Rotation Policy for SBA District Directors

The Small Business Administration (SBA) has been criticized in recent years for questionable personnel practices and program abuses. Allegedly, sponsorship by partisan political figures, political affiliations, and political clearances were factors in the selection of four district directors in SBA. In the absence of a viable staffing plan for district director positions, SBA permitted a personnel management vacuum to exist in which political interests were allowed to influence appointments to these key positions. A number of improper or illegal personnel actions were taken by SBA as a result of efforts to provide preferential treatment to some candidates and employees. In some cases, the personnel actions were based on considerations of political support. The Civil Service Commission recommended and the SBA Administrator agreed to develop and implement a merit plan for filling SBA district director position vacancies, and review and revise as necessary internal SBA policies on recruiting and staffing. SBA has generally taken actions to correct these irregularities, and most employees consider the SBA personnel program good or fair. SBA implementation of a periodic rotation policy for its district directors was widely criticized and raised new charges of political intrusion in personnel management at SBA. The rotation policy was implemented as a part of a series of management and organizational changes to improve the agency's efficiency and delivery of services to the small business community. These changes included reorganizing the central and regional offices and implementing a merit pay system and Senior Executive Service under the Civil Service Reform Act.

Federal agencies have full authority to promote, demote, and reassign employees for reasons that would promote the efficiency of the service. SBA rotation policy does not violate any law or regulation and a number of Federal agencies also have rotation policies requiring periodic reassignment of certain employees. While the rotation policy does not violate any law or regulation, the policy was not adequately developed and implemented. SBA district directors were not formally consulted on the need for such a policy nor given an opportunity to provide input into its development. Alternative arrangements were not considered nor explored with directors who might refuse to accept a reassignment. At a minimum these steps should have been taken before implementing the policy. The Special Counsel of the Merit Systems Protection Board found that violations of the Civil Service Reform Act and Federal regulations had occurred in selecting district directors for rotation. He recommended that SBA cancel the directed reassignments and restore the affected district directors to their former positions with full reimbursement for moving and other expenses as permitted by law. He filed a formal complaint before the Merit Systems Protection Board against SBA Associate Deputy Administrator of Support Services recommending that he be removed, fined $1,000, and barred from the Federal service for a period of 5 years.