I-nit tvi States Gent*ral Xcc.c)ullt ing Office i;AO Rcy>ort to the Chairman, Subcommittee on Civil Service, Committee on Post Of’f’ice and Civil Service, Ho 11x of Representatives September 1990 FEDERAL WORKFORCE Selected Sites Cannot Show Fair and Open Competition for Temporary Jobs RESTIUCXED-- Not to be released outside the General Accounting OffIce unless specifically approved by the Office of Congressional Relations. __ - _.- - - .- GAO,/‘G<;D-YO- 106 GAO United States General Accounting Office Washington, D.C. 20548 General Government Division B-236993 September 5, 1990 The Honorable Gerry Sikorski Chairman, Subcommittee on Civil Service Committee on Post Office and Civil Service House of Representatives Dear Mr. Chairman: This report is one in a series of reports responding to your request that we review agencies’ use of personnel authorities delegated to them by the O* ‘ice of Personnel Management (OPM). In January 1985, OPM dele- gated to agencies the authority to expand their appointment of tempo- rary employees and to make these appointments without OPM approval. As agreed, we determined (1) whether selected agencies were complying with merit selection requirements when using the authority and (2) whether these agencies were making temporary appointments for appropriate reasons. Other reports will follow on agencies’ use of dele- gated authorities to hire superior candidates at higher salaries and to appoint experts and consultants. Under the delegated authority, agencies can hire temporary employees for periods of up to 4 years without seeking OPM approval but must renew each appointment annually. Temporary employees do not receive the same benefits as permanent employees. For instance, temporat-) employees do not receive retirement benefits or life insurance, nor are formal procedures required to terminate these employees. OPM delegated the authority to hire temporary employees to help agen- cies avoid needless permanent appointments for work that is temporary in nature. OPM also gave agencies the latitude to decide what situations warranted temporary appointments. However, regardless of the situa- tion, OPM required agencies to ensure and to be able to demonstrate that all applicants received a fair and competitive chance to be hired-the objective of the federal merit selection system. We reviewed use of the temporary appointment authority at 11 mst alla- Results in Brief tions in 6 civilian agencies that made extensive use of the authorIt\- Officials at the 11 installations said they adhered to merit princlplt>\ when making temporary appointments. However, they did not kr~l1) records adequate to prove that they did so, and merely saying s() IS III it sufficient. Under the applicable statutes and OPM instructions. ;~#Y\c’I~Y Page 1 GAO/GGD90-106 Temporary Appointment \ul hority B236993 are required to have a system for ensuring that all qualified and inter- ested job candidates are fairly and equally considered. Only by main- taming documentation can agencies demonstrate-whether to us, to OPM, or to others-their compliance with these requirements. Of 130 randomly selected appointments that we reviewed at the 11 installations, 121 lacked documentation, precluding a determination that fair and competitive practices were followed in making temporary appointments. The results from reviewing the 130 appointments are projectable to the 8,800 temporary appointments made by the 11 instal- lations. We estimate that about 8,300 of the 8,800 appointments lacked the documentation required to demonstrate fair and competitive practices.’ Agency personnel officials gave several reasons for not maintaining required documentation. For example, several of these officials said OPM’S documentation requirements are not always clearly stated. Despite these officials’ concerns about the clarity of documentation require- ments, the 11 installations either had no written procedures or, if they had them, they lacked certain elements specified or inferred in OPM’S guidance- such as the need to demonstrate that job announcements were sent to state employment offices and OPM. Personnel officials at two installations told us that they believed a system to ensure compli- ance with merit selection requirements would serve little purpose because often more temporary positions were available than applicants. However, because these officials do not document their merit selection process, they cannot demonstrate that all applicants were hired and that all those who were hired were qualified. The agencies also generally lacked adequate documentation describing the reasons for temporary appointments. However, on the basis of the information provided orally by program and personnel officials at the installations we visited, we determined the reasons for most of the 130 appointments were appropriate. That is, about 76 percent of the 130 appointments were made to fill temporary needs. However, that was not the case with the remaining 26 percent, which generally were made to fill permanent needs. Using temporary appointments to fill permanent positions appeared to be inappropriate and could violate merit princi- ples, because, whether deliberately or unintentionally, it (1) can dis- courage qualified applicants interested only in permanent positions %mpling error ratea are shown in appendix I. Page 2 GAO/GGDS&lOg Temporary Appolntmrnt Authority B-236993 from competing and (2) can give temporary employees an advantage should positions be made permanent. OPM'S guidance was not specific enough as to the kinds of situations that preclude use of temporary positions. In December 1989, OPM clarified the guidance, which now specifies situations in which temporary appoint- ments are not to be made and states that temporary appointments should be made only when no permanent need for the employee is expected. The new guidance should help ensure that temporary appoint- ments are made for appropriate reasons. For the 11 installations we visited, agency and OPM personnel manage- ment evaluations have addressed the use of the temporary appointment authority to a limited extent. We believe this limited coverage of the temporary appointment authority in these evaluations is another reason for the problems we found. However, in 1989, OPM revised its oversight approach so that evaluations will include the temporary authority through at least fiscal year 1990. We believe that OPM should (1) con- tinue to review the use and documentation of the temporary appoint- ment authority until adequate agency oversight exists and (2) consider revoking the authority for agencies that do not increase oversight and ensure compliance. In commenting on a draft of this report, the Director of OPM generally agreed with our findings. She said that the December 1989 guidance would help agencies better understand when use of the temporary appointment authority is not appropriate. She also said that additional guidance will be issued to clarify what documentation must be main- tained to demonstrate adherence to merit principles. She did not address OPM'S oversight plans beyond fiscal year 1990. Approach were being hired for appropriate reasons, we reviewed 130 random13 selected temporary appointments made by 11 installations in 6 civilian agencies during the 21-month period ending June 30, 1988. We selected these 11 installations because they were the most extensive users ()f the appointment authority of all civilian installations during that period. The installations are part of the Internal Revenue Service, Depart mnt of the Treasury; the National Park Service, Department of the Int t’rlc jr: the Department of Veterans Affairs; the Census Bureau, Departmt~nt of Commerce; the National Institutes of Health, Department of Iltkalt h ;md Human Services; and the Department of Agriculture. The results w’ Page3 GAO/GGD90-106 Temporary Appointment 4urhority B-236993 obtained from reviewing the 130 appointments can be projected to the 8,800 temporary appointments the installations made during the 2 l- month period. Because documentation we reviewed rarely described the need for or purpose of the appointments, we had to rely on statements from pro- gram and personnel officials at the 11 installations to describe the rea- sons for using the temporary appointment authority. We did our review between January 1989 and March 1990 using generally accepted gov- ernment auditing standards. Comments from OPM on a draft of this report are included on pages 14 and 15. Although we did not request written comments from the six agencies included in our review, we dis- cussed the results of our review with officials of the agencies and con- sidered their comments in preparing this report. Appendix I identifies the 11 installations included in our review and provides more information about our objectives, scope, and methodology. In January 1985, OPM revised its delegation authority to allow agencies Background to make competitive temporary appointments of 1 year or less from their own qualified applicant registers at General Schedule (GS) grades ~~-12 and below and all Federal Wage System positions. The delegated authority also allowed agencies to extend these appointments without 0PM approval in increments of up to a year, for a total amount of time not to exceed 4 years. Agencies must continue to make General Schedule temporary appointments above GS-12 from qualified applicant registers maintained by OPM; and OPM approval also is required for any temporary appointment extension beyond a total of 4 years. Before 1985, the agen- cies’ temporary appointment authority was limited to Federal Wage System positions and to General Schedule grades GS-7 and below. Also, OPM approval was required for extensions totaling more than 1 year. As shown in appendix II, competitive, temporary, full-time appoint- ments accounted for about 50 percent of all competitive, full-time, fed- eral appointments from 1984 through 1989. During this same period, competitive, temporary, full-time appointments accounted for about 6.6 percent of the federal workforce. According to OPM’S Federal Personnel Manual (PM), the purpose of dele- gating the authority was to help agencies “avoid the needless use of a permanent appointment for work that is only temporary in nature.” In Page 4 GAO/GGD9@106 Temporary Appointment Authority E-236993 January 1985, OPM described in the FPM some examples of an appro- priate need for a temporary employee as follows: uncertainty con- cerning future program funding and work-load levels, impending reorganizations, and meeting short-term work-load peaks. However, OPM gave the agencies broad authority in allowing them to use the temporary appointment authority in situations they deemed appropriate. Although OPM gave agencies broad authority to make temporary appointments, it specified other requirements, such as merit hiring pro- cedures based on fair and open competition, with which the agencies had to comply. (See app. III for details of the requirements for making temporary appointments.) In a 1987 letter, OPM stressed the requirement for following merit principles when making temporary appointments. FPM letter 3 16-23 reminded agencies of the need to maintain adequate documentation supporting their temporary appointment selection pro- cess and advised that OPM could revoke the delegated authority from an agency for inappropriate use. Agency personnel officials said that the delegated temporary appoint- ment authority allowed greater hiring efficiency and flexibility in meeting short-term work needs. However, agency officials and employee representatives alike have long expressed concerns about possible abuses of the authority for reasons such as that temporary employees are less costly than career employees because they receive fewer bene- fits and can be terminated without following formal procedures. As we reported in July 1986, such concerns were expressed after OPM first expanded the delegated authority.2 For example, employee representa- tives said that the authority could be abused if agencies were to use temporaries to meet permanent staffing requirements as a cost-saving measure. Both agency officials and employee representatives were con- cerned that the authority could result in productivity losses, increased training costs, and deterioration of a career workforce. Some abuses have been reported. Our February 1989 report on 28 judg- mentally selected temporary appointments identified what we believed were inappropriate uses of the authority.3 For example, we found merit violations in the form of an installation limiting its recruiting efforts to only agency employees and not sending vacancy announcements to cWI ‘Federal Workforce: New Authority to Make and Extend Temporary Appointments (GAO (&;I) tici- 11lBH, July 28,1986). 3Federai Workforce: Temporary Appointments and Extensions in Selected Federal AptBn<IC+1t ;.\C) GGD 8415. Feb. 23, 1989). Page 5 GAO/GGDQS166 Temporary Appointmenr Authority B236963 and state employment offices. Also, the report noted frequent documen- tation weaknesses that hindered effective reviews of appointments. For example, installations were not documenting reasons for making tempo- rary appointments as required by OPM. Further, our July 1986 and February 1989 reports cited infrequent mon- itoring of the delegated authority by both OPM and agencies. Although both agency and OPM officials said they intended to review agencies’ use of the authority as part of their normal management evaluation pro- grams, our reports cited our concerns about their review plans. We said that agency and OPM personnel management evaluations did not always cover the temporary appointment authority. Officials at the 11 installations included in our review said they had Compliance With complied with merit principles when making temporary appointments, Merit Principles Not However, because the installations did not maintain sufficient documen- Demonstrated tation, we were unable to assess their compliance. Agencies are required-by statute and OPM instruction-to have in place a system for ensuring that all qualified and interested job candidates are fairly and equally considered and that applicants are selected solely on the basis of their ability, knowledge, and skills. What Are Merit System As cited in the Civil Service Reform Act of 1978, the merit principle gov- erning recruitment requires that applicants be selected for the civil ser- Principles and Related vice solely on the basis of relative ability, knowledge, and skills, as Documentation determined through fair and open competition. Fair and open competi- Requirements? tion has two main components, as follow: (1) publicity about vacancies must be sufficient to attract a large pool of applicants from a broad spectrum of society and (2) every applicant must be fairly and equally considered. Even under the streamlined hiring procedures allowed by OPM'S delegation of appointment authority, agencies must comply with the merit system principle of fair and open competition. For example, agencies are required to notify state job service and OPM offices of vacancies for temporary appointments (5 U.S.C. 3327 and 5 C.F.R. 330.102). FPM Chapter 333, which applies to temporary employ- ment, does not specify that documentation be maintained to show when or if these vacancy announcements were sent. However, the chapter requires agencies to maintain records permitting the audit of the selec- tion process, and compliance with the requirements necessitates that such documentation be maintained. Page 6 GAO/GGLHO-106 Temporary Appointment A=thrIty B236993 FPM Chapter 333 also instructs agencies to ensure that (1) applications will be accepted on a systematic basis that ensures fair treatment for all candidates, (2) all applications accepted shall be promptly evaluated in accordance with OPM standards, and (3) qualified and available appli- cants will be considered for appointment in established priority order on the basis of veterans’ status. Agencies are to establish an applicant supply system to accomplish this process. OPM also instructs agencies to develop and have available for inspection an up-to-date copy of the detailed procedures followed in maintaining the applicant supply system. FTM Chapter 333 specifies that agencies are to maintain records so that OPM can readily determine whether persons who filed with the agency were given proper consideration. For each appointment, the records must include documentation showing l who applied and who was available by priority order on the basis of veterans’ status and l when or if an applicant was determined to be qualified. Documentation Not Although the extent to which the 11 installations maintained the required documentation varied widely, none of the 11 consistently main- Maintained tained all of the documentation that was required either explicitly or by inference in OPM guidance. We believe that the documentation is needed for judging adherence to merit principles. Therefore, the installations cannot demonstrate their compliance with federal merit system principles. Table 1 shows the documentation deficiencies we found in 121 of the 130 temporary appointments reviewed. As shown in the table, the docu- mentation deficiencies can be projected to the 8,800 appointments made by the 11 civilian installations. (Cases do not add to 121 because some had multiple deficiencies.) Page 7 GAO/GGD90-106 Temporary Appointment .4uchority - 5236993 Table 1: Merit System Documentation Deficiencies in 130 Sampled Cases Number of As percentage of Projection to Deficiency cases 130 cases 8,800 cases No documentation showing that OPM and state employment job service offices were notified (5 U.S.C. 3327 and 5 C.F.R. 330.102) 116 89% 8,000 No list showing who was available and considered for the vacancy by priority group 62 48 4,200 No documentation showing the applicant was determined to be aualified 50 38 3.500 Note: Sampling error rates are shown in appendix I. Agency personnel officials gave several reasons for not maintaining required documentation. For example, agency officials at several instal- lations said that although they sent vacancy announcements to OPM and state job service offices, they did not document the actions because there is no specific requirement to do so. The 11 installations either had no written procedures of their own for personnel specialists to follow or, if they had them, their written procedures lacked certain elements speci- fied or inferred in OPM'S guidance-such as the need to demonstrate that job announcements were sent to state employment offices and OPM. A personnel official at the Animal and Plant Health Inspection Service in Minneapolis, Minnesota, said that applicant supply files were main- tained in a decentralized manner by many clerks and personnel assist- ants and that their lack of knowledge about FPM requirements often resulted in incomplete documentation. The installation had applicant supply files that were relatively complete for the 10 appointments we reviewed. Although most of the files included listings of all those consid- ered for the positions, their priority groups based on veterans’ status, and documentation showing that vacancy announcements were sent to OPM and state employment offices, some lacked one or more of these three elements. According to agency officials, as a result of our review, the agency created an instruction booklet to be used as a guide by per- sonnel assistants and clerks who are responsible for the development and maintenance of applicant supply files. At the IRS site in Austin, Texas, and at the Veterans Affairs Medical Center in Boston, Massachusetts, personnel officials said that they did not maintain applicant supply files and supporting documentation for Page6 GAO/GGD96-106 Temporary Appointment Authority 5236993 all temporary positions because they often hired every available quali- fied applicant and therefore had more openings than applications. They said they believed that applicant supply files and supporting documen- tation would serve little purpose. However, because they did not docu- ment their merit selection process, they could not demonstrate that all applicants were hired and that all those who were hired were qualified. OPM officials said that documentation showing (1) that state job service and OPM offices were notified of vacancies, (2) which applicants were determined to be qualified, and (3) who was available in priority order on the basis of veterans’ status are important means of assuring that merit principles are followed. The officials said that if there is confusion over whether the FPM Chapter 333 requirement that agencies maintain records permitting the audit of the selection process also means that the agencies have to document sending vacancy announcements to state and OPM offices, then this should be clarified. The officials also said that OPM is currently updating FPM Chapter 333 and that the update should take into account needed clarifications in documentation requirements. We believe that an agency can demonstrate its compliance with merit system principles only with (1) knowledgeable personnel specialists, ( 2) written agency applicant supply file procedures that address all the required elements, and (3) adequately documented recruitment and appointment efforts. Not only do documentation deficiencies result in the records of personnel activity needed for OPM or agency revitbw btling incomplete or inaccurate, they also could leave an agency at risk it’ the propriety of an appointment were challenged. Appropriateness of considerable latitude in determining the appropriateness of temp ~-at-y Appointments appointments. Because documentation we reviewed rarely descritxd the need for or purpose of the appointments, we asked program and I)t’r- sonnel officials to cite the reasons for the appointments we revitbwxbti.Of the 130 temporary appointments we reviewed, 97 (75 percent) apptbared to be appropriate in that they filled temporary needs. For instanc.tb. the Bureau of the Census Site in Jeffersonville, Indiana, hired temp)r;trlt~s to fill a short-term need-compiling the results of a special agnc~~lIr I oral economic census. The Animal and Plant Health Inspection Senlc.tb Slttl in Minneapolis, Minnesota, hired temporaries to staff periodic instbc.f,tnti disease control programs. Page 9 GAO/GGD96-166 Temporary Appointnwnc \UI hority B236993 However, in 33 cases (25 percent), the appointments appeared to have been made inappropriately, usually to fill permanent staffing needs. For example, according to some installation officials, they hired individuals on a temporary basis to fill permanent positions because they wanted to train or test the employees or to judge their suitability for the positions before converting them to career appointments. Projecting to the total temporary appointments made by the 11 civilian installations in our review, we estimated that about 2,400 of the 8,000 appointments were inappr0priate.j Using temporary appointments to fill permanent positions could violate the merit principle of fair and open competition by either deliberately or unintentionally restricting competition. For example, we believe a viola- tion occurs when an agency uses a temporary appointment as a trial period to judge an employee’s performance, and later, when satisfied, requests the employee by name from an OPM certificate for a permanent appointment to the same position. This practice violates merit require- ments of fair and open competition because l the temporary appointment disguises the real character of the job, dis- couraging qualified applicants interested in a career appointment from competing for the position and l when a career appointment is made, the temporary employee would be given a competitive advantage over other applicants by virtue of his/ her temporary work experience and training. Table 2 summarizes the reasons agency officials gave for making the 33 appointments we believe to be inappropriate. %mpling error rates are shown in appendix I. 5236993 Table 2: Reasons Given by Agencies for Temporary Appointments We Deem Number of Inappropriate Reasons given for temporaries hired into permanent positions: appointments To expedite the competitive hinng process 9 Used as a tnal period pending successful completion of tramlng, testing, or a review for suitability 8 To avold a celling on permanent employment levels 5 To avoid paying employee benefits 3 Because the employee could not be reached on an OPM certificate 1 Because the employee was a temporary at another agency before being transferred to his current agency 1 Reason unknown, but the need for the employee was permanent 1 Subtotal 28 For temporaries hired into temporary positions: Hired to meet a preestablished employment level 5 Total 33 In December 1989, OPM officials recognized that agencies were using the delegated authority for inappropriate reasons and revised their gui- dance. This revised guidance expressly prohibited using the delegated authority (1) as a trial period, (2) to avoid ceilings on permanent employment levels, (3) to avoid the cost of employee benefits, or (4) to circumvent the competitive examining process. In addition, the FPM revision stated that the use of the authority is appropriate “. . . only when there is a reason to expect that there will be no permanent need for the employee. The use of temporary limited appointments for other reasons is not authorized.” This statement would prohibit agencies from using the authority to hire temporary employees for the sole purpose of expediting the hiring process. However, OPMalso developed a special needs appointment authority allowing agencies to expedite the hiring of employees for up to 30 days, pending completion of the competitive examining process. OPM is required by the Civil Service Reform Act of 1978 to review Little Monitoring of agency compliance with merit system principles and civil service laws. Agencies’ Use of the In turn, OPM requires agencies to make internal reviews of the authori- Authority ties they have been delegated. The agencies we reviewed generally Lvere not making such reviews for the temporary appointment authorlt y. some had no programs to do so. In addition, OPM’S monitoring ot’ r ht) use of this delegated authority at the installations we visited was limit 14. Page 11 GAO/GGDfKk106 Temporary Appointmrnt \uthority B-236993 The 11 installations we reviewed were part of six agencies. To determine if these agencies evaluated the installations’ use of the temporary appointment authority, we sought evaluation studies for the period from 1984 to 1989 from the agencies’ national offices and the installa- tions. We found that the use of the authority had been evaluated once at four of the installations representing three of the agencies. Among the problems found by internal reviewers at the four installa- tions were (1) no documentation of priority groups for those considered for appointments, (2) poorly constructed applicant supply files, and (3) no documentation of qualification determinations. We found some of the same problems at the installations after the internal evaluations were made. While use of the temporary authority provided agencies with benefits, one of the internal evaluation reports described the drawbacks of inap- propriate use of the authority: “Compounding this situation [high employee turnover] is the commonly accepted temporary hiring practice at the center. Specifically, several of the service chiefs have adopted the practice of hiring temporary employees under temporary appoint- ments for permanent positions. They feel that not only are temporaries easier to hire and fire than permanent, but that hiring temporaries also extends the proba- tionary period. However, these managers also believe that this practice has no nega- tive consequences in terms of recruiting and retaining quality staff because, as one chief put it, ‘the employees being hired are not interested in benefits such as health insurance.’ There appears to be little concern by these managers that in using this temporary hiring practice (1) they are compromising the spirit and intent of a career merit system; (2) they are causing a great deal of extra work for the Personnel Office which must process employees twice or even more often; and (3) they are adding to the recruitment and retention difficulties in those cases where an applicant or tem- porary employee does want the ‘security’ and benefits of a permanent appointment.” As of December 1989, in addition to the Departments of Veterans Affairs, Health and Human Services, and Commerce, which all had eval- uation programs in place, two more of the six agencies-the Depart- ments of the Interior and Agriculture-were developing such programs. Officials from each of these two agencies said their programs would include evaluations of the temporary appointment authority. According to the officials, the programs should be in operation by fiscal year 199 1. 5236993 The remaining agency-the Department of the Treasury-had an evalu- ation program in place, but the program did not require review of tem- porary appointments. A Treasury official said that temporary appointments were sometimes reviewed at headquarters but not in regional offices due to a lack of staff. We looked at whether OPM had evaluated the installations’ use of the temporary appointment authority. We found that OPM made 15 per- sonnel management evaluations at the 11 installations during the 1984 to 1988 period. However, the temporary appointment authority was not always part of those evaluations because reviews of delegated authori- ties were outside the scope of these evaluations. OPM reviewed tempo- rary appointment authority at only two of the installations. No deficiencies in the temporary appointment process were cited. OPM revised its evaluation approach in October 1988 to specifically require a review of agencies’ compliance with delegated appointment authorities for fiscal year 1989. Under the revised approach, OPM is to annually select specific issues to be reviewed at about 20 percent of all installations with over 500 staff and provide evaluators with guidelines to follow in making the evaluations. OPM officials said they will require evaluators to review delegated authorities again in fiscal year 1990. Under the new approach, there is no assurance that temporary appoint- ments will be reviewed on a regular basis because issues selected for review may change from one year to the next, depending on what CIPM officials identify as problems needing study. Because agency evalua- tions-a chief source from which OPM discovers problems needing study- are not always done, OPM may find it difficult to determine whether the temporary appointment authority should be included in future governmentwide reviews. From a practical perspective, we endorse the delegation of appointment Conclusions authority to agencies to meet their staffing needs. While most of the temporary appointments we reviewed were made for appropriate rea- sons, we believe 25 percent were not. However, OPM'S revised guidance should help agencies better understand when the use of temporary appointments is not appropriate. Agencies must gain greater appreciation for the need to comply with the documentation requirements involving their use of the temporary appointment authority. Most of the appointments we reviewed were not fully documented and lacked multiple pieces of required documentation. Pye 1s 6AO/GGlMWoITcqauy Appointment Amtbodty - Ix236993 Agency personnel officials said one reason for the missing documenta- tion was unclear guidance. For example, officials said they did not docu- ment sending vacancy announcements to OPM and state job service offices because there is no specific requirement to do so. Because FPM chapter 333 requires documentation of the selection process to permit auditing, to avoid further confusion, OPM needs to clearly state that doc- umentation of vacancy announcement distribution is required. Documentation requirements should not be viewed as bureaucratic “make work.” Inadequate documentation precludes an assessment of whether all qualified applicants received a fair and competitive chance for employment- which is a merit principle stipulated by law. Without adequate documentation, the potential exists for agencies to intention- ally or unintentionally make appointments on a basis other than merit. The oversight process can uncover inadequate documentation and high- light the importance of adequate documentation. Unfortunately, not all of the agencies we reviewed had, or plan to have, oversight programs to review their personnel management actions, including use of the tempo- rary appointment authority. The lack of agency-based evaluations places a greater burden on OPM to ensure that the appointment delega- tions it makes to agencies are being carried out properly. We believe that OPM should oversee use of the delegated authority on a regular basis until adequate agency oversight exists. Further, if, over time, OPM finds that agencies do not increase oversight and ensure compliance, OPM should consider revoking the authority from the noncomplying agencies. To better ensure that agencies comply with temporary appointment Recommendations statutes and OPM instructions, we recommend that the Director of OPM . revise F'PM instructions to specify that agencies must maintain documen- tation to show that vacancy announcements were sent to OPM and state job service offices and . continue to review, on a regular basis, agencies’ use of and documenta- tion for the temporary appointment authority and consider revoking the authority from noncomplying agencies. Agency Comments of OPM said that she shares our concern that in a substantial number of cases agencies failed to maintain sufficient documentation of compliance with statutory and regulatory requirements. She said that additional Page 14 GAO/GGtMO-106 Temporary Appointment .4urhority 5236993 guidance will be issued to make clear exactly what agencies must do when making temporary appointments and exactly what records of these actions must be maintained. She also said that the December 1989 guidance should help agencies better understand when use of the tempo- rary appointment authority is not appropriate. The Director disagreed with our draft report’s characterization of OPM’S personnel management evaluations as infrequent, although she acknowledged that such evaluations have not previously included uni- form case sampling and uniform reporting requirements for the review of temporary appointments. To address the Director’s concern, we revised our language to more clearly stress our point that the evalua- tions’ coverage of temporary appointments at the installations we vis- ited was limited. In addition, the Director said that OPM’S evaluation approach was revised for fiscal year 1989 and included a specific review of temporary appointments in fiscal years 1989 and 1990. Further, the Director said that OPM’S findings in fiscal year 1989 were largely consis- tent with our findings, but her comments did not address OPM’S oversight plans beyond fiscal year 1990. As arranged with the Subcommittee, unless you publicly announce its contents earlier, we plan no further distribution of this report until 30 days from its issue date. At that time, we will provide copies of this report to OPM, to the agencies where we did our work, and to others upon request. The major contributors to this report are listed in appendix V. If you have any questions, please call me on 275-5074. Sincerely yours, Bernard L. Ungar Director, Federal Human Resource Management Issues Page 15 GAO/GGD9@106 Temporary Appointment Authority -- Contents Letter Appendix I 18 Objectives, Scope,and Methodology Appendix II Federal Nonpostal Competitive Full-Time Temporary and Permanent Appointments, Calendar Years 1984 1989 Appendix III Requirements for Making Temporary Appointments for the Period Covered by Our Review Appendix IV 23 Comments From the Office of Personnel Management Appendix V 26 Major Contributors to This Report P8ge 16 - Contents Tables Table 1:Merit System Documentation Deficiencies in 130 8 Sampled Cases Table 2: Reasons Given by Agencies for Temporary 11 Appointments We Deem Inappropriate Table I. 1: Installations Included in Our Review, 19 Temporary Appointments Made, and Appointments Sampled Table 1.2: Sampling Errors for Population Estimates 19 Shown in the Text Abbreviations Code of Federal Regulations Federal Personnel Manual General schedule Office of Personnel Management Standard Fom Appendix I Objectives, Scope,and Methodology At the request of the Chairman, Subcommittee on Civil Service, House Committee on Post Office and Civil Service, we reviewed the use of the temporary hiring authority that was delegated to agencies by OPM in January 1985. Our objectives were to determine (1) whether selected agencies’ use of the temporary appointment authority complied with merit selection requirements and (2) whether those agencies were making temporary appointments for appropriate reasons. We reviewed temporary appointments made by the 11 installations that made the most use of the authority during the 21-month period ending June 30, 1988. The installations represented six civilian agencies. As requested, we excluded the Department of Defense and its agencies and services. In selecting the 11 installations, we obtained statistics on tem- porary appointments from OPM'S Central Personnel Data File but did not attempt to verify the accuracy of the information contained in the file. During the 21-month period ending June 30, 1988,873 installations made 51,981 temporary appointments from their own registers. The 11 installations that made the most use of the authority made 8,800 tempo- rary appointments, or 16.9 percent of all appointments made in the 21- month period. We randomly selected a total of 130 appointments from those made by the 11 installations. Our selection was made by randomly selecting (1) 15 appointments from each of the four installations that used the authority the most and (2) 10 appointments each from the remaining seven installations. The installations, the total appointments made in the 21-month period, and the appointments we selected are shown in table I. 1. We designed our sample selection to represent the 8,800 appoint- ments made by the 11 installations during the period covered by our review with a confidence level of 96 percent and a sampling error within plus or minus 10 percent. The sampling errors for the percentages shown in the report are all less than 10 percent. The sampling errors for population estimates are shown in table 1.2. Page 18 GAO/GGD9@106 Temporary Appointment Authority Appendix I Objectives, Scope, and Methodology Table 1.1: Installations Included in Our Review, Temporary Appointments Made, Appointments and Appointments Sampled Installation Made Samoled Veterans Affarrs Me&al Center, Boston, Massachusetts 1,328 15 Internal Revenue Servrce, Richmond. Virginra 1,182 15 Bureau of the Census, Jeffersonville, Indiana 1,054 15 National Institutes of Health, Bethesda, Maryland 902 15 National Park Service, San Francisco, California 715 10 Internal Revenue Service, Austin, Texas 663 10 National Park Service, Boston, Massachusetts 656 10 Veterans Affairs Medical Center, Northport, New York 625 10 National Park Service, Washington, DC 577 10 Internal Revenue Service, Holtsville, New York 548 10 U.S. Department of Agriculture, Animal and Plant Health Inspection Servtce, Minneapolis, Minnesota 548 10 Totals 8.800 130 Table 1.2: Sampling Errors for Population Estimates Shown in the Text Representation in the population of Page number in 8,800 cases” report Deficiency Estimate Sampling error 2 Lacked documentation to demonstrate fair and competitive practices 8,300 r 300 -~ 8 No documentation showing OPM and state employment job service offices were notified 8,000 * 300 8 No list showing who was available and considered by priority group 4,200 f 500 8 No documentation showing the applicant was determined qualified 3,500 -~ r 600 10 Appointment made for inappropriate reasons 2,400 - 500 aEstimates and errors are rounded to the nearest 100 Page 19 Appendix II Federal Nonpostal Competitive FulLTime Temporary and Permanent Appointments, Calendar Years 19841989 White-collar 1984 1985 1986 1987 1988 1989 Number of temporary appointments 70,770 78,490 55,723 82,033 61 745 49,461 Number of permanent appointments 73,814 83,086 69,552 93,551 08,887 72,053 Total white-collar appointments I I 144,584 161,576 125,275 175,584 150,632 121.514 Temporary appointments as a percent of white-collar appointments 489 486 44.5 467 41 0 407 Blue-collar Number of temporary apporntments 32,507 33,377 23,903 34,370 20849 19.826 Number of permanent appointments 8,339 9,870 6,110 7,131 7,828 8,567 Total blue-collar apporntments 40,846 43,247 30,013 41,501 28.677 28,393 Temoorarv aboointments as a oercent of blue-collar apporntments 79.6 77 2 79.6 828 72 7 69 8 All employees Number of temporary appointments 103,277 111,867 79,626 116,403 82,594 69,287 Number of permanent appointments 82,153 92,956 75,662 100,682 96,715 80,620 Total appointments 185,430 204,823 155,288 217,085 179.309 149,907 Temporarv appointments as a percent of total apporntments 55.7 54.6 51.3 53.6 46 1 46 2 Note The most recent data avariable for calendar year 1989 was through September 1989 Source. Offlce of Management and Budget Turnover Reports prepared by OPM. Page 20 GAO/GGD9@106 Temporary Appointment \u I hority Appendix III Requirements for Making Temporary Appointments for the Period Covered by Our Review OPMis responsible for establishing policies and guidelines on hiring fed- eral employees. With few exceptions, appointments to positions in the federal govern- ment are to be made competitively from registers of qualified applicants who have been evaluated by OPMand ranked on the basis of their rat- ings. However, agencies may make appointments from their own regis- ters if OPMhas delegated the authority to the agencies to do so. OPMhas made such a delegation to agencies for the hiring of temporary employees. As specified in 5 CFR316.402 (a), “[an] agency may make and extend a temporary limited appointment only with specific authorization from [OPM].. 9" In January 1985, OPM provided authorization to agencies to make temporary appointments from agency registers. FPMletter 3 16-2 1 delegated to agencies the authority to make appointments for up to 1 year for all Federal Wage System and General Schedule (GS) positions up to grade ~~-12. Additionally, the letter authorized agencies to extend temporary appointments in increments of 1 year or less and up to a total of 4 years without prior OPMapproval. When exercising the authority, agencies must adhere to competitive and merit selection practices. Merit selection practices require that agencies give fair and equal considera- tion to ail applicants, applying applicable veterans’ preference rules. The FPMletter lists examples of appropriate uses of the authority as follows: . filling any vacancies in commercial activities that are being considered for contracting out (under Office of Management and Budget Circular A- 761, l staffing continuing positions when future funding and work-load levels are uncertain or when it is anticipated that funding levels will be reduced or that the activity will be reorganized, and . filling permanent positions temporarily in order to save them for even- tual incumbency by career or career-conditional employees expected to be displaced from other activities or organizations. The letter further states that in “these and other situations which the agency determines to be appropriate, temporary limited appointments may be made, and extended without prior approval from OPM ." OPMfurther specifies that agencies are to document the reason for a rem- porary appointment on the appointment’s Notification of Personnel Page 21 GAO/GGD-90-106 Temporary Appointment Authority Requirements for Making Temporary Appointments for the Period Covered by Our Review Action, Standard Form (SF) 50. The requirement is contained in FPMSup- plement 296-33. FPMchapter 333 requires agencies to “comply with the merit principles of open competition, fair evaluation of qualifications, and selection solely on the basis of merit and fitness” when making temporary appointments outside of OPMregisters. The chapter also requires that “certain operations must be performed and records maintained so that the agencies may readily operate an applicant supply system that observes the principles of the merit system and so that [OPM]can readily determine whether persons who filed with the agency were given proper consideration.” Information to be maintained includes . title of position for which application is made, l priority group (based on veterans’ status) assigned each applicant and available applicants in higher priority groups, . date application received, . date applicant was determined qualified, and . selection date. In addition to the ITM requirements, 5 U.S.C. 3327 and 5 C.F.R. 330.102 require agencies to notify OPMand state job service offices of openings before they can make temporary appointments from their own registers. Page 22 GAO/GGIHO-106 Temporary Appointrnrrrt \UI hority Appendix IV Comments From the Office of PersonnelManagement UNITED STATES OFFICE OF PCRBONNEL MANAGEMENT WASH,P(OTOP(. D.C. 204 1I Mr. Richard L. Foge 1 Assistant Comptroller General U.S. General Accounting Office Washington, DC 20548 Dear Mr. Fogel: We appreciate the opportunity to comment on the draft GAO report entitled: Federal Workforce: Selected Installations Cannot Demonstrate Fair and Open Competition for Temporary Jobs. Our specific comments on the draft report are as follows: Appropriateness of Temporary Appointments One focus of the review was the appropriateness of the temporary Now on p. 15. appointments made. As the draft report indicates on page 18, however, OPM recently issued guidance on non-permanent employment that "should help agencies better understand when use of temporary appointments is not appropriate." New OPM guidance advises agencies that it would be inappropriate to use temporary employment to: 0 Avoid the cost of employee benefits or ceilings on permanent employment levels: 0 Try out employees prior to permanent appointment: 0 Circumvent the competitive examining process by appointing an individual on a temporary basis because the individual is not within reach for permanent appointment; or 0 Refill positions which, over the preceding 4 years, have been filled continuously on a temporary basis. Page23 Appendix IV Comments FromtheOffice of Personnel Management -2- Documentation We share your concern that in a substantial number of cases reviewed, agencies failed to maintain sufficient documentation showing compliance with statutory and regulatory requirements. To remedy this situation, we plan to issue additional guidance in the Federal Personnel Manual to make clear exactly what agencies must do when making temporary appointments outside the register and exactly what records of these actions must be maintained. Frequency of OPM Personnel Management Evaluations The GAO report also covered the frequency of OPM personnel management evaluations (PMEs) on temporary employment. The report says that "Agency and OPM personnel management evaluations have been infrequent and did not always cover the temporary Now on pp. 3, 6, and 11-13 appointment authority..." (p. 4; see also pp. 7-8, 15, and 17). "Infrequent" does not accurately describe OPFl's installation level PME effort, especially under the Installation Assessment Visit (IAV) program during 1984-88. This agency conducted IAVs at 3,365 installations during that period, an average of 673 a year. And, as your report indicates, "OPM made 15 personnel management evaluations at the 11 installations [in the GAO Now on p. 13 sample] during the 1984 to 1988 period" (p. 17). It is true that OPM's IAV agenda did not include uniform case sampling and reporting requirements for the review of temporary appointments: rather, the evaluator rated installation compliance on a 4-point scale against the following standard on the IAV Staffing Checklist: "Procedures from FPM Chapters 213, 302, 316, and 333 are used for excepted/outside-the-register appointments." (This item covers temporary appointments outside the register together with excepted appointments.) Evaluators based ratings on installation policy and procedures and, time permitting, a review of placement records such as the applicant supply file (OPM Operations Letter 273-1013). Thus, during the IAV cycle from 1984 to 1988, OPM covered temporary appointments largely from a procedural standpoint. AS your report observes, however, OPM adopted a new approach beginning in FY 1989: both FY 19R9 and 1990 reviews include ;1 governmentwide review of temporary appointments. These reviews entailed examination of a sample of temporary cases from Page 24 GAO/GGD90-106Temporary Appointmrnt .\uthority - Appendix lV CommentsFrom the Office of Personnel Management -3- a regulatory perspective in addition to a review of procedural requirements. Our findings in FY 1989 are Largely consistent with your findings. OPM also reviews temporary appointments in Agency-Level Reviews and Targeted Installation Reviews, when called for by the review agenda. Thank you for giving us the opportunity to comment on the draft report. Sincerely, Constance Berry Newman Director Page 25 GAO/GGD9@106Temporary Appointment Authority Appendix V - Major Contributors to This Report General Government Management Issues Division, Washington, Thomas Davies, Assignment Manager D-C. ’ - ~;~;~n,?,;;;l;$&ator Don D. Allison, iechnical Advisor Denver Regional Mary A. Crenshaw, Site Senior Office Miguel A. Lqjan, Evaluator (966368) Page 26 GAO/GGIM@lOtI Temporary Appolntmrnt ~~ulhorlty
Federal Workforce: Selected Sites Cannot Show Fair and Open Competition for Temporary Jobs
Published by the Government Accountability Office on 1990-09-05.
Below is a raw (and likely hideous) rendition of the original report. (PDF)