Skip top navigation Skip to content

Print   Email  Share

OFFICE OF INSPECTOR GENERAL

SEMIANNUAL REPORT TO CONGRESS

April 1, 2009 – September 30, 2009


OIG VISION
Agents Igniting Change and Fostering Accountability, Effectiveness and Efficiency in Government

OIGSeal-small

OIG MISSION
OIG’s mission is to (1) conduct and manage independent audit, evaluations, and investigations concerning Agency programs; (2) prevent and detect against Agency fraud, waste, and abuse; and (3) promote economy and efficiency, and effectiveness in Agency programs and operations.


CONTENTS

Message from the Inspector General

Executive Summary

Introduction

Summary of Significant Management Challenges

The Audit and Evaluation Program
Completed Projects
Ongoing Audit and Evaluation Projects
Audit Follow-up

The Investigation Program
Investigative Inquiries
Completed Investigations
Ongoing Investigative Activities

Other OIG Program Activities

OIG Professional Activities

Appendixes

Appendix I. Final Office of Inspector General Audit and Evaluation Reports

Appendix II. Index of Reporting Requirements

Appendix III. Single Audit Act Reports


Aletha_Brown_IG

A MESSAGE FROM THE INSPECTOR GENERAL

I am pleased to present this Semiannual Report to Congress detailing activities of the Equal Employment Opportunity Commission (EEOC) Office of Inspector General (OIG) for the period from April 1, 2009, to September 30, 2009.

OIG’s work reflects the legislative mandate of the Inspector General Act of 1978, as amended, Public Law 95-451, Section 5(B), as well as the Inspector General Reform Act of 2008, Public Law 110-409, which is to identify and prevent fraud, waste, and abuse. The OIG performs its legislative mandate through the conducting of audits, evaluations, and investigations relating to EEOC programs and operations.

The Agency will undergo significant changes as confirmation of a new Chair and a new commissioner are pending, and the Agency’s Vice Chair has been confirmed to serve as Deputy Director of the Office of Personnel Management. In addition, the Agency is hiring more than 100 new employees to address the private-sector case backlog.

During the reporting period, the OIG completed a number of audit, evaluation, and investigation work products and procured an investigative case management and tracking system. This system will provide OIG management with a much improved ability to efficiently and effectively manage and track its work.

I wish to thank Agency management and staff for their dedication and support, and I look forward to their continued cooperation as we work together to ensure the integrity of Agency operations.

Regards,
Aletha Brown Signature

Aletha L. Brown
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 of April 1, 2009, through September 30, 2009. During this period, the OIG issued one audit report and one management advisory, completed four investigations, and received 254 investigative inquiries, of which 143 were charge-processing issues, 39 were Title VII complaints, and 26 were other investigative allegations.

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

  • An audit report that recommended EEOC’s Chair and senior management take an active role in the Agency’s succession-planning efforts, integrate succession planning with the Agency’s strategic planning and budget processes, and ensure that the Agency takes steps to address critical succession management factors. Management generally concurred with our conclusion that EEOC must finalize succession-planning efforts and ensure that they are implemented.
  • A management advisory that noted weaknesses in internal controls in the Atlanta District Office’s management of the Federal Managers’ Financial Integrity Act (FMFIA) program in the functional areas of the Freedom of Information Act, purchase cards/convenience checks, time and attendance, and property management. To address those weaknesses, the OIG recommended training, improved communication, and reconciliation of inventory.
  • Selection by the OIG of Harper, Rains, Knight & Company, P.A. of Ridgeland, Mississippi, to perform the fiscal year (FY) 2010 financial statement audit of EEOC.
  • Investigations of potential conflict of interest, contract fraud, and computer theft.
  • Ongoing audit and evaluation projects that include (1) FY 2009 audit of the consolidated EEOC financial statements, (2) agency compliance with the FMFIA, (3) independent assessment of Federal Information Security Management Act compliance, and (4) review of EEOC relocation planning.
  • Ongoing investigations that include sexual harassment, prohibited personnel practices, time and attendance fraud, retaliation, falsification of government records, misuse of government-issued credentials, contract fraud, false statements, perjury and misuse of government property, impersonation of a Federal official, theft of government property, and misuse of a government credit card.

INTRODUCTION

The Equal Employment Opportunity Commission

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; the Age Discrimination in Employment Act of 1967; Section 501 of the Rehabilitation Act of 1973 (in the Federal sector only); Title I of the Americans with Disabilities Act of 1990 and Americans with Disabilities Act Amendments Act of 2008; the Civil Rights Act of 1991; and the Lilly Ledbetter Fair Pay Act of 2009 (which states that unlawful pay discrimination occurs “each time wages, benefits, or other compensation is paid, resulting in whole or in part from [a pay] decision or other practice).” 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 comprising five presidentially appointed members, including a Chair, a Vice Chair, and three commissioners. The Chair is responsible for the administration and implementation of policy 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 EEOC, issue charges of discrimination where appropriate, and authorize the filing of lawsuits. Additionally, the President appoints a general counsel, who is responsible for conducting litigation under the laws enforced by the commission.

During the reporting period, President Obama nominated a Chair and a commissioner to serve. In addition, Christine Griffin, the Agency’s Vice Chair, has been nominated and confirmed to serve as Deputy Director of the Office of Personnel Management. EEOC also currently has one vacant commissioner position.

The Office of Inspector General

The U.S. Congress established an Office of Inspector General (OIG) at EEOC through the 1988 amendments of the Inspector General Act of 1978, which expanded authority to designated Federal entities to create independent and objective OIGs. Under the direction of the Inspector General (IG), the OIG meets this statutory responsibility by conducting and supervising audits, evaluations, and investigations relating to the programs and operations of the Agency; providing leadership and coordination; and recommending policies for activities designed to promote economy, efficiency, and effectiveness in the administration of programs and operations.

In October 2008, Congress passed the Inspector General Reform Act of 2008, which generally buttressed the independence of IGs, increased their resources, and held them more accountable for their performance. Inspector General Reform Act provisions include the following:

  • Provide that IGs shall be appointed without regard to political affiliation and solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations.
  • Require that notice of the transfer or removal of an IG be provided to both houses of Congress no less than 30 days before the action. This does not apply to other personnel actions involving IGs.
  • Establish the pay of statutory IGs at Executive Schedule III plus 3 percent. Establish the pay of designated Federal entity IGs at no less than the average pay (including bonuses) of that entity’s senior-level executives (such as the general counsel).
  • Prohibit cash awards and cash bonuses to IGs.
  • Provide that each statutory IG obtain legal advice from a counsel reporting directly to that IG or to another IG. Designated Federal entity IGs must (1) appoint a counsel who will report directly to that IG, (2) obtain the services of a counsel reporting to another IG on a reimbursable basis, or (3) obtain legal advice from legal staff of the Council of the Inspectors General on Integrity and Efficiency (IG Council; discussed below) on a reimbursable basis. The act expressly does not alter the duties of the general counsel of the Agency. The counsel to the IG shall perform such functions as the IG may prescribe.
  • Establish an IG Council. The IG Council’s mission is to address integrity, economy, and effectiveness issues that transcend individual agencies and to increase the professionalism and effectiveness of IG personnel.
  • Direct IGs to send budget requests to agency heads, specifying the amount requested for training. In the agency’s submission to the Office of Management and Budget (OMB), the head of the agency shall include a breakout for IG funding, including the amounts for training and the IG Council as well as any comments of the affected IG with respect to the proposal. OMB must include in the President’s budget submission the amount requested by the President for each IG, the amount requested by the President for training, the amount requested by the President for support for the IG Council, and if an IG determines that the budget submitted by the President would substantially inhibit his or her mission performance, any comments by the affected IG.
  • Clarify subpoena power as extending to data stored in any medium (including information stored electronically and in any tangible thing).
  • Allow designated Federal entity IGs to apply for statutory law enforcement authority and to participate in the Program Fraud Civil Remedies Act.
  • Require OIGs to discuss inspection and evaluation reports in semiannual reports similar to the current reporting of audit reports.
  • Require agency home pages to link directly to IG Web sites. Require IGs to post reports and audits on their Web sites within three days of the date they become publicly available. Require OIGs to create a direct link from their home pages to a Web site with posted audits and reports; make summaries of reports available on their Web sites; post reports in a format that is searchable, downloadable, and easily printed; and include a link for individuals to anonymously report waste, fraud, or abuse.
  • Define OIGs as separate agencies and IGs with functions, powers, and duties of agency head for voluntary separations/buyouts, early outs, reemploying annuitants, and waiving mandatory separation for law enforcement officers; and all provisions relating to senior executive service. Add authority to reemploy retired annuitants. Replace agency directors with the IG Council for reviewing and submitting nominees for presidential rank awards.

The OIG is under the supervision of the IG, an independent EEOC official subject to the general supervision of the Chair. The IG must not be prevented or prohibited by the Chair or any other EEOC official from initiating, carrying out, or completing any audit, investigation, evaluation, or other inquiry or from issuing any report.

The IG provides overall direction, coordination, and leadership to the OIG; is the principal advisor to the Chair in connection with all audit and investigative matters relating to the prevention, identification, and elimination of waste in any EEOC program or operation; and recommends the proper boundaries of audit and investigation jurisdiction between the OIG and other EEOC organizations. The IG also develops a separate and independent annual budget for the OIG; responds directly to inquiries from the public, Congress, or the news media; and prepares press releases, statements, and other information about the OIG’s activities.

The Deputy Inspector General (DIG) serves as the alternate to the IG and participates fully in policy development and management of the diverse audit, investigation, evaluation, and support operations of the OIG. The DIG also ensures that the Audit, Evaluation, and Investigation Programs (AEIP) address their mission, goals, and objectives in accordance with the Inspector General Act, other laws, Agency policy, and congressional requests. The DIG provides overall direction, program guidance, and supervision to the AEIP. AEIP staff conducts audits, evaluations, and investigations of EEOC operations and activities and prepares reports for issuance to the Chair, EEOC management, and Congress.

The Counsel to the Inspector General (CIG) is the sole legal advisor in the OIG, providing advice in connection with matters of importance to the OIG. The CIG provides day-to-day guidance to the OIG’s investigation team and is the primary liaison with Agency legal components and the Department of Justice. The CIG assists the IG and DIG in the development and implementation of the OIG’s policies and procedures. The CIG conducts legal reviews of all audit, evaluation, and investigation reports; reviews proposed and revised legislation and regulations; and recommends appropriate responses and actions.

SUMMARY OF SIGNIFICANT MANAGEMENT CHALLENGES

The following is a summary of the six issues the Inspector General considers the most serious management challenges the Agency is confronting. Most of these were included in earlier OIG reports. They include Change in EEOC Management, Strategic Management of Human Capital, Private Sector Charge Inventory, Budget and Performance Integration, State and Local Partner Performance Management, and Information Technology Culture and Security. Only a fundamental change in management culture can enable the Agency to effectively meet all major challenges. Change in culture comes from the top of an organization. Meeting these challenges requires commitment of significant Agency resources, sound decision making by the Agency’s leadership, and continued oversight by the OIG and GAO. Those senior Agency managers opposing development of a performance culture within EEOC must change or EEOC cannot become a high-performing organization.

Change in EEOC Management

Turnover in senior leadership positions pose an immediate challenge to EEOC. The Agency has an Acting Chair, Stuart Ishimaru. In addition, President Obama has nominated both a Chair and a Commissioner, and a new Chief Human Capital Officer was recently hired. Agency leaders must address the six challenges, particularly private sector backlog. In addition, the Agency, first led by the Acting Chair, and then the new Chair, will need to build the confidence of congressional appropriators in the leadership and judgment of the EEOC to ensure adequate support of the Agency. The new Chairperson and other EEOC management need to break the cycle of using inefficient methods such as activity-based program management instead of performance-based management and instead, embrace and implement genuine strategic planning and innovative work processes such as finishing and implementing a human capital plan.

Strategic Management of Human Capital

Since our last reporting period, little action has taken place to improve the strategic management of human capital. The Agency did not finalize its draft human capital plan or its draft leadership succession plan, both of which were developed in September 2008. During this reporting period, Agency leadership decided to present the draft documents to the new Chief Human Capital Officer (CHCO) for review and any additional input before submitting it to the future Chair of the agency.

The new CHCO, who officially started at the Agency on September 28, 2009, will be challenged to ensure that the final draft plan includes all of the components of the Office of Personnel Management’s (OPM) Human Capital Assessment and Accountability Framework (HCAAF). This may include developing a human capital planning committee comprised of the CHCO, senior leaders and managers from human resources, information technology, finance and mission specific areas. Also, assignment of responsibility and the establishment of timelines for completion will help ensure the implementation of a sound strategic management of human capital program for the Agency.

The Agency also needs to improve management of overtime. A mediator ruled that the Agency intentionally failed to pay overtime compensation to bargaining unit employees in Field, Area, and Local Offices. To improve its performance in overtime compensation, the Agency issued Interim guidance on Overtime for Travel on Non-workdays on July 27, 2009. Also, the Agency provided training on overtime rules, including training sessions for new investigators and investigator support assistants. Additionally, by 2011, the Agency plans to have a web based time and attendance system in place that will require employees to report their time and attendance information including all overtime hours worked.

Private Sector Charge Inventory

EEOC continues to face a major challenge in adequately addressing the backlog of private-sector discrimination cases. This backlog, known as “charge inventory,” is quite large. EEOC projects end of Fiscal Year 2010 charge inventory of 87,807, almost 14,000 higher than the inventory at the end of fiscal year 2008 (73,951). The primary negative effect of increased inventory is the delay in case resolution for thousands of EEOC customers, the people who believe they have been discriminated against.

Fiscal Year 2009 data shows that EEOC received 93,277 new private-sector charges 2,125 less than in 2008. However, 2010 charge receipts are expected to increase significantly, exceeding 100,000.

To help address the backlog, EEOC has begun hiring staff, including investigators and mediators. EEOC increased Agency staff by 155 for FY 2009, and plans an increase of 140 for FY 2010. The Director, Office of Field Programs expects the increase in staff to result in about 15,000 additional case resolutions a year. The Director also stated that in 2010, a backlog reduction effort will be launched, including revised training, guidance, and clarifications to EEOC’s Priority Charge Handling Processing.

However, regardless of impact on inventory from the anticipated additional staff, EEOC needs to develop major improvements in case processing in order to come closer to its mission of eliminating employment discrimination. Without focus on major improvements (i.e., refinements are helpful but are not enough) in case processing, there will not be a fundamental change in how well EEOC succeeds in its most important and resource-intensive activity.

In its FY 2009 budget justification, EEOC did not propose major improvements in charge processing and no such proposals are anticipated in FY 2010. EEOC has not embarked on major program initiatives to reduce the inventory or to reduce the growth of the inventory in over 10 years. The last major initiative was the Priority Charge Handling Process (PCHP), instituted in 1995.

Budget and Performance Integration

Integrating budget and performance remains a key challenge. Without better performance data, Agency managers cannot know how well EEOC performs given the resources it expends. Common sense changes would allow the Agency to stop making many resource and management requests and decisions without vital information. Fortunately, much of the most useful performance data can be captured by adding more detail to EEOC’s existing primary cost accounting system—a biweekly worksheet (the Cost Accounting Sheet) filled out by each employee. The weaknesses in accounting practices are vividly illustrated by:

  • the inconsistent and vague cost accounting methods used in EEOC Field Offices, (as cited in the March 23, 2009, federal arbitrator’s opinion, “In The Matter of the Arbitration Between National Council of EEOC: Locals No. 216, AFGE, AFL-CIO: Under the Fair Labor Standards Act and United States Equal Employment Opportunity Commission: Case No. 071012-00226-A”)
  • the lack of detailed systemic litigation cost data in recent budget requests
  • an Office of Chief Financial Officer’s proposal to add a systemic litigation category was rejected, resulting in a missed opportunity for capturing key performance data
  • EEOC has not adopted a performance measure in the State and Local Program area (see State and Local Partner Performance Management challenge below).

Regarding case inventory target levels, EEOC still lacks solid performance data to support lowering target performance levels. Therefore, EEOC will likely face renewed and major challenges in determining and justifying short-term and long-term performance targets. Until EEOC senior managers, particularly those responsible for private-sector case processing, accept the need to gather and use performance data, this challenge is likely to remain.

State and Local Partner Performance Management

EEOC continues to inadequately address the need to assess the performance of its state and local partners. The EEOC provides substantial annual funding ($26,000,000 for FY 2009) to these partners, known as Fair Employment Practice Agencies or FEPAs, to conduct investigations and resolutions of employment discrimination charges. Work performed by FEPAs, both EEOC funded and non-EEOC funded, is critical to fighting employment discrimination. EEOC has not adopted a performance measure to assess how well FEPAs perform. In 2007, EEOC agreed with OMB to develop such a measure, but has not done so, despite a workgroup report and accompanying recommendations for a performance measure. Therefore, EEOC needs to develop a management culture that recognizes objective assessment of FEPA’s work as a critical element in improving efforts to eradicate employment discrimination. To assist in managing FEPAs efficiently and effectively, OIG will begin a review of EEOC's oversight of FEPA performance in FY 2010.

Change in Information Technology Culture and Security

EEOC continues to improve its information technology culture. However, important work remains. Financial constraints and managerial resistance has hampered the Agency’s Office of Information Technology efforts of employing new technologies and achieving cultural change. But OIT has made significant headway in developing solid business relationships with internal stakeholders to aid in the identification of critical information technology needs of program offices.

OIT is focused on two major multi-million dollar information technology procurements: (1) replacing its aging field office network servers, and (2) procuring new laptops, monitors, and port replicators to replace its aging desktop/laptop inventory. While these procurements are critical, they do not address the large private sector caseload inventory and a critical information security upgrade. In order to effectively assist in reducing the caseload, newer and more innovative use of information technology, web based technologies, existing off the shelf software, and information systems must be identified, explored, tested, and implemented. This effort is necessary for the Agency’s program offices to more strategically, effectively and efficiently approach their work.

Further, protecting Agency information that is accessed remotely is a challenge. For many field offices, the Agency has not implemented Homeland Security Presidential Directive (HSPD)-12. This directive calls for standard, secure, and reliable forms of identification for Federal employees and contractors in accessing Federal networks and facilities. According to the Office of Human Resources, implementation of HSPD-12 is delayed due to various issues such as procurement of enrollment and activation equipment, lack of General Services Administration assistance, and potential employee issues that may require union negotiation. The lack of progress adversely affects the Agency’s ability to adequately provide secure remote access to the Agency network. The Office of Human Resources, in collaboration with OIT, must continue to address these obstacles to implementation.

OIGSeal-small

THE AUDIT AND EVALUATION PROGRAM

The Audit and Evaluation Program supports the OIG’s strategic goal to improve the economy, efficiency, and effectiveness of EEOC programs, operations, and activities.

COMPLETED PROJECTS

Report on the Strategic Management of Human Capital: Succession Planning

The OIG issued the final report Strategic Management of Human Capital: Succession Planning (Report No. 2007-07-ADV) on April 29, 2009. OIG identified seven factors that, according to the Government Accountability Office and Office of Personnel Management, are critical in succession planning: (1) commitment and active support of top leadership; (2) direct link between the organization’s mission, strategic plan, and outcomes; (3) identification of critical skills and competencies that will be needed to achieve current and future programmatic goals; (4) development of strategies to address gaps in mission-critical and other key positions; (5) leadership training programs that include formal and informal training for all levels of supervisors, managers, and potential leaders; (6) strategies for addressing specific human capital challenges such as diversity, leadership, capacity, and retention; and (7) a process for evaluating the costs and benefits of succession-planning efforts and the return on investment they provide the organization.

OIG concluded that EEOC must finalize its succession-planning efforts and ensure that they are implemented. OIG also concluded that the Agency must take steps now to ensure that a leadership pipeline exists within the current workforce that is equipped with the skills, knowledge, and abilities necessary to ensure that future leaders are available to lead the Agency in meeting its mission and strategic goals.

We recommended that EEOC’s Chair and senior management:

  • ensure that the Agency takes steps to address each of the seven critical succession-planning factors
  • take an active role in the Agency’s succession-planning efforts, including the Executive and Senior Leadership Development Program and development and implementation of succession-planning management
  • integrate succession planning with the Agency’s strategic planning and budget processes.

Management generally agreed that EEOC must finalize succession-planning efforts and ensure that they are implemented.

Management Advisory—Atlanta District Office

The OIG issued a management advisory on internal controls for the Atlanta District Office on September 14, 2009. The OIG conducted internal control testing of the Atlanta District Office’s Federal Managers’ Financial Integrity Act (FMFIA) program in the following functional areas: Freedom of Information Act, purchase cards/convenience checks, time and attendance, and property management. We noted weaknesses in internal controls relating to purchase cards/convenience checks, time and attendance, and property management. The advisory contained the following recommendations:

  • Purchase cards/convenience checks. Provide training and refresher training to all employees having purchase card responsibilities
  • Time and attendance. Emphasize employee compliance with Agency time and attendance policies and continue to remind employees to provide support for leave taken and to timely submit, sign, and date the biweekly cost accounting timesheets
  • Property management. Reconcile the latest inventory of Atlanta District Office property to the Agency’s Fixed Asset System.

Evaluation of Request for Proposals for the FY 2010 Financial Statement Audit

The OIG received 10 responses to its request for proposals for the FY 2010 financial statement audit of EEOC. A three-member panel of OIG auditors and evaluators reviewed and ranked each proposal. Then OIG management analyzed the work of the panel. Thereafter, the OIG selected Harper, Rains, Knight & Company, P.A. of Ridgeland, Mississippi, to perform the audit. Contract work will begin in January 2010.

ONGOING AUDIT AND EVALUATION PROJECTS

FY 2009 Audit of the Consolidated EEOC Financial Statements

The OIG contracted with Cotton & Company, LLP to perform the financial statement audit of EEOC, which is required by the Accountability of Tax Dollars Act of 2002. Fieldwork began in April 2009. OIG expects the audit opinion to be issued by November 13, 2009, to meet OMB’s reporting deadline of November 16, 2009, and for inclusion in the Agency’s 2009 Performance and Accountability Report. Additionally, a management letter report will be issued shortly after the financial statement audit identifying any internal control weaknesses.

Agency Compliance with the Federal Managers’ Financial Integrity Act

OIG’s independent assessment is to determine whether the Agency’s management control evaluation process was conducted in accordance with OMB standards. EEOC Order 195.001, Internal Control Systems, requires the OIG to provide the Chair an annual written advisory on whether EEOC’s management control evaluation process complied with OMB guidelines. To make this determination, the 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 FMFIA Assurance Statement and Assurance Statement Letter, with supporting documents.

The OIG expects to issue the assessment to the Chair prior to the reporting deadline of November 15, 2009, in order to include it in the Agency’s 2009 Performance and Accountability Report.

Independent Assessment of Federal Information Security Management Act Compliance

The OIG is currently in the process of completing an evaluation regarding the Agency’s compliance with the Federal Information Security Management Act (FISMA). The E-Government Act of 2002 (P.L. 107-347), which includes Title III of 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 evaluation by agency inspectors general. OIG will complete its independent assessment as stipulated and required by FISMA, as well as OMB Memorandum 09-29, FY 2009 Reporting Instructions for the Federal Information Security Management Act. Work regarding this matter will be completed in the first quarter of FY 2010.

Review of EEOC Relocation Planning

The primary purpose of this review is to determine how EEOC can improve the planning and execution of future EEOC office relocations to ensure that relocations are carried out in the most effective and efficient manner. Data gathering and analysis is complete. The OIG plans to issue draft and final reports in the first quarter of FY 2010.

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 OIG issued no reports with findings during this reporting period (April 1, 2009–September 30, 2009).

Audit follow-up is an integral part of good management and is a shared responsibility of agency management officials and auditors. Corrective action taken by management on resolved findings and recommendations is essential to improving the effectiveness and efficiency of Agency operations. Therefore, EEOC needs to review and enhance the corrective action process to ensure the prompt and proper resolution and implementation of audit recommendations.

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. OIG staff met with the Agency audit follow-up official in August 2009, and noticed that no corrective action plans or changes had taken place since our meeting six months prior. The OIG spring 2009 Semiannual Report to Congress disclosed nine reviews with 36 open recommendations. Also, for that reporting period, the OIG completed two reports with recommendations. Therefore, the OIG is reporting a total of 11 reviews with a total of 53 open recommendations. The following table shows those recommendations for which corrective actions have not been completed.

Recommendations for Which Corrective Actions Have Not Been Completed

Fiscal Year Report Number Report Title Date Issued
2009 2008-06-FIN FY 2008 Financial Statement Audit Management Letter Report 2/12/2009
Open Recommendations:
Implement training procedures to ensure familiarity with budgetary accounting and reporting guidelines published by the Treasury.
Review and revise controls in place to ensure that documentation for all transactions is maintained and readily available for review. Obtain and file all documentation supporting personnel and payroll actions taken and ensure that info is available for review upon request.
Implement training for all personnel to ensure that they are aware of EEOC policies for capitalized equipment to ensure that recordings in the general ledger and subsidiary ledger are accurate. Review and refine controls over the reconciliation of the property subsidiary ledger to the general ledger to ensure that differences are identified and resolved in a timely manner. Report offices that do not submit property certifications in accordance with established policy to the Office of the Chair and require delinquent offices to explain.
Revise the review procedures for over-aged accounts payable and undelivered orders to require that all EEOC offices respond by fiscal year-end to ensure that invalid items are identified and deobligated before year-end financial reports are prepared. Review and refine controls over the accrual process to ensure that accruals are processed to recognize goods and services that have been received. Implement procedures requiring EEOC personnel to identify accounts payable over three months old and determine their continued validity.
Improve quality control procedures for reviewing final versions of financial statements and related footnotes prior to submission to auditors.
Develop and implement policies and procedures for ensuring that application security violations for outsourced applications are appropriately reviewed and reported.
Develop policies for formally analyzing and reviewing all roles to identify incompatible duties; develop and document a process for outlining functions that have been identified as having incompatible abilities. Develop policies and procedures for reviewing SAS 70 reports for outsourced systems and ensuring that all appropriate security and management personnel are involved in the application review process (especially the SAS 70 reviews) and in the control and design implementation process.


Fiscal Year Report Number Report Title Date Issued
2009 2008-05-FIN FY 2008 Financial Statement Audit Internal Control Report 11/14/2008
Open Recommendations:
Review and refine controls over time and attendance reporting; require that incomplete timesheets be returned to employees before certification. Ensure that information submitted to the Office of Human Resources is processed in a timely manner and that training is provided to timekeepers and approving officials.
Review accrual procedures and refine those procedures to ensure that all revenue not earned at year-end is properly classified as deferred in financial statements. Work with the Revolving Fund Division Director to ensure that info recorded in the general ledger is accurately recorded based upon supporting documentation. Chief Financial Officer coordinate with the Revolving Fund Division to ensure that timely, complete, and accurate reconciliations are performed between the general ledger and the subsidiary ledger and that the differences are identified.


Fiscal Year Report Number Report Title Date Issued
2008 2007-11-RFPERF Performance Audit of the Equal Employment Opportunity Commission’s Education, Training, and Technical Assistance Program Revolving Fund 8/26/08
Open Recommendations:
Operate the Revolving Fund as an independent program within the Agency.
Approve the establishment of the EEOC training institute steering committee.
Update the Revolving Fund Business Plan to reflect strategic direction, vision, and goals over the next 3 to 5 years.
Initiate cross-training between job functions where reasonable and practical.
Reconcile spending plans to amounts recorded in the accounting system.
Seek professional assistance to develop a more effective Revolving Fund Division budget method to project financial information to plan training events and monitor goals.


Fiscal Year Report Number Report Title Date Issued
2008 2008-12-AEP FY 2008 Independent Audit of EEOC Privacy Program 9/30/08
Open Recommendations:
Develop and implement policies and procedures to provide periodic reminders to all employees and contractors of their responsibilities to protect sensitive personally identifiable information in both electronic and hard-copy format.
Develop, document, and implement procedures to monitor compliance with EEOC policies and procedures related to the protection, processing, storage, and destruction of sensitive hard-copy personally identifiable information.
Centralize administration of websites privacy policies.
Ensure that all privacy policies posted to EEOC websites comply with OMB requirements.
Ensure that all privacy policies are posted on (a) EEOC’s principal Web site; (b) any known, major entry points to EEOC sites; and (c) any Web page that collects substantial information in identifiable form.
Review all privacy laws and regulations, and identify and document those applicable to EEOC.
Develop, document, and implement a formal process for ensuring that all new privacy-related laws and regulations are evaluated to determine whether EEOC is required to follow them.
Continue with the planned action to implement two-factor authentication with the implementation of Homeland Security Presidential Directive–12 badges.


Fiscal Year Report Number Report Title Date Issued
2008 2008-13-AEP Independent Evaluation of Agency Compliance with Federal Information Systems Management Act 9/24/08
Open Recommendations:
Develop and implement an Agency Awareness Training Plan and Program that meets the standards described in National Institute of Standards and Technology Special Publications 800-50, Building and Information Technology Security Awareness and Training Program.
Implement plans and procedures with the Agency field offices to identify and excess all old and nonworking information systems by April 30, 2008. Also ensure that information is appropriately destroyed prior to the system’s excess.
Develop and implement policies and procedures to provide periodic reminders to all employees and contractors of their responsibilities to take reasonable measures to safeguard authenticators (passwords) from being exposed to unauthorized personnel.


Fiscal Year Report Number Report Title Date Issued
2008 2008-03-AMR Oversight of Federal Agency Reporting Management Directive–715 (MD-715) and Related Topics 9/26/08
Open Recommendations:
Develop a written plan, including a schedule, to ensure timely training for staff with major oversight assignments.
Assess the Federal Sector Programs organizational structure based on the currently authorized positions in order to create more stability.
Develop a plan with milestones for making MD-715 a Web-based submission process.
Ensure that all agencies receive Office of Federal Operations feedback on MD-715 in time to prepare fully for FY 2008 submissions.
Obtain customer feedback on MD-715 and other oversight issues using a real-time blog or similar mechanism. Require Federal agencies to submit Part G, their Equal Employment Opportunity assessment, with their annual MD-715 submissions.


Fiscal Year Report Number Report Title Date Issued
2007 2007-10-RFFIN FY 2007 Financial Statement Audit of EEOC Training and Technical Assistance Internal Control 11/15/07
Open Recommendations:
Implement a policy to periodically review undelivered orders (UDOs) to ensure that all recorded UDOs are adequately supported.


Fiscal Year Report Number Report Title Date Issued
2007 2007-12-AMR Evaluation of EEOC Field Office Continuity of Operations (COOP) 3/27/08
Open Recommendations:
Direct field office directors to prepare COOP plans and activities to ensure that field offices are adequately prepared for a COOP event.
Ensure that all field office staff take the COOP Awareness Course.
Develop and implement policy and procedures instructing field office staff to store all mission-critical electronic files on Agency-managed network drives.


Fiscal Year Report Number Report Title Date Issued
2007 2007-08-FIN FY 2007 Financial Statement Audit 11/15/07
Open Recommendations:
Office of Human Resources should review and refine time and attendance controls.


Fiscal Year Report Number Report Title Date Issued
2007 2007-09-FIN FY 2007 Management Letter Report 01/16/08
Open Recommendations:
Coordinate with the Director of the Revolving Fund Division to establish procedures to recognize revenue on a full accrual basis consistent with generally accepted accounting principles.
Complete background investigations for all employees and contractors in accordance with Federal and EEOC guidelines.
Develop, document, and implement policies and procedures for reviewing user accounts on all systems. Also, review user listings against terminated and separated employee listings.
Implement training procedures for financial personnel ensuring familiarity with Treasury guidelines.


Fiscal Year Report Number Report Title Date Issued
2006 2006-04-FIN FY 2006 Management Letter Report 02/09/07
Open Recommendations:
Report headquarters offices to the Office of the Chair and field offices to the Director, Office of Field Programs for their noncompliance with the property certification policy.
Ensure that all Forms 629 (Reports of Loss, Theft, or Incident) are provided to the security specialist in a timely manner.
EEOC’s Chief Financial Officer should refine the accounts payable and UDO review process to ensure that all recorded balances at year-end are valid and require personnel to contact vendors to obtain invoices for accounts payable more than three months old.
EEOC’s Chief Financial Officer should improve quality control for reviewing final versions of the financial statements and related footnotes to ensure that financial information is complete, accurate, consistent, and timely.

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.

OIGSeal-small

THE INVESTIGATION PROGRAM

The Investigation Program supports 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

Investigative Inquiries Received April 1, 2009–September 30, 2009
Allegations Total
Charge processing 143
Other statutes 26
Title VII 39
Mismanagement 6
Ethics 5
Backgrounds 7
Theft 2
Other criminal violations 18
Fraud 8
Total 254

COMPLETED INVESTIGATIONS

Conflict of Interest

The Designated Agency Ethics Official (DAEO) of EEOC forwarded a matter for investigation that was discovered in the course of the Office of Legal Counsel’s review of the Financial Disclosure Form filed by an Agency employee. Review of the Financial Disclosure Form revealed that the employee had reported stock interests held by her spouse in a particular company in excess of $15,000.00. Review of field office discrimination charge records revealed that the employee may have engaged in a violation of 18 U.S.C. Section 208 in connection with her direct dealings with a particular charge of discrimination.

Title 18 U.S.C. Section 208 prohibits government employees from participating “personally and substantially as a Government officer or employee, through decision, approval, disapproval, recommendation, the rendering of advice, investigation, or otherwise, in a judicial or other proceeding, application, request for ruling or other determination, contract, claim, controversy, charge, accusation, arrest, or other particular matter in which, to his knowledge, he, his spouse, minor child, . . . has a financial interest.” Additionally, 5 C.F.R. Section 2640.202(a)(2) exempts an employee from prosecution if the aggregate market value of the stock is less than $15,000.00.

The evidence adduced in this matter supported a conclusion that at the time of her involvement in the charge of discrimination the employee lacked specific knowledge of her spouse’s stockholdings in the company in question. Therefore, her spouse’s ownership of the stock could not have been a factor in any decision she made regarding the case.

Additionally, evidence obtained regarding the exact value of the stock at the time of the employee’s work on the case involving the company revealed that in actuality the value was far less than the $15,000.00 threshold required for criminal prosecution. The DAEO was advised of the OIG’s findings, and the investigation was closed.

Contract Fraud/Irregularities

A preliminary investigative inquiry was conducted into allegations that EEOC procurement personnel may have violated the law involving the awarding of an A-76 contract to the most efficient organization. The OIG’s inquiry indicated that the Agency acted within the guidelines required for the award of an A-76 contract. Since no violation of law or regulation was established in connection with the award of the contract, the matter was closed.

Computer Theft

The Office of Information Technology (OIT) reported the theft of approximately 37 Dell 620 laptop computers. It was determined that the theft of the computers occurred between February 2007 and January 21, 2008. The Dell D620 laptop computers were delivered to OIT for distribution to field offices on an as-needed basis. The new laptop computers were stored with approximately 370 older Dell laptop computers that were to be distributed to headquarters personnel. A joint investigation into the theft was conducted with the Federal Protective Service. No credible leads have evolved from computer searches, pawn shop searches, or Internet searches generally used to identify the location of stolen computers. Information pertaining to the stolen computers has been placed on the National Crime Information Computer alerting other police agencies to the theft. Due to the passage of time, and in the absence of viable leads as to the identity of the thief, the investigation was closed.

Computer Theft

OIG was informed of the theft of a government-owned computer in the Raleigh Area Office. The computer was stolen from an employee while in the Atlanta, Georgia, area and contained unprotected privacy information (personally identifiable information). The OIG received confirmation of the theft by obtaining the Atlanta Police Department report and the Agency 629 incident report. The Agency was immediately notified, and it followed up with appropriate notification to officials and individuals at risk for loss of privacy information that may have been on the computer. The theft investigation is currently under the jurisdiction of the Atlanta Police Department. Accordingly, no further action was warranted by the OIG in this matter, and the case was closed.

ONGOING INVESTIGATIVE ACTIVITY

OIG has ongoing investigations in several field offices involving sexual harassment, prohibited personnel practices, ethics violations, conflicts of interest, time and attendance fraud, retaliation, falsification of government records, misuse of government-issued credentials, contract fraud, false statements, perjury and misuse of government property, impersonation of a Federal official, theft of government property, and misuse of a government credit card.

OTHER OIG PROGRAM ACTIVITIES

Review of Single Audit Act Reports

During the reporting period, the OIG reviewed 22 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.

Procurement of New Investigative Case Management and Tracking System

The OIG procured the services of WingSwept Technologies Incorporated to develop an investigative case management and tracking system. This system will replace the OIG’s aging Microsoft Access–based OIG Hotline and investigative databases and will allow the OIG to more effectively and efficiently track, manage, and report on investigative issues. Deployment of this system is expected in the first quarter of FY 2010.

Corrective Action Plan—Audit Peer Review

On September 4, 2008, the Farm Credit Administration OIG issued its final report concerning its peer review of the OIG’s audit function. The Farm Credit Administration found that while the OIG complied with standards, improvements should be made in several areas, such as quality control and quality assurance. To ensure that such improvements were implemented, the OIG developed a corrective action plan and began to implement the corrective actions.

During this reporting period, the OIG implemented the other actions detailed in the corrective action plan, including refining the process of recording and tracking staff training and education and ensuring that audit and evaluation plans are fully supported, including recording and otherwise documenting significant changes.

Actions taken during the previous reporting period included development of an independence declaration form that auditors and evaluators will use for each project, development and implementation of an improved audit follow-up program, and development of two project checklists to be used by audit and evaluation staff for quality assurance.

OIG PROFESSIONAL ACTIVITIES

Below are the professional activities for the OIG.

Staff Certifications

The OIG has a highly qualified and very well credentialed staff dedicated to the mission of the office. The OIG staff possess the following certifications or certificates:

  • Certified Fraud Examiner
  • Certified Government Financial Manager
  • Certified High Technology Criminal Investigator, High Tech Crime Institute
  • Certified Information Security Manager
  • Certified Inspector General
  • Certified Inspector General–Auditor
  • Certified Inspector General–Investigator
  • Certified Public Accountant
  • Certified Workplace Mediation and Conflict Resolution
  • American University: Key Executive Leadership Certificate Program
  • Georgetown University: Senior Executive Leadership Certificate
  • Ethics Instructor

Association Affiliations

The OIG staff maintains the following affiliations with associations related to the work of the OIG:

  • American Bar Association
  • American Evaluation Association
  • American Institute of Certified Public Accountants
  • Association of Government Accountants
  • Association of Inspectors General
  • Council of Counsels to the Inspectors General
  • Council of Inspectors General for Integrity and Efficiency—Integrity Committee
  • Federal Law Enforcement Officers Association
  • Information Systems Audit and Control Association
  • The Institute of Internal Auditors
  • International Association of Privacy Professionals
  • Maryland Association of Certified Public Accountants
  • Toastmasters International
  • Maryland State Bar Association
  • National Organization for Black Law Enforcement Executives
  • Council of Inspectors General for Integrity and Efficiency—Evaluation and Inspections Roundtable

Professional Training

During the reporting period, the OIG staff participated in the following training courses:

  • GAO/CIGIE Financial Statement Audit Conference
  • Association of Government Accountants Forum on Emerging Issues
  • Association of Government Accountants—Leadership Conference
  • Maryland Association of Certified Public Accountants Issues Update
  • CIGIE Inspectors General Training Conference
  • Leadership Essentials
  • Computer Theft
  • Management Through Understanding Human Behavior
  • Comprehensive Contracting Officer Technical Representative
  • Ethics Instructor

APPENDIXES

APPENDIX I. FINAL OFFICE OF INSPECTOR GENERAL AUDIT AND EVALUATION REPORTS

Report Title Date Issued Questioned Costs Funds Put to Better Use Unsupported Costs
Report on the Strategic Management of Human Capital 4/29/2009 $0 $0 $0
Management Advisory on Internal Controls for the Atlanta District Office 9/14/2009 $0 $0 $0

APPENDIX II. INDEX OF REPORTING REQUIREMENTS

Inspector General Act Citation Reporting Requirements Page
Section 4(a)(2) Review of Legislation and Regulations NA
Section 5(a)(1) Significant Problems, Abuses, and Deficiencies 13–24
Section 5(a)(2) Recommendations with Respect to Significant Problems, Abuses, and Deficiencies 13–14
Section 5(a)(3) Significant Recommendations Included in Previous Reports on Which Corrective Action Has Not Been Completed 16–21
Section 5(a)(4) Matters Referred to Prosecutive Authorities NA
Section 5(a)(5) Summary of Instances Where Information Was Refused NA
Section 5(a)(6) List of Audit Reports 28
Section 5(a)(7) Summary of Significant Reports 13–14
Section 5(a)(8) Questioned and Unsupported Costs 28
Section 5(a)(9) Recommendations That Funds Be Put to Better Use 28
Section 5(a)(10) Summary of Audit Reports Issued Before the Commencement of the Reporting Period for Which No Management Decision Has Been Made 21
Section 5(a)(11) Significant Management Decisions That Were Revised During the Reporting Period NA
Section 5(a)(12) Significant Management Decisions with Which the Office of Inspector General Disagreed NA

APPENDIX III. SINGLE AUDIT ACT REPORTS

The State of Iowa, FY 2007 The State of Louisiana, FY 2007
The Campo Band of Diegueno Mission Indians, FY 2007 The State of New Hampshire, FY 2008
The State of California, FY 2007 The State of Tennessee, FY 2007
The State of Missouri, FY 2007 The State of Wisconsin, FY 2007
The State of Arizona, FY 2007 The State of New Jersey, FY 2007
The State of Wyoming, FY 2007 The State of Connecticut, FY 2007
The State of Colorado, FY 2007 The State of New Hampshire, FY 2007
The State of Montana, FY 2007 The State of Maine, FY 2007
The State of Idaho, FY 2007 The Government of District of Columbia, FY 2006
The State of Ohio, FY 2007 The State of Nebraska, FY 2007
The State of Florida, FY 2007 The State of Rhode Island and Providence Plantations




OIG Hotline

The OIG Hotline Program was established for Agency employees, other Government employees, contractors, and the general public to report fraud, waste, abuse, or wrongdoing by phone, e-mail

What Should you Report

You should report any concern you may have over a situation in which EEOC is the potential victim of fraudulent acts by employees, contractors, or others. It includes any violations of laws, rules, regulations, gross mismanagement, gross waste or misappropriation of funds, and abuses of authority.

OIG Hotline Contact Information

Call:
EEOC-OIG Hotline
Toll-free 1-800-849-4230

E-Mail:
E-Mail address
OIG.HOTLINE@EEOC.GOV

Write:
Equal Employment Opportunity Commission
Office of Inspector General
PO Box 77067
Washington, DC 20013-7067

Identities of Writers and Callers are always Fully Protected