EEOC Seal

U.S. Equal Employment Opportunity Commission



 

OFFICE OF INSPECTOR GENERAL

Office of Inspector General

SEMIANNUAL REPORT TO CONGRESS

October 1, 2008 – March 31, 2009

TABLE OF CONTENT

Message from the Inspector General

Executive Summary

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

The Audit and Evaluation Programs
Completed Projects
Ongoing Audit and Evaluation Projects

The Investigation Program
Investigative Inquiries
Completed Investigations
Ongoing Investigation Activities

Other OIG Program Activities

OIG Professional Activities

Appendixes
Appendix I Final OIG 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 October 1, 2008, to March 31, 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. OIG is dedicated to maintaining the highest standards of professionalism and quality in its audits, evaluations, and investigations. The reports highlighted in this semiannual report demonstrate OIG’s commitment to ensuring economy and efficiency in EEOC programs and operations.

During this reporting period, the OIG, along with EEOC headquarters, relocated to 131 M. St. NE, Washington, DC. The OIG management and staff worked diligently during the months of October through late December to ensure that the OIG relocation occurred uneventfully. I would like to acknowledge and give my personal thanks to the OIG management team and staff for their superior work and commitment. Without their dedication and willingness to go above and beyond the call of duty, OIG would not be able to achieve and maintain its high level of performance.

Finally, the success of OIG would not be possible without the collaborative work of my staff and agency managers to address the findings and implement the recommendations made by OIG. 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,

Signature of Aletha Brown

Aletha L. Brown
Inspector General


EXECUTIVE SUMMARY

This semiannual report summarizes the Office of Inspector General’s (OIG’s) activities and accomplishments for the period from October 1, 2008, through March 31, 2009. During this period, the OIG issued one final audit report, one draft audit report, one management letter, one management advisory, one annual report, and one fraud, waste, and abuse alert; completed four investigations; and received 202 investigative inquiries, of which 145 were charge processing issues, 17 were Title VII complaints, and 40 were other investigative allegations.

The OIG’s completed and ongoing projects include the following:

  • A consolidated financial statement audit of the Equal Employment Opportunity Commission (EEOC). On November 7, 2008, Cotton & Company, LLP, issued an unqualified opinion on EEOC's fiscal year (FY) 2008 consolidated financial statements. In the Independent Auditor’s Report on Internal Controls, no material weaknesses were identified. However, the auditors identified significant deficiencies in controls relating to time and attendance and in controls over revenue and receivables.
  • A management letter report that identified eight matters in FY 2008 that warranted corrective action. Management concurred with most of the findings and recommendations and provided corrective action plans addressing each issue.
  • A management advisory informing the Acting Chairman of the need to update EEOC Order 110.001, “EEOC Organization and Position Management Handbook,” and EEOC Order 110.002, “Organization, Mission and Functions,” to reflect the current organization of the Agency. We recommended that all offices be required to review their mission and function orders to ensure that they reflect their current office organization structure.
  • A fraud, waste, and abuse alert to headquarters employees regarding the proper disposal of personally identifiable information. During the recent headquarters relocation, the OIG observed a number of instances wherein employees inappropriately discarded personally identifiable information in open trash receptacles. The OIG recommended several appropriate methods for properly discarding both electronic and paper-generated personally identifiable information.
  • An annual report validating the Agency’s compliance with the Federal Managers’ Financial Integrity Act. The OIG concurred with the Office of Research Information and Planning’s reporting of 20 instances of financial nonconformances. Two of those financial nonconformances were identified in FY 2007. The Agency has implemented or is in the process of implementing corrective action plans to resolve the remaining nonconformances in FY 2009.
  • Investigations into allegations of inappropriate conduct, perjury, and submission of altered documents; falsification of time and attendance; and fraud.
  • Ongoing audit and evaluation projects, including (1) draft report regarding the strategic management of human capital and succession planning, (2) review of the Atlanta district office’s Federal Manager’s Financial Integrity Act internal control testing, (3) Federal Information Security Management Act adherence, and (4) review of EEOC office relocation planning.
  • Ongoing investigations, including allegations 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, destruction of government records, 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. 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 Chairman, a Vice Chair, and three Commissioners. The Chairman 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 provides legal advice and leadership, including coordination and supervision, to EEOC’s litigation program.

During the reporting period President Obama appointed Commissioner Stuart Ishimaru as Acting Chairman and Commissioner Christine Griffin as the Agency’s Acting Vice Chair. 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 IGs’ independence, 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.
  • 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 homepages to have a direct link 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 homepages 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. Put the IG Council in place of agency heads 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 Chairman. The IG must not be prevented or prohibited by the Chairman 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 Chairman 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 conduct audits, evaluations, and investigations of EEOC operations and activities and prepare reports for issuance to the Chairman, EEOC management, and Congress.

The Counsel to 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 five issues the IG considers the most serious management challenges the Agency is confronting:

  1. strategic management of human capital,
  2. private-sector charge inventory,
  3. budget and performance integration,
  4. information technology culture, and
  5. state, local, and tribal assistance performance information.

In March 2009, Congress approved EEOC’s fiscal year (FY) 2009 budget for $343,925,000 ($15 million above FY 2008 funding levels, which constitutes a 5 percent increase). According to Acting Chairman Ishimaru, much of the increase will go toward hiring new frontline employees; this hiring is a start to rebuilding the Agency’s capacity to increase systemic work and address a growing charge inventory.

In the FY 2009 appropriations legislation, Congress noted the importance of all these challenge areas except information technology culture. Only a profound change in EEOC’s management culture can enable the Agency to effectively meet all five of these challenges. The Acting Chairman and other EEOC leaders need to embrace and implement genuine strategic planning and innovative work processes that are more efficient and productive. In addition, overcoming these challenges also requires commitment of significant Agency resources, sound decision making by the Agency’s leadership, and continued oversight by the OIG and Government Accountability Office.

Strategic Management of Human Capital

Agency progress on the strategic management of human capital initiative remains slow. The Agency has yet to finalize the draft human capital plan from September 2008. As reported in our last semiannual report, a draft leadership succession plan was submitted to the Agency’s Senior Executive Service Advisory Council for input and recommendations. In October 2008, the Senior Executive Service Advisory Council recommended revision of the draft plan, including a change in emphasis from the General Schedule (GS)-15 Executive Leadership Programs to a focus on developing promising leaders at the GS-13/14 levels. No significant action to move this program forward has taken place since that time.

The Omnibus Appropriations Act of 2009 requires EEOC to implement the recommendations relating to workforce planning contained in the June 2008 Government Accountability Office Report No. 08-589, “Equal Employment Opportunity Commission: Promising Practices and Fully Implementing Strategic Human Capital Planning Can Improve Management of Growing Workload.” Specifically, the Agency needs to do the following:

  • develop criteria for identifying offices that ensure quality outcomes in a timely manner and evaluate and share promising practices across the agency,
  • finalize the strategic human capital plan on the basis of skills and competencies assessments, and
  • develop an implementation plan for the strategies identified in the strategic human capital plan with stakeholder input that identifies necessary resources, responsible parties, timelines for completion, and mileston

The Agency has yet to fill the vacancy for a chief human capital officer, vacant since June 30, 2008. However, the Agency began advertising for the vacancy in early March 2009. It is vital to fill this important position in a timely manner to ensure that the Agency’s strategic management of human capital initiatives is advanced.

In addition, EEOC needs to comply with overtime compensation rules. A Federal arbitrator ruled (as cited in the March 23, 2009, 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”),

Beginning on April 1, 2003 and continuing to the present, EEOC is in violation of the Collective Bargaining Agreement (CBA), the law, and regulations.

The Agency intentionally failed to pay overtime compensation to bargaining unit employees in the positions of Enforcement Investigators GS-1810-9, 11, and 12; positions of Alternative Dispute Resolution Mediators GS-301-12 and 13; and in the positions of two Paralegal Specialists GS-950-9 and 11, in EEOC’s District, Field, Area and Local Offices. In addition, in violation of the CBA, law, and regulations, the aforementioned bargaining unit employees were required to accept compensatory time.

EEOC’s reputation, effectiveness, and employee morale may have been significantly damaged because an Agency charged with fighting employment discrimination appears less credible when that Agency has, since 2003, knowingly violated important employment law and regulations regarding overtime. To repair this damage and ensure compliance, EEOC should plan and publicize a course of action that could include the following:

  • learning what other similarly situated agencies (e.g., those having employees performing significant amounts of overtime) do to ensure compliance with overtime rules and what those agencies do to fund overtime,
  • developing and/or refining policy and procedures on overtime and related issues and ensuring all Agency employees receive these documents directly (via e-mail),
  • directing Agency managers and supervisors to adhere to those policies and procedures,
  • implementing an automated and detailed system to help ensure accurate capture and electronic record of each employee’s time, per Office of Personnel Management requirements (i.e., the system captures all hours, including overtime hours), and
  • conducting follow-up to ensure compliance (e.g., deploying a task force or other group to examine documents and conduct necessary oversight).

Private-Sector Charge Inventory

EEOC continues to face a major challenge in adequately addressing the growing backlog of private-sector discrimination cases. This backlog, known as “charge inventory,” by the end of FY 2010 is projected to reach 114,632 cases, 55 percent higher than the inventory at the end of FY 2008 (73,951 cases). The primary negative effect of increased inventory is the delay in case resolution for thousands of EEOC’s primary customers, the people who believe they have been discriminated against.

FY 2008 information shows that EEOC received over 95,000 new private-sector charges—almost 13,000 more than in 2007. Continued increases in charges are anticipated, according to the director of the office of field programs, who also stated that additional staff may lead to a stable or decreasing inventory. According to the Acting Chairman, the Agency will be hiring 250 new employees.

Regardless of the impact on inventory from the anticipated additional staff, EEOC needs to develop major improvements in case processing to come closer to its mission of eliminating employment discrimination. Without a focus on major improvements 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 FY 2008 Government Accountability Office 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, instituted in 1995.

Budget and Performance Integration

EEOC remains highly challenged in integrating budget and performance. Without better performance data, Agency managers cannot know how well EEOC performs given the resources it expends. By adopting commonsense changes, the Agency can stop making many resource and management requests and decisions without vital information. In the short term, the Agency’s current cost accounting system can be improved by adding more detailed performance data to the biweekly worksheet (the cost accounting sheet) that is filled out by each employee.

In addition, as we reported in the previous semiannual report, EEOC staff were unable to provide adequate support to the former Chair for systemic litigation resource requests, making budget requests less robust. During this reporting period, we learned that 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.

The Agency also lacks necessary performance information in key program areas. While the Agency made significant progress in identifying specific performance targets and goals in 2007 and 2008, progress has slowed.

For example, in 2007 and 2008, EEOC worked with its state and local Fair Employment Practice Agencies (FEPA) partners to develop a measure to assess their contributions, but EEOC has not adopted a performance measure in this area. EEOC has gathered and analyzed information; therefore, it should adopt a FEPA performance measure in FY 2009. Not adopting such a measure would be an indication that EEOC lacks the desire to obtain and act on basic performance information necessary for effective management of the FEPA program.

Regarding case inventory target levels, EEOC lacks solid performance data to support lowering target performance levels. Therefore, OMB has not yet accepted EEOC’s altering of performance targets, meaning that EEOC may 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 importance of gathering and using performance data, this challenge is likely to remain.

Information Technology Culture

Progress is being made in changing EEOC’s information technology culture; however, important work remains. As mentioned in the previous OIG semiannual report, one of the most serious issues facing EEOC is how to foster fundamental change in the information technology culture throughout the Agency. We agree with the Agency’s Chief Information Officer (CIO) that this is one of the highest long-term priority issues that the Agency faces. The change requires moving from a focus on the Agency’s technological infrastructure to a more strategic approach regarding how technology can be used to aid the Agency in accomplishing its mission. Without such change, the Agency is restricted in improving effectiveness and efficiency—in directly serving internal customers (e.g., investigators) and in supporting Agency employees.

Through various initiatives over the past year, the Agency’s CIO 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. For example:

  • the CIO has worked to develop business partnerships and improve communication conduits with other Agency directors and senior management in an effort to identify particular needs concerning information technology,
  • the CIO held several all-hands meetings with the headquarters Office of Information Technology staff as well as field office information technology specialists to foster an atmosphere of professional ownership and management expectations, and
  • the CIO conducted a strategic strength, weakness, opportunity, threat analysis of the Agency’s technological environment.

However, the Agency faces an ongoing and serious short-term problem—the implementation of a strategy for the timely replacement of its aging field office network backbone. Irregular replacement can be harmful to productivity and can cause financial difficulties by concentrating spending rather than using a sound acquisition strategy.

The average age of the servers located in Agency field offices ranges from five to seven years. The industry standard life cycle for information technology equipment, including servers, is three to five years. While these servers are currently functional, the effectiveness and efficiency of the field offices in providing timely service (e-mail and electronic file management, for example) to the public and internally could be seriously jeopardized if one of these servers ceases to function and repairs or replacements cannot be accomplished or obtained in a timely manner. A replacement plan and a funding request have been developed and submitted, and an additional funding request for these purchases has been submitted to senior management.

State and Local Partner Performance Management

EEOC has not adequately addressed the need to assess the performance of its state and local partners. EEOC provides substantial annual funding ($26,000,000 for FY 2009) to these partners, Fair Employment Practice Agencies (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’s FY 2009 appropriation requires EEOC to submit findings from its ongoing review of FEPA per-case costs to the House and Senate Committees on Appropriations. That Congress felt it necessary in an appropriations bill to require EEOC to produce such basic and essential information is a symptom of years of EEOC senior management inaction.

OIG Shield

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

FY 2008 Audit of the Consolidated EEOC Financial Statements

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. On November 7, 2008, Cotton & Company, LLP, issued an unqualified opinion on EEOC's FY 2008 consolidated financial statements. In the Independent Auditor’s Report on Internal Controls, no material weaknesses were identified. However, the auditors identified significant deficiencies in controls relating to time and attendance and in controls over revenue and receivables. Management concurred with the findings and recommendations and is taking steps to correct the noted deficiencies. The Independent Auditor’s Report on Compliance with Laws and Regulations disclosed no instances of noncompliance with required laws and regulations specified under government auditing standards or OMB Bulletin 07-04.

FY 2008 EEOC Financial Statement Audit Management Letter

Cotton & Company, LLP, issued its FY 2008 management letter report on February 12, 2009. The report identified eight matters in FY 2008 that warranted management’s attention. Among the internal control issues discussed in the report were the following:

  • budgetary posting logic,
  • supporting documentation for transactions,
  • controls over property and equipment,
  • controls over undelivered orders and accounts payable,
  • quality control procedures over financial statements,
  • security violations review,
  • segregation of duties, and
  • application controls review.

Except for findings and recommendations relating to the budgetary posting logic, management concurred with the remaining findings and recommendations and provided corrective action plans addressing each issue.

Management Advisory—Management Directives

The OIG issued a Management Advisory on March 17, 2009, informing the Acting Chairman of the need to update EEOC Order No. 110.001, “EEOC Organization and Position Management Handbook,” and EEOC Order No. 110.002, “Organization, Mission and Functions,” to reflect the current organization of the Agency. Specifically, we noted that the Office of Human Resources’ section of the order dated May 2002 did not reflect the current organization of the office. Since that time, the Office of Human Resources has added a new division and created the new position of deputy director. We informed Agency senior management that all EEOC offices should be required to review their specific sections of EEOC Order No. 110 to ensure that it is accurate and reflects their current organizational structure.

Fraud, Waste, and Abuse Alert—Disposal of Personally Identifiable Information

The OIG issued a fraud, waste, and abuse alert on October 22, 2009, to headquarters employees regarding the proper disposal of personally identifiable information. During the recent headquarters relocation, the OIG observed a number of instances wherein employees inappropriately discarded personally identifiable information in open trash receptacles.

In the fraud, waste, and abuse alert, the OIG reminded employees that loss of, misuse of, or unauthorized access to personally identifiable information entrusted to the Agency could adversely affect the privacy to which individuals are entitled under 5 U.S.C. section 552(a) (the Privacy Act) and could cause immeasurable damage to the image and reputation of the Agency. The OIG also recommended several appropriate methods for properly discarding both electronic and paper-generated personally identifiable information.

Agency Compliance with the Federal Manager’s Financial Integrity Act (FMFIA)

The OIG issued its annual report on November 13, 2008, validating the Agency’s compliance with FMFIA. EEOC Order No. 195.001, “Management Accountability and Controls,” requires the OIG to provide annually a written advisory to the head of the Agency regarding whether the management control evaluation process complied with OMB guidelines. To make this determination the OIG reviewed:

  • assurance statements submitted by headquarters and district directors attesting that their systems of management accountability and control were effective and that resources under their control were used consistently with the Agency’s mission and in compliance with the laws and regulations set out in FMFIA of 1982,
  • all functional area summary tables and functional area reports submitted by headquarters and field offices, and
  • the Office of Research, Information and Planning’s (ORIP’s) FY 2007 FMFIA assurance statement and assurance statement letter, with supporting documents.

The OIG concluded that the Agency’s management control evaluation was conducted in accordance with OMB’s standards and concurred with ORIP’s assertion that the Agency had no material weaknesses during the reporting period. The OIG also concurred with ORIP's reporting of 20 instances of financial nonconformance. Two of those financial nonconformances were identified in FY 2007. The Agency has implemented, or is in the process of implementing, corrective action plans to resolve the remaining nonconformances in FY 2009.

ONGOING AUDIT AND EVALUATION PROJECTS

Draft Report on the Strategic Management of Human Capital: Succession Planning

The OIG issued a draft report, “Strategic Management of Human Capital: Succession Planning,” on March 30, 2009. The report identifies the need for succession planning efforts to be finalized and implemented and the need for senior management to take an active role in succession-planning efforts. Additionally, succession planning should be linked to the Agency’s strategic plan and integrated into the budget process. Management comments were due by April 24, 2009, and a final report is planned for issuance in the third quarter of FY 2009.

Review of Atlanta District Office FMFIA Internal Control Testing

The OIG is drafting its report on internal control testing for the Atlanta district office. The review included the verification and validation of Freedom of Information Act reporting, controls over the use of purchase card and convenience checks, time and attendance reporting, and property management. A draft report is planned for issuance in the third quarter of FY 2009.

Adherence to the Federal Information Security Management Act (FISMA)

The OIG is conducting an independent evaluation of the Agency’s adherence to FISMA. FISMA provides a comprehensive framework for ensuring the effectiveness of information security controls over information resources that support Federal operations and assets. FISMA requires agencies to provide information security protections for:

  • information collected or maintained by or on behalf of the agency, and
  • information systems used or operated by an agency or by a contractor of an agency or other organization on behalf of an agency.

Review of EEOC Relocations 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. During the next reporting period, the OIG plans to issue an evaluation report addressing its 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 (October 1, 2008–March 31, 2009) that contained findings.

Fiscal Year Report Number Report Title Date Issued Recommendations
2009 2008-06-FIN FY 2008 Financial Statement Audit Management Letter Report 2/12/2009 Yes
2009 2008-05-FIN FY 2008 Financial Statement Audit Internal Control Report 11/14/2008 Yes

As required by Section 5(a)(3) of the Inspector General Act of 1978, as amended, semiannual reports shall identify each significant recommendation described in previous semiannual reports for 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.

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 (RF) 8/26/08
Open Recommendations:
RF is to operate as an independent program within the Agency.
Approve the establishment of EEOC Training Institute Steering Committee.
Update RF business plan to reflect strategic direction, vision, and goals over the next three to five years.
Initiate cross-training between job functions where reasonable and practical.
Reconcile spending plans to amounts recorded in the accounting system.
RF division is to obtain professional assistance to develop a more effective 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 formats.
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 Web site privacy policies.
Ensure that all privacy policies posted to EEOC Web sites comply with OMB requirements.
Ensure that all privacy policies are posted on (1) EEOC’s principal Web site, (2) any known major entry points to EEOC sites, and (3) 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 all new privacy-related laws and regulations are evaluated to determine whether EEOC is required to follow them.
Recommend that Senior Agency Official for Privacy (SAOP) 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 Security Management Act (FISMA) 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 Publication No. 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, 2009. 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 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 to create more stability.
Develop a plan with milestones for making management directive 715 (MD-715) a Web-based submission process.
Ensure that all agencies receive Office of Federal Operations feedback on MD-715 in time to fully prepare 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 01/15/07
Open Recommendations:
Implement a policy to periodically review undelivered orders to ensure that they 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:
Office of Chief Financial Officer: Coordinate with the director of Revolving Fund to establish procedures to recognize revenue on a full accrual basis consistent with generally accepted accounting principles.
EEOC: Complete background investigations for all employees and contractors in accordance with Federal and EEOC guidelines.
EEOC: Develop, document, and implement policies and procedures for reviewing user accounts on all systems and review user listings against terminated and separated employee listings.
Office of Chief Financial Officer: 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:
EEOC’s Chief Financial Officer (CFO) should report headquarters offices to the Office of the Chairman and field offices to the director of the Office of Field Programs for their noncompliance with the property certification policy.
All EEOC offices should ensure that all forms 629 (Reports of Loss, Theft, or Incident) are provided to the security specialist in a timely manner.
EEOC’s CFO should refine the accounts payable and undelivered orders review process to ensure that all recorded balances at year’s end are valid and should require personnel to contact vendors to obtain invoices for accounts payable over three months old.
CFO 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.

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THE INVESTIGATION 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

Investigative Inquiries Received
October 1, 2008–March 31, 2009
Allegations Total
Charge Processing 145
Other Statutes 5
Title VII 17
Mismanagement 4
Ethics 0
Backgrounds 10
Theft 7
Other Criminal Violations 10
Fraud 4
TOTAL 202

COMPLETED INVESTIGATIONS

Inappropriate Conduct

The OIG received a complaint from a charging party that an EEOC investigator had sexually harassed her on several occasions during the investigation of her charge. The charging party obtained legal counsel and informed the investigator that the attorney should be the point of contact. The investigator, however, continued to contact the charging party. During a preliminary investigation of the matter, the OIG learned from the district director that EEOC management had made a determination that the investigator had engaged in inappropriate behavior regarding his interactions with the charging party and had determined that the investigator should be suspended. Inasmuch as the allegations were noncriminal and all issues were resolved by the actions of management, the OIG closed the matter.

Perjury and Submission of Altered Documents

The OIG received a complaint from a charging party that the respondent, against whom the charging party claimed discrimination, had committed perjury and submitted altered documents during the course of an EEOC investigation. The charging party claimed that the respondent provided documents to the EEOC investigator that were altered and contained false information. After conducting a thorough investigation into this matter and reviewing voluminous documents and files related to the case, the OIG concluded that there was no evidence to substantiate the charging party’s claims of perjury and submission of altered documents.

Falsification of Time and Attendance

The OIG conducted a preliminary inquiry into allegations of time and attendance falsification in violation of Title 18 U.S.C. section 1001 at the request of the district director. After a review of all pertinent material, the OIG determined that there was insufficient evidence to establish that any criminal conduct had occurred. While the evidence did tend to establish time and attendance irregularities of an administrative nature, the district director advised the OIG that management was aware of the matter and had taken action to address, the matter.

Fraud

The OIG received a complaint alleging that an individual had taken a copy of an EEOC settlement letter and altered the letter to state that he or she was to receive a $10,000,000 settlement from the respondent. After altering the letter, the subject then submitted the letter as collateral to a local car dealership in an attempt to obtain a vehicle.

The subject made a second attempt to pass the altered document to a local bank to obtain a loan. The signature of the case investigator appeared to be forged on the fraudulent document. After completion of the preliminary inquiry by the OIG, in consultation with Federal Bureau of Investigations (FBI) agents, this matter was referred to the local FBI field office.

ONGOING INVESTIGATIVE ACTIVITY

The 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, destruction of government records, theft of government property, and the misuse of a government credit card.

OTHER OIG PROGRAM ACTIVITIES

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 applicable standards, improvements should be made in several areas, such as quality control and quality assurance. To ensure these improvements were implemented, the OIG developed a corrective action plan and began to implement the corrective actions.

Actions taken during the 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.

During the next reporting period, the OIG plans to implement the other actions detailed in the corrective action plan, including:

  • refining the process of recording and tracking staff training and education, and
  • ensuring audit and evaluation plans are fully supported, including significant changes.

IG and Administrative Specialist Co-Chaired 11th Annual President's Council on Integrity and Efficiency/ Executive Council on Integrity And Efficiency (PCIE/ECIE) Awards Ceremony

The IG and the Administrative Specialist Co- Chaired, with the Department of Health and Human Services, the 11th Annual PCIE/ECIE Awards Ceremony. The ceremony was held on October 21, 2008, at the Andrew W. Mellon Auditorium, located in Washington, D.C., and it recognized significant accomplishments of individuals and groups within the Federal inspectors general community.

The OIG Offsite Retreat

On November 12, 2008, the OIG held its annual officewide offsite retreat. The retreat was a one-day event held at the Federal Deposit Insurance Corporation’s L. William Seidman Conference Center located in Arlington, Virginia. The theme of the retreat was the development of “Healthy & Effective Communication for Team Building.” The training was facilitated by Dr. R. Nicole Cutts of Cutts Consulting, LLC.

Review of Single Audit Act Reports

During the reporting period, the OIG reviewed 12 audit reports issued by public accounting firms concerning fair employment practices agencies that have work-sharing agreements with EEOC. There were no audit findings 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.

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 Crime 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

Association Affiliations

The OIG staff maintain the following affiliations with associations that are associated with the work of the OIG:

  • American Bar Association
  • American Evaluation Association
  • Association of Certified Fraud Examiners
  • 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
  • Financial Statement Audit Network
  • Federal Law Enforcement Officers Association
  • Information Systems Audit and Control Association
  • International Association of Privacy Professionals
  • Maryland Association of Certified Public Accountants
  • Maryland 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:

  • Forum on Issues in Government Financial Management
  • National Leadership Conference–Association of Government Accountants
  • Financial Statement Audit Conference
  • Department of Homeland Security (DHS)/Federal Law Enforcement Training Center (FLETC) Continuing Legal Education Training Program
  • Ethics Instructor Certification Course
  • How to Beat Office Burnout
  • Leading Change
  • Securing Remote Connectivity
  • Security Auditing
  • National Incident Management System–FEMA Emergency Management Institute
  • Meeting Risk Management Challenges
  • Leadership Detail (performance management detail at the U.S. Department of Justice)

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
FY 2008 Financial Statement Audit Management Letter Report 2/12/2009 $0 $0 $0
FY 2008 Financial Statement Audit Internal Control Report 11/14/2008 $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 14–24
Section 5(a)(2) Recommendations with Respect to Significant Problems, Abuses, and Deficiencies 14–17
Section 5(a)(3) Significant Recommendations Included in Previous Reports on Which Corrective Action Has Not Been Completed 17–21
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 29
Section 5(a)(7) Summary of Significant Reports 14–17
Section 5(a)(8) Questioned and Unsupported Costs 29
Section 5(a)(9) Recommendations That Funds Be Put to Better Use 29
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 Georgia, FY 2007 The State of North Carolina, FY 2007
The State of Nevada, FY 2007 The Confederated Tribes and Bands of the Yakama Nation, FY 2007
The State of New York, FY 2007 The City of New York, FY 2007
The State of Kansas, FY 2006 The State of Kansas, FY 2007
The State of Oklahoma, FY 2007 The State of West Virginia, FY 2007
Miami Dade County, FY 2007 The State of South Dakota, FY 2007




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

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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.


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