Human Capital
Continued Opportunities Exist for FDA and OPM to Improve Oversight of Recruitment, Relocation, and Retention Incentives Gao ID: GAO-10-226 January 22, 2010The Food and Drug Administration (FDA) within the Department of Health and Human Services (HHS) has faced challenges in obtaining the workforce needed to support its responsibilities and similar to other agencies, has paid selected employees recruitment, relocation, and retention (3R) incentives. This report examines (1) the extent to which FDA is linking its use of 3R incentives to its strategic human capital approaches to address its current and emerging challenges; (2) the extent to which FDA's 3R incentives were awarded consistent with regulations and the internal controls FDA has in place to ensure proper disbursement of 3R incentives; and (3) the steps the Office of Personnel Management (OPM) has taken to help ensure that agencies have effective oversight of their 3R incentive programs and how HHS is providing oversight. GAO analyzed a stratified sample of FDA's 3R incentives files, 3R data provided by HHS, HHS's 3R policy and FDA's guidance, and interviewed HHS, FDA, and OPM senior officials.
Retention incentives encompass the majority of 3R incentives awarded to FDA employees in recent years. FDA's employees in mission-critical occupations received the greatest number of 3R incentives from 2007 to 2009. However, without an updated strategic workforce plan or established agencywide indicators for tracking its use of 3R incentives, FDA cannot assess the impact that these incentives have on its overall human capital strategy. While FDA collects data on workforce indicators at the agency and center levels, it has not analyzed how 3R incentives are helping the agency achieve its recruitment and retention goals. On the basis of GAO's review of a stratified sample of FDA's 3R incentive files awarded from January 2007 through October 2008, GAO found that FDA maintained documentation which provided sufficient explanation to justify each award. However, several of the incentive files we reviewed lacked adherence to certain other requirements, such as prescribed contents of a service agreement, which in most instances may have resulted from a lack of documentation. To help ensure the proper awarding of 3R incentives, FDA has various internal controls in place, such as a centralized review and approval process for incentive requests. Over the past 3 years, FDA has made some changes to its internal controls, such as updating its guidance including the standard forms for 3R incentive requests. If effectively implemented, FDA's revisions to its internal controls may help ensure that in the future 3R incentives are properly awarded and documentation exists to support the incentives. While both OPM and HHS provide oversight of 3R incentives through various mechanisms, including guidance and periodic evaluations and accountability reviews, there are opportunities for improvement. As a next step, OPM could provide guidance to all agencies on the importance of considering succession planning in the decision process for awarding retention incentives. While HHS's 3R incentive policy generally addressed the requirements for 3R incentive plans as outlined in OPM's regulations, there were several instances where the policy omitted or did not clearly address certain important requirements, such as the conditions for terminating or reducing an incentive.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-10-226, Human Capital: Continued Opportunities Exist for FDA and OPM to Improve Oversight of Recruitment, Relocation, and Retention Incentives
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
January 2010:
Human Capital:
Continued Opportunities Exist for FDA and OPM to Improve Oversight of
Recruitment, Relocation, and Retention Incentives:
GAO-10-226:
GAO Highlights:
Highlights of GAO-10-226, a report to congressional committees.
Why GAO Did This Study:
Retention incentives encompass the majority of 3R incentives awarded
to FDA employees in recent years (see table 1).
Table 1: Number and Percentage of FDA 3R Incentives Awarded by Year:
Year: 2007;
Recruitment incentives, Number: 3;
Recruitment incentives, Percentage: 0.4%;
Retention incentives, Number: 749;
Retention incentives, Percentage: 99%;
Relocation incentives, Number: 8;
Relocation incentives, Percentage: 1%.
Year: 2008;
Recruitment incentives, Number: 366;
Recruitment incentives, Percentage: 35%;
Retention incentives, Number: 673;
Retention incentives, Percentage: 64%;
Relocation incentives, Number: 10;
Relocation incentives, Percentage: 1%.
Year: 2009;
Recruitment incentives, Number: 93;
Recruitment incentives, Percentage: 15%;
Retention incentives, Number: 516;
Retention incentives, Percentage: 85%;
Relocation incentives, Number: 0;
Relocation incentives, Percentage: 0%.
Source: GAO analysis of HHS data.
Note: The 2009 data are of July 4, 2009; FDA had not awarded any
relocation incentives in 2009.
[End of table]
FDA‘s employees in mission-critical occupations received the greatest
number of 3R incentives from 2007 to 2009. However, without an updated
strategic workforce plan or established agencywide indicators for
tracking its use of 3R incentives, FDA cannot assess the impact that
these incentives have on its overall human capital strategy. While FDA
collects data on workforce indicators at the agency and center levels,
it has not analyzed how 3R incentives are helping the agency achieve
its recruitment and retention goals.
On the basis of GAO‘s review of a stratified sample of FDA‘s 3R
incentive files awarded from January 2007 through October 2008, GAO
found that FDA maintained documentation which provided sufficient
explanation to justify each award. However, several of the incentive
files we reviewed lacked adherence to certain other requirements, such
as prescribed contents of a service agreement, which in most instances
may have resulted from a lack of documentation. To help ensure the
proper awarding of 3R incentives, FDA has various internal controls in
place, such as a centralized review and approval process for incentive
requests. Over the past 3 years, FDA has made some changes to its
internal controls, such as updating its guidance including the
standard forms for 3R incentive requests. If effectively implemented,
FDA‘s revisions to its internal controls may help ensure that in the
future 3R incentives are properly awarded and documentation exists to
support the incentives.
While both OPM and HHS provide oversight of 3R incentives through
various mechanisms, including guidance and periodic evaluations and
accountability reviews, there are opportunities for improvement. As a
next step, OPM could provide guidance to all agencies on the
importance of considering succession planning in the decision process
for awarding retention incentives. While HHS‘s 3R incentive policy
generally addressed the requirements for 3R incentive plans as
outlined in OPM‘s regulations, there were several instances where the
policy omitted or did not clearly address certain important
requirements, such as the conditions for terminating or reducing an
incentive.
What GAO Found:
The Food and Drug Administration (FDA) within the Department of Health
and Human Services (HHS) has faced challenges in obtaining the
workforce needed to support its responsibilities and similar to other
agencies, has paid selected employees recruitment, relocation, and
retention (3R) incentives. This report examines (1) the extent to
which FDA is linking its use of 3R incentives to its strategic human
capital approaches to address its current and emerging challenges; (2)
the extent to which FDA's 3R incentives were awarded consistent with
regulations and the internal controls FDA has in place to ensure
proper disbursement of 3R incentives; and (3) the steps the Office of
Personnel Management (OPM) has taken to help ensure that agencies have
effective oversight of their 3R incentive programs and how HHS is
providing oversight. GAO analyzed a stratified sample of FDA‘s 3R
incentives files, 3R data provided by HHS, HHS‘s 3R policy and FDA‘s
guidance, and interviewed HHS, FDA, and OPM senior officials.
What GAO Recommends:
GAO recommends that (1) FDA take several actions to improve its
oversight of 3R incentives; (2) OPM require agencies to incorporate
succession planning efforts into the decision process for awarding
retention incentives; and (3) HHS revise its 3R incentive policy to
address important OPM requirements. FDA and OPM agreed with the
recommendations and HHS acknowledged the need to update its 3R
incentive policy.
View [hyperlink, http://www.gao.gov/products/GAO-10-226] or key
components. For more information, contact Robert Goldenkoff at (202)
512-6806 or goldenkoffr@gao.gov.
[End of section]
Contents:
Letter:
Background:
FDA Uses 3R Incentives to Recruit and Retain Mission-Critical Staff,
but Lacks Agencywide Indicators for Tracking the Progress of 3R
Incentives in Addressing Its Recruitment and Retention Goals:
FDA Generally Awarded 3R Incentives Consistent with Law and OPM
Regulations, but Adherence to Some Requirements Was Lacking and FDA
Could Improve Its Internal Controls:
OPM and HHS Provide Oversight of 3R Incentives, but Improvements Can
Be Made:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Highlights of the Food and Drug Administration 3R
Incentive File Review Results:
Appendix III: Comments from the Department of Health and Human
Services:
Appendix IV: Comments from the Office of Personnel Management:
Appendix V: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Number and Percentage of FDA 3R Incentives Awarded by Year:
Table 2: FDA 3R Incentive Population Size and Number of Random Case
Selections by Stratum:
Table 3: Examples of How FDA's 3R Incentive Files Addressed Selected
Requirements:
Figures:
Figure 1: Average Percentage of FDA 3R Incentives Awarded by Top
Mission-Critical Occupational Series from 2007 through 2009:
Figure 2: HHS and FDA 3R Incentives Awarded and FDA Percentage of HHS
Total by Year:
Figure 3: Factors for Justifying a 3R Incentive:
Figure 4: FDA's Revised Review and Approval Process for 3R Incentive
Requests:
Abbreviations:
3R: recruitment, relocation, and retention:
CPDF: Central Personnel Data File:
ERB: Executive Review Board:
FDA: Food and Drug Administration:
GP: GS pay plan that covers physicians and dentists paid market pay:
GR: GS pay plan that covers physicians and dentists covered by the
Performance Management and Recognition System termination provisions
paid market pay:
GS: General Schedule:
HHS: Department of Health and Human Services:
OPDIV: operating division:
OPM: U.S. Office of Personnel Management:
RHRC: Rockville Human Resources Center:
SES: Senior Executive Service:
SF 50: Standard Form 50:
[End of section]
United States Government Accountability Office: Washington, DC 20548:
January 22, 2010:
The Honorable Henry A. Waxman:
Chairman:
The Honorable John D. Dingell:
Chairman Emeritus:
The Honorable Joe L. Barton:
Ranking Member:
Committee on Energy and Commerce:
House of Representatives:
The Honorable Bart Stupak:
Chairman:
The Honorable Greg Walden:
Ranking Member:
Subcommittee on Oversight and Investigations:
Committee on Energy and Commerce:
House of Representatives:
The Food and Drug Administration (FDA) within the Department of Health
and Human Services (HHS), has had difficulties carrying out its
expanding mission in part because of challenges in obtaining the
workforce needed to support its increased responsibilities. We have
designated two areas of federal oversight under FDA--food safety and
medical products--as high risk in 2007 and 2009, respectively, and
reported on the significant challenges that continue to compromise the
agency's ability to protect Americans from unsafe food and ineffective
drugs and medical products.[Footnote 1]
FDA has announced plans that may help it address some of its resource
challenges, such as a major, multiyear hiring initiative and an
information technology modernization effort. Although these are
positive steps, FDA still faces workforce challenges. For example,
about 70 percent of FDA's career employees onboard as of fiscal year
2008 will be eligible to retire by the end of fiscal year 2014, which
may lead to gaps in institutional knowledge at all levels.[Footnote 2]
FDA will face high retirement eligibility rates with career employees
in certain mission-critical occupations, with about 63 percent of
mathematical statisticians and 73 percent of pharmacologists onboard
as of fiscal year 2008 eligible to retire by the end of fiscal year
2014.
To help the federal government improve its competitiveness in
recruiting and maintaining a high-quality workforce, the Federal
Workforce Flexibility Act of 2004 provided federal agencies increased
flexibilities to award recruitment, relocation, and retention (3R)
incentives.[Footnote 3] Governmentwide, federal agencies awarded 3R
incentives totaling more than $207 million in 2007 with retention
incentives accounting for the majority of 3R incentive costs at $127
million.[Footnote 4] In May 2009, the U.S. Office of Personnel
Management (OPM) asked agencies to review their 3R incentive programs
to ensure that current and future incentives are used only when
necessary to support their mission and program needs, and are
consistent with the criteria in law and regulations. As a next step,
in July 2009, OPM directed agencies to review and certify that 3R
incentive plans and internal approval and monitoring procedures were
consistent with regulations.
In the last few years, FDA's use of retention incentives has come
under greater congressional scrutiny. Specific issues concerned the
number and dollar amount of incentives being given to FDA managers and
whether they met OPM regulatory requirements. At your request, this
report examines (1) the extent to which FDA is linking its use of 3R
incentives to its strategic human capital approaches to address its
current and emerging challenges; (2) the extent to which FDA's 3R
incentives were awarded consistent with the law, regulations, and
guidance and the internal controls FDA has in place to ensure proper
disbursement of 3R incentives and encourage efficient use; and (3) the
steps OPM has taken to help ensure that agencies including HHS have
effective strategic oversight of their 3R incentive programs and how
HHS is providing oversight of its 3R incentive program.
To meet our objectives, we used a data collection instrument to
analyze a stratified sample of FDA's files for 3R incentives awarded
from January 1, 2007, to October 31, 2008 by year and incentive type.
[Footnote 5] We randomly selected files for review from the 2007 and
2008 retention incentives and 2008 recruitment incentives. For the
2007 and 2008 relocation incentives and 2007 recruitment incentives,
we reviewed all of the files due to the small population size. For the
randomly selected files, we weighted each incentive file so that our
sample statistically represented the population. In addition, we
analyzed data provided by HHS on FDA's and the department's use of 3R
incentives for calendar years 2007 to 2009 (as of July 4) along
various categories including type of incentive, pay plan, occupational
series, and duty station; analyzed FDA data from OPM's Central
Personnel Data File (CPDF) for fiscal year 2008 to identify trends in
FDA's workforce, such as retirement eligibility by occupational series
for career permanent employees; analyzed HHS's 3R incentive policy to
determine consistency with OPM's regulatory requirements; and
interviewed HHS, FDA, and OPM senior officials knowledgeable about 3R
incentives. We checked the 3R incentive data provided by HHS for
reasonableness and the presence of any obvious or potential errors in
accuracy and completeness. We interviewed selected HHS officials
knowledgeable about the data, and brought to the attention of these
officials any concerns or discrepancies we found with the data for
correcting or updating and further clarification. On the basis of
these procedures, we believe the data provided by HHS are sufficiently
reliable for use in the analyses presented in this report. (See
appendix I for a more detailed discussion of our objectives, scope,
and methodology.)
We conducted this performance audit from December 2008 through January
2010 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
Background:
3R incentives are among the human capital flexibilities intended to
help federal agencies address human capital challenges and to build
and maintain a high-performing workforce with essential skills and
competencies. According to OPM, the intent of 3R incentives is to
provide agencies with discretionary authority to use nonbase
compensation to help recruit, relocate, and retain employees in
difficult staffing situations. On the basis of OPM's regulations for
3R incentives, employees eligible to receive these incentives include
the following positions: General Schedule (GS), senior-level,
scientific or professional, Senior Executive Service (SES), law
enforcement, Executive Schedule or those whose pay is set at a rate
equal to a rate for the Executive Schedule, prevailing rate positions
(employment in a recognized trade or manual labor occupation), and
employees in a category approved by OPM at the request of the head of
an agency.[Footnote 6] The regulations also prohibit certain employees
from receiving 3R incentives including those who are in positions that
are appointed by the President with or without Senate confirmation,
noncareer SES members, agency heads or those expected to receive an
appointment as an agency head, and employees in positions excepted
from the competitive service by reason of their confidential, policy-
determining, policy-making, or policy-advocating duties (i.e.,
Schedule C employees).[Footnote 7]
At FDA, certain physicians and dentists appointed under title 38 of
the United States Code[Footnote 8] and Senior Biomedical Research
Service employees appointed under 42 U.S.C. § 237 are also eligible
for 3R incentives.[Footnote 9] FDA employees appointed pursuant to 42
U.S.C. §§ 209(f) and 209(g) are not eligible to receive 3R incentives
under the authority contained in title 5 of the United States Code.
According to an HHS official, FDA's authority to award incentive
payments to these employees is derived from the appointment provisions
themselves. Beginning in 2007, FDA began phasing out the use of
retention incentives for employees paid under titles 38 and 42. (See
appendix II for additional details on employee eligibility.)
The Federal Employees Pay Comparability Act of 1990 first authorized
OPM to allow federal agencies to give 3R incentives to employees under
the following circumstances.[Footnote 10]
* A recruitment incentive could be given to a new employee in a
federal position and a relocation incentive to a current employee who
had to move to accept a different federal position if it was
determined that the agency would be likely to encounter difficulty
filling the position in the absence of such an incentive.
* A retention incentive could be given to a current employee if the
unusually high or unique qualifications of the employee or a special
need of the agency made retaining that employee essential, and it was
determined that the employee would be likely to leave federal service
without the incentive.
The Federal Workforce Flexibility Act of 2004 revised prior 3R
incentive authorities with the goal of increasing agencies'
flexibility in using 3R incentives. We and OPM had reported that 3R
incentives were effective human capital management tools, but agencies
were failing to use them extensively due to a variety of factors
including limited funds and reduced hiring due to downsizing.[Footnote
11] The 2004 act increased the number of situations in which agencies
may give 3R incentives; allowed for alternative methods of payments,
such as installments or lump sum; and increased the potential size of
the incentives. For example, individual retention incentives that were
capped at 25 percent of the employee's basic pay rate could be
increased to up to 50 percent in cases of critical agency need with
OPM's approval. The act also required OPM to annually report to
Congress to ensure the incentives were being used effectively. In
December 2007, OPM issued final regulations on 3R incentives
reflecting its technical modifications and corrections to and
clarifications of the interim regulations issued in May 2005.
Separately, in November 2007, OPM issued final regulations
implementing an additional authority to agencies to pay a retention
incentive to an employee who would be likely to leave for a different
federal position before the closure or relocation of the employee's
office, activity, or organization.
Through its regulations, OPM requires agencies to develop plans for
using 3R incentives outlining, among other things, the required
documentation for the justification and any criteria for determining
the amount of the incentive and the length of the service period under
a service agreement, which is a written agreement between the agency
and the employee outlining the terms of the incentive. According to
OPM officials, agencies do not need OPM approval of their 3R incentive
plans in order to use these incentives. HHS has issued a
departmentwide 3R incentive plan or policy that applies to all of its
agencies or operating divisions (OPDIV), as HHS refers to them,
including FDA. According to HHS's Deputy Assistant Secretary for Human
Resources, the OPDIVs are allowed to develop more stringent internal
guidance to supplement HHS's policy, but they cannot make their
internal processes for awarding 3R incentives more lenient. Building
on HHS's 3R incentive policy for the department, FDA issues
supplemental guidance and instructions to its employees for awarding
3R incentives. Applicable to all of its centers and offices, FDA uses
standard forms for requesting recruitment, relocation, and retention
incentives with instructions attached for completing the forms that
outline the regulatory and HHS policy requirements for those types of
incentives. The official who is recommending the individual for the
incentive must complete the form prior to seeking approval of the
award.
FDA Uses 3R Incentives to Recruit and Retain Mission-Critical Staff,
but Lacks Agencywide Indicators for Tracking the Progress of 3R
Incentives in Addressing Its Recruitment and Retention Goals:
Employees in mission-critical occupations as identified by FDA make up
the majority of FDA's workforce and have also received the greatest
number of 3R incentives from 2007 to 2009.[Footnote 12] According to
the Assistant Commissioner for Management at FDA, mission-critical
positions are broadly categorized at the agency level and not specific
to FDA centers. These positions encompass the core scientific base of
FDA, and include occupations such as medical officers,
pharmacologists, and consumer safety officers. According to this
official, mission-critical positions have remained unchanged with the
exception of a few positions that have become more significant as the
nature of FDA's work has evolved, such as operations research analysts
and veterinary medical officers.
As shown in figure 1, employees in different mission-critical
occupations received different percentages of each type of incentive.
Medical officers, which includes physicians and surgeons, consistently
received on average the greatest number of recruitment incentives of
any mission-critical occupation from 2007 to 2009. Consumer safety
officers, which is the largest mission-critical occupation according
to FDA, on average received the majority of relocation incentives
among mission-critical occupations, while pharmacologists on average
ranked first among all mission-critical occupations that received
retention incentives over this time period.[Footnote 13]
Figure 1: Average Percentage of FDA 3R Incentives Awarded by Top
Mission-Critical Occupational Series from 2007 through 2009:
[Refer to PDF for image: 3 pie-charts]
Recruitment Incentives:
Medical Officer (physicians): 30%;
Chemist: 16%;
Pharmacologist: 13%;
General Health Scientist: 8%;
Mathematical Statistician: 8%;
Consumer Safety Officer: 8%.
Relocation Incentives:
Consumer Safety Officer: 74%;
Medical Officer: 10%;
Mathematical Statistician: 10%.
Retention Incentives:
Pharmacologist: 34%;
Mathematical Statistician: 24%;
Medical Officer: 13%;
Consumer Safety Officer: 4;
Toxicologist: 3%.
Source: GAO analysis of HHS data.
Note: Averages do not total to 100 percent because only the top
occupations are included in the graphic. FDA did not award each type
of 3R incentive to every mission-critical occupational series each
year.
[End of figure]
FDA Lacks an Updated Strategic Workforce Plan to Document Its
Strategies for Achieving Its Recruitment and Retention Goals:
FDA is facing potential retirements that could result in a loss of
leadership and institutional knowledge in its mission-critical
occupations. For example, an average of 24 percent of FDA top
leadership is retirement eligible in 2014 according to FDA.[Footnote
14] Additionally, about 73 percent of career pharmacologists and about
68 percent of career medical officers onboard as of fiscal year 2008
will be eligible for retirement by the end of 2014. Therefore, it is
important to ensure that FDA's 3R incentives are helping the agency
meet its human capital goals. Our previous work has shown that federal
agencies should ensure that the use of human capital flexibilities
including 3R incentives are part of an overall human capital strategy
clearly linked to the mission and program goals of the organization.
[Footnote 15] Agencies need to plan for how they will use and fund
these flexibilities, what results they expect to achieve, and what
methods they will use to evaluate actual results, such as establishing
indicators for measuring success. Importantly, 3R incentives are just
one type of flexibility available to agencies for recruiting and
retaining a quality workforce. Agencies need to assess and determine
which human capital flexibilities are the most appropriate and
effective for managing their workforces. Furthermore, an updated
strategic workforce plan would help FDA clearly document its
strategies for addressing gaps in the number, skills, competencies,
and deployment of its workforce and how human capital flexibilities,
such as 3R incentives, are being used to help achieve recruitment and
retention goals.
FDA has outlined its goals and approaches for recruiting and retaining
the necessary workforce to meet its mission and program goals in its
succession plan and strategic workforce plan. In its succession plan
for 2009-2012, FDA defines succession management as the ongoing
development of potential successors to ensure a smooth transition and
minimum loss of efficiency when management vacancies occur. To help
prepare its current and future leadership, FDA outlines specific
succession planning initiatives in its plan, such as individual
development planning and training that aligns with organizational
goals. According to officials at FDA, succession planning has played a
significant role in filling mission-critical occupations at its
centers and the plan should help assist FDA with these efforts. While
some of what is described in FDA's succession plan is prospective, FDA
officials told us that they are partnering with a university in
Florida in an attempt to satisfy the agency's long-term staffing needs
for a mission-critical occupation. Specifically, they are developing
an undergraduate curriculum for pharmacokineticists intended to help
increase FDA's recruitment pool for this occupation.[Footnote 16]
FDA's fiscal year 2006 workforce plan provides an overview of past and
projected workforce trends and emphasizes the staffing needs of FDA's
mission-critical programs. According to the Assistant Commissioner for
Management at FDA, the plan was intended to be a road map for future
hiring strategies across the agency. However, FDA has not updated the
workforce plan since 2006 and targets for its recent hiring surges
have not been included. According to this official, managing FDA
leadership transitions has been a higher priority than strategic
workforce planning. FDA is preparing to begin a workforce planning
effort in fiscal year 2010 to address key agency-level initiatives and
provide linkages between the agency's use of 3R incentives and broader
human capital decisions. Having an agencywide workforce plan that
clearly documents the recruiting and retention goals and strategies
FDA is working to achieve can help to ensure that the centers are
aware of the agency's goals and strategies and strategically managing
their workforces in a manner that meets the agency's needs. Given
FDA's period of leadership transitions, developing such a workforce
plan creates a road map for the agency to use to move from the current
to the future workforce needed to achieve agency goals.
While not documented in its current workforce plan, FDA has set
recruitment targets for the agency to address the need to hire
additional employees in recent years. Specifically, as part of its
hiring surges in fiscal years 2008 and 2009, FDA set staffing goals
that were linked to the agency achieving its mission and goals. For
example, the agency set targets to fill more than 600 new positions
and to backfill over 700 others in fiscal year 2008 to implement new
responsibilities as a result of legislation, which it achieved within
the first 6 or 7 months, according to FDA's Assistant Commissioner for
Management.[Footnote 17] That was nearly triple the number of people
FDA hired from 2005 to 2007. Similarly in fiscal year 2009, the agency
set a goal to hire 1,600 additional full-time equivalent positions.
According to FDA officials, the agency has exceeded its 2009 hiring
goals by 22 percent and these targets were set within the centers
based on their staffing needs. Further, FDA officials told us one of
its recruitment strategies to increase its Hispanic workforce was to
target this population during its interview job fairs, but this
strategy is not documented in its current workforce plan.
FDA officials told us that they award 3R incentives where they are
needed most and the type of incentive awarded depends largely on the
location. For example, recruitment is a larger issue in some of FDA's
field locations, including areas in Montana and in the southwest along
the Mexican border. To address this challenge FDA offers relocation
incentives to employees in its headquarters and field to move to other
areas of the country. Recognizing the challenge of recruitment in its
remote field locations, FDA is looking for additional sources of
recruiting, including state and local governments in these areas. FDA
officials have found that retention usually is not a problem in its
field locations.
FDA Should Better Track How Its Use of 3R Incentives Is Helping the
Agency Achieve Its Recruitment and Retention Goals:
We have reported on the importance of establishing the necessary data
and indicators to track a program's effectiveness, as well as
establishing a baseline to measure the changes over time and assess
the program in the future.[Footnote 18] Agencies need such
measurements to help them determine if a program is worth the
investment compared to other available human capital flexibilities
targeted at recruitment and retention of employees, such as student
loan repayment. FDA has not established agencywide indicators for
tracking the progress of 3R incentives in addressing recruitment and
retention needs. While FDA collects data on workforce indicators at
the agency and center levels, it has not analyzed how 3R incentives
are helping the agency achieve its recruitment and retention goals.
FDA collects data on agencywide workforce indicators, such as
attrition, retirement, and declination rates, which measure the number
of jobs offered that are declined by potential employees. In addition,
FDA's centers and offices are responsible for tracking their own
workforce data as well as the effect of 3R incentives on their
organizational goals. Specifically, FDA has asked its centers to
provide more detailed attrition rates over a 2-year period to help
support the need for 3R incentives. Officials stated that FDA has no
agencywide exit interview process; rather, it uses HHS's quarterly
exit survey results. Although some centers track exit survey results
to determine why employees are leaving the agency, the center data are
not necessarily provided to the Office of Management--the human
capital office within FDA--according to the Assistant Commissioner for
Management at FDA. Further, FDA officials stated that the agency
relies on HHS-provided data for tracking the number of responses to
job announcements, and the basis for employee separations, but FDA
does not have access to all of the necessary data in a useful format
to accurately track workforce statistics and the linkage to the use of
3R incentives.
Additionally, FDA's Assistant Commissioner for Management said the
agency does not track the use of 3R incentives to assess the
effectiveness of these payments or how they contribute to FDA's human
capital goals. For example, FDA does not track statistics on its
diversity initiatives or the impact of 3R incentives on diversity
recruiting because there is a lack of available data. However, FDA
officials said they need to document the agency's short-and long-term
goals for its 3R incentive program and identify better agencywide
indicators to support the need for 3R incentives. Presently FDA's
guiding principles for awarding 3R incentives developed in the summer
of 2009 are the only documented guidance to centers on 3R incentives,
but the guiding principles do not address how 3R incentives should be
used strategically to help achieve agencywide recruitment and
retention goals.
Updating its workforce plan to document its recruitment and retention
goals and strategies and include indicators to track the progress of
3R incentives in achieving these goals will help ensure FDA makes
maximum use of funds to recruit and retain key talent, a critical goal
in an era of fiscal constraints. As we have found in our work on human
capital flexibilities,[Footnote 19] gauging the 3R incentive program's
direct effect on recruitment and retention trends may be difficult
because a 3R incentive is not likely to be the only major factor in an
employee's decision to join or stay with an agency, although the
incentive may help to tip the scale in the agency's favor. FDA
officials told us that they have recently found that other factors,
such as labor market conditions, could affect these decisions.
Retention Incentives Account for the Majority of 3R Incentives Awarded
by FDA and the Percentage of 3R Incentives Awarded by FDA Is Large
Compared to HHS:
In 2008 and 2009, recruitment and retention incentives accounted for
greater than 95 percent of all 3R incentives awarded in FDA, as shown
in table 1. The majority of the FDA employees receiving 3R incentives
in 2007 and 2008 were in positions within the GS pay plan, which
includes consumer safety officers, medical officers, and mathematical
statisticians, and paid at grades 14 or higher in the case of
retention incentives. To explain the large decrease in the number of
retention incentives between 2007 and 2008, FDA officials told us that
they have taken a more strategic approach to awarding retention
incentives over the last few years by elevating the approving
authority of retention incentive renewals to the Commissioner and
phasing out the use of retention incentives for certain employees paid
under titles 38 and 42 of the United States Code given existing
compensation flexibilities with those positions. For example, in 2007,
FDA employees appointed under title 42, which includes service or
staff fellows and senior science managers, received 15 percent of all
retention incentives FDA awarded and 5 percent of retention incentives
awarded as of July 4, 2009. As a result of its detailed review of its
3R incentives in 2009, FDA officials said several retention incentives
were eliminated. In addition, FDA does not allow any new recruitment
incentive requests for any new employees except for rare and unusual
circumstances that require the Commissioner's approval. According to
FDA, the agency continued to honor any recruitment incentives that
were promised during recruitment discussions with potential employees.
Table 1: Number and Percentage of FDA 3R Incentives Awarded by Year:
Year: 2007;
Recruitment incentives, Number: 3;
Recruitment incentives, Percentage: 0.4%;
Retention incentives, Number: 749;
Retention incentives, Percentage: 99%;
Relocation incentives, Number: 8;
Relocation incentives, Percentage: 1%.
Year: 2008;
Recruitment incentives, Number: 366;
Recruitment incentives, Percentage: 35%;
Retention incentives, Number: 673;
Retention incentives, Percentage: 64%;
Relocation incentives, Number: 10;
Relocation incentives, Percentage: 1%.
Year: 2009;
Recruitment incentives, Number: 93;
Recruitment incentives, Percentage: 15%;
Retention incentives, Number: 516;
Retention incentives, Percentage: 85%;
Relocation incentives, Number: 0;
Relocation incentives, Percentage: 0%.
Source: GAO analysis of HHS data.
Note: The 2009 data are of July 4, 2009; FDA had not awarded any
relocation incentives in 2009.
[End of table]
In comparing FDA's use of 3R incentives to HHS's use of the incentives
departmentwide, FDA's percentage of HHS's recruitment incentives
awarded exceeded 25 percent from 2008 to 2009. Specifically, in 2008,
FDA accounted for 50 percent of all recruitment incentives in HHS,
which was due to FDA's hiring surge that year. In contrast, FDA's
total number of retention incentives awarded steadily decreased from
2007 to 2009 due to the elimination of these incentives for certain
employees. (See figure 2.) As a point of comparison, in 2008, FDA
spent over $11 million, which was over half of the total dollars spent
by HHS on 3R incentive payments; however, FDA employees made up only
about 16 percent of HHS's total workforce in fiscal year 2008.
Figure 2: HHS and FDA 3R Incentives Awarded and FDA Percentage of HHS
Total by Year:
[Refer to PDF for image: 3 vertical bar graphs]
Recruitment Incentives:
Year: 2007;
FDA: 3;
HHS (excluding FDA): 273;
FDA percentage of HHS total: 1%.
Year: 2008;
FDA: 366;
HHS (excluding FDA): 364;
FDA percentage of HHS total: 50%.
Year: 2009;
FDA: 93;
HHS (excluding FDA): 223;
FDA percentage of HHS total: 20%.
Retention Incentives:
Year: 2007;
FDA: 749;
HHS (excluding FDA): 1,171;
FDA percentage of HHS total: 39%.
Year: 2008;
FDA: 673;
HHS (excluding FDA): 1,276;
FDA percentage of HHS total: 35%.
Year: 2009;
FDA: 516;
HHS (excluding FDA): 1,159;
FDA percentage of HHS total: 31%.
Relocation Incentives:
Year: 2007;
FDA: 8;
HHS (excluding FDA): 47;
FDA percentage of HHS total: 15%.
Year: 2008;
FDA: 10;
HHS (excluding FDA): 49;
FDA percentage of HHS total: 17%.
Year: 2009;
FDA: 0;
HHS (excluding FDA): 0;
FDA percentage of HHS total: 0.
Source: GAO analysis of HHS data.
Note: 3R incentives awarded to employees in FDA and HHS from January
1, 2007, through July 4, 2009. FDA awarded three recruitment
incentives in 2007. HHS total includes FDA.
[End of figure]
FDA Generally Awarded 3R Incentives Consistent with Law and OPM
Regulations, but Adherence to Some Requirements Was Lacking and FDA
Could Improve Its Internal Controls:
OPM regulations outline requirements for the proper awarding of 3R
incentives and require agencies to keep documentation and records
sufficient to allow a reviewer to reconstruct the 3R incentive process
and decision. We reviewed the files of a random, stratified sample of
3R incentives awarded at FDA from January 2007 through October 2008 to
determine whether they met requirements in law, OPM regulations, HHS
policy, and FDA guidance.[Footnote 20] All the FDA files we reviewed
provided sufficient explanation to justify the awards, addressing one
or more of the factors for each type of incentive which OPM
regulations state must be considered, as applicable to the case at
hand, to support the awarding of the incentive.[Footnote 21] These
factors are to guide the agency in determining whether a particular
position would be difficult to fill in the absence of a recruitment or
relocation incentive, or whether the unusually high or unique
qualifications of the employee or a special need of the agency for the
employee's services makes it essential to retain the employee and the
employee would be likely to leave the federal service in the absence
of a retention incentive. According to OPM, since the regulations
require an agency to document only those factors that are applicable
to the case at hand, one factor could be sufficient support for
authorizing the incentive. We estimate that every 3R incentive awarded
during the time of our file review included at least one factor of
support in the justification for the incentive.[Footnote 22] Figure 3
lists the factors that an agency must consider in justifying a 3R
incentive.
Figure 3: Factors for Justifying a 3R Incentive:
[Refer to PDF for image: illustration]
Incentive type: Recruitment; Retention; Relocation;
Factors:
* The salaries typically paid outside the federal government for
similar positions;
* Special or unique competencies required for the position;
* Agency efforts to use nonpay authorities, such as special training
and work scheduling flexibilities, to resolve difficulties alone or in
combination with a recruitment, relocation, or retention incentive;
* The desirability of the duties, work, or organizational environment,
or geographic location of the position;
* Other supporting factors.
Incentive type: Relocation; Recruitment;
Factors:
* Recent turnover in similar positions;
* Employment trends and labor-market factors that may affect the
agency's ability to recruit candidates for similar positions;
* The availability and quality of candidates possessing the
competencies required for the position, including the success of
recent efforts to recruit candidates for the position or similar
positions using indicators such as offer acceptance rates, proportion
of positions filled, and the length of time required to fill similar
positions.
Incentive type: Retention;
Factors:
* Employment trends and labor market factors such as the availability
and quality of candidates in the labor market possessing the
competencies required for the position and who, with minimal training,
cost, or disruption of service to the public, could perform the full
range of duties and responsibilities of the employee's position at the
level performed by the employee;
* The extent to which the employee's departure would affect the
agency's ability to carry out an activity, perform a function, or
complete a project that the agency deems essential to its mission;
* The success of recent efforts to recruit candidates and retain
employees with competencies similar to those possessed by the employee
for positions similar to the position held by the employee.
Source: GAO analysis of OPM regulations.
Note: This figure does not reflect the factors for justifying
retention incentives for employees likely to leave for a different
position in the federal service. 5 C.F.R. § 575.315 (d) (2). FDA did
not award any of these incentives during the time of our review.
[End of figure]
The 3R incentive files met additional statutory and regulatory
requirements, such as awarding 3R incentives only to eligible
employees and paying of 3R incentives within applicable aggregate pay
limits prescribed under 5 U.S.C. § 5307 or, for certain
administratively determined pay plans, within the aggregate pay limits
established by HHS.[Footnote 23] (See appendix II for additional
information on the aggregate pay limits and other results from the
file review.)
However, several of the incentive files we reviewed lacked adherence
to certain other requirements, such as approval prior to the incentive
payment, proof of employee relocation, and prescribed contents of a
service agreement, which in most instances may have resulted from a
lack of documentation. Overall, the deficiencies we found with the
lack of adherence to requirements would not invalidate an incentive.
Internal controls are important for managing an agency's human capital
system, including the 3R incentive program, to help ensure the
effective and efficient use of these incentives in accordance with the
law and OPM regulations.[Footnote 24] Over the past 3 years, FDA has
made some changes to its internal controls, such as continuing to
revise its centralized review and approval process for 3R incentive
requests and updating its guidance including the standard forms for 3R
incentive requests. If effectively implemented, the revisions to its
internal controls may help ensure that in the future 3R incentives are
properly awarded and documentation exists to support the incentives.
3R Incentives Were Not Always Processed Consistent with Regulations
and FDA Guidance, but Revisions to FDA's Centralized Review and
Approval Process May Lead to Improvements:
OPM regulations require that all incentives must be approved by the
agency prior to payment to the employee. We estimate that 92 percent
of all 3R incentives awarded from 2007 through October 2008 were
approved by the agency, as evidenced by the approving official's
signature--the FDA Commissioner or designee--prior to payment to the
employee.[Footnote 25] In addition, the regulations require an agency
to make the determination to pay a recruitment or relocation incentive
before the employee enters on duty in the position for which he or she
was recruited or relocated. We estimate that for all recruitment
incentives the agency made the determination to pay the incentive, as
evidenced by the date of the approving official's signature, before
the prospective employee entered on duty.[Footnote 26] In 4 of 12 of
the relocation incentive files (the universe during the time of our
file review), the agency did not make the determination to pay the
relocation incentive, as evidenced by the date of the approving
official's signature, before the prospective employee entered on duty.
However, we verified that no payment was made to the recipients of
these relocation incentives until after the employee relocated to the
new position. According to a senior FDA official, the center in FDA
that requested these relocation incentives did not understand that the
incentives needed to be provided to the Office of Management--the
human capital office within FDA--for processing and approval prior to
the employee entering on duty and mistakenly believed that the former
Commissioner's memorandum authorizing a broad approval of incentives
for their center covered these relocation incentive requests. The
official said that this was an isolated misunderstanding that has been
corrected with further discussions with the center.
In addition, according to HHS policy and FDA guidance, the official
who is recommending the employee for the 3R incentive must sign off on
the request before the official who approves the award, which in FDA's
case is the Commissioner or designee.[Footnote 27] We estimate that in
less than 2 percent of 3R incentives awarded from 2007 through October
2008 the recommending official did not sign off on the request before
the approving official.[Footnote 28] In the three relocation incentive
files that we reviewed where this occurred, the agency used a
justification and approval for the awards signed by the approving
official more than 22 months before the awards were recommended. When
asked why this occurred, FDA said the incentives were mistakenly
signed out of order.
Beginning in March 2006, FDA revised its 3R incentive review and
approval process by centralizing the process--a key internal control
that if implemented properly may improve the processing sequence of
the incentives. Since that time, FDA has continued to streamline its
process, assign oversight responsibility to its Executive Review Board
(ERB), and issue updated guidance, which it calls guiding principles.
FDA's ERB, which consists of the Principal Deputy Commissioner who
serves as the chair, the center directors, the Associate Commissioner
for Policy, and the Assistant Commissioner for Management, is
responsible for reviewing all compensation programs and flexibilities
including 3R incentives across the agency and developing guidelines
for implementing each program. Since the time of our file review, FDA
undertook a detailed review of its 3R incentive program and as a
result of its review, clarified details of FDA's process for approving
3R incentives and the role of the ERB. Figure 4 shows the revised
review and approval process for 3R incentive requests that FDA
currently follows.
Figure 4: FDA's Revised Review and Approval Process for 3R Incentive
Requests:
[Refer to PDF for image: illustration]
1) At the request of the employee‘s supervisor, administrative staff
within the applicable FDA center completes a 3R incentive request form
in consultation with the Office of Management, and the center‘s
executive officer reviews the request to ensure it is complete and the
center has the necessary funds to award the incentive, if approved.
2) The recommending official signs the 3R incentive request officially
recommending the employee for the incentive.
3) The Office of Management reviews and certifies that the 3R
incentive request is consistent with FDA‘s guiding principles and OPM
regulatory requirements.
4) The Executive Review Board reviews all 3R incentive requests and
recommends to the FDA Commissioner whether the overall incentive and
the amount should be approved. The Commissioner or designee approves
or disapproves the request.
5) The Office of Management notifies the recommending officials and
executive officers in the applicable center of the Commissioner‘s
decision and sends the incentive file to the Rockville Human Resources
Center for processing and payment of the incentive and checking to
ensure the file‘s documentation is complete.
Source: GAO analysis of FDA.
[End of figure]
Beginning in September 2009, FDA's procedures call for its Office of
Management to certify if a new 3R incentive request addresses FDA's
guiding principles prior to submitting the incentive request to the
ERB for its review. Further, in an effort to streamline the process,
the ERB Chair may review and recommend some of the incentive requests
to the Commissioner without the full ERB review when the Office of
Management certifies the request. The ERB Chair can request a review
by the full ERB for any incentive request, according to a senior FDA
official. Finally, according to a senior official from the Rockville
Human Resources Center (RHRC), which is responsible for processing
FDA's personnel actions such as incentive requests, the center adopted
the practice of double checking the incentive file to ensure the
documentation in the file, such as the commencement and termination
dates on the service agreements, are complete after the incentive has
been processed.
Relocation Incentive Files Did Not Consistently Document Employees'
Relocation, but Revisions to the Incentive Form Address These
Requirements:
OPM regulations for relocation incentives require that in order to
receive a relocation incentive the employee's work site for the new
position must be 50 miles or more from the work site of the position
held immediately before the move, unless the agency waives the 50-mile
requirement, and the employee must establish a new residence to accept
the position. We found that in 3 of 12 of the relocation incentives
awarded from 2007 through October 2008, the incentive files did not
document that the employee's new work site was more than 50 miles from
the previous work site. For example, an individual who received a
relocation incentive was transferring from another federal agency to
work at FDA in the Washington, D.C., area and the file did not
document where that previous agency was located (e.g., Washington,
D.C., or another city). In addition, 8 of 12 of the relocation
incentives were paid to the employee before or on the same day that
the agency had record of the employee establishing a residence in the
new geographic area.[Footnote 29] In three of these cases, the
sequence of dates was less than a month different, but in three other
cases it was several months. For the remaining two cases, the first
record of the employee's residence in HHS's human capital data system
was the date of the incentive payment. By reviewing the data system
and additional employee records, we found proof that for 11 of the 12
relocation incentives, the employee eventually established a residence
in the new geographic area. For one incentive the previous address on
file was an Army P.O. box with no city or state included. According to
FDA, this individual was deployed with the military to Europe prior to
establishing a residence in the geographic area for the new position.
While the relocation incentive forms we reviewed did not include these
relocation requirements, in the fall of 2008, FDA recognized the need
to more clearly document these relocation requirements and revised its
recruitment or relocation incentive form to include check boxes
addressing these requirements.
In response to our finding on the dates of relocation, senior
officials from FDA and RHRC acknowledged that there is no formal
process to document that the new work site is greater than 50 miles
from the previous work site or that the individual has established a
residence in the new geographic area before the incentive is awarded.
Rather, the RHRC official said they check these requirements through
more informal means--conversations with the employee, reviewing the
resume, and knowledge of where the person is coming from, which in
some cases, is such a great distance from the new duty station that it
is common knowledge that the new work site is greater than 50 miles
from the previous work site and the individual has established a
residence in the new geographic area. According to FDA, the centers
are to verify the change of residence before submitting the incentive
request for payment processing to RHRC by checking that a personnel
action for an address change to the new duty station has been
submitted. As a next step, the centers are to check in the data system
that the address has been changed. In addition, FDA and RHRC officials
said there may be a delay in RHRC's processing of the change of
address from the time the employee submits the request, which may
account for the sequence of dates.
As another explanation for the difference in dates, a senior FDA
official explained that employees who have received the incentive are
permitted to stay in temporary housing after receiving the incentive
before they officially establish a new residence and change their
residence with the agency. OPM officials stated that the regulations
do not define "residence" for this purpose and since relocation
incentives may be paid for temporary work site changes, it is not
necessary for an employee to move his or her permanent residence to
qualify for a relocation incentive; establishing temporary housing is
acceptable. FDA and RHRC officials noted that in some of the older
files we reviewed there was no place to document that an employee had
established a new residence or relocated a distance greater than 50
miles, as the current incentive form now allows.
Service Agreements Failed to Include Elements Required in Statute and
OPM Regulations, but Revised Guidance May Lead to Some Improvement:
The service agreements frequently failed to include contents
prescribed by statute and OPM regulations. Consistent with the statute
and regulations, FDA requires service agreements for recruitment and
relocation incentives, but does not use service agreements for
retention incentives.[Footnote 30] In some areas, we observed
appropriate documentation of the prescribed contents in the service
agreement, such as the total amount of the incentive and length of the
service period, but other areas were lacking, such as the method of
paying the incentive and timing and amounts of each incentive payment.
Not including the prescribed contents of the service agreement may
affect FDA's ability to recover funds should the agency terminate or
reduce an incentive. For an employee who leaves the position prior to
completing the service period for the incentive, FDA uses information
in the service agreement to determine the prorated amount of the
incentive payment that needs to be collected from the former employee.
Since the time of our file review, FDA has updated its guidance and
recruitment or relocation incentive form including the service
agreement section, which if effectively implemented may help prevent
future problems associated with deficient service agreements.
We estimate that all of the recruitment incentive files[Footnote 31]
and 11 of 12 of the relocation incentive files awarded from 2007
through October 2008 documented a permitted total incentive amount in
the service agreement--the maximum amount is 25 percent of base pay--
with the exception of the 1 relocation incentive file that lacked a
service agreement, but documented an appropriate total incentive
amount elsewhere in the file. While considering the criteria in HHS's
3R incentive policy, FDA has established guidelines for determining
the amounts of the 3R incentives. Specifically, during the time of our
file review, recruitment and relocation incentives were to be between
10 and 15 percent of base pay.
The service period, which is a specified period of employment with the
agency the employee agrees to complete in exchange for payment of the
incentive, may not exceed 4 years for recruitment and relocation
incentives with a minimum of 6 months for recruitment incentives. With
the exception of one relocation incentive file which lacked a service
agreement, all the recruitment and relocation incentive files
documented a permitted length of service in the service agreement
length field.[Footnote 32] FDA sets guidelines for determining the
length of the service period for recruitment and relocation
incentives. According to a senior FDA official, FDA has traditionally
used 12 months as the length, but in early 2008, as FDA began hiring a
large number of employees, it started requiring a length of 18 months.
If FDA authorized multiple incentives to an employee, e.g., student
loan repayment in addition to a recruitment incentive, it required a
24-month service period and in some cases where FDA approved a higher
percentage for the incentive amount, it required a 36-month service
period.
Further, the service agreement for recruitment and relocation
incentives must specify the method of paying the incentive, and the
timing and amounts of each incentive payment (i.e., a lump sum at the
beginning or end of the service period, installments throughout the
service period, or a combination). We estimate that 12 percent of the
recruitment incentives,[Footnote 33] and 1 of 12 of the relocation
incentives awarded from 2007 to October 2008, included how the
incentive was to be paid--a lump sum payment--and the amount. None of
the recruitment and relocation incentives included when the incentive
would be paid--at the beginning of the service period--in the service
agreements.[Footnote 34] According to a senior FDA official, FDA has
traditionally paid recruitment and relocation incentives as lump sum
payments at the beginning of the service period because it is most
attractive to prospective employees at recruitment fairs or interviews
and it places less burden on FDA to maintain records and monitor
payments than biweekly or quarterly payments. According to this
official, FDA has previously explored providing managers with other
payment options and managers overwhelmingly responded that this
payment method was most effective. The service agreement section of
FDA's current recruitment or relocation incentive form now states that
the payment is to be made as a lump sum, but does not specify the
timing of the payment.
FDA's service agreements for recruitment and relocation incentives
also included fields for the commencement and termination dates of the
service period as required. We estimate that about 25 percent of
recruitment incentive files, and 1 of 12 of the relocation incentive
files during the time of our file review, included both commencement
and termination dates.[Footnote 35] A senior FDA official explained
that once the Commissioner approves the award, the Office of
Management sends the incentive file to RHRC, which is responsible for
processing the incentives. During the processing of the award, the
dates of the service period are finalized and according to this FDA
official, RHRC officials must fill in the dates once they determine
the official effective date of the incentive. A senior RHRC official
noted that there previously has been no system to add these dates, so
this step was often missed. As discussed earlier, according to this
official, in the fall of 2009, RHRC adopted the practice of double
checking the incentives to ensure the documentation in the file, such
as the commencement and termination dates on the service agreements,
are complete after the incentive has been processed.
OPM officials responsible for administering the governmentwide 3R
incentive program commented that while not necessarily invalidating
the incentive, these missing elements in the service agreements are
potentially significant omissions and a lack of documentation may lead
to problems in paying the incentives. For example, the timing and
amount of each incentive payment needs to be documented in the service
agreement for disbursement purposes and to ensure that the employee
and agency concur about the payment schedule. Without this
information, the agency may have a difficult time supporting its case
if the employee questions payments, and the payment schedule is not
documented in the file. OPM officials said that the agency has a
general responsibility to ensure all requirements of the incentive are
clearly laid out in the incentive file and communicated to the
employee. The officials added that it was important that the
commencement and termination dates of the service period be documented
because FDA may be hindered in exercising proper oversight. Without
the dates, it could be difficult for the agency to recover incorrect
payments or establish that an employee has left the position prior to
completing the service period outlined in the service agreement.
FDA Could Further Improve Its Guidance for 3R Incentives:
While FDA revised its guidance since the time of our file review, FDA
has not addressed several areas specified in the regulations in its
guidance for retention incentives. First, FDA's guidance states that
all recruitment and relocation incentives are to be paid as lump sum
payments, but FDA does not include the method it uses to pay retention
incentives--biweekly installment payments--in its guidance. A senior
FDA official said it has been a long-standing practice in HHS to give
retention incentive payments in biweekly installments and acknowledged
that the guidance should be updated to reflect this practice. By
including the payment method in its guidance, FDA will help ensure
that the method is communicated to all employees and that payments are
made in accordance with regulations.
Second, as specified in the regulations, FDA's guidance does not
include a condition for terminating a retention incentive when no
service agreement is required based solely on the management needs of
the agency. Not including all of the termination conditions in its
guidance could hinder employees' understanding of the conditions under
which they would no longer receive incentive payments, such as due to
insufficient agency funds. While FDA's guidance generally addresses
the conditions for terminating retention incentives due to the fault
of the employee, such as receiving a performance rating of less than
"fully successful," the other conditions for termination are impressed
upon managers through meetings and other communication on the
importance of using these incentives as discretionary flexibilities,
according to a senior FDA official. As OPM has stated, the agency has
a general responsibility to ensure all requirements of the incentive
are clearly communicated to the employee.
OPM and HHS Provide Oversight of 3R Incentives, but Improvements Can
Be Made:
OPM Provides Oversight of 3R Incentives through Various Mechanisms,
but a Stronger Emphasis on Agencies' Strategic Use of 3R Incentives Is
Needed:
The 3R incentive authorities provided under the Federal Workforce
Flexibility Act of 2004 were designed to provide agencies with
additional flexibility to help recruit and retain employees and better
meet agency strategic human capital needs. Since agencies began using
the new flexibilities, OPM has provided governmentwide oversight by
reviewing and reporting on agencies' use of 3R incentives, providing
guidance to agencies, and evaluating agencies' human capital systems
including the use of 3R incentives.
OPM Annually Reviews and Reports on Agencies' Use of 3R Incentives:
Because the Federal Workforce Flexibility Act of 2004 requires OPM to
annually report to Congress on how agencies used 3R incentives, OPM
requires agencies to report that information annually to OPM. Agencies
must submit data on the number and dollar amount paid by incentive
type, pay grade or work level, occupational series, and other
variables and descriptive information on how the 3R incentive
authority was used that year. For the 2007 annual report to Congress,
OPM also asked agencies to provide information on how the use of 3R
incentives helped improve their agencies' recruitment and retention
efforts and identify any barriers the agencies faced in using 3R
incentives. However, the descriptive information in OPM's annual
report to Congress that agencies provided on how 3R incentives helped
address their recruitment and retention efforts is anecdotal, and
according to OPM's Deputy Associate Director in the Center for Pay &
Leave Administration, OPM's annual report is not intended to be an
evaluation determining whether agencies are following the regulations
and using the 3R incentive authorities appropriately. The act's
reporting requirement will sunset after OPM's report covering 2009,
but according to OPM, OPM may ask agencies to continue their 3R
incentive reporting.[Footnote 36] Therefore, it will be important for
OPM to determine what it will do with that information going forward.
In July 2009, the OPM Director initiated a governmentwide review of 3R
incentives to help ensure effective use of 3R incentives and identify
opportunities to strengthen the 3R incentive program administration
and oversight. When asked about the impetus for this review, the
Deputy Associate Director said the economic situation the nation is
facing and the renewed interest in federal service caused the OPM
Director and administration to question if the need for 3R incentives
and the amount of money agencies spend on these incentives--in
particular retention incentives--was still necessary.
* OPM directed agencies to review their use of 3R incentives and if
needed, update their 3R incentive plans, approval, and monitoring
procedures to ensure they meet regulatory requirements. OPM requested
agencies certify that they completed the review by signing a form and
submitting it to OPM by the end of August 2009. A senior HHS official
in the human resources office said HHS completed its review and
certified to OPM that HHS has a plan for awarding 3R incentives that
meets regulations. According to OPM's Deputy Associate Director, the
agency review was a one-time request by OPM to help ensure that
agencies' 3R incentive plans comply with the most recent version of
the regulations.
* OPM is analyzing trends in the use of 3R incentives governmentwide
and in the 12 agencies (including HHS) that spent the most in terms of
overall dollars on 3R incentives according to 2007 data the agencies
submitted for OPM's annual report to Congress. For these 12 agencies,
OPM is also analyzing trends in their workforce data, such as the
number of recruitment incentives as a percentage of new hires.
According to an OPM official, OPM expects to complete its review in
early 2010 and will share the results with agencies shortly after.
Further, OPM formed a workgroup of the compensation experts from these
12 agencies to develop recommendations for measuring the cost-benefit
of the 3R incentive program for the federal government and evaluating
what the impact would be on recruitment and retention efforts if
agencies were to scale back their funding of the 3R incentives.
According to this OPM official, as of October 2009, the workgroup has
drafted recommendations and is discussing how to share its
recommendations with the Chief Human Capital Officers Council.
According to OPM, OPM's and the agencies' reviews of 3R incentives
could result in OPM guidance on metrics agencies may use to ensure the
incentives are being used effectively and addressing their recruitment
and retention goals. Such metrics would enable agencies to report more
systematically on the results of their use of 3R incentives.
Continuing to have governmentwide information on 3R incentives will
provide OPM and policymakers with the information they need to help
assess trends in the overall usage of the 3R incentive program across
the government and determine if changes are needed.
OPM's 3R Incentive Guidance to Agencies Could More Fully Emphasize the
Importance of Considering Succession Planning in the Decision Process
for Awarding Retention Incentives:
Since issuing interim regulations for 3R incentives in 2005, OPM has
issued final regulations for 3R incentives and retention incentives
for employees who are likely to leave for a different federal position
before the closure or relocation of the employee's office, issued
memorandums and posted frequently asked questions and fact sheets
providing guidance on the use of 3R incentives on its Web site, and
held forums for agency officials to discuss the regulatory changes and
other topics in May 2005 and March 2008. According to OPM, OPM also
provides guidance in response to agency inquiries through e-mails or
phone calls on agency-specific 3R issues. In the 2009 memorandums
providing guidance to agencies for reviewing their 3R incentive
programs, the OPM Director stressed the importance of ensuring the
money spent on 3R incentives is being used effectively and that the
cost of using any pay flexibilities, including 3R incentives, should
be weighed against the benefits gained especially in the case of
retention incentives, which account for the majority of 3R incentive
costs.
As a next step, OPM could provide guidance to all agencies on the
importance of considering succession planning in the decision process
for awarding retention incentives. We have noted the importance of
succession planning to strengthen both current and future
organizational capacity and identify, develop, and select successors
who are the right people, with the right skills, at the right time for
leadership and other key positions.[Footnote 37] OPM supports
succession planning as a vital tool for maintaining a highly-skilled
workforce and, according to OPM, succession planning may help an
agency reduce its need more quickly for an employee's services to a
level that makes it unnecessary to continue paying the retention
incentive and allows the agency to terminate it. However, through its
regulations and guidance, OPM does not require agencies to consider
succession planning as part of the decision and documentation process
for awarding a retention incentive. The regulations allow agencies to
award retention incentives to employees, including those who are
eligible to retire and are likely to leave federal service in the
absence of receiving an incentive. While requiring agencies to
annually review the conditions for giving the retention incentive to
ensure they are still present when a service agreement is not
required, OPM regulations do not place any restriction on the number
of consecutive years an individual can receive a retention incentive.
OPM Evaluates Agencies' Human Capital Management Systems Including the
Use of 3R Incentives:
OPM provides oversight of agencies' human capital systems including
the use of 3R incentives by periodically conducting two types of
evaluations--human capital management evaluations and delegated
examining reviews[Footnote 38]--and participating in agency-led
evaluations as part of their broader human capital accountability
requirements under OPM's Human Capital Assessment and Accountability
Framework by providing guidance and assistance. As part of these
evaluations, OPM reviews an agency's 3R incentive plan including
designation of the proper approval authority, documentation of
individual incentive decisions, and agency 3R incentive data for
compliance with applicable regulations. An OPM official responsible
for conducting the evaluations said examples of 3R incentive problems
that OPM may find would be an incomplete or missing incentive request
form or justifications lacking the necessary documentation for the
incentive. If OPM finds that an agency's 3R incentive plan or payments
do not comply with regulations, OPM includes a required action in its
evaluation report, which gives the agency 60 days to submit to OPM for
approval the evidence that it has corrected any identified violations.
According to this official, OPM may make recommendations to the agency
for improvements, but it does not follow up on the implementation of
these recommendations since they do not pertain to legal or regulatory
violations. Regarding an opportunity for improvement that OPM sees for
agencies' use of 3R incentives based on these evaluations, the
official stated that OPM would like to see a more strategic approach
to overall 3R incentive program design and implementation to help
ensure the incentives are used appropriately to reflect changing
conditions in the agency and the labor market. OPM expects each agency
to perform the necessary analysis to determine the tools and
flexibilities, including 3R incentives, which would help each agency
achieve its goals as part of each agency's strategic workforce
planning process, according to this official. It is important for OPM
to encourage agencies to take this step and identify the linkage
between an agency's use of 3R incentives and meeting its recruitment
and retention goals.
Most recently, OPM conducted several delegated examining reviews for
organizations within HHS including RHRC, which provides human capital
services to FDA, in fiscal year 2006. OPM has not recently conducted
any human capital management evaluations at HHS; rather, OPM
participates in the HHS-led accountability reviews, such as the
reviews of several OPDIVs including FDA in fiscal year 2007. OPM did
not examine HHS's 3R incentive program as part of its delegated
examining reviews and found no problems with the use of 3R incentives
in its participation in the HHS-led reviews of several OPDIVs in
fiscal year 2007.
HHS Provides Oversight of 3R Incentives, but Areas of Its 3R Incentive
Policy Could Be Strengthened:
HHS provides oversight of its OPDIVs'--the agencies within HHS--use of
3R incentives by implementing a departmentwide 3R incentive policy and
monitoring and periodically conducting accountability reviews of its
OPDIVs' human capital systems including the use of 3R incentives.
HHS Implements a Departmentwide Policy for 3R Incentives, but the
Policy Does Not Clearly Address Certain Important Requirements:
Figure 28: According to OPM regulations, the agency's 3R incentive
plan must cover certain requirements, such as the designation of
officials with authority to review and approve the payments, required
documentation for justifying the incentive, and conditions for
terminating an incentive and obligations of the agency and employee
upon such termination, among other things. HHS developed a written
policy for authorizing the use of 3R incentives across the department.
[Footnote 39] While HHS's 3R incentive policy generally addressed the
requirements for 3R incentive plans as outlined in OPM's regulations,
there were several instances where the policy omitted or did not
clearly address certain important requirements. Clearly incorporating
the regulatory requirements into the policy will help to ensure that
managers and OPDIVs are using 3R incentives consistent with the law
and regulations. According to a senior HHS official, HHS is reviewing
the current 3R incentive policy and determining if updates are needed
as part of its review of 3R incentives in response to OPM's directive
to agencies in May 2009 to review their 3R incentive programs. We
found that HHS's 3R incentive policy could be strengthened in the
following areas.
* Conditions for reducing or terminating an incentive. HHS's policy
generally addressed the mandatory and discretionary conditions for
reducing or terminating an employee's incentive payment and the
agency's and employee's obligations with regard to notification,
payments, and repayment of the incentive. However, HHS's policy
incorrectly refers to a condition for reducing or terminating a
retention incentive authorization as a discretionary (may) condition,
when it should be documented as a mandatory (must) condition.
Specifically, when no service agreement is required, payment of a
retention incentive must be reduced or terminated when the original
determination to pay the incentive no longer applies or when payment
is no longer warranted at the level originally approved. Further,
HHS's policy does not include a mandatory termination condition for
retention incentives when no service agreement is required due to the
employee being demoted or separated for cause or the employee
receiving a rating of less than "fully successful." The policy only
discusses this condition for retention incentives with service
agreements. HHS officials acknowledged these errors in the 3R
incentive policy and stated that the policy should be corrected and
more specific than the general rules for terminating service
agreements that are currently in the policy. Not correctly specifying
the mandatory and discretionary conditions for reducing or terminating
3R incentives and service agreements could hinder OPDIVs'
interpretation and understanding of these conditions when reductions
or terminations of the incentives may be in order.
* Annual review of retention incentives with no service agreement. OPM
regulations state that for retention incentives that are paid when no
service agreement is required, an agency must review each
determination to pay the incentive at least annually to determine
whether payment is still warranted and certify this determination in
writing. HHS's policy does not provide that retention incentives paid
biweekly, which require no service agreements, need to be reviewed
annually. According to HHS officials, HHS does not provide any
guidance on this requirement; it is up to the OPDIVs to determine how
they will review their incentives, including the annual review for
retention incentives without service agreements. The officials stated
that they plan to build a check of this requirement into the future
accountability reviews of 3R incentives across HHS.
* Conditions for repayment of an incentive. According to OPM
regulations, if a 3R incentive service agreement is terminated due to
employee fault or failure related to performance, the employee can
retain payments received for completed work, but the agency does not
have to pay the amount attributed to completed work that has not been
received unless agreed to in the service agreement, nor is the agency
obligated to pay any incentive payments attributable to uncompleted
service. HHS's policy on the department's obligations in the event of
the termination of a 3R incentive is not clear, suggesting that an
agency may be obligated to make outstanding payments attributed to
uncompleted service if provided for in a service agreement, which is
not permissible when terminated due to employee fault.
According to an HHS official, HHS has not yet awarded retention
incentives to employees who would be likely to leave for a different
position in the federal service before the closure or relocation of
the employee's office or organization. HHS's policy does not address
all the regulatory requirements that apply when using retention
incentives in this manner, such as the requirement that these
incentives cannot be paid in biweekly installments at the full
incentive percentage rate. A senior HHS official said HHS has not yet
determined if it will update the policy to document these requirements
because it has not yet used this type of incentive. Moving forward,
HHS should have the policy in place before using this type of
retention incentive to help ensure the OPDIVs use this flexibility in
a manner that meets the approval of HHS and regulatory requirements.
HHS Monitors and Periodically Conducts Accountability Reviews of Its
OPDIVs' Human Capital Systems Including the Use of 3R Incentives:
OPM regulations require agencies to monitor the use of 3R incentives
to ensure the incentive plan and payments are consistent with the law
and regulatory requirements. In its 3R incentive policy, HHS assigns
its OPDIVs the responsibility of ongoing monitoring of 3R incentives
to ensure compliance with regulations and HHS policy. HHS does not
uniformly review the OPDIVs' guidance outlining the internal process
they follow or 3R incentive forms, but a senior HHS official stated
that HHS provides advice to OPDIVs when requested or required. While
its ongoing monitoring of 3R incentives has been minimal in the past,
according to another senior HHS official, HHS is planning to take a
more active role in light of its recent review of 3R incentives in
response to OPM's directive to agencies in May 2009 to review their 3R
incentive programs. The official stated that HHS is deciding how to
implement the results of its 3R incentive review and build ongoing
monitoring and future reviews of 3R incentives into the existing human
capital accountability reviews conducted by the Office of Human
Resources.
Providing further oversight of 3R incentives, HHS's Human Capital and
Accountability Division within the Office of Human Resources conducts
accountability reviews of the OPDIVs' human capital systems, including
the use of 3R incentives as part of OPM's Human Capital Assessment and
Accountability Framework requirements. The purpose of the
accountability reviews is to ensure the OPDIV's' human capital
programs and policies are effective and adhere to merit system
principles and other pertinent laws and regulations. In response to
HHS's recommendations and required actions as a result of its reviews,
an HHS official responsible for conducting the accountability reviews
said the OPDIVs are asked to respond to all recommendations and
required actions identified by HHS, but HHS only requires a response
to the required actions, which are legal or regulatory violations.
Moving forward, the official said that HHS plans to conduct its
accountability reviews of departmentwide programs, such as 3R
incentives, instead of the OPDIV-specific reviews, to enable the audit
team to examine specific details of the programs across HHS, which the
current approach does not allow. HHS is planning an accountability
program review of 3R incentives in fiscal year 2010.
For its accountability review of FDA in fiscal year 2007, HHS reviewed
FDA's compensation strategies, including 3R incentives, and reported
that they helped attract and retain quality employees. As part of the
review, HHS said the team reviewed 13 group retention incentive
actions at FDA to ensure that the files were completed properly and
contained correct documentation. HHS did not identify any required
actions for FDA on 3R incentives or other aspects of its human capital
system, but it did identify a number of recommendations for
improvements in the human capital area including one specific to
retention incentives. HHS found that overall FDA's retention policies
and practices appear to meet the requirements of HHS policy and other
governmental guidelines. However, HHS reported that FDA had not
incorporated the use of retention tools into its workforce plan and
recommended that FDA identify existing retention tools, analyze their
effectiveness, and incorporate retention strategies into the FDA
workforce plan. According FDA's Assistant Commissioner for Management,
FDA plans to address this recommendation in the scheduled update of
its strategic workforce plan in fiscal year 2010. HHS has not reviewed
FDA since fiscal year 2007 and plans to include FDA as part of its
scheduled program review of 3R incentives for fiscal year 2010.
Conclusions:
Federal agencies have a number of available flexibilities, including
3R incentives, to help them strategically manage their workforces.
OPM's call to agencies to review their 3R incentive programs has
raised awareness about the importance of ensuring that current and
future incentives are used only when necessary to support agency
mission and program needs. FDA, OPM, and HHS have an opportunity to
make further improvements to internal controls and oversight of 3R
incentives. FDA lacks an updated strategic workforce plan that would
help it determine how its use of 3R incentives is contributing to its
human capital goals. Despite positive enhancements over the past 3
years, FDA's internal controls have weaknesses related to requesting,
approving, and processing 3R incentive requests. Strong internal
controls help provide assurance that 3R incentives are used
efficiently and effectively.
As for oversight, OPM requiring all federal agencies to incorporate
succession planning in the decision process for awarding retention
incentives would help to ensure that agencies consider other effective
means to acquire and retain talent. Clearly incorporating important
requirements into HHS's 3R incentive policy will help to ensure that
managers and OPDIVs are using 3R incentives consistent with the law
and regulations.
Recommendations for Executive Action:
To better align the use of 3R incentives with the agency's human
capital goals, we recommend that the Commissioner of FDA update FDA's
strategic workforce plan to document the agency's recruitment and
retention goals and strategies and as part of that update, identify
indicators to better track the progress of 3R incentives over time in
addressing the agency's recruitment and retention goals.
As FDA implements the results of its 2009 review of 3R incentives, we
recommend that the Commissioner of FDA continue to strengthen FDA's
internal controls for requesting, approving, and processing 3R
incentives by taking the following two actions:
* update the guidance for awarding 3R incentives to include the
payment method used for retention incentives and all the conditions
for terminating a retention incentive when no service agreement is
required, and:
* ensure 3R incentive files are properly completed and reviewed to
address policy and regulatory requirements before the employees
receive the incentive payments.
As OPM implements the results of its governmentwide 3R incentive
review, we recommend that the Director of OPM require agencies to
incorporate succession planning efforts into the decision process for
awarding retention incentives and document this requirement for
succession planning in their 3R incentive plans.
To ensure the department and OPDIVs are aware of HHS's policy in all
areas of 3R incentives and use these incentives consistent with law
and OPM regulations, we recommend that the Secretary of HHS revise
HHS's 3R incentive policy to ensure that the guidance provided clearly
addresses certain important requirements outlined in the regulations.
Agency Comments and Our Evaluation:
We provided a copy of the draft report to the Secretary of HHS and
Director of OPM for their review and comment. HHS's Acting Assistant
Secretary for Legislation provided written comments that included
comments from FDA (see appendix III). FDA generally agreed with our
recommendations. FDA stated that it will continue to review its 3R
incentives to ensure that their use is consistent with the agency's
guidance for the use of 3R incentives. In response to its
recommendation, HHS acknowledged the need to revise its 3R incentive
policy and stated that it is in the process of reviewing and making
the appropriate changes. HHS also provided technical comments on the
draft report, which we incorporated as appropriate.
OPM provided written comments, which are included in appendix IV. OPM
agreed with our recommendation and stated that it will develop future
guidance on the importance of considering succession planning in the
decision process for awarding retention incentive. OPM stated that it
is working with agencies to review the 3R incentive program and its
current regulations, guidance, and monitoring policies to identify
areas where improvements can be made, such as developing and using
metrics to monitor and evaluate 3R incentive usage. OPM also provided
technical comments on the draft report, which we incorporated as
appropriate.
As we agreed with your offices, unless you publicly announce the
contents of this report earlier, we plan no further distribution of it
until 30 days from the date of this letter. At that time, we will send
copies of this report to the appropriate congressional committees, the
Secretary of HHS, Commissioner of FDA, Director of OPM, and other
interested parties. The report will also be available at no charge on
the GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions regarding this report, please
contact me at (202) 512-6806 or goldenkoffr@gao.gov. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this report. GAO staff who made major
contributions to this report are listed in appendix V.
Signed by:
Robert N. Goldenkoff:
Director, Strategic Issues:
[End of section]
Appendix I Objectives, Scope, and Methodology:
This report examines (1) the extent to which the Food and Drug
Administration (FDA) is linking its use of recruitment, relocation,
and retention (3R) incentives to its strategic human capital
approaches to address its current and emerging challenges; (2) the
extent to which FDA's 3R incentives were awarded consistent with the
law, regulations, and guidance and the internal controls FDA has in
place to ensure proper disbursement of 3R incentives and encourage
efficient use; and (3) the steps the Office of Personnel Management
(OPM) has taken to help ensure that agencies, including the Department
of Health and Human Services (HHS), have effective strategic oversight
of their 3R incentive programs, and how HHS is providing oversight of
its 3R incentive program.
To address our first objective, we collected and analyzed aggregate
pay data as provided by HHS on the amount and number of 3R incentives
by various categories for employees in FDA and the rest of HHS from
January 1, 2007, through July 4, 2009, and data on FDA's workforce
from OPM's Central Personnel Data File (CPDF) for fiscal year 2008.
[Footnote 40] To describe FDA's use of 3R incentives and draw a
comparison to the rest of HHS, we analyzed and compared the data on
FDA and the rest of HHS to determine the number of each type of 3R
incentive provided to employees and the aggregate distributions across
various categories including duty location, pay plan, and occupational
series by calendar year. Using the HHS pay data, we calculated the
percentage of FDA and HHS total numbers of 3R incentives and total
expenditures on these incentives, the mission-critical occupational
series' percentage of FDA's total number of 3R incentives with mission-
critical occupations as defined by FDA, the average distribution of
FDA 3R incentives by top occupational series, and the distribution of
FDA 3R incentives by pay plan.
To compare the use of 3R incentives in FDA with trends in its
workforce, using data from CPDF, we calculated FDA retirement
eligibility by occupational series for career permanent employees,
[Footnote 41] and FDA's percentage of HHS's total workforce. As a
point of comparison on the governmentwide use of 3R incentives, we
reviewed OPM's Recruitment, Relocation, and Retention Incentives
Calendar Year 2007: Report to the Congress, issued in September 2008,
and identified the total dollar amount spent on 3R incentives in 2007.
We checked the HHS data for reasonableness and the presence of any
obvious or potential errors in accuracy and completeness. We conducted
interviews with selected HHS officials knowledgeable about the data,
and brought to the attention of these officials any concerns or
discrepancies we found with the data for correcting or updating and
further clarification. On the basis of these procedures, we believe
the data provided by HHS are sufficiently reliable for use in the
analyses presented in this report. In addition, we believe the CPDF is
sufficiently reliable for the informational purpose of this report.
[Footnote 42]
To identify linkage with the use of 3R incentives and FDA's human
capital documents, we analyzed FDA's Fiscal Year 2006 Workforce Plan--
the most recent workforce plan available--and FDA's Succession Plan
2009-2012. We also conducted interviews with FDA officials about the
trends we identified in the 3R incentives pay data, FDA's strategic
human capital approaches and how the use of 3R incentives fits into
broader human capital decisions at the agencywide and center-specific
levels, and how the agency tracks the use of 3R incentives to assess
the effectiveness of these payments and how they contribute to FDA's
broader human capital goals.
To address our second objective, we identified all elements that are
required to be included in documenting the awarding of an incentive.
We analyzed applicable provisions of title 5 of the United States
Code, OPM regulations, HHS policy, and FDA guidance, and interviewed
HHS, FDA, and OPM officials to create a data collection instrument
identifying the applicable requirements. We used this data collection
instrument to analyze a sample of 3R incentives awarded by FDA in 2007
and 2008 in order to determine the extent to which documentation
elements required for the awarding of 3R incentives were present.
To review the FDA 3R incentive files, we took a stratified sample. We
looked at new incentives for three categories of incentive files--
recruitment, relocation, and retention--from 2007 and 2008. There were
2,056 incentive actions in this population from January 1, 2007, to
October 31, 2008. We randomly selected files for review from each set,
or stratum, of incentive actions for each category and year, except
for three strata where we reviewed all of the files due to the small
population size. Our sample size was 107 files, with the number of
selected files per stratum shown in table 2.
Table 2: FDA 3R Incentive Population Size and Number of Random Case
Selections by Stratum:
Stratum: 2007 Relocation;
Population: 5;
Sample size: 5;
Number of out-of-scope cases: 0.
Stratum: 2007 Retention;
Population: 807;
Sample size: 37;
Number of out-of-scope cases: 0.
Stratum: 2007 Recruitment;
Population: 1;
Sample size: 1;
Number of out-of-scope cases: 0.
Stratum: 2008 Relocation;
Population: 7;
Sample size: 7;
Number of out-of-scope cases: 0.
Stratum: 2008 Retention;
Population: 898;
Sample size: 41;
Number of out-of-scope cases: 2.
Stratum: 2008 Recruitment;
Population: 338;
Sample size: 16;
Number of out-of-scope cases: 0.
Stratum: Total;
Population: 2,056;
Sample size: 107;
Number of out-of-scope cases: 2.
Source: GAO.
[End of table]
Subsequent analysis of the 107 files showed that 2 of the files were
not in the scope for this review, leaving us with a random sample of
105 files. We applied our data collection instrument to the random
sample of 105 files to determine whether each file contained all the
elements that needed to be documented in the awarding of a 3R
incentive. Each incentive file was weighted so that our random sample
statistically represented the population in each stratum.
Because we followed a probability procedure based on random
selections, our sample of 3R incentive files was only one of a large
number of samples that we might have drawn. Because each sample could
have provided different estimates, we express our confidence in the
precision of our particular sample's results in 95 percent confidence
intervals. These are intervals that would contain the actual
population values for 95 percent of the samples we could have drawn.
As a result, we are 95 percent confident that each of the confidence
intervals in this report will include the true values in the study
population. All percentage estimates from the 3R incentive file review
have margins of error at the 95 percent confidence level of plus or
minus 10 percentage points or less, unless otherwise noted.
The practical difficulties of utilizing any data collection instrument
may introduce errors, commonly referred to as nonsampling errors. For
example, difficulties in how a particular question is interpreted, in
the sources of information that are available to respondents, or in
how the data are entered into a database or were analyzed can
introduce unwanted variability into the results. We took steps in the
development of the instrument, the data collection, and the data
analysis to minimize these nonsampling errors, including providing
detailed instructions of the data collection instrument. In addition,
we had a second independent reviewer for the data analysis to further
minimize such errors.
We interviewed OPM officials to help understand OPM's policy on
oversight of 3R incentives and the regulations, their interpretation
of HHS's policy and FDA's guidance on 3R incentives, and how the
results of the file review were viewed in this context. We did not ask
OPM to review HHS's policy or FDA's guidance on 3R incentives as part
of our review. We also interviewed FDA officials to discuss their
internal controls relating to the awarding and oversight of 3R
incentives, and how the findings of our review fit within the context
of their oversight. We reviewed FDA's most recent review of its policy
and usage of 3R incentives to identify revisions that were made to
internal controls.
To address the third objective, we analyzed OPM's guidance on 3R
incentives including regulations, memorandums, and fact sheets;
templates for its human capital evaluations; and the 3R incentive
report to Congress for calendar year 2007. We also interviewed
cognizant officials from the two divisions in OPM that are responsible
for developing the 3R incentive regulations and annual reports and
monitoring agencies' use of 3R incentives. To obtain information on
HHS's oversight of 3R incentives, we analyzed HHS's 3R incentive
policy to determine consistency with OPM regulations on 3R incentives,
HHS's fiscal year 2007 human capital accountability review of FDA to
identify relevant findings on 3R incentives, and other relevant
documentation; interviewed senior-level HHS officials responsible for
implementing the 3R incentive policy and conducting accountability
reviews of the operating divisions' human capital management systems
including 3R incentives; and interviewed senior-level FDA officials
familiar with HHS's monitoring and oversight of 3R incentives.
We conducted our work from December 2008 through January 2010 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: Highlights of the Food and Drug Administration 3R
Incentive File Review Results:
The following table provides examples of the results for our review of
FDA's 3R incentive files. We reviewed the files of a random,
stratified sample of 3R incentives awarded from January 2007 through
October 2008 to determine whether they met requirements in law, OPM
regulations, HHS policy, and FDA guidance.[Footnote 43]
Table 3: Examples of How FDA's 3R Incentive Files Addressed Selected
Requirements:
Required forms:
Requirements for 3R incentive files according to law, OPM regulations,
HHS policy, or FDA guidance: Incentive request: An FDA form that
outlines descriptive information, such as the employee's name, pay
series, and incentive amount, and documents the approving signatures;
How FDA 3R incentive files addressed requirements: We estimate that
all 3R incentive files contained the request form for the incentive.[A]
Requirements for 3R incentive files according to law, OPM regulations,
HHS policy, or FDA guidance: Justification for the incentive request:
Documents the need for the incentive and the reason why the incentive
is warranted according to regulatory and policy requirements and
includes supplemental information, such as salary surveys, to support
justification;
How FDA 3R incentive files addressed requirements: We estimate that
about 95 percent of 3R incentive files contained the justification for
the incentive request.[B] Further, we estimate that about 83 percent
of 3R incentive files contained supporting documentation,
predominantly salary surveys,[C] used to support the need for the
incentive.
Requirements for 3R incentive files according to law, OPM regulations,
HHS policy, or FDA guidance: Service agreement: A written agreement
the employee must sign before receiving the incentive to complete a
specified period of employment with the agency prior to receiving the
incentive. Regulations require service agreements for recruitment and
relocation incentives, but not for retention incentives when the
incentive is paid on a biweekly basis at the full percentage amount:
* FDA requires service agreements for recruitment and relocation
incentives, but does not use service agreements for retention
incentives because it pays these incentives in biweekly installments
at the full percentage amount;
How FDA 3R incentive files addressed requirements: All recruitment
incentive files we reviewed, and 11 of the 12 relocation incentive
files we reviewed, contained a service agreement. None of the
retention incentive files had an agreement as allowed by
regulations.[D]
Requirements for 3R incentive files according to law, OPM regulations,
HHS policy, or FDA guidance: Standard Form (SF) 50: A notification of
the personnel action for the incentive payment to help ensure the
authorization was processed accordingly;
How FDA 3R incentive files addressed requirements: We estimate that
all 3R incentive files contained the SF-50 showing the proper payment
authorization.[E]
Approval of the incentive request:
Requirements for 3R incentive files according to law, OPM regulations,
HHS policy, or FDA guidance: Recommending official signature: FDA
requires the center director or a deputy commissioner to officially
request the incentive and sign the request form[F];
How FDA 3R incentive files addressed requirements: We estimate that
about 99 percent of 3R incentive files were signed by the recommending
official, or a proxy on his or her behalf.[G]
Requirements for 3R incentive files according to law, OPM regulations,
HHS policy, or FDA guidance: Approving official signature: FDA's
Commissioner is the approving official who is to officially approve or
disapprove all incentive requests and sign the request form:
* From 2007 through 2008, FDA allowed the Deputy Commissioner for
Operations/Chief Operating Officer to sign for the Commissioner and
approve the requests. According to an HHS official, this delegation of
approval is consistent with HHS policy and OPM regulations;
How FDA 3R incentive files addressed requirements: We estimate that
all of the 3R incentive files were signed by the approving official[H]
or a designee on his behalf. For most of the files, the Deputy
Commissioner for Operations/Chief Operating Officer signed as a
designee for the Commissioner as the approving official.
Eligibility conditions for 3R incentives:
Requirements for 3R incentive files according to law, OPM regulations,
HHS policy, or FDA guidance: Eligible categories of employees: As
provided for by statute, OPM regulations identify the categories of
eligible employees including positions in or whose pay is set at the
General Schedule (GS), senior-level or scientific or professional,
Senior Executive Service (SES), law enforcement officers, Executive
Schedule, prevailing rate, and other positions approved by OPM:
* Employees appointed pursuant to 42 U.S.C. §§ 209(f) and 209(g) are
not eligible to receive 3R incentives pursuant to the authorities at 5
U.S.C. §§ 5753 or 5754. Rather, their compensation is authorized
pursuant to these appointment provisions which permit HHS flexibility
in setting compensation for those appointed. FDA began phasing out the
use of retention incentives for these employees starting in 2007;
How FDA 3R incentive files addressed requirements: We estimate that
all 3R incentives were awarded to eligible categories of employees.[I]
Requirements for 3R incentive files according to law, OPM regulations,
HHS policy, or FDA guidance: Newly appointed employee for recruitment
incentives: An employee must be in the first appointment in the
federal government or meet the regulatory definition for newly
appointed in order to be eligible to receive a recruitment incentive;
How FDA 3R incentive files addressed requirements: All recruitment
incentive files we reviewed contained documentation supporting that
the recipient was newly appointed to the federal government.
Requirements for 3R incentive files according to law, OPM regulations,
HHS policy, or FDA guidance: Current employee for relocation and
retention incentives: An employee must be an employee in the federal
government immediately before the relocation or receiving the
retention incentive payment;
How FDA 3R incentive files addressed requirements: 10 of 12 of the
relocation incentive files contained documentation supporting that the
incentive was given to an employee in the federal government
immediately before receiving the incentive. All retention incentives
we reviewed were given to current FDA employees.
Aggregate pay limitation:
Requirements for 3R incentive files according to law, OPM regulations,
HHS policy, or FDA guidance: Aggregate pay limitation: Payment of 3R
incentives is subject to an aggregate pay limit under 5 U.S.C. § 5307
which limits compensation received in any calendar year to an amount
equal to the rate for level I of the Executive Schedule or, for
employees in SES positions covered by a certified performance
appraisal system, equal to the annual compensation payable to the Vice
President.[J] For FDA's GS employees, the amounts were $186,600 and
$191,300 for 2007 and 2008, respectively. For FDA's SES employees,
which are covered under HHS's certified appraisal system, the amounts
were $215,700 and $221,100 for 2007 and 2008, respectively:
* For FDA employees appointed under the authority of 42 U.S.C. §§
209(f) and 209(g), the aggregate pay limit under section 5307 does not
apply to payments authorized outside of title 5. HHS has established
aggregate pay limits for these title 42 positions, which for its
209(g) employees, reflect the limit required under section 5307 for
FDA's GS employees. For its 209(f) employees, the aggregate pay limit
was $375,000 for 2007 and 2008;
How FDA 3R incentive files addressed requirements: We estimate that
all employees' 3R incentive payments were within applicable aggregate
pay limits for the year as set by statute or HHS.[K]
Source: GAO analysis of law, OPM regulations, HHS policy, FDA
guidance, and a sample of FDA 3R incentive files.
[A] The 95 percent confidence interval for this estimate is from 97.2
to 100 percent.
[B] The 95 percent confidence interval for this estimate is from 88.3
to 98.3 percent.
[C] The 95 percent confidence interval for this estimate is from 76.4
to 87.6 percent.
[D] 1 of 1 and 16 of 16 recruitment incentive files from 2007 and
2008, respectively, and 0 of 37 and 0 of 39 retention incentive files
from 2007 and 2008, respectively.
[E] The 95 percent confidence interval for this estimate is from 97.2
to 100 percent.
[F] FDA requires the center directors/Associate Commissioner for
Regulatory Affairs, or within the Office of the Commissioner, the
deputy commissioners/Chief Counsel or Chief of Staff, as applicable,
to officially request the incentive and sign the request form.
[G] The 95 percent confidence interval for this estimate is from 95.0
to 100 percent.
[H] The 95 percent confidence interval for this estimate is from 97.2
to 100 percent.
[I] The 95 percent confidence interval for this estimate is from 97.2
to 100 percent.
[J] 5 U.S.C. § 5307(d) provides for the higher aggregate pay limit for
SES positions (or senior-level or scientific or professional positions
paid under 5 U.S.C. § 5376) in agencies with systems that have been
certified by OPM with Office of Management and Budget concurrence as
having performance appraisal systems which, as designed and applied,
make meaningful distinctions based on relative performance. 5 C.F.R.
part 530, subpart B and part 430, subpart D.
[K] The 95 percent confidence interval for this estimate is from 97.2
to 100 percent.
[End of table]
[End of section]
Appendix III: Comments from the Department of Health and Human
Services:
Department Of Health & Human Services:
Office Of The Secretary:
Assistant Secretary for Legislation:
Washington, DC 20201:
December 29, 2009:
Robert N. Goldenkoff:
Director, Strategic Issues:
U.S. Government Accountability Office:
441 G Street N.W.
Washington, DC 20548:
Dear Mr. Goldenkoff:
Enclosed are comments on the U.S. Government Accountability Office's
(GAO) report entitled: "Human Capital: Continued Opportunities Exist
for FDA and OPM to Improve Oversight of Recruitment, Relocation, and
Retention Incentives" (GA0-10-226).
The Department appreciates the opportunity to review this report
before its publication.
Sincerely,
Signed by:
Andrea Palm:
Acting Assistant Secretary for Legislation:
Enclosure:
[End of letter]
General COMMENTS FROM THE DEPARTMENT OF HEALTH AND HUMAN SERVICES
(HHS) On The Government Accountability Office's (GAO) Draft Report
Entitled: "Human Capital: Continued Opportunities Exist For FDA And
OPM To Improve Oversight Of Recruitment, Relocation, And Retention
Incentives" (GAO-10-226):
The Department appreciates the work that GAO has recently completed on
the study entitled, Human Capital: Continued Opportunities Exist for
FDA and OPM to Improve Oversight of Recruitment, Relocation, and
Retention Incentives.
FDA leadership is taking advantage of these opportunities for improved
oversight. We have already taken major steps over the last year, and
we accept GAO's recommendations for additional changes.
In April 2009, FDA dissolved and reconstituted the FDA Executive
Review Board (ERB). Chaired by Principal Deputy Commissioner Dr.
Joshua Sharfstein, the ERB now includes the agency's seven Center
Directors, the Associate Commissioner for Policy, and the Assistant
Commissioner for Management. The ERB is responsible for reviewing all
compensation programs across the FDA.
The first charge for the ERB was to develop Guiding Principles for the
use of 3R incentives. These principles put additional restrictions on
the use of these incentives, beyond those required by law or
regulation.
Recruitment:
The ERB has assessed the agency's use of recruitment incentives. It
concluded that based upon the current status of the job market, FDA
would end the routine use of recruitment incentives. Since June 1,
2009, the ERB has not approved any new recruitment incentives and FDA
anticipates that the use of recruitment incentives will dramatically
decrease in 2009 as compared to 2008.
Relocation:
The ERB reviewed the current use of relocation incentives and found
these incentives to be rarely awarded and a potentially effective and
appropriate tool for key personnel. In FY 2008, eight employees
received the incentives. There were zero relocation incentives awarded
in FY 2009, and zero so far in FY 2010.
Retention:
The ERB reviewed every existing categorical and individual retention
incentive. At the time of the ERB's review, 343 employees had received
categorical retention incentives and 171 individual employees had
received individual retention incentives. FDA had already dropped the
use of retention incentives in Title 42.
FDA's review of categorical incentives found that the agency hires
many scientists with specialized knowledge in such fields as
mathematical statistics, pharmacology, pharmacokinetics, and
toxicology in competition with much higher-paying private sector jobs.
These incentives have been critical for FDA to retain critical human
capital and are far more efficient than a continual turnover in
regulatory scientists.
In its initial re-review of individual retention incentives, FDA
revalidated 135 of the 171 individual incentives based on the
principles adopted. Of the 135, 31 were reduced for fiscal year 2010,
and 7 of those that were not reduced have subsequently been eliminated.
The FDA will continue to the review and revalidate the 3R incentives
to ensure that the use of these incentives is consistent with the
established Guiding Principles.
Overall, the FDA is committed to effectively managing its 3R program
and has implemented some program enhancements that are above and
beyond the guidance that has been provided either by OPM or HHS. These
enhancements include the implementation of human capital elements
within the request for retention incentives that require managers to
provide specific information about succession planning efforts when
requesting a retention incentive. In addition, although OPM
regulations do not place any restrictions on the number of
consecutive years an individual can receive a retention incentive, FDA
has incorporated in its Guiding Principles and implemented a 5-year
limit on the number of consecutive years that an individual can
receive a retention incentive. In conjunction with the implementation
of this 5-year maximum, each incentive is reviewed on an annual basis
to determine if the original conditions still apply. The incentives
are not automatically renewed.
Response to Recommendations:
GAO Recommendation:
To better align the use of 3R incentives with the agency's human
capital goals, we recommend that the Commissioner of FDA update FDA's
strategic workforce plan to document the agency's recruitment and
retention goals and strategies and as part of that update, identify
indicators to better track the progress of 3R incentives over time in
addressing the agency's recruitment and retention goals.
FDA agrees with this recommendation. FDA has recently initiated a
Human Capital and Workforce Planning effort that will encompass and
document the agency's recruitment and retention goals. As part of that
effort, FDA will put in place a mechanism to track and assess the
progress of the 3R incentives.
GAO Recommendation:
As FDA implements the results of its 2009 review of 3R incentives, we
recommend that the Commissioner of FDA continue to strengthen FDA's
internal controls for requesting, approving, and processing 3R
incentives by taking the following two actions:
* Update the guidance for awarding 3R incentives to include the
payment method used for retention incentives and all the conditions
for terminating retention incentives when no service agreement is
required.
FDA agrees with this recommendation. FDA will update the existing
guidance for 3R incentive payments to include specific controls that
address payment method and conditions for terminating.
* Ensure 3R incentive files are properly completed and reviewed to
address policy and regulatory requirements before the employees
receive the incentive payments.
FDA agrees with this recommendation. FDA will coordinate with the
Department of Health and Human Services, Office of Human Resources, to
ensure that the cases are processed appropriately and properly
documented prior to payment.
GAO Recommendation:
To ensure the Department and OPDIVs are aware of HHS's policy in all
areas of 3R incentives and use these incentives in a manner that is
consistent with law and OPM regulations, we recommend the Secretary of
HHS revise the Department's 3R incentive policy to ensure that the
guidance provided clearly addresses certain important requirements
outline in the regulations.
HHS acknowledges the need to revise its 3R policy and is in the
process of reviewing and making the appropriate changes.
[End of section]
Appendix IV: Comments from the Office of Personnel Management:
UNITED STATES OFFICE OF PERSONNEL MANAGEMENT:
The Director:
Washington, DC 20415:
"Our mission is to ensure the Federal Government has an effective
civilian workforce."
[hyperlink, http://www.usajobs.gov]
[hyperlink, http://www.opm.gov]
December 20, 2009:
Mr. Robert N. Goldenkoff:
Director, Strategic Issues:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Mr. Goldenkoff:
Thank you for the opportunity to respond to the United States
Government Accountability Office's (GAO's) draft report entitled Human
Capital: Continued Opportunities Exist for FDA and OPM to Improve
Oversight of Recruitment, Relocation. and Retention Incentives (GA0-10-
226). In the report, GAO examines the extent to which the Food and
Drug Administration (FDA) is linking its use of recruitment,
relocation, and retention incentives (3Rs) to its strategic human
capital approaches to address its current and emerging challenges; the
extent to which FDA's 3Rs were awarded consistent with regulations and
internal FDA controls; and the steps the U.S. Office of Personnel
Management (OPM) has taken to help ensure that agencies have effective
oversight of their 3Rs programs and how the Department of Health and
Human Services is providing oversight.
I believe the 3Rs are important human resources tools that help
agencies attract and retain employees for a model civilian workforce.
However, these incentives must be used consistent with the law and
OPM's regulations and paid only when necessary to support agency
mission and program needs. As you are aware, OPM is working with
agencies to review the 3Rs program and our current regulations,
guidance, and monitoring policies to identify areas where improvements
can be made.
OPM has prepared the attached comments in response to your draft
report. I look forward to working with GAO and other Federal agencies
to strengthen the effectiveness of the 3Rs program. We appreciate the
opportunity to comment on your report.
Sincerely,
Signed by:
John Berry:
Director:
Enclosure:
[End of letter]
GAO Recommendation for OPM Action:
GAO recommends: "OPM's 3R incentive guidance to agencies could more
fully emphasize the importance of considering succession planning in
the decision process for awarding retention incentives" (page 30).
OPM Comments: OPM agrees with GAO's recommendation and will develop
future guidance.
GAO Views on the Use of Metrics:
GAO states that OPM's annual 3Rs report to Congress could take a more
results-oriented approach. (page 28) Specifically, it could include
metrics to ensure incentives are being used effectively to address
recruitment and retention goals. GAO states that continuing to have
Governmentwide information on 3R incentives will provide OPM and
policymakers with the information they need to help assess trends in
the overall usage of the 3R incentive program across the Government
and determine if changes are needed.
OPM Comments: OPM's 3R report to Congress complies with the
requirements of the Federal Workforce Flexibility Act (section 101(c)
of Public Law 108-411). OPM has not expanded the report because of the
already data-intensive burden on agency and OPM resources. However, we
have been discussing ways to develop and use metrics with several
agencies as well as ways to monitor and evaluate 3Rs usage. (If GAO
has some specific recommendations, we would welcome receiving them.)
We are starting a long-term project to review and validate 3Rs
information in the Enterprise Human Resources Integration (EHRI)
system and improve EHRI reporting definitions, standards, and edits.
However, we have several competing needs for EHRI data and we cannot
predict at this time when our project will be completed. Once
completed, we would be able to extract 3R human resources and payroll
information from the EHRI system on a biweekly basis rather than
relying on separate reporting from agencies. Even so, we would still
need to solicit additional 3Rs information from agencies, but it would
be substantially less than what we request now.
OPM's Oversight Role:
GAO interviewed OPM officials to help understand OPM's policy on
oversight of 3R incentives and 3R regulations, their interpretation of
HHS's policy and FDA's guidance on 3R incentives, and how the results
of the file review were viewed in this context. (page 43)
OPM Comments: OPM did provide guidance to GAO on the issues contained
in the report, as noted. However, GAO did not ask OPM to review a copy
of HHS's policy or FDA's guidance on 3R incentives, nor did we conduct
such a review as a result of this study.
[End of section]
Appendix V: GAO Contact and Staff Acknowledgments:
GAO Contact:
Robert N. Goldenkoff, (202) 512-6806, goldenkoffr@gao.gov:
Staff Acknowledgments:
In addition to the individual named above, Belva Martin, Acting
Director; Carl Barden; David Bobruff; Sara Daleski; Karin Fangman;
Peter Gilchrist; Wati Kadzai; Janice Latimer; Meredith Moore; Melanie
Papasian; Jeffery Schmerling; and Gregory Wilmoth made major
contributions to this report.
[End of section]
Footnotes:
[1] GAO, High-Risk Series: An Update, [hyperlink,
http://www.gao.gov/products/GAO-09-271] (Washington, D.C.: January
2009).
[2] Based on analysis of data from the U.S. Office of Personnel
Management's Central Personnel Data File for fiscal year 2008, which
were the most recent data available during the time of our review.
[3] Federal Workforce Flexibility Act of 2004, Pub. L. No. 108-411,
118 Stat. 2305 (Oct. 30, 2004); 5 U.S.C. §§ 5753 and 5754.
[4] OPM, Recruitment, Relocation, and Retention Incentives Calendar
Year 2007: Report to the Congress (September 2008). This report was
the most recently available data on governmentwide use of 3R
incentives at the time of our review.
[5] These were the most recent 3R incentive files available when we
drew our sample.
[6] See, 5 U.S.C. 5753 (a), 5754(a) and 5 C.F.R. §§ 575.103, 575.203,
575.303 for covered employees. See [hyperlink,
http://www.opm.gov/oca/pay/HTML/3Rs_extensions.asp] for the list of
single-agency pay systems for which OPM has approved 3R incentive
coverage.
[7] 5 C.F.R. §§ 575.104, 575.204, 575.304.
[8] Pursuant to OPM's authority under 5 U.S.C. § 5371, OPM delegated
to HHS the authority to use certain title 38 personnel authorities for
health care occupations within two pay plans. The GP pay plan covers
GS physicians and dentists paid market pay under 38 U.S.C. § 7431(c)
and the GR pay plan covers physicians and dentists covered by the
Performance Management and Recognition System termination provisions
who are paid market pay under 38 U.S.C. § 7431(c). Employees under
these pay plans are considered GS employees and therefore eligible for
3R incentives.
[9] At the request of HHS, OPM approved Senior Biomedical Research
Service employees' eligibility to receive 3R incentives in 1999.
[10] See, Pub. L. No. 101-509, 104 Stat. 1389 (Nov. 5, 1990). This act
amended the Federal Pay Comparability Act of 1970 and other acts
relating to federal employment.
[11] OPM, Report of a Special Study: The 3Rs: Lessons Learned from
Recruitment, Relocation, and Retention Incentives (1999) and GAO,
Human Capital: Effective Use of Flexibilities Can Assist Agencies in
Managing Their Workforces, [hyperlink,
http://www.gao.gov/products/GAO-03-2] (Washington, D.C.: Dec. 6, 2002).
[12] We analyzed data on FDA's workforce from OPM's CPDF for fiscal
year 2008 (the most recent data available during the time of our
review) and HHS provided data on 3R incentives awarded to employees in
FDA and the rest of the department from January 1, 2007, through July
4, 2009.
[13] Consumer safety officers are charged with protecting consumers
from foods, drugs, cosmetics, and other products and equipment that
are impure, unwholesome, ineffective, improperly or deceptively
labeled or packaged, or in some other way dangerous or defective.
[14] FDA defines "top leadership" in its succession plan for 2009-2012
as SES employees, employees whose pay is administratively determined,
and GS-14 and GS-15 employees.
[15] [hyperlink, http://www.gao.gov/products/GAO-03-2].
[16] Pharmacokineticists are among the scientists at FDA who determine
the scientific validity of manufacturers' tests, drug safety, and
efficacy claims.
[17] Food and Drug Administration Amendments Act of 2007, Pub. L. No.
110-85, § 121 Stat. 823 (Sept. 27, 2007).
[18] GAO, Federal Student Loan Repayment Program: OPM Could Build on
Its Efforts to Help Agencies Administer the Program and Measure
Results, [hyperlink, http://www.gao.gov/products/GAO-05-762]
(Washington, D.C.: July 22, 2005).
[19] [hyperlink, http://www.gao.gov/products/GAO-05-762].
[20] Our sample includes 17 recruitment, 12 relocation, and 76
retention incentives. We reviewed the entire population of relocation
incentives awarded from January 2007 through October 2008 so estimates
on the population are not necessary. For recruitment and retention
incentives, we are able to make population attribute estimates at the
95 percent confidence level with an overall precision of +/-10.0
percent for the time of our file review. While additional recruitment
and relocation incentives may have been approved from October 31 to
December 31, 2008, the list of incentive actions from which we drew
our sample included all retention incentive actions in 2008 given
FDA's quarterly review process for retention incentive requests. For
more information on how the sample was drawn, see appendix I.
[21] These factors are found at 5 C.F.R. §§ 575.106(b), 575.206(b),
and 575.306(b).
[22] The 95 percent confidence interval for this estimate is from 97.2
to 100 percent.
[23] Generally, 5 U.S.C. § 5307 limits payment of bonuses, awards, or
other cash payments under title 5 in any given year when payments
added to an employee's basic pay would exceed the rate payable for
level I of the Executive Schedule. For FDA employees appointed under
the authority of 42 U.S.C. §§ 209(f) and 209(g), HHS states their
compensation, including 3R incentive payments, is authorized pursuant
to these appointment provisions, which permit HHS flexibility in
setting compensation for those appointed. The aggregate pay limit
under section 5307 does not apply to these incentive payments since
they are not payments provided under title 5. However, HHS establishes
aggregate pay limits for all such employees across HHS to which FDA
adheres. Although we find that the aggregate pay limit under section
5307 is not applicable to payments made to employees appointed under
209(f) and 209(g), we express no opinion as to whether the cap on
administratively determined pay under 5 U.S.C. § 5373 should limit, as
a matter of law, the pay levels established by HHS for these employees.
[24] GAO, Standards for Internal Control in the Federal Government,
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]
(Washington, D.C.: November 1999).
[25] The 95 percent confidence interval for this estimate is from 84.6
to 96.6 percent.
[26] The 95 percent confidence interval for this estimate is from 83.8
to 100 percent.
[27] For the recommending official, FDA requires the center directors/
Associate Commissioner for Regulatory Affairs or within the Office of
the Commissioner, the deputy commissioners/Chief Counsel or Chief of
Staff, as applicable, to officially request the incentive and sign the
request form.
[28] The 95 percent confidence interval for this estimate is from 0.1
to 5.9 percent.
[29] In order to obtain the date the employee established residence in
the new geographic area, we reviewed information in HHS's human
capital data system--the Enterprise Human Resources and Payment
System--which HHS uses to centrally maintain personnel data for all
employees. Specifically, we identified the date the employee's change
of address request was processed and the previous location the agency
had on file for each employee. We then compared the dates for change
of address to the relocation incentive payment date. When the previous
location for an employee was not recorded in the data system, we
reviewed the employee's resume on file at FDA to identify the location.
[30] In accordance with 5 U.S.C. § 5754, regulations do not require a
service agreement for retention incentives, if the agency pays the
incentive in biweekly installments, and sets the biweekly installments
at the full retention incentive percentage rate established for the
employee. FDA pays all of its retention incentives in biweekly
installments set at the full retention incentive percentage. Eleven of
12 of the relocation incentive files and 1 of 1 and 16 of 16 of the
recruitment incentive files from 2007 and 2008, respectively,
contained service agreements.
[31] The 95 percent confidence interval for this estimate is from 83.8
to 100 percent.
[32] Eleven of 12 of the relocation incentive files and 1 of 1 and 16
of 16 of the recruitment incentive files from 2007 and 2008,
respectively.
[33] The 95 percent confidence interval for this estimate is from 1.5
to 38.4 percent.
[34] Five of 5 and 7 of 7 of the relocation incentive files from 2007
and 2008, respectively, and 1 of 1 and 16 of 16 of the recruitment
incentive files from 2007 and 2008, respectively.
[35] The 95 percent confidence interval for this estimate is from 7.2
to 52.4 percent.
[36] 5 CFR 575.315(i). The requirement that agencies report annually
on the use of retention incentives for employees likely to leave for
another position in the federal service before the closure or
relocation of the employee's facility or office does not have a sunset
provision.
[37] GAO, Human Capital: Succession Planning and Management is
Critical Driver of Organizational Transformation, [hyperlink,
http://www.gao.gov/products/GAO-04-127T] (Washington, D.C.: Oct. 1,
2003).
[38] Delegated examining reviews examine agencies' use of the
authority granted by OPM to fill competitive civil service jobs.
Appointments under this authority are subject to civil service laws
and regulations to help ensure fair and open competition; recruitment
from all segments of society; and selection on the basis of the
applicants' competencies or knowledge, skills, and abilities. As part
of this review, OPM reviews agencies' decisions to use hiring
compensation incentives (e.g., recruitment and relocation incentives)
to ensure they are appropriately documented and justified.
[39] HHS, Human Resources Manual, Instruction 575-1, Change 1,
Recruitment, Relocation and Retention Incentives (Dec. 15, 2008).
[40] The CPDF is a database that contains individual records for most
federal employees and is the primary governmentwide source for
information on federal employees.
[41] We calculated retirement eligibility by occupational series for
career permanent employees. Career employees are employees with
appointments that do not have an ending date or maximum length of
service.
[42] We previously reported that governmentwide data from the CPDF
were 96 percent or more accurate. See GAO, OPM's Central Personnel
Data File: Data Appear Sufficiently Reliable to Meet Most Customer
Needs, [hyperlink, http://www.gao.gov/products/GAO/GGD-98-199]
(Washington, D.C.: Sept. 30, 1998). Also, in a document dated February
28, 2008, an OPM official confirmed that OPM continues to follow the
CPDF data quality standards and procedures contained in our 1998
report.
[43] Our sample includes 17 recruitment, 12 relocation, and 76
retention incentives. We reviewed the entire population of relocation
incentives awarded from January 2007 through October 2008 so estimates
to the population are not necessary. For recruitment and retention
incentives, we are able to make population attribute estimates at the
95 percent confidence level with an overall precision of +/-10.0
percent for the time of our file review.
[End of section]
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