[Material transmitted]{.underline}

Instruction 251-1, Intramanagement Communication and Consultation (pages
1-10)

Exhibit 251-1-A, Memorandum of Understanding for the Payment of Dues
through Payroll Allotment (pages 1-3)

[Material superseded]{.underline}

Instruction 251-1 (pages 1-5: 72.5)

Circular 550-4 (page 1)

[Background]{.underline}[^1]

The major revisions in the attached Instruction 251-1 on intramanagement
communication and consultation are as follows:

1.  References to section 7(e) of Executive Order 11491 have been
    deleted from the Instruction, since that Executive order section was
    revoked in 1975 by Executive Order 11838. The requirement for
    Federal agencies to have a system for intramanagement communication
    and consultation is now contained in FPM Chapter 251.

2.  The authority to establish an official relationship with an
    association of supervisors and management officials has been
    clarified (see section 251-1-50B), Specifically, Regional Directors
    may authorize an association in their region when membership crosses
    OPDIV lines, after obtaining agreement from the OPDIVs involved.
    Also, the Assistant Secretary for Personnel Administration is the
    authorizing official for associations where membership crosses OPDIV
    lines at headquarters or outside of a single region.

3.  A provision has been added to the Instruction requiring the
    establishment of an official relationship if an association meets
    the criteria and its membership encompasses more than 50 percent of
    the eligible employees in an organization (see section 251-1-50D.3).

4.  Information has been added to the Instruction regarding the process
    for setting up dues withholding arrangements with associations of
    supervisors and management officials (see section 251-1-60). For
    administrative convenience, the process parallels, in many respects,
    the dues withholding process for labor organizations, although these
    associations are not affiliated with labor organizations. The
    official designated to handle dues withholding for supervisory or
    management associations may be the labor relations officer or some
    other individual in the personnel office. The fee previously charged
    for dues withholding has been eliminated.

This issuance is effective immediately.

[Filing instructions]{.underline}

Remove superseded material and file new material. Change Table of
Contents (Instruction 002-1) for the Personnel Manual to reflect
changes. Post receipt of this transmittal to the HHS Check List of
Transmittals and file this transmittal in sequential order after the
check list.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Thomas S. McFee

Assistant Secretary for

Personnel Administration

Subject: INTRAMANAGEMENT COMMUNICATION AND CONSULTATION

251-1-00 Purpose and Authority

10 Coverage

20 References

30 Policy

40 Requirements

50 Establishment of an Official Relationship with an Association

60 Dues Withholding

70 Evaluation

Exhibit 251-1-A Memorandum of Understanding for the Payment of Dues
through Payroll\
Allotment

[251-1-00]{.underline} PURPOSE AND AUTHORITY

This Instruction establishes policies and procedures concerning the
systems for communication and consultation among management levels
within the Department of Health and Human Services (HHS). Chapter 251 of
the Federal Personnel Manual (FPM) is the authority for Federal agencies
to establish such systems, and this Instruction should be used in
conjunction with that FPM chapter.

[251-1-10]{.underline} COVERAGE

A.  This Instruction covers all supervisors and management officials
    within HHS. (See 5 U.S. Code 7103\[a\] \[10\] and \[11\] for the
    definitions of \"supervisor\" and \"management official.\")

B.  This Instruction does not cover employees who are eligible for
    representation by a labor organization under 5 U.S. Code Chapter 71.
    This Instruction also does not cover professional and other
    organizations (which fall under FPM Chapter 252) or employee welfare
    and recreation associations (which fall under HHS General
    Administration Chapter 25-10).

C.  This Instruction covers all the Operating Divisions (OPDIVs) in the
    Department. (For purposes of this Instruction, the term \"Operating
    Division\" includes the Office of the Secretary \[0S\] and the
    Office of Child Support Enforcement \[OCSE\], and the term \"OPDIV
    Head\" includes the Assistant Secretary for Management and Budget
    for OS and the Director, OCSE.)[^2]

[251-1-20]{.underline} REFERENCES

A.  5 U.S. Code Chapter 71 (law - labor-management relations)

B.  5 C.F.R. 550.331 (regulations - dues withholding for members of
    associations of supervisors and management officials)

C.  FPM Chapter 251 (requirements and guidance on intramanagement
    communication and consultation)

D.  FPM Chapter 252 (professional and other associations)

E.  HHS Instruction 273-1 (personnel management evaluations)

F.  HHS Instruction 550-2 (allotment of dues to a labor organization)

G.  HHS Instruction 711-1 (labor-management relations)

H.  HHS General Administration Manual Chapter 13-20 (use of Department
    facilities for nonofficial purposes)

I.  HHS General Administration Manual Chapter 25-10 (employee welfare
    and recreation associations)

[251-1-30]{.underline} POLICY

A.  The Department\'s goals include ensuring (1) that decision makers in
    HHS have the benefit of the wisdom and experience of supervisors and
    management officials and (2) that supervisors and management
    officials may contribute to and have a thorough understanding of
    Department objectives and the means for achieving them. To
    accomplish these goals, it is the policy of the Department to
    maintain systems:

    1.  To keep supervisors and management officials informed on
        policies, programs, problems, and resources of the Department;
        and

    2.  To consult with them for the purpose of devising policies,
        administering and evaluating programs, and identifying and
        resolving problems.

B.  The basic channel of communication and consultation is the chain of
    supervision established by the official organization. In addition,
    supervisors and management officials may form associations, as
    outlined in 251-1-50 below, which can supplement the basic means of
    communication and consultation.

[251-1-40]{.underline} REQUIREMENTS

A.  Each Operating Division must maintain and use one or more systems of
    communication and consultation with its supervisors and management
    officials. (For information on various systems and techniques, see
    FPM Chapter 251, subchapter 2.)

B.  These systems must have the characteristics listed in FPM Chapter
    251, section l-2.c, including the following:

    1.  All supervisors and management officials in the OPDIV are
        reached by the systems.

    2.  The systems of communication and consultation include
        supervisors and management officials in the decision-making
        process and ensure that they are notified of the decisions of
        executive management on a timely basis. They should not be \"the
        last to know\" about decisions which involve their work or their
        employees.

    3.  Supervisors and management officials at all levels may express
        their views and recommendations to higher members of management
        in a candid and forthright manner without fear of reprisal or
        discrimination.

    4.  Individual supervisors and management officials are able to
        participate in the communication and consultation if they are
        not affiliated with an association of supervisors and management
        officials. At the same time, the voluntary joining together of
        supervisors and management officials in groups or associations
        is not precluded or discouraged.

[251-1-50]{.underline} ESTABLISHMENT OF AN OFFICIAL RELATIONSHIP WITH
AN\
ASSOCIATION

A.  [Objective]{.underline}\
    \
    The objective of establishing official consultative relationships
    with associations of supervisors and management officials is to
    provide them with an opportunity to express their ideas, opinions,
    and desires in all policy areas.

B.  [Authority\
    \
    ]{.underline}The following officials (or their designees) are
    authorized to establish an official relationship with an
    association:

    1.  OPDIV Heads, for associations within their OPDIV.

    2.  Regional Directors:

        a.  For associations within the office of the Regional Director
            in their region, and

        b.  For associations within their region when association
            membership crosses OPDIV lines. In such cases, the Regional
            Director must obtain agreement from the OPDIV Heads (or
            their designees) who have employees affected by the official
            relationship.

    3.  The Assistant Secretary for Personnel Administration, for
        associations where membership crosses OPDIV lines at headquarter
        or outside of a single region.

C.  [Criteria]{.underline}\
    \
    As association seeking to establish an official relationship must
    meet the following criteria:

    1.  The association\'s membership is primarily supervisory or
        managerial employees;

    2.  The association does not discriminate in terms of membership or
        treatment because of race, color, religion, sex, handicap,
        national origin, or age;

    3.  The association is not eligible for recognition under 5 U.S.
        Code Chapter 71 and is not affiliated with a labor organization
        or a federation of labor organizations;

    4.  The association has sufficient membership to ensure a worthwhile
        dialogue with executive management;

    5.  The association has a constitution and by-laws which indicate
        that the organization subscribes to standards of fiscal
        responsibility and employs democratic principles in the
        nomination and election of officers; and

    6.  Any other appropriate criteria established by the authorizing
        official (see 251-1-50B above).

D.  [Procedures]{.underline}

    1.  An association desiring establishment of an official
        relationship must submit its request to the authorizing official
        (see 251-1-50B above). The request must include:

        a.  A copy of the association\'s constitution and by-laws;

        b.  The names of the officers;

        c.  The names of individuals serving on an advisory board to the
            association, if any;

        d.  A certification of the number of members; and

        e.  The position numbers of members not classified as
            supervisors, so that the composition of the association can
            be determined

    2.  When the authorizing official determines that the criteria in
        251-1-50C above are met, he or she will notify the association
        in writing that an official relationship is established. If the
        authorizing official is someone below the level of the officials
        listed in 251-1-50B.1, 2, or 3 above, he or she will send an
        information copy of the notification and the association\'s
        request to the official who has designated him or her as an
        authorizing official.

    3.  The authorizing official must establish an official relationship
        with an association that has requested it, if the association
        meets the criteria in 251-1-50C above and more than 50 percent
        of the eligible employees in the organization are members of the
        association\"

[251-1-60]{.underline} DUES WITHHOLDING

A.  If an association has membership dues and wishes to provide payroll
    withholding for its members, the association may request a dues
    withholding arrangement from the authorizing official (see 251-1-50B
    above). Such an arrangement must be established by a written
    agreement (or memorandum of understanding) between the authorizing
    official and the association, under 5 C.F.R. 550.331.

B.  A sample memorandum of understanding for dues withholding is
    contained in Exhibit 251-1-A. (It should be noted in the sample that
    Standard Form 1187 is used for requesting the payroll deduction and
    Standard Form 1188 is used for canceling the deduction \[See copies
    of the forms in HHS Instruction 550-2.\] These forms are designed
    for labor organizations and may be used, for administrative
    convenience, for associations of supervisors and management
    officials. However, an association may wish to design and use its
    own equivalent form or forms. If so, the association forms must be
    referenced in \[and a copy attached to\] the memorandum of
    understanding-)

C.  An association wishing to have dues withholding must meet the
    criteria in 251-1-50C above.

D.  Dues deductions will be made on a biweekly basis only. (For
    information on the effect of insufficient salary for a pay period,
    see Exhibit 251-1-A, section F.)

E.  Before a memorandum of understanding for dues withholding is signed
    by the authorizing official, the official will designate an official
    in the servicing personnel office to handle the dues withholding.
    The designated personnel official will contact the Division of
    Labor-Management and Employee Relations, HHS, by telephone to obtain
    a dues withholding account number. The account number will be
    included in the memorandum of understanding

F.  After a memorandum of understanding has been signed by the
    authorizing official and the association, the following procedures
    apply:

    1.  [Establishing an Account]{.underline}

        a.  The authorizing official will send a copy of the memorandum
            of understanding to the designated personnel official,

        b.  The association will notify the designated personnel
            official, in writing, of the name and complete address of
            the official or financial institution which is to receive
            the remittances (and the official who is to receive the
            reports) for the association, Associations are encouraged to
            designate an account in a financial institution to receive
            the remittances

        c.  The designated personnel official will complete a Form
            HHS-610A to establish the association\'s withholding account
            in the payroll system (see form in HHS Instruction 550-2,
            Exhibit 550-2-B). The personnel official will distribute the
            copies of the Form HHS-61OA as follows:\
            \
            (1) The original copy is forwarded to the servicing
            personnel office\'s\
            transaction unit for entry into the Terminal Data
            Collection\
            Service (TDCS);\
            \
            (2) The first copy is forwarded to the association; and\
            \
            (3) The second copy is retained by the personnel official.

    2.  [Notifying Other Servicing Personnel Offices\
        \
        ]{.underline}If the association has members in more than one
        servicing personnel office, the authorizing official will send
        copies of the memorandum of understanding to all the personnel
        offices involved so that they can process allotments under
        sections 251-1-60F.3 through 6 below.

    3.  [Initiating a Dues Allotment]{.underline}

        a.  The association \-- not the Department \-- will stock the SF
            1187 or equivalent forms. (The SF 1187 forms may be
            purchased from the Government Printing Office.) The
            association will inform its members of the voluntary nature
            of the dues allotment and will provide them with the forms.

        b.  To initiate a dues allotment, the employee and the
            association will complete the SF 1187 or equivalent, and the
            form will be sent to the designated official in the
            employee\'s servicing personnel office. When the SF 1187 is
            used, the employee\'s social security number must be
            inserted in the \"Employee I.D. Number\" block. The dues
            withholding account number must be included in the \"Name of
            Labor Organization\" block.

        c.  After receiving the SF 1187 or equivalent, the designated
            personnel official will complete a Form HHS-61O. (See form
            in HHS Instruction 550-2, Exhibit 550-2-A.) The personnel
            official will distribute the copies of the Form HHS-61O as
            outlined in 251-1-60F.lc above and will retain the SF 1187
            or equivalence

    4.  [Correcting an Error in a Dues Allotment]{.underline}\
        \
        If an error occurs in an employee\'s dues withholding, the
        employee or the association should notify the designated
        personnel official. The personnel official will complete a Form
        HHS-61O or take other appropriate action to correct the errors
        No retroactive adjustments will be made, and the association
        must make any necessary adjustments directly with the employee.

    5.  [Revoking a Dues Allotment]{.underline}

        a.  An employee may request revocation of the dues allotment by
            submitting a completed SF 1188 (or equivalent form) or a
            written request to the designated official in the
            employee\'s servicing personnel office. The employee\'s
            social security number must be provided in the written
            request or in the \"Employee I.D. Number\" block on the SF
            1188 or equivalent. If a written request is used, it must
            contain all the information required by the SF 1188 or
            equivalent

        b.  The designated personnel official will complete a Form
            HHS-61O, distribute the copies as outlined in 251-1-60F.lc
            above, and retain the revocation request.

        c.  The SF 1188 will not be carried in the Department supply
            system. Associations may purchase it from the Government
            Printing Office.

    6.  [Terminating a Dues Allotment]{.underline}

        a.  The association will notify the designated official in the
            member\'s servicing personnel office in writing within 15
            calendar days when a member resigns from the association, is
            suspended or expelled from it, or otherwise ceases to be a
            member in good standing.

        b.  Upon receipt of the notification, the designated personnel
            official will complete the Form HHS-61O, distribute the
            copies as outlined in 251-1-60F.lc above, and retain the
            notification.

        c.  Dues allotment to an association will automatically be
            terminated if an employee separates from the Federal service
            or transfers to another Federal agency outside of HHS.

    7.  [Making Changes in an Account]{.underline}

        a.  When an association changes its dues amount or makes any
            other changes in its account (such as changing the name or
            address of the official who is to receive the remittance),
            the association will report the change in writing to the
            designated official in the authorizing official\'s servicing
            personnel office.

        b.  The personnel official will complete a Form HHS-61OA,
            distribute the copies as outlined in 251-1-60F.lc above, and
            retain the written request from the association.

    8.  [Canceling an Account]{.underline}

        a.  If the authorizing official decides to cancel an
            association\'s withholding account for violation of the
            memorandum of under standing or for other appropriate
            reasons, the authorizing official will notify the
            association in writing and will notify all involved
            servicing personnel offices.

        b.  The designated official in the authorizing official\'s
            servicing personnel office will complete a Form HHS-61OA and
            will distribute the copies as outlined in 251-1-60F.lc
            above.

    9.  [Reports]{.underline}

        a.  The payroll office will submit three copies of a report
            biweekly to the designated official in the authorizing
            official\'s servicing personnel office. The report will
            include, among other items, the name of each employee for
            whom a dues deduction was made, the total number of
            deductions made, the total amount withheld, and the amount
            of the remittance sent to the association.

        b.  The designated personnel official will forward two copies of
            the report to the official identified by the association
            under 251-1-60F.lb above. The personnel official will retain
            the third copy.

    10. [Retention of Forms and Reports]{.underline}

        a.  The designated personnel official will retain the forms SF
            1187 and SF 1188 (or equivalent) and HHS 610 for 3 years
            after they are superseded or 3 years after the employee
            transfers or separates This is in accordance with General
            Records Schedule 2 in the HHS Records Management Manual.

        b.  The Form HHS 61OA will be retained as follows:\
            \
            (1) Forms which establish or cancel accounts will be
            retained as\
            long as the association has an official relationship with
            the\
            Department.\
            \
            (2) Forms which change account information will be retained
            as\
            long as that change is applicable

        c.  The designated personnel official will retain a copy of the
            biweekly reports for at least 1 year from the issue date.

G.  Any payroll action requiring the use of the Forms HHS-61O and
    HHS-61OA will not be effective sooner than the pay period in which
    the data from the forms are accepted into the TDCS system from the
    servicing personnel offices

H.  The Department will not charge a fee to associations of supervisors
    and management officials for dues withholding.

[251-1-70]{.underline} EVALUATION

The effectiveness of systems for communication and consultation with
supervisors and management officials will be an element of the program
for evaluation of personnel management in the various components of the
Department (See HHS Instruction 273-l.)

MEMORANDUM OF UNDERSTANDING FOR THE PAYMENT OF DUES THROUGH PAYROLL
ALLOTMENT

This memorandum of understanding for the payment of dues through payroll
allotment is entered into by the Department of Health and Human Services
(Department) and the \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Association (Association).

This memorandum of understanding covers all members of the Association
who (1) are employees of the Department; (2) are members in good
standing of the Association; (3) voluntarily authorize a dues allotment
to the Association by completing Standard Form 1187, which is the form
for requesting payroll deductions; and (4) receive compensation (after
all deductions of a higher priority) that is sufficient to cover the
total amount of the allotment.

This memorandum of understanding is subject to and will be governed by
applicable Federal laws and the regulations and policies of the
Department and the U.S. Office of Personnel Management.

The Association will:

Inform its members of the voluntary nature of the dues allotment and the
conditions under which the allotment may be revoked;

Purchase the necessary copies of the SF 1187 and distribute them to its
members covered by this memorandum of understanding;

Ensure that SF 1187s are fully and properly completed and forwarded to
the designated official in the member\'s servicing personnel office for
processing through the Terminal Data Collection Service. The
Association\'s dues withholding account number (\_\_\_\_\_\_) must be
properly noted on each SF 1187 submitted. The amount withheld for the
dues allotment is to be stated in a biweekly amount (annual rate divided
by 26, or monthly rate multiplied by 12 and the result divided by 26).
The servicing personnel office will return to the Association for
correction any improperly completed SF 1187;

Inform the servicing personnel office within 15 calendar days when a
member covered by this memorandum of understanding resigns from the
Association, is suspended or expelled from it, or otherwise ceases to be
a member in good standing;

Promptly refund the amount of erroneous remittances of dues withheld by
the Department that result from terminated membership or authorized
revocation;

Inform the servicing personnel office in writing of any change in the
amount of the Association\'s membership dues. This notification must be
made as much as possible in advance of the desired effective date to
allow time to make the necessary adjustments in the Department\'s
payroll system; and

Advise the servicing personnel office in writing of the name and address
of the person or office (i.e., remittance official) who is authorized to
receive the Association\'s dues deduction checks and reports.

E. The Department will:

1\. Take the action necessary to effect the payment of dues through
payroll allotment in accordance with this memorandum of understanding;

2\. Withhold the authorized dues on a biweekly basis; and

3\. Transmit to the remittance official of the Association for each pay
period:

a\. A check payable to the Association in an amount equal to the total
of the dues deductions made under this memorandum of understanding; and

b\. A report with the names of each member of the Association from whose
pay a dues deduction was made under this memorandum of understanding.
The report will include the total number of dues deductions made, the
total amount withheld, and the amount of the check transmitted to the
Association.

F. If an erroneous dues amount is withheld, the member will notify the
designated dues withholding official in the servicing personnel office.
The Employee Systems Center will only make adjustments prospectively. No
retroactive adjustments will be made. In any pay period where the
member\'s salary, after all legal and required deductions are made, is
not sufficient to cover the amount of the dues allotment, none will be
made, nor will any withholding be made to cover that pay period from
future earnings. The Association must make necessary dues adjustments
directly with the member.

G. The dues deduction will begin with the first full pay period after
the member\'s properly completed SF 1187 is received in the member\'s
servicing personnel office and the transaction is accepted into the
payroll system.

A member of the Association may request revocation of the dues deduction
by submitting to the servicing personnel office either an SF 1188, which
is the form for cancellation of payroll deduction, or a signed written
request. Any written request must contain all the information required
by the SF 1188.

The revocation of a dues allotment submitted by a member of the
Association will be effective the first full pay period after the
revocation is received in the servicing personnel office and the
transaction is accepted into the payroll system.

The termination of a dues allotment due to loss of membership in good
standing in the Association will be effective the first full pay period
after the notification is received in the servicing personnel office and
the transaction is accepted into the payroll system.

Termination of dues allotment due to separation from the Federal service
or transfer to another Department or agency will be effective with the
separation or transfer.

This memorandum of understanding may be modified at any time on
agreement of the parties.

This memorandum of understanding is effective when signed by the
officials of the Association and the Department who are authorized to
establish an official relationship.

For the Department: For the Association:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(Typed name) Date (Typed name) Date

(Title) (Title)

[^1]: ^.^ Distribution: MS(PERS):HRFC-001

[^2]: ^.^ Responsible office: Division of Policy, Office of the
    Assistant Secretary

    for Personnel Administration, HHS (FTS 475-0085)