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.
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.
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.
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 FY 2010 charge inventory of 87,807, almost 14,000 higher than the inventory at the end of FY 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 over almost 93,277 new private-sector charges, 2,125 less than in FY 2008. However, FY 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. We agree with one of the key findings of a GAO report stating EEOC needs to develop criteria for identifying offices that ensure quality outcomes in a timely manner and share promising practices across the Agency.
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.
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:
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.
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. 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.
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.
Aletha L. Brown
U.S. Equal Employment Opportunity Commission
November 13, 2009
|TO:||Stuart J. Ishimaru
|FROM:||Aletha L. Brown
|SUBJECT:||Audit of the Equal Employment Opportunity Commission's Fiscal Year 2009 and 2008 Financial Statements (OIG Report No. 2009-04-FIN)|
The Office of Inspector General (OIG) contracted with the independent certified public accounting firm of Cotton and Company LLP to audit the financial statements of the U.S. Equal Employment Opportunity Commission (EEOC) for fiscal years 2009 and 2008. The contract required that the audit be done in accordance with U.S. generally accepted government auditing standards; Office of Management and Budget's Bulletin 07-04, Audit Requirements for Federal Financial Statements, and the Government Accountability Office/President's Council on Integrity and Efficiency's Financial Audit Manual.
Cotton and Company LLP issued an unqualified opinion on EEOC's FY 2009 and 2008 financial statements. In its Report on Internal Control, Cotton and Company LLP noted two areas involving internal control and its operation that were considered to be significant deficiencies. These included time and attendance controls and controls over revenue and receivables. In its Report on Compliance, Cotton and Co. LLP noted no instances of non compliance with certain laws and regulations applicable to the agency.
In connection with the contract, OIG reviewed Cotton and Company LLP's report and related documentation and inquired of its representatives. Our review, as differentiated from an audit in accordance with U.S. generally accepted government auditing standards, was not intended to enable us to express, and we do not express, opinions on EEOC's financial statements or conclusions about the effectiveness of internal controls or on whether EEOC's financial management systems substantially complied with FFMIA; or conclusions on compliance with laws and regulations. Cotton and Company LLP is responsible for the attached auditor's report dated November 13, 2009 and the conclusions expressed in the report. However, OIG's review disclosed no instances where Cotton and Company LLP did not comply, in all material respects, with generally accepted government auditing standards.
EEOC management was given the opportunity to review the draft report and to provide comments. Management comments are included with the report as an attachment.