OFFICE OF INSPECTOR GENERAL

SEMIANNUAL REPORT TO CONGRESS

APRIL 1, 2007 – SEPTEMBER 30, 2007

Office of Inspector General

October 30, 2007

The Honorable Naomi C. Earp
Chair
Equal Employment Opportunity Commission
Washington, D.C. 20507

Dear Madam Chair:

The Office of Inspector General’s (OIG’s) Semiannual Report to Congress, summarizing our activities for the six-month period of April 1, 2007, through September 30, 2007, is provided for your review. The Inspector General Act of 1978, as amended, Public Law 95-451, Section 5(B),requires that you submit this report to the Congress within 30 days of receipt.

During this reporting period, the OIG issued one audit, one evaluation report, one management alert, and two external peer reviews; completed 11 investigations; and received 201 investigative inquiries. Highlights include the results of an assessment of the Agency’s adherence to the Federal Information Security Management Act. Important ongoing work includes audits of the EEOC financial statements, the Training and Technical Assistance Program Revolving Fund financial statements, and the Agency’s compliance with the Federal Managers’ Financial Integrity Act. Evaluation activities include a review of the continuity of operations planning in Agency field offices, evaluation of the implementation of Homeland Security Presidential Directive–12, and a survey of the Federal sector complaint processing system. The OIG also identified the most serious management challenges confronting the Agency. These matters will require commitment of significant resources, sound decision making by leadership, and continued oversight by the OIG.

The Office of Inspector General is dedicated to promoting economy, efficiency, effectiveness, and integrity throughout the Agency. The OIG staff would like to thank you for your support and thank the Equal Employment Opportunity Commission (EEOC) employees for their continued cooperation and support of our mission to prevent and detect fraud, waste, and abuse within the Agency.

Sincerely,

Aletha L. Brown
Inspector General

TABLE OF CONTENTS

Executive Summary

Introduction

The Equal Employment Opportunity Commission
The Office of Inspector General
Summary of Significant Management Challenges

The Audit and Evaluation Program

Completed Projects
Ongoing Audit and Evaluation Projects
Other Audit and Evaluation Activities

The Investigative Program

Investigative Inquiries
Completed Investigations
Other Completed Projects
Ongoing Investigative Activity

Other OIG Activities

Breach Notification Policy
Government Accountability Office
OIG Retreat
Professional Development Activities

Appendices

(Appendix I) Final OIG Audit and Evaluation Reports
(Appendix II) Index of Reporting Requirements
(Appendix III) Single Audit Act Reports

Equal Employment Opportunity Commission
Office of Inspector General

Executive Summary

This semiannual report is issued by the Equal Employment Opportunity Commission’s (EEOC’s) Office of Inspector General (OIG) pursuant to the Inspector General Act of 1978,as amended. It summarizes the OIG’s activities and accomplishments for the period April 1, 2007, through September 30, 2007. During this period, the OIG issued one audit, one evaluation report, one management alert,  and two external peer reviews; completed 11 investigations; and received 201 investigative inquires, of which 113 were charge-processing issues and 48 involved Title VII complaints.

The OIG’s completed and ongoing audit, evaluation, and investigative projects include the following:

• The fiscal year (FY) 2007 Federal Information Security Management Act (FISMA) independent evaluation was completed. The OIG determined that all significant deficiencies reported in FY 2006 had been corrected. The 2007 evaluation identified several issues regarding the Agency’s information security policy and security test and evaluation process.
• The OIG completed a peer review of the Federal Communications Commission (FCC) and issued an unqualified opinion of the FCC’s system of quality control for its Office of Inspector General.
• The OIG completed a quality assessment review of the investigative operation of the Securities and Exchange Commission (SEC) Office of Inspector General. The SEC was found to be in full compliance with the President’s Council on Integrity and Efficiency/ Executive Council on Integrity and Efficiency (PCIE/ECIE) quality standards of investigation.
• The OIG issued a Management Alert involving a Performance Audit of the EEOC Training and Technical Assistance Program Revolving Fund was issued in advance of a draft report by the accounting firm M.D. Oppenheim & Company, P.C. (MDO). MDO identified significant issues dealing with RF management that we felt should be brought to the attention of senior management in advance of the issuance of MDO’s draft report.
• The OIG completed investigations involving the arrest of one individual on credit card fraud, the resignation of one individual to avoid action on outside employment, and the retirement of two individuals to avoid actions involving conflicts of interest.
• Ongoing audit activity includes audits of the annual consolidated EEOC financial statements and of the Training and Technical Assistance Revolving Fund financial statements; a performance audit of the Training and Technical Assistance Revolving Fund; and a review of EEOC’s compliance with the Federal Managers’ Financial Integrity Act.
• Ongoing evaluation activities include a review of the continuity of operations planning in Agency field offices, evaluation of the implementation of Homeland Security Presidential Directive–12, and a review of the Federal sector complaint processing system.
• Ongoing investigative activities involve such matters as sexual harassment, prohibited personnel practices, ethics violations, conflicts of interest, retaliation, falsification of government records, misuse of government-issued credentials, false statements, and misuse of government property.

INTRODUCTION

The Equal Employment Opportunity Commission

EEOC is the Federal agency responsible for enforcement of Title VII of the Civil Rights Act of 1964, as amended; the Equal Pay Act of 1963; theAge Discrimination in Employment Act of 1967 (ADEA); in the Federal sector only, Section 501 of the Rehabilitation Act of 1973; Title I of the Americans with Disabilities Act of 1990 (ADA); and the Civil Rights Act of 1991. These statutes prohibit employment discrimination based on race, sex, color, religion, national origin, age, or disability. EEOC is also responsible for carrying out Executive Order 12067, which promotes coordination and minimizes conflict and duplication among Federal agencies that administer statutes or regulations involving employment discrimination.

EEOC is a bipartisan commission comprised of five presidentially appointed members, including a Chair, a Vice Chair, and three Commissioners. The Chair is responsible for the administration and implementation of policy for the Commission and for the financial management and organizational development of the Commission. The Vice Chair and the Commissioners equally participate in the development and approval of the policies of the Commission, issue charges of discrimination where appropriate, and authorize the filing of lawsuits. Additionally, the President appoints a General Counsel, who provides legal advice and leadership, including coordination and supervision, to EEOC’s litigation program.

The Office of Inspector General

The U.S. Congress established an Office of Inspector General (OIG) at EEOC through the 1988 amendment of the Inspector General Act of 1978, which expanded authority to independent agencies and Federal entities to create Offices of Inspector General. The OIG’s primary responsibility is to assist EEOC by ensuring integrity, efficiency, and accountability in the Agency’s programs to enforce laws against discrimination in the workplace. Specifically, the OIG supports the Agency by carrying out its mandate to independently and objectively conduct and supervise audits, evaluations, and investigations; prevent and detect fraud, waste, and abuse; and promote economy and efficiency in programs and operations. The OIG keeps EEOC’s Chair and the Congress fully informed and current about problems, recommends corrective action, and monitors EEOC’s progress in implementing such action.

The OIG is under the supervision of the Inspector General, who provides overall direction, coordination, and leadership to staff. The OIG includes a Deputy Inspector General, an audit and evaluation staff, an investigative staff, an independent counsel, and an administrative staff. The Deputy Inspector General serves as the alter ego of the Inspector General and has the responsibility for providing overall program guidance, direction, and supervision to audit, evaluation, and investigative staffs.

The audit program provides assurance to the Chair and Congress that EEOC programs are working efficiently and effectively. The audit/evaluation staff conducts performance and financial audits, as well as special reviews and evaluations. These audits focus on management controls, administrative and program operations, transaction processing, and financial and other information systems. Special reviews and evaluations assess program performance and information security and consider the implications of EEOC programs, operations, and policies.

The mission of the investigative program is to perform investigative activities related to the integrity of EEOC’s programs. Most of the OIG’s investigations focus on violations of law or misconduct by Agency employees, and on allegations of irregularities or abuses in operations and programs. As required, the OIG’s investigators work in concert with other Federal, state, and local law enforcement entities in connection with their investigative activities. Over half of the investigative inquiries the OIG receives result from employees and the public e‑mailing or calling the OIG’s 24-hour hotline to report wrongdoing. A significant number of these calls concern EEOC’s discrimination complaint process and are referred to the appropriate program office for its response to the complainant.

Summary of Significant Management Challenges

The following is a summary of issues the Inspector General considers the most serious management challenges the Agency is confronting. These matters require the commitment of significant Agency resources, sound decision making by the leadership, and continued oversight by the OIG.

Strategic Management of Human Capital

In our opinion, the Agency would receive a red light in the Strategic Management of Human Capital portion of the President’s Management Agenda. The Agency needs to complete a workforce analysis addressing competency gaps in all mission-critical occupations. Once the workforce analysis is completed, strategies need to be developed to address the closing of competency gaps. Further, positions, functions, and organizations need to be structured in a manner that optimizes productivity, efficiency, and organizational effectiveness. In a 2006 audit of human resources operations by the Office of Personnel Management, EEOC officials cite funding constraints and a large caseload as the two major challenges affecting mission accomplishment. These challenges are magnified by the fact that EEOC has not conducted adequate workforce analysis or workforce planning to determine the degree to which budget or other issues, such as organizational structure and efficiency, impact mission accomplishment. It is imperative that senior-level management place greater emphasis on the human capital condition at EEOC and take steps to ensure that a vision of the Agency’s future workforce is in place.

Also, EEOC continues to lack a comprehensive human capital plan closely linked to the Agency’s strategic plan and annual performance goals. For example, the strategic plan does not fully integrate human capital into its mission goals and objectives. Measurable short- and long-term human capital needs are not defined, planned for, or funded. A comprehensive human capital plan would be the roadmap for continuous improvement and the framework for transforming the culture and operations of the Agency, and it should include:

• a clearly understood strategic plan;
• human capital outcomes and goals;
• strategies for accomplishing the goals;
• an implementation plan;
• a communication plan; and
• an accountability system.

Shrinking Workforce and Increasing Workload

The Agency is challenged in accomplishing its mission of promoting equality of opportunity in the workforce and enforcing Federal laws prohibiting employment discrimination due to a reduced workforce and an increasing backlog of pending cases. EEOC has experienced a significant loss of its workforce, mostly to attrition and buyouts that the agency offered to free up resources. Figure 1 shows a decline of 347 staff (as measured in full-time equivalents) between 1999 and 2006.

Figure 1. EEOC Staffing FY 1999–2008 (2007 and 2008 are estimates)

Staff at end of fiscal year

(Source: U.S. Equal Employment Opportunity Commission Budget and Staffing History, eeoc.gov)

Further, the Agency is faced with an aging workforce that is increasingly retirement eligible. EEOC will have 42 percent of its employees eligible for retirement between fiscal years 2007 and 2012, which includes 46 percent of its investigators and 24 percent of its attorneys. Unfortunately, other than preparing annual succession plans, there is little evidence of succession planning implementation or recruiting and retention strategies.

EEOC faced an inventory of nearly 40,000 private-sector charges at the end of 2006, a 19 percent increase over the previous year. Estimates show that that inventory may reach 67,000 by the end of FY 2008. EEOC’s inventories of hearing requests and appeals from Federal employees are also increasing.

Finally, the Agency’s human resources office appears understaffed and lacking the skill sets needed to gain a green light in the strategic human capital initiative. EEOC is not unique in this regard; a recent study by the Partnership for Public Service and Grant Thornton, LLP, concludes that “the increased use of automation, consolidation and outsourcing in the human resources (HR) arena have left many federal HR professionals with largely outdated skills and no coordinated plan to upgrade those capabilities.”

The Contact Center Function

A critical challenge for EEOC is managing the transition from an outsourced contact center to an EEOC-staffed contact center. The success of this effort will profoundly affect customer service, employee morale, and the budget. The Commission approved a three-month extension (through December 19, 2007) of the contract with the contact center outsourcing firm. The Agency plans to use Agency staff to answer customer inquiries, which will provide EEOC management a short time frame in which to:

• write position descriptions, advertise the positions, and hire staff;
• decide in which field office(s) staff will be located;
• plan for the migration and/or integration of hardware and software needs;
• plan and execute the call distribution and data systems;
• create and execute training for the EEOC customer service representatives; and
• determine how to budget for the new positions and other costs.

Many of these issues pose difficult questions. For example, if the EEOC hires the same number of staff as used by the contact center contractor, about $1 million in additional personnel costs (and additional nonpersonnel transition costs) will be incurred. Given the challenges cited above, an additional extension with the outsource contact center provider may be necessary. EEOC has hired a consultant to assist in the transition planning.

Headquarters Reposition and Headquarters Relocation

Headquarters Reposition

In early 2007, Agency Chair Naomi Earp formed a workgroup consisting of headquarters and field personnel to give her recommendations on the repositioning of headquarters. Chair Earp has asked the workgroup to focus on streamlining, eliminating redundancies, and structuring headquarters to be more efficient so as to provide better customer service to Agency field staff and the public. The workgroup met in Washington in April, May, and June. The project appears to have made little progress in the past several months. However, a draft report is expected in November 2007. The key challenge in the reorganization effort is to overcome opposition from managers who are attempting to protect their turf, fear change, and resist accountability.

Headquarters Relocation

The lease on the current headquarters building will expire on July 31, 2008. The new headquarters location will be at 131 M Street, Northeast, Washington, DC. Realigning and streamlining headquarters functions and the timeliness and efficiency of moving staff and equipment will impact the productivity, effectiveness, and morale of all headquarters employees.

A critical challenge is to ensure a timely relocation of the headquarters. The award for the lease of the new headquarters location was delayed from January 2007 to May 2007. After a second round of comments by staff on office configurations, the timing for the relocation was changed from July 2008 to August 2008. Since the new headquarters location will have less square footage than the current location, significant attention must be paid to staff relocation, office furniture, file management, and development of the Agency’s new information technology architecture.

As we recommended in our spring 2007 Semiannual Report to Congress, EEOC management initiated strategies to better manage employee expectations regarding the relocation. These include more timely two-way communication of information and events on the NoMA News Blog via the Agency’s intranet.

Budget/Performance Integration

Although it is making progress, we believe the agency would receive a red light in the Budget and Performance Integration portion of the President’s Management Agenda. The most notable deficiency is the Agency’s inability to finalize an update to the strategic plan. In February 2007, the Office of Management and Budget (OMB) released its Program Assessment Rating Tool (PART) assessment of EEOC. EEOC was rated “Not Performing—Results Not Demonstrated.” As a result, EEOC is listed in the Not Performing Programs section of the OMB PART Web site, thereby placing EEOC in the lowest 22 percent of rated programs. This means that Agency managers do not have much of the information and tools vital to good management (e.g., adequate annual performance targets). Therefore, EEOC’s challenge is to make the required improvements to raise its rating.

Prior to this reporting period, EEOC developed a PART improvement plan. During this reporting period, some progress was achieved in implementing the plan. For example, the Agency collected data and held discussions that should lead to the development of improved measures and performance targets. We urge senior Agency management to ensure substantial progress in these areas.

EEOC’s cost accounting system has improved external reporting and the provision of information useful in managing Agency resources. For example, Agency managers now have more reliable information about program costs (e.g., how much is spent on outreach efforts). In addition, effective October 1, 2007, the Agency’s time allocation system has been improved by adding a new activity code for use by employees dedicated to answering public calls in the in-house operation that will replace the National Contact Center, and by reducing from nine to four the number of activity codes for reporting union activities.

Financial Management

EEOC is challenged to continue improving its financial management in order to meet Federal requirements and achieve improved Agency management. The Agency is moving forward with the migration from the Integrated Financial Management System (IFMS) to the Momentum System for accounting and reporting. The system became operational on October 9, 2007. Also, the Chief Financial Officer (CFO) is currently evaluating vendor proposals for supporting the Agency’s purchase card program. The Agency’s current vendor, Bank of America, opted to end its participation in the General Services Administration (GSA) Smartpay purchase card program. There are four vendors competing for the contract. A decision must be made by January 1, 2008, and the agency will switch to the new vendor by June 30, 2008. Additionally, the CFO must select a vendor for the agency’s travel processing by October 2007. The current system, Travel Manager, is no longer an approved system for government use.

E-Gov

The Agency’s E-Gov efforts face several challenges in the upcoming FY 2008. One of these challenges is the relocation of headquarters to 131 M Street, Northeast, Washington, DC. This requires moving information technology infrastructure to the new location while minimizing the disruption to headquarters services. Another challenge is the potential relocation of the Agency’s data center managed services for the hosting of Agency servers and equipment, once an acquisition plan is executed.The Agency will also be challenged in the funding of several technological initiatives related to the implementation of knowledge management as part of the Agency’s business processes. Knowledge management comprises a range of practices used by organizations to identify, create, represent, and distribute knowledge for reuse, awareness, and learning. Finally, the funding of a possible transition from Novell GroupWise to the Microsoft Exchange network platform creates another challenge.

Competitive Sourcing

The Agency faces the significant challenge of ensuring that internal opposition and resource constraints will not hamper competitive sourcing activities. The Agency’s future competitive sourcing efforts will include a standard competition for desktop management. This competition will involve 40–50 full-time equivalents (FTEs) in the field and headquarter offices. Desktop management is a comprehensive approach to managing all the computers within an organization. Desktop management includes overseeing laptops and other computing devices as well as desktop computers.

The Agency is also in the process of awarding a contract to obtain assistance in writing the request for proposal (RFP) to ultimately obtain technology services to secure managed telecommunication and server operations. In addition, during FY 2007, the Agency drafted a performance work statement for the Freedom of Information Act (FOIA) and Section 83 of EEOC’s Compliance Manual (Section 83, File Disclosure Request). The results of this competition are anticipated in the first quarter of 2008.

THE AUDIT AND EVALUATION PROGRAM

OIG audit and evaluation projects contribute to and support the achievement of the Agency’s strategic objective of justice, opportunity, and inclusive workplaces and the management objective of organizational excellence. OIG’s mission fully supports EEOC’s Five-Point Plan and annual performance measures contributing to the long-term performance objective of EEOC as a model workplace.

Completed Projects

Peer Review of the Federal Communications Commission

On July 19, 2007, the OIG staff completed the peer review of the Federal Communications Commission (FCC) and issued an unqualified opinion on the FCC’s system of quality control for its Office of Inspector General’s audit function in effect for the year ended March 31, 2007. The review was conducted in accordance with the guidelines established by the President’s Council on Integrity and Efficiency and the Executive Council on Integrity and Efficiency (PCIE/ECIE).

FY 2007 Federal Information Security Management Act Independent Evaluation

The Federal Information Security Management Act of 2002 (FISMA) was enacted to strengthen the security of Federal government information and information systems. FISMA outlines information security compliance criteria for agencies, including the requirement for annual review and independent assessment by agency inspectors general. In FY 2007, the EEOC Office of Information and Technology (OIT) addressed and corrected all the recommendations that resulted from the FY 2006 independent evaluation report and corrected those items reported as significant deficiencies. The FY 2007 evaluation identified several issues regarding Agency information security policy and security test and evaluation (ST&E), for which we provided findings and recommendations.

Management Alert FY 2007 Performance Audit of EEOC’s Training and Technical Assistance Program Revolving Fund

The OIG contracted with independent public accounting firm M.D. Oppenheim & Company, P.C. (MDO), to conduct an FY 2007 performance audit of EEOC’s Training and Technical Assistance Program Revolving Fund (RF). MDO identified significant issues dealing with RF management that we felt should be brought to the attention of senior management in advance of the issuance of MDO’s draft report, which was scheduled to be issued by September 28, 2007. The following issues were included in the September 25, 2007, management alert:

• RF management did not provide basic management information relating to its various training programs, such as the Examining Conflicts in Employment Law (EXCEL) conference or the Technical Assistance Programs (TAPs), in a timely manner.
• The RF needed to begin to plan for an early transition for a successor to the current RF Accounting Officer/Business Manager. The current RF Accounting Officer/Business Manager plans to retire in January 2008. To complicate matters, the auditors discovered that there were no documented policy and procedures manuals associated with the position.

Ongoing Audit and Evaluation Projects

FY 2007 Audits of the Consolidated EEOC Financial Statements and EEOC’s Training and Technical Assistance Program Revolving Fund

The OIG contracted with Cotton & Company, LLP, to perform the consolidated financial statement audit of EEOC. This audit is required by the Accountability of Tax Dollars Act of 2002. Fieldwork is currently in progress. It is expected that the audit opinion will be issued in time to meet the reporting deadline of November 15, 2007, and will be available for inclusion in the Agency’s Performance and Accountability Report. Also, running concurrently with the annual consolidated financial statement audit, Cotton & Company, LLP, is auditing the FY 2007 financial statements of EEOC’s Training and Technical Assistance Program Revolving Fund (RF). This RF audit represents the first financial statement audit ever conducted of the fund. Separate financial statement reports will be issued by the auditors relating to the RF.

FY 2007 Performance Audit of EEOC’s Training and Technical Assistance Program Revolving Fund

The OIG contracted with M.D. Oppenheim & Company, P.C., to conduct a performance audit of EEOC’s Training and Technical Assistance Program Revolving Fund (RF). Specific objectives of the audit include determining:

• if the RF is organized and managed to balance all customer needs, and what impact the current Agency’s governance structure has on RF operations;
• if there is an effective review process for adding new offerings and discontinuing low-use programs;
• if there is an effective and inclusive process for developing business plans, if business plans address the full scope of potential technical assistance, and if the right people are involved in the business planning process for the RF;
• if there is an effective working relationship between the headquarters RF staff and the field staff;
• how effective RF management is in controlling costs associated with the annual EXCEL conference, and what steps are taken to ensure that fees charged offset the costs of the event;
• if there are any other program management operational issues that could be improved; and
• if RF-related performance measures contained in the Agency’s current strategic plan are adequate and relevant, and if these and any other performance measures developed by the RF are the right measures.

Fieldwork is currently being conducted and a draft report is anticipated early in the first quarter of 2008.

2007 Office of Human Resources Reviews

The OIG will update our draft report to reflect planned Office of Human Resources (OHR) actions that were to take place by the end of FY 2007 relating to the President’s Management Agenda and evaluating the Agency’s progress in implementing recommendations contained in the March 2006 Office of Personnel Management’s (OPM’s) audit report on EEOC’s human resources operations. The OIG will give OHR management the opportunity to respond to the report before issuance. A final draft report is anticipated early in the first quarter of 2008.

Agency Compliance with the Federal Managers’ Financial Integrity Act

The purpose of the OIG’s independent assessment is to determine if the Agency’s management control evaluation process was conducted in accordance with OMB’s standards. EEOC Order 195.001, Internal Control Systems, requires the OIG to annually provide the Chair a written advisory on whether EEOC’s management control evaluation process complied with OMB guidelines. To make this determination, OIG is reviewing:

• system assurance statements submitted by headquarters and district directors;
• functional area summary tables and functional area reports submitted by headquarters and field offices; and
• EEOC’s Office of Research, Information and Planning’s FY 2005 Federal Managers’ Financial Integrity Act (FMFIA) Assurance Statement and Assurance Statement Letter, with supporting documents.

It is expected that the advisory to the Chair will be issued prior to the reporting deadline of November 15, 2007, and will be available for inclusion in the Agency’s 2007 Performance and Accountability Report.

Evaluation of the Continuity of Operations Planning in Agency Field Offices—From Disaster to Recovery

The OIG is conducting an evaluation regarding continuity of operations in Agency field offices. It is the policy of the U.S. Federal government to have in place a comprehensive and effective program to ensure the continuity of essential Federal functions under all circumstances. Presidential Decision Directive 67 (PDD 67) directs all levels of government to plan for and be able to continue minimum operations in any potential national security situation. It assigns specific, essential functions to Federal agencies based on their existing statutory authorities and capabilities. Each agency must publish a Continuity of Operations Plan (COOP); support the program by maintaining the necessary planning and budgeting processes; and ensure its ability to respond during a national emergency through training, testing, and evaluation. EEOC has developed a COOP for each field office in case a situation arises that may cause an interruption of public service. The primary objective of this review is to assess field offices’ COOPs, particularly the COOPs’ ability to provide effective business continuity in performance of the Agency’s mission after an unexpected emergency or disaster. The OIG is in the process of completing its fieldwork. We plan to issue a draft report during the first quarter of FY 2008.

Evaluation of the Agency Implementation of Homeland Security Presidential Directive–12

The OIG is currently in the initial phases of conducting an evaluation regarding Homeland Security Presidential Directive–12 (HSPD-12). HSPD-12, signed in 2004 by President George W. Bush, mandates a secure, standardized, and interoperable identification and authentication system for all Federal employees and contractors. This directive demanded creation and widespread use of a means of universal, standardized, secure, reliable identification for Federal employees and contractors. The objective of this review is to determine the current status of HSPD-12 implementation within EEOC; it will include an evaluation of the Agency’s Personal Identity Verification (PIV) I and PIV II implementation status. A draft report is scheduled to be issued during the second quarter of FY 2008.

Preliminary Review of the Federal Sector Complaint Processing System

The OIG began preparation for its first evaluation of the Federal sector complaint processing system. During a survey of the complaint processing system, the OIG obtained and reviewed the body of report recommendations issued to EEOC by the Government Accountability Office (GAO), met with GAO, and took other steps to determine whether changes and improvements corrected deficiencies. In the upcoming reporting period, the OIG will meet with the Office of Federal Operations (OFO) and the Office of Field Programs to identify areas of opportunity for OIG evaluations.

Other Audit and Evaluation Activities

Review of Single Audit Act Reports

During the reporting period, the OIG reviewed 28 audit reports issued by public accounting firms concerning Fair Employment Practices Agencies (FEPAs) that have work-sharing agreements with EEOC. There were no audit findings for the FEPAs that involved EEOC funds (see Appendix III). The Single Audit Act of 1984 requires recipients of Federal funds to arrange for audits of their activities. Federal agencies that award these funds must receive annual audit reports to determine whether prompt and appropriate corrective action has been taken in response to audit findings.

Audit Follow-Up

Section 5(a)(1) of the Inspector General Act of 1978, as amended, requires that semiannual reports include a summary description of significant problems, abuses, and deficiencies relating to the Agency’s administration of programs and operations disclosed by the OIG during the reporting period. The following table shows reports issued during this reporting period (April 1, 2007 – September 30, 2007) that contained findings:

As required by Section 5(a)(3) of the Inspector General Act of 1978, as amended, semiannual reports shall provide an identification of each significant recommendation described in previous semiannual reports on which corrective action has not been completed. The following table shows those activities noted in previous semiannual reports for which corrective actions have not been completed:

As required by Section 5(a)(10) of the Inspector General Act of 1978, as amended, semiannual reports shall include a summary of each audit report issued before the commencement of the reporting period for which no management decision has been made by the end of the reporting period. The OIG has no audit or evaluation reports that were issued before commencement of the reporting period for which no management decision has been made.

THE INVESTIGATIVE PROGRAM

The investigation program supports the OIG’s strategic goal to focus limited investigative resources on issues that represent the greatest risk and offer the maximum opportunity to detect and prevent fraud, waste, and abuse in EEOC programs and operations.

Investigative Inquiries

Completed Investigations

Wire Fraud/Mail Fraud

The OIG completed an investigation in conjunction with the U.S. Attorney’s Office and a Federal grand jury in Puerto Rico. The investigation of the National Employment Council involved the organization’s use of EEOC’s official seal and the official seal of the U.S. Department of Justice (DOJ) in defrauding business entities in Puerto Rico, including several large corporations. The National Employment Council used the seals to coerce Puerto Rican businesses to purchase its services for an annual fee. In return, the victim companies would receive a certificate of completion, participation, or certification bearing the seal of EEOC or DOJ, purporting to show their relationship with the National Employment Council. The companies received no services but were threatened with legal action and badgered into continuing to do business with the National Employment Council. The fraud began in 1994 and continued through 2004. The U.S. Attorney’s Office declined to prosecute; accordingly, the OIG closed this matter.

Prohibited Outside Practice of Law

The OIG completed an investigation into a violation of Title 18 U.S.C. Section 205, alleging conflict of interest by an agency employee. The employee allegedly represented employees of EEOC and the U.S. Navy in legal proceedings against the U.S. government while serving in the capacity of attorney with EEOC. The matter was referred to the U.S. Attorney’s Office but was declined for prosecution. The subject of the investigation retired from government service under a medical disability prior to any administrative action on the matter.

Credit Card Fraud

The OIG received a complaint alleging that a former employee may have stolen a government travel card from another employee prior to departing from Federal service. The former employee used the travel card for several cash advances and purchases prior to resigning. After conducting a joint investigation with the Federal Protective Service, agents filed charges in the Superior Court of the District of Columbia and the subject was arrested and is currently awaiting trial.

Misuse of Government Property

The OIG completed an investigation involving the misuse of the OIG Special Agent badge by an employee of EEOC. The employee altered the OIG badge and used a facsimile of the badge to create a parking placard for use in the individual’s personal vehicle. The subject created additional duplicates of the parking placard for others in the subject’s office. The badge was used without the authorization of the Inspector General. A report has been issued to the appropriate Agency management officials regarding the employee’s violation of the Standards of Ethical Conduct for Employees of the Executive Branch, 5 C.F.R. Section 2635.704, Misuse of Government Property.

Unauthorized Outside Employment

The OIG completed an investigation into allegations that an employee had engaged in outside employment activities in conjunction with his designated responsibilities for the Agency. During the course of the investigation, the OIG determined that the subject operated an outside business, wherein the subject conducted educational courses at local universities and was involved in seminars on dispute resolution and other topics related to his employment with the Agency. The subject retired from Federal service during the course of the investigation.

Postemployment Restriction

The OIG conducted an investigation into a possible Title 18 U.S.C. Section 208 conflict of interest when an employee attempted to solicit business for postemployment activity. While assigned to make a determination on a charge of discrimination, an Agency employee allegedly arranged to mediate the charge after his retirement. The OIG determined that the employee had contact with the respondent in the case and that the respondent had approached the employee regarding the postemployment activity while the subject was still an Agency employee. The employee retired and had no further involvement in the complaint. The OIG determined that the employee’s activity did not rise to the level of a criminal violation. Moreover, since the employee had retired, no administrative action could be taken and the matter was closed.

Violation of Time and Attendance

The OIG conducted an investigation into allegations that an employee was falsifying time and attendance records. The employee was alleged to have filed false records for time worked conducting outreach activities for the Agency and the earning of compensatory time. It was also alleged that the employee had a close personal relationship with the director of the office and was given preferences in promotions and awards. After conducting the investigation the OIG found insufficient evidence to support either of the allegations and closed the case.

Improper Destruction of Discrimination Charge Files

The OIG received a complaint advising that an office was willfully and knowingly destroying complaints of discrimination without conducting appropriate investigations to determine if the complaints were valid. Agents conducted an examination of records for the office in question and determined that no files had been improperly destroyed.

Falsification of Time and Attendance

The OIG conducted an investigation into allegations that an EEOC employee had falsified documentation submitted in support of requests for advanced sick leave. The complaint alleged that the employee had submitted altered documentation on previous occasions. The OIG closed this matter after learning that the management of the EEOC field office had conducted mediation in this matter, which resulted in the employee being allowed to retire.

Outside Employment

The OIG conducted a preliminary investigation into an allegation that an EEOC official was working outside EEOC without Agency authorization. The OIG found that the employee had received authorization to work outside the Agency and was doing so in furtherance of EEOC’s mission to offer training to the public. The matter was closed in light of the employee’s outside employment being authorized.

Inappropriate Conduct

The OIG conducted an investigation into allegations that an EEOC official was having a relationship with his subordinate and was inappropriately expending Agency funds by allowing her to accompany him on official EEOC travel. The complainant alleged that no other employees were afforded the same travel opportunities. During the investigation, the OIG learned that the subordinate employee had resigned from EEOC; as a result of this resignation, the allegations could not be substantiated and the matter was closed.

Other Completed Projects

Peer Review of the Securities and Exchange Commission

The investigations staff conducted a Quality Assessment Review of the investigative operation of the Securities and Exchange Commission (SEC) Office of Inspector General during the reporting period. The OIG reviewed records at the SEC headquarters in Washington, D.C., and at the SEC’s Alexandria, Virginia, facility. The review was conducted in accordance with the President’s Council on Integrity and Efficiency and the Executive Council on Integrity and Efficiency (PCIE/ECIE) quality standards for investigations and the Quality Assessment Review guidelines established by the PCIE/ECIE, and covered the period October 1, 2005, through September 30, 2006. The SEC was found to be in full compliance with the quality standards established by the PCIE/ECIE.

Ongoing Investigative Activities

The OIG has ongoing investigations in several field offices, involving such matters as sexual harassment, prohibited personnel practices, ethics violations, conflicts of interest, retaliation, falsification of government records, misuse of government-issued credentials, false statements, misuse of government property, and misuse of the Agency seal.

OTHER OIG ACTIVITIES

Breach Notification Policy

The OIG serves as member of the ID Theft Core Management Group. Based upon guidance outlined in OMB-07-16, the Office of Information Technology developed a draft Breach Notification Policy in September 2007. The OIG provided comments to the policy draft that recommended: (1) a broader interpretation of OMB-07-16allowing not only identity theft but addressing other non-identity-theft-related security breaches, such as those relating to health and financial information, which pose potential harm; (2) broader responsibilities for the Incident/Breach Response Core Management Group to cover all forms of incidents/breaches, including identity theft; (3) policy language that addresses the use of the Web site as a mechanism to provide full disclosure to stakeholders regarding incidents and breaches; (4) modifying the Agency’s Policy for Personally Identifiable Data Extracts from EEOC Premises, or some other related document, to provide a discussion of the security of paper records; and (5) development of an incident/breach risk matrix to be used by the Agency for its analysis.

Government Accountability Office

In July 2007 the Government Accountability Office (GAO) initiated a study of the effects of restructuring efforts at EEOC. The objectives are to answer the following questions: (1) What effect has EEOC’s National Contact Center had on its operations? (2) What effect has EEOC’s field office realignment had on EEOC’s operations and its ability to fulfill its mission? and (3) What is known about the actual or projected financial impact of these changes?

This work is in response to a request by the Senate Appropriations Committee’s Subcommittee on Commerce, Justice, Science, and Related Agencies. The OIG attended the entrance conference. GAO’s follow-up meeting with the OIG is pending.

In September the GAO initiated an evaluation of the governance structures at designated federal entities and the inspector general’s role and reporting relationships with the governance structures.  GAO initiated this work after receiving a request for Senator Charles Grassley.

OIG Retreat

The OIG held an off-site 1.5-day staff retreat in September 2007. The agenda included leadership training, team-building and problem-solving exercises, auditing and information security updates, planning activities, and staff recommendations for improved operations. An awards and staff recognition dinner was held to congratulate staff for their accomplishments and commitment to the mission of the OIG.

Professional Development Activities

Staff attended the President’s Council on Integrity and Efficiency and the Executive Council on Integrity and Efficiency (PCIE/ECIE) committee meetings and events held by the Inspection and Evaluation Council, the Council of Counsels, and the Information Technology Roundtable. The Inspector General joined the Integrity Committee in June 2007, served as Co-Chair of the 10th Annual PCIE/ECIE Awards Program, and was on the ECIE Nominations Review Panel. The awards program will be held in October 2007. OIG staff also attended meetings of the Federal Audit Executive Council and the Association of Inspectors General Capital Chapter, and the National Training Conference held in April 2007. Other training activities and formal courses completed by OIG staff included the following:

• Federal Financial Statements: Staying Current
• Governmental Accounting, Financial Reporting, and Budgeting
• Continuing Legal Education Training—FLETC
• Conflict of Interest and Ethics Violation Summit—U.S. SEC
• Certified Inspector General Investigator—Association of Inspectors General
• Continuity of Operations (COOP)—multiple courses
• Security Awareness

APPENDICES

APPENDIX I – FINAL OIG AUDIT AND EVALUATION REPORTS

APPENDIX – II – FINAL OIG AUDIT AND EVALUATION REPORTS

APPENDIX III – SINGLE AUDIT ACT REPORTS

To report suspected fraud, waste and abuse

CONTACT

THE INSPECTOR GENERAL's HOTLINE

Toll-free 1-800-849-4230

Or Write: OFFICE OF INSPECTOR GENERAL - HOTLINE
P.O. BOX 18212
WASHINGTON, D.C. 20036-8212

Identities of Writers and Callers are always Fully Protected

This page was last modified on December 12, 2007.

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