Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
SURVEYING STAFF TO IDENTIFY 
UNNECESSARY INTERNAL CONTROLS 
Methodology and Results 
JUNE GIBBS BROWN 
Inspector General 
FEBRUARY 1995 
OEI-09-94-00210  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health and Human Services (HHS) 
programs as well as the health and welfare of beneficiaries served by those programs.  This 
statutory mission is carried out through a nationwide network of audits, investigations, and 
inspections conducted by three OIG operating components:  the Office of Audit Services, the Office 
of Investigations, and the Office of Evaluation and Inspections.  The OIG also informs the 
Secretary of HHS of program and management problems and recommends courses to correct them. 
OFFICE OF AUDIT SERVICES 
The OIGs Office of Audit Services (OAS) provides all auditing services for HHS, either by 
conducting audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying out their 
respective responsibilities and are intended to provide independent assessments of HHS programs 
and operations in order to reduce waste, abuse, and mismanagement and to promote economy and 
efficiency throughout the Department. 
OFFICE OF INVESTIGATIONS 
The OIGs Office of Investigations (OI) conducts criminal, civil, and administrative investigations 
of allegations of wrongdoing in HHS programs or to HHS beneficiaries and of unjust enrichment 
by providers.  The investigative efforts of OI lead to criminal convictions, administrative sanctions, 
or civil money penalties.  The OI also oversees State Medicaid fraud control units which investigate 
and prosecute fraud and patient abuse in the Medicaid program. 
OFFICE OF EVALUATION AND INSPECTIONS 
The OIGs Office of Evaluation and Inspections (OEI) conducts short-term management and 
program evaluations (called inspections) that focus on issues of concern to the Department, the 
Congress, and the public.  The findings and recommendations contained in these inspection reports 
generate rapid, accurate, and up-to-date information on the efficiency, vulnerability, and 
effectiveness of departmental programs.  The report was prepared in the San Francisco regional 
office under the direction of Kaye D. Kidwell, Regional Inspector General, and Paul A. Gottlober, 
Deputy Regional Inspector General.  Project staff included: 
REGION IX  HEADQUARTERS 
Elizabeth Celniker  Tina Fuchs

Donald Loeb

Brad Rollin

REGION II 
Nancy Harrison 
For additional copies of this report, please contact the San Francisco office at (415) 437-7900.  E X E C U T I V E   S U M M A R Y 

PURPOSE 
The purpose of this inspection was to develop and test a prototype that agencies could use 
to identify unduly burdensome or unnecessary internal controls. 
BACKGROUND 
On September 11, 1993, President Clinton signed Executive Order 12861 which required 
that all executive departments and agencies eliminate 50 percent of their internal controls 
by 1996.  The President signed the Executive Order immediately following release of the 
National Performance Review which described and detailed the immense time and 
resources consumed by an over-abundance of internal controls. 
In response, Department of Health and Human Services Secretary Donna Shalala instructed 
her Continuous Improvement Program (CIP) Steering Committee to oversee the reduction 
of internal controls within the Department.  The CIPs work group on internal controls 
requested the Office of Inspector Generals (OIG) assistance in identifying duplicative or 
unnecessary controls and requirements. 
METHODOLOGY 
The prototype methodology we developed uses clustered focus groups as well as group and 
individual interviews with field-level staff to identify internal controls that they believe are 
burdensome or unnecessary.  We tested our methodology with 154 staff working for Public 
Health Service (PHS) agencies in California, including the Food and Drug Administration 
and the Indian Health Service.  We selected PHS for the case study because of its diversity 
and complexity. 
FINDINGS 
Our findings are based on the opinions of the 154 field staff whom we interviewed.  We 
did not attempt to confirm or verify these opinions. 
Staff identified 260 internal controls that they believe are unduly burdensome or 
unnecessary 
The controls staff identified generally fall into the three CIP-defined categories: 
approvals, procedures, and reports.  Staff cited several reasons why they believe so many 
unnecessary internal controls exist. 
i  Most unnecessary controls pertain to approvals and the need for delegations of authority 
Approximately 56 percent of the 260 controls that staff believe are unnecessary or unduly 
burdensome fall into the category of approvals.  Staff contend that many unnecessary 
levels of review and approval exist in their offices, headquarters, and other agencies.  In 
addition to unnecessary program controls, staff cited unnecessary administrative controls in 
the areas of procurement, budget, travel, personnel, performance evaluation, timekeeping, 
payroll, and training. 
To a limited extent, staff identified both written and unwritten procedures that should be 
modified or eliminated 
Staff identified almost 30 written or unwritten operational procedures they believe should 
be eliminated or modified.  Staff stated that written procedures contain too much 
extraneous information, are outdated or too difficult to continually update, and/or conflict 
with other procedures. 
Staff believe that many reports and paperwork could be eliminated or otherwise 
streamlined 
Staff identified approximately 85 burdensome or otherwise problematic reports and systems 
for reporting data as well as unnecessary paperwork that they believe could be eliminated. 
The most commonly mentioned reports were data reports.  These include information on 
staff and/or agency finances, travel, staffing, inventory, training, and conferences.  They 
also include data reported to headquarters on the performance of the agencies customers, 
such as grantees, contractors, firms regulated by FDA, and health care providers funded by 
PHS.  Staff stated that completing these reports takes their time away from the more 
important tasks of administering public health programs.  Finally, some systems that were 
designed to ease reporting have become more burdensome than helpful. 
Approximately 96 percent of participants believe that focus groups are useful for 
identifying unnecessary internal controls 
In order to assess the focus group approach, we asked participants to complete an 
evaluation form at the end of each focus group.  Participants strongly believe that the focus 
group approach yields high quality information about unnecessary internal controls. 
CONCLUSIONS 
Focus groups are an effective means of identifying internal controls that may be unduly 
burdensome or unnecessary; however, the next step is to identify the reason for each 
control before modifying or eliminating it 
The focus group method provides an effective forum for initial identification and 
discussion of problematic internal controls.  It allows internal control reviewers to identify 
ii  the controls that cause the most problems for staff--those that most negatively affect their 
morale and their ability to do their jobs.  It also allows reviewers to identify controls that 
might not have been identified using a "top-down" approach.  Finally, it helps clarify why 
staff are concerned about specific controls. 
Once the controls are identified, the next step is to determine the reason for each control, 
take action, and provide feedback to staff.  The focus groups provide a starting point for 
analysis.  Obtaining the perspectives of the people who developed, imposed, and oversee 
each control is important in determining if a control should be retained, modified or 
eliminated. 
Agencies efforts to reduce internal controls are incomplete without field staff input 
Field staff identified controls that headquarters reduction efforts would probably not 
identify because many of them are operational and do not appear in written procedures. 
Field staff can contribute valuable information about revising controls that affect them.  In 
addition, the actual process of surveying staff can have positive effects on employee 
empowerment and morale. 
Ongoing efforts to reduce internal controls are necessary to prevent their proliferation 
The large number of unnecessary internal controls identified by staff is partially related to 
the lack of a continuous effort to weed out and eliminate them.  An on-going internal 
controls review effort will be necessary to avert another build-up of unnecessary controls 
after agencies meet the Presidents 50 percent reduction requirement. 
NEXT PHASES OF THE INSPECTION 
This report will be followed by two additional inspection phases, each resulting in a 
separate report.  First, we will provide PHS with a list of every internal control identified 
by staff as unduly burdensome or unnecessary.  At the same time, we will develop a 
methodology to analyze the controls identified by staff and test this methodology using a 
sample of controls we select in association with PHS and the Office of the Secretary.  This 
methodology should help agencies determine the reason for each control and enable them 
to decide whether the control should be retained, modified, or eliminated. 
iii  T A B L E   O F   C O N T E N T S 

PAGE

EXECUTIVE SUMMARY

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3

  Overview  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3

  Focus Group Methodology  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4

  Individual and Small Group Interviews  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7

FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

  Staff identified 260 unnecessary internal controls  . . . . . . . . . . . . . . . . . . . . . . . .  8

  Most internal controls pertain to approvals  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

  Some procedures are problematic  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11

  Reports and paperwork could be streamlined . . . . . . . . . . . . . . . . . . . . . . . . . . .   12

  Almost all participants approved of focus group process . . . . . . . . . . . . . . . . . . .   13

CONCLUSIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14

NEXT PHASES OF THE INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14

APPENDICES

A:  Letter to PHS Staff  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   A-1

B:  Focus Group Question Route . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

C:  Focus Group Checklist  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1

D:  Tips on Focus Groups

E:  Brainstorming Rules
 I N T R O D U C T I O N 

PURPOSE 
The purpose of this inspection was to develop and test a prototype that agencies could use 
to identify unduly burdensome or unnecessary internal controls. 
BACKGROUND 
On September 11, 1993, President Clinton signed Executive Order 12861 which required 
that all executive departments and agencies eliminate 50 percent of their internal 
management regulations and controls by 1996.  The President signed the Executive Order 
immediately following release of the National Performance Review which described and 
detailed the immense time and resources consumed by an over-abundance of internal 
controls. 
In October 1993, the Office of Management and Budget (OMB) issued instructions to all 
executive departments for implementing the Executive Order.  The OMB instruction stated 
that "the goal of this reduction effort is to weed out needless internal regulations so that: 
(1) the outcomes to be achieved in a regulation are clearly articulated; (2) responsibilities 
for decision making and action are clearly assigned; and (3) oversight can shift from 
process to outcome."  The OMB encouraged agencies to re-examine internal business 
practices and how these practices can be re-engineered to accomplish necessary reductions. 
In response to the Executive Order and OMB instructions, Department of Health and 
Human Services (HHS) Secretary Donna Shalala instructed her Continuous Improvement 
Program (CIP) Steering Committee to oversee the reduction of internal regulations and 
controls within the Department.  The CIPs Advisory Group on Organization and 
Management Structure and Processes established a work group to focus on internal 
controls.  The CIP work group requested the Office of Inspector Generals 
(OIG) assistance in identifying duplicative or unnecessary controls and requirements. 
Defining Internal Regulations and Controls 
The Executive Order defines internal management regulation as an agency directive or 
regulation that pertains to its organization, management, or personnel matters.  The OMB 
clarified this definition by stating that, for the purposes of the reduction effort, an internal 
control is defined as: 
...any agency directive, regardless of what you call it, that prescribes agency 
policies or procedures--including internal agency acquisition regulations and 
grant management requirements--that pertain to an agencys internal 
organization, management, or personnel. 
1
 The OMB stated that certain regulatory provisions should not be included in this reduction 
effort.  Excluded are provisions that (1) are non-discretionary (i.e. those required by 
statute, court order, Executive Order, or other external agency directive), (2) promote 
public information access, and (3) are determined to be necessary for the delivery of 
"essential services." 
The CIP clarified the definition of internal controls for purposes of HHS reduction effort 
as: 
...any imposition by an organizational unit upon another of a requirement for 
approval of decisions or activities, guidance or procedures on how to 
accomplish an assignment or mission, or reporting of information...internal 
controls include any such imposition, regardless of the origin of the 
requirement. 
For purposes of this study, the term internal controls includes all of the elements in both 
the Executive Order and CIP definitions.  For clarity and brevity, we have consolidated 
these definitions into the following three primary categories: 
approvals:  layers of review and approvals; 
procedures:  written manuals and guidance as well as unwritten controls such as 
policies and instructions that have become standard; and 
reports:  written or automated reports describing grantee or staff performance, 
requirements to use specific reporting systems, and paperwork requirements. 
Status of Current Reduction Efforts 
Since release of the National Performance Review in September 1993, the CIPs 
Organization and Management Work Group has been focusing its attention on reducing 
internal controls.  Its efforts have targeted (1) refining the task and developing a strategy to 
achieve the 50 percent control reduction target, (2) issuing guidance to CIP committees and 
HHS agencies, and (3) conducting analysis and review. 
Agencies within HHS are at various stages in their internal controls reduction efforts.  The 
CIP requests that agencies provide them with quarterly reports on the status of their efforts. 
This is one in a series of reports prepared by the OIG on the subject of reducing internal 
controls.  It describes the methodology that we used to identify unnecessary internal 
controls and the general results of our inspection.  In subsequent reports, we will describe 
in more detail the controls that staff identified.  We conducted this inspection in 
accordance with the Quality Standards for Inspections issued by the Presidents Council 
on Integrity and Efficiency. 
2
 M E T H O D O L O G Y 

OVERVIEW 
The prototype methodology we developed uses focus groups and interviews with field-level 
staff to identify internal controls that they believe are burdensome or unnecessary.  We 
devised this approach after reviewing HHS agencies internal controls reduction efforts 
which are focused on headquarters-initiated policies, instructions, and requirements. 
To test our methodology, we conducted interviews--either individually, in small groups, or 
in focus groups--with 154 staff working for Public Health Service (PHS) agencies in 
California.  We selected PHS for the case study because of its diversity and complexity. 
The sample included the PHS regional office in San Francisco, the Food and Drug 
Administration (FDA) regional office in San Francisco, the FDA district office in Alameda, 
the FDA resident post in San Jose, and the Indian Health Service (IHS) Area Office in 
Sacramento.  We also interviewed some staff from the IHS district office in Sacramento. 
Number of Staff Participating in Focus Groups and Interviews, by Office 
Number of 
Number of  Number of  Number of  staff not in  Total Staff 
Focus  Group  Individual  sample who  Interviewed 
Agency 
Group  Interview  Interview  provided  (and % of all 
Participants  Participants  Participants  information  agency staff) 
(sent letters) 
PHS Regional Office  42 out of 64 
10  22  10  0 
San Francisco  (65.6%) 
FDA Regional Office  16 out of 18 
9  3  4  0 
San Francisco  (88.9%) 
FDA District Office  44 out of 130 
29  7  8  0 
Alameda  (33.8%) 
FDA Resident Post  8 out of 10 
6  0  2  0 
San Jose  (80.0%) 
IHS Area Office 
44 out of 81 
Sacramento (includes  23  14  5  2 
(54.3%) 
district staff) 
154 out of 303 
TOTAL  77  46  29  2 
(50.8%) 
3
 FOCUS GROUP METHODOLOGY 
We interviewed half of our sample (77 out of 154) in a total of 15 focus groups.  The 
primary benefit of using focus groups was the quality of information that was generated by 
free-flowing discussion among staff who perform similar functions.  Focus group literature 
suggests that participants often feel more secure in the focus group setting.  Because 
participants are not required to respond, their statements may be more spontaneous and 
meaningful.  Using focus groups also saves time in identifying unnecessary internal 
controls.  During an hour and a half session, we could collect information from four to 
eight individuals. 
Developing the focus group clusters 
We collaborated with each PHS agency to develop the focus group clusters.  The focus 
group literature recommends that groups should be comprised of 4 to 12 people.  We 
decided to limit our focus groups to no more than eight people to ensure that everybody 
could participate fully. 
To form the focus groups, we collected staff rosters from each agency.  We clustered staff 
based on three separate criteria: 
staff who perform similar duties within the same division or branch (e.g. FDA 
district office microbiologists who all work in the Laboratory Branch); 
staff who perform similar duties but work in different divisions or branches (e.g. 
PHS regional office administrative staff who work in different divisions and 
branches); and 
staff who did not perform similar duties but worked in the same division or branch 
(e.g. professionals of various disciplines working in IHS Office of Health 
Programs). 
If the total staff in a cluster numbered more than eight--the maximum desired focus group 
size--we selected a random sample to form the focus group.  When we were not able to 
develop a cluster of at least four staff, we arranged a small group (two or three people) 
interview rather than a focus group.  We conducted small group interviews slightly 
differently than focus groups.  See page 7 for a more detailed explanation. 
We made ourselves available to staff who were not selected to participate.  After we 
selected the participants, we sent letters describing the study to all staff, including those 
who were not selected due to the random sampling.  Appendix A is a copy of the letter 
that we sent.  The letters offered everyone the opportunity to call or send electronic mail to 
us describing unnecessary internal controls.  We also offered to meet privately if they 
wished.  We received phone calls from two staff members who asked questions about the 
study.  They did not provide information about unnecessary internal controls. 
4
 Scheduling the focus groups 
We compared the effectiveness of two methods of scheduling the focus groups.  For the

PHS regional office, we contacted staff directly to inform them of the scheduled date and

time.  For IHS and FDA, our liaisons within these offices informed staff of the schedule.

Both methods were successful, although each had benefits and drawbacks.

The primary benefit of contacting staff directly is that everyone clearly understood that an

outside, impartial group was addressing the issue of internal controls.  This can yield

beneficial results during interviews because participants may believe there is a greater

opportunity for change.  We were concerned that staff would not contribute as freely if

they believed local agency management was spearheading the effort.  The drawback,

however, was that staff were not acquainted with us and were hesitant to commit time to

meeting with us, although their supervisors were aware we would be contacting them.  As

a result, scheduling the PHS focus groups was time-consuming, and some participants did

not come to their assigned sessions.  The staff that attended, however, provided useful

information on burdensome and unnecessary internal controls.

Using our agency liaisons to schedule the focus groups was successful but required

additional efforts to inform staff that this was an independent assessment of internal

controls rather than a PHS effort.  Staff informed us they were skeptical that

PHS would take action on the issues they identified.  Although we were concerned that

staff scheduled by PHS would be more hesitant to participate and contribute, we found that

these staff were more likely to attend than staff we scheduled and they identified numerous

controls they believed were unduly burdensome or unnecessary.

Preparing to conduct the focus groups 
Prior to conducting the focus groups, we reviewed literature describing successful focus 
group practices.  The literature suggested that the moderator use a standardized "question 
route."  A question route basically is a combination between a script and a discussion 
guide.  Our question route included the text of our introduction and questions and guided 
the moderator through each step of the focus group process.  It also listed the approximate 
amount of time we allotted for each phase of the focus group in order to finish in 
approximately 90 minutes.  Appendix B is the question route we used. 
The literature stated that we should use unbiased, open-ended questions and probes to 
evoke discussion from all participants.  The literature also helped us develop the checklists 
we used to procure appropriate supplies and prepare the meeting rooms.  See appendix C 
for the checklist we used and appendix D for tips on conducting focus groups. 
Conducting the focus groups 
Each focus group session consisted of four phases:  introduction, brainstorming, ranking 
items identified during the brainstorming, and detailed discussion of the top-ranking items. 
In practice, the focus groups varied in length from 80 to 120 minutes. 
5  Two OIG staff administered each session; one moderated while the other assisted.  The 
moderator was responsible for leading the discussion, ensuring participants did not stray 
from the topic, and pacing the focus group so it did not exceed the time limit.  The 
moderator also was responsible for assuring that certain participants did not dominate the 
conversation and that shy or quiet participants were included in the discussion.  The 
assistant recorded the brainstorming session on flipcharts, operated the tape recorder, took 
notes during the probe session, and observed the participants body language and 
expressions.  In a few focus groups, we used a third OIG staff person to operate the tape 
recorder and observe the participants. 
Introduction:  During the introduction, we briefly described our office, summarized our 
purpose, and outlined our goals for the focus group.  At the beginning of each focus group 
session, we posted the CIP definition of internal controls and discussed each type-
approvals, guidance, and reports--in detail.  We also acknowledged that certain controls 
were useful and necessary, but, for the purposes of this study, we wanted participants to 
focus on those they believed should be modified or eliminated. 
This was a critical time to convince reluctant staff that contributing their ideas was 
important.  We accomplished this by mentioning that the Office of the Secretary had 
requested the study.  We acknowledged that we had no authority to make changes 
ourselves, but we could make recommendations. 
Brainstorming:  Referring to the CIP definition, the moderator asked participants to call 
out any controls they considered unduly burdensome or unnecessary.  We went in order of 
the CIP definition--approvals first, followed by guidance and reports--but told staff they 
could mention any control as it came to them.  The assistant recorded each item on 
flipcharts. 
We asked participants to abide by certain rules when brainstorming.  These included: 
not debating or otherwise discussing other participants ideas,

giving a minimum of explanation so we could get the most out of the time set aside

for brainstorming, and

speaking one at a time.

See appendix E for the entire list of brainstorming rules. 
We allowed 45 to 60 minutes for the brainstorming.  At the conclusion, we allowed time 
for participants to ask each other for clarification of individual items and to consolidate 
items if they wished to do so. 
Ranking:  We used a "walk and vote" method to allow participants to rank the internal 
controls.  We gave each participant five uniquely colored stickers and asked them to place 
the stickers on the flipcharts next to the controls they most strongly believed needed to be 
modified or eliminated.  We told participants they could distribute their votes in any 
6
 manner they saw fit.  They could use all five votes on one control or they could spread 
them over several controls. 
Assigning each participant a unique color allowed us some flexibility in analyzing the data. 
First, we were able to determine how strongly the participants felt about each control by 
tabulating the total number of stickers.  Second, it enabled us to obtain a simple count of 
the number of participants who voted for a specific control by counting the number of 
colors for each control.  The color-coding system also enabled us to identify instances 
where one person felt strongly about a control so we could direct follow-up questions to 
that individual. 
Detailed Discussion:  After participants voted, we discussed in more detail the three items 
with the most votes.  Specifically, we asked: 
What are the problems with the control?

What is the reason for the control?

What should be done with the control?

Whom should we contact to obtain more information about the reason for the

control?

Because this was the first opportunity for participants to debate the merits and faults of the 
controls, we recorded the discussion using audio tape.  We assured participants that they 
would not be identified by name when we transcribed the tapes. 
INDIVIDUAL AND SMALL GROUP INTERVIEWS 
When appropriate, we interviewed staff in individual or small group (two or three people) 
settings.  We deemed these settings appropriate when staff held unique positions in an 
office or when the number of staff performing similar duties was not enough to hold a 
focus group.  Some examples of staff who were interviewed in these settings include most 
managers, administrative officers, and special consultants.  We interviewed 75 staff in 
48 separate sessions. 
We conducted the interviews almost the same as the focus groups.  We used the same 
questions and probes for the detailed discussion, but we did not use the walk and vote 
method for ranking.  To assure consistency with the focus groups and to limit our 
discussion to the most significant controls, ranking was based upon the number of 
participants in the interview: 
When there was/were 
we asked them to... 
participant(s), 
1  "Rank the three controls that you believe most strongly should be changed" 
2  "Each rank two controls that you believe most strongly should be changed" 
3  "Each pick one control that you believe most strongly should be changed" 
7
 F I N D I N G S 

The findings below are based on the opinions of the 154 field staff whom we interviewed. 
We did not attempt to confirm or verify these opinions. 
STAFF IDENTIFIED 260 INTERNAL CONTROLS THAT THEY BELIEVE ARE 
UNDULY BURDENSOME OR UNNECESSARY 
The controls staff identified generally fall into the three CIP-defined categories:  approvals,

procedures, and reports.  Approximately 56 percent of controls pertain to approvals and the

need for delegations of authority, 11 percent to procedures, and

33 percent to reporting requirements.

Staff cited several reasons why they believe so many unnecessary internal controls exist.

Although staff believe that certain controls are necessary and help ensure consistency

nationally, they also believe that agencies are too quick to impose specific controls rather

than broader, flexible guidelines.  At times, agencies impose--or watchdog agencies

recommend--broad or agency-wide controls in response to a single occurrence or unusual

situation.  In addition, managers at different levels (in both the field and headquarters)

sometimes impose controls on the same administrative or regulatory area.  Finally, some

staff noted that their agencies had never conducted a systematic review of internal controls.

As a result, agencies rarely eliminated internal controls, even if they were outdated or no

longer necessary.

MOST UNNECESSARY CONTROLS PERTAIN TO APPROVALS AND THE NEED 
FOR DELEGATIONS OF AUTHORITY 
Approximately 56 percent of the 260 controls that staff believe are unduly burdensome or 
unnecessary fall into the category of approvals.  Staff contend that many unnecessary 
levels of review and approval exist in their offices, headquarters, and other agencies.  Staff 
identified numerous operational controls imposed by headquarters and their own field 
offices.  In addition, they cited unnecessary administrative controls in such areas as 
procurement (including those imposed by the General Services Administration), budget and 
finance, travel, personnel, performance evaluation, timekeeping and payroll, and training. 
Staff mentioned the negative impact of operational controls imposed by headquarters in 
three-quarters of all focus group and interview sessions 
Staff mentioned more than 35 controls imposed by headquarters agencies that hamper their 
ability to do their jobs efficiently and provide quality customer service.  These pertain to 
the agencys legal, professional, regulatory, oversight, contracting, and grant activities. 
Some examples include multiple levels of review at FDA headquarters prior to taking 
simple regulatory actions, PHS central office policy and controls on using consultants for 
site visits, and IHS headquarters role in monitoring self-governance. 
8
 In general, staff do not believe the numerous layers of review and approval at the 
headquarters level are necessary.  While staff understand that the role of headquarters is to 
ensure consistency throughout the country, they described the negative effects of these 
controls: 
Delays in decision-making caused by multiple headquarters-level reviews may 
seriously impact field staffs ability to meet the agencys mission.  Lengthy 
headquarters delays sometimes result in field staff having to redo work. 
Field staff at times do not believe that headquarters staff know all of the facts when 
making decisions and therefore do not make the best possible decisions. 
Some headquarters agencies always approve local recommendations and decisions 
and therefore do not appear to serve a useful purpose in decision-making. 
Although one rationale for centralized authority is to ensure that favoritism is 
eliminated, staff claim that the agencys customers simply bypass the local office 
and appeal directly to headquarters.  Staff believe that the favoritism that was 
eliminated at the local level is now occurring at the headquarters level. 
In general, lack of authority has negatively impacted morale and employee 
empowerment. 
Staff identified more than 20 burdensome operational controls that have been imposed 
by regional, district, or other field office management 
Staff described office processes that involve many layers of review and approval similar to 
those they described in headquarters offices.  In other cases, staff simply do not understand 
why certain top managers (e.g. the IHS area office director or the FDA district director) 
are required to sign leave slips or sign off as the property manager on small purchases. 
Controls on procurement and those imposed by the General Services Administration 
(GSA) impact staffs ability to do their jobs 
Staff from all agencies identified more than 15 controls regarding procurement and GSA. 
These controls frequently result in staff not having access to appropriate resources in a 
timely manner. 
Staff described an overabundance of local and national controls on procurement.  The 
controls on procuring copiers, computer hardware and software, supplies, copying 
services, conference facilities, telephone services, repairs, and small purchases in general 
take time away from staffs normal duties and impact their ability to do their jobs.  For 
the most part, the processes that staff mentioned as burdensome include (1) the multiple 
approval levels--especially at the local level--even for small purchases, (2) the requirement 
that staff obtain three bids for goods and services, (3) the paperwork required simply to 
9
 request a procurement, and (4) the general inability to obtain needed equipment, supplies, 
and services in a timely manner. 
Staff from all agencies were particularly critical of GSAs procurement and building 
management controls.  They reported that GSAs involvement has resulted in massive 
delays in relocating offices, delays in procuring what turned out to be a faulty telephone 
system, inability to obtain emergency building management services, and unnecessary 
paperwork. 
Budget and finance controls are particularly burdensome to mid- and upper-level field 
managers 
Staff from all agencies described unnecessary budget and finance controls at the local and 
headquarters levels.  The major issue is the lack of authority that local mid-level managers 
have to manage their own budgets.  While they are required to submit budgets to manage 
their offices, they are still required to obtain approval for every expenditure.  According to 
these mid-level managers, local or headquarters management frequently reduce their 
budgets without consulting or notifying them.  Other budget and finance issues include 
requirements that (1) staff keep budget commitment registers that are not reconciled with 
agency budget data, (2) agencies use budget software that staff believe is outdated and 
inadequate, and (3) funds must be recertified by a second staff member for availability in 
the fourth quarter of the fiscal year. 
Agencies require too many approvals for staff to travel on official business and receive 
travel reimbursement in a timely manner 
Staff provided a list of more than a dozen burdensome internal controls regarding travel. 
Of the 260 unduly burdensome or unnecessary controls identified, the number of review 
and approval layers for travel orders was mentioned more frequently than any other single 
control, even though many field staff do not travel for their jobs.  Staff described similar 
problems with the travel reimbursement process, where delays due to multiple approval 
levels have resulted in instances where staffs credit cards have been cancelled due to non-
payment.  Other burdensome controls include those limiting staffs ability to obtain blanket 
travel orders, the number and level of approvals for registration fees and travel to non-
agency meetings, and local requirements that staff submit and get approval for a monthly 
travel plan, even though each trip must be individually approved. 
Staff provided approximately 30 examples of unnecessary controls in the area of 
personnel, performance evaluation, timekeeping, and payroll 
Staff from all agencies identified approximately one dozen unnecessary or burdensome 
personnel-related controls imposed by their agencies and the Office of Personnel 
Management (OPM).  In the area of personnel policy, the issues raised most often were the 
cumbersome processes to hire and fire, the time required to obtain a new position 
description due to the multiple layers of review within the agency and OPM, and the 
10
 general inconsistency between controls pertaining to PHS commissioned officers and those 
affecting civil service employees. 
Discussions about controls on performance evaluation evoked strong sentiment from staff. 
When asked to vote for the controls they believed most strongly needed to be addressed, 
more staff voted for controls regarding the civil service Employee Performance 
Management System (EPMS) than for any other control.  Many staff and managers 
disagree with the requirement that they must adhere to the strict criteria and format of the 
EPMS.  Some staff believe, in addition, that headquarters control over bonuses and awards 
severely hampers employee morale. 
In the areas of timekeeping and payroll, staff noted several areas where delegations of 
authority and more freedom to design a flexible system would save time and resources. 
These areas include the requirement that they use time cards, the process for approving 
leave, and the controls limiting the field offices ability to implement alternative work 
schedules. 
Certain internal controls limit staffs input on and access to training 
Staff identified a few controls that they believe hamper their ability to obtain appropriate 
training and career development resources.  Staff do not understand why so many 
approvals are necessary on the SF-350 training form, including training officers in 
headquarters who do not know their training needs.  Some staff also believe that the 
controls in place limit their ability to identify their own training needs and obtain the 
appropriate training. 
TO A LIMITED EXTENT, STAFF IDENTIFIED BOTH WRITTEN AND 
UNWRITTEN PROCEDURES THAT SHOULD BE MODIFIED OR ELIMINATED 
Staff identified almost 30 procedures that should be eliminated or modified.  In some 
cases, staff referred to written manuals, guidance, and procedures.  In other cases, they 
described burdensome and inefficient processes for completing tasks that have never been 
formalized (e.g., written into a manual or memo), but have become required operational 
standards. 
Staff stated that certain written procedures: 
contain too much extraneous information,

are outdated or too difficult to update continually, and/or

conflict with other procedures.

In other cases, staff believe that procedures were written or implemented by people who 
didnt have recent field experience and therefore didnt understand how guidance should 
have been developed.  As a result, certain procedures--such as FDAs processes for sample 
disposition, analytical worksheets, and check analysis for imports--have become 
unnecessarily burdensome and time-consuming. 
11  STAFF BELIEVE THAT MANY REPORTS AND PAPERWORK COULD BE 
ELIMINATED OR OTHERWISE STREAMLINED 
Staff identified approximately 85 burdensome or otherwise problematic reports and systems 
for reporting data as well as paperwork that they believe are unnecessary and could be 
eliminated.  Duplication was a major theme that emerged from the focus groups.  Staff 
painted a picture of uncoordinated reporting systems that take their time away from the 
more important tasks of administering public health programs. 
Although not specifically an internal control, staff overwhelmingly believe that special 
report requests from headquarters need to be reduced.  The requests require that staff stop 
their normal tasks in order to prepare data that is often already available through other 
sources.  Staff do not understand the purpose of the reports and seldom receive feedback 
on the results of their efforts. 
Completing burdensome or unnecessary reports takes time away from more critical 
duties 
Data reports 
Staff identified 50 data reports that should be eliminated or changed.  These reports 
include information on staff and/or agency finances, travel, staffing, inventory, training, 
and conferences.  They also include data reported to headquarters on the performance of 
the agencies customers, such as grantees, contractors, firms regulated by FDA, and health 
care providers funded by PHS. 
Staff believe that many of these reports are no longer necessary.  In some cases, automated 
systems have replaced manual systems, but headquarters still requires paper reports.  In 
other cases, regulations or requirements changed, but nobody informed field offices that 
reports were no longer required. 
At times, the rigid, required format of reports wastes time and effort.  For instance, 
although staff routinely complete reports after conducting field visits, they cited instances 
where they should be allowed to substitute abbreviated reports for full reports.  An 
example is FDA inspection reports where investigators find no violations.  Investigators 
stated that they are required to complete the full establishment inspection report, even 
though they must write "no action indicated" throughout the entire report. 
Employee activity reports 
Staff described the burden of completing reports that summarize their activities to 
supervisors or headquarters.  Staff from all agencies believe that monthly, weekly, and 
even daily reports hurt morale because their existence implies that management does not 
trust them.  In general, both staff and their first-line supervisors believe that the 
supervisors should monitor staff by being involved in their activities and talking with them 
rather than by mandating reports. 
12  Some systems that were designed to ease reporting have become more burdensome than 
helpful 
Although staff acknowledged that automation has improved their work lives, they are 
somewhat dissatisfied with the requirements to use specific systems.  During the focus 
groups and interviews, they described systems that are cumbersome or flawed or require 
too much information.  In other cases, staff contended that commercial software would 
meet their needs much better than the proprietary software that headquarters requires them 
to use.  Examples of reporting systems that staff believe need to be changed are budget 
tracking, timekeeping, and employee activity tracking systems. 
Headquarters and local management have limited staffs access to certain systems, such as 
PHS BHCDAnet and FDAs central file number assignment system.  These controls cause 
delays in completing assignments because staff have to ask authorizing officials to provide 
information from these systems. 
Staff suggest that basic paperwork exercises be reevaluated 
Staff questioned the most basic of paperwork requirements:  differently colored file copies, 
sending hard copies after transmitting copies via electronic mail or fax, and requiring hard 
copies of reports that are available on automated systems.  Staff also mentioned instances 
where paperwork could be reduced if materials were distributed on-line or only to staff 
who need and use them. 
APPROXIMATELY 96 PERCENT OF PARTICIPANTS BELIEVE THAT FOCUS 
GROUPS ARE USEFUL FOR IDENTIFYING UNNECESSARY INTERNAL 
CONTROLS 
In order to assess the focus group process, we asked participants to complete an evaluation 
form at the end of each focus group.  Specifically, we asked their opinions about (1) how 
effective the focus group method was for identifying problematic internal controls, (2) 
whether the focus group concentrated on the most appropriate issue areas, and (3) how the 
process could be improved. 
Participants strongly believe that the focus group process yields high quality information 
about unnecessary internal controls.  Almost all--96 percent--of the participants believe that 
focus groups are an effective method for identifying problematic internal controls. 
Approximately one-third of these participants believe that it is very effective.  In addition, 
94 percent of participants believe that the focus group discussion, which was based on the 
CIP definition of internal controls, concentrated on the most appropriate issue areas. 
A few participants suggested changes that they believe would improve the process. 
Although we sent letters specifically describing the discussion areas to all participants prior 
to each focus group, several stated that they would have been better prepared if they had 
received more information and examples of internal controls before the session.  Other 
participants believe that 90 minutes is not long enough for the focus group. 
13  C O N C L U S I O N S 

FOCUS GROUPS ARE AN EFFECTIVE MEANS OF IDENTIFYING INTERNAL 
CONTROLS THAT MAY BE UNDULY BURDENSOME OR UNNECESSARY; 
HOWEVER, THE NEXT STEP IS TO FOLLOW UP TO IDENTIFY THE REASON 
FOR EACH CONTROL BEFORE MODIFYING OR ELIMINATING IT 
The focus group method provides an effective forum for initial identification and 
discussion of problematic internal controls.  It allows internal control reviewers to identify 
the controls that cause the most problems for staff--those that most negatively affect their 
morale and their ability to do their jobs.  It also allows reviewers to identify controls that 
might not have been identified using a "top-down" approach.  Finally, it helps clarify why 
staff are concerned about specific controls. 
Once the controls are identified, the next step is to determine the reason for each control, 
take action, and provide feedback to staff.  The focus groups provide a starting point for 
analysis.  Obtaining the perspectives of the people who developed, imposed, and oversee 
each control is important in determining if a control should be retained, modified or 
eliminated. 
AGENCIES EFFORTS TO REDUCE INTERNAL CONTROLS ARE 
INCOMPLETE WITHOUT FIELD STAFF INPUT 
Field staff identified controls that headquarters reduction efforts would probably not 
identify because many of them are operational and do not appear in written procedures. 
More than half of the controls staff identified involve layers of approval that are unique to 
a particular agency and, sometimes, to a particular field office.  Field staff can contribute 
useful information about revising controls that affect them.  In addition, the actual process 
of surveying staff can have a positive effect on employee empowerment and morale. 
ONGOING EFFORTS TO REDUCE INTERNAL CONTROLS ARE NECESSARY 
TO PREVENT THEIR PROLIFERATION 
The large number of unnecessary internal controls identified by staff is partially related to 
the lack of a continuous effort to weed out and eliminate them.  At the same time, 
managers and agency watchdogs such as the General Accounting Office and the Office of 
Inspector Generals Office of Audit Services frequently identify vulnerabilities and the 
need for more internal controls based on reviews of agency programs.  An on-going 
internal controls review effort will be necessary to avert another build-up of unnecessary 
controls after agencies meet the Presidents 50 percent reduction requirement. 
NEXT PHASES OF THE INSPECTION 
This report will be followed by two additional inspection phases, each resulting in a 
separate report.  First, we will provide PHS with a list of every internal control identified 
14  by staff as unduly burdensome or unnecessary.  At the same time, we will develop a 
methodology to analyze the controls identified by staff and test this methodology using a 
sample of controls we select in association with PHS and the Office of the Secretary.  This 
methodology should help agencies determine the reason for each control and enable them 
to decide whether the control should be retained, modified, or eliminated. 
15
          




A - 1
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B - 1
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C - 1
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