oversight

Personnel Practices: The Department of Energy's Use of Schedule C Appointment Authority

Published by the Government Accountability Office on 1990-03-08.

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

               United   States   General   Accounting   Office   %


GAO            Report “‘tothe Chairman, Subcommittee
               on Civil Service, Committee on Post
               Office and Civil Service, House of
               Representatives

March   1990
               PERSONNEL
               PRACTICES
               The Department of
               Energy’s Use of
               Schedule C
               Appointment
               Authority
             United States

GAO          General Accounting  Office
             Washington, D.C. 20648

             General Government         Division

             B-229415

             March 8, 1990

             The Honorable Gerry Sikorski
             Chairman, Subcommittee on Civil Service
             Committee on Post Office and Civil Service
             Houseof Representatives

             Dear Mr. Chairman:

             This report respondsto your January 31, 1990, request for information
             on ScheduleC employeesat certain offices within the Department of
             Energy (DOE). More specifically, you asked us to identify the current
             number of ScheduleC employeesin DOE’S Office of Public Affairs and
             Office of Congressionaland Intergovernmental Affairs and to verify
             that these employeesoccupied positions that had been approved by the
             Office of Personnel Management(OPM) as required.

             On February 7,1990, we briefed the Subcommittee on the results of our
             work. In addition to providing the requested information, we advised
             the Subcommittee that DOE had detailed three of its permanent Schedule
             C employees directly to the White House, a practice we criticized in ear-
             lier reports as an inappropriate use of ScheduleC appointment author-
             ity.’ As requested, this report summarizes information provided at that
             briefing.


             ScheduleC positions are positions excepted from the competitive service
Background   becausethey are either policy determining or involve a close and confi-
             dential working relationship with a key official2 A key official can be a
             presidential appointee, another ScheduleC appointee, or an SESmember
             who is not occupying a position reserved for career membersof the SES.
             ScheduleC appointees may not report to or through officials in the com-
             petitive service and a close and confidential working relationship does
             not exist unless the appointees are subject to the immediate supervision
             of the key official.
             OPM must approve not only the establishment of each permanent Sched-
             ule C position but also any subsequentposition changes,such as in title,
             grade, immediate supervisor, and organizational location. OPM’S approval

             ‘Personnel Practices: Federal Employees Detailed From DOD to the White House (GAO/GGDELS33,
             Mar 14,1988) and PersonnelPractices: Detailing of Federal Employees to the White House(GAO/
             GGD-87.lOZBR,     July 22, 1987).

             “See 5 CFR 213.3301 et seq. and Chapter 213 of the Federal Personnel Manual.




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B-229416




whether or not the employee was in a permanent or a temporary posi-
tion. We compared this list to (1) a DOE report updated through February
1, 1990, listing all permanent and temporary ScheduleC employeesand
(2) OPM position certification documents maintained at DOE.

To determine whether OPM approved all ScheduleC positions located in
these two LWE offices, we discussedwith an OPM official the processOPM
follows in approving ScheduleC positions. We compared DOE'S list of
ScheduleC positions with OPM's records of approved and occupied posi-
tions. These records included OPM'S most recent ScheduleC Position and
Incumbent List and its log of approved positions through February 1,
1990. We also reviewed OPM'S records for all DoEoccupiedpositions to
verify the accuracy of OPM'S Position and Incumbent List.

We visited the work station for each ScheduleC employee in DOE'S
Offices of Public Affairs and Congressionaland Intergovernmental
Affairs and examined the telephone directory to verify that employees
were located in the office that OPM had approved.

During our review, we noted that DOE had detailed three ScheduleC
employeesto the White House.These details were from offices not origi-
nally included in our review. However, becauseof our earlier concerns
with this practice, we reviewed the circumstancessurrounding these
details. We reviewed the personnel folders for the ScheduleC employees
on detail to the White House to document the beginning and ending
dates for the detail, the dates entered on duty, OPM'S approval of the
ScheduleC position at DOE, and the agreementsfor reimbursement. We
discussedwith DOE officials whether the employeeswere hired directly
for the White House,whether the White House had reimbursed DOE, and
whether DOE had reported the details to the Senate and House Commit-
tees on Appropriations, as required by law.
Our work was done in February 1990 at DOE and OPM headquarters in
Washington, DC., and in accordancewith generally acceptedgovern-
ment auditing standards.




page3
                       B229416




                       DOE records show that three permanent ScheduleC employees were
Inappropriate Use of   detailed to the White House from DOE’s Office of the Secretary and
Schedule C             Office of Managementand Administration. As of February 1, 1990,
Appointment            these employeeshad been detailed for periods ranging from 123 to 374
                       days. While these offices were not originally included in our review, we
Authority              included them becauseof our previous concernswith details. In review-
                       ing the justification for these positions, we found that DOE had provided
                       inaccurate information to OPM in requesting approval to establish them.

                       DOE did not comply with OPM'S regulations and guidelines for ScheduleC
                       excepted service appointments. These regulations and guidelines pro-
                       vide that agencies,upon specific authorization by OPM, may make
                       appointments to positions that are policy determining or that involve a
                       close and confidential working relationship with a key official. OPM
                       approves ScheduleC positions on this basis and requires that ScheduleC
                       employeesbe supervised directly by the key official. Any changesto
                       this supervisory relationship must be approved by OPM.

                       At the time DOE provided information to OPM requesting permanent
                       authorization for these positions, the individuals proposed for the posi-
                       tions were temporary ScheduleC employees and had already been
                       detailed to the White House for periods ranging from 61 to 182 days.
                       However, DOE prepared position descriptions that showed that the posi-
                       tions were located within DOE and that the relationship between the
                       ScheduleC employee and the key official was confidential in nature. The
                       position descriptions were signed by DOE officials who certified that (1)
                       the descriptions were accurate statements of the major duties and
                       responsibilities for the positions, (2) the positions were located in DOE,
                       and (3) that the positions were necessaryto carry out government
                       functions.

                       An OPM official told us that OPM approves ScheduleC positions on the
                       basis of the paperwork submitted by the agencies.As a practical matter,
                       OPM does not verify the accuracy of the paperwork nor does it review
                       agencies’use of ScheduleC appointment authority. As a result, unless
                       otherwise informed, OPM has no way of knowing if such positions are
                       being created for detailing.

                       When OPM approved the ScheduleC positions, DOE had already detailed
                       the incumbents to the White House.Therefore, the confidential relation-
                       ship between the incumbents and the key DOE officials, the basis for a
                       ScheduleC appointment, no longer existed. In addition, DOE did not
                       request approval from OPM to changethe supervisory relationships.


                       Page 5                 GAO/GGIHKMl DOE’s Use of ScheduleC Appointment Authority
                   E.229416




                   if the detail extends beyond 180 days. The law also requires the Presi-
                   dent to submit an annual report to Congressshowing the number of
                   employees detailed to the five specified offices over 30 days and the
                   reimbursements made to agenciesfor employeesdetailed more than 180
                   days in a fiscal year.

                   DOE  had not billed the White House for the two ScheduleC employees
                   whose details had exceeded180 days. As of February 1,1990, the bills
                   for these two employees were 66 and 94 days overdue. An official from
                   DOE's Office of Headquarters Accounting Operations told us that DOE'S
                   procedures call for billing the White House on a quarterly basis when
                   details are for an indeterminate length of time. Although the Director,
                   Office of Personnel and Career Development claimed that notification of
                   these details had been forwarded to Headquarters Accounting Opera-
                   tions, the accounting staff had no record of having received the notifica-
                   tions. On February 16, 1990, DOE arranged with the White House to
                   expedite reimbursement totaling about $10,000 for these two details. On
                   February 23, 1990, DOE prepared a procedure to improve controls over
                   the transmission of reimbursable detail agreementsbetween the Office
                   of Personnel and the Office of Headquarters Accounting Operations.

                   In our earlier reports, we also found that the 13 departments were not
                   billing the White House for their employeesdetailed over 180 days in a
                   fiscal year to perform White House functions. In the March 1988 report,
                   White House officials said they had instituted new procedures starting
                   in fiscal year 1988 to ensure that agenciesare reimbursed when appro-
                   priate. One official said that the White House Office, in accordancewith
                   the new procedures, would monitor those agenciesthat do not request
                   reimbursement. However, the official said that responsibility for
                   requesting payment must remain with the detailing agency.


                   Public Law 100-202, which was enacted on December21, 1987, gener-
Details to Other   ally requires executive branch agenciesto submit annual reports to the
Agencies Are Not   Senate and House Committees on Appropriations on employeesdetailed
Being Reported     to other agenciesincluding the White House. The Director of DOE's Office
                   of Personnel and Career Development said he was unaware that such a
                   requirement existed and therefore no such reports had been prepared.

                   In order to determine if this was an isolated situation, we checked with
                   officials at the Department of Agriculture and at the Department of
                   Health and Human Servicesto seeif those agencieswere preparing the
                   annual reports. We selectedthese agenciesbecauseof their size. The


                   page7                  GAO/GGMO-61 DOE’sUse of Schedule C Appointment Authority
                    5229416




                    assure that they continue to be prepared in the future. We also recom-
                    mend that the Secretary implement, without delay, the proceduresthat
                    were recently prepared to assurethat agenciesare promptly billed for
                    such details.

                    On the basis of our findings at DOE and our earlier work on details to the
Recommendationsto   White House,we recommendthat the Director of OPM require agenciesto
the Director, OPM   certify in their applications that ScheduleC positions are not being
                    established solely or primarily for details. We also recommendthat the
                    Director of OPM disapprove applications that do not contain this certifi-
                    cation In addition, we recommendthat the Director of OPM periodically
                    monitor agencies’use of ScheduleC employeesfor compliance with its
                    regulations and guidelines.
                    Finally, we recommend that the Director, OPM, reemphasizeto agencies
                    that ScheduleC employees can only occupy positions in the agency that
                    OPM approves. It should make clear that any changesto these assign-
                    ments must be approved by OPM and it should also encourageagenciesto
                    submit annual reports as required by Public Law 100-202.


                    A draft of this report was discussedwith DOE and OPM officials. They
                    generally agreed with the facts presented and their comments were con-
                    sidered in preparing our final report.

                    As arranged with the Subcommittee,we plan no further distribution
                    until 30 days from the date of this report unless you releaseit earlier. At
                    that time, we will send it to the Secretary of Energy, the Director of OPM,
                    and other interested parties upon request.




                    page9
Page 11   GAO/GGD9O-61DOE’sUse of Schedule C Appointment Authority
---,.,-   .- ,,,,..,.- -.. .
Appendix

Major Contributors to This Report


                        Norman A. Stubenhofer, Assistant Director, Federal Human Resource
General Government        Management Issues
Division, Washington,
                -       Helen Fauntleroy, Senior Evaluator
D.C.                    James J. Grace, Senior Evaluator
                        Katrina L. Miller, Clerk Typist


                        Jeffrey S. Forman, Senior Attorney
Office of the General
Counsel, Washington,
D.C.




                        Page 12               GAO/GGD90-61DOE’sUse of ScheduleC Appointment Authority
Is229416




Major contributors to this report are listed in the appendix. Pleasecon-
tact me at 275-5074 if you or your staff have any questions concerning
the report.
Sincerely yours,




Bernard L. Ungar
Director, Federal Human Resource
  Management Issues




Page 10                GAO/GGD9081 DOE’sUse of schedule C Appointment Authority
                    B-229416




                    officials told us that they were not aware that such reports were
                    required and therefore the reports had not been prepared.


                    DOE followed OPM'S regulations and guidelines when it established 19
Conclusions         permanent ScheduleC positions in its Offices of Public Affairs and Con-
                    gressional and Intergovernmental Affairs. However, as our previous
                    reports have stressed,WE'S hiring of three persons and immediately
                    assigning them to the White Housewas an inappropriate use of Schedule
                    C appointment authority. The purpose of this authority is specifically to
                    facilitate the employment of policymakers and confidential assistants
                    within the agency for which the positions are established. This purpose
                    is frustrated when positions are created for someother use.
                    We continue to believe that a go-day prohibition against detailing Sched-
                    ule C employees would be appropriate and that OPM should reconsider
                    our previous recommendation. In addition, we believe OPM'S approval
                    process for ScheduleC positions needsto be strengthened to preclude
                    the inappropriate hiring of ScheduleC employeesby agenciesfor the
                    purpose of detailing them to the White House. In our view, OPM should
                    not approve ScheduleC positions being established solely or primarily
                    for the purpose of detailing. In addition, OPM should (1) require agencies
                    applying for a ScheduleC position to certify that the position is not
                    being established for that purpose and (2) periodically monitor agencies’
                    use of ScheduleC employees for compliance with its requirements.

                    DOE did not bill the White House on time for two details during fiscal
                    year 1989 and had not prepared reports on details during fiscal year
                    1989 for the Senate and HouseCommittees on Appropriations. We
                    believe that, in order to comply with its own billing practices, DOE needs
                    to implement procedures that make sure that agenciesare billed on time.
                    We also believe DOE needsto implement procedures to assure that
                    required reports on detailed employeesare prepared in accordancewith
                    law.


Recommendationsto   We recommendthat the Secretary of Energy discontinue the practice of
                    hiring ScheduleC appointees and assigning them immediately to the
the Secretary of    White House.We also recommendthat the Secretary report the three
Energy              details to OPM and not renew them at their conclusion.

                    Additionally, we recommendthat the Secretary of Energy prepare the
                    reports on details for fiscal year 1989 and implement procedures to


                    Page 8                 GAO/GGD9041 DOE’sUse of ScheduleC Appointment Authority
                        Thus, DOE'S action was an inappropriate use of ScheduleC authority
                        becausean immediate detail to the White Housedoes not facilitate the
                        employment of policymakers and confidential assistants in the agency
                        for which the position was established.

                        WE'S  Special Assistant to the Secretary and White House Liaison told us
                        that DOE had hired the employeesunder ScheduleC authority for detail
                        to the White House.She said that two of these employeesnever worked
                        at DOE and that the third did only for a brief time as a temporary Sched-
                        ule C employee. This official said that the employees are supervised on a
                        daily basis by a White House official and not the DOE supervisor that OPM
                        had approved. The official told us she did not believe anything improper
                        had been done and was not aware that ScheduleC position changes
                        neededto be approved by OPM.
                        In 1987 and 1988, we reported on the practices of 13 federal depart-
                        ments, including DOE, in detailing employeesto the White House.We
                        found that each of the departments had inappropriately detailed Sched-
                        ule C employees to the White Houseunder circumstances similar to
                        those described in this report. In our March 1988, report we recom-
                        mended that OPM issue regulations prohibiting the detailing of Schedule
                        C appointees within 90 days of appointment. We reported that such
                        action would preclude the inappropriate use of ScheduleC authority
                        without precluding the White House or federal agenciesfrom using
                        Schedule C employeesto help meet their staffing needs.Even with adop-
                        tion of such a prohibition, the White House and federal agencieswould
                        still have the option to directly appoint and pay their own ScheduleC
                        employees.
                        The former OPM director disagreed with our recommendation. She said
                        that if there was a legitimate need for an immediate detail of a Schedule
                        C appointee to the White House,such a regulation would only serve as
                        an obstacle to delay the accomplishment of an Administration task.


                        Public Law 95-5’70,dated November 2, 1978, provides for detailing
Delays in Billing the   employees on a nonreimbursable basis to five White House offices-the
White House for         White HouseOffice, the Executive Residenceat the White House,the
Details Over 180 Days   Office of the Vice President, the Office of Policy Development, and the
                        Office of Administration. Thesenonreimbursable details must not
                        exceed 180 calendar days in a fiscal year. When the detailed employee is
                        performing services that would otherwise be performed by White House
                        employees,the White Houseis required to reimburse the lending agency


                        Page6                  GA0,‘GGD90-61DOE’sUse of Schedule C Appointment Authority
                                       5229416




                                       As of February 1,1990, DOE had 19 permanent ScheduleC positions in
Approvals Were                         the Office of Public Affairs and in the Office of Congressionaland Inter-
Obtained for the                       governmental Affairs. The following table shows the actual physical
Schedule C Positions                   locations of these 19 permanent poskions, as well as eight temporary
                                       positions that did not require OPM'S approval.
We Reviewed
Table 1: Schedule C Positions in
Selected WE Officea, February 1,199O                                                                  Poritions
                                       DOE office                                         Permanent     Temporary   Total
                                       Public Affairs                                             8             5     13
                                       Congressional    and Intergovernmental   Affairs          11             3     14
                                       Total                                                     19             8     27


                                       We reviewed the circumstancessurrounding the approval of these 19
                                       permanent ScheduleC positions and found that OPM'S and DOE’S records
                                       were in agreement for 16 of the positions. There was some discrepancy
                                       for the remaining three positions. OPM had approved one position for the
                                       Office of Congressionaland Intergovernmental Affairs while DOE
                                       showed the location of the position to be in the Office of Public Affairs.
                                       DOE officials told us that this organizational change resulted from a
                                       recent reorganization and that they were not aware such changes had to
                                       be reported to OPM. In addition, OPM's reports showed that two positions
                                       were located in the Office of the Secretary while DOE reported that one
                                       of the positions was in the Office of Public Affairs and the other was in
                                       the Office of Congressionaland Intergovernmental Affairs. OPM'S
                                       records showed that it had approved the positions for the locations
                                       reported by DOE, but OPM's report erroneously listed these two positions
                                       within the Office of the Secretary.

                                       In reviewing OPM's Position and Incumbent List, we found that OPM
                                       included three positions in the Office of Congressionaland Intergovern-
                                       mental Affairs that were not reported by DOE. DOE officials told us that
                                       two of these positions were vacant as of October 1989 but for some rea-
                                       son had not been reported to OPM, as required. They said that the third
                                       position was vacated in January 1990. DOE reported this latest changeto
                                       OPM, but OPM had not received the report at the time of our review. DOE
                                       officials told us that they would submit the required documents for
                                       OPM'S approval of the changesthat occurred in 1989.




                                       page4
                        5229416




                        of a ScheduleC position is revoked immediately when the position is
                        vacated. Even though agenciesmust obtain OPM approval for permanent
                        ScheduleC positions, agenciesmay establish temporary ScheduleC posi-
                        tions without OPM'S approval immediately following a changein the
                        presidential administration or within 1 year following the changeof an
                        agency head or the creation of a new agency.Each temporary appoint-
                        ment is restricted to a 120-day period, which may be extended once for
                        an additional 120 days. Temporary positions may also be converted to
                        permanent ScheduleC positions by obtaining OPM approval.


                        As of February 1, 1990, DOE had 8 permanent ScheduleC positions in the
Results in Brief        Office of Public Affairs and 11 in the Office of Congressionaland Inter-
                        governmental Affairs, DOE complied with OPM'S regulations and guide-
                        lines in establishing these 19 positions. However, M)E had not reported
                        to OPM changesto ScheduleC positions in these two offices that it made
                        during 1989 although it was required to do so. DOE officials said they
                        would notify OPM of these changesafter we brought the matter to their
                        attention.

                        In addition to establishing the above 19 positions, DOE used ScheduleC
                        appointment authority to hire three permanent employeesand detail
                        them directly to the White Housein 1989. We believe these three actions
                        were inappropriate since, in obtaining OPM approval for these positions,
                        DOE had certified that the positions and the appointees would be located
                        within DOE. Use of ScheduleC authority to create positions in DOE solely
                        for the White House’suse frustrates the purpose of this authority. In
                        addition, DOE did not follow its proceduresin billing the White House for
                        two of the details and did not annually report the details to the Senate
                        and House Committees on Appropriations as required by law.

                        Our objectives were to determine (1) the number of ScheduleC positions
Objectives, Scope,and   in DOE'S Office of Public Affairs and Office of Congressionaland Inter-
Methodology             governmental Affairs as of February 1, 1990; (2) whether OPM had
                        approved these positions; and (3) whether the employeeshired to
                        occupy these positions were located in the office approved by OPM.
                        To determine the number of ScheduleC positions, we had WE prepare
                        for us a list of these positions in the Office of Public Affairs and in the
                        Office of Congressionaland Intergovernmental Affairs. This list
                        included each employee’s name, title, grade, entrance-on-duty date, and



                        Page2                  GAO/GGD9061DOE'sUseofScheduleCAppointmentAuthority