GAO 

United States Government Accountability Office

Report to Congressional Committees

HUMAN CAPITAL

Continued 

Opportunities Exist 

for FDA and OPM to 

Improve Oversight of 

Recruitment, 

Relocation, and 

Retention Incentives 

January 2010 

GAO-10-226 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

January 2010

HUMAN CAPITAL

Continued Opportunities Exist for FDA and OPM to 

Improve Oversight of Recruitment, Relocation, and 

Highlights of GAO-10-226, a report to Retention Incentives congressional committees 

The Food and Drug Administration 

(FDA) within the Department of 

Health and Human Services (HHS) 

has faced challenges in obtaining 

the workforce needed to support 

its responsibilities and similar to 

other agencies, has paid selected 

employees recruitment, relocation, 

and retention (3R) incentives. This 

report examines (1) the extent to 

which FDA is linking its use of 3R 

incentives to its strategic human 

capital approaches to address its 

current and emerging challenges; 

(2) the extent to which FDA's 3R 

incentives were awarded 

consistent with regulations and the 

internal controls FDA has in place 

to ensure proper disbursement of 

3R incentives; and (3) the steps the 

Office of Personnel Management 

(OPM) has taken to help ensure 

that agencies have effective 

oversight of their 3R incentive 

programs and how HHS is 

providing oversight. GAO analyzed 

a stratified sample of FDA’s 3R 

incentives files, 3R data provided 

by HHS, HHS’s 3R policy and FDA’s 

guidance, and interviewed HHS, 

FDA, and OPM senior officials. 

What GAO Recommends

GAO recommends that (1) FDA 

take several actions to improve its 

oversight of 3R incentives; (2) OPM 

require agencies to incorporate 

succession planning efforts into the 

decision process for awarding 

retention incentives; and (3) HHS 

revise its 3R incentive policy to 

address important OPM 

requirements. FDA and OPM 

agreed with the recommendations 

and HHS acknowledged the need to 

update its 3R incentive policy. 

Retention incentives encompass the majority of 3R incentives awarded to 

FDA employees in recent years (see table 1). 

Table 1: Number and Percentage of FDA 3R Incentives Awarded by Year 

Recruitment incentives Retention incentives Relocation incentives

Year Number Percentage Number Percentage Number Percentage

2007 3 0.4% 749 99% 8 1%

2008 366 35% 673 64% 10 1%

2009 93 15% 516 85% 0 0%

Source: GAO analysis of HHS data. 

Note: The 2009 data are of July 4, 2009; FDA had not awarded any relocation incentives in 2009. 

FDA’s employees in mission-critical occupations received the greatest number 

of 3R incentives from 2007 to 2009. However, without an updated strategic 

workforce plan or established agencywide indicators for tracking its use of 3R 

incentives, FDA cannot assess the impact that these incentives have on its 

overall human capital strategy. While FDA collects data on workforce 

indicators at the agency and center levels, it has not analyzed how 3R 

incentives are helping the agency achieve its recruitment and retention goals. 

On the basis of GAO’s review of a stratified sample of FDA’s 3R incentive files 

awarded from January 2007 through October 2008, GAO found that FDA 

maintained documentation which provided sufficient explanation to justify 

each award. However, several of the incentive files we reviewed lacked 

adherence to certain other requirements, such as prescribed contents of a 

service agreement, which in most instances may have resulted from a lack of 

documentation. To help ensure the proper awarding of 3R incentives, FDA has 

various internal controls in place, such as a centralized review and approval 

process for incentive requests. Over the past 3 years, FDA has made some 

changes to its internal controls, such as updating its guidance including the 

standard forms for 3R incentive requests. If effectively implemented, FDA’s 

revisions to its internal controls may help ensure that in the future 3R 

incentives are properly awarded and documentation exists to support the 

incentives. 

While both OPM and HHS provide oversight of 3R incentives through various 

mechanisms, including guidance and periodic evaluations and accountability 

reviews, there are opportunities for improvement. As a next step, OPM could 

provide guidance to all agencies on the importance of considering succession 

planning in the decision process for awarding retention incentives. While 

HHS’s 3R incentive policy generally addressed the requirements for 3R 

incentive plans as outlined in OPM’s regulations, there were several instances 

where the policy omitted or did not clearly address certain important 

View GAO-10-226 or key components. requirements, such as the conditions for terminating or reducing an incentive. 

For more information, contact Robert 

Goldenkoff at (202) 512-6806 or 

goldenkoffr@gao.gov. 
Page i GAO-10-226 

Contents 

Letter 1

Background 3

FDA Uses 3R Incentives to Recruit and Retain Mission-Critical 

Staff, but Lacks Agencywide Indicators for Tracking the 

Progress of 3R Incentives in Addressing Its Recruitment and 

Retention Goals 7

FDA Generally Awarded 3R Incentives Consistent with Law and 

OPM Regulations, but Adherence to Some Requirements Was 

Lacking and FDA Could Improve Its Internal Controls 15

OPM and HHS Provide Oversight of 3R Incentives, but 

Improvements Can Be Made 27

Conclusions 34

Recommendations for Executive Action 35

Agency Comments and Our Evaluation 36

Appendix I Objectives, Scope, and Methodology 38 

Appendix II Highlights of the Food and Drug Administration 3R 

Incentive File Review Results 42 

Appendix III Comments from the Department of Health and 

Human Services 45 

Appendix IV Comments from the Office of Personnel Management 49 

Appendix V GAO Contact and Staff Acknowledgments 51 

Tables 

Table 1: Number and Percentage of FDA 3R Incentives Awarded by 

Year 13

Table 2: FDA 3R Incentive Population Size and Number of Random 

Case Selections by Stratum 40

 FDA 3R Incentives 
Table 3: Examples of How FDA’s 3R Incentive Files Addressed 

Selected Requirements 42

Figures 

Figure 1: Average Percentage of FDA 3R Incentives Awarded by 

Top Mission-Critical Occupational Series from 2007 

through 2009 8

Figure 2: HHS and FDA 3R Incentives Awarded and FDA 

Percentage of HHS Total by Year 14

Figure 3: Factors for Justifying a 3R Incentive 16

Figure 4: FDA’s Revised Review and Approval Process for 3R 

Incentive Requests 20 

Abbreviations 

3R recruitment, relocation, and retention 

CPDF Central Personnel Data File 

ERB Executive Review Board 

FDA Food and Drug Administration 

GP GS pay plan that covers physicians and dentists paid 

 market pay 

GR GS pay plan that covers physicians and dentists covered by 

 the Performance Management and Recognition System 

 termination provisions paid market pay 

GS General Schedule 

HHS Department of Health and Human Services 

OPDIV operating division 

OPM U.S. Office of Personnel Management 

RHRC Rockville Human Resources Center 

SES Senior Executive Service 

SF 50 Standard Form 50 

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Page ii GAO-10-226 FDA 3R Incentives
Page 1 GAO-10-226 

 

United States Government Accountability Office

Washington, DC 20548 

 

January 22, 2010 

The Honorable Henry A. Waxman 

Chairman 

The Honorable John D. Dingell 

Chairman Emeritus 

The Honorable Joe L. Barton 

Ranking Member 

Committee on Energy and Commerce 

House of Representatives 

The Honorable Bart Stupak 

Chairman 

The Honorable Greg Walden 

Ranking Member 

Subcommittee on Oversight and Investigations 

Committee on Energy and Commerce 

House of Representatives 

The Food and Drug Administration (FDA) within the Department of 

Health and Human Services (HHS), has had difficulties carrying out its 

expanding mission in part because of challenges in obtaining the 

workforce needed to support its increased responsibilities. We have 

designated two areas of federal oversight under FDA—food safety and 

medical products—as high risk in 2007 and 2009, respectively, and 

reported on the significant challenges that continue to compromise the 

agency’s ability to protect Americans from unsafe food and ineffective 

drugs and medical products.1

FDA has announced plans that may help it address some of its resource 

challenges, such as a major, multiyear hiring initiative and an information 

technology modernization effort. Although these are positive steps, FDA 

still faces workforce challenges. For example, about 70 percent of FDA’s 

career employees onboard as of fiscal year 2008 will be eligible to retire by 

the end of fiscal year 2014, which may lead to gaps in institutional 

knowledge at all levels.2

 FDA will face high retirement eligibility rates with 

1

GAO, High-Risk Series: An Update, GAO-09-271 (Washington, D.C.: January 2009). 

2

Based on analysis of data from the U.S. Office of Personnel Management’s Central 

Personnel Data File for fiscal year 2008, which were the most recent data available during 

the time of our review. 

 FDA 3R Incentives 
 

career employees in certain mission-critical occupations, with about 63 

percent of mathematical statisticians and 73 percent of pharmacologists 

onboard as of fiscal year 2008 eligible to retire by the end of fiscal year 

2014. 

To help the federal government improve its competitiveness in recruiting 

and maintaining a high-quality workforce, the Federal Workforce 

Flexibility Act of 2004 provided federal agencies increased flexibilities to 

award recruitment, relocation, and retention (3R) incentives.3

Governmentwide, federal agencies awarded 3R incentives totaling more 

than $207 million in 2007 with retention incentives accounting for the 

majority of 3R incentive costs at $127 million.4

 In May 2009, the U.S. Office 

of Personnel Management (OPM) asked agencies to review their 3R 

incentive programs to ensure that current and future incentives are used 

only when necessary to support their mission and program needs, and are 

consistent with the criteria in law and regulations. As a next step, in July 

2009, OPM directed agencies to review and certify that 3R incentive plans 

and internal approval and monitoring procedures were consistent with 

regulations. 

In the last few years, FDA’s use of retention incentives has come under 

greater congressional scrutiny. Specific issues concerned the number and 

dollar amount of incentives being given to FDA managers and whether 

they met OPM regulatory requirements. At your request, this report 

examines (1) the extent to which FDA is linking its use of 3R incentives to 

its strategic human capital approaches to address its current and emerging 

challenges; (2) the extent to which FDA’s 3R incentives were awarded 

consistent with the law, regulations, and guidance and the internal 

controls FDA has in place to ensure proper disbursement of 3R incentives 

and encourage efficient use; and (3) the steps OPM has taken to help 

ensure that agencies including HHS have effective strategic oversight of 

their 3R incentive programs and how HHS is providing oversight of its 3R 

incentive program. 

 

3

Federal Workforce Flexibility Act of 2004, Pub. L. No. 108-411, 118 Stat. 2305 (Oct. 30, 

2004); 5 U.S.C. §§ 5753 and 5754. 

4

OPM, Recruitment, Relocation, and Retention Incentives Calendar Year 2007: Report to 

the Congress (September 2008). This report was the most recently available data on 

governmentwide use of 3R incentives at the time of our review. 

Page 2 GAO-10-226 FDA 3R Incentives
 

To meet our objectives, we used a data collection instrument to analyze a 

stratified sample of FDA’s files for 3R incentives awarded from January 1, 

2007, to October 31, 2008 by year and incentive type.5

 We randomly 

selected files for review from the 2007 and 2008 retention incentives and 

2008 recruitment incentives. For the 2007 and 2008 relocation incentives 

and 2007 recruitment incentives, we reviewed all of the files due to the 

small population size. For the randomly selected files, we weighted each 

incentive file so that our sample statistically represented the population. In 

addition, we analyzed data provided by HHS on FDA’s and the 

department’s use of 3R incentives for calendar years 2007 to 2009 (as of 

July 4) along various categories including type of incentive, pay plan, 

occupational series, and duty station; analyzed FDA data from OPM’s 

Central Personnel Data File (CPDF) for fiscal year 2008 to identify trends 

in FDA’s workforce, such as retirement eligibility by occupational series 

for career permanent employees; analyzed HHS’s 3R incentive policy to 

determine consistency with OPM’s regulatory requirements; and 

interviewed HHS, FDA, and OPM senior officials knowledgeable about 3R 

incentives. We checked the 3R incentive data provided by HHS for 

reasonableness and the presence of any obvious or potential errors in 

accuracy and completeness. We interviewed selected HHS officials 

knowledgeable about the data, and brought to the attention of these 

officials any concerns or discrepancies we found with the data for 

correcting or updating and further clarification. On the basis of these 

procedures, we believe the data provided by HHS are sufficiently reliable 

for use in the analyses presented in this report. (See app. I for a more 

detailed discussion of our objectives, scope, and methodology.) 

We conducted this performance audit from December 2008 through 

January 2010 in accordance with generally accepted government auditing 

standards. 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. 

3R incentives are among the human capital flexibilities intended to help 

federal agencies address human capital challenges and to build and 

maintain a high-performing workforce with essential skills and 

Background 

 

5

These were the most recent 3R incentive files available when we drew our sample. 

Page 3 GAO-10-226 FDA 3R Incentives
 

competencies. According to OPM, the intent of 3R incentives is to provide 

agencies with discretionary authority to use nonbase compensation to 

help recruit, relocate, and retain employees in difficult staffing situations. 

On the basis of OPM’s regulations for 3R incentives, employees eligible to 

receive these incentives include the following positions: General Schedule 

(GS), senior-level, scientific or professional, Senior Executive Service 

(SES), law enforcement, Executive Schedule or those whose pay is set at a 

rate equal to a rate for the Executive Schedule, prevailing rate positions 

(employment in a recognized trade or manual labor occupation), and 

employees in a category approved by OPM at the request of the head of an 

agency.6

 The regulations also prohibit certain employees from receiving 3R 

incentives including those who are in positions that are appointed by the 

President with or without Senate confirmation, noncareer SES members, 

agency heads or those expected to receive an appointment as an agency 

head, and employees in positions excepted from the competitive service 

by reason of their confidential, policy-determining, policy-making, or 

policy-advocating duties (i.e., Schedule C employees).7

At FDA, certain physicians and dentists appointed under title 38 of the 

United States Code8

 and Senior Biomedical Research Service employees 

appointed under 42 U.S.C. § 237 are also eligible for 3R incentives.9

 FDA 

employees appointed pursuant to 42 U.S.C. §§ 209(f) and 209(g) are not 

eligible to receive 3R incentives under the authority contained in title 5 of 

the United States Code. According to an HHS official, FDA’s authority to 

award incentive payments to these employees is derived from the 

appointment provisions themselves. Beginning in 2007, FDA began 

phasing out the use of retention incentives for employees paid under titles 

38 and 42. (See app. II for additional details on employee eligibility.) 

 

6

See, 5 U.S.C. 5753 (a), 5754(a) and 5 C.F.R. §§ 575.103, 575.203, 575.303 for covered 

employees. See http://www.opm.gov/oca/pay/HTML/3Rs_extensions.asp for the list of 

single-agency pay systems for which OPM has approved 3R incentive coverage. 

7

5 C.F.R. §§ 575.104, 575.204, 575.304. 

8

Pursuant to OPM’s authority under 5 U.S.C. § 5371, OPM delegated to HHS the authority to 

use certain title 38 personnel authorities for health care occupations within two pay plans. 

The GP pay plan covers GS physicians and dentists paid market pay under 38 U.S.C. § 

7431(c) and the GR pay plan covers physicians and dentists covered by the Performance 

Management and Recognition System termination provisions who are paid market pay 

under 38 U.S.C. § 7431(c). Employees under these pay plans are considered GS employees 

and therefore eligible for 3R incentives. 

9

At the request of HHS, OPM approved Senior Biomedical Research Service employees’ 

eligibility to receive 3R incentives in 1999. 

Page 4 GAO-10-226 FDA 3R Incentives
 

The Federal Employees Pay Comparability Act of 1990 first authorized 

OPM to allow federal agencies to give 3R incentives to employees under 

the following circumstances.10

• A recruitment incentive could be given to a new employee in a federal 

position and a relocation incentive to a current employee who had to 

move to accept a different federal position if it was determined that the 

agency would be likely to encounter difficulty filling the position in the 

absence of such an incentive. 

• A retention incentive could be given to a current employee if the unusually 

high or unique qualifications of the employee or a special need of the 

agency made retaining that employee essential, and it was determined that 

the employee would be likely to leave federal service without the 

incentive. 

The Federal Workforce Flexibility Act of 2004 revised prior 3R incentive 

authorities with the goal of increasing agencies’ flexibility in using 3R 

incentives. We and OPM had reported that 3R incentives were effective 

human capital management tools, but agencies were failing to use them 

extensively due to a variety of factors including limited funds and reduced 

hiring due to downsizing.11 The 2004 act increased the number of situations 

in which agencies may give 3R incentives; allowed for alternative methods 

of payments, such as installments or lump sum; and increased the 

potential size of the incentives. For example, individual retention 

incentives that were capped at 25 percent of the employee’s basic pay rate 

could be increased to up to 50 percent in cases of critical agency need 

with OPM’s approval. The act also required OPM to annually report to 

Congress to ensure the incentives were being used effectively. In 

December 2007, OPM issued final regulations on 3R incentives reflecting 

its technical modifications and corrections to and clarifications of the 

interim regulations issued in May 2005. Separately, in November 2007, 

OPM issued final regulations implementing an additional authority to 

agencies to pay a retention incentive to an employee who would be likely 

to leave for a different federal position before the closure or relocation of 

the employee’s office, activity, or organization. 

 

10See, Pub. L. No. 101-509, 104 Stat. 1389 (Nov. 5, 1990). This act amended the Federal Pay 

Comparability Act of 1970 and other acts relating to federal employment. 

11OPM, Report of a Special Study: The 3Rs: Lessons Learned from Recruitment, 

Relocation, and Retention Incentives (1999) and GAO, Human Capital: Effective Use of 

Flexibilities Can Assist Agencies in Managing Their Workforces, GAO-03-2 (Washington, 

D.C.: Dec. 6, 2002). 

Page 5 GAO-10-226 FDA 3R Incentives
 

Through its regulations, OPM requires agencies to develop plans for using 

3R incentives outlining, among other things, the required documentation 

for the justification and any criteria for determining the amount of the 

incentive and the length of the service period under a service agreement, 

which is a written agreement between the agency and the employee 

outlining the terms of the incentive. According to OPM officials, agencies 

do not need OPM approval of their 3R incentive plans in order to use these 

incentives. HHS has issued a departmentwide 3R incentive plan or policy 

that applies to all of its agencies or operating divisions (OPDIV), as HHS 

refers to them, including FDA. According to HHS’s Deputy Assistant 

Secretary for Human Resources, the OPDIVs are allowed to develop more 

stringent internal guidance to supplement HHS’s policy, but they cannot 

make their internal processes for awarding 3R incentives more lenient. 

Building on HHS’s 3R incentive policy for the department, FDA issues 

supplemental guidance and instructions to its employees for awarding 3R 

incentives. Applicable to all of its centers and offices, FDA uses standard 

forms for requesting recruitment, relocation, and retention incentives with 

instructions attached for completing the forms that outline the regulatory 

and HHS policy requirements for those types of incentives. The official 

who is recommending the individual for the incentive must complete the 

form prior to seeking approval of the award. 

Page 6 GAO-10-226 FDA 3R Incentives
 

Employees in mission-critical occupations as identified by FDA make up 

the majority of FDA’s workforce and have also received the greatest 

number of 3R incentives from 2007 to 2009.12 According to the Assistant 

Commissioner for Management at FDA, mission-critical positions are 

broadly categorized at the agency level and not specific to FDA centers. 

These positions encompass the core scientific base of FDA, and include 

occupations such as medical officers, pharmacologists, and consumer 

safety officers. According to this official, mission-critical positions have 

remained unchanged with the exception of a few positions that have 

become more significant as the nature of FDA’s work has evolved, such as 

operations research analysts and veterinary medical officers. 

As shown in figure 1, employees in different mission-critical occupations 

received different percentages of each type of incentive. Medical officers, 

which includes physicians and surgeons, consistently received on average 

the greatest number of recruitment incentives of any mission-critical 

occupation from 2007 to 2009. Consumer safety officers, which is the 

largest mission-critical occupation according to FDA, on average received 

the majority of relocation incentives among mission-critical occupations, 

while pharmacologists on average ranked first among all mission-critical 

occupations that received retention incentives over this time period.13

FDA Uses 3R 

Incentives to Recruit 

and Retain MissionCritical Staff, but 

Lacks Agencywide 

Indicators for 

Tracking the Progress 

of 3R Incentives in 

Addressing Its 

Recruitment and 

Retention Goals 

 

12We analyzed data on FDA’s workforce from OPM’s CPDF for fiscal year 2008 (the most 

recent data available during the time of our review) and HHS provided data on 3R 

incentives awarded to employees in FDA and the rest of the department from January 1, 

2007, through July 4, 2009. 

13Consumer safety officers are charged with protecting consumers from foods, drugs, 

cosmetics, and other products and equipment that are impure, unwholesome, ineffective, 

improperly or deceptively labeled or packaged, or in some other way dangerous or 

defective. 

Page 7 GAO-10-226 FDA 3R Incentives
 

Figure 1: Average Percentage of FDA 3R Incentives Awarded by Top Mission-Critical Occupational Series from 2007 through 

2009 

8%

3%

4%

13%

24%

34%

8%

8%

16%

30%

13% 74%

10%

10%

Medical Officer (physicians) Consumer Safety Officer

Medical Officer

Toxicologist

Consumer Safety Officer

Medical Officer

Consumer Safety Officer

Mathematical Statistician 

Mathematical Statistician 

Mathematical Statistician 

General Health Scientist

Pharmacologist

Pharmacologist

Chemist

Recruitment incentives

Retention incentives

Relocation incentives

Source: GAO analysis of HHS data.

Note: Averages do not total to 100 percent because only the top occupations are included in the 

graphic. FDA did not award each type of 3R incentive to every mission-critical occupational series 

each year. 

Page 8 GAO-10-226 FDA 3R Incentives
 

FDA is facing potential retirements that could result in a loss of leadership 

and institutional knowledge in its mission-critical occupations. For 

example, an average of 24 percent of FDA top leadership is retirement 

eligible in 2014 according to FDA.14 Additionally, about 73 percent of 

career pharmacologists and about 68 percent of career medical officers 

onboard as of fiscal year 2008 will be eligible for retirement by the end of 

2014. Therefore, it is important to ensure that FDA’s 3R incentives are 

helping the agency meet its human capital goals. Our previous work has 

shown that federal agencies should ensure that the use of human capital 

flexibilities including 3R incentives are part of an overall human capital 

strategy clearly linked to the mission and program goals of the 

organization.15 Agencies need to plan for how they will use and fund these 

flexibilities, what results they expect to achieve, and what methods they 

will use to evaluate actual results, such as establishing indicators for 

measuring success. Importantly, 3R incentives are just one type of 

flexibility available to agencies for recruiting and retaining a quality 

workforce. Agencies need to assess and determine which human capital 

flexibilities are the most appropriate and effective for managing their 

workforces. Furthermore, an updated strategic workforce plan would help 

FDA clearly document its strategies for addressing gaps in the number, 

skills, competencies, and deployment of its workforce and how human 

capital flexibilities, such as 3R incentives, are being used to help achieve 

recruitment and retention goals. 

FDA Lacks an Updated 

Strategic Workforce Plan 

to Document Its Strategies 

for Achieving Its 

Recruitment and Retention 

Goals 

FDA has outlined its goals and approaches for recruiting and retaining the 

necessary workforce to meet its mission and program goals in its 

succession plan and strategic workforce plan. In its succession plan for 

2009-2012, FDA defines succession management as the ongoing 

development of potential successors to ensure a smooth transition and 

minimum loss of efficiency when management vacancies occur. To help 

prepare its current and future leadership, FDA outlines specific succession 

planning initiatives in its plan, such as individual development planning 

and training that aligns with organizational goals. According to officials at 

FDA, succession planning has played a significant role in filling missioncritical occupations at its centers and the plan should help assist FDA with 

these efforts. While some of what is described in FDA’s succession plan is 

prospective, FDA officials told us that they are partnering with a university 

 

14FDA defines “top leadership” in its succession plan for 2009-2012 as SES employees, 

employees whose pay is administratively determined, and GS-14 and GS-15 employees. 

15GAO-03-2.

Page 9 GAO-10-226 FDA 3R Incentives
 

in Florida in an attempt to satisfy the agency’s long-term staffing needs for 

a mission-critical occupation. Specifically, they are developing an 

undergraduate curriculum for pharmacokineticists intended to help 

increase FDA’s recruitment pool for this occupation.16

FDA’s fiscal year 2006 workforce plan provides an overview of past and 

projected workforce trends and emphasizes the staffing needs of FDA’s 

mission-critical programs. According to the Assistant Commissioner for 

Management at FDA, the plan was intended to be a road map for future 

hiring strategies across the agency. However, FDA has not updated the 

workforce plan since 2006 and targets for its recent hiring surges have not 

been included. According to this official, managing FDA leadership 

transitions has been a higher priority than strategic workforce planning. 

FDA is preparing to begin a workforce planning effort in fiscal year 2010 to 

address key agency-level initiatives and provide linkages between the 

agency’s use of 3R incentives and broader human capital decisions. Having 

an agencywide workforce plan that clearly documents the recruiting and 

retention goals and strategies FDA is working to achieve can help to 

ensure that the centers are aware of the agency’s goals and strategies and 

strategically managing their workforces in a manner that meets the 

agency’s needs. Given FDA’s period of leadership transitions, developing 

such a workforce plan creates a road map for the agency to use to move 

from the current to the future workforce needed to achieve agency goals. 

While not documented in its current workforce plan, FDA has set 

recruitment targets for the agency to address the need to hire additional 

employees in recent years. Specifically, as part of its hiring surges in fiscal 

years 2008 and 2009, FDA set staffing goals that were linked to the agency 

achieving its mission and goals. For example, the agency set targets to fill 

more than 600 new positions and to backfill over 700 others in fiscal year 

2008 to implement new responsibilities as a result of legislation, which it 

achieved within the first 6 or 7 months, according to FDA’s Assistant 

Commissioner for Management.17 That was nearly triple the number of 

people FDA hired from 2005 to 2007. Similarly in fiscal year 2009, the 

agency set a goal to hire 1,600 additional full-time equivalent positions. 

According to FDA officials, the agency has exceeded its 2009 hiring goals 

 

16Pharmacokineticists are among the scientists at FDA who determine the scientific validity 

of manufacturers’ tests, drug safety, and efficacy claims. 

17Food and Drug Administration Amendments Act of 2007, Pub. L. No. 110-85, § 121 Stat. 

823 (Sept. 27, 2007). 

Page 10 GAO-10-226 FDA 3R Incentives
 

by 22 percent and these targets were set within the centers based on their 

staffing needs. Further, FDA officials told us one of its recruitment 

strategies to increase its Hispanic workforce was to target this population 

during its interview job fairs, but this strategy is not documented in its 

current workforce plan. 

FDA officials told us that they award 3R incentives where they are needed 

most and the type of incentive awarded depends largely on the location. 

For example, recruitment is a larger issue in some of FDA’s field locations, 

including areas in Montana and in the southwest along the Mexican 

border. To address this challenge FDA offers relocation incentives to 

employees in its headquarters and field to move to other areas of the 

country. Recognizing the challenge of recruitment in its remote field 

locations, FDA is looking for additional sources of recruiting, including 

state and local governments in these areas. FDA officials have found that 

retention usually is not a problem in its field locations. 

FDA Should Better Track 

How Its Use of 3R 

Incentives Is Helping the 

Agency Achieve Its 

Recruitment and Retention 

Goals 

We have reported on the importance of establishing the necessary data 

and indicators to track a program’s effectiveness, as well as establishing a 

baseline to measure the changes over time and assess the program in the 

future.18 Agencies need such measurements to help them determine if a 

program is worth the investment compared to other available human 

capital flexibilities targeted at recruitment and retention of employees, 

such as student loan repayment. FDA has not established agencywide 

indicators for tracking the progress of 3R incentives in addressing 

recruitment and retention needs. While FDA collects data on workforce 

indicators at the agency and center levels, it has not analyzed how 3R 

incentives are helping the agency achieve its recruitment and retention 

goals. 

FDA collects data on agencywide workforce indicators, such as attrition, 

retirement, and declination rates, which measure the number of jobs 

offered that are declined by potential employees. In addition, FDA’s 

centers and offices are responsible for tracking their own workforce data 

as well as the effect of 3R incentives on their organizational goals. 

Specifically, FDA has asked its centers to provide more detailed attrition 

 

18GAO, Federal Student Loan Repayment Program: OPM Could Build on Its Efforts to 

Help Agencies Administer the Program and Measure Results, GAO-05-762 (Washington, 

D.C.: July 22, 2005). 

Page 11 GAO-10-226 FDA 3R Incentives
 

rates over a 2-year period to help support the need for 3R incentives. 

Officials stated that FDA has no agencywide exit interview process; rather, 

it uses HHS’s quarterly exit survey results. Although some centers track 

exit survey results to determine why employees are leaving the agency, the 

center data are not necessarily provided to the Office of Management—the 

human capital office within FDA—according to the Assistant 

Commissioner for Management at FDA. Further, FDA officials stated that 

the agency relies on HHS-provided data for tracking the number of 

responses to job announcements, and the basis for employee separations, 

but FDA does not have access to all of the necessary data in a useful 

format to accurately track workforce statistics and the linkage to the use 

of 3R incentives. 

Additionally, FDA’s Assistant Commissioner for Management said the 

agency does not track the use of 3R incentives to assess the effectiveness 

of these payments or how they contribute to FDA’s human capital goals. 

For example, FDA does not track statistics on its diversity initiatives or 

the impact of 3R incentives on diversity recruiting because there is a lack 

of available data. However, FDA officials said they need to document the 

agency’s short- and long-term goals for its 3R incentive program and 

identify better agencywide indicators to support the need for 3R 

incentives. Presently FDA’s guiding principles for awarding 3R incentives 

developed in the summer of 2009 are the only documented guidance to 

centers on 3R incentives, but the guiding principles do not address how 3R 

incentives should be used strategically to help achieve agencywide 

recruitment and retention goals. 

Updating its workforce plan to document its recruitment and retention 

goals and strategies and include indicators to track the progress of 3R 

incentives in achieving these goals will help ensure FDA makes maximum 

use of funds to recruit and retain key talent, a critical goal in an era of 

fiscal constraints. As we have found in our work on human capital 

flexibilities,19 gauging the 3R incentive program’s direct effect on 

recruitment and retention trends may be difficult because a 3R incentive is 

not likely to be the only major factor in an employee’s decision to join or 

stay with an agency, although the incentive may help to tip the scale in the 

agency’s favor. FDA officials told us that they have recently found that 

other factors, such as labor market conditions, could affect these 

decisions. 

 

19GAO-05-762. 

Page 12 GAO-10-226 FDA 3R Incentives
 

Retention Incentives 

Account for the Majority of 

3R Incentives Awarded by 

FDA and the Percentage of 

3R Incentives Awarded by 

FDA Is Large Compared to 

HHS 

In 2008 and 2009, recruitment and retention incentives accounted for 

greater than 95 percent of all 3R incentives awarded in FDA, as shown in 

table 1. The majority of the FDA employees receiving 3R incentives in 2007 

and 2008 were in positions within the GS pay plan, which includes 

consumer safety officers, medical officers, and mathematical statisticians, 

and paid at grades 14 or higher in the case of retention incentives. To 

explain the large decrease in the number of retention incentives between 

2007 and 2008, FDA officials told us that they have taken a more strategic 

approach to awarding retention incentives over the last few years by 

elevating the approving authority of retention incentive renewals to the 

Commissioner and phasing out the use of retention incentives for certain 

employees paid under titles 38 and 42 of the United States Code given 

existing compensation flexibilities with those positions. For example, in 

2007, FDA employees appointed under title 42, which includes service or 

staff fellows and senior science managers, received 15 percent of all 

retention incentives FDA awarded and 5 percent of retention incentives 

awarded as of July 4, 2009. As a result of its detailed review of its 3R 

incentives in 2009, FDA officials said several retention incentives were 

eliminated. In addition, FDA does not allow any new recruitment incentive 

requests for any new employees except for rare and unusual 

circumstances that require the Commissioner’s approval. According to 

FDA, the agency continued to honor any recruitment incentives that were 

promised during recruitment discussions with potential employees. 

Table 1: Number and Percentage of FDA 3R Incentives Awarded by Year 

Recruitment incentives Retention incentives Relocation incentives 

Year Number Percentage Number Percentage Number Percentage

2007 3 0.4% 749 99% 8 1%

2008 366 35% 673 64% 10 1%

2009 93 15% 516 85% 0 0%

Source: GAO analysis of HHS data. 

Note: For 2009, FDA had not awarded any relocation incentives as of July 4, 2009. 

In comparing FDA’s use of 3R incentives to HHS’s use of the incentives 

departmentwide, FDA’s percentage of HHS’s recruitment incentives 

awarded exceeded 25 percent from 2008 to 2009. Specifically, in 2008, FDA 

accounted for 50 percent of all recruitment incentives in HHS, which was 

due to FDA’s hiring surge that year. In contrast, FDA’s total number of 

retention incentives awarded steadily decreased from 2007 to 2009 due to 

the elimination of these incentives for certain employees. (See fig. 2.) As a 

point of comparison, in 2008, FDA spent over $11 million, which was over 

Page 13 GAO-10-226 FDA 3R Incentives
 

half of the total dollars spent by HHS on 3R incentive payments; however, 

FDA employees made up only about 16 percent of HHS’s total workforce 

in fiscal year 2008. 

Figure 2: HHS and FDA 3R Incentives Awarded and FDA Percentage of HHS Total by Year 

0

80

160

240

320

400

480

560

640

720

800

2007 2008 2009

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2007 2008 2009

0

6

12

18

24

30

36

42

48

54

60

2007 2008 2009

HHS (excluding FDA)

FDA

Recruitment incentives Retention incentives Relocation incentives

1% 50% 29%

FDA percentage of HHS total

39% 35% 31%

FDA percentage of HHS total

15% 17% 0%

FDA percentage of HHS total 

Source: GAO analysis of HHS data.

Number awarded Number awarded Number awarded

Note: 3R incentives awarded to employees in FDA and HHS from January 1, 2007, through July 4, 

2009. FDA awarded three recruitment incentives in 2007. HHS total includes FDA. 

Page 14 GAO-10-226 FDA 3R Incentives
 

OPM regulations outline requirements for the proper awarding of 3R 

incentives and require agencies to keep documentation and records 

sufficient to allow a reviewer to reconstruct the 3R incentive process and 

decision. We reviewed the files of a random, stratified sample of 3R 

incentives awarded at FDA from January 2007 through October 2008 to 

determine whether they met requirements in law, OPM regulations, HHS 

policy, and FDA guidance.20 All the FDA files we reviewed provided 

sufficient explanation to justify the awards, addressing one or more of the 

factors for each type of incentive which OPM regulations state must be 

considered, as applicable to the case at hand, to support the awarding of 

the incentive.21 These factors are to guide the agency in determining 

whether a particular position would be difficult to fill in the absence of a 

recruitment or relocation incentive, or whether the unusually high or 

unique qualifications of the employee or a special need of the agency for 

the employee’s services makes it essential to retain the employee and the 

employee would be likely to leave the federal service in the absence of a 

retention incentive. According to OPM, since the regulations require an 

agency to document only those factors that are applicable to the case at 

hand, one factor could be sufficient support for authorizing the incentive. 

We estimate that every 3R incentive awarded during the time of our file 

review included at least one factor of support in the justification for the 

incentive.22 Figure 3 lists the factors that an agency must consider in 

justifying a 3R incentive. 

FDA Generally 

Awarded 3R 

Incentives Consistent 

with Law and OPM 

Regulations, but 

Adherence to Some 

Requirements Was 

Lacking and FDA 

Could Improve Its 

Internal Controls 

 

20Our sample includes 17 recruitment, 12 relocation, and 76 retention incentives. We 

reviewed the entire population of relocation incentives awarded from January 2007 through 

October 2008 so estimates on the population are not necessary. For recruitment and 

retention incentives, we are able to make population attribute estimates at the 95 percent 

confidence level with an overall precision of +/- 10.0 percent for the time of our file review. 

While additional recruitment and relocation incentives may have been approved from 

October 31 to December 31, 2008, the list of incentive actions from which we drew our 

sample included all retention incentive actions in 2008 given FDA’s quarterly review 

process for retention incentive requests. For more information on how the sample was 

drawn, see appendix I. 

21These factors are found at 5 C.F.R. §§ 575.106(b), 575.206(b), and 575.306(b). 

22The 95 percent confidence interval for this estimate is from 97.2 to 100 percent. 

Page 15 GAO-10-226 FDA 3R Incentives
 

Figure 3: Factors for Justifying a 3R Incentive 

Employment trends and labor market factors such as the availability and 

quality of candidates in the labor market possessing the competencies

required for the position and who, with minimal training, cost, or disruption 

of service to the public, could perform the full range of duties and 

responsibilities of the employee's position at the level performed by the 

employee

The extent to which the employee's departure would affect the agency's

ability to carry out an activity, perform a function, or complete a project 

that the agency deems essential to its mission

The success of recent efforts to recruit candidates and retain employees with competencies similar to those possessed by the employee for 

positions similar to the position held by the employee

Agency efforts to use nonpay authorities, such as special training and 

work scheduling flexibilities, to resolve difficulties alone or in combination with a recruitment, relocation, or retention incentive

Employment trends and labor-market factors that may affect the agency's

ability to recruit candidates for similar positions

The availability and quality of candidates possessing the competencies

required for the position, including the success of recent efforts to recruit 

candidates for the position or similar positions using indicators such as

offer acceptance rates, proportion of positions filled, and the length of 

time required to fill similar positions

Recent turnover in similar positions

Other supporting factors

The desirability of the duties, work, or organizational environment, or 

geographic location of the position

The salaries typically paid outside the federal government for similar 

positions

Special or unique competencies required for the position

Retention

Retention

Recruitment

Recruitment

Relocation

Relocation

Incentive type Factors

Source: GAO analysis of OPM regulations.

Note: This figure does not reflect the factors for justifying retention incentives for employees likely to 

leave for a different position in the federal service. 5 C.F.R. § 575.315 (d) (2). FDA did not award any 

of these incentives during the time of our review. 

The 3R incentive files met additional statutory and regulatory 

requirements, such as awarding 3R incentives only to eligible employees 

and paying of 3R incentives within applicable aggregate pay limits 

prescribed under 5 U.S.C. § 5307 or, for certain administratively 

determined pay plans, within the aggregate pay limits established by 

Page 16 GAO-10-226 FDA 3R Incentives
 

HHS.23 (See app. II for additional information on the aggregate pay limits 

and other results from the file review.) 

However, several of the incentive files we reviewed lacked adherence to 

certain other requirements, such as approval prior to the incentive 

payment, proof of employee relocation, and prescribed contents of a 

service agreement, which in most instances may have resulted from a lack 

of documentation. Overall, the deficiencies we found with the lack of 

adherence to requirements would not invalidate an incentive. Internal 

controls are important for managing an agency’s human capital system, 

including the 3R incentive program, to help ensure the effective and 

efficient use of these incentives in accordance with the law and OPM 

regulations.24 Over the past 3 years, FDA has made some changes to its 

internal controls, such as continuing to revise its centralized review and 

approval process for 3R incentive requests and updating its guidance 

including the standard forms for 3R incentive requests. If effectively 

implemented, the revisions to its internal controls may help ensure that in 

the future 3R incentives are properly awarded and documentation exists 

to support the incentives. 

 

23Generally, 5 U.S.C. § 5307 limits payment of bonuses, awards, or other cash payments 

under title 5 in any given year when payments added to an employee’s basic pay would 

exceed the rate payable for level I of the Executive Schedule. For FDA employees 

appointed under the authority of 42 U.S.C. §§ 209(f) and 209(g), HHS states their 

compensation, including 3R incentive payments, is authorized pursuant to these 

appointment provisions, which permit HHS flexibility in setting compensation for those 

appointed. The aggregate pay limit under section 5307 does not apply to these incentive 

payments since they are not payments provided under title 5. However, HHS establishes 

aggregate pay limits for all such employees across HHS to which FDA adheres. Although 

we find that the aggregate pay limit under section 5307 is not applicable to payments made 

to employees appointed under 209(f) and 209(g), we express no opinion as to whether the 

cap on administratively determined pay under 5 U.S.C. § 5373 should limit, as a matter of 

law, the pay levels established by HHS for these employees. 

24GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999). 

Page 17 GAO-10-226 FDA 3R Incentives
 

OPM regulations require that all incentives must be approved by the 

agency prior to payment to the employee. We estimate that 92 percent of 

all 3R incentives awarded from 2007 through October 2008 were approved 

by the agency, as evidenced by the approving official’s signature—the FDA 

Commissioner or designee—prior to payment to the employee.25 In 

addition, the regulations require an agency to make the determination to 

pay a recruitment or relocation incentive before the employee enters on 

duty in the position for which he or she was recruited or relocated. We 

estimate that for all recruitment incentives the agency made the 

determination to pay the incentive, as evidenced by the date of the 

approving official’s signature, before the prospective employee entered on 

duty.26 In 4 of 12 of the relocation incentive files (the universe during the 

time of our file review), the agency did not make the determination to pay 

the relocation incentive, as evidenced by the date of the approving 

official’s signature, before the prospective employee entered on duty. 

However, we verified that no payment was made to the recipients of these 

relocation incentives until after the employee relocated to the new 

position. According to a senior FDA official, the center in FDA that 

requested these relocation incentives did not understand that the 

incentives needed to be provided to the Office of Management—the 

human capital office within FDA—for processing and approval prior to the 

employee entering on duty and mistakenly believed that the former 

Commissioner’s memorandum authorizing a broad approval of incentives 

for their center covered these relocation incentive requests. The official 

said that this was an isolated misunderstanding that has been corrected 

with further discussions with the center. 

3R Incentives Were Not 

Always Processed 

Consistent with 

Regulations and FDA 

Guidance, but Revisions to 

FDA’s Centralized Review 

and Approval Process May 

Lead to Improvements 

In addition, according to HHS policy and FDA guidance, the official who is 

recommending the employee for the 3R incentive must sign off on the 

request before the official who approves the award, which in FDA’s case is 

the Commissioner or designee.27 We estimate that in less than 2 percent of 

3R incentives awarded from 2007 through October 2008 the recommending 

official did not sign off on the request before the approving official.28 In the 

 

25The 95 percent confidence interval for this estimate is from 84.6 to 96.6 percent. 

26The 95 percent confidence interval for this estimate is from 83.8 to 100 percent. 

27For the recommending official, FDA requires the center directors/Associate 

Commissioner for Regulatory Affairs or within the Office of the Commissioner, the deputy 

commissioners/Chief Counsel or Chief of Staff, as applicable, to officially request the 

incentive and sign the request form. 

28The 95 percent confidence interval for this estimate is from 0.1 to 5.9 percent. 

Page 18 GAO-10-226 FDA 3R Incentives
 

three relocation incentive files that we reviewed where this occurred, the 

agency used a justification and approval for the awards signed by the 

approving official more than 22 months before the awards were 

recommended. When asked why this occurred, FDA said the incentives 

were mistakenly signed out of order. 

Beginning in March 2006, FDA revised its 3R incentive review and 

approval process by centralizing the process—a key internal control that if 

implemented properly may improve the processing sequence of the 

incentives. Since that time, FDA has continued to streamline its process, 

assign oversight responsibility to its Executive Review Board (ERB), and 

issue updated guidance, which it calls guiding principles. FDA’s ERB, 

which consists of the Principal Deputy Commissioner who serves as the 

chair, the center directors, the Associate Commissioner for Policy, and the 

Assistant Commissioner for Management, is responsible for reviewing all 

compensation programs and flexibilities including 3R incentives across 

the agency and developing guidelines for implementing each program. 

Since the time of our file review, FDA undertook a detailed review of its 

3R incentive program and as a result of its review, clarified details of 

FDA’s process for approving 3R incentives and the role of the ERB. Figure 

4 shows the revised review and approval process for 3R incentive requests 

that FDA currently follows. 

Page 19 GAO-10-226 FDA 3R Incentives
 

Figure 4: FDA’s Revised Review and Approval Process for 3R Incentive Requests 

At the request of the employee’s supervisor, administrative staff within the applicable FDA center 

completes a 3R incentive request form in consultation with the Office of Management, and the 

center’s executive officer reviews the request to ensure it is complete and the center has the 

necessary funds to award the incentive, if approved. 

The Office of Management notifies the recommending officials and executive officers in the 

applicable center of the Commissioner’s decision and sends the incentive file to the Rockville 

Human Resources Center for processing and payment of the incentive and checking to ensure 

the file’s documentation is complete.

The Executive Review Board reviews all 3R incentive requests and recommends to the FDA 

Commissioner whether the overall incentive and the amount should be approved. The 

Commissioner or designee approves or disapproves the request. 

The recommending official signs the 3R incentive request officially recommending the employee 

for the incentive. 

The Office of Management reviews and certifies that the 3R incentive request is consistent with 

FDA’s guiding principles and OPM regulatory requirements. 

Source: GAO analysis of FDA.

Beginning in September 2009, FDA’s procedures call for its Office of 

Management to certify if a new 3R incentive request addresses FDA’s 

guiding principles prior to submitting the incentive request to the ERB for 

its review. Further, in an effort to streamline the process, the ERB Chair 

may review and recommend some of the incentive requests to the 

Commissioner without the full ERB review when the Office of 

Management certifies the request. The ERB Chair can request a review by 

the full ERB for any incentive request, according to a senior FDA official. 

Finally, according to a senior official from the Rockville Human Resources 

Center (RHRC), which is responsible for processing FDA’s personnel 

actions such as incentive requests, the center adopted the practice of 

double checking the incentive file to ensure the documentation in the file, 

Page 20 GAO-10-226 FDA 3R Incentives
 

such as the commencement and termination dates on the service 

agreements, are complete after the incentive has been processed. 

Relocation Incentive Files 

Did Not Consistently 

Document Employees’ 

Relocation, but Revisions 

to the Incentive Form 

Address These 

Requirements 

OPM regulations for relocation incentives require that in order to receive a 

relocation incentive the employee’s work site for the new position must be 

50 miles or more from the work site of the position held immediately 

before the move, unless the agency waives the 50-mile requirement, and 

the employee must establish a new residence to accept the position. We 

found that in 3 of 12 of the relocation incentives awarded from 2007 

through October 2008, the incentive files did not document that the 

employee’s new work site was more than 50 miles from the previous work 

site. For example, an individual who received a relocation incentive was 

transferring from another federal agency to work at FDA in the 

Washington, D.C., area and the file did not document where that previous 

agency was located (e.g., Washington, D.C., or another city). In addition, 8 

of 12 of the relocation incentives were paid to the employee before or on 

the same day that the agency had record of the employee establishing a 

residence in the new geographic area.29 In three of these cases, the 

sequence of dates was less than a month different, but in three other cases 

it was several months. For the remaining two cases, the first record of the 

employee’s residence in HHS’s human capital data system was the date of 

the incentive payment. By reviewing the data system and additional 

employee records, we found proof that for 11 of the 12 relocation 

incentives, the employee eventually established a residence in the new 

geographic area. For one incentive the previous address on file was an 

Army P.O. box with no city or state included. According to FDA, this 

individual was deployed with the military to Europe prior to establishing a 

residence in the geographic area for the new position. While the relocation 

incentive forms we reviewed did not include these relocation 

requirements, in the fall of 2008, FDA recognized the need to more clearly 

document these relocation requirements and revised its recruitment or 

relocation incentive form to include check boxes addressing these 

requirements. 

 

29In order to obtain the date the employee established residence in the new geographic 

area, we reviewed information in HHS’s human capital data system—the Enterprise Human 

Resources and Payment System—which HHS uses to centrally maintain personnel data for 

all employees. Specifically, we identified the date the employee’s change of address request 

was processed and the previous location the agency had on file for each employee. We then 

compared the dates for change of address to the relocation incentive payment date. When 

the previous location for an employee was not recorded in the data system, we reviewed 

the employee’s resume on file at FDA to identify the location. 

Page 21 GAO-10-226 FDA 3R Incentives
 

In response to our finding on the dates of relocation, senior officials from 

FDA and RHRC acknowledged that there is no formal process to 

document that the new work site is greater than 50 miles from the 

previous work site or that the individual has established a residence in the 

new geographic area before the incentive is awarded. Rather, the RHRC 

official said they check these requirements through more informal 

means—conversations with the employee, reviewing the resume, and 

knowledge of where the person is coming from, which in some cases, is 

such a great distance from the new duty station that it is common 

knowledge that the new work site is greater than 50 miles from the 

previous work site and the individual has established a residence in the 

new geographic area. According to FDA, the centers are to verify the 

change of residence before submitting the incentive request for payment 

processing to RHRC by checking that a personnel action for an address 

change to the new duty station has been submitted. As a next step, the 

centers are to check in the data system that the address has been changed. 

In addition, FDA and RHRC officials said there may be a delay in RHRC’s 

processing of the change of address from the time the employee submits 

the request, which may account for the sequence of dates. 

As another explanation for the difference in dates, a senior FDA official 

explained that employees who have received the incentive are permitted 

to stay in temporary housing after receiving the incentive before they 

officially establish a new residence and change their residence with the 

agency. OPM officials stated that the regulations do not define “residence” 

for this purpose and since relocation incentives may be paid for temporary 

work site changes, it is not necessary for an employee to move his or her 

permanent residence to qualify for a relocation incentive; establishing 

temporary housing is acceptable. FDA and RHRC officials noted that in 

some of the older files we reviewed there was no place to document that 

an employee had established a new residence or relocated a distance 

greater than 50 miles, as the current incentive form now allows. 

Page 22 GAO-10-226 FDA 3R Incentives
 

The service agreements frequently failed to include contents prescribed by 

statute and OPM regulations. Consistent with the statute and regulations, 

FDA requires service agreements for recruitment and relocation 

incentives, but does not use service agreements for retention incentives.30

In some areas, we observed appropriate documentation of the prescribed 

contents in the service agreement, such as the total amount of the 

incentive and length of the service period, but other areas were lacking, 

such as the method of paying the incentive and timing and amounts of 

each incentive payment. Not including the prescribed contents of the 

service agreement may affect FDA’s ability to recover funds should the 

agency terminate or reduce an incentive. For an employee who leaves the 

position prior to completing the service period for the incentive, FDA uses 

information in the service agreement to determine the prorated amount of 

the incentive payment that needs to be collected from the former 

employee. Since the time of our file review, FDA has updated its guidance 

and recruitment or relocation incentive form including the service 

agreement section, which if effectively implemented may help prevent 

future problems associated with deficient service agreements. 

Service Agreements Failed 

to Include Elements 

Required in Statute and 

OPM Regulations, but 

Revised Guidance May 

Lead to Some 

Improvement 

We estimate that all of the recruitment incentive files31 and 11 of 12 of the 

relocation incentive files awarded from 2007 through October 2008 

documented a permitted total incentive amount in the service 

agreement—the maximum amount is 25 percent of base pay—with the 

exception of the 1 relocation incentive file that lacked a service 

agreement, but documented an appropriate total incentive amount 

elsewhere in the file. While considering the criteria in HHS’s 3R incentive 

policy, FDA has established guidelines for determining the amounts of the 

3R incentives. Specifically, during the time of our file review, recruitment 

and relocation incentives were to be between 10 and 15 percent of base 

pay. 

The service period, which is a specified period of employment with the 

agency the employee agrees to complete in exchange for payment of the 

 

30In accordance with 5 U.S.C. § 5754, regulations do not require a service agreement for 

retention incentives, if the agency pays the incentive in biweekly installments, and sets the 

biweekly installments at the full retention incentive percentage rate established for the 

employee. FDA pays all of its retention incentives in biweekly installments set at the full 

retention incentive percentage. Eleven of 12 of the relocation incentive files and 1 of 1 and 

16 of 16 of the recruitment incentive files from 2007 and 2008, respectively, contained 

service agreements. 

31The 95 percent confidence interval for this estimate is from 83.8 to 100 percent. 

Page 23 GAO-10-226 FDA 3R Incentives
 

incentive, may not exceed 4 years for recruitment and relocation 

incentives with a minimum of 6 months for recruitment incentives. With 

the exception of one relocation incentive file which lacked a service 

agreement, all the recruitment and relocation incentive files documented a 

permitted length of service in the service agreement length field.32 FDA 

sets guidelines for determining the length of the service period for 

recruitment and relocation incentives. According to a senior FDA official, 

FDA has traditionally used 12 months as the length, but in early 2008, as 

FDA began hiring a large number of employees, it started requiring a 

length of 18 months. If FDA authorized multiple incentives to an employee, 

e.g., student loan repayment in addition to a recruitment incentive, it 

required a 24-month service period and in some cases where FDA 

approved a higher percentage for the incentive amount, it required a 36-

month service period. 

Further, the service agreement for recruitment and relocation incentives 

must specify the method of paying the incentive, and the timing and 

amounts of each incentive payment (i.e., a lump sum at the beginning or 

end of the service period, installments throughout the service period, or a 

combination). We estimate that 12 percent of the recruitment incentives,33

and 1 of 12 of the relocation incentives awarded from 2007 to October 

2008, included how the incentive was to be paid—a lump sum payment—

and the amount. None of the recruitment and relocation incentives 

included when the incentive would be paid—at the beginning of the 

service period—in the service agreements.34 According to a senior FDA 

official, FDA has traditionally paid recruitment and relocation incentives 

as lump sum payments at the beginning of the service period because it is 

most attractive to prospective employees at recruitment fairs or interviews 

and it places less burden on FDA to maintain records and monitor 

payments than biweekly or quarterly payments. According to this official, 

FDA has previously explored providing managers with other payment 

options and managers overwhelmingly responded that this payment 

method was most effective. The service agreement section of FDA’s 

current recruitment or relocation incentive form now states that the 

 

32Eleven of 12 of the relocation incentive files and 1 of 1 and 16 of 16 of the recruitment 

incentive files from 2007 and 2008, respectively. 

33The 95 percent confidence interval for this estimate is from 1.5 to 38.4 percent. 

34Five of 5 and 7 of 7 of the relocation incentive files from 2007 and 2008, respectively, and 

1 of 1 and 16 of 16 of the recruitment incentive files from 2007 and 2008, respectively. 

Page 24 GAO-10-226 FDA 3R Incentives
 

payment is to be made as a lump sum, but does not specify the timing of 

the payment. 

FDA’s service agreements for recruitment and relocation incentives also 

included fields for the commencement and termination dates of the 

service period as required. We estimate that about 25 percent of 

recruitment incentive files, and 1 of 12 of the relocation incentive files 

during the time of our file review, included both commencement and 

termination dates.35 A senior FDA official explained that once the 

Commissioner approves the award, the Office of Management sends the 

incentive file to RHRC, which is responsible for processing the incentives. 

During the processing of the award, the dates of the service period are 

finalized and according to this FDA official, RHRC officials must fill in the 

dates once they determine the official effective date of the incentive. A 

senior RHRC official noted that there previously has been no system to 

add these dates, so this step was often missed. As discussed earlier, 

according to this official, in the fall of 2009, RHRC adopted the practice of 

double checking the incentives to ensure the documentation in the file, 

such as the commencement and termination dates on the service 

agreements, are complete after the incentive has been processed. 

OPM officials responsible for administering the governmentwide 3R 

incentive program commented that while not necessarily invalidating the 

incentive, these missing elements in the service agreements are potentially 

significant omissions and a lack of documentation may lead to problems in 

paying the incentives. For example, the timing and amount of each 

incentive payment needs to be documented in the service agreement for 

disbursement purposes and to ensure that the employee and agency 

concur about the payment schedule. Without this information, the agency 

may have a difficult time supporting its case if the employee questions 

payments, and the payment schedule is not documented in the file. OPM 

officials said that the agency has a general responsibility to ensure all 

requirements of the incentive are clearly laid out in the incentive file and 

communicated to the employee. The officials added that it was important 

that the commencement and termination dates of the service period be 

documented because FDA may be hindered in exercising proper oversight. 

Without the dates, it could be difficult for the agency to recover incorrect 

payments or establish that an employee has left the position prior to 

completing the service period outlined in the service agreement. 

 

35The 95 percent confidence interval for this estimate is from 7.2 to 52.4 percent. 

Page 25 GAO-10-226 FDA 3R Incentives
 

FDA Could Further 

Improve Its Guidance for 

3R Incentives 

While FDA revised its guidance since the time of our file review, FDA has 

not addressed several areas specified in the regulations in its guidance for 

retention incentives. First, FDA’s guidance states that all recruitment and 

relocation incentives are to be paid as lump sum payments, but FDA does 

not include the method it uses to pay retention incentives—biweekly 

installment payments—in its guidance. A senior FDA official said it has 

been a long-standing practice in HHS to give retention incentive payments 

in biweekly installments and acknowledged that the guidance should be 

updated to reflect this practice. By including the payment method in its 

guidance, FDA will help ensure that the method is communicated to all 

employees and that payments are made in accordance with regulations. 

Second, as specified in the regulations, FDA’s guidance does not include a 

condition for terminating a retention incentive when no service agreement 

is required based solely on the management needs of the agency. Not 

including all of the termination conditions in its guidance could hinder 

employees’ understanding of the conditions under which they would no 

longer receive incentive payments, such as due to insufficient agency 

funds. While FDA’s guidance generally addresses the conditions for 

terminating retention incentives due to the fault of the employee, such as 

receiving a performance rating of less than “fully successful,” the other 

conditions for termination are impressed upon managers through 

meetings and other communication on the importance of using these 

incentives as discretionary flexibilities, according to a senior FDA official. 

As OPM has stated, the agency has a general responsibility to ensure all 

requirements of the incentive are clearly communicated to the employee. 

Page 26 GAO-10-226 FDA 3R Incentives
 

OPM and HHS 

Provide Oversight of 

3R Incentives, but 

Improvements Can Be 

Made 

OPM Provides Oversight of 

3R Incentives through 

Various Mechanisms, but a 

Stronger Emphasis on 

Agencies’ Strategic Use of 

3R Incentives Is Needed 

The 3R incentive authorities provided under the Federal Workforce 

Flexibility Act of 2004 were designed to provide agencies with additional 

flexibility to help recruit and retain employees and better meet agency 

strategic human capital needs. Since agencies began using the new 

flexibilities, OPM has provided governmentwide oversight by reviewing 

and reporting on agencies’ use of 3R incentives, providing guidance to 

agencies, and evaluating agencies’ human capital systems including the 

use of 3R incentives. 

Because the Federal Workforce Flexibility Act of 2004 requires OPM to 

annually report to Congress on how agencies used 3R incentives, OPM 

requires agencies to report that information annually to OPM. Agencies 

must submit data on the number and dollar amount paid by incentive type, 

pay grade or work level, occupational series, and other variables and 

descriptive information on how the 3R incentive authority was used that 

year. For the 2007 annual report to Congress, OPM also asked agencies to 

provide information on how the use of 3R incentives helped improve their 

agencies’ recruitment and retention efforts and identify any barriers the 

agencies faced in using 3R incentives. However, the descriptive 

information in OPM’s annual report to Congress that agencies provided on 

how 3R incentives helped address their recruitment and retention efforts 

is anecdotal, and according to OPM’s Deputy Associate Director in the 

Center for Pay & Leave Administration, OPM’s annual report is not 

intended to be an evaluation determining whether agencies are following 

the regulations and using the 3R incentive authorities appropriately. The 

act’s reporting requirement will sunset after OPM’s report covering 2009, 

but according to OPM, OPM may ask agencies to continue their 3R 

OPM Annually Reviews and 

Reports on Agencies’ Use of 3R 

Incentives 

Page 27 GAO-10-226 FDA 3R Incentives
 

incentive reporting.36 Therefore, it will be important for OPM to determine 

what it will do with that information going forward. 

In July 2009, the OPM Director initiated a governmentwide review of 3R 

incentives to help ensure effective use of 3R incentives and identify 

opportunities to strengthen the 3R incentive program administration and 

oversight. When asked about the impetus for this review, the Deputy 

Associate Director said the economic situation the nation is facing and the 

renewed interest in federal service caused the OPM Director and 

administration to question if the need for 3R incentives and the amount of 

money agencies spend on these incentives—in particular retention 

incentives—was still necessary. 

• OPM directed agencies to review their use of 3R incentives and if needed, 

update their 3R incentive plans, approval, and monitoring procedures to 

ensure they meet regulatory requirements. OPM requested agencies certify 

that they completed the review by signing a form and submitting it to OPM 

by the end of August 2009. A senior HHS official in the human resources 

office said HHS completed its review and certified to OPM that HHS has a 

plan for awarding 3R incentives that meets regulations. According to 

OPM’s Deputy Associate Director, the agency review was a one-time 

request by OPM to help ensure that agencies’ 3R incentive plans comply 

with the most recent version of the regulations. 

• OPM is analyzing trends in the use of 3R incentives governmentwide and 

in the 12 agencies (including HHS) that spent the most in terms of overall 

dollars on 3R incentives according to 2007 data the agencies submitted for 

OPM’s annual report to Congress. For these 12 agencies, OPM is also 

analyzing trends in their workforce data, such as the number of 

recruitment incentives as a percentage of new hires. According to an OPM 

official, OPM expects to complete its review in early 2010 and will share 

the results with agencies shortly after. Further, OPM formed a workgroup 

of the compensation experts from these 12 agencies to develop 

recommendations for measuring the cost-benefit of the 3R incentive 

program for the federal government and evaluating what the impact would 

be on recruitment and retention efforts if agencies were to scale back their 

funding of the 3R incentives. According to this OPM official, as of October 

2009, the workgroup has drafted recommendations and is discussing how 

 

365 CFR 575.315(i). The requirement that agencies report annually on the use of retention 

incentives for employees likely to leave for another position in the federal service before 

the closure or relocation of the employee’s facility or office does not have a sunset 

provision. 

Page 28 GAO-10-226 FDA 3R Incentives
 

to share its recommendations with the Chief Human Capital Officers 

Council. 

According to OPM, OPM’s and the agencies’ reviews of 3R incentives could 

result in OPM guidance on metrics agencies may use to ensure the 

incentives are being used effectively and addressing their recruitment and 

retention goals. Such metrics would enable agencies to report more 

systematically on the results of their use of 3R incentives. Continuing to 

have governmentwide information on 3R incentives will provide OPM and 

policymakers with the information they need to help assess trends in the 

overall usage of the 3R incentive program across the government and 

determine if changes are needed. 

Since issuing interim regulations for 3R incentives in 2005, OPM has issued 

final regulations for 3R incentives and retention incentives for employees 

who are likely to leave for a different federal position before the closure or 

relocation of the employee’s office, issued memorandums and posted 

frequently asked questions and fact sheets providing guidance on the use 

of 3R incentives on its Web site, and held forums for agency officials to 

discuss the regulatory changes and other topics in May 2005 and March 

2008. According to OPM, OPM also provides guidance in response to 

agency inquiries through e-mails or phone calls on agency-specific 3R 

issues. In the 2009 memorandums providing guidance to agencies for 

reviewing their 3R incentive programs, the OPM Director stressed the 

importance of ensuring the money spent on 3R incentives is being used 

effectively and that the cost of using any pay flexibilities, including 3R 

incentives, should be weighed against the benefits gained especially in the 

case of retention incentives, which account for the majority of 3R 

incentive costs. 

OPM’s 3R Incentive Guidance 

to Agencies Could More Fully 

Emphasize the Importance of 

Considering Succession 

Planning in the Decision 

Process for Awarding 

Retention Incentives 

As a next step, OPM could provide guidance to all agencies on the 

importance of considering succession planning in the decision process for 

awarding retention incentives. We have noted the importance of 

succession planning to strengthen both current and future organizational 

capacity and identify, develop, and select successors who are the right 

people, with the right skills, at the right time for leadership and other key 

positions.37 OPM supports succession planning as a vital tool for 

maintaining a highly-skilled workforce and, according to OPM, succession 

planning may help an agency reduce its need more quickly for an 

 

37GAO, Human Capital: Succession Planning and Management is Critical Driver of 

Organizational Transformation, GAO-04-127T (Washington, D.C.: Oct. 1, 2003). 

Page 29 GAO-10-226 FDA 3R Incentives
 

employee’s services to a level that makes it unnecessary to continue 

paying the retention incentive and allows the agency to terminate it. 

However, through its regulations and guidance, OPM does not require 

agencies to consider succession planning as part of the decision and 

documentation process for awarding a retention incentive. The regulations 

allow agencies to award retention incentives to employees, including 

those who are eligible to retire and are likely to leave federal service in the 

absence of receiving an incentive. While requiring agencies to annually 

review the conditions for giving the retention incentive to ensure they are 

still present when a service agreement is not required, OPM regulations do 

not place any restriction on the number of consecutive years an individual 

can receive a retention incentive. 

OPM provides oversight of agencies’ human capital systems including the 

use of 3R incentives by periodically conducting two types of evaluations—

human capital management evaluations and delegated examining 

reviews38—and participating in agency-led evaluations as part of their 

broader human capital accountability requirements under OPM’s Human 

Capital Assessment and Accountability Framework by providing guidance 

and assistance. As part of these evaluations, OPM reviews an agency’s 3R 

incentive plan including designation of the proper approval authority, 

documentation of individual incentive decisions, and agency 3R incentive 

data for compliance with applicable regulations. An OPM official 

responsible for conducting the evaluations said examples of 3R incentive 

problems that OPM may find would be an incomplete or missing incentive 

request form or justifications lacking the necessary documentation for the 

incentive. If OPM finds that an agency’s 3R incentive plan or payments do 

not comply with regulations, OPM includes a required action in its 

evaluation report, which gives the agency 60 days to submit to OPM for 

approval the evidence that it has corrected any identified violations. 

According to this official, OPM may make recommendations to the agency 

for improvements, but it does not follow up on the implementation of 

these recommendations since they do not pertain to legal or regulatory 

violations. Regarding an opportunity for improvement that OPM sees for 

OPM Evaluates Agencies’ 

Human Capital Management 

Systems Including the Use of 

3R Incentives 

 

38Delegated examining reviews examine agencies’ use of the authority granted by OPM to 

fill competitive civil service jobs. Appointments under this authority are subject to civil 

service laws and regulations to help ensure fair and open competition; recruitment from all 

segments of society; and selection on the basis of the applicants’ competencies or 

knowledge, skills, and abilities. As part of this review, OPM reviews agencies’ decisions to 

use hiring compensation incentives (e.g., recruitment and relocation incentives) to ensure 

they are appropriately documented and justified. 

Page 30 GAO-10-226 FDA 3R Incentives
 

agencies’ use of 3R incentives based on these evaluations, the official 

stated that OPM would like to see a more strategic approach to overall 3R 

incentive program design and implementation to help ensure the 

incentives are used appropriately to reflect changing conditions in the 

agency and the labor market. OPM expects each agency to perform the 

necessary analysis to determine the tools and flexibilities, including 3R 

incentives, which would help each agency achieve its goals as part of each 

agency’s strategic workforce planning process, according to this official. It 

is important for OPM to encourage agencies to take this step and identify 

the linkage between an agency’s use of 3R incentives and meeting its 

recruitment and retention goals. 

Most recently, OPM conducted several delegated examining reviews for 

organizations within HHS including RHRC, which provides human capital 

services to FDA, in fiscal year 2006. OPM has not recently conducted any 

human capital management evaluations at HHS; rather, OPM participates 

in the HHS-led accountability reviews, such as the reviews of several 

OPDIVs including FDA in fiscal year 2007. OPM did not examine HHS’s 3R 

incentive program as part of its delegated examining reviews and found no 

problems with the use of 3R incentives in its participation in the HHS-led 

reviews of several OPDIVs in fiscal year 2007. 

HHS Provides Oversight of 

3R Incentives, but Areas of 

Its 3R Incentive Policy 

Could Be Strengthened 

HHS provides oversight of its OPDIVs’—the agencies within HHS—use of 

3R incentives by implementing a departmentwide 3R incentive policy and 

monitoring and periodically conducting accountability reviews of its 

OPDIVs’ human capital systems including the use of 3R incentives. 

According to OPM regulations, the agency’s 3R incentive plan must cover 

certain requirements, such as the designation of officials with authority to 

review and approve the payments, required documentation for justifying 

the incentive, and conditions for terminating an incentive and obligations 

of the agency and employee upon such termination, among other things. 

HHS developed a written policy for authorizing the use of 3R incentives 

across the department.39 While HHS’s 3R incentive policy generally 

addressed the requirements for 3R incentive plans as outlined in OPM’s 

regulations, there were several instances where the policy omitted or did 

not clearly address certain important requirements. Clearly incorporating 

HHS Implements a 

Departmentwide Policy for 3R 

Incentives, but the Policy Does 

Not Clearly Address Certain 

Important Requirements 

 

39HHS, Human Resources Manual, Instruction 575-1, Change 1, Recruitment, Relocation 

and Retention Incentives (Dec. 15, 2008). 

Page 31 GAO-10-226 FDA 3R Incentives
 

the regulatory requirements into the policy will help to ensure that 

managers and OPDIVs are using 3R incentives consistent with the law and 

regulations. According to a senior HHS official, HHS is reviewing the 

current 3R incentive policy and determining if updates are needed as part 

of its review of 3R incentives in response to OPM’s directive to agencies in 

May 2009 to review their 3R incentive programs. We found that HHS’s 3R 

incentive policy could be strengthened in the following areas. 

• Conditions for reducing or terminating an incentive. HHS’s policy 

generally addressed the mandatory and discretionary conditions for 

reducing or terminating an employee’s incentive payment and the agency’s 

and employee’s obligations with regard to notification, payments, and 

repayment of the incentive. However, HHS’s policy incorrectly refers to a 

condition for reducing or terminating a retention incentive authorization 

as a discretionary (may) condition, when it should be documented as a 

mandatory (must) condition. Specifically, when no service agreement is 

required, payment of a retention incentive must be reduced or terminated 

when the original determination to pay the incentive no longer applies or 

when payment is no longer warranted at the level originally approved. 

Further, HHS’s policy does not include a mandatory termination condition 

for retention incentives when no service agreement is required due to the 

employee being demoted or separated for cause or the employee receiving 

a rating of less than “fully successful.” The policy only discusses this 

condition for retention incentives with service agreements. HHS officials 

acknowledged these errors in the 3R incentive policy and stated that the 

policy should be corrected and more specific than the general rules for 

terminating service agreements that are currently in the policy. Not 

correctly specifying the mandatory and discretionary conditions for 

reducing or terminating 3R incentives and service agreements could 

hinder OPDIVs’ interpretation and understanding of these conditions when 

reductions or terminations of the incentives may be in order. 

• Annual review of retention incentives with no service agreement. 

OPM regulations state that for retention incentives that are paid when no 

service agreement is required, an agency must review each determination 

to pay the incentive at least annually to determine whether payment is still 

warranted and certify this determination in writing. HHS’s policy does not 

provide that retention incentives paid biweekly, which require no service 

agreements, need to be reviewed annually. According to HHS officials, 

HHS does not provide any guidance on this requirement; it is up to the 

OPDIVs to determine how they will review their incentives, including the 

annual review for retention incentives without service agreements. The 

officials stated that they plan to build a check of this requirement into the 

future accountability reviews of 3R incentives across HHS. 

Page 32 GAO-10-226 FDA 3R Incentives
 

• Conditions for repayment of an incentive. According to OPM 

regulations, if a 3R incentive service agreement is terminated due to 

employee fault or failure related to performance, the employee can retain 

payments received for completed work, but the agency does not have to 

pay the amount attributed to completed work that has not been received 

unless agreed to in the service agreement, nor is the agency obligated to 

pay any incentive payments attributable to uncompleted service. HHS’s 

policy on the department’s obligations in the event of the termination of a 

3R incentive is not clear, suggesting that an agency may be obligated to 

make outstanding payments attributed to uncompleted service if provided 

for in a service agreement, which is not permissible when terminated due 

to employee fault. 

According to an HHS official, HHS has not yet awarded retention 

incentives to employees who would be likely to leave for a different 

position in the federal service before the closure or relocation of the 

employee’s office or organization. HHS’s policy does not address all the 

regulatory requirements that apply when using retention incentives in this 

manner, such as the requirement that these incentives cannot be paid in 

biweekly installments at the full incentive percentage rate. A senior HHS 

official said HHS has not yet determined if it will update the policy to 

document these requirements because it has not yet used this type of 

incentive. Moving forward, HHS should have the policy in place before 

using this type of retention incentive to help ensure the OPDIVs use this 

flexibility in a manner that meets the approval of HHS and regulatory 

requirements. 

OPM regulations require agencies to monitor the use of 3R incentives to 

ensure the incentive plan and payments are consistent with the law and 

regulatory requirements. In its 3R incentive policy, HHS assigns its OPDIVs 

the responsibility of ongoing monitoring of 3R incentives to ensure 

compliance with regulations and HHS policy. HHS does not uniformly 

review the OPDIVs’ guidance outlining the internal process they follow or 

3R incentive forms, but a senior HHS official stated that HHS provides 

advice to OPDIVs when requested or required. While its ongoing 

monitoring of 3R incentives has been minimal in the past, according to 

another senior HHS official, HHS is planning to take a more active role in 

light of its recent review of 3R incentives in response to OPM’s directive to 

agencies in May 2009 to review their 3R incentive programs. The official 

stated that HHS is deciding how to implement the results of its 3R 

incentive review and build ongoing monitoring and future reviews of 3R 

incentives into the existing human capital accountability reviews 

conducted by the Office of Human Resources. 

HHS Monitors and Periodically 

Conducts Accountability 

Reviews of Its OPDIVs’ Human 

Capital Systems Including the 

Use of 3R Incentives 

Page 33 GAO-10-226 FDA 3R Incentives
 

Providing further oversight of 3R incentives, HHS’s Human Capital and 

Accountability Division within the Office of Human Resources conducts 

accountability reviews of the OPDIVs’ human capital systems, including 

the use of 3R incentives as part of OPM’s Human Capital Assessment and 

Accountability Framework requirements. The purpose of the 

accountability reviews is to ensure the OPDIV’s’ human capital programs 

and policies are effective and adhere to merit system principles and other 

pertinent laws and regulations. In response to HHS’s recommendations 

and required actions as a result of its reviews, an HHS official responsible 

for conducting the accountability reviews said the OPDIVs are asked to 

respond to all recommendations and required actions identified by HHS, 

but HHS only requires a response to the required actions, which are legal 

or regulatory violations. Moving forward, the official said that HHS plans 

to conduct its accountability reviews of departmentwide programs, such 

as 3R incentives, instead of the OPDIV-specific reviews, to enable the audit 

team to examine specific details of the programs across HHS, which the 

current approach does not allow. HHS is planning an accountability 

program review of 3R incentives in fiscal year 2010. 

For its accountability review of FDA in fiscal year 2007, HHS reviewed 

FDA’s compensation strategies, including 3R incentives, and reported that 

they helped attract and retain quality employees. As part of the review, 

HHS said the team reviewed 13 group retention incentive actions at FDA 

to ensure that the files were completed properly and contained correct 

documentation. HHS did not identify any required actions for FDA on 3R 

incentives or other aspects of its human capital system, but it did identify a 

number of recommendations for improvements in the human capital area 

including one specific to retention incentives. HHS found that overall 

FDA’s retention policies and practices appear to meet the requirements of 

HHS policy and other governmental guidelines. However, HHS reported 

that FDA had not incorporated the use of retention tools into its 

workforce plan and recommended that FDA identify existing retention 

tools, analyze their effectiveness, and incorporate retention strategies into 

the FDA workforce plan. According FDA’s Assistant Commissioner for 

Management, FDA plans to address this recommendation in the scheduled 

update of its strategic workforce plan in fiscal year 2010. HHS has not 

reviewed FDA since fiscal year 2007 and plans to include FDA as part of its 

scheduled program review of 3R incentives for fiscal year 2010. 

Federal agencies have a number of available flexibilities, including 3R 

incentives, to help them strategically manage their workforces. OPM’s call 

to agencies to review their 3R incentive programs has raised awareness 

Conclusions 

Page 34 GAO-10-226 FDA 3R Incentives
 

about the importance of ensuring that current and future incentives are 

used only when necessary to support agency mission and program needs. 

FDA, OPM, and HHS have an opportunity to make further improvements 

to internal controls and oversight of 3R incentives. FDA lacks an updated 

strategic workforce plan that would help it determine how its use of 3R 

incentives is contributing to its human capital goals. Despite positive 

enhancements over the past 3 years, FDA’s internal controls have 

weaknesses related to requesting, approving, and processing 3R incentive 

requests. Strong internal controls help provide assurance that 3R 

incentives are used efficiently and effectively. 

As for oversight, OPM requiring all federal agencies to incorporate 

succession planning in the decision process for awarding retention 

incentives would help to ensure that agencies consider other effective 

means to acquire and retain talent. Clearly incorporating important 

requirements into HHS’s 3R incentive policy will help to ensure that 

managers and OPDIVs are using 3R incentives consistent with the law and 

regulations. 

To better align the use of 3R incentives with the agency’s human capital 

goals, we recommend that the Commissioner of FDA update FDA’s 

strategic workforce plan to document the agency’s recruitment and 

retention goals and strategies and as part of that update, identify 

indicators to better track the progress of 3R incentives over time in 

addressing the agency’s recruitment and retention goals. 

Recommendations for 

Executive Action 

As FDA implements the results of its 2009 review of 3R incentives, we 

recommend that the Commissioner of FDA continue to strengthen FDA’s 

internal controls for requesting, approving, and processing 3R incentives 

by taking the following two actions: 

• update the guidance for awarding 3R incentives to include the payment 

method used for retention incentives and all the conditions for terminating 

a retention incentive when no service agreement is required, and 

• ensure 3R incentive files are properly completed and reviewed to address 

policy and regulatory requirements before the employees receive the 

incentive payments. 

As OPM implements the results of its governmentwide 3R incentive 

review, we recommend that the Director of OPM require agencies to 

incorporate succession planning efforts into the decision process for 

Page 35 GAO-10-226 FDA 3R Incentives
 

awarding retention incentives and document this requirement for 

succession planning in their 3R incentive plans. 

To ensure the department and OPDIVs are aware of HHS’s policy in all 

areas of 3R incentives and use these incentives consistent with law and 

OPM regulations, we recommend that the Secretary of HHS revise HHS’s 

3R incentive policy to ensure that the guidance provided clearly addresses 

certain important requirements outlined in the regulations. 

We provided a copy of the draft report to the Secretary of HHS and 

Director of OPM for their review and comment. HHS’s Acting Assistant 

Secretary for Legislation provided written comments that included 

comments from FDA (see app. III). FDA generally agreed with our 

recommendations. FDA stated that it will continue to review its 3R 

incentives to ensure that their use is consistent with the agency’s guidance 

for the use of 3R incentives. In response to its recommendation, HHS 

acknowledged the need to revise its 3R incentive policy and stated that it 

is in the process of reviewing and making the appropriate changes. HHS 

also provided technical comments on the draft report, which we 

incorporated as appropriate. 

Agency Comments 

and Our Evaluation 

OPM provided written comments, which are included in appendix IV. OPM 

agreed with our recommendation and stated that it will develop future 

guidance on the importance of considering succession planning in the 

decision process for awarding retention incentive. OPM stated that it is 

working with agencies to review the 3R incentive program and its current 

regulations, guidance, and monitoring policies to identify areas where 

improvements can be made, such as developing and using metrics to 

monitor and evaluate 3R incentive usage. OPM also provided technical 

comments on the draft report, which we incorporated as appropriate. 

As we agreed with your offices, unless you publicly announce the contents 

of this report earlier, we plan no further distribution of it until 30 days 

from the date of this letter. At that time, we will send copies of this report 

to the appropriate congressional committees, the Secretary of HHS, 

Commissioner of FDA, Director of OPM, and other interested parties. The 

report will also be available at no charge on the GAO Web site at 

http://www.gao.gov. 

Page 36 GAO-10-226 FDA 3R Incentives
 

If you or your staff have any questions regarding this report, please 

contact me at (202) 512-6806 or goldenkoffr@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made major contributions to 

Robert N. Goldenkoff 

this report are listed in appendix V. 

Director, Strategic Issues 

Page 37 GAO-10-226 FDA 3R Incentives
Appendix I: Objectives, Scope, and 

Methodology 

Page 38 GAO-10-226 

Appendix I: Objectives, Scope, and 

Methodology 

This report examines (1) the extent to which the Food and Drug 

Administration (FDA) is linking its use of recruitment, relocation, and 

retention (3R) incentives to its strategic human capital approaches to 

address its current and emerging challenges; (2) the extent to which FDA’s 

3R incentives were awarded consistent with the law, regulations, and 

guidance and the internal controls FDA has in place to ensure proper 

disbursement of 3R incentives and encourage efficient use; and (3) the 

steps the Office of Personnel Management (OPM) has taken to help ensure 

that agencies, including the Department of Health and Human Services 

(HHS), have effective strategic oversight of their 3R incentive programs, 

and how HHS is providing oversight of its 3R incentive program. 

To address our first objective, we collected and analyzed aggregate pay 

data as provided by HHS on the amount and number of 3R incentives by 

various categories for employees in FDA and the rest of HHS from January 

1, 2007, through July 4, 2009, and data on FDA’s workforce from OPM’s 

Central Personnel Data File (CPDF) for fiscal year 2008.1

 To describe 

FDA’s use of 3R incentives and draw a comparison to the rest of HHS, we 

analyzed and compared the data on FDA and the rest of HHS to determine 

the number of each type of 3R incentive provided to employees and the 

aggregate distributions across various categories including duty location, 

pay plan, and occupational series by calendar year. Using the HHS pay 

data, we calculated the percentage of FDA and HHS total numbers of 3R 

incentives and total expenditures on these incentives, the mission-critical 

occupational series’ percentage of FDA’s total number of 3R incentives 

with mission-critical occupations as defined by FDA, the average 

distribution of FDA 3R incentives by top occupational series, and the 

distribution of FDA 3R incentives by pay plan. 

To compare the use of 3R incentives in FDA with trends in its workforce, 

using data from CPDF, we calculated FDA retirement eligibility by 

occupational series for career permanent employees,2

 and FDA’s 

percentage of HHS’s total workforce. As a point of comparison on the 

governmentwide use of 3R incentives, we reviewed OPM’s Recruitment, 

Relocation, and Retention Incentives Calendar Year 2007: Report to the

 

1

The CPDF is a database that contains individual records for most federal employees and is 

the primary governmentwide source for information on federal employees. 

2

We calculated retirement eligibility by occupational series for career permanent 

employees. Career employees are employees with appointments that do not have an ending 

date or maximum length of service. 

 FDA 3R Incentives 
Appendix I: Objectives, Scope, and 

Methodology 

Congress, issued in September 2008, and identified the total dollar amount 

spent on 3R incentives in 2007. We checked the HHS data for 

reasonableness and the presence of any obvious or potential errors in 

accuracy and completeness. We conducted interviews with selected HHS 

officials knowledgeable about the data, and brought to the attention of 

these officials any concerns or discrepancies we found with the data for 

correcting or updating and further clarification. On the basis of these 

procedures, we believe the data provided by HHS are sufficiently reliable 

for use in the analyses presented in this report. In addition, we believe the 

CPDF is sufficiently reliable for the informational purpose of this report.3

To identify linkage with the use of 3R incentives and FDA’s human capital 

documents, we analyzed FDA’s Fiscal Year 2006 Workforce Plan—the 

most recent workforce plan available—and FDA’s Succession Plan 2009-

2012. We also conducted interviews with FDA officials about the trends 

we identified in the 3R incentives pay data, FDA’s strategic human capital 

approaches and how the use of 3R incentives fits into broader human 

capital decisions at the agencywide and center-specific levels, and how the 

agency tracks the use of 3R incentives to assess the effectiveness of these 

payments and how they contribute to FDA’s broader human capital goals. 

To address our second objective, we identified all elements that are 

required to be included in documenting the awarding of an incentive. We 

analyzed applicable provisions of title 5 of the United States Code, OPM 

regulations, HHS policy, and FDA guidance, and interviewed HHS, FDA, 

and OPM officials to create a data collection instrument identifying the 

applicable requirements. We used this data collection instrument to 

analyze a sample of 3R incentives awarded by FDA in 2007 and 2008 in 

order to determine the extent to which documentation elements required 

for the awarding of 3R incentives were present. 

To review the FDA 3R incentive files, we took a stratified sample. We 

looked at new incentives for three categories of incentive files— 

recruitment, relocation, and retention—from 2007 and 2008. There were 

2,056 incentive actions in this population from January 1, 2007, to October 

 

3

We previously reported that governmentwide data from the CPDF were 96 percent or 

more accurate. See GAO, OPM’s Central Personnel Data File: Data Appear Sufficiently 

Reliable to Meet Most Customer Needs, GAO/GGD-98-199 (Washington, D.C.: Sept. 30, 

1998). Also, in a document dated February 28, 2008, an OPM official confirmed that OPM 

continues to follow the CPDF data quality standards and procedures contained in our 1998 

report. 

Page 39 GAO-10-226 FDA 3R Incentives
Appendix I: Objectives, Scope, and 

Methodology 

31, 2008. We randomly selected files for review from each set, or stratum, 

of incentive actions for each category and year, except for three strata 

where we reviewed all of the files due to the small population size. Our 

sample size was 107 files, with the number of selected files per stratum 

shown in table 2. 

Table 2: FDA 3R Incentive Population Size and Number of Random Case Selections 

by Stratum 

Stratum Population Sample size Number of out-of-scope cases

2007 Relocation 5 5 0

2007 Retention 807 37 0

2007 Recruitment 1 1 0

2008 Relocation 7 7 0

2008 Retention 898 41 2

2008 Recruitment 338 16 0

Total 2,056 107 2

Source: GAO. 

Subsequent analysis of the 107 files showed that 2 of the files were not in 

the scope for this review, leaving us with a random sample of 105 files. We 

applied our data collection instrument to the random sample of 105 files to 

determine whether each file contained all the elements that needed to be 

documented in the awarding of a 3R incentive. Each incentive file was 

weighted so that our random sample statistically represented the 

population in each stratum. 

Because we followed a probability procedure based on random selections, 

our sample of 3R incentive files was only one of a large number of samples 

that we might have drawn. Because each sample could have provided 

different estimates, we express our confidence in the precision of our 

particular sample’s results in 95 percent confidence intervals. These are 

intervals that would contain the actual population values for 95 percent of 

the samples we could have drawn. As a result, we are 95 percent confident 

that each of the confidence intervals in this report will include the true 

values in the study population. All percentage estimates from the 3R 

incentive file review have margins of error at the 95 percent confidence 

level of plus or minus 10 percentage points or less, unless otherwise noted. 

The practical difficulties of utilizing any data collection instrument may 

introduce errors, commonly referred to as nonsampling errors. For 

example, difficulties in how a particular question is interpreted, in the 

Page 40 GAO-10-226 FDA 3R Incentives
Appendix I: Objectives, Scope, and 

Methodology 

sources of information that are available to respondents, or in how the 

data are entered into a database or were analyzed can introduce unwanted 

variability into the results. We took steps in the development of the 

instrument, the data collection, and the data analysis to minimize these 

nonsampling errors, including providing detailed instructions of the data 

collection instrument. In addition, we had a second independent reviewer 

for the data analysis to further minimize such errors. 

We interviewed OPM officials to help understand OPM’s policy on 

oversight of 3R incentives and the regulations, their interpretation of 

HHS’s policy and FDA’s guidance on 3R incentives, and how the results of 

the file review were viewed in this context. We did not ask OPM to review 

HHS’s policy or FDA’s guidance on 3R incentives as part of our review. We 

also interviewed FDA officials to discuss their internal controls relating to 

the awarding and oversight of 3R incentives, and how the findings of our 

review fit within the context of their oversight. We reviewed FDA’s most 

recent review of its policy and usage of 3R incentives to identify revisions 

that were made to internal controls. 

To address the third objective, we analyzed OPM’s guidance on 3R 

incentives including regulations, memorandums, and fact sheets; 

templates for its human capital evaluations; and the 3R incentive report to 

Congress for calendar year 2007. We also interviewed cognizant officials 

from the two divisions in OPM that are responsible for developing the 3R 

incentive regulations and annual reports and monitoring agencies’ use of 

3R incentives. To obtain information on HHS’s oversight of 3R incentives, 

we analyzed HHS’s 3R incentive policy to determine consistency with OPM 

regulations on 3R incentives, HHS’s fiscal year 2007 human capital 

accountability review of FDA to identify relevant findings on 3R 

incentives, and other relevant documentation; interviewed senior-level 

HHS officials responsible for implementing the 3R incentive policy and 

conducting accountability reviews of the operating divisions’ human 

capital management systems including 3R incentives; and interviewed 

senior-level FDA officials familiar with HHS’s monitoring and oversight of 

3R incentives. 

We conducted our work from December 2008 through January 2010 in 

accordance with generally accepted government auditing standards. 

Page 41 GAO-10-226 FDA 3R Incentives
Appendix II: Highlights of the Food and Drug 

Administration 3R Incentive File Review Appendix II: Highlights of the Food and Drug Results 

Administration 3R Incentive File Review 

Results 

The following table provides examples of the results for our review of 

FDA’s 3R incentive files. We reviewed the files of a random, stratified 

sample of 3R incentives awarded from January 2007 through October 2008 

to determine whether they met requirements in law, OPM regulations, HHS 

policy, and FDA guidance.1

Table 3: Examples of How FDA’s 3R Incentive Files Addressed Selected Requirements 

Requirements for 3R incentive files according to law, OPM regulations, 

HHS policy, or FDA guidance 

How FDA 3R incentive files addressed 

requirements 

Required forms 

Incentive request: An FDA form that outlines descriptive information, such as the 

employee’s name, pay series, and incentive amount, and documents the 

approving signatures. 

We estimate that all 3R incentive files contained 

the request form for the incentive.a

Justification for the incentive request: Documents the need for the incentive and 

the reason why the incentive is warranted according to regulatory and policy 

requirements and includes supplemental information, such as salary surveys, to 

support justification. 

We estimate that about 95 percent of 3R incentive 

files contained the justification for the incentive 

request.b

 Further, we estimate that about 83 

percent of 3R incentive files contained supporting 

documentation, predominantly salary surveys,c

used to support the need for the incentive. 

Service agreement: A written agreement the employee must sign before 

receiving the incentive to complete a specified period of employment with the 

agency prior to receiving the incentive. Regulations require service agreements 

for recruitment and relocation incentives, but not for retention incentives when the 

incentive is paid on a biweekly basis at the full percentage amount. 

• FDA requires service agreements for recruitment and relocation incentives, 

but does not use service agreements for retention incentives because it pays 

these incentives in biweekly installments at the full percentage amount. 

All recruitment incentive files we reviewed, and 11 

of the 12 relocation incentive files we reviewed, 

contained a service agreement. None of the 

retention incentive files had an agreement as 

allowed by regulations.d

Standard Form (SF) 50: A notification of the personnel action for the incentive 

payment to help ensure the authorization was processed accordingly. 

We estimate that all 3R incentive files contained 

the SF-50 showing the proper payment 

authorization.e

Approval of the incentive request 

Recommending official signature: FDA requires the center director or a deputy 

commissioner to officially request the incentive and sign the request form.f

We estimate that about 99 percent of 3R incentive 

files were signed by the recommending official, or 

a proxy on his or her behalf.g

 

1

Our sample includes 17 recruitment, 12 relocation, and 76 retention incentives. We 

reviewed the entire population of relocation incentives awarded from January 2007 through 

October 2008 so estimates to the population are not necessary. For recruitment and 

retention incentives, we are able to make population attribute estimates at the 95 percent 

confidence level with an overall precision of +/- 10.0 percent for the time of our file review. 

Page 42 GAO-10-226 FDA 3R Incentives 
Appendix II: Highlights of the Food and Drug 

Administration 3R Incentive File Review 

Results 

Requirements for 3R incentive files according to law, OPM regulations, 

HHS policy, or FDA guidance 

How FDA 3R incentive files addressed 

requirements 

Approving official signature: FDA’s Commissioner is the approving official who is 

to officially approve or disapprove all incentive requests and sign the request 

form. 

• From 2007 through 2008, FDA allowed the Deputy Commissioner for 

Operations/Chief Operating Officer to sign for the Commissioner and 

approve the requests. According to an HHS official, this delegation of 

approval is consistent with HHS policy and OPM regulations. 

We estimate that all of the 3R incentive files were 

signed by the approving officialh or a designee on 

his behalf. For most of the files, the Deputy 

Commissioner for Operations/Chief Operating 

Officer signed as a designee for the Commissioner 

as the approving official. 

Eligibility conditions for 3R incentives 

Eligible categories of employees: As provided for by statute, OPM regulations 

identify the categories of eligible employees including positions in or whose pay 

is set at the General Schedule (GS), senior-level or scientific or professional, 

Senior Executive Service (SES), law enforcement officers, Executive Schedule, 

prevailing rate, and other positions approved by OPM. 

• Employees appointed pursuant to 42 U.S.C. §§ 209(f) and 209(g) are not 

eligible to receive 3R incentives pursuant to the authorities at 5 U.S.C. §§ 

5753 or 5754. Rather, their compensation is authorized pursuant to these 

appointment provisions which permit HHS flexibility in setting compensation 

for those appointed. FDA began phasing out the use of retention incentives 

for these employees starting in 2007. 

We estimate that all 3R incentives were awarded 

to eligible categories of employees.i

Newly appointed employee for recruitment incentives: An employee must be in 

the first appointment in the federal government or meet the regulatory definition 

for newly appointed in order to be eligible to receive a recruitment incentive. 

All recruitment incentive files we reviewed 

contained documentation supporting that the 

recipient was newly appointed to the federal 

government. 

Current employee for relocation and retention incentives: An employee must be 

an employee in the federal government immediately before the relocation or 

receiving the retention incentive payment. 

10 of 12 of the relocation incentive files contained 

documentation supporting that the incentive was 

given to an employee in the federal government 

immediately before receiving the incentive. All 

retention incentives we reviewed were given to 

current FDA employees. 

Aggregate pay limitation 

Aggregate pay limitation: Payment of 3R incentives is subject to an aggregate 

pay limit under 5 U.S.C. § 5307 which limits compensation received in any 

calendar year to an amount equal to the rate for level I of the Executive Schedule 

or, for employees in SES positions covered by a certified performance appraisal 

system, equal to the annual compensation payable to the Vice President.j

 For 

FDA’s GS employees, the amounts were $186,600 and $191,300 for 2007 and 

2008, respectively. For FDA’s SES employees, which are covered under HHS’s 

certified appraisal system, the amounts were $215,700 and $221,100 for 2007 

and 2008, respectively. 

• For FDA employees appointed under the authority of 42 U.S.C. §§ 209(f) 

and 209(g), the aggregate pay limit under section 5307 does not apply to 

payments authorized outside of title 5. HHS has established aggregate pay 

limits for these title 42 positions, which for its 209(g) employees, reflect the 

limit required under section 5307 for FDA’s GS employees. For its 209(f) 

employees, the aggregate pay limit was $375,000 for 2007 and 2008. 

We estimate that all employees’ 3R incentive 

payments were within applicable aggregate pay 

limits for the year as set by statute or HHS.k

Source: GAO analysis of law, OPM regulations, HHS policy, FDA guidance, and a sample of FDA 3R incentive files. 

a

The 95 percent confidence interval for this estimate is from 97.2 to 100 percent. 

b

The 95 percent confidence interval for this estimate is from 88.3 to 98.3 percent. 

Page 43 GAO-10-226 FDA 3R Incentives
Appendix II: Highlights of the Food and Drug 

Administration 3R Incentive File Review 

Results 

c

The 95 percent confidence interval for this estimate is from 76.4 to 87.6 percent. 

d

1 of 1 and 16 of 16 recruitment incentive files from 2007 and 2008, respectively, and 0 of 37 and 0 of 

39 retention incentive files from 2007 and 2008, respectively. 

e

The 95 percent confidence interval for this estimate is from 97.2 to 100 percent. 

f

FDA requires the center directors/Associate Commissioner for Regulatory Affairs, or within the Office 

of the Commissioner, the deputy commissioners/Chief Counsel or Chief of Staff, as applicable, to 

officially request the incentive and sign the request form. 

g

The 95 percent confidence interval for this estimate is from 95.0 to 100 percent. 

h

The 95 percent confidence interval for this estimate is from 97.2 to 100 percent. 

i

The 95 percent confidence interval for this estimate is from 97.2 to 100 percent. 

j

5 U.S.C. § 5307(d) provides for the higher aggregate pay limit for SES positions (or senior-level or 

scientific or professional positions paid under 5 U.S.C. § 5376) in agencies with systems that have 

been certified by OPM with Office of Management and Budget concurrence as having performance 

appraisal systems which, as designed and applied, make meaningful distinctions based on relative 

performance. 5 C.F.R. part 530, subpart B and part 430, subpart D. 

k

The 95 percent confidence interval for this estimate is from 97.2 to 100 percent. 

Page 44 GAO-10-226 FDA 3R Incentives
Appendix III: Comments from the Department Appendix III: Comments from the of Health and Human Services 

Department of Health and Human Services 

Page 45 GAO-10-226 FDA 3R Incentives 
Appendix III: Comments from the Department 

of Health and Human Services 

Page 46 GAO-10-226 FDA 3R Incentives
Appendix III: Comments from the Department 

of Health and Human Services 

Page 47 GAO-10-226 FDA 3R Incentives
Appendix III: Comments from the Department 

of Health and Human Services 

Page 48 GAO-10-226 FDA 3R Incentives
Appendix IV: Comments from the Office of Appendix IV: Comments from the Office of Personnel Management 

Personnel Management 

Page 49 GAO-10-226 FDA 3R Incentives 
Appendix IV: Comments from the Office of 

Personnel Management 

Page 50 GAO-10-226 FDA 3R Incentives
Appendix V: 

A

GAO Contact and Staff 

cknowledgments 

Page 51 GAO-10-226 

Appendix V: GAO Contact and Staff 

Acknowledgments 

Robert N. Goldenkoff, (202) 512-6806, goldenkoffr@gao.gov 

In addition to the individual named above, Belva Martin, Acting Director; 

Carl Barden; David Bobruff; Sara Daleski; Karin Fangman; Peter Gilchrist; 

Wati Kadzai; Janice Latimer; Meredith Moore; Melanie Papasian; Jeffery 

Schmerling; and Gregory Wilmoth made major contributions to this report. 

 FDA 3R Incentives 

GAO Contact 

Staff 

Acknowledgments 

(450722) 
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