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EPA OIG Not Fully Compliant 

With Overtime Policies 

Report No. 15-B-0075 February 4, 2015

U.S. ENVIRONMENTAL PROTECTION AGENCY

OFFICE OF INSPECTOR GENERAL

Spending Taxpayer Dollars
Report Contributors: Jean Bloom

Angela Bennett

Abbreviations

AIGA Assistant Inspector General for Audit

CFR Code of Federal Regulations

EPA U.S. Environmental Protection Agency

IGEMS Inspector General Enterprise Management System

OA Office of Audit

OCOS Office of Chief of Staff

OIG Office of Inspector General

OMS Office of Mission Systems

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 15-B-0075

February 4, 2015

Why We Did This Review

On April 9, 2014, a member of 

the U.S. Senate requested the 

U.S. Environmental Protection

Agency’s (EPA’s) Office of 

Inspector General (OIG) to 

provide clarification on the 

process used to determine and 

track overtime compensation 

for EPA employees. The 

Senator requested that the 

OIG examine whether the 

agency: (1) properly 

documents how overtime is 

distributed and identify the 

process that is used, (2) has a 

specific breakdown of activities 

for employees who received 

overtime during the last 2 fiscal 

years, and (3) has an effective 

means to ensure employees 

are not compensated overtime

for travel. As part of our 

agency audit, we conducted an 

audit of the OIG’s compliance 

with applicable overtime 

policies.

This report addresses the 

following OIG goal:

 To be responsible 

stewards of taxpayer 

dollars.

Send all inquiries to our public 

affairs office at (202) 566-2391

or visit www.epa.gov/oig.

The full report is at:

www.epa.gov/oig/reports/2015/ 

20150204-15-B-0075.pdf

EPA OIG Not Fully Compliant With

Overtime Policies 

 What We Found

The OIG did not always use the EPA Form 

2560-7, Request for Authorization of 

Overtime Work, for overtime requests and 

authorization as required by EPA Pay 

Administration Manual 3155. Also, the OIG 

did not always comply with the OIG Policy 

323, Time and Attendance Reporting Policy,

pertaining to the use of the planned 

timesheet for the advance approval of 

overtime. This occurred because:

 Management did not provide oversight to ensure compliance with 

policies pertaining to the authorization of overtime. 

 OIG policies were not clear on the use of the EPA authorization 

form for overtime requests versus the use of the planned 

timesheets for advance approval of overtime.

 There was no oversight or emphasis by management to ensure 

planned timesheets were submitted and approved in advance.

Also, the OIG did not retain the EPA authorization forms supporting the

overtime requests.

As a result of the issues noted, the OIG may have incurred overtime 

charges without proper authorization, may have made after-the-fact 

approvals, and did not comply with records management requirements. 

 Recommendations and Planned Corrective Actions

We recommend that the Deputy Inspector General: (1) revise OIG policy 

to clarify EPA overtime authorization requirements and appropriate 

levels of approval and stipulate use of EPA Form 2560-7 for overtime 

requests; and (2) inform management and employees of the 

requirement to comply with EPA overtime policies, use EPA Form 

2560-7, obtain advance approval for scheduling of overtime hours in the 

planned timesheet, and retain supporting documents as required by OIG 

and EPA records management policies. The Deputy Inspector General 

agreed with our recommendations and provided corrective actions and 

planned completion dates to address all recommendations.

The OIG may have 

incurred overtime 

charges without 

proper authorization 

and advance approval, 

and did not maintain 

overtime authorization 

forms as required.

U.S. Environmental Protection EPA

Office of Inspector General

At a Glance
February 4, 2015

MEMORANDUM

SUBJECT: EPA OIG Not Fully Compliant With Overtime Policies 

Report No. 15-B-0075

FROM: Kevin Christensen, Assistant Inspector General

Office of Audit

TO: Charles Sheehan, Deputy Inspector General

At the request of a member of the U.S. Senate, we initiated an audit of the U.S. Environmental 

Protection Agency’s (EPA’s) internal controls pertaining to overtime pay. As part of our agency audit, 

we conducted an audit of the Office of Inspector General (OIG) to determine its compliance with 

applicable OIG and EPA policies covering the use of overtime. During the OIG audit, we identified 

issues that impact the OIG and require your immediate attention. We are reporting these issues to you 

separately. 

Action Required 

During the exit conference, you provided corrective actions that addressed the recommendations and 

planned completion dates. The OIG must demonstrate that the proposed corrective actions are resolved 

before the report can be closed. 

We will post this report to our website at http://www.epa.gov/oig.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C. 20460

OFFICE OF

INSPECTOR GENERAL
EPA OIG Not Fully Compliant With 15-B-0075

Overtime Policies 

Table of Contents

Purpose...................................................................................................................... 1

Background ............................................................................................................... 1

Overtime Costs Incurred by OIG......................................................................... 1

Requirements for Overtime Authorization and Approval ..................................... 1

Requirements for Records Management ............................................................ 3

Scope and Methodology........................................................................................... 3

Results of Review ..................................................................................................... 4

EPA’s Request for Authorization of Overtime Work Forms

 Not Always Prepared or Retained............................................................. 5

Overtime Schedule Not Always Approved in Advance........................................ 6

Recommendations .................................................................................................... 7

Exit Conference and Planned Corrective Action..................................................... 7

Status of Recommendations and Potential Monetary Benefits ............................. 8

Appendix

A EPA OIG Distribution ....................................................................................... 9
15-B-0075 1

Purpose

We conducted this audit to determine whether the U.S. Environmental Protection 

Agency (EPA) Office of Inspector General (OIG) complied with applicable OIG 

and EPA policies for the authorization and approval of overtime payments.

Background

On April 9, 2014, a member of the U.S. Senate requested the EPA OIG to provide 

clarification on the process the EPA uses to determine and track overtime 

compensation for employees. In particular, the Senator requested that the OIG 

examine whether the EPA:

 Properly documents how overtime is distributed and identify the process 

that is used.

 Has a specific breakdown of activities for employees who received 

overtime during the last 2 fiscal years.

 Has an effective means for ensuring employees are not compensated 

overtime for travel.

As part of our agency audit, we conducted an audit of the OIG to determine its 

compliance with applicable OIG and EPA policies covering the use of overtime.

Overtime Costs Incurred by OIG

For the period October 2011 through September 2013, the OIG incurred 2,560.50 

hours of overtime at an estimated cost of $168,736.95.

1 As shown in Table 1, the 

OIG’s Office of Audit (OA) Financial Audit Team incurred the majority of the 

overtime hours in connection with the annual audit of EPA’s financial statements.

In addition, the OIG’s Office of Mission Systems (OMS) incurred overtime 

charges in support of the Financial Audit Team.

Table 1: Overtime hours and costs incurred 

OIG office Overtime hours Overtime costs

OA 2,482.50 $163596.75

OMS 78.00 5140.20

Total 2,560.50 $168,736.95

Source: OIG-generated table.

Requirements for Overtime Authorization and Approval 

The OIG must adhere to applicable federal regulations and EPA and OIG policies 

related to the authorization and approval of overtime. 

 

1 For estimating purposes, costs are based on OA’s latest average billing rate of $65.90 per hour for fiscal year 2014.
15-B-0075 2

The Code of Federal Regulations (CFR), at 5 CFR § 550.111, provides guidance 

on the authorization of overtime pay. The regulation defines overtime as work in 

excess of 8 hours in a day or in excess of 40 hours in an administrative work

week. The regulation also provides that overtime must be officially ordered or 

approved only in writing by an officer or employee to whom this authority has 

been specifically delegated.

EPA Pay Administration Manual 3155, Chapter 4, “Overtime Pay and Compensatory 

Time” (May 17, 1990), addresses overtime pay. Section 5E provides that overtime 

must be officially authorized and approved in writing on EPA Form 2560-7, Request 

for Authorization of Overtime Work.

2 Section 6 provides agency officials, including 

the Inspector General, the authorization to approve overtime in accordance with 

governing laws, regulations, and EPA rules and procedures. This section also 

provides that this authority may be re-delegated to a level that will assure compliance 

with legal and regulatory requirements.

 

The OIG does not currently have an internal policy that addresses the rules and 

regulations of overtime pay. Prior OIG Policy 304, Overtime Pay, Compensatory 

Time, Administratively Uncontrollable Overtime, and Law Enforcement 

Availability Pay (April 24, 2007), was rescinded on June 25, 2013. The OIG 

rescinded the policy because the basic rules and regulations for overtime pay are 

covered in EPA Pay Administration Manual 3155 and do not require further 

interpretation by the OIG. This policy had stated that the OIG strives to achieve 

its mission in a manner that minimizes the need for employees to work overtime. 

However, when employees are required to work overtime, the OIG must follow 

the EPA’s rules and procedures regarding overtime pay and compensatory time.

OIG staff are also required to follow OIG Policy 323, OIG Time and Attendance 

Reporting Policy (July 7, 2011). This policy provides general guidance and 

procedures concerning the OIG’s time and attendance reporting process in the 

Inspector General Enterprise Management System (IGEMS) and in the EPA’s 

PeoplePlus payroll system. Section 2.1 of the policy, Roles and Responsibilities,

discusses requirements for the advance approval of overtime. The OIG uses the 

Time Planning and Timesheet modules within IGEMS to document the approval 

of overtime. Employees are required to use the planned timesheet in the Time 

Planning module to document the advance approval of the specific days and 

hours overtime will be worked. Supervisors are responsible for approving planned 

timesheets for the upcoming pay period no later than the last Friday of the current 

pay period. The actual timesheet in the Timesheet module records daily activities 

for submission to the supervisor every 2 weeks. The OIG uses both modules for 

internal reporting purposes only. 

The EPA’s PeoplePlus system is the OIG’s official payroll and time and

attendance system. Assistant Inspectors General are required to ensure that 

 

2 EPA Form 2560-7 is required for the authorization of overtime and compensatory time off in lieu of payment for 

overtime.
15-B-0075 3

employees, timekeepers and supervisors comply with the provisions of this 

policy, including maintaining any required supporting documentation in 

accordance with agency retention schedules.

Requirements for Records Management 

The OIG is responsible for maintaining all records pertaining to the approval of 

overtime in accordance with OIG records management policies. OIG Policy 420,

OIG Records Management Policy (February 28, 2014), says the OIG shall operate 

a records management program in its headquarters and regional offices consistent 

with federal regulations, as required by the Federal Records Act.

The OIG is also required to follow EPA records management policies related to 

time and attendance. EPA Resource Management Directive Systems 2540-08-P1, 

Payroll: Time and Attendance Reporting, dated September 5, 2014, requires

timekeepers to maintain supporting documentation for approved leave, overtime, 

compensatory time and other time and attendance reports in accordance with EPA 

records management requirements. EPA records management requirements 

applicable to time and attendance source records are covered in EPA Records 

Schedule 0300 and 1005. 

EPA Records Schedule 0300 (December 31, 2013) provides that the agency’s 

PeoplePlus time and attendance data may be closed and destroyed after an audit 

by the U.S. Government Accountability Office or when the data are 6 years old, 

whichever is sooner. EPA Records Schedule 1005 (December 31, 2013) pertains 

to financial management records and provides that time and attendance source 

records may be closed and destroyed after a U.S. Government Accountability 

Office audit or when the records are 6 years old, whichever is sooner. 

Scope and Methodology

We conducted our audit from May 13, 2014, through October 10, 2014, in 

accordance with the generally accepted government auditing standards issued by 

the Comptroller General of the United States. Those standards require that we 

plan and perform the audit to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our audit objectives. 

We believe that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. Based on the request from the 

Senator, we limited the scope of our audit to overtime charges3over a 2-year 

period. 

We held an entrance conference with the OIG’s Office of Chief of Staff (OCOS)

on May 13, 2014, in our headquarters in Washington, D.C. We made return site 

visits to headquarters the weeks of June 2, 2014, and July 7, 2014, to perform 

 

3 Overtime charges included some compensatory time that was converted to paid overtime. Our audit did not include 

unconverted compensatory time. 
15-B-0075 4

fieldwork. To determine the OIG’s compliance with applicable overtime policies, 

we performed the following steps:

 Met with representatives from OCOS to identify and discuss applicable 

OIG policies and procedures covering overtime.

 Met with the EPA’s Office of Human Resources to identify and discuss 

applicable EPA policies covering overtime.

 Reviewed overtime data obtained from IGEMS for the period of 

October 2011 through September 2013 to determine overtime charges 

categorized by OIG offices and employees. 

 Met with OA and OMS representatives to discuss their respective office 

procedures for authorizing and approving overtime.

 Obtained and reviewed the OIG’s Request for Authorization of Overtime 

Work forms and planned timesheets to determine whether overtime was 

authorized, approved in advance and justified.

Because travel associated with the OIG’s overtime work was minimal, we did not 

include travel compensation in the scope of the audit.

Results of Review

The OIG did not comply with certain overtime policies. Specifically, EPA Form 

2560-7 was not always prepared as required by EPA Pay Administration Manual 

3155. In addition, planned timesheets were not always submitted for advance 

approval of overtime as required by OIG Policy 323. This occurred because:

 Management did not provide oversight to ensure compliance with EPA 

policies pertaining to overtime, including the use of EPA Form 2560-7.

 OIG policies were not clear on the use of the EPA authorization form for 

overtime requests versus the use of the planned timesheets for advance 

approval of overtime.

 There was no oversight or emphasis by management to ensure that 

planned timesheets were submitted and approved in advance.

Also, the OIG did not retain the EPA authorization forms supporting overtime

requests as required by OIG and EPA records management policies. 

As a result of the issues noted, the OIG may have incurred overtime charges 

without proper authorization, may have made after-the-fact approvals, and did not 

comply with records management requirements. Without adequate controls and 

oversight, there is limited assurance that overtime charges are properly authorized

or approved in advance or that supporting records are appropriately retained.
15-B-0075 5

EPA’s Request for Authorization of Overtime Work Forms 

Not Always Prepared or Retained

Our analysis of the OIG’s compliance with the EPA policy for authorizing

overtime showed that the OIG did not always follow the policy in EPA Manual 

3155. EPA policy requires the completion of EPA Form 2560-7 for overtime

requests and authorization. Also, the OIG used two different processes for 

authorizing and approving overtime—the OA process used the authorization form 

but OA did not retain the forms as required, while the OMS process did not 

include the use of the authorization form. 

OA Process 

The overtime request process used by OA is a multistep process that 

occurs as needed each pay period. The process begins with the Project 

Manager submitting the EPA authorization form to the Director. The EPA 

authorization form requires, among other things: a justification or reason 

for the overtime request, the employee’s name, estimated hours and dates,

and the signature of the requester and approver.

The OIG Director signs the EPA Form 2560-7 as the requester and 

forwards the form to the Assistant Inspector General for Audit (AIGA) for 

approval. The AIGA, as the approver, maintains the EPA authorization 

forms.

IGEMS showed 158 actual timesheets with overtime charges incurred 

during the period October 2011 through September 2013. Our analysis of 

OA overtime charges (incurred on 149 of the 158 actual timesheets) 

showed that OA could not locate authorization forms to support the 

authorization of overtime incurred on 90 of the 149 actual timesheets.

Also, although OA provided copies of the forms to support authorization 

of overtime incurred on the remaining 59 actual timesheets, the forms

lacked signatures by the requester and approver. Consequently, we could 

not confirm whether the authorization forms were reviewed by the 

Director or approved by the AIGA. 

During the period of our review, the Deputy AIGA said the forms would 

have been submitted to, and approved by, the prior AIGA. Searches of the 

prior AIGA’s files and records by the Deputy AIGA were unsuccessful.

Based on evidence provided, the authorization process appears to have 

been followed but the signed forms were not retained as required by OIG 

and EPA records management policies.

The EPA’s records management schedule for time and attendance 

documentation provides for record closure and disposal after a

U.S. Government Accountability Office audit or when the records are 
15-B-0075 6

6 years old, whichever is sooner. Therefore, according to the schedule, the 

OIG should have retained the authorization forms for the period covered 

by our review (October 2011 through September 2013).

OMS Process

Our analysis of OMS overtime charges (incurred on nine of the 158 actual 

timesheets) showed that OMS did not prepare the authorization form. 

OMS said the authorization form is no longer required because advance 

approval of overtime is documented with the planned timesheets. OMS 

further stated that the electronic workflow process within the IGEMS 

Time Planning module can capture the same data that employees would 

have provided were they still using the EPA’s authorization form. Our 

analysis showed that the IGEMS Time Planning module may have the 

potential to capture the required information. However, the advance 

approval of overtime within IGEMS is generally at a nonsupervisory level

and by a person who is not knowledgeable about the budgetary impacts 

that need to be considered prior to authorizing overtime. In addition, OIG 

is still required to follow EPA Manual 3155, which mandates the 

completion of EPA Form 2560-7.

Related Causes

Inconsistencies between the processes used by OA and OMS to authorize 

and provide advance approval of overtime occurred because there is no 

OIG policy for overtime that requires the use of the EPA authorization 

form. While OIG Policy 323 discusses the use of planned timesheets for 

the advance approval of overtime, the policy is silent on the authorization 

of overtime and the use of the EPA authorization form. The EPA’s 

authorization form must be used to capture all applicable information 

needed to meet the EPA’s requirements for authorization (e.g.,

justification and approval at the appropriate level). In addition, oversight is 

needed by management to ensure compliance with EPA policies 

pertaining to overtime, including the use of EPA Form 2560-7.

Overtime Schedule Not Always Approved in Advance

As part of the audit, the OIG conducted analysis to determine whether employees 

had submitted planned timesheets for the advanced approval of scheduled

overtime hours. Our analysis showed that:

 For 12 of the 158 actual timesheets, employees did not submit planned 

timesheets for advance approval as required by OIG Policy 323. 

 For the remaining 146 actual timesheets, employees had submitted 

planned timesheets, but we could only confirm that 47 of the 146 planned 

timesheets had actually been approved prior to incurring overtime charges. 
15-B-0075 7

Because the history of a planned timesheet is limited to 1 year from the current 

pay period, we could not determine whether the remaining 99 planned timesheets 

had been approved prior to incurring overtime charges. OMS said it has the ability 

to retrieve the information from IGEMS, but it would take time to gather the 

history. As a result, we did not request the history for the 99 remaining planned 

timesheets. We consider the results of our analysis sufficient to support the 

findings and recommendations. 

Recommendations

We recommend that the Deputy Inspector General:

1. Revise OIG Policy 323, OIG Time and Attendance Reporting Policy, to

clarify EPA overtime authorization requirements and appropriate levels of 

approval, and to stipulate the requirement to use EPA Form 2560-7 to 

document overtime authorization.

2. Inform management and employees of the requirements to:

 Comply with EPA overtime policies, including the requirement to 

use EPA Form 2560-7 to document overtime authorization.

 Obtain advance approval of specific overtime hours in the IGEMS 

planned timesheet.

 Retain overtime documents in accordance with OIG and EPA 

records management policies.

Exit Conference and Planned Corrective Action

We conducted a preliminary exit conference with the Deputy Inspector General 

on July 28, 2014. On August 14, 2014, we issued finding outlines to the Deputy

Inspector General who, in turn, distributed the finding outlines to the OIG Senior 

Leadership Team.

We received numerous comments and suggestions from Senior Leadership Team

members during August 18–19, 2014. We reviewed the comments and 

suggestions and made changes to the findings as needed. We did not issue revised 

finding outlines. Instead, the results were incorporated into this final report. 

On November 18, 2014, we conducted a final exit conference with the Deputy 

Inspector General to discuss our recommendations and his proposed corrective 

actions. The Deputy Inspector General agreed with our recommendations and 

provided proposed corrective actions and completion dates for all 

recommendations. We agree with the proposed actions and consider the 

recommendations open with corrective actions ongoing.
15-B-0075 8

Status of Recommendations and 

Potential Monetary Benefits

RECOMMENDATIONS

POTENTIAL MONETARY 

BENEFITS (in $000s)

Rec. 

No.

Page 

No. Subject Status1 Action Official

Planned 

Completion 

Date

Claimed 

Amount

Agreed-To 

Amount

1 7 Revise OIG Policy 323, OIG Time and Attendance 

Reporting Policy, to clarify EPA overtime

authorization requirements and appropriate levels 

of approval, and to stipulate the requirement to use 

EPA Form 2560-7 to document overtime 

authorization.

O Deputy Inspector General 9/30/15

2 7 Inform management and employees of the 

requirements to:

 Comply with EPA overtime policies, including 

the requirement to use EPA Form 2560-7 to 

document overtime authorization.

 Obtain advance approval of specific overtime

hours in the IGEMS planned timesheet.

 Retain overtime documents in accordance 

with OIG and EPA records management 

policies.

O Deputy Inspector General 2/12/15

1 O = Recommendation is open with agreed-to corrective actions pending.

C = Recommendation is closed with all agreed-to actions completed.

U = Recommendation is unresolved with resolution efforts in progress.
15-B-0075 9

Appendix A

EPA OIG Distribution

Inspector General

Deputy Inspector General

Counsel to the Inspector General

Chief of Staff, Office of Inspector General

Assistant Inspector General for Investigations

Assistant Inspector General for Mission Systems

Assistant Inspector General for Program Evaluation

Deputy Assistant Inspector General for Congressional and Public Affairs