FY2005 Performance Accountability Report 

November 15, 2005 

U.S. OFFICE OF SPECIAL COUNSEL

 1730 M Street, N.W., Suite 300 

 Washington, D.C. 20036-4505 

(www.osc.gov) 
TABLE OF CONTENTS 

WWW.OSC.GOV 

 Page 

Part 1: Message from the Special Counsel 4 

Part 2: Management Discussion and Analysis 5 

I. Agency at a Glance ........................................................................................... 6

II. Statutory Background ........................................................................................ 6

III. The Mission of the U.S. Office of Special Counsel..................................................... 7

IV. Organizational Structure of OSC........................................................................... 8

V. Performance Goals and Results............................................................................. 10

VI. OSC's Systems, Controls, and Legal Compliance ..................................................... 13

VII. Future Effects of Known Demands, Risks, Uncertainties, Events, Conditions, and Trends .... 15

VIII. Comments on Final FY 2005 Financial Statements ..................................................... 17

Part 3: Performance 19

Goal 1: Prohibited Personnel Practices ........................................................................... 20

Goal 2: Hatch Act .................................................................................................... 28 

Goal 3: Whistleblower Disclosures ............................................................................... 31 

Goal 4: Outreach ..................................................................................................... 35

Goal 5: Human Resources ........................................................................................ .. 39

Goal 6: Information Technology .................................................................................. 48
Page 

Part 4: Financial Section 51

Independent Auditor’s Report .................................................................................... 52

Independent Auditor’s Report on Compliance with Laws and Regulations ................................ 56

Independent Auditor’s Report on Internal Control ............................................................. 58

Financial Statements ................................................................................................ 60

FY 2005 Performance Accountability Report 2 
FY 2005 Performance Accountability Report 4

 

 A Message from the 

 Special Counsel 

It is my pleasure to present the Office of Special Counsel’s Performance and Accountability 

Report for Fiscal Year 2005. 

This agency has a proud history of serving the federal workforce and the public through its 

tenacious defense of the merit system principles that continue to safeguard the integrity of the 

executive branch agencies of the United States. 

Fiscal Year 2005 marks only the second year the Office of Special Counsel was required to 

have a financial audit. I am happy to report once again the agency’s strong results, which 

include no reportable conditions and no material weaknesses. 

To all of those who rely on our counsel, our service, and our protection, be assured that we will 

continue striving for excellence. Thank you for your continued trust and confidence. 

 Sincerely, 

 

 Scott J. Bloch 

 Special Counsel 
Part 2: Management Discussion and Analysis 
FY 2005 Performance Accountability Report 5

I. Agency at a Glance 

The U.S. Office of Special Counsel (OSC) is an independent federal investigative and 

prosecutorial agency. Its primary mission is to safeguard the merit system in federal 

employment, by protecting employees and applicants from prohibited personnel practices 

(PPPs), especially reprisal for whistleblowing. In addition, the agency operates a secure channel 

for federal whistleblower disclosures of violations of law, rule or regulation; gross 

mismanagement; gross waste of funds; abuse of authority; and substantial and specific danger to 

public health and safety. OSC also has jurisdiction under the Hatch Act to enforce restrictions 

on political activity by government employees. Finally, OSC enforces federal employment 

rights secured by the Uniformed Services Employment and Reemployment Rights Act 

(USERRA). 

OSC currently has approximately 110 FTE and three career staff vacancies. 

II. Statutory Background 

OSC was first established on January 1, 1979.1

 From then until 1989, it operated as an 

autonomous investigative and prosecutorial arm of the Merit Systems Protection Board (“the 

Board”). By law, OSC received and investigated complaints from current and former federal 

employees, and applicants for federal employment, alleging prohibited personnel practices by 

federal agencies; provided advice on restrictions imposed by the Hatch Act on political activity 

by covered federal, state, and local government employees; and received disclosures from federal 

whistleblowers (current and former employees, and applicants for employment) about 

wrongdoing in government agencies. The office also enforced restrictions against prohibited 

personnel practices and political activity by filing, where appropriate, petitions for corrective 

and/ or disciplinary action with the Board. 

In 1989, Congress enacted the Whistleblower Protection Act. The law made OSC an 

independent agency within the Executive Branch, with continued responsibility for the functions 

described above. It also enhanced protections against reprisal for employees who disclose 

wrongdoing in the federal government, and strengthened OSC’s ability to enforce those 

protections. 2

The Congress passed legislation in 1993 that significantly amended Hatch Act provisions 

applicable to federal and District of Columbia (D.C.) government employees, and enforced by 

OSC.3

 Provisions of the act enforced by OSC with respect to certain state and local government 

employees were unaffected by the 1993 amendments. 

In 1994, the Uniformed Services Employment and Reemployment Rights Act became 

law. It defined employment-related rights of persons in connection with military service, 

prohibited discrimination against them because of that service, and gave OSC new authority to 

pursue remedies for violations by federal agencies.4

OSC’s 1994 reauthorization act expanded protections for federal employees, and defined 
FY 2005 Performance Accountability Report 6

new responsibilities for OSC and other federal agencies. It provided that within 240 days after 

receiving a prohibited personnel practice complaint, OSC should determine whether there are 

reasonable grounds to believe that such a violation occurred, exists, or is to be taken. The act 

extended the protections of certain legal provisions enforced by OSC to approximately 60,000 

employees of what was then known as the Veterans Administration (now the Department of 

Veterans Affairs), and to employees of certain government corporations. It also broadened the 

scope of personnel actions covered under these provisions. Finally, the act made federal 

agencies responsible for informing their employees of available rights and remedies under the 

Whistleblower Protection Act, and directed agencies to consult with OSC in that process. 5

In November of 2001, Congress enacted the Aviation and Transportation Security Act,6

which created the Transportation Security Administration (TSA). Under the act, non-security 

screener employees of TSA could file allegations of reprisal for whistleblowing with OSC and 

the MSPB. The approximately 45,000 security screeners in TSA, however, could not pursue 

such complaints at OSC or the MSPB. 

OSC efforts led to the signing of a memorandum of understanding (MOU) with TSA in 

May 2002, under which OSC would review whistleblower retaliation complaints from security 

screeners, and recommend corrective or disciplinary action to TSA when warranted. The MOU 

did not (and could not), however, provide for OSC enforcement action before the MSPB, or for 

individual right of action (IRA) appeals by security screeners to the MSPB. 

III. The Mission of the U.S. Office of Special Counsel 

OSC’s mission is to protect current and former federal employees, and applicants for 

federal employment, especially whistleblowers, from prohibited employment practices; promote 

and enforce compliance by government employees with legal restrictions on political activity, 

and facilitate disclosures by federal whistleblowers about government wrongdoing. OSC carries 

out this mission by: 

• investigating complaints of prohibited personnel practices, especially reprisal for 

whistleblowing, and pursuing remedies for violations; 

• providing advisory opinions on, and enforcing Hatch Act restrictions on political 

activity; 

• operating an independent and secure channel for disclosures of wrongdoing in federal 

agencies; 

• protecting reemployment and antidiscrimination rights of veterans under the 

USERRA; and 

• promoting greater understanding of the rights and responsibilities of federal 

employees under the laws enforced by OSC. 
FY 2005 Performance Accountability Report 7

IV. Organizational Structure of OSC 

OSC maintains its headquarters office in Washington, D.C. Four field offices are located 

in Dallas, Oakland (known as the San Francisco Bay Area Field Office), Detroit (called the 

Midwest Field Office), and Washington, D.C. 

After OSC’s January 2005 reorganization, the agency components include the Immediate 

Office of the Special Counsel (IOSC), five operating units/divisions and six supporting offices 

explained in detail below. 

Immediate Office of the Special Counsel. The Special Counsel and staff in IOSC are 

responsible for policymaking and overall management of OSC. They also manage the agency’s 

congressional liaison and public affairs activities, and its outreach program, which includes 

promotion of compliance by other federal agencies with the employee information requirement 

at 5 U.S.C. § 2302(c). 

Complaints Examining Unit. This is the intake point for all complaints alleging 

prohibited personnel practices and other violations of civil service law, rule, or regulation within 

OSC’s jurisdiction.7 This Unit is responsible for screening up to 1,700 prohibited personnel 

practice cases per year. Attorneys and personnel management specialists conduct an initial 

review of complaints to determine if they are within OSC’s jurisdiction, and if so, whether 

further investigation is warranted. The unit refers all matters stating a potentially valid claim to 

the Investigation and Prosecution Division for further investigation.8 

Disclosure Unit. This unit is responsible for receiving and reviewing disclosures 

received from federal whistleblowers. It advises the Special Counsel on the appropriate 

disposition of the information disclosed (including possible referral to the head of the agency 

involved for an investigation and report to OSC; referral to an agency Inspector General; or 

closure). The unit also reviews agency reports of investigation, to determine whether they 

appear to be reasonable and in compliance with statutory requirements before the Special 

Counsel sends them to the President and appropriate congressional oversight committees. 

Investigation and Prosecution Division. Formerly three parallel units, staffed primarily 

by investigators and attorneys, the reorganization includes one IPD comprising four field offices, 

which will conduct field investigations of matters referred after preliminary inquiry by the 

Complaints Examining Unit. Division attorneys conduct a legal analysis after investigations are 

completed to determine whether the evidence is sufficient to establish that a prohibited personnel 

practice (or other violation within OSC’s jurisdiction) has occurred. Investigators work with 

attorneys in evaluating whether a matter warrants corrective action, disciplinary action, or both. 

If meritorious cases cannot be resolved through negotiation with the agency involved, 

division attorneys represent the Special Counsel in any litigation before the Merit Systems 

Protection Board. They also represent the Special Counsel when OSC intervenes, or otherwise 

participates, in other proceedings before the Board. Finally, division investigators and attorneys 

also investigate alleged violations of the Hatch Act and the Uniformed Services Employment and 

Reemployment Rights Act. However, under a new pilot program, most USERRA functions will 

be housed in a new USERRA unit in the Special Projects Unit to assure uniformity of policy 
FY 2005 Performance Accountability Report 8

regarding the new pilot. 

Hatch Act Unit. The unit issues advisory opinions to individuals seeking information 

about Hatch Act restrictions on political activity by federal, and certain state and local, 

government employees. The unit is also responsible for enforcing the act. It reviews complaints 

alleging a Hatch Act violation and, when warranted, investigates and prosecutes the matter (or 

refers the matter to the Investigation and Prosecution Division for further action). It will also 

oversee Hatch Act matters delegated to the IPD. 

USERRA/Special Projects Unit. The Special Projects Unit uses senior trial lawyers to 

work cases of high priority and has also been used by the Special Counsel to conduct internal 

research on the processes and procedures of the operational units at OSC. In addition, a 

subdivision of the SPU called the USERRA Unit handles the new special project assigned by 

P.L. 108-454 that requires OSC to investigate the re-employment rights of military service 

members under USERRA, which involves new functions, increased caseload, and new 

personnel. 

SUPPORTING UNITS: 

Alternative Dispute Resolution Program. In selected cases referred by the Complaints 

Examining Unit for further investigation, the agency contacts the complainant and the agency 

involved, and invites them to participate in OSC’s voluntary Mediation Program. If mediation 

resolves the complaint, the parties execute a written and binding settlement agreement; if not, the 

complaint is referred for further investigation. 

The mediation program for Alternative Dispute Resolution has been reorganized. Rather 

than have a single ADR specialist under the leadership of an SES employee, the agency has 

expanded the program through cross-training multiple individuals from each of OSC’s operating 

units. As a result the agency now has a broad pool of trained mediators with different legal areas 

of expertise. 

Legal Counsel and Policy Division. This division provides general counsel and policy 

services to OSC, including legal advice and support on management and administrative matters; 

legal defense of OSC in litigation filed against the agency; policy planning and development; and 

management of the agency ethics program. 

Management and Budget Division. This division provides administrative and 

management support services to OSC, in furtherance of program, human capital, and budget 

decisions. Division also includes the Information Technology Branch (formerly Information 

Systems Branch), Human Resources Branch, Document Control Branch and Budget and 

Procurement branch. The purpose of this division is to put the administrative support functions 

under one authority. 

Training Office. A training office has been created to train all new employees, cross 

train existing employees, and develop specialized training in areas such as litigation skills. 

Specifically, the Training Office will cross train attorneys and investigators to enable them to 

traverse organizational boundaries within the agency. They will develop sufficient expertise in 
FY 2005 Performance Accountability Report 9

several areas of the law, giving management the ability to detail employees to address any 

potential backlogs that could form in the various units. 

Customer Service Unit. In the past, this function has been handled by rotating OSC 

staff to answer inquiries from the public or help with filing complaints and/or filling out forms. 

This unit will provide enhanced assistance to the public and federal employees, while 

streamlining operations by removing the ‘Officer of the Week’ duty from the attorneys in CEU. 

V. Performance Goals and Results 

OSC has had a chronic problem of cases in backlog for years, and through tremendous 

effort by the entire agency, has succeeded in eliminating the backlogs from its Hatch Act unit, 

Disclosure unit, and Complaints Examining unit. The agency has been successful in hiring, and 

is now operating at a staff level as close to its approved FTE levels as possible, given the funding 

of the agency for FY 2006. OSC implemented a significant reorganization which is bearing fruit 

in the way the streamlined divisions and empowered individual employees accomplish the 

business of the agency. OSC now stands ready to exceed its goals of efficiency and expeditious 

justice. 

During the backlog reduction, to ensure each claim received a full and fair resolution, the 

Special Counsel insisted that the agency’s referrals for further action in the investigation and 

prosecution division (IPD) remain at a high level and even be increased. During the SPU work 

on PPPs and Hatch Act cases, the referral rate increased 100% over historic levels. 

While OSC received much credit for resolving the cases in the backlog with full and fair 

resolution, the agency became subject to some criticism that Disclosure Unit (DU) cases were 

closed without adequate review. The DU cases resolved were primarily cases that had been 

identified as likely closures during the last two to three years, but had not been resolved due to 

the focus on and volume of the several types of higher priority DU cases. These older DU cases 

received fresh review and the backlog was reduced through a tremendous effort. Nevertheless, 

to dissolve this criticism entirely, OSC invited a bipartisan group of Congressional staffers to 

visit OSC and review the case files and the processes used in resolving these cases, as well as 

PPP cases. 

After this investigation, OSC’s successes in reducing the DU backlog and reducing the 

PPP backlog while increasing the internal rate of referral were commended in a congratulatory 

letter from the U.S. House of Representatives Committee on Government Reform. 

It should be noted that the increase in the number of internal referrals carries with it the 

necessary placement of a heavy burden on the IPD, which is in the process of working through 

those cases currently. 
FY 2005 Performance Accountability Report 10

OSC’S results in FY 2005 include:

1. OSC negotiated and implemented a memorandum of understanding (MOU) at the request 

of the U.S. Postal Service Office of Inspector General (USPS OIG) to investigate Section 

2302(b)(8) whistleblower complaints from USPS OIG employees. OSC does not 

otherwise have jurisdiction to investigate these complaints. 

2. The newly created Customer Service Unit is now up and running. This unit handles 

hotline calls from employees seeking advice regarding possible statutory violations under 

OSC’s jurisdiction. This Unit replaces the former practice of having one CEU employee 

designated Officer of the Week (OW) each week, requiring that employee to answer all 

of the above inquiries for the week. It was determined that the OW function was having 

a significant impact on the case processing efficiency of CEU employees. The Customer 

Service Unit ensures that attorneys who can be processing cases are not tied up on the 

telephone answering questions for several weeks each year. As a result, each of these 

CEU attorneys can handle approximately 10 extra cases per year. 

3. OSC changed the manner in which USERRA claims were internally processed by 

assigning them only to experienced attorneys. The change resulted in quicker processing 

times. Most significant, however, was the Special Counsel’s willingness to prosecute 

federal agencies for violations of the law. Prior Special Counsels had never filed any 

USERRA enforcement actions with the U.S. Merit Systems Protection Board (since 

USERRA was passed in 1994). In 2005, OSC set a precedent by filing three USERRA 

cases in one year. Full corrective action was received in all three cases. 

4. During FY 2005, the Special Counsel has again focused on raising the profile of the 

Uniform Services Employment and Re-employment Rights Act (USERRA), so that 

returning reservists and veterans are aware of their rights and of the existence of OSC. In 

early 2005, OSC’s role in enforcing USERRA again expanded. Pursuant to a 

demonstration project established by the Veterans Benefits Improvement Act of 2004 

(VBIA), P.L. 108-454, signed by President Bush on December 10, 2004, OSC, rather 

than the Department of Labor’s Veterans Employment and Training Service (DOL 

VETS), has the authority to investigate federal sector USERRA claims brought by 

persons whose social security number ends in an odd-numbered digit. Under the project, 

OSC also receives and investigates all federal sector USERRA claims containing a 

related prohibited personnel practice allegation over which OSC has jurisdiction 

regardless of the person’s social security number. By the end of FY 2005, OSC had 

already received 111 cases. 

 5. Referrals for full investigations of both PPP and DU cases significantly increased by 

 lowering the hurdles employees need to get through to show that there is a reasonable 

 possibility that a PPP has been committed against them, or that there is a substantial 
FY 2005 Performance Accountability Report 11

likelihood that a federal employee is reporting agency waste, fraud, illegality or abuse. 

This helps both the merit system and federal employees. 

6. The Special Counsel followed through on his promise to litigate more cases before the 

Merit Systems Protection Board (Board) to protect the merit system and federal 

employees. In FY 2005, OSC filed 13 cases before the Board, three more than in FY 

2004. 

7. OSC’s Outreach Program efforts have succeeded in educating federal agency managers 

and employees concerning their responsibilities and rights. OSC also assisted federal 

agencies to fulfill their statutory obligation to consult with OSC concerning informing 

federal employees of their rights under the laws that OSC enforces.9

 OSC formally 

launched its government-wide 2302(c) Certification Program in October 2002. Since that 

time, 47 agencies (including Cabinet-level agencies such as the Departments of Labor, 

Energy, State, Transportation, Education, Health and Human Services and Veterans 

Affairs) have registered for the program. 

8. OSC is now participating in the federal GoLearn Project, which will increase outreach by 

up to 50,000 federal employees per year. 

9. OSC’s Alternative Dispute Resolution (ADR) Specialist continued to achieve a very high 

resolution rate for the cases in OSC’s ADR Program, including several high profile 

whistleblower reprisal cases. OSC has enhanced its resources for conducting mediations. 

Instead of having one full time mediator, seven people from different parts of the agency 

have received training in conducting mediations. OSC now has a cadre of professionals 

with varied skills and legal expertise in multiple areas from which to draw. 

10. The Employee Advisory Committee is comprised of eight staff members, elected by their 

colleagues, who meet monthly to provide recommendations and feed-back to the Special 

Counsel and the agency. The Special Counsel conceived of this idea and implemented it; 

the Employee Advisory Committee has been highly successful. The Student Loan 

Repayment / Employee Retention Program is one example of the agency responding 

directly to suggestions made to the Special Counsel in this forum. 

11. A Government Accountability Office (GAO) March 2004 Report (GAO 04-36) was 

critical of OSC’s chronic backlog problem. OSC provided a detailed response back to 

the GAO on May 17, 2005 and it is available on the OSC website GAO document. The 

response includes several strategies to reduce the backlogs in PPP and other cases that 

have already yielded results. 

12. OSC continued to handle high-profile cases that received media attention, most of which 

resulted in corrective action. 

13. The Special Counsel selected Anne Whiteman, an 18-year air traffic controller at Dallas 

Fort Worth International Airport (DFW), as a recipient of the 2005 Special Counsel’s 

Public Servant Award. Ms. Whiteman disclosed to OSC that air traffic controllers and 

management at the DFW Terminal Radar Approach Control (TRACON) routinely 
FY 2005 Performance Accountability Report 12

covered up serious operational errors, in violation of an FAA order. Ms. Whiteman is the 

fifth federal employee to receive such an award. The Public Servant Award program was 

established in 2001 to recognize the contributions that federal employees make to the 

public interest when – often at great personal risk – they make significant disclosures of 

violations of law, rule, or regulation; gross mismanagement; a gross waste of funds; an 

abuse of authority; or, as was the case here, a substantial and specific danger to public 

health and safety. The Public Servant Award is a non-monetary and merit-based award. 

Its purpose is to publicly recognize the most significant contributions made by federal 

whistleblowers who have either filed disclosures with OSC or who have sought relief 

from OSC on the grounds that they have suffered retaliation. 

In spite of the successes, OSC faces continued challenges. It is clear that although the 

reduction of backlogged cases has helped OSC meet its strategic goals of protecting federal 

employees from PPPs, protecting the merit system, and guarding the public interest through its

Disclosure Unit, there are other ways of measuring success. We must now improve the timeliness of OSC’s review of PPP cases and whistleblower disclosures.

 

VI. OSC's Systems, Controls, and Legal Compliance 

Management control activities carried out by OSC include periodic reviews of agency 

administrative and program elements to assure that obligations and costs comply with applicable 

laws; funds, property and other assets are safeguarded; revenues and expenditures are properly 

recorded and accounted for; and programs are efficiently and effectively carried out in 

accordance with law and management policy. During FY 2005, reviews were completed on the 

following agency administrative operations: 

1. Information Security Program. OSC’s Chief Information Officer conducts an annual 

security review. The results of this review were summarized in the agency’s Federal 

Information Security Management Act (FISMA) Report, submitted to OMB in 

October, 2005. The review found no material weaknesses in the agency’s 

information technology policies, procedures, or practices. Further, there were no 

security incidents affecting critical agency information systems. 

2. Reorganization – Agency Structure and Procedures. After a lengthy and in-depth 

analysis, OSC reorganized structurally in January 2005. The second phase of the reorganization consists in procedural streamlining. Much of this streamlining has been 

accomplished through procedural changes in FY 2005, and the streamlining continues 

with an ongoing project to revise OSC’s standard operating procedures. After this is 

accomplished, the agency will be more effective at processing cases. 

Sources for the reorganization and procedural changes were the following: 
FY 2005 Performance Accountability Report 13

• A General Accountability Office (GAO) report on OSC’s caseload, case 

management processes, technology, and privacy protection policies published 

in March 2004, the main result of which was a recommendation that OSC 

develop a strategic plan to allow processing of more cases within the statutory 

time limits, and reduce case backlogs. 

• Input from OSC’s Special Projects Unit, which the Special Counsel formed to 

focus solely on reducing the various backlogs in the agency. This unit 

provided in-depth analysis of the current case handling practices of the 

various operating units of the agency. The unit has also been very successful 

in reducing backlogs of prohibited personnel practice cases and OSC 

Disclosure Unit cases. 

• As an aid in addressing the strategic initiatives described in number 2 above, 

OSC contracted with a private sector management consulting firm to perform 

an agency-wide assessment. This assessment was delivered to OSC in 

September 2004. It addressed the procedural, structural and legal issues at the 

heart of the agency, and provided recommendations for change in each area. 

3. GAO Report: On October 15, 2004, GAO produced a report entitled “U.S. Office of 

Special Counsel's Role in Enforcing Law to Protect Reemployment Rights of 

Veterans and Reservists in Federal Employment. GAO-05-74R, which analyzes how 

OSC carries out its responsibilities under USERRA, including processing times and 

changes made by OSC to handle current claims and any increase in claims. 

This document reported favorably on OSC’s processes and results, noting that OSC 

obtained corrective action from Federal Employers on all USERRA claims that had 

merit. It also outlined the possible benefits to service members from having OSC 

handle USERRA claims earlier in the process. This later became a reality with the 

passage of the Veterans Benefits Improvement Act of 2004, Pub. L. No. 108-454, § 

204, 118 Stat. 3606, which requires DOL and OSC to carry out a three-year 

demonstration program under which certain federal sector claims under USERRA are 

to be referred to OSC for initial investigation and resolution. 

4. Financial Audit. OSC is undergoing its second financial audit. The agency’s first 

audit was in the summer and fall of FY 2004. The auditors reported no material 

weaknesses in FY 2004. The current audit addresses accounting and procurement 

procedures and operations, almost all of which are accomplished by the Bureau of 

Public Debt (BPD) at the Department of the Treasury under an interagency 

outsourcing agreement. The audit will not be completed until early December 2005. 

In the event that any material control weaknesses are identified during this year’s 

audit, they will be discussed in the next FMFIA/IG Act report. 

5. OSC Capitalization Policy. In November 2004, at the beginning of FY 2005, OSC 

created a capitalization policy for assets with purchase price over $50,000. This 

policy is in place and being followed. 
FY 2005 Performance Accountability Report 14

In FY 2005, several OSC financial management activities including procurement, budget 

accounting, financial accounting, reporting accounting, and travel services were administered by 

BPD. OSC personnel and payroll data entry transactions were processed by the Department of 

Agriculture’s (USDA’s) National Finance Center (NFC). These operations were administered 

under cross-servicing agreements with both departmental entities. For information on any 

significant management control issues related to services provided under these agreements, OSC 

relies on information received from BPD and NFC, and any audits or other reviews issued by the 

Treasury and USDA OIGs, their Offices of the Chief Financial Officer (OCFO), and the General 

Accounting Office (GAO). 

On April 18, 2005, there was a GAO Report entitled “Bureau of the Public Debt: Areas 

for Improvement in Information Security Controls” GAO-05-467R, which pointed out that the 

FY 2004 audit at BPD identified six new general information security control issues. It also 

states that BPD informed GAO that it has taken corrective action to address these issues, and 

further notes that BPD has made significant progress in addressing open recommendations from 

prior years’ audits. Additionally, the report points out that none of these findings pose significant 

risk to the BPD financial systems. These GAO conclusions lead OSC to conclude that the 

objectives of its management control program for its transactions handled by BPD were met for 

FY 2005. 

Reports on NFC operations have identified internal control or other problems detailed in 

USDA OIG and/or OCFO reports required by law to be submitted to the President and Congress. 

These include OIG Report No. 11401-20-FM, “Fiscal Year 2004- Review of the National 

Finance Center General Controls” (October 2004). The report identifies eleven technical control 

issues. However, OSC transactions processed by NFC during FY 2005, however, do not appear 

to have been affected by the problems reported. OSC will, however, follow up on findings when 

warranted. 

VII. Future Effects of Known Demands, Risks, Uncertainties, 

Events, Conditions, and Trends 

In the past several years, the agency has experienced an increase in caseload level. There 

are a number of factors which have contributed to this level of complaint filings with OSC: 

y There has been a heightened awareness of the Hatch Act due to the 2004 elections, and 

increased filing of disciplinary action cases by OSC. Several of these cases have involved 

high-profile employees and significant national press coverage. Hatch Act cases are 

projected to be 9% above the number of cases in FY 2004 by the end of the fiscal year. 

y Congress passed a statute intended to decrease the processing time for USERRA 

complainants from members of our armed forces. Under the pilot program created by 
FY 2005 Performance Accountability Report 15

Congress, which began in February, 2005, OSC recently began processing half of the 

USERRA cases that would typically be processed by the Department of Labor. OSC looks

forward to the decision that Congress will make after the Demonstration Project ends,

when OSC may be asked to handle all USERRA cases.

y In recent years, OSC has had a large number of high-profile whistleblower cases, leading to 

increased national press coverage of OSC. FY 2005 continued this trend. 

y OSC continues to investigate whistleblower retaliation complaints from Transportation 

Security Agency (TSA) security screeners under OSC’s Memorandum of Understanding 

(MOU) with TSA. This MOU remains viable despite the Merit System Protection Board’s 

decision that the Board does not have jurisdiction to adjudicate these matters. 

y During FY 2005, OSC continued to certify more agencies through its outreach program. 

Moreover, new agencies continue to sign up for the certification program. As agencies 

implement the certification process, agency employees who might previously have been 

unaware of their rights and remedies through OSC are becoming informed. 

y In addition to OSC’s certification program, OSC continues to provide outreach programs to 

agencies requesting them, or as part of OSC settlements in particular matters. 

The effect of these conditions, events, and trends is that caseloads will continue their 

overall upward trend for the foreseeable future. OSC must therefore continue to ensure its

workforce has the skill to meet these needs. 

The Special Counsel stressed the importance of further development of OSC’s agencywide cross training program. This is an important initiative, which provided for unprecedented 

efficiency at OSC by developing the agency’s employees to the point where they have sufficient 

expertise to operate in more than one of OSC’s highly specialized units, and can therefore cross 

organizational boundaries to address the case backlogs in their initial stage. The mediation 

program for Alternative Dispute Resolution has been reorganized. Rather than have a single 

ADR specialist under the leadership of an SES employee, the agency has expanded the program 

through cross-training multiple individuals from each of OSC’s operating units. As a result the 

agency now has a broad pool of trained mediators with different legal areas of expertise. 

The Special Counsel has highlighted the importance of the Veterans Benefits 

Improvement Act mentioned above. Effective February 8, 2005, pursuant to this statute, OSC 

began investigating certain federal sector USERRA claims under the demonstration project. 

Specifically the act gives OSC, rather than the Department of Labor’s Veterans Employment and 

Training Service (VETS), the authority to investigate federal sector USERRA claims brought by 

persons whose social security number ends in an odd-numbered digit. Under the project, OSC 

also receives and investigates all federal sector USERRA claims containing a related prohibited 

personnel practice allegation over which OSC has jurisdiction regardless of the person’s social 

security number. The demonstration project ends on September 30, 2007, and Congress will 

determine whether OSC will continue to have investigative responsibility over federal sector 

USERRA claims. 
FY 2005 Performance Accountability Report 16

VIII. Comments on Final FY 2005 Financial Statements 

• OSC’s Asset Capitalization Policy has been in place for one year. It pertains to assets 

with initial purchase price over $50,000. The agency’s phone system falls under this 

policy, and was initially capitalized in the amount of $108,650. Net book value is now 

$67,371, down from $89,101 at the end of FY 2004. 

• An ongoing trend is that salaries, benefits, rent and utility payments tend to take 

precedence over major productivity-enhancing Information Technology projects. 

Salaries, benefits, rent and utility payments are over 86% of the agency’s expenditures. 

So any increases such as pay raises or rent increases have an impact on the agency’s 

ability to fund the IT projects. OSC continues to find ways to implement IT 

enhancements at low costs. 

• OSC, like all other federal government agencies, has been asked to implement a 

comprehensive Continuity of Operations Plan (COOP) to safeguard vital records and 

databases, establish an alternate operating site, and validate capability through tests, 

training, and exercises. OSC's COOP plan will be very limited in scope, since it was

unfunded in FY 2004 and FY 2005 and is unfunded in FY 2006.

• Limitations of the Financial Statements: The principal financial statements have been 

prepared to report the financial position and results of operations of OSC, pursuant to the 

requirements of 31 U.S.C. 3515 (b). 

The statements have been prepared from the books and records of the Review 

Commission in accordance with generally accepted accounting principles (GAAP) for 

Federal entities and formats prescribed by the Office of Management and Budget (OMB). 

The statements are in addition to the financial reports used to monitor and control 

budgetary resources which are prepared from the same books and records. These 

statements should be read with the realization that they are for a component of the United 

States Government, a sovereign entity. 

 

 
FY 2005 Performance Accountability Report 17

Endnotes: 

1

 Reorganization Plan Number 2 of 1978. See 5 U.S.C.A. App.1, § 204. The Civil Service Reform Act of 1978 

(Public Law No. 95-454, 92 Stat. 1111) enlarged OSC’s functions and powers. 2 Public Law No. 101-12 (1989). Provisions setting forth OSC authorities and responsibilities were codified at 

5 U.S.C. § 1211, et seq. 3

 Public Law No. 103-94 (1993), codified in scattered sections of 5 U.S.C. and 12 U.S.C. 

4

 Public Law No. 103-353 (1994), codified at 38 U.S.C. § 4301, et seq. The Veterans’ Employment Opportunities 

Act of 1998 (Public Law No. 103-424) also expanded OSC’s role in protecting veterans. The act made it a 

prohibited personnel practice to knowingly take, recommend, or approve (or fail to take, recommend, or approve) 

any personnel action, if taking (or failing to take) such action would violate a veterans’ preference requirement. See

5 U.S.C. § 2302(b)(11). (The former § 2302(b)(11) was re-designated as § 2302(b)(12).). 

5

 Public Law No. 103-424 (1994), codified in various sections of title 5 of the U.S. Code. The provision making 

federal agencies responsible, in consultation with OSC, for informing their employees of rights and remedies under 

the Whistleblower Protection Act appears at 5 U.S.C. § 2302(c). 

6 Public Law 107-71 (2001). 7

 Unless noted otherwise, all references after this to prohibited personnel practice complaints include complaints 

alleging other violations of civil service law, rule, or regulation listed at 5 U.S.C. § 1216, except for alleged 

violations of the Hatch Act. 

8 When the Complaints Examining Unit makes a preliminary determination to close a complaint without further 

investigation, it must by law provide complainants with a written statement of reasons, to which they may respond. 

On the basis of the response, if any, the unit decides whether to close the matter, or refer it to the Investigation and 

Prosecution Division. 

9 “The head of each agency shall be responsible for the prevention of prohibited personnel practices, for the 

compliance with and enforcement of applicable civil service laws, rules, and regulations, and other aspects of 

personnel management, and for ensuring (in consultation with the Office of Special Counsel) that agency employees 

are informed of the rights and remedies available to them under this chapter and chapter 12 of this title.” 5 U.S.C. 

2302(c). 
Part 3: Performance 
FY 2005 Performance Accountability Report 18

Goal 1: Prohibited Personnel Practices 
FY 2005 Performance Accountability Report 19

ANNUAL RESULTS: STRATEGIC GOAL 1 (PROHIBITED PERSONNEL PRACTICES) 

To fulfill congressional intent that OSC use its investigative and prosecutorial authority to protect the merit 

system and federal employees from prohibited personnel practices (PPP’s), especially retaliation for 

whistleblowing 

FY 2005 Performance Goals – 1. Quality standards review. Conduct quality review of sampling of closed FY 04 

PPP, HA and DU complaint files, under established standards, no later than 7/30/04. Direct improvements based 

on reviews. 

FY 2005 Targets 

Make sure that all aspects of investigation comply with results of quality standards review. 

FY 2005 Results 

The new customer service unit tracked complaints for better service. The new training unit tailored course 

material to quality review standards. Monitored the changes in unit SOPs and changes implemented under the 

assessment team and SPU and determined if the changes complied with quality standards. Continued to monitor 

cases before the MSPB and Federal Circuit in which OSC was not a party and circulated relevant cases to staff. 

Held employees accountable for failure to meet quality standards. Authorized the Training Office to draft 

relevant course material based on results of quality review. Authorized Customer Service unit to occasionally poll 

incoming callers concerning how well their needs were met by OSC. 

FY 2004 Results - New Special Counsel began quality review with the Complaints Examining Unit (CEU) which 

is complete. CEU is the screening “intake” unit for prohibited personnel practices complaints (PPPs). CEU 

implemented new procedure for case referrals to IPDs and a new procedure to streamline the referral memo. 

Devised new OSC Complaint Form 11. Devised new CEU investigative standard so more cases will be referred 

for further investigation. New CEU discovery process for complaint filing.

FY 2003 Results - First quality standards review conducted on random sample of case files. Results sent to senior 

management for review. Further action awaiting review of review program and process by new Special Counsel.

FY 2002 Results - Standards incorporated in new or revised policy and procedural issuances (e.g., directives and 

manuals). Employees required to adhere to standards in policy and procedural issuances. Standards distilled in 

program review guide. Quality review process developed.
FY 2005 Performance Accountability Report 20

ANNUAL RESULTS: STRATEGIC GOAL 1 (PROHIBITED PERSONNEL PRACTICES) 

To fulfill congressional intent that OSC use its investigative and prosecutorial authority to protect the merit 

system and federal employees from prohibited personnel practices (PPP’s), especially retaliation for 

whistleblowing

FY 2005 Performance Goals - 2. Improve quality and productivity through increased teamwork. Continue to 

identify changes to enhance investigator/attorney consultation, sharing of best practices, productivity, and overall 

quality of investigations and legal analyses. Consider options, including but not limited to, workforce restructuring 

consistent with the initiatives to reduce managers and organizational layers, speed decision-making, and re-direct 

positions to front-line staff. 

FY 2005 Targets – Make sure that information available to any one individual is shared by all team members. 

FY 2005 Results - Where and when appropriate eliminated unnecessary layers of management and repetitious 

review of documents and meetings. Aggressively enforced USERRA to protect service members from 

discrimination in employment in the federal sector. Accomplished organizational changes that more fully utilize 

field offices and better serve customers. Further developed a succession plan that will improve knowledge, skills, 

and abilities of potential leaders for the agency. Implemented changes to procedures and began measuring effects 

of the changes. Continued measuring effects of procedures and processes changed in previous fiscal years. 

Improved quality of investigations and legal analyses by promoting intra and inter-divisional consultation between 

attorneys and investigators, by developing and sharing best practices, and avoiding duplication of effort. 

Established new guidelines that set specific deadlines for case handling, and remove impediments to timely 

resolution of cases in the IPD. Authorized the training office to monitor quality review and use the information to 

draft relevant course material for cross training OSC personnel. 

FY 2004 Results - Caseload completion goal met or exceeded. Encouraged employees to review Significant Case 

Activity Reports of other IPD divisions to determine if cases can be processed more efficiently by consulting with 

other Division attorneys or investigators with similar cases. New Special Counsel established a SPU in March 

2004 to eliminate the historic backlog of cases in Agency. SPU project resolved 288 PPP cases with a referral rate 

of 28% further investigation by the IPDs. Assessment team evaluated Agency for several months (April 04-Aug 

04) and issued a report with recommendations that was shared with all staff. Required employees assigned 

research projects to check Intranet to determine if research has already been done or is in the process of being 

done. This action is pending the results of IOSC’s evaluation and implementation of outside assessment 

recommendations. Meetings discontinued as of April 2004 due to backlog reduction efforts and pending SPU’s 

report on improvements for case processing. Best practices continue to be shared between divisions through 

informal discussions and consultations. 

FY 2003 Results - Reduced managerial staff by not filling Supervisory Investigator vacancy created by 

incumbent’s retirement. Position to be allocated to non-supervisory work on program (case-related) matters. 

Team Leaders initiated monthly meetings to share best practices, discuss legal and administrative issues, and 

increase quality and productivity of IPD work. Associate Special Counsels (ASCs) continued to attend selected 

investigator/attorney interviews and listen to interview tapes to monitor quality and provide feedback on 

interviewing skills. 

FY 2002 Results - Restructuring implemented in FY 2001. Directive issued on authentication, organization, and 

maintenance of records in complaint and investigation files after FY 2001 case file protocol pilot test. 

ANNUAL RESULTS: STRATEGIC GOAL 1 (PROHIBITED PERSONNEL PRACTICES) 

To fulfill congressional intent that OSC use its investigative and prosecutorial authority to protect the merit 

system and federal employees from prohibited personnel practices (PPP’s), especially retaliation for 

whistleblowing

FY 2005 Performance Goals - 3. Develop and communicate consistent agency policies. Continue to communicate 

agency policies to all relevant staff as developed. 

FY 2005 Targets) Make sure materials outlining internal policies are distributed and assimilated by all staff. 
FY 2005 Performance Accountability Report 21

FY 2005 Results - Monitored amount and length of legal memoranda for compliance to new procedures. 

Monitored changes to investigative and legal memoranda by managers to ensure compliance to new procedures. 

Monitored case administrative procedures to ensure uniform case handling in all IPD teams. Reviewed case 

handling numbers to ensure that new procedures increase efficiency. Pursuant to reorganization directive, drafted 

standard operating procedures that delayer management and give more autonomy to lower level employees. 

Pursuant to reorganization directive, drafted operating procedures and administrative case handling procedures 

that are consistent for each unit within the IPD To measure efficiency of operating procedures. 

FY 2004 Results - Continued to communicate agency policies to all relevant staff as developed. Formal Intranet 

Task Group not convened, but assigned staff updated Intranet as needed to keep program staffs updated on agency 

policies and novel legal issues. Staff has been re-trained by Division directors and supervisors on important 

policies. Staff survey of knowledge of OSC policies and procedures is pending IOSC and SPU review and/or 

revision of existing policies and procedures. In general the new policies will “power down” activity and 

decentralize review procedures to lower level workers to eliminate bureaucratic delays. 

FY 2003 Results - Continued to communicate agency policies to all relevant staff as developed (e.g., manual 

updates). 

FY 2002 Results - Agency intranet and/or shared network drives used to communicate new and revised policies 

and procedures to staff on timely, consistent basis; (e.g., directives, manuals, policy statements, legal analyses, 

model correspondence with complainants, style guidance, interagency memoranda; forms); policy statements 

posted on web site. Training conferences / sessions conducted by each IPD, along with periodic meetings for 

division employees. Bi-weekly meetings of senior program staff and management (including Special Counsel) 

held to ensure consistency and effectiveness of program and administrative policies and procedures. Hatch Act 

training provided to IPD employees. 

ANNUAL RESULTS: STRATEGIC GOAL 1 (PROHIBITED PERSONNEL PRACTICES) 

To fulfill congressional intent that OSC use its investigative and prosecutorial authority to protect the merit 

system and federal employees from prohibited personnel practices (PPP’s), especially retaliation for 

whistleblowing

FY 2005 Performance Goals - 4. Case priority system/resource allocation. Continue to implement policy for case 

handling by priority (according to particular types of PPP complaints and complexity level, including consideration 

of resource allocation). Set targets for FY 05 productivity within individual case categories according to 

productivity reported in first 3 quarters of FY 04. 

FY 2005 Targets – Make sure that each new case fits into the priority system that has been developed. 

FY 2005 Results – Since previously established case priority system began to yield counterproductive results, it is 

now being revised to a simpler system of first in first out, barring managerial intervention in particular cases. 

Once approved, this change will be reflected in next year’s performance goals and targets. 

FY 2004 Results - Priority case-handling policy continued for PPP cases. New evaluation of case priority system 

not performed pending SPU and outside third party assessment team evaluation of case-handling processes and 

procedures. New procedures may be developed in early FY 2005. Division directors measure 

productivity and review progress against targets and staff resources on a continuing basis. 

FY 2003 Results - Priority case-handling policy continued for PPP cases. Informal goals set for numbers of cases 

processed by investigators and attorneys, while continuing to use the priority system as an integral tool to reduce 

the backlog. 85% of the PPP complaints received processed within 240-day timetable established by Congress – 

13.33% improvement over prior year. 

FY 2002 Results Directive on IPD case priority and resource allocation issued. Automated case allocation system 

implemented. Employees required to adhere to case priority and resource allocation directive. CEU testing 

application and utility of IPD case priority and resource allocation procedures. 
FY 2005 Performance Accountability Report 22

ANNUAL RESULTS: STRATEGIC GOAL 1 (PROHIBITED PERSONNEL PRACTICES) 

To fulfill congressional intent that OSC use its investigative and prosecutorial authority to protect the merit 

system and federal employees from prohibited personnel practices (PPP’s), especially retaliation for 

whistleblowing

FY 2005 Performance Goals - 5. Identify and Implement Case Processing Improvements. Increase frequency of 

smaller informal staff gatherings in CEU to discuss case processing and garner staff input for improvements. 

FY 2005 Targets - Ensure policy changes implemented to increase productivity are carried out by all employees. 

FY 2005 Results - Monitored new operating procedures to determine if goals and efficiencies become part of the 

IPD structure. Monitored the length and review system of legal and investigative memoranda to comply with new 

operating procedures to power decision making to lower levels. Implemented incentive program for suggestions 

that improve case processing efficiency. Continued to ensure that employees, especially new employees, review 

sample work product posted on Intranet and work product guidelines when drafting CEU and IPD work product. 

Continued to maintain current work product samples on Intranet, including legal research, preliminary 

determination letters, final closure letters, PPP Reports, litigation documents, CEU referral and closure 

memoranda, CEU referral and closure letters. Required staff to post all approved work product in selected 

categories. Assigned staff to monitor whether work product being posted. Held employees accountable for 

failure to post work product. Continued to assign staff to determine which work product samples should remain 

on Intranet as “model” work product on a quarterly basis. Monitored whether work product selected is 

appropriate. Continued to hold agency-wide training conferences. 

FY 2004 Results - IPD Directors have attempted to discuss practices to improve consistency of the three IPDs. 

Ongoing review and discussion with Special Counsel underway. Re-educated employees regarding Awards 

Program that provides for incentives for suggestions that increase case processing efficiency. An attorney is 

assigned to ensure that current work product samples are included on the intranet and collects approve work 

product from staff for posting to the Intranet. Division Directors and supervisors consult regularly with attorneys 

and investigators regarding ways to improve correspondence. Attorneys and investigators hold telephone 

conferences when appropriate. 

FY 2003 Results - “Open Forum” lunches discontinued because newly established monthly Team Leader meetings 

provided productive forum for exchange of ideas and best practices. 

FY 2002 Results - Directive issued on case priority and resource allocation gave IPDs guidance and discretion to 

take identified actions to reduce duplication, eliminate unnecessary steps, and appropriately allocate resources. 

Training conferences for two IPDs and all supervisors included exchange of best practices and ideas for 

improvement of case work quality and quantity. Employees required to adhere to policy and procedural 

issuances. 

ANNUAL RESULTS: STRATEGIC GOAL 1 (PROHIBITED PERSONNEL PRACTICES) 

To fulfill congressional intent that OSC use its investigative and prosecutorial authority to protect the merit 

system and federal employees from prohibited personnel practices (PPP’s), especially retaliation for 

whistleblowing

FY 2005 Performance Goals - 6. ADR. Offer mediation option in appropriate cases, and track results. 

FY 2005 Targets - Ensure mediation is offered in all cases where it is appropriate. 
FY 2005 Performance Accountability Report 23

FY 2005 Results - Continued to offer mediation option in appropriate cases, and track results. Reviewed 

performance during FY 04, and determined to use more in-person mediation in FY 2006. Continued with 

effective initial communications with complainants and agencies to better explain the advantages of mediation, 

including the possible expeditious resolution of the conflict and the avoidance of a time and resource-consuming 

investigation. Anticipated that this effort will increase the acceptance rate from agencies and complainants and 

lead to more mediated resolutions. Determined to use the Director as a co-mediator where appropriate to assure 

quality control and consistency in the program. Continued training of OSC staff in mediation skills. Enrolled 

Mediation Unit Director in the "sharing neutrals" (SN) program at HHS, which will result in the Director 

developing further mediation skills by conducting mediations in other agencies. It also will make outside 

mediators available to participate in the OSC program where appropriate. 

FY 2004 Results - The ADR Unit exceeded the mediation offer goal by increasing mediation offers from 31% of 

CEU-referred cases in FY ‘03 to 40% in FY ‘04. Broadening the criteria for offering mediation to parties had an 

adverse affect on complainant and agency acceptance rates. Nevertheless, the 68% complainant acceptance rate 

came within reach of the 75-85% goal. Similarly, the agency acceptance rate of 55% came within reach of the 

goal . The number of 

mediations conducted (21) met the target. The resolution rate goal was exceeded in FY ‘04 with an 86% rate. 

FY 2003 Results - ADR option offered in 100% of mediation-appropriate cases and results tracked. ADR 

program met or exceeded all goals set for FY 2003. 

Targets set for FY 2004. 

FY 2002 Results - ADR offered in 100% of mediation-appropriate cases.1 Mediation offers: 32% of CEUreferred complaints (goal - 20%). Acceptance rates: 78% of complainants (goal - 65%), 66% of agencies (goal – 

60%). Mediations held: 20 cases (goal 26). Resolution rate: 65% (goal 40%) 

ANNUAL RESULTS: STRATEGIC GOAL 1 (PROHIBITED PERSONNEL PRACTICES) 

To fulfill congressional intent that OSC use its investigative and prosecutorial authority to protect the merit 

system and federal employees from prohibited personnel practices (PPP’s), especially retaliation for 

whistleblowing

FY 2005 Performance Goals - 7. Early settlement. Continue to adhere to OSC’s policy of early settlement of 

meritorious cases; monitor settlement of such cases. 

FY 2005 Targets - Ensure that early settlement efforts are applied to all appropriate cases. 

FY 2005 Results – IPD - Continued to adhere to OSC's policy of early settlement of meritorious cases; monitored 

settlement of such cases. Fully implemented "best practice" guidelines for identifying cases for early settlement, 

and for negotiating settlements with agencies. Monitored compliance with "best practice" guidelines and held 

employees accountable for failure to adhere to guidelines. Permitted CEU personnel to identify possible early 

settlement cases, and allowed CEU opportunities to settle meritorious cases. Assigned staff to develop "best 

practice" guidelines for identifying cases for early settlement, and for negotiating settlements with agencies and 

complainants; posted guidance on Intranet and held Division meetings to encourage implementation of the 

guidance. 

FY 2004 Results - Division Directors and supervisors guide staff on a case by case basis as to whether early 

settlement is appropriate and should be attempted. Division Directors and supervisors also review draft settlement 

agreements prior to implementation of those agreements. 

FY 2003 Results - Early settlement of meritorious cases policy continued. (see Goal 9 results). Settlements 

monitored as needed to ensure agency implementation. 

FY 2002 Results - Early settlement of meritorious cases policy continued (see Goal 9 results). Settlements 

monitored as needed to ensure agency implementation. 
FY 2005 Performance Accountability Report 24

ANNUAL RESULTS: STRATEGIC GOAL 1 (PROHIBITED PERSONNEL PRACTICES) 

To fulfill congressional intent that OSC use its investigative and prosecutorial authority to protect the merit 

system and federal employees from prohibited personnel practices (PPP’s), especially retaliation for 

whistleblowing

FY 2005 Performance Goals - 8. Case-tracking capability. Continue to modify and enhance capability of case 

tracking system as needed. 

FY 2005 Targets – Continue to enhance case-tracking system based on user and management needs. 

FY 2005 Results – Continued to enhance case tracking system. Formed plans to develop specialized litigation 

screen in case tracking system. 

FY 2004 Results - Continued to hold OSC 2000 users’ group meetings to exchange ideas and seek feedback from 

users, and to make changes as necessary to the system; submitted report to Deputy Special Counsel on changes 

made to systems. 

FY 2003 Results - ISB implemented OSC 2000 changes as needed to monitor new case actions and priorities. 

Periodic OSC 2000 users’ group meetings held. Report submitted to Deputy Special Counsel on OSC 2000 

changes made/projected prior to 7/30/03. 

FY 2002 Results - ISB implemented automated case priority and resource allocation system and other changes 

needed to ensure that case tracking system can monitor and track new case actions and priorities. ISB held bimonthly OSC 2000 users’ group meetings to exchange ideas. Litigation tracking system developed and piloted. 

ANNUAL RESULTS: STRATEGIC GOAL 1 (PROHIBITED PERSONNEL PRACTICES) 

To fulfill congressional intent that OSC use its investigative and prosecutorial authority to protect the merit 

system and federal employees from prohibited personnel practices (PPP’s), especially retaliation for 

whistleblowing

FY 2005 Performance Goals - 9. Favorable Actions - Obtain voluntary corrective action; prosecute MSPB cases 

where voluntary action not forthcoming; and obtain disciplinary action where appropriate. 

FY 2005 Targets – Obtain corrective or disciplinary action in all cases where it is appropriate. In order to avoid 

presupposition of the existence of violations, and to eliminate the possibility of creating bias towards prosecuting 

non-meritorious cases, quantified goals concerning Favorable Actions are not used. 

FY 2005 Results – Tracked the trial techniques courses and attendees to determine if the new emphasis on filing 

cases is successful. Reorganized the IPD into multiple Field Offices to foster healthy competition and filing of 

prosecutable cases. 

FY 2004 Results - Policies in full force; continue to track results. Continued to obtain voluntary corrective and 

disciplinary actions when appropriate. MSPB cases filed when voluntary action was not taken. 68 favorable 

actions (including nine stays of personnel actions and ten disciplinary actions) obtained in 67 matters. Four 

complaints were filed with the MSPB during FY 04. 

FY 2003 Results - Continued to obtain voluntary corrective and disciplinary actions when appropriate. MSPB 

cases filed when voluntary action was not taken. 115 favorable actions (including 12 disciplinary actions, and 

seven stays of personnel actions) obtained in 83 PPP matters. Complaints involving allegations of reprisal for 

whistleblowing accounted for 75 of the 83 matters. Two complaints seeking disciplinary action filed with MSPB. 

Suspension (45 days) obtained in settlement of complaint filed with MSPB in prior year, charging personnel 

director with commission of a PPP. Policies maintained in full force and results tracked. 

FY 2002 Results - 126 favorable actions, including 13 disciplinary actions, by agencies (78% of matters 

involved alleged reprisal for whistleblowing). 1 disciplinary action complaint (alleging reprisal for 

whistleblowing) filed with MSPB. 
FY 2005 Performance Accountability Report 25

ANNUAL RESULTS: STRATEGIC GOAL 1 (PROHIBITED PERSONNEL PRACTICES) 

To fulfill congressional intent that OSC use its investigative and prosecutorial authority to protect the merit 

system and federal employees from prohibited personnel practices (PPP’s), especially retaliation for 

whistleblowing

FY 2005 Performance Goals - 10. Case-tracking capability. Continue to ensure that OSC 2000 has the capability 

to monitor and track all voluntary corrective actions obtained, all MSPB petitions filed, and all disciplinary actions 

obtained. 

FY 2005 Targets - Make sure OSC data screens meet all internal requirements. 

FY 2005 Results - Continued to convene bi-monthly OSC 2000 users’ group meetings to exchange ideas and seek 

feedback from users if necessary. Began planning to integrate OSC 2000 with future Document Management 

System 

FY 2004 Results - Ensure that OSC 2000 is able to capture litigation data from all programs, and enhance userfriendliness of litigation data entry system. 

FY 2003 Results - Litigation case tracking system implemented. Continued to convene bi-monthly meetings of 

OSC 2000 users group. Submitted report of changes accomplished. 

FY 2002 Results - Further management evaluation determined that tracking “reasonable grounds” determinations 

was not needed / useful. 

ANNUAL RESULTS: STRATEGIC GOAL 1 (PROHIBITED PERSONNEL PRACTICES) 

To fulfill congressional intent that OSC use its investigative and prosecutorial authority to protect the merit 

system and federal employees from prohibited personnel practices (PPP’s), especially retaliation for 

whistleblowing

FY 2005 Performance Goals - 11. Improve quality of correspondence with complainants. Continue use of standard 

on quality of written correspondence in annual quality review process. Review sampling of closed PPP FY 03 

complaint files under established standards. Measure results and compared to baselines established by FY 02 and 

FY 03 reviews. Incorporate compliance with directed improvements into employees’ performance plans. 

FY 2005 Targets - Ensure that correspondence complies with all established policies concerning quality 

standards. 

FY 2005 Results – Because annual reviews of closed cases have been held in abeyance, this strategy has not been 

implemented. 

FY 2004 Results - Because annual reviews of closed cases have been held in abeyance, this strategy has not been 

implemented. 

FY 2003 Results - See Goal 1. Division management continued to review written work-product and to provide 

guidance as needed improvement of quality of written work. 

FY 2002 Results - Model correspondence samples circulated and posted on agency intranet and/or shared network 

drives. Substantive letters reviewed by a supervisor or ASC. Correspondence quality standard incorporated in 

program review guide. 
FY 2005 Performance Accountability Report 26

GOAL 2: HATCH ACT 
FY 2005 Performance Accountability Report 27

ANNUAL RESULTS: STRATEGIC GOAL 2 (HATCH ACT) 

To fulfill congressional intent that federal and covered state and local employees comply with the Hatch 

Act’s (HA’s) restrictions when they engage in political activity. 

FY 2005 Performance Goals - 1. Advisory Opinions. Use tracking report to establish a timeliness baseline for 

setting a timeliness response time target. (Note: due to staff constraints and increasing intake, specific targets 

may be unrealistic.) Pursue additional FTEs for the Unit. 

FY 2005 Targets – Make sure internal practices yield results desired for increased productivity. 

FY 2005 Results - Continued to index advisory opinions. Continued to ensure that established productivity targets 

are met by tracking individual productivity, meeting with staff to discuss advisory processing and gathering staff 

input for improvements 

FY 2004 Results - Determined unnecessary with current staffing levels. 

FY 2003 Results - Developed computerized system to organize data entries into report for use in tracking average 

response times. 

FY 2002 Results - Completed by end of FY 2002 (or start of FY 2003). 

ANNUAL RESULTS: STRATEGIC GOAL 2 (HATCH ACT) 

To fulfill congressional intent that federal and covered state and local employees comply with the Hatch 

Act’s (HA’s) restrictions when they engage in political activity. 

FY 2005 Performance Goals - 2. Information Dissemination. Work with Outreach Director to enlist the 

assistance of identified federal agencies in disseminating Hatch Act information to state and local agencies 

receiving federal grants. 

FY 2005 Targets – Reach as many individuals as possible with our various sources of information concerning 

OSC. 

FY 2005 Results - Continued to conduct outreach programs. 

FY 2004 Results - Continued to conduct Hatch Act outreach programs especially at federal agencies that disburse 

large numbers of grants to state and local agencies. Conducted 33 Hatch Act outreach programs for federal 

agencies. 

FY 2003 Results - Conducted one Hatch Act outreach program for state and local government employees. 

Created PowerPoint presentation for use in training state and local government employees 

FY 2002 Results - Working with outreach specialist, developed HA fact sheet for state and local employees, 

disseminated fact sheet to targeted state and local groups and associations, and placed fact sheet on OSC web site. 

Wrote article on HA for National League of Cities newsletter. Worked with National Organization of Counties 

on newsletter article about the HA. Addressed annual conference of National Association of Secretaries of State 

on HA. Featured HA news on OSC web site banner 

ANNUAL RESULTS: STRATEGIC GOAL 2 (HATCH ACT) 

To fulfill congressional intent that federal and covered state and local employees comply with the Hatch 

Act’s (HA’s) restrictions when they engage in political activity. 

FY 2005 Performance Goals - 3. Publication of Advisory Opinions. Review current postings of selected Hatch 

Act advisory opinions on OSC web-site, and revise and update as necessary. 

FY 2005 Targets – Make sure all Advisory Opinions which can be, are published. 

FY 2005 Results - Continued to revise web-site text re: Hatch Act, as needed. Continued to issue press releases. 

FY 2004 Results - Issued 8 Hatch related press releases in FY 2004. 

FY 2003 Results - Reviewed and revised postings as needed. 
FY 2005 Performance Accountability Report 28

FY 2002 Results - Reviewed postings to ensure appropriate revisions made when necessary; 39 HA advisory 

opinions posted include seven posted in FY 2002. Created internal indexing system for HA advisory opinions, 

integrated with Word, to facilitate indexing as opinion is written. 

ANNUAL RESULTS: STRATEGIC GOAL 2 (HATCH ACT) 

To fulfill congressional intent that federal and covered state and local employees comply with the Hatch 

Act’s (HA’s) restrictions when they engage in political activity. 

FY 2005 Performance Goals - 4. and 5. Quality and timeliness in investigations. Continue to conduct review of 

sampling of closed HA complaint files, under established quality standards. Measure results from work of 

experienced attorneys and compare earlier review results (conducted in FY 03). Direct improvements based on 

reviews. Incorporate compliance with directed improvements into employees’ performance plans. Improve 

productivity through teamwork. Continue to meet with staff to discuss case processing and gather staff input for 

improvements. Implement case priority system by the beginning of the FY and measure backlog reduction results 

in each case category. Baseline productivity reported for FY 04 will be used to set targets for backlog reduction 

within individual case categories at the beginning FY 05. However, due to staff constraints and increasing intake, 

specific targets may be unrealistic. 

FY 2005 Targets – Make sure steps are taken to increase quality and timeliness of investigations. 

FY 2005 Results - Created and used a new Hatch Act violation complaint form. Continued to identify and resolve 

over-age cases. Developed new Standard Operating Procedures. Continued to ensure that established 

productivity targets are met by tracking individual case productivity, meeting with staff to discuss case processing 

and gathering staff input. 

FY 2004 Results - Standards not finalized nor did review occur based on pending review of PPP review process 

after recommendations made by SPU on case processing. 

FY 2003 Results - Finalized quality standards, and developed proposed case priority system. Case processing 

improvements identified in meetings with staff. Review on hold pending evaluation of PPP program and process. 

FY 2002 Results - Began drafting written quality and timeliness standards as basis for initial quality review of HA 

matters. 

ANNUAL RESULTS: STRATEGIC GOAL 2 (HATCH ACT) 

To fulfill congressional intent that federal and covered state and local employees comply with the Hatch 

Act’s (HA’s) restrictions when they engage in political activity. 

FY 2005 Performance Goals 6 and 7. Enforcement: Issue warning letters or seek appropriate penalties where 

Hatch Act violation revealed. 

FY 2005 Targets – Make sure penalties are applied when necessary. 

FY 2005 Results – In FY 2005, we issued 18 “cure” letters asking individuals to come into compliance with the 

Hatch Act. Issued 87 “warning” letters advising individuals not to engage in prohibited political activity again. 

FY 2004 Results - In FY 2004, we issued 24 “cure” letters asking individuals to come into compliance with the 

Hatch Act. Issued 93 “warning” letters advising individuals not to engage in prohibited political activity again. 

FY 2003 Results - Policy remained in full force. Results tracked on OSC2000. 

FY 2002 Results - OSC reports created to track warning letters, cure letters, and actions taken in response to such 

letters (e.g., withdrawal from race). 
FY 2005 Performance Accountability Report 29

Goal 3: Whistleblower Disclosures 
FY 2005 Performance Accountability Report 30

ANNUAL RESULTS: STRATEGIC GOAL 3 (WHISTLEBLOWER DISCLOSURES 

To fulfill congressional intent that OSC promote the public interest in the disclosure of violations of law, rule 

or regulation, gross waste of funds, gross mismanagement, abuse of authority, or substantial and specific 

dangers to the public health and safety, by serving as a secure channel for federal employees, former 

employees and applicants (“whistleblowers”) to blow the whistle in accordance with 5 U.S.C. § 1213. 

AANN Annual 

FY 2005 Performance Goals - 1, 4, and 7. Quality standards review. Conduct quality review of FY 04 cases, 

no later than 6/30/04. 

FY 2005 Targets – Make sure all actions conform to results of quality standards review. 

FY 2005 Results - Where possible, streamlined management review of documents. Drafted and implemented 

new standard operating procedures in response to organizational changes to fully better serve customers. 

FY 2004 Results - (Based on strategy 1, 5, 7, 9): If annual reviews are kept, complete Disclosure Unit standards 

for conducting such reviews. Staff drafted quality measurement standards but not implemented. Project put on 

hold pending Special Counsel review of SPU report on recommendations for revising policies and procedures. 

Agency established a Special Projects Unit (SPU) to work DU cases and draft procedures to comply with statutory 

deadlines. 

Retain an independent organization to assess policies and procedures and human capital management issues within 

the DU. 

FY 2003 Results - Review on hold pending evaluation of PPP program and process. 

FY 2002 Results - Drafting begun on quality standards. 

ANNUAL RESULTS: STRATEGIC GOAL 3 (WHISTLEBLOWER DISCLOSURES 

To fulfill congressional intent that OSC promote the public interest in the disclosure of violations of law, rule 

or regulation, gross waste of funds, gross mismanagement, abuse of authority, or substantial and specific 

dangers to the public health and safety, by serving as a secure channel for federal employees, former 

employees and applicants (“whistleblowers”) to blow the whistle in accordance with 5 U.S.C. § 1213. 

FY 2005 Performance Goals - 2. Disclosure priority system. Continue to implement policy for case handling by 

priority (according to particular types of disclosure matter and complexity level, including consideration of 

resource allocation). At beginning of FY 04, measure FY 03 productivity and set targets for increased 

productivity within individual categories according to baseline productivity reported in FY 02, and FY 03 

productivity. Work to meet productivity targets by end of FY. Evaluate whether realistic backlog reduction 

targets can be established, given the unrealistic statutory definition of backlog and the unknown number of 

complaints received annually. 

FY 2005 Targets – Make sure all cases are handled according to internal rules for case priority. 

FY 2005 Results - Continued “3b” project to quicken review and processing of minor cases. Processed cases to 

prevent return of backlog, to the extent possible given the intake of the Disclosure Unit, staffing levels, and 

competing priorities of referral cases. Given Disclosure Unit staffing and intake levels, maintained Disclosure 

Unit docket so that no case was more than 6 months old and there were no more than 100 cases on the docket, 

excluding those referred for investigation. 

FY 2004 Results - Target Implemented modifications designed in FY 2002 to the disclosure case priority report in 

the case tracking system to include number of cases in each priority category. 100.25/person/year or between 9-

10 cases per staff attorney per month (based on a work year, not calendar year): Continued to implement case 

priority policy. Assigned staff to monitor on quarterly basis whether appropriate progress is being made to meet 

productivity targets. This is currently under review. 

FY 2003 Results - Priority system proved effective in tracking cases, but high intake and lack of adequate staff 

resources prevented setting realistic backlog reduction targets in any individual category. 
FY 2005 Performance Accountability Report 31

FY 2002 Results - Draft Disclosure Manual includes written standards and procedures for disclosure handling by 

priority, formalizing and improving procedures used and priorities applied by unit personnel. Implemented and 

continued to test effectiveness of priority case tracking system. 

ANNUAL RESULTS: STRATEGIC GOAL 3 (WHISTLEBLOWER DISCLOSURES 

To fulfill congressional intent that OSC promote the public interest in the disclosure of violations of law, rule 

or regulation, gross waste of funds, gross mismanagement, abuse of authority, or substantial and specific 

dangers to the public health and safety, by serving as a secure channel for federal employees, former 

employees and applicants (“whistleblowers”) to blow the whistle in accordance with 5 U.S.C. § 1213. 

FY 2005 Performance Goals - 3. Disclosure manual. Continue to revise and update Disclosure Manual to 

include new policies and procedures. 

FY 2005 Targets – Make sure changes are made to disclosure manual. 

FY 2005 Results - Updated SOP portion of Disclosure manual and added new definition of “substantial 

likelihood.” 

FY 2004 Results - This is on hold pending backlog reduction process and reassessment of DU procedures. 

FY 2003 Results -Disclosure Unit training manual, substantive memoranda, and sample correspondence placed on 

shared network drive. 

FY 2002 Results - Completed initial draft of Disclosure Manual, updating and adding new policies and 

procedures including case priority system and including criteria for referral of matters from CEU to disclosure. 

ANNUAL RESULTS: STRATEGIC GOAL 3 (WHISTLEBLOWER DISCLOSURES 

To fulfill congressional intent that OSC promote the public interest in the disclosure of violations of law, rule 

or regulation, gross waste of funds, gross mismanagement, abuse of authority, or substantial and specific 

dangers to the public health and safety, by serving as a secure channel for federal employees, former 

employees and applicants (“whistleblowers”) to blow the whistle in accordance with 5 U.S.C. § 1213. 

FY 2005 Performance Goals - 5. Education of Federal Agency Staff. Assess effectiveness of education initiative 

in FY 02 and FY 03 by anecdotal evaluation of interactions with agency OIG and OGC staffs by DU staff. 

Determine if training of staffs of additional agencies is warranted, or if turnover in agency staffs warrants 

retraining in some agencies. 

FY 2005 Targets – Ensure that educational efforts cover all those who request it. 

FY 2005 Results - Continued informal discussion with IG staff to explain OSC referral system in an effort to 

improve agency compliance with statutory deadline and improve report quality. Maintained informal discussions 

and outreach with staff of IG offices. Targeted specific agencies that would particularly benefit from such 

discussions. 

FY 2004 Results - Develop informational materials for use by agency OIG and OGC staffs on §1213, and place 

materials on the OSC web page. 

FY 2003 Results - Disseminated information during contacts with agencies and Offices of Inspector General on 

disclosure matters. 

FY 2002 Results - Information on agency investigation and reporting obligations under §1213 disseminated in 

training sessions/meetings with 20 (approx.) Offices of Inspector General on President’s Council on Integrity and 

Efficiency. 
FY 2005 Performance Accountability Report 32

ANNUAL RESULTS: STRATEGIC GOAL 3 (WHISTLEBLOWER DISCLOSURES 

To fulfill congressional intent that OSC promote the public interest in the disclosure of violations of law, rule 

or regulation, gross waste of funds, gross mismanagement, abuse of authority, or substantial and specific 

dangers to the public health and safety, by serving as a secure channel for federal employees, former 

employees and applicants (“whistleblowers”) to blow the whistle in accordance with 5 U.S.C. § 1213. 

FY 2005 Performance Goals - 6. Agency deadlines. Continue to track agency deadlines through automated 

notification system. Evaluate effectiveness of automated notification system in improving agency compliance with 

DU deadlines. 

FY 2005 Targets – Make sure all reports are written and submitted on time. 

FY 2005 Results - Implemented new operational procedure which required Special Counsel approval for any 

agency request for an extension after one extension has been granted. Implemented new reports memorandum to 

the President and Congress. 

FY 2004 Results - Modified automatic notification system for tracking agency reports. 

FY 2003 Results - Done. 

FY 2002 Results - Tested automatic system for tracking OSC actions when agencies fail to conduct investigation 

and report back to OSC within statutory time limits (modifications to increase systems effectiveness to be made 

based on test results). 

ANNUAL RESULTS: STRATEGIC GOAL 3 (WHISTLEBLOWER DISCLOSURES 

To fulfill congressional intent that OSC promote the public interest in the disclosure of violations of law, rule 

or regulation, gross waste of funds, gross mismanagement, abuse of authority, or substantial and specific 

dangers to the public health and safety, by serving as a secure channel for federal employees, former 

employees and applicants (“whistleblowers”) to blow the whistle in accordance with 5 U.S.C. § 1213. 

FY 2005 Performance Goals - 7. Publicize agency findings. Continue to adhere to policy of issuing press releases 

on a case-by-case basis when agency findings are transmitted to Congress and the President. 

FY 2005 Targets – Ensure agency findings are appropriately published. 

FY 2005 Results - Maintained policy. 

FY 2004 Results - Press releases at the discretion of the Special Counsel. No press releases on DU cases issued 

in FY 04. 

FY 2003 Results - Done. 

FY 2002 Results - Continued policy of issuing press releases on a case-by-case basis when agency findings are 

transmitted to the President and Congress. Basic list of interested groups and associations for receipt of press 

releases in use and expanded as needed based on press release topic. System to track frequency of media 

reporting of agency findings not completed due to lack of staff resources. 
FY 2005 Performance Accountability Report 33

GOAL 4: OUTREACH 
FY 2005 Performance Accountability Report 34

ANNUAL RESULTS: STRATEGIC GOAL 4 (OUTREACH) 

To raise government employees’ and managers’ awareness of their rights and responsibilities under 

chapters 12 and 23 of title 5. 

FY 2005 Performance Goals - 1. 2302(c) Certification Program. Continue implementation of agency 

certification program designed during FY 02. Using results from OPM survey and list of agencies participating in 

2302(c) program, develop strategy to encourage compliance with 5 U.S.C. § 2302(c) (congressionally mandated 

training requirement) among agencies that are not yet in compliance. Facilitate implementation of agency-wide 

education programs on Title 5, Chapters 12 and 23 rights and remedies. 

FY 2005 Targets – Certify at least fifteen additional agencies during FY 2005. 

FY 2005 Results - Continued to promote 2302(c) certification program among the Federal Community; the 

program has 47 agencies registered and 47 certified. Continued to have OPM include OSC-related questions in 

OPM’s FY 04 annual survey of federal employees. Assigned staff to monitor progress of agencies registered with 

program and to assist agencies in completing program. Reviewed progress and successes of this program and 

gave greater emphasis, to increase participation. Contracted with EEOC and the web-based GoLearn education 

project to train an estimated 50,000 federal executive employees on PPPs. Registered and certified all 19 of the 

subordinate organizations of the Department of Homeland Security. 

FY 2004 Results - Assigned Outreach director and staff attorney to monitor progress of agencies registered with 

program and assist agencies in completing program. Certified 9 agencies. (This goal was exceeded, 47 registered 

and 26 certified during FY 2004.) Solicited participation of new agencies by issuing invitations to at least 10 

unregistered agencies. Continued to have OPM include OSC-related questions in OPM’s FY 04 annual survey of 

federal employees. 

FY 2003 Results - Done in FY 2001. Certified 8 additional agencies under §2302(c) certification program. 

Registered 18 additional agencies for §2302(c) certification program participation. 

FY 2002 Results - Done in FY 2001. Designed and implemented § 2302(c) certification program, using OPM as 

pilot. Initiated contacts with 10 large agencies to introduce and solicit participation in § 2302(c) program. 4 

agencies certified under § 2302(c) program; 8 registered for program participation. 

ANNUAL RESULTS: STRATEGIC GOAL 4 (OUTREACH) 

To raise government employees’ and managers’ awareness of their rights and responsibilities under 

chapters 12 and 23 of title 5. 

FY 2005 Performance Goals - 3. Systemic Training. Continue policy of including systemic training as part of 

OSC’s corrective and disciplinary action settlements. 

FY 2005 Targets – Use training as part of corrective or disciplinary action settlements whenever appropriate. 

FY 2005 Results - Three cases of training were part of a larger settlement. Asked for systemic training on 50% 

of all agency settlement negotiations. 

FY 2004 Results - Developed and implemented guidelines with criteria for appropriate inclusion of systemic 

training in corrective action settlements, considering type of case, settlement terms, whether PPP is isolated 

incident, and other factors. Assigned staff to monitor corrective action settlements on a quarterly basis and report 

on whether guidelines are being appropriately complied with. Assign staff to monitor corrective action 

settlements on a quarterly basis and report on whether guidelines were appropriately complied with when 

corrective action settlements were obtained. 

FY 2003 Results - 11 corrective actions included agency agreement to train employees on rights and remedies 

enforced by OSC. 

FY 2002 Results - 40 corrective actions included agency agreement to train employees on rights and remedies 

enforced by OSC. 
FY 2005 Performance Accountability Report 35

ANNUAL RESULTS: STRATEGIC GOAL 4 (OUTREACH) 

To raise government employees’ and managers’ awareness of their rights and responsibilities under 

chapters 12 and 23 of title 5. 

FY 2005 Performance Goals - 2 and 4. Education/Training Materials. Continue to maintain and enhance training 

and education materials for use by OSC, employing agencies, and other trainers. Continue to publicize the use of 

OPM Computer-Based Training (CBT) program. 

FY 2005 Targets – Make sure training materials are up-to-date. 

FY 2005 Results - Drafted and disbursed materials to better educate federal agencies regarding the rights of 

service members under USERRA. 

FY 2004 Results - Cooperated with OPM to implement CBT program if OPM has program available in FY 2004. 

Publicized the use of OPM CBT program to agencies as part of the 2302(c) Certification Program if available. 

Created link to OPM CBT module from OSC website if available. Continued to develop training materials for a 

few agencies where OSC has limited jurisdiction. Post training materials on OSC website. Continued to review 

and enhance website contents. Continued to design training materials for agencies where OSC has limited 

jurisdiction and post on OSC’s website. 

FY 2003 Results - Hatch Act Unit developed and published (on OSC web site) government-wide guidance on use 

of e-mail use and political activity. Hatch Act unit created PowerPoint presentation for use in training state and 

local government employees. Revised and updated Web site on continuing basis. Web site recorded 453,623 

user sessions and 8,067,166 successful hits. 

FY 2002 Results - Issued: (a) new “Whistleblower Retaliation” poster; (b) new “Hatch Act for State and Local 

Employees” fact sheet; and (c) § 2302(c) Certification Program brochure. Assisted OPM with ongoing 

development of web-based training on § 2302(c). 

ANNUAL RESULTS: STRATEGIC GOAL 4 (OUTREACH) 

To raise government employees’ and managers’ awareness of their rights and responsibilities under 

chapters 12 and 23 of title 5. 

FY 2005 Performance Goals - 2 and 5. Outreach/Training. Continue to convene or participate in forums for 

practitioners and agency representatives, in conjunction with other federal agencies, unions, federal management 

associations, and private training sources to enhance awareness of employee rights and responsibilities. 

Systematically collect data on effectiveness of forums by emphasizing the importance of participants’ completion 

of evaluation forms. Evaluate skills of presenters and provide training as indicated. 

FY 2005 Targets – Provide requested training or materials to any interested outside agencies who request them. 

FY 2005 Results - Implemented USERRA outreach, using a detailed power point presentation to educate federal 

agencies on the rights of service members. Conducted outreach events (34 conducted to date). 

FY 2004 Results - OSC staff spoke or participated in 81 outreach events. Conducted formal analysis of 

evaluation forms and develop recommendations for improvement of forms and presentations, as indicated. 

Continued to provide raining by OSC employees when requested by agencies or agency components, when budget 

and other program activities allow. 

FY 2003 Results - Provided OSC speakers for 72 events, including widely attended events such as the Judge 

Advocate General Annual Conference, the Office of Government Ethics Regional Symposium, the Federal 

Dispute Resolution Conference, and the new Inspectors General orientation. Evaluation data collected prior to 

departure of Outreach Director in the summer of 2003. 

FY 2002 Results - Provided OSC speakers for 103 presentations at 95 events. Speaker evaluations reviewed and 

recommendations implemented as needed. 
FY 2005 Performance Accountability Report 36

ANNUAL RESULTS: STRATEGIC GOAL 4 (OUTREACH) 

To raise government employees’ and managers’ awareness of their rights and responsibilities under 

chapters 12 and 23 of title 5. 

FY 2005 Performance Goals - 6. Press Releases. Issue press releases when OSC obtains stays, corrective or 

disciplinary actions, through settlements or litigation; files a complaint before the MSPB in a significant PPP or 

Hatch Act matter; transmits a disclosure report to Congress and the President; or in other situations in which 

issuance of a press release would further OSC’s mission. 

FY 2005 Targets – Make sure press releases are sent out in all appropriate cases. 

FY 2005 Results - FY 05: Continued to issue press releases consistent with Agency policies. 

FY 2004 Results - Issued 19 press releases 

FY 2003 Results - 24 press releases on significant case and other developments (e.g., case settlements, litigation 

outcomes, and other OSC developments) issued and posted on agency Web site. 

FY 2002 Results - 30 press releases issued. 
FY 2005 Performance Accountability Report 37

Goal 5: Human Resources 
FY 2005 Performance Accountability Report 38

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 1. Information and Feedback. Continue to include information to new employees 

in orientation packet. Continue post-hire follow-up with new employees. Continue to conduct exit interviews, 

using standard form, to elicit information from departing employees about their experiences with OSC, including 

suggestions for enhancing OSC’s operations and internal policies, with emphasis on feedback on the unit from 

which they are separating. Continue to summarize exit interview responses and provide feedback to Special 

Counsel and Deputy Special Counsel. 

FY 2005 Targets – Make sure new employees receive all appropriate information. 

FY 2005 Results - Continued standardized methods of feedback, but also implemented an Employee Advisory 

Committee, whereby elected non-supervisory employees gave feedback and received information directly in 

monthly sessions with the Special Counsel. 

FY 2004 Results - Procedure implemented to get feedback from new employees 4-months after their initial 

appointment. 

FY 2003 Results - Exit interview process (questionnaire provided to all separating employees) continued. 

Feedback provided to Special Counsel and Deputy Special Counsel. 

FY 2002 Results - Continued to provide information to new employees and continued to conduct exit interviews. 

Feedback was provided to Special Counsel and Deputy Special Counsel. 

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 2. Awards. Continue to use awards and employee recognition policy to provide 

greater flexibility for rewarding performance and special acts/service. Review awards program requirements to 

determine how documentation may be streamlined. 

FY 2005 Targets – Ensure awards are considered on a regular basis. 

FY 2005 Results - Encouraged use of OSC’s flexible awards program, especially for adequate motivation of top 

employees. 

FY 2004 Results - Awards policy reviewed following FY 03 and it was determined that there was inadequate 

funding budgeted to allow managers the flexibility to fully implement the award program and the type of awards 

that are outlined in our policy; e.g. on-the-spot cash awards, special act awards, etc. OSC needs to request and 

budget for additional funds for awards in FY 05. 

FY 2003 Results - Employee recognition chapter of agency personnel manual revised and to be implemented in 

FY 2004 (to include provision reducing documentation required to support awards). 

FY 2002 Results - Initiated re-draft of revised incentive awards and employee recognition policy to add new 

flexibilities. 
FY 2005 Performance Accountability Report 39

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 3. Recruitment. Enhance hiring and retention strategies by providing information 

on employee benefits such as retention bonuses, recruitment bonuses, relocation allowances, and tuition loan 

reimbursement. Encourage and publicize work-family initiatives. Develop automated databases for distributing 

vacancy announcements to enhance the diversity of OSC’s workforce. Consider feasibility of offering recruitment 

incentives to current employees. 

FY 2005 Targets – Fill open positions in a timely manner, up to maximum headcount approved by Congress and 

supportable by agency funding. 

FY 2005 Results - Agency retention, recruitment bonus, and relocation allowance programs finalized, but subject 

to OPM rules. Conducted recruitment at local law schools to fill legal intern positions. The goal was to train 

these individuals for placement in permanent attorney positions following graduation from law school and receipt 

of bar membership. Unanimous praise from agency career management staff about quality & professionalism of 

the 05 intern group. Inaugurated Student Loan Reimbursement / Retention program. Began using as a marketing 

tool. It made the difference in at least two job offers being accepted. Successfully recruited disabled veteran. 

FY 2004 Results - Drafted a Student Loan Repayment Program policy. Conducted a survey of current employees 

for the Student Loan Repayment Program to determine the level of interest. 

FY 2003 Results - Retention and recruitment bonuses and tuition loan reimbursement policies developed and 

under legal review (implementation planned in FY 2004). Continued targeted recruitment of law clerks/legal 

interns. Several law clerks converted to permanent status as attorneys after passing the bar.) Flexible workplace 

policy implemented as pilot program (organizational impact to be assessed in FY 2004). Continued use of 

comprehensive recruitment mailing list data base developed in FY 2001. 

FY 2002 Results - Developed polices for flexible workplace program, retention and recruitment bonuses, 

relocation allowance, and student loan repayment program. Presented information at job fairs and local colleges 

and universities to recruit for entry-level positions. Reviewed recruitment procedures for attorneys and other 

positions in the excepted service to determine how process can be streamlined. 

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 4. Retain Workforce. Continue to make work environment more challenging and 

rewarding. Increase number of upward mobility/trainee positions. Implement recommendations from FY 03 

survey to make work more challenging and rewarding for program staff. Identify developmental and careerenhancing assignments and devise method for distributing them equitably. 

FY 2005 Targets – Find ways to enhance desirability of work environment. 

FY 2005 Results - : Qualified additional OSC personnel for higher security clearances. Designated a Continuity 

of Operations plan and Officer. Implemented an Occupant Emergency Plan and a Shelter in Place plan. 

Established and filled three entry level program positions using upward mobility program, career intern program, 

or outstanding scholar program. (an increase of 300% over 04). Inaugurated Student Loan Reimbursement / 

Retention program. 14 employees signed up, agreeing to stay with the agency for 3 years. Performed Security 

Review (IT Security, Physical Security, and SCIF plan development) with expert security contractor. 
FY 2005 Performance Accountability Report 40

FY 2004 Results - Formal written training plans were developed for all trainees in upward mobility programs. 

One career Federal intern was hired. An employee/supervisor satisfaction survey was completed which included 

information on a telework pilot program. Overall response was very positive. 

FY 2003 Results -Appropriate training (formal and informal) provided to employees. All employees surveyed to 

obtain feedback on agency performance management system, including about actions affecting performance – 

e.g., fairness of rewards system, challenge of assignments given. (Most managers, supervisors, and employees 

who responded indicated that the system met their needs.) 

FY 2002 Results - Provided career development and enhancement opportunities for staff by delegating 

opportunities to participate in agency planning process, enhancing institutional knowledge and capacity of career 

staff. Filled two upward mobility positions. Continued use of part-time appointments, employee/family friendly 

policies, alternative work schedules, awards and bonuses to retain qualified staff. Provided orientation to new 

employees on agency mission and administrative activities. Continued to offer employees access to training and 

retirement planning classes through the Small Agency Council. Offered employees access to preventive health 

services. Surveyed IPD staff during evaluation of FY 2001 reorganization, and reported to management on 

results. Implemented staff suggestion box program, and reported to staff on suggestions implemented. 

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 5. Training conferences. Plan and hold at least two division team-building/training 

conferences. 

FY 2005 Targets – Hold at least two training conferences during the fiscal year. 

FY 2005 Results - : Qualified additional OSC personnel for higher security clearances. Designated a Continuity 

of Operations plan and Officer. Implemented an Occupant Emergency Plan and a Shelter in Place plan. 

Established and filled three entry level program positions using upward mobility program, career intern program, 

or outstanding scholar program. (an increase of 300% over 04). Inaugurated Student Loan Reimbursement / 

Retention program. 14 employees signed up, agreeing to stay with the agency for 3 years. Performed Security 

Review (IT Security, Physical Security, and SCIF plan development) with expert security contractor. 

FY 2004 Results - A senior staff conference was held at the Airlie Conference facility and an “all hands” 

conference was held at an off-site location with the new Special Counsel. The purpose of both was strategic 

planning, team building and leadership development. 

FY 2003 Results - OSC unable to conduct agency-wide training conference due to lack of funds. 

FY 2002 Results - Initiated planning for FY 2002 all-staff conference (deferred to FY 2003 for budgetary 

reasons). Held management/supervisory staff teambuilding/training conference. Held two division-wide training 

conferences. 
FY 2005 Performance Accountability Report 41

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 6. Competency acquisition. Continue to provide training to address needed 

competencies. Develop a training plan of the three occupations analyzed in FY 03 using information from 

analysis. 

FY 2005 Targets – Make sure adequate training is provided, especially to address any skills needed by new staff. 

FY 2005 Results - Formed Training Unit to further develop in house cross training for CEU and other units, to 

work on special agency-wide training initiatives, and to advise employees of topical training available in the 

region. Held cross training classes for new attorneys from all units, on how to process CEU cases dealing with 

Prohibited Personnel Practices. Provided MSPB training for all attorneys. 

FY 2004 Results - An outside consulting firm is being considered for conducting an audit of several agency 

positions to include the Human Resources specialist position. Audit to be conducted in FY 05. 

FY 2003 Results - After consultation with Complaints Examining Unit (CEU) head on competency-building for 

staff through agency-developed training, delivered course on Senior Executive Service staffing to new and current 

CEU staff. 

FY 2002 Results - Managers and supervisors identified individual competency needs and, as funds permitted, 

employees attended formal training to address identified needs. 

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 7. Consistency in policies and procedures. Continue to hold monthly meetings of 

senior program staff. NEW IN FY 2004 

FY 2005 Targets – Ensure internal guidelines are judiciously applied. 

FY 2005 Results - Continued to hold regular meetings of senior program staff. 

FY 2004 Results - A senior staff meeting is held each Tuesday to discuss significant agency activities, to include 

policy and procedural changes. 

FY 2003 Results – n/a 

FY 2002 Results - n/a 

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 8. ADR. Continue to communicate to OSC employees the benefits of ADR for 

internal conflict resolution. 

FY 2005 Targets - Train our employees on benefits of internal ADR. 

FY 2005 Results - Reorganized ADR program and structure in the agency. Sent at least 6 employees from 

various units to formal ADR training. 

FY 2004 Results - No ADR discussions held in FY 04. 
FY 2005 Performance Accountability Report 42

FY 2003 Results - Informed new employees about available ADR strategies (as well as EEO and administrative 

grievance procedures). 

FY 2002 Results - Placed ADR information on OSC Intranet, and continued to provide all new employees with 

information about ADR processes. (Also placed agency grievance procedure on the Intranet, and provided new 

employees with information about the process.) 

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 9. Identify leadership needs. Continually evaluate current inventory of leadership 

available and identify expected replacement needs for the future. Continue to gather data on projected retirements.

 . 

FY 2005 Targets – Identify timing of future leadership vacancies and begin succession planning and training. 

FY 2005 Results - Identified personnel and training needs for succession planning. 

FY 2004 Results - Full-time Equivalents (FTE) workload data provided to Special Counsel on a routine basis. 

Director of Human Resources retired on September 30, 2004. 

FY 2003 Results - Data gathered for workforce analysis to be conducted in FY 2004. 

FY 2002 Results - Continued to gather data on projected retirements and how vacancies would be filled. 

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 10. Executive and Supervisory Development Opportunities. Develop 

managerial/supervisory training; prepare development plans for current managers and supervisors and for 

employees interested in becoming first-time managers, supervisors or team leaders. Identify training courses for 

OSC employees who have expressed an interest in becoming first-time supervisors or team leaders. Develop 

criteria for participation in developmental program. . 

FY 2005 Targets – Give adequate managerial training. 

FY 2005 Results - Sent new managers to outside managerial training classes. After identifying future leaders, 

drafted a succession plan, and then began conducting training and appropriate mentoring. 

FY 2004 Results - No specific supervisory/training seminars held in FY 2004 because of budget constraints. 

FY 2003 Results - Handbook not developed due to other priorities. 

FY 2002 Results - Presented internal leadership development seminars for managers and supervisors (topic: 

occupational health and safety). Supervisory/Managerial Handbook deferred to FY 2003. 
FY 2005 Performance Accountability Report 43

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 11. Evaluate workforce. Continually evaluate deployment of workforce to 

maximize use of human capital. 

Evaluate efficiency of other OSC Divisions, soliciting suggestions from staff for ideas to improve quality and 

productivity. 

Re-survey IPD staffs and compare results with FY 02 survey. . 

FY 2005 Targets – Ensure all personnel adequately evaluated. 

FY 2005 Results - : Evaluated the strategic alignment of the agency and train employees to directly serve 

customer needs. Planned for changes in personnel and agency organization, to better respond to customers being 

serviced by the field offices. Reorganized the agency, creating a Customer Service Unit, combining 3 

Investigations & Prosecution Divisions into 1, reorganizing the ADR function, and creating an additional field 

office in the area of the country that had no OSC presence. 

FY 2004 Results - An outside assessment team from Military Professional Resources, Inc. (MPRI) was tasked by 

the Special Counsel to conduct an independent organizational assessment of the agency during the period April – 

July 2004. The results were provided to the staff to review and evaluate for future implementation as part of the 

agency reorganization plan. 

FY 2003 Results – n/a 

FY 2002 Results - Conducted a survey of IPD staff as part of evaluation of reorganization, and prepared a written 

report analyzing the productivity and survey results. 

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 12. Manage Fiscal Resources. Continue to compete contracts for services among 

both private and federal sector providers. . 

FY 2005 Targets – Ensure finances are properly managed and internal controls are in place. 

FY 2005 Results - Competed several large contracts for services. Hired an 8A firm for contract services. 

FY 2004 Results - No cost comparison done for budgeting and accounting services in FY 04. (New Goal in 

FY2004). 

FY 2003 Results – n/a 

FY 2002 Results - n/a 
FY 2005 Performance Accountability Report 44

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 13. GPRA task assignment. Assign specific tasks identified in the annual plan to 

individuals and include tasks in individual performance standards; appraise performance on assignments. 

FY 2005 Targets – Make sure goals that have been set are met by staff. 

FY 2005 Results - Program Managers held meetings with staff to discuss how their performance plans are 

integrated with the agency’s strategic and annual plans. Directive to staff outlined agency goals and progress 

made. 

FY 2004 Results – n/a 

FY 2003 Results – n/a 

FY 2002 Results - n/a 

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 14. Communicate Plan to Staff. Continue providing copies of the strategic and 

annual plans to all staff and to new employees. Continue to hold meetings with staff to communicate the goals and 

objectives in the plans. 

FY 2005 Targets – Make sure copies of plans are distributed or available. 

FY 2005 Results - Implemented plans for including agency components in planning, through regular Senior Staff 

meetings and off-site Senior Staff meetings. 

FY 2004 Results - A senior staff conference was held at the Airlie Conference facility and an “all hands” 

conference was held at an off-site location with the new Special Counsel. The purpose of both was strategic 

planning, team building and leadership development. 

FY 2003 Results – n/a 

FY 2002 Results - n/a 

ANNUAL RESULTS: STRATEGIC GOAL 5 (HUMAN RESOURCES) 

To maintain a highly skilled, well-trained, customer-oriented workforce to carry out the agency’s mission. 

FY 2005 Performance Goals - 15. Coordinate and monitor implementation. Continue practice of assigning 

responsibility for planning and monitoring performance under plan. Evaluate effectiveness of strategy by 

assessing completion of tasks. . 

FY 2005 Targets – Make sure each section is involved in goal-setting and monitoring progress in reaching targets. 
FY 2005 Performance Accountability Report 45

FY 2005 Results - Continued to assign responsibility for monitoring implementation of annual goals on a regular 

basis to program staff. Report progress in attainment of annual goals on regular basis to Special Counsel or 

designee. 

FY 2004 Results – n/a 

FY 2003 Results – n/a 

FY 2002 Results - n/a 
FY 2005 Performance Accountability Report 46

GOAL 6: INFORMATION TECHNOLOGY 
FY 2005 Performance Accountability Report 47

ANNUAL RESULTS: STRATEGIC GOAL 6 (INFORMATION TECHNOLOGY) 

To integrate current information technology into OSC business processes, in order to improve 

organizational performance and to comply with statutory mandates. 

FY 2005 Performance Goals - 1. Continue to upgrade hardware and software as needed. Expand the use of 

video conferencing to improve scope of access and reduce costs . 

FY 2005 Targets – Make sure software and hardware does not become obsolete prior to life-cycle deadlines. 

FY 2005 Results - Phase 1 implementation of reduced document management system; procured basic software 

module; acquired training. As PCs reach the end of their life cycle, continued replacing with laptops and docking 

stations to support telecommuting 

FY 2004 Results - FY 2004: Hardware: As PCs reached the end of their life cycle, replaced with laptops and 

docking stations to support telecommuting. 

Software: Converted OSC 2000 applications to .Net. Migrated more than 50% of users to Windows XP. 

Procured additional software necessary to increase user capacity for telecommuting. Phone System: Converted to 

new phone/voice-mail system, with upgraded voice/data links. Document Management System: Developed plans, 

procured one server for it; benchmarked a document management system at DOJ. Personal Digital Assistant 

(PDA): Integrated PDA into the agency’s enterprise architecture. 

FY 2003 Results - Standardized on new flexible workstation architecture. Rolled out six pilot workstations based 

on the new architecture. Upgraded remote access server and procured additional laptops to support 

telecommuting. Replaced 50% of network printers. Procured high capacity tape backup drives to accommodate 

added storage capacity. Maintained 100% effective deployment rate on all equipment purchases. Achieved 100% 

system uptime for agency enterprise network. Maintained compliance with § 508 and government-wide security 

requirements. 

FY 2002 Results - Procured new file server. All PCs upgraded to Pentium III 800 MHz or better; upgraded email and database servers. Deployed H.320 and H.323 video conferencing system to improve communication 

with agency’s field offices and customers. Installation performed in-house, saving over $4300. Maintained close 

to 100% effective deployment rate on all equipment purchases. Achieved almost 100% system uptime for agency 

enterprise network; 100% uptime for all computer systems; and 99.85% uptime for internet server. Maintained 

compliance with § 508 and all government-wide security requirements. 

ANNUAL RESULTS: STRATEGIC GOAL 6 (INFORMATION TECHNOLOGY) 

To integrate current information technology into OSC business processes, in order to improve 

organizational performance and to comply with statutory mandates. 

FY 2005 Performance Goals - 2. OSC 2000/Case-Tracking Capability. ISB to ensure that OSC 2000 casetracking system has the capability to monitor and track data relevant to measure baselines, and progress towards 

meeting objectives. Continue to modify system to meet needs of program staff. Continue to convene bi-monthly 

meetings of OSC 2000 users group, to report progress and seek feedback from internal customers. Prepare a 

report on changes implemented by 7/30/04. Continue to maintain and update OSC web page and Intranet to 

ensure fast, efficient dissemination of OSC policies and procedures, both internally and externally, as appropriate.

 . 

FY 2005 Targets – Ensure all requirements collected are met within time frames set by agency management. 

FY 2005 Results - Developed interoperability with proposed document management system. Re-wrote 

instructions and posted on Intra-net. Provided training to users. 
FY 2005 Performance Accountability Report 48

FY 2004 Results - FY 2004: Convened task group including all program components to ensure litigation case 

tracking system can capture all program data. Determined how to make system more user-friendly. 

FY 2003 Results - Made over 100 enhancements to OSC 2000 case tracking system, including case priority code 

tracking and enhanced reporting programs. Integrated e-filing system with the case tracking system. Continued to 

convene bi-monthly meetings of OSC 2000 users group. Submitted report on changes accomplished. 

FY 2002 Results - Continued to convene bi-monthly meetings of OSC 2000 users group; submitted report of 

changes accomplished. Made almost 100 enhancements to OSC 2000 case tracking system including provisions to 

track case priority codes and enhance reporting programs. Developed litigation and FOIA tracking systems. 

ANNUAL RESULTS: STRATEGIC GOAL 6 (INFORMATION TECHNOLOGY) 

To integrate current information technology into OSC business processes, in order to improve 

organizational performance and to comply with statutory mandates. 

FY 2005 Performance Goals - 3. Electronic Filing. Continue to monitor and support implementation of electronic 

filing system. . 

FY 2005 Targets – Take steps to increase number of forms which can be electronically filed. 

FY 2005 Results - Enhanced capability of e-filing. 

FY 2004 Results - FY 2004: Monitored implementation of electronic filing application. 

FY 2003 Results - Developed Electronic Filing System implemented at start of FY 2004. Moved e-filing systems 

to a secured subnet. 

FY 2002 Results - Based on written plan, infrastructure for electronic filing of complaints and disclosures, FOIA 

requests and OSC customer surveys (procure servers; install application software) in place, with planned 

implementation by October 2003. 

ANNUAL RESULTS: STRATEGIC GOAL 6 (INFORMATION TECHNOLOGY) 

To integrate current information technology into OSC business processes, in order to improve 

organizational performance and to comply with statutory mandates. 

FY 2005 Performance Goals - 4. IT Security Study. Conduct annual information technology security and 

vulnerability assessment studies, in accordance with government-wide standards. . 

FY 2005 Targets – Ensure IT security is continually upgraded to address current security threats. 

FY 2005 Results - Conducted annual information technology security and vulnerability assessment studies, in 

accordance with government-wide standards. 

FY 2004 Results - Continued to monitor security strategies. . Secured telephone closet on the 3rd floor. 

FY 2003 Results - Implemented recommendations outlined in FY 2002 assessment report. 

FY 2002 Results - Completed external contractor’s independent review of IT security. 
FY 2005 Performance Accountability Report 49

Part IV Financial Section 
OFFICE OF SPECIAL COUNSEL 

Washington, D. C. 

INDEPENDENT AUDITOR’S REPORTS 

AND FINANCIAL STATEMENTS 

September 30, 2005 and 2004 
OFFICE OF SPECIAL COUNSEL 

INDEPENDENT AUDITOR’S REPORTS AND 

FINANCIAL STATEMENTS 

September 30, 2005 and 2004 

TABLE OF CONTENTS

PAGE 

Independent Auditor’s Report..........................................................................................................1 

Independent Auditor’s Report on Compliance with Laws and Regulations....................................3 

Independent Auditor’s Report on Internal Control..........................................................................5 

Financial Statements ........................................................................................................................7 

Required Supplementary Information............................................................................................22 
A1

Offices in 13 states and Washington, DC 1 h

Independent Auditor’s Report

To the Office of Special Counsel 

We have audited the accompanying balance sheets of the Office of Special Counsel (OSC) as of 

September 30, 2005 and 2004, and the related statements of net cost, changes in net position, 

budgetary resources, and statement of financing for the years then ended (collectively the 

financial statements). These financial statements are the responsibility of OSC’s management. 

Our responsibility is to express an opinion on these financial statements based on our audits. 

We conducted our audits in accordance with auditing standards generally accepted in the United 

States of America; the standards applicable to the financial audits contained in Government 

Auditing Standards, issued by the Comptroller General of the United States; and Office of 

Management and Budget (OMB) Bulletin No. 01-02, Audit Requirements for Federal Financial 

Statements. Those standards require that we plan and perform the audit to obtain reasonable 

assurance about whether the financial statements are free of material misstatement. An audit 

includes examining, on a test basis, evidence supporting the amounts and disclosures in the 

financial statements. An audit also includes assessing the accounting principles used and 

significant estimates made by management, as well as evaluating the overall financial statement 

presentation. We believe that our audits provide a reasonable basis for our opinion. 

In our opinion, the financial statements referred to above, present fairly, in all material respects, 

the financial position of OSC as of September 30, 2005 and 2004 and its net cost; changes in net 

position; budgetary resources; and reconciliation of net cost to budgetary resources for the years 

then ended in conformity with accounting principles generally accepted in the United States of 

America. 

In accordance with Government Auditing Standards, we have also issued our reports dated 

October 27, 2005 on our consideration of OSC’s internal control over financial reporting, and on 

our tests of OSC’s compliance with certain provisions of laws, regulations, contracts, grant 

agreements and other matters. The purpose of those reports is to describe the scope of our 

testing of internal control over financial reporting and compliance and the results of that testing, 

and not provide an opinion on the internal control over financial reporting or on compliance. 

Those reports are an integral part of our audits performed in accordance with Government 

Auditing Standards and should be considered in assessing the results of our audits. 
2

Our audits were made for the purpose of forming an opinion on the basic financial statements 

taken as a whole. The Management Discussion and Analysis and Trading Partner Information 

are not a required part of the basic financial statements but are supplementary information 

required by OMB Circular A-136, Financial Reporting Requirements. We have applied certain 

limited procedures to such information, which consisted principally of inquiries of OSC 

management regarding the methods of measurement and presentation of this supplementary 

information. However, we did not audit the informa

a1

tion and express no opinion on it. 

Calverton, Maryland 

October 27, 2005 
A1

Offices in 13 states and Washington, DC 3 h

Independent Auditor’s Report on Compliance with Laws and Regulations 

To the Office of Special Counsel 

We have audited the financial statements of the Office of Special Counsel (OSC), as of and for 

the year ended September 30, 2005 and have issued our report thereon dated October 27, 2005. 

We conducted our audit in accordance with auditing standards generally accepted in the United 

States of America; the standards applicable to financial audits contained in Government Auditing 

Standards, issued by the Comptroller General of the United States; and Office of Management 

and Budget (OMB) Bulletin No. 01-02, Audit Requirements for Federal Financial Statements. 

The management of OSC is responsible for complying with laws and regulations applicable to 

OSC. As part of obtaining reasonable assurance about whether OSC’s financial statements are 

free of material misstatement, we performed tests of its compliance with certain provisions of 

laws and regulations, noncompliance with which could have a direct and material affect on the 

determination of financial statement amounts and certain other laws and regulations specified in 

OMB Bulletin No. 01-02, including the requirements referred to in the Federal Financial 

Management Improvement Act (FFMIA) of 1996 (as codified in 31 U.S.C. 3512). We limited 

our tests of compliance to these provisions and we did not test compliance with all laws and 

regulations applicable to OSC. 

The results of our tests of compliance with laws and regulations described in the preceding 

paragraph, exclusive of FFMIA, disclosed no instances of noncompliance with laws and 

regulations that are required to be reported under Government Auditing Standards and OMB 

Bulletin No. 01-02. 

Under FFMIA, we are required to report whether OSC’s financial management systems 

substantially comply with the Federal financial management systems requirements, applicable 

Federal accounting standards, and the United States Government Standard General Ledger at the 

transaction level. To meet this requirement, we performed tests of compliance with FFMIA 

section 803(a) requirements. The results of our tests disclosed no instances in which OSC’s 

financial management systems did not substantially comply with the three requirements 

discussed in the preceding paragraph. 

Providing an opinion on compliance with certain provisions of laws and regulations was not an 

objective of our audit and, accordingly, we do not express such an opinion. 
4

This report is intended solely for the information and use of the management of OSC, the Bureau 

of Public Debt, OMB and Congress, and is not intended to be and should not be used by anyone 

other than these specified parties. 

a1

Calverton, Maryland 

October 27, 2005 
A1

Offices in 13 states and Washington, DC 5 h

Independent Auditor’s Report on Internal Control 

To the Office of Special Counsel 

We have audited the financial statements of the Office of Special Counsel (OSC), as of and for 

the year ended September 30, 2005, and have issued our report thereon dated October 27, 2005. 

We conducted our audit in accordance with auditing standards generally accepted in the United 

States of America; the standards applicable to the financial audits contained in Government 

Auditing Standards; issued by the Comptroller General of the United States; and, Office of 

Management and Budget (OMB) Bulletin No. 01-02, Audit Requirements for Federal Financial 

Statements. 

In planning and performing our audit, we considered OSC’s internal control over financial 

reporting by obtaining an understanding of OSC’s internal control, determined whether internal 

controls had been placed in operation, assessed control risk, and performed tests of controls in 

order to determine our auditing procedures for the purpose of expressing our opinion on the 

financial statements. We limited our internal control testing to those controls necessary to 

achieve the objectives described in OMB Bulletin No. 01-02. We did not test all internal 

controls relevant to operating objectives as broadly defined by the Federal Managers’ Financial 

Integrity Act (31 U.S.C. 3512), such as those controls relevant to ensuring efficient operations. 

The objective of our audit was not to provide assurance on internal control. Consequently, we do 

not provide an opinion on internal control. 

Our consideration of the internal control over financial reporting would not necessarily disclose 

all matters in the internal control over financial reporting that might be reportable conditions. 

Under standards issued by the American Institute of Certified Public Accountants, reportable 

conditions are matters coming to our attention relating to significant deficiencies in the design or 

operation of the internal control that, in our judgment, could adversely affect OSC’s ability to 

record, process, summarize, and report financial data consistent with the assertions by 

management in the financial statements. Material weaknesses are reportable conditions in which 

the design or operation of one or more of the internal control components does not reduce to a 

relatively low level the risk that misstatements caused by error or fraud in amounts that would be 

material in relation to the financial statements being audited may occur and not be detected 

within a timely period by employees in the normal course of performing their assigned functions. 

Because of inherent limitations in internal controls, misstatements, losses, or noncompliance may 

nevertheless occur and not be detected. We noted no matters involving the internal control and 

its operation that we consider to be material weaknesses as defined above. We did note certain 

matters involving internal control and its operation that we have reported to management of OSC 

in a separate letter dated October 27, 2005. 
6 

Finally, with respect to internal controls related to performance measures reported in OSC’s 

Management’s Discussion and Analysis, we obtained an understanding of the design of 

significant internal controls relating to the existence and completeness assertions, as required by 

OMB Bulletin No. 01-02. Our procedures were not designed to provide assurance on internal 

control over reported performance measures, and, accordingly, we do not provide an opinion on 

such controls. 

*************************************** 

This report is intended solely for the information and use of the management of OSC, the Bureau 

of Public Debt, OMB and Congress, and is not intended to be and should not be used by anyone 

other than these specified parties. 

a1

Calverton, Maryland 

October 27, 2005 
OFFICE OF SPECIAL COUNSEL 

FINANCIAL STATEMENTS 

September 30, 2005 and 2004 

 
7 

OFFICE OF SPECIAL COUNSEL 

FINANCIAL STATEMENTS 

September 30, 2005 and 2004 

TABLE OF CONTENTS

PAGE 

Balance Sheets .................................................................................................................................8 

Statements of Net Cost.....................................................................................................................9 

Statements of Changes in Net Position..........................................................................................10 

Statements of Budgetary Resources...............................................................................................11 

Statements of Financing.................................................................................................................12 

Notes to Financial Statements........................................................................................................13 

Required Supplementary Information............................................................................................22 

• Trading Partner Information ..............................................................................................23 

• Appendix A – Management Discussion and Analysis.......................................................24 
OFFICE OF SPECIAL COUNSEL 

BALANCE SHEETS 

September 30, 2005 and 2004 

The accompanying notes are an integral 

part of these financial statements. 

8 

2005 2004 

ASSETS 

Intragovernmental - Fund balance with Treasury (Note 2) $ 3,325,060 $ 1,939,552 

Accounts receivable 3,084 124 

Property and equipment, net (Note 3) 67,371 89,101 

Other - 2,020

$ 3,395,515 $ 2,030,797

TOTAL ASSETS 

LIABILITIES 

Intragovernmental liabilities (Note 4) $ 177,011 $ 123,838 

Accounts payable (Note 4) 158,788 89,527 

Other (Note 4) 1,021,919 1,203,133

 

Total liabilities 1,357,718 1,416,498

 

NET POSITION 

Unexpended appropriations 2,683,745 1,293,682 

Cumulative results of operations (645,948) (679,383) 

Total Net Position 2,037,797 614,299

 

TOTAL LIABILITIES AND NET POSITION $ 3,395,515 $ 2,030,797

 
OFFICE OF SPECIAL COUNSEL 

STATEMENTS OF NET COST 

Years Ended September 30, 2005 and 2004 

The accompanying notes are an integral 

part of these financial statements. 

9 

2005 2004 

 

PROGRAM COSTS 

Intragovernmental costs $ 4,017,863 $ 3,871,558 

Less intragovernmental earned revenue (184,272) - 

 3,833,591 3,871,558 

 

Costs with the public 10,686,050 9,779,046

 

Total Program Costs (Note 7) 14,519,641 13,650,604 

 

COSTS NOT ASSIGNED TO PROGRAMS - - 

 

NET COST OF OPERATIONS $ 14,519,641 $ 13,650,604
OFFICE OF SPECIAL COUNSEL 

STATEMENTS OF CHANGES IN NET POSITION 

Years Ended September 30, 2005 and 2004 

The accompanying notes are an integral 

part of these financial statements. 

10 

2005 2004 

Cumulative 

Results of 

Operations 

Unexpended 

Appropriations 

Cumulative 

Results of 

Operations 

Unexpended 

Appropriations 

 

BEGINNING BALANCES $ (679,383) $ 1,293,682 $ (589,930) $ 708,964

 

BUDGETARY FINANCING SOURCES 

Appropriations received - 15,449,000 - 13,504,000 

Other adjustments (rescissions, etc.) - (209,580) - (127,197) 

Appropriations used 13,849,357 (13,849,357) 12,792,085 (12,792,085) 

 

OTHER FINANCING SOURCES 

Imputed financing from costs absorbed 

by others 703,719 - 769,066 - 

 

TOTAL FINANCING SOURCES 14,553,076 1,390,063 13,561,151 584,718

 

NET COST OF OPERATIONS 14,519,641 - 13,650,604 - 

 

ENDING BALANCES $ (645,948) $ 2,683,745 $ (679,383) $ 1,293,682
OFFICE OF SPECIAL COUNSEL 

STATEMENTS OF BUDGETARY RESOURCES 

Years Ended September 30, 2005 and 2004 

The accompanying notes are an integral 

part of these financial statements. 

11 

2005 2004 

 

BUDGETARY RESOURCES 

Budget authority - appropriations received $ 15,449,000 $ 13,504,000 

Unobligated balance - beginning of period 861,990 364,645 

Spending authority from offsetting collections - collected 184,272 - 

 

Subtotal 16,495,262 13,868,645 

 

Recoveries of prior year obligations 118,268 437,968 

Permanently not available: 

Cancellations of expired and no-year accounts (85,988) (47,523) 

Pursuant to public law (123,592) (79,674) 

 

Total Budgetary Resources $ 16,403,950 $ 14,179,416

 

STATUS OF BUDGETARY RESOURCES 

Obligations incurred – Direct – Category A $ - $ (21,123) 

Obligations incurred – Direct – Category B 15,437,418 13,338,548 

Obligations incurred – Reimbursable – Category B 184,272 - 

Unobligated balance apportioned 451,740 580,993 

Unobligated balances not available (Note 2) 330,520 280,998

 

Total Status of Budgetary Resources $ 16,403,950 $ 14,179,416

 

RELATIONSHIP OF OBLIGATIONS TO OUTLAYS 

Obligated balance, net – beginning of period $ 1,077,561 $ 735,426 

Obligated balance, net – end of period: 

Undelivered orders 1,901,485 388,263 

Accounts payable and accrued liabilities $ 641,314 $ 689,298

 

Outlays: 

Disbursements $ 14,038,184 $ 12,537,322 

Less offsetting receipts (184,272) - 

 

Net Outlays $ 13,853,912 $ 12,537,322
OFFICE OF SPECIAL COUNSEL 

STATEMENTS OF FINANCING 

Years Ended September 30, 2005 and 2004 

The accompanying notes are an integral 

part of these financial statements. 

12 

2005 2004 

 

RESOURCES USED TO FINANCE ACTIVITIES 

Budgetary Resources Obligated: 

Obligations incurred $ 15,621,690 $ 13,317,425 

Less: spending authority from offsetting collections 

and recoveries (302,540) (437,968) 

Obligations net of offsetting collections and recoveries 15,319,150 12,879,457 

Less offsetting receipts/collections - - 

Net obligations 15,319,150 12,879,457 

Other resources - imputed financing from costs absorbed by others 703,719 769,066

 

Total Resources Used to Finance Activities 16,022,869 13,648,523

 

RESOURCES USED TO FINANCE ITEMS NOT PART OF THE COST 

OF OPERATIONS 

 

Change in budgetary resources obligated for goods, services and benefit 

orders not yet received 1,511,202 45,964 

Resources that fund expenses recognized in prior periods 33,964 - 

Resources that finance the acquisition of assets - 128,199

Total Resources Used to Finance Items Not Part of the Net Cost of 

Operations 1,545,166 174,163

 

Total Resources Used to Finance the Net Cost of Operations 14,477,703 13,474,360

 

COMPONENTS OF NET COST OF OPERATIONS THAT WILL NOT 

REQUIRE OR GENERATE RESOURCES IN THE CURRENT 

PERIOD

 

Components Requiring or Generating Resources in Future Period: 

Increase in annual leave liability - 96,222 

Other 23,166 41,733

Total Components of Net Cost of Operations that Will Require or 

Generate Resources in Future Periods 23,166 137,955

 

Components Not Requiring or Generating Resources: 

Depreciation and amortization 21,730 39,098 

Other (2,958) (809) 

Total Components of Net Cost of Operations That Will Not 

Require or Generate Resources 18,772 38,289

 

Total Components of Net Cost of Operations That Will Not 

Require or General Resources in the Current Period 41,938 176,244

 

NET COST OF OPERATIONS $ 14,519,641 $ 13,650,604
OFFICE OF SPECIAL COUNSEL 

NOTES TO FINANCIAL STATEMENTS 

September 30, 2005 and 2004 

13 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity 

The Office of Special Counsel (OSC) is an independent federal investigative and prosecutorial 

agency. OSC’s authority comes from four federal statutes, the Civil Service Reform Act, the 

Whistleblower Protection Act, the Hatch Act and the Uniform Services Employment and 

Reemployment Rights Act. OSC’s primary mission is to safeguard the merit system by 

protecting federal employees and applicants from prohibited personnel practices. OSC receives, 

investigates, and prosecutes allegations of prohibited personnel practices, with an emphasis on 

protecting federal government whistleblowers. 

OSC is headed by the Special Counsel, who is appointed by the President, and confirmed by the 

Senate. As of September 30, 2005 the agency employs approximately 108 employees to carry 

out its government-wide responsibilities in the headquarters office in Washington, D.C., and in 

the Dallas, San Francisco, and Detroit field offices. 

OSC has rights and ownership of all assets reported in these financial statements. There are no 

non-entity assets. 

B. Basis of Presentation 

The financial statements have been prepared to report the financial position, net cost of 

operations, changes in net position, status and availability of budgetary resources, and the 

reconciliation between proprietary and budgetary accounts of the Office of Special Counsel 

(OSC). The statements are a requirement of the Chief Financial Officers Act of 1990, the 

Government Management Reform Act of 1994, the Accountability of Tax Dollars Act of 2002 

and the Office of Management and Budget (OMB) Circular A-136, Financial Reporting 

Requirements. They have been prepared from, and are fully supported by, the books and records 

of OSC in accordance with the hierarchy of accounting principles generally accepted in the 

United States of America, standards approved by the principals of the Federal Accounting 

Standards Advisory Board (FASAB), OMB Circular A-136, Financial Reporting Requirements

and OSC Accounting policies which are summarized in this note. These statements, with the 

exception of the Statement of Budgetary Resources, are different from financial management 

reports, which are also prepared pursuant to OMB directives that are used to monitor and control 

OSC’s use of budgetary resources. 

The statements consist of the Balance Sheet, Statement of Net Cost, Statement of Changes in Net 

Position, Statement of Budgetary Resources, and the Statement of Financing. In accordance with 

OMB Circular A-136, the financial statements and associated notes are presented on a 

comparative basis. 
OFFICE OF SPECIAL COUNSEL 

NOTES TO FINANCIAL STATEMENTS 

September 30, 2005 and 2004 

14 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

C. Basis of Accounting 

Transactions are recorded on both an accrual accounting basis and a budgetary basis. Under the 

accrual method, revenues are recognized when earned, and expenses are recognized when a 

liability is incurred, without regard to receipt or payment of cash. Budgetary accounting 

facilitates compliance with legal requirements on the use of federal funds. 

D. Revenues & Other Financing Sources 

Congress enacts annual and multi-year appropriations to be used, within statutory limits, for 

operating and capital expenditures. Additional amounts are obtained from service fees and 

reimbursements from other government entities and the public. 

Appropriations are recognized as a financing source when expended. Revenues from service 

fees associated with reimbursable agreements are recognized concurrently with the recognition 

of accrued expenditures for performing the services. 

We recognize as an imputed financing source the amount of accrued pension and post-retirement 

benefit expenses for current employees paid on our behalf by the Office of Personnel 

Management (OPM). 

E. Taxes 

OSC, as a Federal entity, is not subject to Federal, State, or local income taxes, and, accordingly, 

no provision for income taxes has been recorded in the accompanying financial statements. 

F. Fund Balance with Treasury 

The U.S. Treasury processes cash receipts and disbursements. Funds held at the Treasury are 

available to pay agency liabilities. OSC does not maintain cash in commercial bank accounts or 

foreign currency balances. 

G. Accounts Receivable 

Accounts receivable consists of amounts owed to OSC by other Federal agencies and the public. 

Amounts due from Federal agencies are considered fully collectible. Accounts receivable from 

the public include reimbursements from employees. An allowance for uncollectible accounts 

receivable from the public is established when either (1) based upon a review of outstanding 

accounts and the failure of all collection efforts, management determines that collection is 

unlikely to occur considering the debtor’s ability to pay, or (2) an account for which no 

allowance has been established is submitted to the Department of the Treasury for collection, 

which takes place when it becomes 180 days delinquent. 
OFFICE OF SPECIAL COUNSEL 

NOTES TO FINANCIAL STATEMENTS 

September 30, 2005 and 2004 

15 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

H. Property and Equipment, Net 

OSC’s property, plant and equipment is recorded at original acquisition cost and is depreciated 

using the straight-line method over the estimated useful life of the asset. Major alterations and 

renovations are capitalized, while maintenance and repair costs are charged to expense as 

incurred. OSC’s capitalization threshold is $50,000 for individual purchases. Applicable 

standard governmental guidelines regulate the disposal and convertibility of agency property, 

plant and equipment. The useful life classifications for capitalized assets are as follows: 

Description Useful Life (years)

Office Equipment 5 

Computer Hardware 5 

Computer Software 2 

I. Advances and Prepaid Charges 

Advance payments are generally prohibited by law. There are some exceptions, such as 

reimbursable agreements, subscriptions and payments to contractors and employees. Payments 

made in advance of the receipt of goods and services are recorded as advances or prepaid charges 

at the time of prepayment and recognized as expenses when the related goods and services are 

received. 

J. Liabilities 

Liabilities covered by budgetary or other resources are those liabilities for which Congress has 

appropriated funds or funding is otherwise available to pay amounts due. 

Liabilities not covered by budgetary or other resources represent amounts owed in excess of 

available Congressionally appropriated funds or other amounts. The liquidation of liabilities not 

covered by budgetary or other resources is dependent on future Congressional appropriations or 

other funding. Intragovernmental liabilities are claims against OSC by other Federal agencies. 

Liabilities not covered by budgetary resources on the Balance Sheet are equivalent to amounts 

reported as Components requiring or generating resources on the Statement of Financing. 

Additionally, the Government, acting in its sovereign capacity, can abrogate liabilities. 

K. Accounts Payable 

Accounts payable consists of amounts owed to other Federal agencies and the public. 
OFFICE OF SPECIAL COUNSEL 

NOTES TO FINANCIAL STATEMENTS 

September 30, 2005 and 2004 

16 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

L. Annual, Sick, and Other Leave 

Annual leave is accrued as it is earned, and the accrual is reduced as leave is taken. The balance 

in the accrued leave account is adjusted to reflect current pay rates. Liabilities associated with 

other types of vested leave, including compensatory, restored leave, and sick leave in certain 

circumstances, are accrued at year-end, based on latest pay rates and unused hours of leave. Sick 

leave is generally nonvested. Funding will be obtained from future financing sources to the 

extent that current or prior year appropriations are not available to fund annual and other types of 

vested leave earned but not taken. Nonvested leave is expensed when used. 

M. Accrued Workers’ Compensation 

A liability is recorded for actual and estimated future payments to be made for workers’ 

compensation pursuant to the Federal Employees’ Compensation Act (FECA). The actual costs 

incurred are reflected as a liability because OSC will reimburse the Department of Labor (DOL) 

two years after the actual payment of expenses. Future appropriations will be used for the 

reimbursement to DOL. The liability consists of (1) the net present value of estimated future 

payments calculated by the DOL, and (2) the unreimbursed cost paid by DOL for compensation 

to recipients under the FECA. 

N. Retirement Plans 

OSC employees participate in either the Civil Service Retirement System (CSRS) or the Federal 

Employees’ Retirement System (FERS). The employees who participate in CSRS are 

beneficiaries of OSC’s matching contribution, equal to seven percent of pay, distributed to their 

annuity account in the Civil Service Retirement and Disability Fund. 

FERS went into effect on January 1, 1987. FERS and Social Security automatically cover most 

employees hired after December 31, 1983. Employees hired prior to January 1, 1984 elected to 

join either FERS and Social Security, or remain in CSRS. FERS offers a savings plan to which 

OSC automatically contributes one percent of pay and matches any employee contribution up to 

an additional four percent of pay. For FERS participants, OSC also contributes the employer’s 

matching share of Social Security. 

FERS employees and certain CSRS reinstatement employees are eligible to participate in the 

Social Security program after retirement. In these instances, OSC remits the employer’s share of 

the required contribution. 

OSC recognizes the imputed cost of pension and other retirement benefits during the employees’ 

active years of service. OPM actuaries determine pension cost factors by calculating the value of 

pension benefits expected to be paid in the future and communicates these factors to OSC for 
OFFICE OF SPECIAL COUNSEL 

NOTES TO FINANCIAL STATEMENTS 

September 30, 2005 and 2004 

17 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

current period expense reporting. OPM also provides information regarding the full cost of 

health and life insurance benefits. OSC recognized the offsetting revenue as imputed financing 

sources to the extent these expenses will be paid by OPM. 

OSC does not report on its financial statements information pertaining to the retirement plans 

covering its employees. Reporting amounts such as plan assets, accumulated plan benefits, and 

related unfunded liabilities, if any, is the responsibility of the OPM. 

O. Use of Estimates 

Management has made certain estimates and assumptions when reporting assets, liabilities, 

revenue, and expenses, and in the note disclosures. Actual results could differ from these 

estimates. Significant estimates include year-end accruals of accounts payable. 

P. Imputed Costs/Financing Sources 

Federal Government entities often receive goods and services from other Federal Government 

entities without reimbursing the providing entity for all the related costs. In addition, Federal 

Government entities also incur costs that are paid in total or in part by other entities. An imputed 

financing source is recognized by the receiving entity for costs that are paid by other entities. 

OSC recognized imputed costs and financing sources in fiscal years 2005 and 2004 to the extent 

directed by OMB. 

Q. Contingencies 

Liabilities are deemed contingent when the existence or amount of the liability cannot be 

determined with certainty pending the outcome of future events. OSC recognizes contingent 

liabilities, in the accompanying balance sheet and statement of net cost, when it is both probable 

and can be reasonably estimated. OSC discloses contingent liabilities in the notes to the 

financial statements when the conditions for liability recognition are not met or when a loss from 

the outcome of future events is more than remote. In some cases, once losses are certain, 

payments may be made from the Judgment Fund maintained by the U.S. Treasury rather than 

from the amounts appropriated to OSC for agency operations. Payments from the Judgment 

Fund are recorded as an “Other Financing Source” when made. There are no contingencies that 

require disclosure. 

R. Expired Accounts and Cancelled Authority 

Unless otherwise specified by law, annual authority expires for incurring new obligations at the 

beginning of the subsequent fiscal year. The account in which the annual authority is placed is 

called the expired account. For five fiscal years, the expired account is available for expenditure 
OFFICE OF SPECIAL COUNSEL 

NOTES TO FINANCIAL STATEMENTS 

September 30, 2005 and 2004 

18 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

to liquidate valid obligations incurred during the unexpired period. Adjustments are allowed to 

increase or decrease valid obligations incurred during the unexpired period but not previously 

reported. At the end of the fifth expired year, the expired account is cancelled. 

NOTE 2 – FUND BALANCE WITH TREASURY

Fund balance with Treasury account balances as of September 30, 2005 and 2004 were: 

2005 2004 

 

Fund Balances: 

Appropriated Funds $ 3,325,060 $ 1,939,552

Status of Fund Balance with Treasury: 

Unobligated Balance 

 Available $ 451,740 $ 580,993 

 Unavailable 330,520 280,998 

Obligated Balance not yet Disbursed 2,542,800 1,077,561

Total $ 3,325,060 $ 1,939,552

Restricted unobligated fund balances represent the amount of appropriations for which the period 

of availability for obligation has expired. These balances are available for upward adjustments 

of obligations incurred only during the period for which the appropriation was available for 

obligation or for paying claims attributable to the appropriations. 

NOTE 3 – PROPERTY AND EQUIPMENT 

Property and equipment (office) account balances as of September 30, 2005 and 2004 were as 

follows: 

2005 2004 

 

Acquisition Cost $ 108,650 $ 108,650 

 

Less Accumulated Depreciation 41,279 19,549

 

Net Book Value $ 67,371 $ 89,101
OFFICE OF SPECIAL COUNSEL 

NOTES TO FINANCIAL STATEMENTS 

September 30, 2005 and 2004 

19 

NOTE 4 – LIABILITIES

The accrued liabilities for OSC are comprised of program expense accruals, payroll accruals, and 

annual leave (funded and unfunded) earned by employees. Program expense accruals represent 

expenses that were incurred prior to year-end but were not paid. Similarly, payroll accruals 

represent payroll expenses that were incurred prior to year-end but were not paid. 

September 30 

2005 2004 

Intragovernmental 

Accrued Liabilities $ 29,668 $ 37,267

Payroll Taxes Payable 71,697 36,309 

Post-Employment Benefits 10,747 8,528 

Unfunded FECA Liability 64,899 41,734 

Total Intragovernmental $ 177,011 $ 123,838 

 Accounts Payable $ 158,788 $ 89,527 

 Accrued Liabilities 16,355 133,753 

 Payroll Accrual 342,964 344,547

 Payroll Taxes Payable 11,097 39,367

 Unfunded Annual Leave 651,503 685,466

Total Other Liabilities 1,180,707 1,292,660

Total Liabilities $ 1,357,718 $ 1,416,498 

All liabilities are current liabilities. 

NOTE 5 – LEASES 

Operating Leases

OSC occupies office space under lease agreements in Washington, DC, Dallas, Oakland, and 

Detroit that are accounted for as operating leases. The DC lease term began on October 26, 1999 

and expires on October 25, 2009. The Dallas lease term began on December 9, 2002 and expires 

on December 8, 2007. The Oakland lease term began on March 1, 2000 and expired on February 

28, 2005. A new 60-month lease was entered into for the Oakland office commencing on 

February 1, 2006 and expiring on January 31, 2011. The Detroit lease began on March 20, 2005 

and will expire on March 19, 2010. Total rent expense for the fiscal years ended September 30, 

2005 and 2004 was $972,977 and $956,673, respectively. Lease payments are increased 

annually based on the adjustments for operating cost and real estate tax escalations. Below is a 

schedule of future payments for the terms of all the leases. 
OFFICE OF SPECIAL COUNSEL 

NOTES TO FINANCIAL STATEMENTS 

September 30, 2005 and 2004 

20 

NOTE 5 – LEASES (CONTINUED) 

Fiscal Year Totals 

2006 $ 1,048,220 

2007 1,077,022 

2008 1,022,105 

2009 1,024,962

2010 153,392

2011 43,779

Total Future Payments $ 4,369,480 

The operating lease amount does not include estimated payments for leases with annual renewal 

options. 

NOTE 6 – LIABILITIES NOT COVERED BY BUDGETARY RESOURCES 

The liabilities on OSC’s Balance Sheet as of September 30, 2005 and 2004, include liabilities not 

covered by budgetary resources, which are liabilities for which congressional action is needed 

before budgetary resources can be provided. Although future appropriations to fund these 

liabilities are likely and anticipated, it is not certain that appropriations will be enacted to fund 

these liabilities. There are no intragovernmental liabilities not covered by budgetary resources. 

Other liabilities not covered by budgetary resources consist entirely of unfunded leave. 

Unfunded leave balances are $651,503 and $685,466 as of September 30, 2005 and 2004, 

respectively. 

NOTE 7 – OPERATING/PROGRAM COSTS 

Costs by major budgetary object classification for the years ended September 30, 2005 and 2004 

are as follows: 

Budgetary Object Classifications 2005 2004 

Personnel and Benefits $ 12,262,714 $ 11,437,672 

Travel and Transportation 254,622 151,023 

Rents, Communication & Utilities 981,133 1,060,352 

Printing and Contractual Services 672,325 574,813 

Supplies and Materials 74,296 76,502 

Equipment 458,810 343,220 

Miscellaneous 13 7,022 

Total $ 14,703,913 $ 13,650,604 
OFFICE OF SPECIAL COUNSEL 

NOTES TO FINANCIAL STATEMENTS 

September 30, 2005 and 2004 

This information is an integral part of 

the accompanying financial statements. 

21 

NOTE 8 – CUSTODIAL ACTIVITY 

OSC is an administrative agency collecting for another entity or the General Fund. As a 

collecting entity, OSC measures revenue based on cash collection and refunds. This revenue is 

reported as custodial activity on the “Statement of Custodial Activity”. Account 5990 

“Collection for Others” is used to collect the cash. The type of cash collected is for fines, 

penalties and administrative fees. Collections and dispositions for fiscal years 2005 and 2004 

were $351 and $0, respectively. 

NOTE 9 – BUDGETARY RESOURCE COMPARISONS TO THE BUDGET OF THE 

UNITED STATES GOVERNMENT 

The 2007 Budget of the United States Government, with the Actual Column completed for fiscal 

year 2005, has not yet been published as of the date of these financial statements. The Budget is 

expected to be published and delivered to Congress in early February 2006. The 2006 Budget of 

the United States Government, with the Actual Column completed for 2004, has been reconciled. 

NOTE 10 – IMPUTED FINANCING SOURCES 

OSC recognizes as imputed financing the amount of accrued pension and post-retirement benefit 

expenses for current employees. The assets and liabilities associated with such benefits are the 

responsibility of the administering agency, the Office of Personnel Management (OPM). For the 

fiscal years ended September 30, 2005 and 2004, respectively, imputed financing from OPM 

were $703,719 and $769,066. 
22 

REQUIRED SUPPLEMENTARY INFORMATION (RSI)
OFFICE OF SPECIAL COUNSEL 

REQUIRED SUPPLEMENTARY INFORMATION 

TRADING PARTNER INFORMATION 

As of and For The Year Ended September 30, 2005 

23 

ASSETS LIABILITIES 

Agency 

Treasury 

Financial 

Mgmt. Dept. 

Code 

Fund 

Balance 

w/Treasury Advances Total 

Accounts 

Payable & 

Accrued 

Liabilities Payroll Taxes 

Library of Congress 3 $ - $ - $ - $ - $ - $ US Government Printing Office 4 - - - - - US Dept. of Agriculture 12 - - - - - Department of Labor 16 - - - 64,899 10,747 US Postal Service 18 - - - - - Department of Treasury 20 3,325,060 - 3,325,060 7,371 - Office of Personnel 

Management 24 - - - - 53,291 

General Services Administration 47 - - - 22,297 - Dept. of Homeland Security 70 - - - - - Dept. of Health & Human 

Services 75 - - - - - 

National Archives and Records 

Administration 88 - - - - - 

General Fund of the Treasury 99 - - - - 18,406 

Total $ 3,325,060 $ - $ 3,325,060 $ 94,567 $ 82,444 $