Ex-Im Bank's Retention Allowance Program

Gao ID: GGD-97-37R February 19, 1997

Pursuant to a congressional request, GAO provided information on the Export-Import Bank's (Eximbank) noncompliance with statutory and regulatory requirements in awarding retention allowances to its employees, focusing on: (1) the number and dollar value of illegally awarded allowances; (2) what actions the Chief Operating Officer (COO) took in response to GAO's and the Office of Personnel Management's (OPM) concerns; (3) the roles of the Office of Management and Budget (OMB) and the National Performance Review (NPR) in advising and approving the Eximbank's actions; and (4) the status of the Eximbank's current retention allowance program.

GAO noted that: (1) during GAO's and OPM's reviews of the Eximbank's retention allowances program, 217 employees were receiving retention allowances; (2) OPM determined that these 217 allowances, as well as those received by 6 other employees prior to OPM's review, were not approved in accordance with applicable law and regulations; (3) from the program's inception in fiscal year 1992 until the termination of the existing allowances effective January 21, 1996, 223 employees received retention allowances totalling $1,305,514; (4) in a legal decision, GAO granted the Eximbank's request for waivers of repayment for 223 employees; (5) GAO conveyed its preliminary compliance concerns to Eximbank officials on April 4, 1995; (6) however, on the basis of previous questions GAO had raised about the Eximbank's policy and practices, Bank staff had already informed the COO on March 30, 1995, that GAO had compliance concerns; (7) the Eximbank received OPM's draft report identifying its serious concerns on October 31, 1995, and received OPM's conclusion that the Eximbank's use of retention allowance authority was illegal in its January 19, 1996, final report; (8) the COO began taking actions to respond to OPM's concerns following a meeting with OPM on November 30, 1995; (9) while Eximbank officials discussed the Bank's plan for streamlining its workforce and several of its pay-for-performance strategies with the OMB, both OMB and Eximbank officials agreed that the Bank's streamlining plan did not discuss specific strategies for rewarding performance or retaining highly skilled staff; (10) they also agreed that OMB officials had not officially approved any of the Bank's pay-for-performance strategies, including the use of retention allowances; (11) the Eximbank's Chief Financial Officer told GAO that Eximbank officials have no recollection of substantive discussions with NPR concerning the streamlining plan or pay-for-performance strategies, and they acknowledged that NPR did not approve any of these initiatives; (12) OPM officials said the Eximbank's current retention allowance program is in compliance with applicable laws and regulations; (13) OPM reviewed and approved the awards for eight Eximbank employees who received retention allowances after January 21, 1996, and the Bank incorporated OPM's suggestions in its September 19, 1996, revision to its retention allowance plan; and (14) GAO's review of the Eximbank's current retention allowance plan indicated that it resolves the deficiencies GAO identified in the previous administration of the program.

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