
                                   year 1989.

                                     “‘Federal Employees:Early Retirementsat the DefenseDepartmentm FiscalYear 1988(GAO/

                                     Page 46                                             GAO/GGD90103 Public 5xvice Issues
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    Assuring the Quality   of the Public Service

    As of May 1989,49 percent of eligible FERS employees contributed to the
    thrift plan and received matching government contributions. Participa-
    tion rates among major departments varied from 40 percent at the
    Department of the Treasury to 70 percent at the Department of State.
    Within departments, we noted more significant variances. For example,
    within the Department of Navy, participation rates varied from 26 to 61
    percent, and within the Department of the Treasury, the participation
    rates varied from 33 to 73 percent.

    We concluded that agencies and the Thrift Board should target for spe-
    cial meetings those organizations with low participation rates. Also,
    agencies should identify further the reasons for low participation rates
    in some organizations and identify ways to address those reasons. In
    addition, we concluded that agencies should target new employees for
    special briefings to further explain the importance of their participation
    just before their first opportunity to contribute.

    We also testified on a bill, H.R. 2514, that would (1) authorize federal
    agencies to pay lost interest to employees’ Thrift Savings Fund accounts
    caused by agencies’ administrative errors and (2) remove restrictions on
    investments by certain thrift savings plan participants. The bill passed
    the House in April 1990 and was pending in the Senate when we pre-
    pared this report. We supported these changes for the following reasons:

l   In a February 1989 Comptroller General decision,“4 we concluded that
    agencies did not have statutory authority to reimburse lost interest pay-
    ments to employees’ thrift savings accounts from appropriated funds
    without an express mandate from Congress. Because this would finan-
    cially penalize federal employees, we said that from an equitable stand-
    point, we would support legislation authorizing agencies to make
    payments into savings plan accounts to cover earnings lost due to an
    agency’s delay in making contributions. H.R. 2514 would authorize such
l   H.R. 2514 would also eliminate restrictions that phase in the amount of
    contributions that can be invested in the stock and fixed income funds.
    Because the thrift fund was removed from the federal budget in fiscal
    year 1989 and its expenditures are not reflected as budget outlays, we
    testified that the current restrictions on investments are no longer
    needed. The fund’s transactions should not be considered transactions of
    the federal government. Elimination of these restrictions would provide

        AgencyAutimity to Pay Lost Earningson Contributionsto EmployeeThrift SavingsPlan Accounts
     (B-231205,Feb.3, 1989).

     Page 44                                               GAO/GGD90103     Public !kvice   Issues
                                Assuring the Quality of the Public Service

                                shifts per workweek. They are paid on a biweekly basis under a complex
                                formula involving the sum of regular base pay, premium pay, and over-
                                time pay.

                                We recommended that Congress enact legislation to change current pay
                                provisions so that firefighters’ pay is not reduced upon promotion. Fed-
                                eral civilian firefighters at or above the GS-5 level who spend at least 80
                                percent of their work time on supervisory and closely related work are
                                statutorily exempt from overtime. Therefore, their pay is the sum of
                                only base and premium pay. We found instances where firefighters pro-
                                moted to supervisory positions had their gross salaries reduced by
                                losing overtime pay, and we believe legislation is needed to correct the
                                problem. This situation could reduce the pool of qualified applicants for
                                supervisory firefighter positions. When we prepared this report, no leg-
                                islative action had been taken to implement this recommendation.

                                We also recommended that the Secretary of Defense

                            l alert officials at Army and Navy payroll offices that some of their pay
                              systems are vulnerable to improper payments resulting from random
                              mistakes and misinterpretation of regulations, and
                            s take action to see that personnel in those payroll offices who do manual
                              calculations receive special training.

                                We found instances where these agencies made overpayments. By letter
                                (dated December 12, 1989), DOD informed us that it had initiated actions
                                to implement these recommendations.

Federal Retirement Issues       The Federal Employees Retirement System (FERS) Act of 1986 (P.L. 99-
                                335) provided (1) a new retirement system for all federal civilian
                                employees hired after December 1983 and (2) an opportunity for about
                                2.1 million employees covered by existing retirement systems, primarily
                                the Civil Service Retirement System (CSRS), to transfer to FERSduring a
                                July through December 1987 open season. FERSprovides benefits from
                                three separate components, each administered by a different agency.
                                OPM is responsible for the pension plan component, SSAis responsible for
                                the Social Security component, and the Federal Retirement Thrift
                                Investment Board is responsible for the Thrift Savings Plan component
                                (a retirement savings and investment plan which provides tax deferral

                                Page 42                                      GAO/GGD9@103Public !kvice Issues
                             Chapter 2
                             Assuring   the Quality   of tbe Public Senice

Compensation Policies and    While pay is uniform under the GS system, employees in some agencies
                             are not under the General Schedule, and others are under pay practices
Practices Vary Among         unique to specific employee groups. The diversity of the compensation
Agencies                     systems is illustrated by reports we issued during fiscal year 1989 on
                             the compensation of top managers in the Tennessee Valley Authority
                             (WA), U.S. Park Police, and federal civilian firefighters.

Tennessee Valley Authority   In May 1989 we reported on the compensation of top WA managers.lQ
                             The House Subcommittee on Oversight, Committee on Ways and Means,
                             requested the report.

                             We found that WA uses a supplemental retirement plan as deferred
                             income to provide additional compensation to recruit and retain top
                             managers and to reward outstanding performance. Available only to
                             certain top WA managers, this plan supplements benefits provided under
                             other retirement plans. In addition, WA compensates its top managers
                             with relocation incentives (payments in addition to travel and relocation
                             expenses), performance awards and bonuses and, before October 1,
                              1988, paid its employees’ share of Social Security contributions and
                             medical and dental insurance premiums. The average annual base salary
                             provided 220 top TVA managers was $72,950 on October 1,1988, ranging
                             from a high of $77,400 to a low of $63,950. For the period of January 1
                             through October 1, 1988,29 top managers received either supplemental
                             retirement and/or relocation incentive benefits averaging $31,438 and
                             $26,125, respectively.

                             Earlier, in April 1989, we provided our legal opinion to the Subcom-
                             mittee on the authority of WA to make payments to its employees that
                             might exceed a statutory limitation. We stated that the supplemental
                             retirement and the relocation incentive benefits represent a clear and
                             direct circumvention of 16 USC. 831b, which states that no employee
                             of WA shall receive a salary in excess of that received by members of the
                             WA Board of Directors. WA Board members are paid at level IV of the
                             Executive Schedule, which was $80,700 a year when we prepared our
                             legal opinion. While we recognized that WA may well be experiencing
                             difficulties in recruiting and retaining top executives due to the salary
                             limitations imposed on all federal officials by the statutory ceiling, we
                             concluded that WA should ask Congress to amend or repeal the statute if
                             it is sure it needs to raise salaries to recruit and retain top executives.

                              ‘“TVA Management:Information on Compensationfor Top Managers(GAO/RCED-SS-137BR,
                              17. 1989).

                              Page 40
                        Chapter 2
                        Assuring the Quality   of the Public Service

                        cost of living in geographic areas can cause significant differences in
                        federal employees’ purchasing power. A dollar paid an employee in a
                        high-cost area does not go as far as that same dollar in a low-cost area.
                        Thus, it can be argued that the current uniform Gs pay system does not
                        equitably compensate employees doing the same work in different

                        In addition, the disparities in local private sector pay rates for partic-
                        ular occupations result in differences in the federal government’s com-
                        petitiveness with local job markets. Because of local pay differences, the
                        government may pay more than the market in some areas for certain
                        jobs, even with the large average pay gap. In other areas, the federal
                         government pays much less than its competitors for the same jobs.

                        Given the pay gap and the problems of inequitable and uncompetitive
                        pay from one area to another, it is not surprising that agencies continue
                        to report recruitment and retention problems. Federal employees in
                        some high-cost areas, although they desire to serve the public, may find
                        it difficult to support their families. Job applicants in areas where fed-
                        eral pay falls significantly below pay in the private sector must be
                        willing to accept less pay to become federal employees. Therefore, we
                        concluded that any reform of the federal white-collar pay-setting pro-
                        cess must consider geographic compensation differences through some
                        form of locality pay.

Types of Locality Pay   We testified that essentially two separate models or types of locality pay
                        systems are available to the federal government-one based on cost of
Systems                 living and one based on the local labor market. Cost-of-living-based
                        locality pay focuses on equalizing employee purchasing power
                        throughout the country and would adjust pay for all federal white-collar
                        employees in specified areas. Labor-market-based locality pay is prima-
                        rily concerned with keeping the federal government competitive with
                        other employers and would provide pay adjustments for those
                        employees in occupations in specified areas where federal pay is lower
                        than the private sector rate. Because either model would vary pay
                        adjustments by area, adoption of locality pay could be a less expensive
                        way to address the recruitment and retention problem than attempting
                        to close the pay gap through nationwide adjustments.

                        Both types of locality pay already exist in the federal government. For
                        example, the Federal Deposit Insurance Corporation, which has certain
                        pay-setting autonomy unavailable to other federal agencies, adds cost-

                        Page 38                                        GAO/GGD4M%103Public Service Immes
                                         Chapter 2
                                         Assuring the Quality    of the Public Service

                                         Comparability worked fairly well for many years. Disagreements often
                                         occurred over measuring pay comparability, what jobs should be sur-
                                         veyed, and the size of the employers in the survey, but the process was
                                         continually refined and, as a rule, federal pay was kept comparable to
                                         the private sector average.

                                         Beginning in 1978 and each year since then, however, presidents
                                         decided to grant federal pay raises at lesser amounts than required to
                                         achieve comparability with the private sector. Such “alternative plans”
                                         are allowed by the law when the president believes smaller pay raises
                                         are justified by a “national emergency or economic conditions affecting
                                         the general welfare.” As a result, a gap between federal and private
                                         sector pay for comparable jobs gradually developed, growing each year
                                         until it stood at about 22 percent when we testified in June 1989 and
                                         about 25 percent as of January 1990.

                                         Table 2.1 demonstrates the results of federal white-collar pay setting
                                         since 1977; it shows how the federal-private sector pay gap grew each
                                         year that alternative plans were imposed. Table 2.2 shows the median
                                         rates paid for selected jobs in the private and federal sectors. The
                                         median federal pay for certain jobs currently lags far behind median pri-
                                         vate sector pay. With such uncompetitive pay rates, it is unlikely gov-
                                         ernment will be able to attract and retain the good people it needs.

Table 2.1: History of General Schedule
Pay Adjustments (1978 to 1990)                                                                Pay agenr           Increase
                                         Month/year                            ~ __~_      determination          provided          Pay gap
                                         October    1978
                                                     .     ~~~            _~                           6.40%            5.50%            2.90%
                                         October    1979                                              10.41             7 00             3.41
                                         October    1980                                              13.46             9.10             4.36
                                         October    1961                                              15.10             4.80            10.30
                                         October    1982                                              16.47             4.00            14.47
                                          --_       1984                                              21.51             4.00            1751
                                         -~__~.     1985                                              18.26             3.50            14.78
                                         January    1986                                              19.15             0 00            19 15
                                         January    1987                                               23 79
                                                                                                   -.~__                3 00            20 79
                                         January    1986                                               23 74            2.00            21.74
                                         January    1989                                              26.28             4.10            22.18
                                         Januarv    1990                                              28 62             3 60            2.5 07

                                         ‘The President’s Pay Agent (currently the Secretary of Labor and the Dwectors of OMB and OPM) deter
                                         mines and reports annually to the President the pay adjustments necessary to maintain pay compara
                                         billty based on surveys of pwate sector pay by the Bureau of Labor Statistics

                                          Page 36                                                   GAO/GGB90-103      Public Service Issues
                         Chapter 2
                         assuring the Quality   of the Public Service

                         shortages in some offices during the precanvass also led the Bureau to
                         alter its goals and move staff among offices to complete work.

Pay                      Ensuring competitive pay rates has been a challenge for the Bureau. In a
                         series of testimonies during 1988 and 1989, we encouraged the Bureau
                         to consider a geographic pay system that would be sensitive to labor
                         market conditions and competitive with local wage rates. The Bureau
                         subsequently developed and implemented a district office geographic
                         pay program for the 1990 census. Under Title 13 of the U.S. Code, the
                         Secretary of Commerce has the authority to administratively determine
                         pay rates for temporary employees hired for the decennial census and
                         related activities.

                         Most of the temporary employees the Bureau hired for the census were
                         enumerators. While the Bureau originally planned enumerator pay rates
                         for 1990 to be either $5.50 or $6.00 per hour, the geographic wage pro-
                         gram contains seven different wage levels, with enumerator pay
                         increasing at $0.50-intervals and ranging from $5.00 to $8.00 per hour.

Diminishing Labor Pool   A diminishing labor pool also confronts the Bureau. To many potential
                         employees, census work is unattractive because of its temporary nature,
                         lack of benefits, and required access to an automobile. We urged the
                         Bureau to explore all options to enlarge its labor pool. One option that
                         both we and the Bureau endorsed and Congress enacted this year was
                         legislation to allow federal military and civilian retirees to work on the
                          1990 census without a reduction in their retirement annuities.

                         In our May 1989 testimony, we pointed out that federal retirees are a
                         potentially large source of applicants. For example, more than 1.6 mil-
                         lion federal retirees are under the age of 70. Retired postal workers
                         familiar with neighborhoods and recognized by residents would be espe-
                         cially valuable. We cautioned, however, that the Bureau should take
                         maximum advantage of the legislation. We urged the Bureau to pursue
                         recruitment strategies that target federal retirees and to monitor the
                         number of retirees it hires as a basis for decisions on subsequent

                         Page 34                                        GAO/GGW103   Public Service huee
                            Chapter 2
                            Assuring the Quality   of the Public Service

                            At the time of our review, Park Police had 627 officers, 489 of whom
                            were located in the Washington, DC., area. A comparison of Park Police
                            vacancy and turnover rates with those of 11 other police units in the
                            Washington, DC., area did not indicate any recruitment and retention
                            problems. Between October 1986 and September 1988, authorized and
                            on-board staffing levels at Park Police increased, and the vacancy rate
                            during the period varied but was at it lowest level in fiscal year 1988.
                            The turnover rate at Park Police varied slightly and was at its lowest
                            level for the 4-year period in fiscal year 1988.

                            Park Police officials, when commenting on a draft of our report, gener-
                            ally agreed with the facts but still believed recruiting and retention
                            problems existed even though they were difficult to quantify. They said
                            that, while Park Police had received many applications, the quality of
                            the applicants had declined. In addition, they said they have had trouble
                            recruiting women and minorities. They also said a comparison of the res-
                            ignations and retirements during the first 9 months of fiscal year 1989
                            (after the period covered by our report) compared with those during the
                            same period in 1988 showed that resignations and retirements had

Federal ADP Personnel       In February 1989 we reported on the government’s ability to recruit and
                            retain ADP personnel.1i The report was requested by the Senate Subcom-
                            mittee on Federal Services, Post Office, and Civil Service, Committee on
                            Governmental Affairs.

                            We interviewed 46 top information and personnel managers in 23 major
                            civilian and defense agencies to develop an understanding of the recruit-
                            ment and retention of ADP personnel across a broad spectrum of federal
                            agencies. Noncompetitive pay, limited training opportunities, and the
                            negative image of federal service were among the factors that managers
                            said hindered their efforts to recruit and retain ADP personnel. Some spe-
                            cific concerns noted included the following:

                        l The government’s salary for an entry-level computer programmer was
                          as much as 33 percent less than private sector pay for similar work.
                        . Budget constraints limited training opportunities and restricted career
                          development opportunities for ADP personnel.
                        . Unflattering perceptions of government employment further compli-
                          cated recruitment efforts.

                             ‘“Federal ADP Pwxmnel: Recruitmentand Retention(GAO,‘IMTEG89-12BR,Feb.7, 1989).

                             Page 32                                            GAO/GGIMO-103   Public Service Issues
                       Chapter 2
                       Assuring the Quality of the Public Service

                       of Defense buildup. However, the fiscal year 1989 reduction was ulti-
                       mately limited to 3 percent, which compared with Armywide civilian
                       personnel reductions for the year. The 3-percent reduction did not
                       appear to seriously impact audit coverage.

                       Our last public service report pointed out personnel recruitment or
Agencies Continue to   retention problems that raised concerns about mission accomplishment
Experience             in scientific and engineering occupations, as well as in four agencies-
Recruitment and        EPA, FAA, the Internal Revenue Service (IRS), and &?A.We cited inadequate
                       pay as a cause of many of these problems. As discussed below, we
Retention Problems     reported on similar problems in fiscal year 1989 at FDA, the U.S. Park
                       Police, and in federal ADP occupations. Some evidence of problems was
                       anecdotal and not supported by quantifiable statistics on staff vacancies
                       and turnover, as discussed in our review of the U.S. Park Police. We also
                       reported on the major challenge the Bureau of the Census faced in
                       acquiring and retaining a sufficient number of competent temporary
                       employees to take the 1990 census.

Food and Drug          In September 1989 we reported that FDA was experiencing difficulties in
Administration         recruiting and retaining staff because of the disparity in pay and bene-
                       fits between the federal government and the private sector.‘” The Senate
                       Appropriations Subcommittee on Agriculture, Rural Development, and
                       Related Agencies and the Senate Committee on Labor and Human
                       Resources requested the report.

                       FDA data showed that it took from at least 4 months to more than 5 years
                       to fill 36 vacant Senior Executive Service (SES) positions. Vacant posi-
                       tions existed in all six FDA centers and the Office of Regulatory Affairs,
                       including positions at the directorate, deputy directorate, and associate
                       commissioner levels Fifteen of these 36 positions were vacant for less
                       than 1 year before they were filled. Most of the other 21 positions were
                       vacant for up to 2 years; and 1, a division director position in the Center
                       for Drug Evaluation and Research, had not been permanently filled for
                       more than 5 years.

                       “F’DA Resources: Comprehenwe      Assessment of Staffing, Facilities,   and Equipment Needed (GAO/
                       HRD 89 _142 , Sept. 1.5. 1989).

                       Page 30                                                       GAO/GGDM-103 Public Service Issues
                  Chapter 2
                  Assuring the Quality of the Public Service

                  As the reports disclosed, s.% managers and employees believed the
                  staffing reductions hurt the quality of SSA’Sservice provision. The first
                  report, issued in February 1989, presented the views of SSApersonnel on
                  the quality of the agency’s service to the public and the impact of staff
                  reductions9 Questionnaires were mailed to a sample of 467 managers
                  and 643 employees in SSA’Sdistrict and branch offices and hearing
                  offices in June 1988. Generally, both managers and employees said that
                  the quality of service to the public had declined since a similar survey in
                   1986 and that morale at units had also declined due to reductions in
                  staff. Specific survey findings included a quadrupling of the percentage
                  of managers who rated their unit’s performance as declining since
                   1986-from 11 to 47 percent. When asked to rate the eight factors con-
                  tributing to declining performance, the two principal reasons managers
                  cited were staff reductions (cited by 91 percent of the respondents) and
                  low morale (cited by 78 percent of the respondents).

                  The second report, issued in June 1989, examined several issues related
                  to the quality of service provided by %A, including a further discussion
                  of the SSA morale problem.ltl While we found little information to com-
                  pare morale at SSAwith that of other federal agencies, the available
                  information suggests that job satisfaction at SSA may be lower than at
                  most major federal agencies. Our survey data indicated a sizable drop in
                  ss~ staff morale between 1986 and 1988, which managers attribute to
                  the staff reductions. In 1986, for example, 44 percent of the managers
                  and 20 percent of the employees rated their units’ morale as high, com-
                  pared with 23 percent of the managers and 12 percent of the employees
                  in 1988.

EPA’s Superfund   In November 1988 we issued a report on the degree of compliance with
                  deadlines in the Superfund Amendments and Reauthorization Act of
                  1986.1i The Senate Subcommittee on Superfund and Environmental
                  Oversight, Committee on Environment and Public Works, requested the

                  The 1986 reauthorization extended Superfund through 1991; provided
                  an additional $8.5 billion in cleanup funds; amended existing hazardous

                  %cial Security:Vmvs of AgencyPersonnelon ServiceQuality and Staff Reductions(GAO/
                       89.37BR,Feb. 10, 1989)
                   “‘Social Security.Staff Reductmx!and ServiceQuality (GAO/HRD4@106BR,June 16,1989).
                                                DeadlinesSlow Progressin EnvironmentalPrograms(GAO/

                  Page 28                                               GAO/GGD@O-103    Public Service Issues
                   Chapter 2
                   Amwing the Quality of the Public Service

                   and delay needed inspections and licensing actions. As a result, some
                   licensees may never be reinspected after the first year. In one case, NRC
                   did not inspect a licensee for 10 years. When it did so in 1987, NRC found
                   that a fire had destroyed the facility 3 years earlier, and the licensee
                   had abandoned a damaged piece of equipment containing radioactive

Federal Aviation   Staffing shortages at FAAhave raised questions in Congress on FAA’S
Administration     ability to oversee aviation safety. In our last public service report, we
                   noted that problems with FAA’S human resource planning and manage-
                   ment contributed to staffing shortages and to other difficulties with air
                   traffic control, airline inspection, and air traffic equipment maintenance
                   and repair programs. In fiscal year 1989, we reported and testified on
                   serious problems that continue to trouble the air traffic control
                   workforce. These products were in response to a request by the House
                   Committee on Public Works and Transportation that we update a 1985
                   questionnaire and a previous evaluation of the problems facing the air
                   traffic control workforce. Our updated questionnaire, completed in 1988
                   by more than 5,000 controllers, supervisors, and managers from FAA’S
                   largest facilities, provides their views on various issues, including the
                   adequacy of staffing, training of new controllers, morale, and safety of
                   the air traffic control system. Their views on the quality of controller
                   training appear in chapter 3.

                   FAA has been trying t,o hire new controllers but has not been able to meet
                   congressionally mandated goals for employing experienced controllers
                   (referred to as full performance level controllers). In fiscal year 1988,
                   FAA was understaffed by about 3,300 experienced controllers from the
                   1981 prestrike level of 13,205. Several factors have affected FAA’S pro-
                   gress in hiring new controllers. FAA needs 100 applicants to eventually
                   produce one experienced controller. A 40-percent attrition rate at the
                   FAA academy has made it difficult for FAA to replace the more than
                   11,000 controllers it lost in 198 1. In addition, data showed that about 29
                   percent of the first-line supervisors were eligible to retire. As FAA has
                   been striving to deal with its staffing problems, air traffic has increased
                   every year since the strike.

                   ‘Aviation Safety: SeriousProblemsContinueto Trouble the Air Traffic Control Work Force(GAO/
                   (GAO/RCED-i9-113Fs, Apr. 24, 1989);SeriousProblemsContinueto Trouble the Air Traffic Cm-
                   trol Work Force(GAO/T-RCED-89-44,May 26, 1989).

                   Page 26                                                GAO/GGLN@-103
                                                                                      Public Service &%,‘%
Chapter   2
Assurlql the Quality of the Public Service

In fiscal year 1988, the number of commercial officers declined by
almost 15 percent (26 officers) from the 176 officers on board in the
peak staffing year (fiscal year 1986). Only about 150 positions could be
funded in fiscal year 1988 because of budget limitations, according to
Commerce. Since 1986 officers lost through attrition and unrenewed lim-
ited appointments have generally not been replaced. As a result, staff
has been spread more thinly. In addition, coverage of some promising
markets (as in East Asia) has been sacrificed.

The second report, issued in August 1989, described problems with the
Department of Commerce’s Worldwide Commercial Information Man-
agement System.5 The report was requested by the Senate Subcommittee
on Foreign Commerce and Tourism, Committee on Commerce, Science
and Transportation. One of the problems we found was a data base of
questionable quality due in part to insufficient support staff.

This system is Commerce’s third attempt since 1978 to develop a com-
prehensive, automated trade information data base to help U.S. firms
establish themselves in the export marketplace. It is designed to link 122
overseas posts and 47 domestic district offices to a central data base of
commercial information in Commerce headquarters. The data base is
also designed to contain a list of domestic and foreign traders, a reposi-
tory of market research reports (cataloged by subject and country), and
a list of upcoming trade promotion activities.

While budgets have been inadequate to support the system’s develop-
ment and implementation, we found that even if more funds were pro-
vided it was questionable whether adequate field staff was in place to
operate the system as designed. Field staff is crucial to the system’s suc-
cess but has been significantly reduced since the system’s inception.
Between 1985 and 1988, the number of domestic and overseas field staff
declined by 119 (11 percent) from 1,064 to 945. Domestic field staff
reductions-Commerce’s      largest-were part of an OMB initiative encour-
aging state governments to assume a greater role in export promotion
and offsetting increases in foreign post operating costs.

In addition to staff reductions, we also found that a large number of
staff vacancies could not be filled because of a lack of funds. For
example, 18 of 59 authorized positions in a high-volume exporting
region were vacant at the time of our report. Most of the posts and

  Export Promotion:ProblemsWith Commerce’sCommercialInformation ManagementSystem(GAO/
NSlAD89-162,Aug. 31, 1989).

Page 24                                           GAO/GGD9&103    Public Service Issues
Chapter 2
Assuring the Quality   of the Public Servke

as hepatitis B, influenza, Lyme disease, and infectious diseases in neo-
natal intensive care units and day care centers; vaccine programs; and
occupational health activities.

We also found that CDC accounts for staff-year use by organizational
subunit and not by program or activity as required by the Standards for
Internal Controls in the Federal Government published by our office in
1983. As a result of this practice, actual time charges cannot be accu-
rately allocated to specific programs and activities, and agency officials
must use either budgeted amounts or estimates when requested to pro-
vide data on actual staff-years expended and on other management
functions. Lack of data on the uses of resources constitutes a weakness
in management information that predisposes the agency to potential
misallocations of staff resources. For example, management cannot com-
pare budgeted to actual staff resources to determine where and why
variances exist. In addition, agency officials have no historical data to
rely on when justifying budget requests for additional staff. To provide
for the proper classification and reporting of staff-years, we recom-
mended that CDCdevise a system to track employees’ actual time spent
on each program or activity.

 The second report was issued in July 1989 and focused on how staffing
 problems had impaired a CDCcomponent, the Center for Prevention Ser-
 vices, from effectively using federal funds aimed at preventing the
 spread of the human immunodeficiency virus (HIV), which causes AK&~
 The Senate Committee on Governmental Affairs requested the report
 and asked us to obtain information on CDC’Smanagement of mv-preven-
 tion funding to state and local health departments.

 The HIV epidemic is a national public health threat of potentially cata-
 strophic proportions. Over 54,000 persons have died from AIDSthrough
 April 1989, according to CDC.As many as 1.5 million Americans may
 already be infected with HIV, according to the Public Health Service, and
 epidemiological research suggests that more than 50 percent of those
 infected will develop AIDS. Prevention Services is responsible for
 administering cooperative agreements with state and local health
 departments for HIV prevention. Funding for these cooperative programs
 has increased from about $25 million in 1986 to about $144 million in

 3AI!X Education:Staffing and Funding Problem Impair Progress (GAO/HRD-89-124,   July 28,

 Page 22                                                GAO/GGD90-103     Pub&   Service Ismes

Agriculture, Rural Development, and Related Agencies, and the Senate
Committee on Labor and Human Resources because of concerns about
FDA'S level of resources to meet its current and future responsibilities.

FDA  touches the day-to-day lives of virtually all citizens through its regu-
lation of the safety of the nation’s foods, drugs, medical devices, radio-
logical products, and cosmetics. Since fiscal year 1980, new laws (such
as the Federal Anti-Tampering Act) and other public health problems,
such as the acquired immunodeficiency syndrome (AIDS) epidemic, have
significantly increased FDA'S responsibilities. However, FDA staffing
levels have not increased along with these added responsibilities. In
fact, staffing has declined. During most of this period, FDA'S staffing
requests were reduced by each level of review in the executive branch,
with substantial reductions usually made by the Office of Management
and Budget (OMB). FDA'S staff declined from 7,816 in fiscal year 1980 to
an estimated 7,229 in fiscal year 1989-a reduction of 587 (or 7.5 per-
cent). FDA officials have reported that staffing shortages caused inade-
quate coverage of some activities.

Problems relating to FDA'S food programs illustrate the situation. While
the staffing levels allocated to FDA'S food programs decreased 17 per-
cent, from 2,569 in 1980 to 2,129 in 1989, FDA'S responsibilities
increased significantly. For example, it was assigned new legislative
responsibilities under the Infant Formula Act of 1980 and the Pesticides
Monitoring Improvements Act of 1988. While one of FDA'S specific
responsibilities is to develop methods to analyze pesticide residues, FDA
has had the resources to develop analytic methods to be used in field
laboratories to test only 150 of 450 approved pesticides on the market,
according to FDA's Center for Foods.

In addition to new legislatively imposed responsibilities, FDA'S Center for
Foods and related field staff have had to deal with increased concern for
the safety of seafood (a growing part of the American diet); pesticide
residues on fresh fruits and vegetables; illness outbreaks associated
with foodborne pathogenic microorganisms (e.g., listeria and salmo-
nella); and a variety of unplanned events, such as glass in baby food and
cyanide-laced grapes from Chile. The Chernobyl nuclear accident also
required increased FDA inspections of imported foods from Europe and
Asia to detect possible radiation contamination.

To achieve adequate staffing, FDA officials estimated that more than
2,000 additional positions were needed for fiscal year 1990 to (1)
replace those lost since 1980, (2) fully implement new legislative

 Page20                                       GAO/GGD90103PubticSenieeIssues
Chapter  1

whether the financial disclosure requirements for the legislative branch
under the Ethics in Government Act of 1978 are being met (see ch. 4).

Because this report contains brief descriptions of reports we issued and
statements of testimony on personnel issues presented before various
congressional committees during fiscal year 1989, it does not contain
any new audit or evaluative work on the activities of OPM or MSPB. The
report notes known actions on our recommendations that agencies have
taken as of April 1990. The descriptions of agency actions came prima-
rily from the agencies’ official written responses to the recommenda-
tions.? All reports and statements are organized into four major
categories to address the major issues confronting the public service: its
quality, effectiveness, integrity, and stewardship.

‘The headof a federal agency1srequired by 31 USC. 720to submit a written statementon actions
taken on our recommendationsto the SenateCommitteeon GovernmentalAffairs and the House
Comnutteeon GovernmentOperationsnot later than 60 days after the date of the report and to the
Houseand SenateCmmutteeson Appropriations with the agency’sfit requestfor appropriations
mademorethan 60 days after the date of the report.

Page 18                                                 GAO/GGB90-103     Public Service Issues
                                            chapter 1

Merit Systems Protection                    MSPB  is an independent, quasi-judicial agency in the executive branch
                                            charged with safeguarding the federal merit systems and civilian fed-
Board                                       eral employees against unfair personnel actions. It hears and decides
                                            employee appeals on agency personnel actions to assure that these
                                            actions are consistent with merit system principles. These actions
                                            include employee removal, reduction-in-grade, and suspension. MSPB can
                                            (by its own authority) order corrective and disciplinary action against
                                            an employee or agency when appropriate. It also conducts studies of the
                                            civil service and other merit systems in the executive branch to deter-
                                            mine the presence or absence of prohibited personnel practices. These
                                            practices, established by CSRA, are listed in table 1.2. Specific allegations
                                            of prohibited personnel practices are investigated by the Office of Spe-
                                            cial Counsel, which became an independent executive branch agency in
                                            July 1989 under the Whistleblower Protection Act. The Special Counsel
                                            may initiate disciplinary and corrective actions before the board when

Table 1.2: Prohibited Personnel Practices
                                            Officials and employees who are authorized to take personnel actions are prohibited
                                            -    discriminating against any employee or applicant;
                                            -    soliciting or considenng any recommendatron on a person who requests or IS berng
                                                 considered for a personnel action unless the material IS an evaluation of the person’s
                                                 work performance, ability. aptitude, or general qualifications, or character, loyalty, and
                                             -   using official authority to coerce political actions, to require polrtical contrrbutions, or to
                                                 retaliate for refusal to do these thinas:
                                             -   willfully deceiving or obstructing an individual as to his or her right to compete for federal
                                             -   Influencing anyone to wrthdraw from competrhon, whether to improve or worsen the
                                                 prospects of any applicant,
                                             -   granting any special preferentral treatment or advantage not authorized by law to a job
                                                 applrcant or employee;
                                             -   apporntrng, employing, promoting, or advancing relatrves in their agencres;
                                             -   taking or falling to take a personnel actron as a reprisal agarnst employees who exercrse
                                                 their appeal rights, refuse to engage rn politrcal actrvrty, or lawfully disclose violatrons of
                                                 law, rule, or regulation, or of mrsmanagement, gross waste of funds, abuse of authority,
                                                 or a substantial and specrfrc danger to public health or safety, and
                                             -   taking or failing to take any other personnel action violating a law, rule, or regulatron
                                                 directly related to ment system princrples.

                                             During fiscal year 1989, we did not receive any specific congressional
                                             requests to review any MSPB activities. Because of the large numbers of
                                             congressional requests for reviews of OPM and other federal agency per-
                                             sonnel management activities, we did not undertake a separate review
                                             of MSPB during the year.

                                             Page 16                                                    GAO/GGD90.163      Public Service Issues
Chapter 1


                      This report summarizes our findings and recommendations from fiscal
                      year 1989 on the management of the federal government’s most valued
                      resource-its employees. People problems affect agency performance,
                      which affects the lives of every American citizen.

                      As in our previous public service report that covered products issued
                      during fiscal years 1987 and 1988,’ we organized our summary of fiscal
                      year 1989 reports around issues affecting the quality, effectiveness,
                      integrity, and stewardship of the public service. Many of these products
                      contained recommendations to Congress and various federal depart-
                      ments and agencies. Appendix I lists those products with recommenda-
                      tions to Congress that we believe still require action.

                      Title I of the Civil Service Reform Act of 1978 (CSRA), 5 U.S.C. 2304,
Background            requires us to report annually on the significant activities of the Office
                      of Personnel Management (OPM) and the Merit Systems Protection Board

Office of Personnel   OPM is the federal agency primarily  charged with executing the laws
                      governing the federal civil service and developing, administering, and
Management            enforcing civil service rules and regulations. Generally, OPM is respon-
                      sible for assuring the systematic application throughout government of
                      nine basic merit system principles that were codified for the first time in
                      law by CSRA and are summarized in table 1.1. Specifically, OPM responsi-
                      bilities include examining applicants for positions in the civil service,
                      personnel investigations, personnel program evaluation, executive
                      development, and training.

                      OPM also administers the retirement and insurance programs for most
                      federal civilian employees and is responsible for exercising leadership in
                      affirmative action. OPM policies govern civilian employment in executive
                      branch agencies and certain agencies in the legislative and judicial
                      branches. OPM helps these agencies carry out its policies while delegating
                      certain personnel powers to agency heads.

                      ‘The public Service:IssuesAffecting Its Quality, Effectiveness,Integrity, and Stewardship(GAO/
                      cxD89-73, June 6, 1989).

                      Page 14                                                  GAO/GGD90103 Public Service Issues

ADP       automated data processing
AIDS      acquired immunodeficiency syndrome
CDC       Centers for Disease Control
CSRA      Civil Service Reform Act
CSRS      Civil Service Retirement System
DOD       Department of Defense
FDA       Food and Drug Administration
EEO       equal employment opportunity
EECC      Equal Employment Opportunity Commission
EPA       Environmental Protection Agency
FAA       Federal Aviation Administration
FERS      Federal Employees Retirement System
FLRA      Federal Labor Relations Authority
FSLIC     Federal Savings and Loan Insurance Corporation
GS        General Schedule
HHS       Department of Health and Human Services
HIV       human immunodeficiency virus
HUD       Department of Housing and Urban Development
INS       Immigration and Naturalization Service
IPA       Intergovernmental Personnel Act
IRS       Internal Revenue Service
MSPB      Merit Systems Protection Board
NASA      National Aeronautics and Space Administration
NORAD     North American Aerospace Defense Command
NRC       Nuclear Regulatory Commission
OGE       Office of Government Ethics
OMB       Office of Management and Budget
OPM       Office of Personnel Management
PCEE      President’s Commission on Executive Exchange
PCP       phencyclidine
PME       Personnel Management Evaluation
PMRS      Performance Management and Recognition System
S!33      Senior Executive Service
SSA       Social Security Administration
TVA       Tennessee Valley Authority
VA        Veterans Administration
VOA       Voice of America

Page 12                                 GAO/GGD9@102   Public Service Issues
                        Discrimination Complaint Costs                                            84
                     Integrity of Various Administrative Systems and                              86
                           Management Practices
                        Allegation of Management Retaliation Against Agents                       85
                             of the Immigration and Naturalization Service
                        Internal Controls Strengthened Over Justice’s Payroll                      86
                       Questionable Validity and Reliability of IRS Data on                        87
                           Alleged Employee Misconduct
                       Identification and Reporting of DOD’s Use of                                88
                            Consulting Services in Weapons System Acquisition
                       Special Air Transportation Services Provided to TVA’s                       89
                            Manager of Nuclear Power
                     Agency Compliance With Appointment or Employment                              89
                       Conversions of Noncareer Appointees to Career                               90
                       Temporary Appointments and Extensions in Selected                           91
                       Incomplete Hiring Data on Overseas DOD Dependent                            92
                       Selected Personnel Practices Warrant Management                             93
                            Attention at the Voice of America
                       Shortcomings in Navy’s Management Oversight of                              94
                            Civilian Substitution
                       Conversion of Military Positions to Civilian Positions at                   95
                            an Air Force Weapons Laboratory
                       Receivership Employees Who Perform Federal                                  96
                            Functions Should Be Appointed Federal Employees

Chapter 5                                                                                          98
Strengthening the    OPM Needs to Enhance Its Leadership of Federal Human
                         Resource Management
Stewardship of the     OPM’s Response to Management Review Findings and                            98
Public Service             Recommendations
                       Related Actions on Recommendations to the President                        105
                           and Congress
                     OPM’s Performance in Administering Civil Service                             107
                       Executive Training and Development                                         107
                       Oversight of Agencies’ Programs to Hire and Advance                        110
                           Disabled Veterans

                     Page 10                                     GAO/GGD90-103   Public Service Issues

Executive Summary                                                                                   4

Chapter 1                                                                                          14
Introduction            Background
                          Office of Personnel Management
                          Merit Systems Protection Board                                           16
                          National Commission on the Public Service                                17
                        Objective, Scope, and Methodology                                          17

Chapter 2                                                                                          19
Assuring the Quality    Staffing Shortages Continue to Affect Mission                              19
of the Public Service     Food and Drug Administration                                            19
                          Centers for D&ease Control                                              21
                          Department of Commerce                                                  23
                          Nuclear Regulatory Commission                                           25
                          Federal Aviation Administration                                         26
                          Social Security Administration                                          27
                          EPA’s Superfund                                                         28
                          Army Audit Agency                                                       29
                        Agencies Continue to Experience Recruitment and                           30
                             Retention Problems
                          Food and Drug Administration                                             30
                          U.S. Park Police                                                         31
                          Federal ADP Personnel                                                    32
                          Bureau of the Census                                                     33
                        Competitive Compensation Is Critical to Maintaining a                      35
                             Quality Workforce
                          Why Federal Pay Reform Has Become Such a Serious                         35
                          Types of Locality Pay Systems                                            38
                          Compensation Policies and Practices Vary Among                           40
                          Federal Retirement Issues                                                42

Chapter 3                                                                                          50
Improving the           Providing Competent and Experienced Leadership                             50
                          Lack of Management Continuity and Accountability                         51
Effectiveness of the           Hinders an Air Force Modernization Effort
Public Service            Extent and Usefulness of Training and Development                        52
                          Lack of Data on SES Vacancies                                            53

                        Page 8                                   GAO/GGB90103   Public Service I.ssues

                              amounts than required to maintain comparability with the private
                              sector each year since 1978. (See pp. 35 to 49.)

Improving the                 Competent and experienced leadership, effective training and develop-
                              merit, and performance accountability and rewards are all important for
Effectiveness of the Public   developing and maintaining a high-quality public service.
                              GAO reported on the lack of management continuity and accountability
                              in certain costly defense programs, the extent to which career members
                              of the Senior Executive Service (SFS)participated in executive training
                              and development activities and their perceptions of the usefulness of
                              those experiences, and the lack of readily available data on why agen-
                              cies were unable to fill their SES vacancies sooner. GAO also urged Con-
                              gress to take actions to improve the effectiveness of two special public
                              service employment programs: an executive exchange program
                              (whereby the government and private sector voluntarily exchange exec-
                              utives on a temporary basis) and an intergovernmental mobility pro-
                              gram (which has become a primary way that agencies use to bring
                               academic personnel into the federal government). For example, GAO rec-
                               ommended that Congress permit more corporate executives working in
                              government under the exchange program to be paid their full salaries by
                               their corporate employers. (See pp. 50 to 57.)
                              Training problems continued as one of several human resource manage-
                              ment issues affecting FAA. Specifically, FAA's controller and aviation
                              safety inspector training needed improvements. GAO also reported on (1)
                              the extent to which agencies were complying with requirements to start
                              computer security training programs and (2) factors affecting the
                              Department of State’s implementation of a professional development
                              program for Foreign Service members. (See pp. 58 to 61.)
                              Finding ways to enhance the performance of the federal workforce has
                              been a major thrust of recent civil service reforms. In recent years GAO
                              has reviewed a variety of systems aimed at improving the performance
                              and accountability of the public service in selected agencies. During
                              fiscal year 1989, GAO reported on a variety of implementation problems
                              with (1) the pay-for-performance system for federal supervisors and
                              managers, (2) agency procedures for dealing with certain poor per-
                              formers, and (3) disciplinary policies and practices in the U.S. Postal
                              Service. For example, GAO found that the pay-for-performance system
                              was not viewed by covered employees as fully meeting its objectives to
                               motivate and reward employees, SSA'S system for dealing with poor per-
                               formers could be improved, and Postal Service guidance to supervisors

                               Page6                                     GAO/GGD90-103PublicSeniceIssues
Executive Summary

                     Management of the federal government’s most valuable resource, its
Purpose              employees, affects the quality of the services it delivers to the public.
                     The Office of Personnel Management (OPM) has a special role in over-
                     seeing the management of the federal workforce.

                     Title I of the Civil Service Reform Act of 1978 (CSRA)requires GAO to
                     report annually on certain public service activities. This report summa-
                     rizes major issues GAO identified in 93 reports and testimonies issued in
                     fiscal year 1989 dealing with the federal public service.

                          is the federal agency primarily charged with executing the laws
Background           OPM
                     governing the federal civil service and developing, administering, and
                     enforcing civil service rules and regulations. OPM policies govern civilian
                     employment in executive branch agencies and certain agencies in the
                     legislative and judicial branches. OPM is responsible for helping these
                     agencies to carry out its policies while delegating certain personnel
                     powers to agency heads. Notwithstanding OPM'S critical leadership role,
                     federal agencies bear primary responsibility for personnel management.
                     In enacting CSRA, Congress intended that OPM decentralize to federal
                     agencies more personnel management authority and flexibility. In a
                     June 1989 summary report, GAO discussed public service issues covered
                     previously in GAO reports and testimonies prepared in fiscal years 1987
                     and 1988.

                           reports in fiscal year 1989 continued to confirm that the state of
Results in Brief     GAO'S
                     the public service is not what it should be and, as a result, some govern-
                     ment programs and services have suffered. Deficiencies and problems
                     continue because of the federal government’s inability to consistently

                   . assure the quality and improve the effectiveness of its workforce
                     through successful recruiting, competitive pay, competent leadership,
                     and improved performance management;
                   . enhance the integrity of the public service by effectively curtailing con-
                     flicts of interest and strengthen the effectiveness of personnel adminis-
                     trative systems and management practices; and
                   . strengthen the stewardship of the public service through more effective
                     leadership by OPM in human resources management and civil service


John Tavares, Project Manager, Federal Human Resource Management Issues, was the
principal contributor to this report. Please contact me on 275-5074 if you have any questions
concerning the report.

Bernard L. Ungar
Director, Federal Human
   Resource Management Issues

                      Page 2