Federal Downsizing

As part of its downsizing efforts, the government has offered federal workers incentive payments, or buyouts, to encourage them to leave through voluntary separations. Unless a waiver is granted, buyout recipients generally must repay the buyout if they return to federal employment within five years of their separation. During the period GAO reviewed--January 1993 through June 1995--two different buyout rules were in effect at the Defense Department (DOD). DOD employees could receive buyouts, and they were not required to repay the buyouts if they returned to federal service, although DOD's policy was not to rehire its buyout recipients until one year after their separation. Beginning in March 1994, however, the Federal Workforce Restructuring Act mandated that all federal employees, including those at DOD, repay their buyouts if they returned to federal employment within five years of their separation. In October 1996, GAO reported on 23 cases of buyout recipients who appeared to have violated the act's repayment provision or DOD's reemployment policy or about whom GAO could not determine whether they had returned to federal employment because of inconsistent source data. (See GAO/GGD-97-7R.) This report discusses whether (1) the 23 buyout recipients returned to federal service and, if so, whether they repaid the buyout or met DOD's reemployment policy and (2) whether the agencies that were identified as employing the 23 buyout recipients had internal controls in place to help ensure that buyout recipients repaid buyouts when required to do so.

GAO noted that: (1) the information provided to GAO by the appropriate agencies' Office of Inspector General (OIG) and personnel office showed that a violation of the Federal Workforce Restructuring Act (FWRA) repayment provision or the DOD reemployment policy occurred in 11 of 23 cases; (2) the FWRA repayment provision was violated in 9 of the 11 cases, and the DOD reemployment policy was violated in the 2 other cases; (3) the remaining 12 cases were not violations, although they had originally appeared to be questionable because of discrepancies between agency reports and data in the Office of Personnel Management's (OPM) Central Personnel Data File (CPDF), which GAO used as a source of information; (4) in addition, while researching 1 of the 23 cases, an agency OIG found that the agency employed an additional buyout recipient who had not repaid the buyout; (5) regarding internal control procedures, none of the 9 agencies that GAO contacted for information on the 23 buyout recipient cases had adequate internal control procedures in place to provide reasonable assurance that the FWRA repayment provision was met; (6) two other agencies notified their personnel officers of the FWRA repayment provision; however, only one component of each agency developed additional procedures to help ensure compliance with the provision; (7) in addition to buyout recipients who return directly to federal employment, some buyout recipients work under contract for the federal government; (8) some of these contract personnel are employed under contracts that are expressly identified as personal services contracts and, thus, are subject to the FWRA repayment provision; and (9) in addition to these personnel, other contract personnel who are subject to relatively continuous supervision and control by agency officials are, in effect, working under personal services contracts and are subject to the FWRA repayment provision.

Recommendations

Our 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.

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