Appendix III

Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page 1 

Review of Alternative Work 

Arrangements, Overtime 

Compensation, and COOP-Related 

Activities at the SEC

September 28, 2011

Report No. 491
O .... ' CI!:O .. 

'NSP I!:CTO R C I!:NERA L 

UNITED STA TES 

SECURITIES AND EXCHANGE COMMISSION 

WASHINGTON, D .C. 20549 

Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011

Report No. 491

Page ii

This memorandum transmits the U.S. Securities and Exchange Commission 

OIG's final report detailing the results on our review of the SEC's alternative work 

arrangements, overtime compensation, and COOP-related activities. This review 

was conducted as part of our continuous effort to assess management of the 

Commission's programs and operations and as part of our annual audit plan. 

The final report contains 27 recommendations, which if fully implemented should 

enhance the Commission's alternative work schedule, overtime compensation, 

telework, and COOP programs. The respective offices concurred with all 27 of 

the report's recommendations. Your written response to the draft report is 

included in Appendix V. 

Within the next 45 days, please provide the OIG with a written corrective action 

plan that is designed to address the report's recommendations. The corrective 

action plan should include information such as the responsible official/point of 

contact, timeframes for completing required actions, and milestones identifying 

how you will address the recommendations. 

MEMORANDUM 

September 28, 2011 

To: Cristin Fair, Acting Associate Executive Director, Office of Human 

Resources 

Jayne Seidman, Acting Associate Executive Director, Office of 

Administrative Services 

Barry D. Walters, Director/Chief FOIA Officer, Office of FOIA, 

Records Management, and Security 

Thomas A. Bayer, Director, Chief Information Officer, Office of 

Information Technology 

From: H. David Kotz, Inspector General, Office of Inspector General (OIG

Subject: Review of Alternative Work Arrangements, Overtime 

Compensalion, and COOP-Relaled Activities al Ihe SEC, Report 

No. 491 

r#"t'.k-
Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page iii

Should you have any questions regarding this report, please do not hesitate to 

contact me. We appreciate the courtesy and cooperation that you and your staff 

extended to our auditor during this review. 

Attachment

cc: James R. Burns, Deputy Chief of Staff, Office of the Chairman

Luis A. Aguilar, Commissioner

Troy A. Paredes, Commissioner

Elisse B. Walter, Commissioner

Jeff Heslop, Chief Operating Officer, Executive Director, Office of Chief of

 Operations
Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011

Report No. 491

Page iv

Review of Alternative Work Arrangements, 

Overtime Compensation, and COOP-Related 

Activities at the SEC

Executive Summary

Background. Federal agencies have, in recent years, been directed to provide 

employees with greater flexibilities in their work and expanded opportunities to 

telework. In addition, agencies are now required to have continuity of operations 

(COOP) plans and to incorporate telework into these plans. 

With respect to flexible work schedules, President Clinton's memorandum of July 

11, 1994, "Expanding Family-Friendly Work Arrangements in the Executive 

Branch," directed the heads of all executive agencies to establish a program to 

encourage and support the expansion of flexible family-friendly work 

arrangements. In a subsequent memorandum, "Implementing Federal Family 

Friendly Work Arrangements," dated June 21, 1996, President Clinton directed 

the heads of executive agencies to review their personnel practices and develop 

a plan of action to utilize the flexible policies in place and, to the extent feasible, 

expand the ability to provide employees with flexible hours and telecommuting 

opportunities.

In addition, federal legislation has focused on telework. For example, on 

December 8, 2004, Congress enacted Public Law 108-447, which required the 

SEC to certify within two months that telecommuting opportunities were made 

available to 100 percent of the eligible workforce. The law also required the SEC 

to provide quarterly reports to the U.S. House and Senate Committees on 

Appropriations on the status of telecommuting programs, including the number of 

federal employees eligible for, and participating in, such programs, and to 

designate a telework coordinator responsible for overseeing the implementation 

and operation of its telework programs. On December 9, 2010, the Telework 

Enhancement Act of 2010 was enacted. This statute also required, among other 

things, that within 180 days, executive agencies establish a telework policy 

authorizing telework for all eligible employees, determine the eligibility of all 

employees to participate in telework programs, and notify all employees of their 

eligibility to telework.

Telework has also become an important part of COOP, which is an effort within 

executive departments and agencies to ensure that primary mission-essential 

functions (PMEF) continue to be performed during a wide range of emergencies, 

including localized acts of nature, accidents, and technological or attack-related 

emergencies. The Telework Enhancement Act of 2010 required agencies to 

incorporate telework into their COOP plans.
Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page v 

Within the Securities and Exchange Commission (SEC or the Commission), the 

Office of Human Resources (OHR) is responsible for developing, implementing, 

and evaluating the Commission’s work/life programs, including alternative work 

schedule programs and its telework program. Although the existing SEC 

Personnel Operating Policies and Procedures (POPPS) Manual describes 

alternative work schedules and telework, as well as overtime compensation for 

employees, the material is outdated. OHR is developing a new handbook, the 

Human Capital Directive, to replace the POPPS Manual. The 2007 collective 

bargaining agreement (CBA) between the SEC and the National Treasury 

Employees Union (NTEU) addresses alternative work schedules, telework, and 

overtime compensation in detail and is applicable to all SEC bargaining unit 

employees. According to OHR, the alternative work schedule programs 

described in the CBA are also available to nonbargaining unit employees.

To facilitate its review of the SEC’s implementation and oversight of flexible work 

schedule and telework initiatives, the OIG issued a survey to all SEC personnel 

concerning alternative work schedules, telework, overtime compensation, and 

COOP. The survey consisted of numerous yes/no and multiple-choice questions 

and also included an opportunity for respondents to provide written feedback to 

the OIG. 

Objectives. The objectives of our review were to (1) examine how well the SEC 

has implemented and oversees its alternative work schedule and telework 

programs; (2) determine whether the SEC complies with applicable federal laws 

and regulations and SEC policies and procedures pertaining to alternative work 

schedules, telework, and overtime; and (3) assess the pertinent SEC information 

technology capabilities and support for the SEC’s telework and COOP 

programs. 

Summary of Results. We reviewed data provided by OHR on SEC employees’ 

participation in alternative work schedule programs during fiscal years 2008 

through 2010 to determine whether SEC employees were only working properly

authorized alternative work schedules. We found, however, that six alternative 

work schedule programs in which SEC employees participated—3-day 

workweek, flexible workweek, Maxiflex, 10-hour days biweekly, first 40-hour tours 

of duty, and rotating shifts—were not among the alternative work schedules 

included in the CBA or the POPPS Manual. We also obtained confirmation from 

OHR that these options are not authorized for SEC personnel. 

In addition to the three types of alternative work schedules authorized for SEC 

employees—Flexitour, 5-4/9 compressed, and 10-4 compressed—the Office of 

Personnel Management (OPM) Handbook on Alternative Work Schedules 

describes other types of alternative work schedules that federal agencies may 

choose to implement. We determined that some federal agencies are allowing 

their employees more flexibility with respect to their arrival and departure times 

and the length of workdays within the workweek or pay period by implementing 
Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page vi

work schedule options such as a gliding schedule, variable day schedule, or 

variable week schedule. We determined that, due to the benefits that alternative 

work schedule options provide to employees, the SEC might benefit from making 

additional flexible work schedule options available to its employees.

Our review also found that the SEC does not have a comprehensive manual that 

addresses alternative work schedule options that are available to all employees. 

The CBA, which applies to both nonprofessional and professional SEC 

employees, but not to managers, supervisors, and certain other excluded 

employees, references only three types of alternative work schedules: Flexitour 

with credit hours, compressed 5-4/9, and compressed 4-10. The POPPS Manual 

addresses only two alternative work schedule options, Flexitour and 5/4-9 

compressed, and the pertinent material has not been updated since January 20, 

1995. Moreover, the POPPS Manual provision addressing Flexitour schedules 

and credit hours is inconsistent with the Flexitour provisions of the CBA. 

Additionally, the POPPS Manual provision addressing compressed work 

schedules is not only outdated, but contains significant inconsistencies with the 

CBA. We further determined that the SEC has no official form for employees to 

use when requesting to participate in an alternative work schedule. We also 

found that little training on alternative work schedules is available to SEC 

employees and that this lack of training may have contributed to the use of 

unauthorized alternative work schedules by SEC employees.

With respect to overtime compensation, we found that SEC employees generally 

may receive compensation for overtime hours worked in the form of credit hours, 

overtime pay, or compensatory time off, with credit hours being the most widely 

used method of overtime compensation. Our review found that the current CBA 

language allows employees who work a conforming schedule (i.e., one that 

aligns with the office’s official business hours) is inconsistent with federal law 

providing that credit hours are available only to employees who work flexible 

schedules. We also found that while the employees of the Senior Executive 

Service (SES) are prohibited by federal regulation from earning credit hours, 

Senior Officers at the SEC (who are essentially equivalent to SES members) are 

permitted to, and do earn credit hours, although the SEC has no official policy 

addressing this issue. Our review also found that while Senior Officers are 

prohibited from earning compensatory time off except for religious purposes, one 

Senior Officer did earn compensatory time off for other than religious purposes 

during fiscal years 2008 through 2010.

In addition, our review found that while many SEC employees are compensated 

for overtime work in some manner, other employees are not being compensated 

for overtime work and are, therefore, volunteering their time. Many of the 

comments received in response to our work/life survey related to voluntary 

overtime. In those comments, some employees expressed the belief that 

uncompensated overtime is unfair to employees, while other employees 

indicated that they view voluntary overtime as part of the job or that taking pride 
Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page vii

in their work and professionalism motivates them to work late. We found that a 

1992 provision of the POPPS Manual provided that employees in professional or 

supervisory positions are expected to have sufficient interest in completing their 

assignments on a timely basis and keeping their workload reasonably current by 

performing voluntary work outside of regular work hours on their own initiative 

whenever necessary. We noted, however, that with respect to bargaining unit 

employees, this provision appeared to be superseded by the 2007 CBA, which 

provided that the SEC will not expect or require employees to donate time in lieu 

of proper overtime compensation. Further, we found no SEC policy document 

that superseded the 1992 POPPS provision for nonbargaining unit employees, 

and we found inconsistent views among OHR senior staff with respect to the 

appropriateness or legality of management’s expectation that employees who are 

exempt from the overtime pay requirements of the Fair Labor Standards Act work 

some amount of uncompensated overtime.

Our review determined that the SEC’s promotional and training activities related 

to telework are inadequate. Specifically, we determined that an assessment by 

the federal Telework Advisory Group of the SEC’s telework policy completed in 

June 2010 found the policy lacked clarity and contained some ambiguity and 

redundancy. We found that new SEC employees receive little information about 

telework during orientation, and 57 percent of the respondents to our Work/Life 

survey believed that the SEC’s advertisement of its work/life programs could, or 

should be, improved, with some comments specifically mentioning the lack of 

information regarding telework. The work/life survey also identified suggested 

improvements to the SEC’s current guidance concerning telework. Further, our 

analysis of the training materials currently being used for SEC telework courses 

revealed some gaps in their content, particularly with respect to the teleworking 

provisions of the CBA.

In addition, our review found that as of December 31, 2010, 125 SEC employees 

engaged in telework three or more days per week, with 68 of these employees 

being located in the SEC headquarters facility. We learned, however, that the 

majority of these frequent teleworkers, including some who telework five days a 

week, still have private offices at SEC headquarters, notwithstanding that a 

stated purpose of federal telework programs is to reduce real estate and energy 

costs and promote management efficiencies.

In reviewing the use of telework at the SEC, we analyzed the telework data that 

the SEC reported to OPM for calendar years 2008 and 2009 and compared the 

reported data to other telework data maintained by OHR. We found 

inconsistencies in the data that were provided to us, and we determined that the 

reports produced by the SEC for OPM do not track the number of employees 

whose telework agreements have been denied or terminated. We also noted 

that the Telework Enhancement Act of 2010 establishes additional requirements 

for OPM reports based on agency-provided data and that the SEC will be unable 

to provide the necessary data to OPM without a system for gathering timely and 
Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011

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Page viii

accurate information on telework. While we found that the SEC’s Telework 

Coordinator has established a Telework program work plan for fiscal year 2011 

that includes addressing OPM reporting requirements, the Telework Coordinator 

has not developed explicit goals and objectives to ensure that the elements of 

the plan are achieved or any goals and objectives for increasing telework 

participation.

With regard to telework as it relates to COOP, we found that nearly half—49 

percent—of SEC COOP mission-essential personnel do not have telework 

agreements in place. This lack of telework agreements indicates that these 

employees may not be teleworking, even on an ad hoc basis, and may not be 

routinely practicing their remote access capabilities. We also determined that the 

telework agreements of mission-essential personnel do not include work 

expectations related to emergency telework and that the SEC does not require its 

mission-essential personnel to enter into telework agreements. 

During our review, we obtained information pertinent to the SEC’s participation in 

COOP exercises and, in particular, reviewed the results of the SEC’s test of its 

telework capability during a 2009 COOP exercise. We found that, in addition to 

nearly half of the SEC’s mission-essential personnel lacking telework 

agreements, some SEC mission-essential personnel participating in COOP 

exercises are not required to remotely access the SEC’s network during such 

exercises. We concluded that a significant number of SEC mission-essential 

personnel are not likely routinely practicing their remote access capabilities, 

which could impair their ability to perform mission-essential functions during 

emergency situations. 

We further determined that although telework is mentioned in the SEC’s 

headquarters and regional COOP plans, the telework provisions in the COOP 

plan were not as specific and detailed as those contained in the SEC’s April 2009 

Pandemic Influenza Preparedness Plan.1

 Under OPM guidance, telework must 

be part of all agency emergency planning, and management must be committed 

to implementing telework as broadly as possible to take full advantage of 

telework for emergency purposes. We found that the current SEC COOP Plan 

emphasized the use of relocation facilities rather than telework and that the 

COOP Plan’s lack of emphasis on telework could hinder effective planning and 

preparation for carrying out essential functions during emergencies and 

catastrophic events.2

 

1 In connection with its annual continuity exercises, the SEC has advised us that FEMA has examined the 

SEC’s COOP Plan multiple times and found it to be in compliance with applicable continuity planning 

requirements, notably those in Federal Continuity Directive I (issued by the Department of Homeland 

Security in February 2008). 2 Although telework is not necessarily preferable to relocation to alternative facilities in particular emergency 

situations, it is an important continuity-support capability that should be taken fully into account in the SEC’s 

emergency planning. 
Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

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Page ix

In addition, our examination of the regional office COOP plans revealed that 

none of those plans contain all the elements of a viable continuity plan and that 

some of the plans were outdated. We also determined that the SEC’s regional 

office COOP plans, like the Commission-wide COOP Plan, do not fully address 

the role of telework.

Finally, we determined that although the SEC has a variety of remote access 

tools for teleworkers to use, the Office of Information Technology (OIT) has not 

tested the maximum user limits of the SEC’s remote access technology. The 

failure to conduct stress tests of remote access capabilities gives rise to 

concerns that increased use of remote access devices and systems could stress 

SEC remote access resources and the SEC network and strain help desk 

resources. As a result, SEC users working off-site might be unable to access the 

system and necessary applications and work materials, and the Commission’s 

ability to function effectively, particularly during emergencies or catastrophic 

events, would be impaired. 

Summary of Recommendations. Our review determined that several 

improvements are needed to the SEC’s alternative work schedule, overtime, 

telework, and COOP programs. 

Specifically, we recommend the following:

(1) OHR should take necessary actions to ensure that employees do 

not work unauthorized alternative work schedules, including required 

revisions to the CBA, and steps to ensure that all Commission 

managers and staff are fully informed about which alternative work 

schedules are authorized.

(2) OHR should ensure that the (a) new Human Capital Directive 

addresses all alternative work schedules available to SEC 

employees, and (b) contents of the Human Capital Directive are and 

remain consistent with the alternative work schedule components of 

the CBA.

(3) OHR should ensure that the new Human Capital Directive 

addresses all SEC employees—supervisory, managerial, 

professional, nonprofessional, bargaining unit, and nonbargaining 

unit employees—and contains up-to-date information on all 

alternative work schedule programs authorized by the Commission. 

(4) OHR should (a) provide comprehensive training to all employees 

and managers on all available alternative work schedule programs, 

and (b) make up-to-date information on alternative work schedules 

and policy available electronically to all employees on the SEC 
Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

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Page x 

intranet site and periodically notify employees of its availability and 

location. 

(5) OHR should develop an alternative work schedule request form that 

contains sections for the requesting employee’s information and 

certification; the type of alternative work schedule requested, 

including specific work hours and, if applicable, workdays; the 

immediate supervisor’s approval; and, if applicable, the approving 

official’s decision.

(6) OHR, in developing the new Human Capital Directive, should work 

with NTEU to determine whether additional alternative work 

schedules, such as the gliding, variable day, variable week, threeday workweek, and Maxiflex options described in OPM’s Handbook 

on Alternative Work Schedules, should be adopted as options for 

SEC employees.

(7) OHR should include in the new Human Capital Directive clear, upto-date information on the laws, policies, guidelines, and procedures 

related to credit hours, compensatory time off, payment for overtime 

worked, and voluntary and uncompensated services. 

(8) OHR should negotiate revisions to the language in the CBA between 

the Commission and the NTEU with respect to the use of credit 

hours by employees working conforming schedules, ensuring that 

the revised language conforms with applicable law.

(9) OHR should institute appropriate controls to ensure that Senior 

Officers do not receive compensatory time off. 

(10) OHR should consult with the Office of the General Counsel and 

OPM to determine whether the SEC should adopt an official policy 

that addresses whether Senior Officers are permitted to earn credit 

hours.

(11) OHR should ensure that the recommendations made by the 

Telework Advisory Group in its assessment of the SEC’s telework 

policy are considered, including the recommendation that OHR use 

the Telework Advisory Group’s telework policy evaluation checklist 

as a resource to further develop the Commission’s telework policy.

(12) OHR should revise the one-page overview of telework provided to 

new employees to include website references for telework 

resources; the name, telephone number, and e-mail address of the 

SEC Telework Coordinator; and page references to article 11, 

Telework Program, of the 2007 CBA. 
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Page xi

(13) OHR should provide comprehensive telework training sessions to 

SEC employees that address, among other things, telework tools; 

policies and procedures for discontinuing telework; what happens 

when an employee is promoted, reassigned, or detailed; duty station 

policy; employee availability during telework; employee personal 

computer usage; mandatory telework-related forms; office supplies 

and equipment; and protection of government records.

(14) OHR should provide comprehensive telework training sessions to 

SEC managers that address, among other things, telework tools, 

policies, and procedures related to managers’ approval and denial of 

employee telework, managers’ right to direct employees to report to 

work on their telework day, and managers’ ability to suspend or 

terminate telework.

(15) OHR should require training and recertification for current 

teleworkers and their managers at least every two years.

(16) OHR should send administrative notice e-mails to all SEC 

employees twice each year reminding them of the Commission’s 

telework options and the benefits of participating in the program.

(17) The Office of Administrative Services should establish and enforce 

procedures to ensure that employees who telework three or more 

days a week do not maintain private offices, but rather share office 

space. 

(18) OHR should develop an improved telework database that will track 

the processing of telework agreements and store telework 

agreements to ensure that the data it reports to OPM are reliable 

and valid.

(19) OHR should require that SEC managers provide the Telework 

Coordinator with copies of denied or terminated telework 

agreements to facilitate tracking of such agreements.

(20) OHR should develop goals and objectives for accomplishing the 

work listed in the telework program work plan for fiscal year 2011 

and for increasing telework participation by SEC employees.

(21) OHR should establish a process to monitor progress in meeting the 

Commission’s telework-related goals and objectives and, if the goals 

and objectives are not being met, OHR should take action to identify 

and eliminate barriers to meeting the goals and objectives.
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Page xii

(22) Consistent with governing Federal Emergency Management Agency 

(FEMA) and OPM directives, and the SEC CBA, OHR, in 

conjunction with the Office of Freedom of Information Act (FOIA), 

Records Management, and Security, should require all missionessential personnel to enter into telework agreements that 

specifically allow them to conduct their continuity of operations 

responsibilities and the mission-essential functions they will perform 

during emergencies or agency closures.

(23) Consistent with governing FEMA and OPM directives and the SEC 

CBA, OHR, in conjunction with the Office of FOIA, Records 

Management, and Security, should require mission-essential 

personnel who have telework agreements to telework periodically to 

practice their assigned mission-essential and primary missionessential functions.

(24) The Office of FOIA, Records Management, and Security should 

update the continuity communications section of the SEC’s COOP 

Plan and expand it to expressly address conducting essential 

functions by telework consistent with governing FEMA and OPM 

directives and the SEC CBA, and include subsections addressing 

telework capability, training staff to telework effectively, and 

exercising agency telework competence as detailed in the SEC’s 

Pandemic Influenza Preparedness Plan.

(25) The Office of FOIA, Records Management, and Security should 

instruct regional office directors to revise their regional office COOP

plan to address all the essential elements of viable continuity 

capability specified by FEMA and, to ensure that the plans are 

reviewed and modified timely and presented in a standard format, 

the Office of Security Services should establish timelines and 

submission criteria for the revised plans.

(26) The Office of FOIA, Records Management, and Security should 

instruct the directors of the appropriate regional offices to include in 

their COOP plans strategies for supporting headquarters essential 

functions during devolution of control.

(27) OIT should coordinate with other SEC offices and divisions to 

perform server stress tests, which should incorporate a variety of 

applications used with remote access.
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Page xiii

TABLE OF CONTENTS 

Executive Summary ..........................................................................................

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Table of Contents ............................................................................................

Background and Objectives ..........................................................................

Background ...............................................................................................

Objectives ..................................................................................................

Findings and Recommendations .................................................................

Finding 1: A Number of SEC Employees Are Working Unauthorized Work

Schedules, and SEC Policy on Alternative Work Schedules Is Poorly 

Documented and Communicated...............................................................

Recommendation 1 ...............................................................

Recommendation 2 ...............................................................

Recommendation 3...............................................................

Recommendation 4...............................................................

Recommendation 5...............................................................

Recommendation 6 ...............................................................

Finding 2: The SEC Lacks Clear Guidance on Overtime Compensation 

and Uncompensated Services ...................................................................

Recommendation 7 ...............................................................

Recommendation 8 ...............................................................

Recommendation 9 ...............................................................

Recommendation 10.............................................................

Finding 3: Promotion and Training Activities for the SEC Telework 

Program Are Inadequate ...........................................................................

Recommendation 11 .............................................................

Recommendation 12.............................................................

Recommendation 13.............................................................

Recommendation 14.............................................................

Recommendation 15.............................................................

Recommendation 16.............................................................

Finding 4: The Majority of Frequent Teleworkers at SEC Headquarters 

Have Private Offices ..................................................................................

Recommendation 17 .............................................................
Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

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Finding 5: The SEC Telework Data Reported to OPM Are Inconsistent 

With Other Telework Data Maintained by OHR...........................................

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Recommendation 18 .............................................................

Recommendation 19.............................................................

Recommendation 20 .............................................................

Recommendation 21 .............................................................

Finding 6: Some SEC Mission-Essential Personnel Lack Telework 

Agreements................................................................................................

Recommendation 22 .............................................................

Recommendation 23 .............................................................

Finding 7: The SEC COOP Plan Does Not Comprehensively Address the

Role of Telework ........................................................................................

Recommendation 24 .............................................................

Finding 8: The SEC’s Regional Offices Lack Viable COOP Plans ............

Recommendation 25 .............................................................

Recommendation 26 .............................................................

Finding 9: The SEC Has Not Tested the Maximum User Limit for Remote

Access to the SEC Network .......................................................................

Recommendation 27 .............................................................

Appendices 

Appendix I: Abbreviations................................................................................ 55 

............................ 56 

............................ 58 

............................ 61 

............................ 67 

............................ 72 

Appendix II: Scope and Methodology...................................

Appendix III: Criteria.............................................................

Appendix IV: List of Recommendations ...............................

Appendix V: Management’s Comments ..............................

Appendix VI: OIG Response to Management’s Comments..

Tables 

Table 1: SEC Employees’ Use of Alternative Work Schedules Other Than 

Flexitour, Fiscal Years 2008-2010...................................................................

Table 2: Hours of Overtime Compensation Received by SEC Employees, 

Fiscal Years 2008–2010 .................................................................................

Table 3: SEC Telework Participation Data Reported to OPM and 

Telework Participation Data Provided to the OIG, Calendar Years 2008 

and 2009 ........................................................................................................

Table 4: Elements of Viable Continuity Capability in SEC Regional 

Offices’ COOP Plans ......................................................................................

... 9 

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. 49 
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Table 5: SEC Remote Access Tools for Teleworkers ....................................52

................ 53 

Table 6: OIT Help Desk Failure Tickets Related to Remote Access

Technology, Fiscal Year 2010 .........................................................
Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

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Page 1 

Background and Objectives

Background 

In recent decades, federal agencies have been directed to provide employees 

with greater flexibility in their work schedules and expanded opportunities to 

telework. In addition, federal law requires agencies to incorporate telework into 

their continuity of operations (COOP) plans.

SEC Work/Life Policy Documents

Within the Securities and Exchange Commission (SEC or the Commission), the 

Office of Human Resources (OHR) is responsible for developing, implementing, 

and evaluating the Commission’s work/life programs, including alternative work 

schedule programs and its telework program. Although the existing SEC 

Personnel Operating Policies and Procedures (POPPS) Manual describes 

alternative work schedules and telework, as well as overtime compensation for 

employees, the material is outdated. OHR is developing a new handbook to 

replace the POPPS Manual. The 2007 collective bargaining agreement (CBA) 

between the SEC and the National Treasury Employees Union (NTEU) 

addresses alternative work schedules, telework, and overtime compensation in 

detail and is applicable to all SEC bargaining unit employees. According to OHR, 

the alternative work schedules described in the CBA are also available to 

nonbargaining unit employees.

Work/Life Legislation, Directives, and Guidance

Alternative Work Schedules. The Federal Employees Flexible and 

Compressed Work Schedules Act of 1982 authorized, but did not require,

executive agencies to establish programs that allow the use of flexible work 

schedules, including compressed work schedules.3

 On July 11, 1994, President 

William J. Clinton issued a memorandum directing the head of each executive 

department or agency to “establish a program to encourage and support the 

expansion of flexible family-friendly work arrangements,” including job sharing, 

part-time employment, alternative work schedules, and telework. The 

memorandum stated that implementation of flexible work arrangements was 

necessary in order for the federal government to recruit and retain a workforce 

“that will provide the highest quality of service to the American people.” The 

memorandum also requested that independent agencies “adhere to this directive 

to the extent permitted by law.”4

 

 

3 5 U.S.C. § 6120 et seq. 4 Memorandum from President William J. Clinton for the Heads of Executive Departments and Agencies, 

Expanding Family-Friendly Work Arrangements in the Executive Branch (July 11, 1994). 
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Following up on the July 1994 memorandum, President Clinton issued a 

memorandum on June 21, 1996, that directed heads of executive departments 

and agencies “to review their personnel practices and develop a plan of action to 

utilize the flexible policies already in place” and, to the extent feasible, expand 

their ability to provide their employees with, among other things, flexible hours 

and opportunities to telecommute.5 Although the decision to establish alternative 

work schedule programs is at the discretion of agency heads, “this discretion is 

subject to the obligation to negotiate with the exclusive representative(s) of 

bargaining unit employees.”

6

 NTEU is the exclusive representative of SEC 

bargaining unit employees, and article 7 of the 2007 CBA between the SEC and 

the union lays out the details of the SEC’s alternative work schedule program, 

which includes both flexible work schedules and two variations of compressed 

work schedules. The CBA also addresses credit hours, which may be earned by 

employees who work flexible schedules.

Telework. On December 8, 2004, Congress enacted Public Law 108-447, which 

required that the SEC certify within two months “that telecommuting opportunities 

are made available to 100 percent of the eligible workforce.” The law also 

required that the SEC provide quarterly reports to the Committees on 

Appropriations on “the status of telecommuting programs, including the number 

of Federal employees eligible for, and participating in, such programs,” and that it 

designate a telework coordinator responsible for overseeing the implementation 

and operation of its telework programs.7

On December 9, 2010, the Telework Enhancement Act of 2010 was enacted. It 

defined telework as an arrangement under which an employee performs his or 

her duties, responsibilities, and other authorized activities “from an approved 

worksite other than the location from which the employee would otherwise work.” 

The law required that within 180 days executive agencies establish a telework 

policy “under which eligible employees of the agency may be authorized to 

telework,” determine the eligibility of all employees to participate in telework, and 

notify all employees of their eligibility to telework. Other requirements of the law 

included the following:

• Any employee who participates in telework must have a written 

telework agreement with his or her manager.

• Agency heads must ensure that interactive telework training is

provided to employees eligible to telework and to their managers.

• Employees must successfully complete interactive telework training 

before they enter into a written telework agreement.

• Within 18 months and annually thereafter, the Office of Personnel 

Management (OPM) must report to Congress, the Comptroller 

 

5 Memorandum from President William J. Clinton for the Heads of Executive Departments and Agencies, 

Implementing Federal Family Friendly Work Arrangements (June 24, 1996).

6 OPM, Handbook on Alternative Work Schedules, http://www2.opm.gov/oca/aws/index.asp#Introduction. 7 Pub. L. No. 108-447, div. B, § 622. 
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General, and the Office of Management and Budget on telework 

participation in each executive agency and each agency’s progress 

in meeting its telework participation goal.

• Agencies must incorporate telework into their COOP plans.

The act assigns OPM responsibility for providing telework policy and policy 

guidance to agencies and for helping them establish appropriate teleworking 

goals.8

Role of Telework in COOP. COOP, as defined in National Security Presidential 

Directive-51/Homeland Security Presidential Directive-20, is an effort within 

individual executive departments and agencies to ensure that mission-essential 

functions (MEF) and primary mission-essential functions (PMEF) continue to be 

performed during a wide range of emergencies, including localized acts of 

nature, accidents, and technological or attack-related emergencies.9 Each 

agency is required to have a COOP plan, which, according to the Federal 

Emergency Management Agency (FEMA), is to serve as its roadmap for 

implementing and managing its COOP program.

10 Personnel identified as 

mission-essential (or mission critical) are expected to remain in contact with the 

agency at all times during any emergency closure and “may be called to work 

during emergencies dealing with national security, extended emergencies, or 

other unique situations.”

11

As previously noted, the Telework Enhancement Act of 2010 requires agencies 

to incorporate telework into their COOP plans. In addition, OPM’s Guide to 

Telework in the Federal Government encourages federal agency management to 

implement remote work arrangements as broadly as possible to take full 

advantage of telework for emergency purposes and ensure, among other things, 

that equipment and technology have been tested and that employees are 

comfortable with technology and communications methods.12 The SEC does not 

require its mission-essential personnel to enter into telework agreements. 

However, an October 16, 2007, memorandum from the former SEC Executive 

Director to division directors and office heads approved telework for all missionessential personnel during COOP situations without requiring that they have 

telework agreements in place. In addition, the Telework Enhancement Act of 

 

8 Telework Enhancement Act of 2010, Pub. L. No. 111-292. 9 National Security Presidential Directive-51/Homeland Security Presidential Directive-20, “National 

s the 

ivate sector; 

s continuity 

s. The National

onal Continuity 

tifying and 

Continuity Policy,” was issued on May 4, 2007, by President George W. Bush. It emphasize

importance of a comprehensive national program involving all government levels and the pr

prescribes continuity requirements for all executive departments and agencies; and provide

guidance for states, territories, tribal and local governments, and private sector organization

Continuity Policy Implementation Plan was issued in August 2007, and builds upon the Nati

Policy and provides guidance to executive departments and agencies on appropriately iden

carrying out their PMEFs. See http://www.fema.gov/pdf/about/org/ncp/ncpip.pdf. 10 http://www.fema.gov/about/org/ncp/coop/index.shtm. 11 OPM, A Federal Employee’s Emergency Guide, p. 5, 

http://www.opm.gov/emergency/pdf/employeesguide.pdf. 

12 OPM, A Guide to Telework in the Federal Government (April 2011), p. 33, 

http://www.telework.gov/guidance_and_legislation/telework_guide/telework_guide.pdf. 
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2010 provides that “[d]uring any period that an executive agency is operating 

under a COOP plan, that plan shall supersede any telework policy.”13 

Compensatory Time Off. OPM defines compensatory time off as “[t]ime off with 

pay in lieu of overtime pay for irregular or authorized overtime work . . . .”14 Not 

all employees who work overtime hours are eligible to receive compensatory time 

off. For example, consistent with OPM guidance and regulation for members of 

the Senior Executive Service,

15 the SEC does not permit Senior Officer (SO) 

employees to earn compensatory time off except for religious purposes. In 

addition, employees cannot earn compensatory time off if the value of the time 

off would cause their compensation to exceed an amount equivalent to the salary 

16 of a GS-15 step 10 employee. 

The Antideficiency Act prohibits any officer or employee of the federal 

government from accepting voluntary services.17 Some SEC employees have 

indicated that they are expected to work “voluntary overtime” despite this 

prohibition. Although the POPPS Manual states that professional or supervisory 

employees are expected to perform voluntary work outside of their regular work 

hours in order to complete regular assignments on time,18 article 10 of the 2007 

CBA states that the employer will not expect or require employees to donate time 

in lieu of compensation for overtime work. The CBA, however, states that it 

applies only to bargaining unit employees. Moreover, the CBA does not state 

that covered employees cannot voluntarily donate time beyond their regular work 

hours.

Work/Life Programs Survey

On December 29, 2010, with the assistance of the Office of Information 

Technology (OIT), we released a survey to all SEC employees that contained 

questions about SEC work/life programs. The survey addressed telework

(including COOP-related telework), alternative work schedules, and overtime 

compensation. It consisted of 45 yes/no and multiple-choice questions and an 

open-ended section in which respondents could provide detailed feedback. Our 

purpose in administering the survey was to obtain information on the 

effectiveness and efficiency of SEC work/life programs, including aspects of the 

telework program related to COOP and OIT technical support for remote access. 

Survey response was voluntary, and respondents were anonymous unless they 

elected to identify themselves to us. We encouraged respondents to provide 

written comments, where applicable, to support and explain their responses. By 

January 12, 2011, the closing date of the survey, we had received responses 

 

13 Pub. L. No. 111-292, 5 U.S.C. § 6504(d)(2). 14 http://www.opm.gov/oca/pay/html/comp.htm. 15 http://www.opm.gov/ses/about_ses/faqs.asp#, p. 4. 16 See 5 U.S.C. § 5547. 17 31 U.S.C. § 1342. 18 SEC Personnel Operating Policies and Procedures (POPPS Manual), SECM 6-1, ch. 630.B, § 4(A)(1) 

(Jan. 17, 1992).
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from 1,917 of 3,919 SEC employees, as well as numerous written comments. In 

addition, 104 of the respondents asked to be contacted for an interview to further 

discuss their views.

Objectives

The objectives of this review were to examine the SEC’s

• implementation and oversight of its telework and alternative 

work schedule programs; 

• compliance with applicable federal and Commission policies 

and procedures pertaining to telework, alternative work 

schedules, and overtime; and 

• information technology capabilities and support for the telework 

and COOP programs.
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Findings and Recommendations

Finding 1: A Number of SEC Employees Are 

Working Unauthorized Work Schedules, and SEC 

Policy on Alternative Work Schedules Is Poorly 

Documented and Communicated 

A number of SEC employees are using alternative 

work schedules that have not been authorized by the 

SEC. In addition, the SEC lacks comprehensive 

written policies and procedures related to alternative 

work schedules. Further, training on alternative work 

schedules provided by OHR to employees and 

managers is minimal and inadequate.

Alternative Work Schedules

By law, federal agencies are authorized to establish programs that allow the use 

of flexible work schedules.19 The OPM Handbook on Alternative Work 

Schedules provides guidance to agencies on the administration of alternative 

work schedules. It notes that although the decision to establish alternative work 

programs is at the discretion of the head of each agency, “this discretion is 

subject to the obligation to negotiate with the exclusive representative(s) of 

bargaining unit employees.”

20 

At the SEC, the OHR Office of Labor and Employee Relations manages, 

administers, and establishes policies for the Commission’s alternative work 

schedule programs in negotiation with NTEU, which is the exclusive 

representative of SEC bargaining unit employees.21 Article 7 of the 2007 CBA 

between the SEC and NTEU addresses work schedules, including alternative 

work schedules.

22 In addition, two chapters of the POPPS Manual address 

alternative work schedules. Chapter 610.A addresses Flexitour schedules and 

credit hours, and chapter 610.C addresses compressed work schedules. Both 

chapters are dated January 20, 1995.

OPM’s definition of “alternative work schedule” includes both flexible work 

schedules and compressed work schedules. The OPM Handbook on Alternative 

Work Schedules defines a flexible work schedule as meaning the following:

 

19 5 U.S.C. § 6122. 20 OPM, Handbook on Alternative Work Schedules (OPM Handbook), 

http://www2.opm.gov/oca/aws/index.asp#Introduction. 21 Collective Bargaining Agreement Between the United States Securities and Exchange Commission and 

the National Treasury Employees Union (2007) (CBA), article 1, § 1.

22 CBA, art. 7, “Work Schedules,” pp. 23–37.
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(1) in the case of a full-time employee, . . . an 80-hour biweekly 

basic work requirement that allows an employee to determine his or 

her own schedule within the limits set by the agency; and 

(2) in the case of a part-time employee, . . . a biweekly basic work 

requirement of less than 80 hours that allows an employee to 

determine his or her own schedule within the limits set by the 

agency.23

The handbook defines a compressed work schedule as meaning the following: 

 

(1) in the case of a full-time employee, an 80-hour biweekly basic 

work requirement that is scheduled by an agency for less than 10 

workdays; and

(2) in the case of a part-time employee, a biweekly basic work 

requirement of less than 80 hours that is scheduled by an agency 

for less than 10 workdays and that may require the employee to 

work more than 8 hours in a day.24 

The SEC has authorized use of three types of alternative work schedules: a 

flexible schedule, known as Flexitour; a 5/4-9 compressed schedule; and a 4-10 

compressed schedule.

25 These three alternative schedules, and others, are 

described below.

SEC Employees’ Use of Alternative Work Schedules

OHR provided us with data on SEC employees’ use of alternative work 

schedules in fiscal years 2008 through 2010. According to the data, which are 

summarized in table 1, SEC employees used the following eight types of 

alternative work schedules over the three-year period: 

• 5/4-9 compressed schedule. Employees work eight 9-hour days 

and one 8-hour day during each 80-hour biweekly pay period. 

Employees must be present during their office’s designated core 

hours26 and may not earn or use credit hours. For part-time 

employees, the number of hours worked per week and the number 

of hours in each biweekly pay period vary. 

• 3-day workweek. Full-time employees work 13 hours and 20 

minutes a day, for a total of 40 hours a week, during each 80-hour 

biweekly pay period. For part-time employees, the number of hours 

worked per week and the number of hours in each biweekly pay 

period vary. 

 

23 OPM Handbook, http://www2.opm.gov/oca/aws/html/define.asp. 24 OPM Handbook, http://www2.opm.gov/oca/aws/html/define.asp. 25 See CBA, art. 7, “Work Schedules.” 26 Core hours are the hours during which full-time employees are required to be at work.
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• 4-10 compressed schedule. Full-time employees work 10 hours a 

day, four days a week, during each 80-hour biweekly pay period. 

Employees must be present during their office’s designated core 

hours and may not earn or use credit hours. For part-time 

employees, the number of hours worked per week and the number 

of hours in each biweekly pay period vary. 

• Flexible workweek. Full-time employees work 40 hours each week 

and 80 hours each pay period, regardless of the number of hours 

worked per day. Employees vary their arrival and departure times 

by earning and using credit hours.

• Maxiflex. Full-time employees work 80 hours during each biweekly 

pay period on a schedule that contains core hours on fewer than 10 

workdays in the biweekly pay period. Employees may vary the 

number of hours worked on a given workday or the number of 

hours worked each week within limits established for the 

employee’s organization. 

• 10-hour days biweekly. Full-time employees must work 10 hours a 

day and 80 hours during each biweekly pay period. 

• First 40-hour tours of duty. All work performed by an employee 

within the first 40 hours is considered regularly scheduled work for 

premium pay and hours of duty purposes. Any additional hours of 

officially ordered or approved work within the administrative 

workweek are considered overtime. (This type of alternative 

schedule may be permitted for employees for whom it is not 

practical to establish a regular schedule of definite hours of duty for 

each workday of a regularly scheduled administrative workweek.)27

• Rotating shift. Employees have work schedules with hours that 

change at prescribed intervals. 

OHR also informed us that in addition to the above-listed schedules, many SEC 

employees also used a flexible alternative work schedule known as Flexitour. 

Full-time employees working Flexitour schedules work eight hours a day, 

Monday through Friday. Those eight hours must include the office’s core hours,

but employees on Flexitour schedules may request arrival and departure times 

within established flexible bands of time that do not coincide with the office’s 

official business hours. Employees on Flexitour schedules are eligible for credit 

hours.

 

27 A regularly scheduled administrative workweek is the period an employee is regularly scheduled to work 

within an administrative workweek. 5 C.F.R. § 610.102. A basic workweek is the officially prescribed days 

and hours for which a full-time employee is entitled to basic pay. 5 C.F.R. § 532.501.
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Table 1: SEC Employees’ Use of Alternative Work Schedules Other Than 

Flexitour, Fiscal Years 2008–2010

Alternate Work 

Schedule Program

SEC Employees 

Fiscal Year 2008

SEC Employees 

Fiscal Year 2009

SEC Employees 

Fiscal Year 2010

5-4/9 compressed 

schedule 1,757 1,617 1,691

3-day workweek 2 1 0 

4-10 compressed 

schedule 132 156 165

Flexible workweek 0 0 2 

Maxiflex 12 12 10

10-hour day(s) 

biweekly, full- or parttime5 5 4 

First 40-hour tours of 

duty 16 10 9 

Rotating shift 1 1 1 

Total 1,925 1,802 1,882

Source: SEC Office of Inspector General (OIG) analysis of data provided by OHR.

As noted above, the SEC authorizes only three types of alternative work 

schedules, including Flexitour. However, the OHR data in table 1 show that, in 

addition to Flexitour, SEC employees used eight types of alternative work 

schedules in fiscal years 2008 through 2010. After reviewing the data provided 

by OHR to determine whether all the alternative work schedule codes 

represented in the data were for valid, SEC-authorized programs, we determined 

that six of the alternative work programs in which SEC employees participated—

3-day workweek, flexible workweek, Maxiflex, 10-hour days biweekly, first 40-

hour tours of duty, and rotating shifts—are not among the alternative work 

schedules included in the CBA or POPPS Manual. We also obtained 

confirmation from OHR that these options are not authorized for SEC employees. 

Availability of Additional Alternative Work Schedules

In addition to the three types of alternative work schedules authorized for SEC 

employees—Flexitour, 5-4/9 compressed, and 10-4 compressed—and the five 

unauthorized types described above, the OPM Handbook on Alternative Work 

Schedules describes other alternative work schedules that federal agencies 

might choose to implement. For example, the handbook describes the following 

three additional flexible work schedule options:

• Gliding schedule. Full-time employees have a basic work 

requirement of 8 hours a day and 40 hours a week but may vary 

their arrival and departure times on a daily basis within the 

organization’s established flexible hours.
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• Variable day schedule. Full-time employees have a basic work 

requirement of 40 hours in each week of the biweekly pay period 

but may vary the number of hours worked on a given workday 

during the week within the organization’s established flexible hours 

and consistent with any other limits established for the organization.

• Variable week schedule. Full-time employees have a basic work 

requirement of 80 hours for the biweekly pay period but may vary 

the number of hours worked on a given workday or the number of 

hours each week within the limits established for the organization.

Each of the three options described above gives employees greater flexibility 

than the basic Flexitour option available at the SEC. We determined that some

other federal agencies are allowing their employees more flexibility with respect 

to their arrival and departure times and the length of individual workdays within 

the workweek or pay period. The Pension Benefit Guaranty Corporation and the 

Department of Housing and Urban Development, for example, offer a gliding 

schedule option to their employees. The Social Security Administration, the 

Environmental Protection Agency, and the Federal Housing Finance Agency 

offer variable day and variable week schedule options, as well as a gliding 

schedule option, to their employees. 

According to OPM, 

[Alternative work schedule] programs have the potential to enable 

managers and supervisors to meet their program goals while, at the 

same time, allowing employees to be more flexible in scheduling 

their personal activities. As employees gain greater control over 

their time, they can, for example, balance work and family 

responsibilities more easily, become involved in volunteer activities, 

and take advantage of educational opportunities. The employee 

benefits provided by alternative work schedule programs also are 

useful recruitment and retention tools.28

In light of these potential outcomes, the SEC might benefit from including 

additional flexible work schedule options, such as the three described above and 

the options identified in table 1, among the alternative work schedules it offers to 

employees. 

Documentation of SEC Alternative Work Schedule Policy

During our review, we found that the SEC does not have a comprehensive 

manual that addresses alternative work schedule options that are available to all 

employees and, in fact, SEC employees are utilizing alternative work schedule 

 

28 OPM Handbook, https://www.opm.gov/oca/aws/index.asp#Authority and Responsibility. 
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options that are not contained in any SEC guidance. The CBA applies to both 

nonprofessional and professional SEC employees but excludes all management 

officials, supervisors, and certain other employees.

29 The only alternative work 

schedules that the CBA references are Flexitour with credit hours, compressed 

5-4/9, and compressed 4-10. The POPPS Manual addresses only Flexitour and 

5/4-9 compressed alternative work schedules, and the material related to these 

alternative schedules has not been updated since it was adopted on January 20, 

1995. Chapter 610.A of the POPPS Manual, which addresses Flexitour 

schedules and credit hours, is inconsistent with the Flexitour provisions of the 

CBA with respect to specifics such as core hours, official business hours, and 

how frequently employees may request changes in their schedules. Chapter 

610.C of the POPPS Manual, which addresses compressed work schedules, has 

major inconsistencies with the CBA and is clearly outdated. First, it only 

authorizes use of 5/4-9 compressed schedules, while the CBA also authorizes 

use of 4-10 schedules. Second, as written, it applies only to individuals with 

“authorized 5-4-9 compressed work schedule plans submitted by offices with 

organizational units at the SEC Operations Center and Annex in Alexandria, 

Virginia and within the Facilities and Printing Branches of the Office of 

Administrative and Personnel Management.” For other SEC offices and 

divisions, it only provides requirements for submitting a plan proposing the use of 

5/4-9 compressed schedules.30

According to OHR, even though the CBA does not cover management officials 

and supervisors, the same alternative work schedules are available to and are

authorized for all SEC employees, both bargaining and nonbargaining unit 

employees. OHR further stated that it is developing a new handbook, entitled 

Human Capital Directive, to replace the POPPS Manual and that the new

handbook will clarify that all employees—supervisory, managerial, professional, 

and nonprofessional—are covered by the same alternative work schedule

policies. 

We also found that the SEC has no official form for employees to use when 

requesting alternative work schedules. According to article 7 of the CBA, 

employees requesting Flexitour or compressed work schedules must submit a 

written request to their supervisor specifying their first, second, and third choices 

for their work schedule, and they are to receive a response to their request within 

14 calendar days. If an employee's request is denied, the supervisor should 

provide the employee the reasons for the denial in writing. Although the POPPS 

Manual refers to employees’ responsibility to obtain prior written approval for 

alternative work schedules and to managers’ and supervisors’ responsibility to

approve, modify, or disapprove Flexitour schedules,

31 the manual does not refer 

to procedures for submitting and approving requests for other alternative work 

schedules.

 

29 These other employees are described at 5 U.S.C. §§ 7112(b)(2), (3), (4), (6), and (7). 30 POPPS Manual, ch. 610.C, “Compressed Work Schedules.” 31 See POPPS Manual, ch. 610, §§ 5(D), 5(E), 
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Training on Alternative Work Schedules for SEC Employees

During our review, we further found that little training on alternative work 

schedules is available to SEC employees. We interviewed the director of the 

OHR Office of Labor and Employee Relations about communication and training

related to the alternative work schedule program at the SEC. The director said

that the CBA describes the available alternative work schedule options and is 

provided to employees during new employee orientation. She also said that she 

provides guidance on the program by telephone in response to inquiries from 

employees but that the division does not distribute written information on 

alternative work schedules to employees. In addition, she stated that when the 

CBA is updated or changed, the Office of Labor and Employee Relations 

provides training to all managers and the union provides training to bargaining 

unit employees. Nonbargaining unit employees receive no training on alternative 

work schedules, however. Citing a lack of Labor and Employee Relations staff to 

conduct training and her own recent appointment, in November 2010, the

Director conceded that training on alternative work schedules for SEC staff 

needs improvement and further said that she would like to offer brown bag lunch 

training sessions on the topic for all managers.

We believe that employees may have used unauthorized alternative work 

schedules because they and their managers lacked knowledge about authorized, 

available options. This lack of knowledge may have resulted from inadequate 

written information about authorized alternative work schedules and inadequate 

training on alternative work schedules for managers and employees.

Recommendation 1:

The Office of Human Resources should take necessary actions to ensure 

that employees do not work unauthorized alternative work schedules, 

including required revisions to the collective bargaining agreement and 

steps to ensure that all Commission managers and staff are fully informed 

about which alternative work schedules are authorized.

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased the OHR concurred with this 

recommendation. 
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Recommendation 2: 

The Office of Human Resources should ensure that the

2 a. new Human Capital Directive addresses all alternative work 

schedules available to Securities and Exchange Commission 

employees; and

 

2 b. contents of the Human Capital Directive are and remain consistent 

with the alternative work schedule components of the collective 

bargaining agreement.

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OHR concurred with this 

recommendation.

Recommendation 3: 

The Office of Human Resources should ensure that the new Human 

Capital Directive addresses all Securities and Exchange Commission

employees—supervisory, managerial, professional, nonprofessional, 

bargaining unit, and nonbargaining unit employees—and contains up-todate information on all alternative work schedule programs authorized by 

the Commission. 

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OHR concurred with this 

recommendation. 

Recommendation 4: 

The Office of Human Resources should

4 a. provide comprehensive training to all employees and managers on 

all available alternative work schedule programs. This training 

should be provided to all new employees during employee 

orientation and to all employees and managers whenever 

significant changes to the policy occur, such as upon completion of 

the Human Capital Directive or adoption of a new collective 

bargaining agreement; and 
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4 b. make up-to-date information on alternative work schedules and 

policy available electronically to all employees on the Securities 

and Exchange Commission intranet site and periodically notify 

employees of its availability and location.

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OHR concurred with this 

recommendation. 

Recommendation 5: 

The Office of Human Resources should develop an alternative work 

schedule request form. The form should contain sections for the 

requesting employee’s information and certification; the type of alternative 

work schedule requested, including specific work hours and, if applicable, 

workdays; the immediate supervisor’s approval; and, if applicable, the

approving official’s decision.

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OHR concurred with this 

recommendation. 

Recommendation 6: 

The Office of Human Resources, in developing the new Human Capital 

Directive, should work with the National Treasury Employees Union to 

determine whether additional alternative work schedules, such as the 

gliding, variable day, variable week, three-day workweek, and Maxiflex 

options described in the Office of Personnel Management Handbook on 

Alternative Work Schedules, should be adopted as options for Securities 

and Exchange Commission employees.

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OHR concurred with this 

recommendation.
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Finding 2: The SEC Lacks Clear Guidance on 

Overtime Compensation and Uncompensated 

Services

There is confusion among SEC employees about the types 

of compensation available for overtime hours worked, 

eligibility for specific types of compensation, and 

Commission policy on voluntary overtime. OHR policy and 

guidance on these issues are incomplete and outdated and 

in some cases inconsistent with the provisions of the current 

CBA.

SEC Workforce Categories

OPM assigns combinations of letters to designate workforce categories to 

agencies that have their own unique pay plans. Since 2002, with the enactment 

of the SEC’s pay parity legislation,32 the Commission has had one of those 

unique plans. Instead of General Schedule and Senior Executive Service (SES) 

designations, SEC employees have SK and SO designations. SK employees are 

similar to employees covered by the General Schedule pay system, and SO 

employees are similar to SES members. 

Types of Compensation in Lieu of Pay for Overtime Worked

Credit Hours. OPM defines credit hours as “hours within a flexible work 

schedule that an employee elects to work in excess of his or her basic work 

requirement so as to vary the length of a workweek or workday.”33 Credit hours

are permitted only for employees who work flexible work schedules and only to 

the extent permitted by an employee’s agency. Credit hours are not available to 

employees who work compressed schedules.34 Employees are not paid basic 

pay or overtime pay for credit hours when they earn them. Instead, employees 

may use credit hours during a subsequent day, week, or pay period, with 

supervisory approval, to be absent from an equal number of hours of their basic 

work requirement with no loss of basic pay. SES members are prohibited by 

regulation from earning credit hours.35 

Compensatory Time Off. OPM defines compensatory time off as “[t]ime off with 

pay in lieu of overtime pay for irregular or occasional overtime work.”

36

 

32 Pub. L. No. 107-123 (Jan. 16, 2002).

 

33 OPM Handbook on Alternative Work Schedules, http://www.opm.gov/oca/aws/html/define.asp. Agency 

policies or union agreements may place restrictions on earning or using credit hours.

34 See 5 U.S.C. §§ 6121 and 6122; see also OPM, Handbook on Alternative Work Schedules, 

http://www.opm.gov/oca/aws/html/flex.asp, and CBA, art. 7, “Credit Hours, §§ 5(A)(4), 5(B)(4). 35 5 C.F.R. § 610.408. 36 OPM, Overtime Compensation (May 30, 2000), http://www.opm.gov/oca/pay/html/comp.htm.
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Compensatory time off is authorized for employees who are ordered to work 

overtime hours, and it may be approved both for employees who are covered by 

the Fair Labor Standards Act (nonexempt employees) and those who are not

covered (exempt employees).37 In addition, agencies may require exempt 

employees whose rate of basic pay exceeds the rate of GS-10, step 10, to 

accept compensatory time off rather than overtime pay for irregular or occasional 

overtime work.38 This requirement has been adopted by the SEC and appears in 

both the CBA and the POPPS Manual.39 Nonexempt employees cannot be 

required to accept compensatory time off in lieu of overtime pay.40 SES 

members are not eligible to receive compensatory time off because it is 

considered premium pay, and they are excluded by law from earning premium 

pay, but they may receive compensatory time off for religious purposes.41 

Compensation for Overtime at the SEC

Subject to certain limitations noted above, compensation for overtime hours 

worked at the SEC can take the form of credit hours, overtime pay, or 

compensatory time off. As table 2 shows, credit hours are the most widely used 

form of overtime compensation at the SEC. For fiscal years 2008 through 2010, 

credit hours accounted for more than 60 percent of overtime compensation in

each fiscal year.

Table 2: Hours of Overtime Compensation Received by SEC

Employees, Fiscal Years 2008–2010

Type of 

Compensation

Fiscal Year

2008

Fiscal Year

2009

Fiscal Year

2010

Credit hours earned 81,980 74,360 75,355

Hours of overtime pay 

earned

11,907 11,463 13,027

Hours of compensatory time

earned

32,787 37,076 34,338

Total overtime hours 

compensated

126,674 122,899 122,720

Source: OIG analysis of data provided by OHR. 

Note: All numbers are rounded to the nearest whole hour. 

 

37 See OPM, Compensatory Time, “Employee Coverage,” http://www.opm.gov/oca/pay/html/comp.htm. 

Nonexempt employees are covered by the minimum wage and overtime provisions of the Fair Labor 

Standards Act and cannot be required to accept compensatory time in lieu of overtime pay.

38 See OPM, Compensatory Time, “Mandatory,” http://www.opm.gov/oca/pay/html/comp.htm. 39 CBA, art. 10, “Overtime and Compensatory Time, § 3(B); POPPS Manual, ch. 630.B, “Compensatory 

Time,” § 4(B)(2) (Jan. 17, 1992).

40 See OPM, Compensatory Time, “Mandatory,” http://www.opm.gov/oca/pay/html/comp.htm. 41 5 C.F.R. § 534.408.
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Eligibility of Employees on Conforming Schedules to Earn Credit Hours. 

The CBA states that “[a]n employee on a Conforming or Flexitour Schedule may 

earn and use credit hours to accommodate appointments or other personal 

needs without using leave.”42 The CBA defines a conforming schedule as a 

schedule that conforms to the office’s official business hours.43 However, by law

and as noted in the OPM Handbook on Alternative Work Schedules, credit hours 

are available only to employees who work flexible schedules.

44 According to 

OHR, “the intent [in the CBA] was to consider the conforming schedule 

tantamount to an election to work a Flexitour schedule, just matching the official 

duty hours.” Nevertheless, OHR acknowledged that the current CBA language is 

inconsistent with the law and that this issue should be addressed as the parties 

negotiate a new CBA. 

Eligibility of SO Employees for Credit Hours. According to OHR, SO 

employees are eligible to earn credit hours, although the SEC has no official 

written policy stating that they are eligible for credit hours. OHR’s determination 

of SO eligibility is based on the language of a November 8, 2002, memorandum 

containing guidance on the applicability to nonbargaining unit employees of the 

August 30, 2002, CBA between NTEU and the SEC.45 The memorandum does 

not explicitly state that SO employees are entitled to earn credit hours, but it 

contains the following statement: “[A]ll non-bargaining unit employees are eligible 

to earn, and carry-over, 24 credit hours consistent with the provisions of the Work 

Schedules article [of the CBA].” OHR stated that because the language did not 

specifically exclude SO employees from earning credit hours—and because it did 

explicitly exclude them from being eligible for part-time employment or working a

compressed schedule (other provisions of the 2002 CBA addressed in the 

memorandum)—the memorandum was interpreted to mean that SO employees 

were eligible to earn credit hours. 

Although agencies may permit their SES employees to participate in flexible work 

schedule programs, SES members are prohibited, as previously noted, from 

earning credit hours.46 However, the SEC pay parity legislation enacted in 2002 

included a technical amendment that removed the SEC from the SES system.47 

As a result, the SEC does not have SES members; thus, the prohibition on 

earning credit hours does not technically apply to the SEC’s SO employees, even 

though in many respects SO employees are considered equivalent to other 

 

42 CBA, art. 7, “Work Schedules,” § 12(A). 43 CBA, art. 7, “Work Schedules,” § 1(C). 44 See 5 U.S.C. § 6121(4) and OPM, Handbook on Alternative Work Schedules, 

https://www.opm.gov/oca/aws/html/flex.asp. See also 5 U.S.C. § 6121, which defines “credit hours” as “any 

hours, within a flexible schedule established under section 6122 of [Title V],which are in excess of an 

employee’s basic work requirement and which the employees elects to work so as to vary the length of a 

workweek or a workday” (emphasis added).

45 Collective Bargaining Agreement and Non-Bargaining Unit Employees, Memorandum From Jayne 

Seidman, Associate Executive Director (Nov. 8, 2002).

46 See 5 C.F.R. § 610.408; OPM Handbook on Alternative Work Schedules, 

https://www.opm.gov/oca/aws/html/flex.asp.

47 See 5 U.S.C. § 3132(a)(1)(E).
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agencies’ SES employees. According to information provided by OHR, SO 

employees at the Commission do earn credit hours. Data provided by OHR 

indicated that over an eight-week period beginning on June 5, 2011, and ending 

on July 30, 2011, 56 SO employees earned a total of 957 credit hours. During 

that period, the total earned per employee ranged from 2 hours to 52.75 hours. 

During this same time period, 57 SO employees used a total of 995.5 credit 

hours. The total used per employee during that period ranged from 1 hour to 

50.25 hours.

Eligibility of SO Employees for Compensatory Time Off. With respect to 

compensatory time off, the SEC carried over requirements from the SES system 

to SO employees. The SEC does not permit SO employees to earn 

compensatory time off except for religious purposes. This policy is consistent 

with the statutory prohibition on SES members earning compensatory time off 

except for religious purposes. By law, SES members are excluded from earning

“premium pay,” which includes overtime pay, and are therefore also excluded 

from earning compensatory time off in lieu of overtime pay.

48 

Despite the prohibition on SO employees earning compensatory time-off, we 

found that one SO employee did earn compensatory time off during fiscal years 

2008 through 2010. 

Uncompensated Overtime. We found that some SEC employees are being 

compensated for overtime hours worked in the form of credit hours, overtime 

pay, or compensatory time off, but that other employees are not being 

compensated for overtime hours worked. Employees who do not receive 

compensation for overtime worked are, technically, volunteering their time. 

Overtime compensation was among the topics addressed in the work/life survey 

that we issued to all SEC regional and headquarters employees in December 

2010. Some commenters expressed the belief that uncompensated overtime is

unfair to employees. Specifically, one respondent commented that Quicktime, 

the SEC’s electronic time and attendance system, does not provide a means to 

track actual time worked. He further stated that over the past three years, he had 

worked over 100 hours in excess of credit hours for which he was not 

compensated. Another respondent stated that he had worked more than 150 

hours of unpaid overtime in the past year. Some employees, on the other hand, 

indicated that they view voluntary overtime as part of the job or that taking pride 

in their work and professionalism motivates them to work late. 

Other comments related to a lack of clarity with respect to overtime rules at the 

SEC or to informal practices related to overtime in individual offices:

• An employee who was also a manager commented that he found 

the SEC’s overtime rules to be unclear. 

 

48 5 C.F.R. § 534.408.
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• An employee stated that accountants and attorneys in his division 

are expected to show up early and leave late. 

• An employee stated that overtime was “normal” for his office. 

• An employee stated that, with his supervisor’s knowledge, he works 

extra hours without being compensated and that he believes it is 

acceptable for managers to approve late arrivals or early 

departures for employees if the supervisor knows that they have

put in extra time without compensation.

• An employee stated that a few of the supervisors in his division 

provide some informal overtime compensation by allowing 

employees who have worked extra hours to come in late or leave 

early.

With respect to voluntary overtime, the POPPS Manual states the following:

Employees occupying professional or supervisory positions 

are expected to have a sufficient interest in completing their 

work assignments on a timely basis or in keeping their 

workload reasonably current by performing voluntary work 

outside of regular work hours, on their own initiative, 

whenever it is necessary. Accordingly, as a general rule, 

overtime work will not be ordered or approved for 

professional, administrative and technical employees in 

grades GS-9 to GS/GM-15, where the only reasons [sic] for 

such overtime is to perform continuing regular work 

assignments.49

In addition, the manual states that “ordered overtime work for employees in 

grades GS-9 to GS/GM-15 must be for a specific work project where the 

supervisor has determined that time is of the essence and it must be completed 

by a specific deadline.”50 

The 2007 CBA states, however, that employees “will be compensated for 

overtime work in accordance with all applicable laws, regulations, and this 

Article” and that the employer “will not expect or require an employee to donate 

time in lieu of proper compensation for overtime work.”51 The CBA also states 

that exempt employees who are officially ordered to perform overtime work will 

receive appropriate compensation, but it does not expressly state that employees 

cannot donate time on their own accord without any expectation or requirement 

from their employer.52

 

49 POPPS Manual, ch. 630.B, “Compensatory Time,” § 4(A)(1) (Jan. 17, 1992). 50 POPPS Manual, ch. 630.B, “Compensatory Time,” § 4(A)(2) (Jan. 17, 1992). 51 CBA, art. 10, “Overtime and Compensatory Time,” §§ 1(A), 1(B). 52 CBA, art. 10, “Overtime and Compensatory Time,” § 2(A). 
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In a 2005 lawsuit brought by Department of Justice attorneys (exempt employees 

at the GS-15 level and below) seeking overtime compensation under the Federal 

Employees Pay Act, the court held that the attorneys were not entitled to 

compensation under the act for overtime work because the overtime had not 

been officially ordered or approved in writing, as required,53 even though the 

government admitted that the attorneys were expected to work overtime without 

compensation.54 

According to OHR, the guidelines in the POPPS Manual continue to apply to

managerial, nonbargaining unit, and bargaining unit employees, except when 

they have been superseded by law, regulation, other guidance, or, for bargaining

unit employees, the CBA. The 2007 CBA appears to supersede the POPPS 

Manual provisions with respect to overtime compensation for bargaining unit 

employees. For the remainder of employees, there appears to be no SEC 

document that supersedes the 1992 POPPS Manual policy concerning voluntary 

overtime, although the Antideficiency Act contains the following voluntary 

services prohibition: 

An officer or employee of the United States Government or 

of the District of Columbia government may not accept 

voluntary services for either government or employ personal 

services exceeding that authorized by law except for 

emergencies involving the safety of human life or the 

protection of property.55 

To date, though, we have found no instance where a court has held that 

voluntary overtime by federal employees is barred under the Antideficiency Act.

The lack of a formal written policy on voluntary overtime appears to have led to 

confusion and inconsistency within OHR as well. During our review, we asked 

OHR senior staff about SEC guidelines on voluntary overtime, but we received 

inconsistent responses. For example, an OHR office director acknowledged that 

technically an employee cannot volunteer or donate time to the government, 

while other OHR senior staff members opined that employees may voluntarily 

work additional hours but cannot be ordered to work extra hours without pay. 

Based upon our discussions with OHR senior officials, there seemed to be some 

agreement that expecting an employee to perform significant amounts of 

uncompensated overtime on a regular, recurrent basis could be inappropriate 

and might be at odds with the statutory prohibition on voluntary services. We 

found inconsistent views, though, with respect to the appropriateness or legality 

 

53 According to 5 C.F.R. § 550.111(c), “Overtime work in excess of any included in a regularly scheduled 

administrative workweek may be ordered or approved only in writing by an officer or employee to whom this 

authority has been specifically delegated.”

54 John Doe v. United States, 372 F.3d 1347 (Fed. Cir. 2004), cert. denied, 544 U.S. 904 (2005). See also 

John Doe v. United States, 463 F.3d 1314, 1321 (Fed. Cir. 2006) (agreeing with the government that the 

Doe plaintiffs did not have not a viable claim for overtime pay), cert. denied, 549 U.S. 1321 (2007). 55 31 U.S.C. § 1342.
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of management’s expectation that exempt employees work some amount of 

uncompensated overtime.

Uncertainty About Overtime Compensation Policy. Some of the comments 

provided by respondents to our work/life survey indicated that they did not fully 

understand SEC and other federal policy and restrictions related to 

compensation for overtime worked. Some respondents stated their confusion 

outright. One respondent said that he did not understand “how the overtime pay 

versus credit hour distinction was made.” Another said that he was

underinformed about how compensatory time off, overtime pay, and credit hours

work. Other respondents, while not expressing outright confusion, provided 

comments that demonstrated their lack of understanding of the agency’s

overtime compensation policy. For example, some employees stated that they 

would rather receive overtime pay than credit hours, indicating a lack of 

understanding of the difference between credit hours and overtime pay with 

respect to their purposes and associated requirements and restrictions. 

Recommendation 7: 

The Office of Human Resources should include in the new Human Capital 

Directive clear, up-to-date information on the laws, policies, guidelines, 

and procedures related to credit hours, compensatory time off, payment 

for overtime worked, and voluntary and uncompensated services. 

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OHR concurred with this 

recommendation. 

Recommendation 8: 

The Office of Human Resources should negotiate revisions to the 

language in the collective bargaining agreement between the Commission 

and the National Treasury Employees Union with respect to the use of 

credit hours by employees working conforming schedules, ensuring that 

the revised language conforms with applicable law.

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OHR concurred with this 

recommendation. 
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Recommendation 9:

The Office of Human Resources should institute appropriate controls to 

ensure that Senior Officers do not receive compensatory time off. 

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OHR concurred with this 

recommendation. 

Recommendation 10: 

The Office of Human Resources should consult with the Office of the 

General Counsel and the Office of Personnel Management to determine 

whether the Securities and Exchange Commission should adopt an official

policy that addresses whether Senior Officers are permitted to earn credit 

hours. 

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OHR concurred with this 

recommendation. 

Finding 3: Promotion and Training Activities for 

the SEC Telework Program Are Inadequate 

OHR has not promoted or publicized the SEC telework 

program and related policy as effectively as possible and 

has not made comprehensive telework training available to 

all SEC employees. Improvements in these areas could

increase participation and enhance acceptance of telework 

among SEC staff and managers. 

In their answers to questions in the work/life survey, many SEC employees 

indicated that telework advertising and telework training at the Commission need 

improvement. During interviews that we conducted as follow-up to the work/life 

survey, some employees expressed concerns about the SEC’s telework policy. 

Employees also stated during interviews that telework rules should be clear and 

conveniently located in one place. 
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Previous Internal Assessments of the SEC Telework Program

Two previous internal assessments of the SEC telework program have been 

conducted. 

The first was undertaken by the SEC Telework Coordinator and was completed 

in fiscal year 2008. The report resulting from the assessment summarized 

telework services and utilization at the Commission. It noted that a surge in 

recurring telework agreements had resulted from the Commission’s Expanded 

Telework Trial Program, which gave employees an opportunity to telework three 

to five days a week.56 The report also stated that teleworking at SEC regional 

offices continued to increase at a faster rate than at headquarters.

The second assessment, completed in June 2010, was performed by the 

Telework Advisory Group. The Telework Advisory Group, which was established

in 2009 by the director of OPM, consists of leaders in telework from selected 

federal cabinet-level and independent agencies. The group developed a 

checklist of specific factors that effective telework policies should be expected to 

address. The overall objectives of the checklist were to ensure that telework 

policies (1) could be clearly understood and easily used and (2) incorporated 

criteria fundamental to the development and support of an effective telework 

program.

In its assessment of whether the SEC’s telework policy met the first objective, the 

Telework Advisory Group commented that the SEC’s policy was difficult to follow

and contained some ambiguity and redundancy. In addition, the group noted that 

the Commission’s Expanded Telework Trial Program was difficult to reconcile 

with the rest of the SEC’s telework policy. With respect to the second objective, 

the Telework Advisory Group made numerous comments, including ones related 

to unclear language, vaguely defined roles and responsibilities, unclear 

descriptions of telework in situations related to COOP, and vague references to 

the purpose of telework. Overall, the Telework Advisory Group recommended 

that the SEC use the group’s checklist as a resource to further develop and 

organize its telework policy. According to the SEC Telework Coordinator, plans 

are being developed to improve the SEC telework program, and these plans will 

include implementation of the Telework Advisory Group’s recommendations.

SEC Employees’ Attitudes Toward Telework 

According to comments made by survey respondents during our follow-up 

interviews, some SEC managers are opposed to allowing their staff to telework. 

The following were among the comments we received:

 56 See CBA, art. 11, “Telework Program,” § 13, “Expanded Telework Trial Program.”
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Telework Guidance for Employees 

In response to a question in the work/life survey about the quality of guidance 

covering telework at the SEC, about 63 percent of the respondents rated the 

• Staff do not request telework because “they have heard” from 

coworkers that telework is not acceptable in their division.

• Employees in their division who request telework are subject to 

management reprisal. 

• Employees in their division who request telework would be subject 

to more stringent work requirements. 

In addition, some interviewees stated that management is not responding to 

telework requests and is failing to notify them when their requests are approved 

or to provide written responses when their requests are denied. 

In response to the work/life survey question about how other SEC employees’ 

participation in the telework program affected them, about 75 percent of the 

respondents indicated that it had “no effect.” Most of the remainder responded

that it increased their workload or made it inconvenient to reach staff or schedule 

meetings. 

Promotion of Telework at the SEC

We found that new SEC employees receive only very basic information about 

telework during orientation. We found that the orientation materials provided do 

not even include website references for telework resources or the name, 

telephone number, or e-mail address of the SEC Telework Coordinator. We 

believe that this information is important for new employees who have questions 

about the program or related policies and procedures. 

In response to the work/life survey question about the SEC’s advertisement of its 

work/life programs, about 57 percent of the respondents answered that it could 

be improved or needed to be improved. With respect to telework specifically, 

comments included the following:

• “I have not seen announcements or any information regarding 

implementation of telework.” 

• “There is a general lack of knowledge about what is available to 

employees, especially regarding ad-hoc telework agreements. 

Many of my colleagues are not taking advantage of these programs 

either because they are not aware of them or do not believe they 

would be eligible to participate.” 

• “I have received little to no information about these programs, and 

what I have learned is through informal channels.”
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guidance as average, above average, or excellent. Of the remaining 

respondents, about 11 percent rated it below average; about 5 percent rated it 

poor; and about 21 percent said that they did not know. Respondents’ negative 

comments included the following:

• “The telework guidance could be a lot better.”

• “[The SEC should] write a policy to describe what is teleworking 

and what is not teleworking.” 

• “For telework . . . there is no guidance as to how these options are 

applicable to management.” 

During our follow-up interviews with survey respondents, several suggested ways 

in which the SEC could improve its telework guidance. These suggestions 

included providing better guidance on what is expected of teleworkers, what 

constitutes telework tools (e.g., Blackberry, laptop, personal computer), 

reimbursement for telework expenses, and distance requirements for 

teleworking. 

Telework Training Provided to SEC Employees

The Telework Enhancement Act of 2010 requires that the head of each 

executive agency ensure that an interactive telework training program is 

provided to employees eligible to participate in the agency’s telework program 

and to all managers of teleworkers. The law requires that employees 

successfully complete the interactive training before they can enter into a written 

agreement to telework.57

Because the Telework Enhancement Act of 2010 was signed on December 9, 

2010, its training requirements were not in effect during most of our fieldwork or

during the period covered by the work/life survey. Although online, interactive 

telework training was and is available to SEC employees at telework.gov, the 

joint OPM/General Services Administration (GSA) website, there was no 

requirement that SEC employees complete any training before entering into a 

telework agreement. The two courses offered at telework.gov—one for 

employees and one for managers—are both intended to provide only a “brief, 

practical introduction to telework” and do not contain detailed, organizationspecific information.58 We found no specific requirements with respect to the 

content of telework training provided, either for executive branch employees 

generally or for SEC employees specifically.

At the SEC, several telework courses with more SEC-specific content have been 

offered, but only to a limited number of employees and managers. Some 

 

57 Pub. L. No. 111-292, (Dec. 9, 2010). 5 U.S.C. §§ 6503(a)(1) and (a)(2). 58 See http://www.telework.gov/tools_and_resources/training/employees/index.aspx. 
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respondents to the work/life survey commented that they believe that more 

telework training should be provided to SEC managers and new participants in 

telework programs. 

Our analysis of the training materials for the SEC telework courses revealed 

some gaps in their content, particularly with respect to the telework provisions of 

the CBA. The following are brief descriptions of the courses, their audiences, 

and the content gaps we found.

• What Is Telework? (training materials developed by the SEC 

Telework Coordinator), provided in April 2010 at the Regional 

Administrative Summit and from March through July 2010 at

Successful Leaders Program classes. This course addressed the 

definition of telework, types of telework, the location of telework 

policy, and the responsibilities of teleworkers and their supervisors. 

It did not address policy and procedures for approving and denying 

telework, managers’ right to direct an employee to report to work 

on their telework day, and managers’ ability to suspend or 

terminate telework.

• Working in a Flexible Workplace, developed by Work/Life 

Performance, Inc., presented six times during 2010 to the 

employees of the Division of Corporation Finance. This training

covered existing and pending telework legislation, telework policy

in the CBA, characteristics of a good teleworker, strategies for 

success in teleworking, and employee teleworking scenarios. The 

training did not cover a number of issues addressed in the CBA, 

including policy and procedures for discontinuing telework; what 

happens when an employee is promoted, reassigned, or detailed; 

duty station policy; employee availability; employee personal 

computer usage and the self-certification safety checklist; office 

supplies and SEC equipment; and protection of government 

records.

• Managing in a Flexible Workplace, developed by Work/Life 

Performance, Inc., presented four times during 2010 to the 

managers of the Division of Corporation Finance. This training 

covered existing and pending telework legislation, the advantages 

to managers of employee telework, strategies for successful 

management of teleworkers, manager scenarios, and when the 

manager is the teleworker. The training did not cover a number of 

issues addressed in the CBA, including policy and procedures for 

approving and denying telework, managers’ right to direct 

employees to report to work on their telework day, and managers’ 

ability to suspend or terminate telework.
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• Telework Training for Supervisors, presented 20 times during 

spring 2005 to SEC supervisors by the SEC University. The 

training included discussions on benefits of and barriers to 

teleworking, eligibility criteria and telework options, techniques for 

managing teleworkers, communication strategies, spotting 

problems, security and legal issues, and procedures and access. 

The appendices to the training materials included a supervisor 

assessment tool, employee assessment tool, job assessment tool, 

supervisor checklist, a copy of the CBA telework policy, and 

procedures for accessing SEC electronic resources from off-site 

locations. The training materials also included copies of SEC Form 

1011, Telework Request and Agreement Form, and SEC Form 

1012, Telework Self-Certification Safety Checklist. Although this

training was very detailed, it was available only to supervisors.

Some of the negative responses to work/life survey questions about the SEC’s 

implementation of telework may be a consequence of managers’ and 

employees’ lack of understanding of the advantages and purpose of the 

program. If managers have not been trained on the benefits of telework or how 

to manage a staff working remotely, they may be opposed to telework. The lack 

of training for SEC employees on how to properly perform telework could affect 

nonteleworkers’ morale and erode their confidence in the telework program. 

Also, lack of training for teleworkers could lead to abuses of the privilege, which

could negatively affect productivity and contribute to waste of resources. In 

addition, inadequate publicity about the SEC telework program and inadequate 

dissemination of telework-related information to SEC employees could lead to 

lower participation levels at a time when federal agencies are expected to 

facilitate eligible employees’ participation in telework programs. 

Recommendation 11: 

The Office of Human Resources should ensure that the recommendations 

made by the Telework Advisory Group in its assessment of the Securities 

and Exchange Commission’s telework policy are considered, including the 

recommendation that OHR use the Telework Advisory Group’s telework 

policy evaluation checklist as a resource to further develop the 

Commission’s telework policy.

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OHR concurred with this 

recommendation. 
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Recommendation 12: 

The Office of Human Resources should revise the one-page overview of 

telework provided to new employees to include website references for 

telework resources; the name, telephone number, and e-mail address of 

the Securities and Exchange Commission Telework Coordinator; and 

page references to article 11, Telework Program, of the 2007 collective 

bargaining agreement. 

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OHR concurred with this 

recommendation. 

Recommendation 13:

The Office of Human Resources should provide comprehensive telework 

training sessions to Securities and Exchange Commission employees that 

address, among other things, telework tools; policies and procedures for 

discontinuing telework; what happens when an employee is promoted, 

reassigned, or detailed; duty station policy; employee availability during 

telework; employee personal computer usage; mandatory telework-related

forms; office supplies and equipment; and protection of government 

records.

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OHR concurred with this 

recommendation.

Recommendation 14:

The Office of Human Resources should provide comprehensive 

telework training sessions to Securities and Exchange Commission 

managers that address, among other things, telework tools, policies

and procedures related to managers’ approval and denial of 

employee telework, managers’ right to direct employees to report to 

work on their telework day, and managers’ ability to suspend or 

terminate telework.

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments. 
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OIG Analysis. We are pleased that OHR concurred with this 

recommendation. 

Recommendation 15: 

The Office of Human Resources should require training and recertification 

for current teleworkers and managers of teleworkers at least every two 

years. 

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OHR concurred with this 

recommendation. 

Recommendation 16:

The Office of Human Resources should send administrative notice e-mails

to all Securities and Exchange Commission employees twice each year 

reminding them of the Commission’s telework options and the benefits of 

participating in the program.

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OHR concurred with this 

recommendation. 

Finding 4: The Majority of Frequent Teleworkers 

at SEC Headquarters Have Private Offices

One of the justifications for permitting and encouraging telework in 

the federal government is telework’s potential to help government 

reduce real estate and energy costs. However, most of the SEC 

headquarters employees who telework at least three days a week, 

including those who telework five days a week, have private offices. 

In addition, we found that the SEC has no requirement and no 

timeframe for requiring that frequent teleworkers forgo or share 

office space. 

As of December 31, 2010, 125 SEC employees were frequent teleworkers—that 

is, they engaged in telework three or more days each week. Of these 125, 68 

worked at SEC headquarters, and 50 of the 68 worked in the Division of 

Corporation Finance. At least 10 of the 68 frequent teleworkers in headquarters 
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teleworked five days a week. The majority of the frequent teleworkers at SEC 

headquarters, including those who telework five days a week, have private 

offices. 

According to A Guide to Telework in the Federal Government,

Federal telework programs are established primarily to meet 

agency mission and operational needs. Telework saves money by 

helping government reduce real estate and energy costs and 

promote management efficiencies.59 

In addition, GSA guidelines state that in considering whether to acquire space or 

other facilities for employees, executive agency heads are required by law to 

consider whether space needs can be met through alternative workplace 

arrangements.60 The guidelines also direct executive agency heads to consider 

reduced facility and other costs per person when determining whether the 

agency’s needs can be met through alternative workplace arrangements.61

In 2007, the SEC initiated a 24-month expanded telework trial program that gave 

employees the option of teleworking from three to five days a week during the 

trial period. In its discussion of the expanded telework trial program, the 2007 

CBA between the SEC and NTEU stated that participants in the program “may 

be required to share office space on the days they are in the traditional office 

regardless of their seniority or office arrangement at the time they apply.”

 

62

Despite the references to cost savings and the potential for reduced space 

requirements in federal law and guidance, and the acknowledgement in the CBA 

that frequent teleworkers may be required to share offices, the SEC does not 

require frequent teleworkers to forgo or share office space. According to the 

Acting Associate Executive Director of the Office of Administrative Services 

(OAS), requiring frequent teleworkers to share offices is under consideration, but 

OAS has no current plan or timeframe for implementing such a requirement. In 

addition, OAS management told us that the Division of Corporation Finance, 

which contains most of the SEC headquarters frequent teleworkers, opposes 

requiring teleworkers to share offices.63 

By failing to require frequent and full-time teleworkers to forgo or share office 

space, the SEC is not fully realizing the cost-saving potential of employee 

 

59 A Guide to Telework in the Federal Government, p. 2, 

http://www.telework.gov/guidance_and_legislation/telework_guide/telework_guide.pdf. 60 GSA, Federal Management Regulation Bulletin 2006-B3, Guidelines for Alternative Workplace 

Arrangements, § XII, 71 Fed. Reg. 13,847. The statutory requirement referred to in the guidelines is at 40 

U.S.C. § 587(c)(2). 

61 GSA, Financial Management Regulation Bulletin 2006-B3, Guidelines for Alternative Workplace 

Arrangements, § XIII, 71 Fed. Reg. 13,847.

62 Collective Bargaining Agreement, art. 11, Telework, § 13.D.8. 63 According to management in the Division of Corporation Finance, (1) the division does not oppose 

requiring teleworkers to share offices and (2) 17 of the division’s 47 “extended teleworkers” currently share 

offices.
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telework and may continue to lease excessive amounts of office space. 

Moreover, as telework is further encouraged for federal employees, SEC 

employees are likely to increase their participation in the Commission’s telework 

program. As a result, unless the SEC implements a requirement that frequent 

teleworkers forgo or share office space, the issue of underutilized office space 

will become even more severe, increasing the potential for wasted resources.64 

Recommendation 17: 

The Office of Administrative Services should establish and enforce 

procedures to ensure that employees who telework three or more days a 

week do not maintain private offices, but rather share office space. 

Management Comments. OAS concurred with this recommendation. 

See Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OAS concurred with this 

recommendation. 

Finding 5: The SEC Telework Data Reported to 

OPM Are Inconsistent With Other Telework Data 

Maintained by OHR

The telework data that OHR reports to OPM in response to 

OPM’s call for telework data are inconsistent with other 

telework data maintained by OHR. OHR is uncertain about 

the details of the automated option used to produce the 

OPM data and why the data it produces differ from other 

OHR telework data. In addition, the current SEC Microsoft 

Access telework database is not sufficient to track data for 

the new reporting requirements established by the Telework 

Enhancement Act of 2010. 

Section 359 of the 2001 Department of Transportation appropriations bill required 

all executive agencies to establish telecommuting policies.65 The law also 

directed OPM to ensure that this requirement was applied to 25 percent of the 

 

64 An investigation by the SEC OIG recently found that OAS entered into a contract to lease at least 900,000 

square feet of new office space in Washington, D.C. The SEC has since arranged for other federal 

agencies to occupy some of that space and is attempting to be released from its obligation for the remainder 

of that space. See OIG, Report of Investigation: Improper Actions Relating to the Leasing of Office Space, 

Case No. OIG-553 (May 16, 2011). Also, on March 8, 2011, the SEC extended, without competitive bidding, 

the term of its lease of space in Alexandria, Virginia, by three years. We found no evidence that in making 

its decision to renew this lease, the SEC considered the potential availability of unoccupied offices at Station 

Place, in Washington, D.C., that are currently reserved for employees who telecommute full-time. 65 Pub. L. No. 106-346.
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federal workforce by April 2001 and to an additional 25 percent in each 

subsequent year. Beginning in 2001, OPM issued the annual OPM Telework 

Data Call, in partnership with GSA, to track the extent of telework implementation 

in federal agencies. The call provides insights into participation rates and 

telework implementation strategies as captured in agency records. 

OHR provided us with Excel spreadsheets containing telework data for calendar 

years 2008 and 2009 and hard copies of the OPM Call for Telework Data reports 

for calendar years 2008 and 2009. The Excel spreadsheets, according to OHR, 

listed all SEC employees who participated in telework during the calendar year. 

For the telework data reported to OPM, OHR uses the “data call for OPM” option 

in Microsoft Access. According to OHR, both sets of data were developed from 

data stored in the Microsoft Access telework database. That database contains 

some data retrieved from SYBASE66 and some data from telework agreements 

that were entered manually into the database by OHR personnel. 

We compared the data in the Excel spreadsheets to data provided in response to 

the OPM Call for Telework Data reports and found that they were inconsistent for 

both calendar year 2008 and calendar year 2009. As shown in table 3, the 

numbers of teleworkers that OHR reported to OPM were higher than the numbers 

of teleworkers shown in the Excel spreadsheets that OHR provided to us.

Table 3: SEC Telework Participation Data Reported to OPM and Telework 

Participation Data Provided to the OIG, Calendar Years 2008 and 2009 

Calendar 

Year 2008 

Data 

Reported to 

OPM

Calendar Year

2008 Data 

Provided to the

OIG

Calendar Year

2009 Data 

Reported to 

OPM

Calendar Year

2009 Data 

Provided to

the OIG

Number of SEC 

employees

3,671 3,637 3,993 3,730

Number of 

recurring 

teleworkers 575 500 785 625

Number of ad 

hoc teleworkers

1,021 709 1,114 905 

Total number of 

teleworkers 

(recurring plus 

ad hoc)

1,596 1,209 1,899 1,530

Source: OHR. Note: The OPM Status of Telework in the Federal Government reports contain data from the 

prior calendar year. That is, the 2010 report contains calendar year 2009 data; the 2009 report contains 

calendar year 2008 data; and so on. The 2010 report, which contains calendar year 2009 data, is the most 

recent report that OPM has released.

66 SYBASE is a relational database that matches data by using common characteristics found within the 

data set.

 
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For calendar year 2008, OHR reported a total of 387 more teleworkers to OPM 

than were shown in the Excel spreadsheets provided to us; for calendar year

2009, OHR reported a total of 369 more teleworkers to OPM than were shown in 

the spreadsheets provided to us.

The SEC Telework Coordinator said that she is not sure of the logic behind the 

system calculations but continues to use the “data call for OPM” report option 

because the data from this report are what have been used in the past to report 

to OPM. The Access database was developed by contractors in the SEC’s Walkin Development Center in OIT before the current Telework Coordinator was 

employed by OHR. The contractors who developed the system for producing the 

Data Call for OPM report no longer work in the Walk-in Development Center. 

The Telework Coordinator’s current contact for questions involving the telework 

database is the manager of the Walk-in Development Center, who told us that 

she did not develop and does not maintain the database but only troubleshoots 

when the Telework Coordinator has problems with it. 

The Telework Coordinator stated that Quicktime would be a better system for 

tracking telework data but that telework tracking in Quicktime only began in 

January 2010. Moreover, she said that not all employees are entering all 

instances of telework in Quicktime because not all teleworkers have been coded 

correctly by their timekeepers in Quicktime. If an employee is not coded as a 

teleworker, Quicktime will not allow the employee to enter time teleworked.67

We also determined after reviewing the reports produced by the SEC in response 

to the OPM Call for Telework Data that the reports do not track the number of 

employees whose telework agreements have been denied or terminated. The 

Telework Coordinator explained that she does not have a mechanism to track 

denied agreements and that information on denials is not provided to her. She 

believes that office and division managers keep this information because they 

are required to provide written explanations of denials to employees. The 

Telework Coordinator stated that terminated agreements are also not reported to 

OHR and that she would not be aware of a termination unless she were 

contacted for advice on the matter. The OPM Call for Telework Data does not 

require that agencies provide this information, but it asks for data on denials and 

terminations from agencies that do track these numbers.68 In addition, we 

believe that tracking terminations and denials can provide useful information 

about the implementation of the Commission’s telework program. 

67 On August 19, 2011, the Acting Associate Executive Director of OHR sent an e-mail to all SEC employees 

that instructed them, effective immediately, to record “all time worked from an alternative worksite” on their 

QuickTime timesheet. The e-mail contains detailed instructions for entering this information into QuickTime 

and notes that “[a]ll teleworking employees must have an approved telework agreement in place.” 

According to the e-mail, “The QuickTime system will allow employees with an approved telework agreement 

to enter their telework hours.”

68 OPM, Status of Telework in the Federal Government: Report to the Congress (February 2011), app. A, 

“2010 Call for Telework Data,” p. 42, 

http://www.telework.gov/Reports_and_Studies/Annual_Reports/2010teleworkreport.pdf .

 
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The Telework Enhancement Act of 2010 establishes additional requirements for 

reports submitted by OPM, including information on agencies’ progress in 

meeting their goals for increasing telework participation by their employees. 

Each report submitted by OPM is to include the following:

(A) the degree of participation by employees of each executive

agency in teleworking during the period covered by the 

report . . ., including— 

(i) the total number of employees in the agency; 

(ii) the number and percent of employees in the 

agency who are eligible to telework; and

(iii) the number and percent of eligible employees

in the agency who are teleworking— 

(I) 3 or more days per pay period;

(II) 1 or 2 days per pay period;

(III) once per month; and

(IV) on an occasional, episodic, or shortterm basis;

(B) the method for gathering telework data in each agency;

(C) if the total number of employees teleworking is 10 percent 

higher or lower than the previous year in any agency, the 

reasons for the positive or negative variation;

(D) the agency goal for increasing participation to the extent 

practicable or necessary for the next reporting period . . .; 

(E) an explanation of whether or not the agency met the goals 

for the last reporting period and, if not, what actions are 

being taken to identify and eliminate barriers to maximizing 

telework opportunities for the next reporting period;

(F) an assessment of the progress each agency has made in 

meeting agency participation rate goals during the reporting 

period, and other agency goals relating to telework, such as 

the impact of telework on— 

(i) emergency readiness;

(ii) energy use;

(iii) recruitment and retention;

(iv) performance;

(v) productivity; and

(vi) employee attitudes and opinions regarding 

telework; and

(G)the best practices in agency telework programs.69

 

69 Pub. L. No. 111-292, 5 U.S.C. § 6506(b)(2).
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OPM must submit the first report containing this information no later than 18 

months after the December 9, 2010, enactment of the law and annually 

thereafter. Given the requirements of the new law, OPM may ask executive 

departments and agencies for additional telework-related information. Without a 

system for gathering timely, accurate information on telework, the SEC will be 

unable to provide the information to OPM that OPM needs to fulfill its statutory 

telework reporting requirements. In addition, the Commission will be unable to

determine whether it is achieving goals and objectives for increased telework 

participation and whether modifications to strategies to increase participation are 

necessary. 

We further found that the SEC’s Telework Coordinator has a telework program

work plan for fiscal year 2011 that includes addressing OPM reporting 

requirements. The plan calls for work in five areas:

• Meeting the requirements of The Telework 

Enhancement Act of 2010

• Analyzing and evaluating the Expanded Telework Trial 

Program

• Working with the Labor Relations Branch to identify 

topics and strategy for upcoming negotiations with 

NTEU

• Improving storage and reporting of telework information, 

including research options for a new database and 

ensuring that all SEC staff are coded as default 

teleworkers in Quicktime

• Redesigning the telework webpage to include SECspecific information and links to telework articles and 

other telework resources

However, the Telework Coordinator has not developed explicit goals and 

objectives to ensure that the elements of the plan are achieved or any goals and 

objectives for increasing telework participation. Without accurate data on 

telework participation, neither OPM nor the SEC can effectively track progress 

toward meeting telework participation goals. Moreover, the SEC’s current lack of 

goals or objectives for increasing telework participation may give the impression 

of a lack of commitment to this aim and may hinder the effectiveness of efforts to 

increase telework participation at the Commission and to assess progress. 

Recommendation 18: 

The Office of Human Resources should develop an improved telework 

database that will track the processing of telework agreements and store 

telework agreements to ensure that the data it reports to the Office of 

Personnel Management are reliable and valid.
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Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OHR concurred with this 

recommendation. 

Recommendation 19: 

The Office of Human Resources should require that Securities and 

Exchange Commission managers provide the Telework Coordinator with 

copies of denied or terminated telework agreements to facilitate tracking of 

such agreements.

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OHR concurred with this 

recommendation. 

Recommendation 20: 

The Office of Human Resources should develop goals and objectives for 

accomplishing the work listed in the telework program work plan for fiscal 

year 2011 and for increasing telework participation by Securities and 

Exchange Commission employees.

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OHR concurred with this 

recommendation.

Recommendation 21: 

The Office of Human Resources should establish a process to monitor 

progress in meeting the Commission’s telework-related goals and 

objectives. If the goals and objectives are not being met, the Office of 

Human Resources should take action to identify and eliminate barriers to 

meeting the goals and objectives. 

Management Comments. OHR concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OHR concurred with this 

recommendation.
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Finding 6: Some SEC Mission-Essential 

Personnel Lack Telework Agreements 

Not all SEC mission-essential employees have written 

telework agreements in place. The telework agreements of 

those who have them do not include expectations for 

emergency telework. In addition, mission-essential 

personnel are not routinely practicing their remote access 

capabilities to ensure that these capabilities will be functional 

during an actual emergency. 

To determine whether the Commission’s mission-essential personnel have the 

appropriate telework authority and capability to carry out essential SEC functions 

during an emergency or catastrophic event, we reviewed whether these 

employees had telework agreements in place and, if so, whether those 

agreements included provisions for emergency telework. We found not only that 

some mission-essential personnel lacked telework agreements, but also that 

existing agreements did not address emergency telework. 

Responsibilities of Mission-Essential Personnel

The role of mission-essential staff is to execute the SEC’s MEFs and PMEFs 

under crisis conditions. 

Mission-essential personnel are selected by SEC division and office heads based 

on 

• predetermined essential functions that must be performed, 

regardless of the operational status of the SEC’s primary operating 

facility; 

• staff member’s knowledge and expertise in performing essential 

functions; and

• staff member’s ability to rapidly deploy to relocation site in an 

emergency situation. 

COOP, as defined in National Security Presidential Directive-51/Homeland 

Security Presidential Directive-20 (NSPD-51/HSPD-20) and the National 

Continuity Policy Implementation Plan, is an effort within individual executive 

departments and agencies to ensure that PMEFs continue to be performed 

during a wide range of emergencies, including localized acts of nature, accidents, 

and technological or attack-related emergencies.70 The continuity program staff 

within an agency are responsible for coordinating and overseeing the 

 

70 See National Continuity Implementation Plan, http://www.fema.gov/pdf/about/org/ncp/ncpip.pdf.
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development and implementation of COOP plans and supporting procedures.71 

Each agency’s COOP plan is to be the roadmap for implementing and managing 

its COOP program.72 Personnel identified as mission-essential are expected to 

remain in contact with the agency at all times during any emergency closure and 

may be called to work during emergencies dealing with national security, 

extended emergencies, or other unique situations.73 

The SEC’s MEFs, which must be continued throughout a crisis or resumed 

quickly after a disruption of normal activities, are as follows: 

• Regulation and Policy: Interpret Rules. Activities involve the 

SEC's development and dissemination of guidance to assist 

in the interpretation and implementation of regulations and 

federal securities laws. Activities also involve clarifying and 

interpreting the applicability of rules and regulations to 

specific factual situations or to new products and industry 

practices for the benefit of investors, securities industry 

participants, other government agencies, other regulators, 

and the general public. 

• Regulation and Policy: SEC Commission Approvals. 

Involves activities related to the steps performed by the SEC 

Commission or SEC staff on behalf of the Commission to 

formally issue an opinion or order, or to approve a 

rulemaking action.

• Regulatory Oversight: Review and Take Action on 

Applications for Exemption from Provisions of Securities 

Laws. These activities include receiving, reviewing, tracking, 

and providing comments and publishing notices of 

applications for exemption. Further, provides technical and 

economic analysis for recommendations and actions taken.

• Regulatory Oversight: Monitor Financial Markets and 

Provide Crisis Management. Includes activities to monitor 

developments that pose potential systemic risks to normal 

market operations and coordinating inter-market and 

interagency communications with financial industry 

participants, SEC registrants and financial agencies 

responding to the crisis. 

 

71 Department of Homeland Security, Federal Continuity Directive 1 (FCD 1), Federal Executive Branch 

National Continuity Program and Requirements (February 2008), p. 3

72 http://fema.gov/about/org/ncp/coop/index.shtm. 73 OPM, A Federal Employee’s Emergency Guide, p. 5, 

http://www.opm.gov/emergency/pdf/employeesguide.pdf.
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• Disseminate Information and Manage External 

Relationships: Public Access to Commission Filings and 

Information. Includes activities to process and publish 

information that is officially released by the SEC for public 

access. Activities also include managing web content for 

both the internal and public facing SEC websites and 

interfacing with media and news outlets to convey official 

SEC information.74

PMEFs, which are a subset of the agency’s MEFs, must be performed to support 

the continuation of the federal government’s national essential functions before, 

during, and in the aftermath of an emergency. The SEC’s agency-level PMEFs 

are covered in internal guidance entitled Regulatory Oversight: Monitor Financial 

Markets and Provide Crisis Management. This guidance addresses crisis 

management response and monitoring for developments caused by catastrophic 

events that directly or indirectly disrupt normal financial market operations.

Telework Agreements of SEC Mission-Essential Personnel

According to OPM’s A Guide to Telework in the Federal Government, a good 

telework agreement should include “[e]xpectations for emergency telework”—that 

is, whether the employee in expected to work in cases of a “continuity event,” 

such as a national or local emergency or another situation that disrupts normal 

office operations.

75 

We found that nearly half—49 percent—of SEC COOP mission-essential 

personnel do not have telework agreements. Their lack of telework agreements 

indicates that these employees may not be teleworking, even on an ad hoc basis,

and may not be routinely practicing their remote access capabilities. We also 

determined that the telework agreements of mission-essential personnel do not 

include work expectations related to emergency telework. 

To make these determinations, we obtained a list from the SEC Continuity 

Support Center of the 277 SEC headquarters personnel and the 120 regional 

office personnel identified as mission-essential as of February 16, 2011.76 We 

compared that list to the list of SEC teleworkers for fiscal year 2010 provided by

OHR and found that 156 (56 percent) of headquarters and 40 (33 percent) of 

regional office mission-essential personnel did not have telework agreements. 

We then requested a sample of 36 telework agreements for the mission-essential 

headquarters and regional office personnel who did have agreements in place 

and found that none of those agreements included expectations for emergency 

 

74 SEC Continuity of Operations Plan, “Mission Essential Functions” (April 2010), pp.11-12. 75 A Guide to Telework in the Federal Government, p. 19, 

http://www.telework.gov/guidance_and_legislation/telework_guide/telework_guide.pdf. 76 The Continuity Support Center is an SEC internal web-based system dedicated to continuity assurance 

and emergency preparedness.
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telework. The sample consisted of telework agreements from 15 headquarters 

offices and divisions and from all 11 regional offices. 

We also found that the SEC does not require its mission-essential personnel to 

enter into telework agreements. The former Continuity Program Manager for the 

SEC informed us that he encouraged all mission-essential personnel to request 

ad hoc telework, but he also noted that the former SEC Executive Director had 

approved telework by all mission-essential personnel during “COOP situations” 

without requiring that such employees have telework agreements already in 

place.77 This approval was given in an October 16, 2007, memorandum to 

division directors and office heads, in which the former Executive Director stated, 

“By this memorandum, I am approving telework by . . . designated crisis-essential 

personnel in all COOP situations.” 78 Failure to require mission-essential 

personnel to enter into telework agreements may be inconsistent with the 

Telework Enhancement Act of 2010, however, which requires that employees 

who telework have written agreements with their managers that outline “the 

specific work arrangement that is agreed to.”79

Remote Access Testing During COOP Exercises

The National Continuity Programs Directorate within FEMA develops and 

manages COOP exercise programs.

 These programs range from tabletop 

exercises designed for federal agencies’ internal use to large, functional, fullscale exercises involving numerous federal and nonfederal entities. 

Exercise Eagle Horizon is a full scale, scenario-based exercise focusing on 

federal organizations’ COOP programs in the National Capital Region. The SEC 

participates annually in Exercise Eagle Horizon. 

Exercise Eagle Horizon was held on May 17 through May 19 in 2010, on May 7

through May 8 in 2008, and on June 17 in 2009. Not all SEC headquarters and 

regional office mission-essential participated in the Eagle Horizon exercises 

during these years. The SEC asked its headquarters divisions and offices and its 

regional offices to participate in each COOP exercise. A small contingent of 

operations and COOP staff were deployed to an alternate facility to meet the 

exercise requirements and test continuity capabilities. Approximately 35 

headquarters personnel participated in Exercise Eagle Horizon in 2008; 

approximately 255 headquarters and regional office personnel participated in 

2009; and approximately 65 headquarters personnel participated in 2010.

 

77 E-mail dated March 9, 2011, from the former SEC Continuity Program Manager. 78 Memorandum from SEC Executive Director to SEC Division Directors and Office Heads, Telework for 

Continuity Assurance (Oct. 16, 2007). In the memorandum, “crisis-essential employees” are the same as 

mission-essential personnel. 79 Pub. L. No. 111-292, 5 U.S.C. § 6502(b)(2).
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During Exercise Eagle Horizon in 2009, the SEC conducted a test of its telework 

capability. OIT engaged a contractor, Science Applications International 

Corporation, to evaluate the Commission’s participation in the exercise. The 

results of the remote access testing were included in a report issued by the 

contractor.

80 According to the report, 245 SEC personnel participated in the 

remote access test. These personnel included staff from SEC divisions and 

offices at headquarters and in regional offices. There were 486 session logons

confirmed during the test period.

81 OIT Customer Care received 35 calls related 

to network connectivity problems during the test period.82 

OIT also conducted a survey of SEC participants in the remote access test. Of 

the 245 participants, 145 completed the survey. Approximately 37 percent of the 

respondents indicated that they had experienced problems with remote access, 

and approximately 15 percent of the respondents stated that they had contacted 

OIT Customer Care as a result of problems they experienced. 

During fiscal years 2008 through 2010, the SEC participated in no COOP-related 

exercises other than Exercise Eagle Horizon. However, OIT sponsors and 

conducts a variety of limited internal disaster recovery-related and emergency 

notification system exercises each year.83 From fiscal year 2008 through fiscal 

year 2010, OIT conducted 23 such exercises. Six exercises were conducted in 

2008, 8 in 2009, and 9 in 2010. The number of mission-essential personnel who 

participated in these exercises was not recorded. 

In A Guide to Telework in the Federal Government, OPM states that “[t]elework 

must be part of all agency emergency planning.”84 In the guide, OPM also 

“strongly recommends that agencies include specific language in the telework 

agreement for any employee who may potentially be asked to telework in case of 

emergency situations or continuity events” and states that such employees 

“should be encouraged to practice teleworking on a regular basis and as often as 

possible.”85 In addition, the guide states that managers should be committed to 

implementing remote work arrangements as broadly as possible to take full 

advantage of them for COOP purposes and to ensure that 

• equipment, technology, and technical support have been 

tested; 

 

80 Eagle Horizon ’09: Securities and Exchange Commission (SEC) Office of Information Technology (OIT) 

Lessons Learned Report (July 8, 2009).

81 G/On logons accounted for 66 logons, VPN for 85, and Citrix for 335. See table 5 for a definition of these 

terms.

82 G/On users accounted for 4 calls, VPN users for 6, Citrix users for 14, RSA token users for 1, and “other” 

for 10.

83 NotiFind is the SEC’s agency wide notification system for providing critical information to employees in the 

event of an emergency. 84 A Guide to Telework in the Federal Government, p. 33, 

http://www.telework.gov/guidance_and_legislation/telework_guide/telework_guide.pdf.

85 A Guide to Telework in the Federal Government, p. 23, 

http://www.telework.gov/guidance_and_legislation/telework_guide/telework_guide.pdf.
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• employees are comfortable with technology and 

communications methods; and 

• managers are comfortable managing a distributed 

workgroup.

86

As previously noted, nearly half of the SEC’s mission-essential personnel do not 

have telework agreements. In addition, according to the SEC’s Continuity 

Program Manager, some SEC mission-essential personnel participating in 

COOP exercises are not required to remotely access the SEC’s network during 

COOP exercises. We therefore concluded that it is likely that a significant 

number of essential personnel are not routinely practicing their remote access 

capabilities. Failure to practice these capabilities could impair the ability of these 

personnel to perform MEFs during emergency situations. When remote access 

tools, technology, and technical support are not used regularly, it is not possible 

to identify and correct any problems related to them. 

In the work/life survey we conducted, we asked employees who had participated 

in a government-wide COOP exercise at the SEC to rate their experiences with 

teleworking during the exercise. About 37 percent of employees rated ease of 

access as excellent; about 37 percent rated their ability to complete all assigned 

telework tasks as excellent, and about 24 percent rated the timeliness of OIT’s 

response to telework access issues as excellent. We also asked when 

employees had last tested their remote access capability for COOP purposes. 

Approximately 54 percent responded that it had been more than 6 months or that 

they had never tested it. Finally, we asked employees who had been assigned a 

laptop for COOP purposes whether they connected their laptops to the SEC 

network every 30 days to ensure that all patches had been applied, and

approximately 43 percent responded that they did not do so. 

The lack of telework agreements for all mission-essential SEC personnel, the 

failure of existing telework agreements to address emergency telework, and the 

lack of routine testing of remote access capabilities by mission-essential 

personnel could hinder the SEC’s ability to effectively utilize its remote access 

capabilities during an emergency or catastrophic event that required employees 

to work off-site in order to carry out essential functions. 

Recommendation 22: 

Consistent with governing Federal Emergency Management Agency and 

Office of Personnel Management directives, and the SEC Collective 

Bargaining Agreement, the Office of Human Resources, in conjunction

with the Office of FOIA, Records Management, and Security, should 

require all mission-essential personnel to enter into telework agreements 

 

86 A Guide to Telework in the Federal Government, p. 33, 

http://www.telework.gov/guidance_and_legislation/telework_guide/telework_guide.pdf.
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that specifically allow them to conduct their continuity of operations

responsibilities and the mission-essential functions they will perform 

during emergencies or agency closures.

Management Comments. OHR and OFRMS concurred with this 

recommendation. See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OHR and OFRMS concurred with this 

recommendation. 

Recommendation 23: 

Consistent with governing Federal Emergency Management Agency and 

Office of Personnel Management directives, and the SEC Collective 

Bargaining Agreement, the Office of Human Resources, in conjunction 

with the Office of FOIA, Records Management, and Security, should 

require mission-essential personnel who have telework agreements to 

telework periodically to practice their assigned mission-essential and 

primary mission-essential functions.

Management Comments. OHR and OFRMS concurred with this 

recommendation. See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OHR and OFRMS concurred with this 

recommendation.

Finding 7: The SEC COOP Plan Does Not 

Comprehensively Address the Role of Telework

The role of telework during emergencies and catastrophic 

events is not comprehensively addressed in the SEC’s 

COOP Plan. Instead, Emergency Relocation Sites are 

emphasized as the means of performing essential functions 

for COOP purposes.87

Although telework is mentioned many times in the SEC’s COOP plan, we found 

that the COOP plan did not address the telework function as comprehensively as 

the Commission’s April 2009 Pandemic Influenza Preparedness Plan did. 

According to A Guide to Telework in the Federal Government, “[t]elework must 

 

87 An Emergency Relocation Site is an alternate work site that provides the capability to perform minimum 

essential department or agency functions until normal operations can be resumed.
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be part of all agency emergency planning.”88 The guide states that management 

must be committed to implementing telework as broadly as possible to take full 

advantage of telework for emergency purposes and ensure that equipment and 

technology have been tested, employees are comfortable with technology and 

communications methods, and managers are comfortable managing a distributed 

workgroup.89 In addition, the Telework Enhancement Act of 2010 requires that 

telework be incorporated as part of the COOP plans of executive agencies.

90

Contents of the SEC’s Pandemic Influenza Preparedness Plan

The SEC’s April 2009 Pandemic Influenza Preparedness Plan specifically and 

comprehensively addressed telework, stating the following:

The agency’s crisis-essential workforce will engage in sustained 

telework, linked by a variety of resilient communications equipment, 

throughout the period of its dispersal. The agency will, therefore, 

continue aggressively to pursue its program of ensuring that its 

crisis-essential workforce is fully equipped, trained, and 

demonstrably able to telework.

The plan’s section on conducting essential functions by telework addressed crisis 

telework approval and policies, technology and support, telework capability, 

training staff to telework effectively, exercising agency telework competence, and 

expanding the agency’s telework-capable workforce. In the subsection on 

expanding the agency’s telework-capable workforce, the plan stated, “While 

recognizing that not all employees’ responsibilities lend themselves equally well 

to telework, the agency believes that it will be better prepared to protect its 

employees’ health and safety and to conduct its most essential functions, while 

promoting public health objectives, if it continues to progress steadily towards 

100 percent telework-capable workforce.”

Telework Provisions in the SEC’s COOP Plan

The SEC’s COOP Plan, dated April 2010, places more emphasis on essential 

personnel performing their duties from relocation facilities than by telework. The 

COOP Plan states that “SEC essential functions will be relocated to the one of 

three Emergency Relocation Site (ERS) locations.” It further states, “Following 

activation of the plan and notification of personnel, the SEC will relocate 

personnel and vital records to a continuity facility . . . . SEC continuity personnel 

will deploy to the assigned continuity facility to perform SEC essential functions 

 

88 A Guide to Telework in the Federal Government, p. 33, 

http://www.telework.gov/guidance_and_legislation/telework_guide/telework_guide.pdf.

89 A Guide to Telework in the Federal Government, p. 33, 

http://www.telework.gov/guidance_and_legislation/telework_guide/telework_guide.pdf.

90 Pub. L. No. 111-292, 5 U.S.C. § 6504(d)(1). In addition, section 6504(d)(2) of the act states that “[d]uring 

any period that an executive agency is operating under a continuity of operations plan, that plan shall 

supersede any telework policy.”
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and other continuity tasks.” The COOP Plan also notes that “SEC continuity 

personnel have access to strategic business applications, market watch data 

services, and high-speed data lines at its Emergency Relocation Site (ERS) 

locations and by remote access.” OIT has responsibility for establishing 

appropriate communications links for remote access and applications and data 

access for personnel not designated as emergency responders to support the 

Emergency Relocation Group. The SEC’s COOP Plan specifically acknowledges

telework as an option only with the statement that “[o]ther essential staff are put 

into telework mode” during level 4 of Phase 1: Readiness and Preparedness.

Even though the SEC’s COOP Plan incorporates some elements of the 

Pandemic Influenza Preparedness Plan’s detailed telework planning, the lack of 

emphasis on telework in the SEC’s COOP Plan could hinder effective planning 

and preparation for carrying out MEFs during emergencies and catastrophic 

events.

Recommendation 24: 

The Office of FOIA, Records Management, and Security should update 

the continuity communications section of the Securities and Exchange 

Commission’s Continuity of Operations Plan and expand it to expressly 

address conducting essential functions by telework consistent with 

governing Federal Emergency Management Agency and Office of 

Personnel Management directives, and the SEC Collective Bargaining 

Agreement. It should include subsections addressing telework capability, 

training staff to telework effectively, and exercising agency telework 

competence as detailed in the Commission’s Pandemic Influenza 

Preparedness Plan.

Management Comments. OFRMS concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OFRMS concurred with this 

recommendation. 

Finding 8: The SEC’s Regional Offices Lack Viable 

COOP Plans

SEC regional office directors have not fully developed 

regional-level COOP plans and therefore are not in 

compliance with federal guidance. 

During our review, we determined that none of the SEC regional office COOP 

plans contain all the elements of a viable continuity plan. In addition, according 

to the Commission-wide COOP Plan, SEC regional office directors are 
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responsible for updating regional office COOP plans, but we found that the plans 

were outdated. During an interview, the SEC COOP Coordinator acknowledged 

that the regional office COOP plans were very outdated and said that the SEC’s 

Continuity Task Force is forming a regional team to address all of the regional 

office COOP plans.91

With respect to telework, the SEC’s regional office COOP plans, like the 

Commission-wide COOP Plan, do not fully address the role of telework. Some 

regional office COOP plans refer to ensuring that all staff have e-mail capabilities 

at their telework location and discuss alternative telework arrangements and 

assignments for mission-essential personnel and monitoring assignments of 

telework and mission-essential personnel. Other regional office COOP plans 

refer to ensuring that staff have the ability and equipment to telework as an 

interim arrangement and to locating essential staff at either the devolution92 site 

or permitting them to telework. None of the regional office COOP plans specify 

the MEFs and PMEFs to be performed during telework.

Elements of Viable Capability Continuity

Federal Continuity Directive 1, Federal Executive Branch National Continuity 

Program (FCD 1), states in support of maintaining a comprehensive and effective 

continuity capability, “[T]he Federal executive branch has developed and 

implemented a continuity program which is composed of efforts within individual 

agencies to ensure that their Mission Essential Functions . . . continue to be 

performed during a wide range of emergencies, including localized acts of 

nature, accidents, and technological or attack-related emergencies.” The 

directive also states, “All agencies, regardless of their size or location, shall have 

in place a viable continuity capability to ensure continued performance of their 

agency’s essential functions under all conditions.” 93

On its website, FEMA states, “The ultimate goal of continuity in the executive 

branch is the continuation of National Essential Functions (NEFs). In order to 

achieve that goal, the objective for organizations is to identify their Essential 

Functions (EFs) and ensure that those functions can be continued throughout, or 

resumed rapidly after, a disruption of normal activities.” 94

91 The Continuity Task Force consists of both senior-level and lower-level employees who are subject-matter 

experts from the various SEC divisions and offices. Its mission is to conduct continuity planning for the 

Commission.

 

92 “Devolution” is defined by FEMA as the “capability to transfer statutory authority and responsibility for 

essential functions from an agency’s and organization’s primary operating staff and facilities to other agency 

and organization employees and facilities, and to sustain that operational capability for an extended period.” 

See http://www.fema.gov/about/org/ncp/coop/index.shtm. 93 Department of Homeland Security, Federal Continuity Directive 1 (FCD 1), Federal Executive Branch 

National Continuity Program and Requirements (February 2008), p. 2. 

http://www.fema.gov/pdf/about/offices/fcd1.pdf . 94 See http://www.fema.gov/about/org/ncp/coop/index.shtm. The national essential functions are the eight 

functions that the president and national leadership will focus on to lead and sustain the nation during a 

catastrophic emergency: (1) preserving the constitutional form of government; (2) providing visible 

leadership to the nation; (3) defending the country against all enemies; (4) maintaining and fostering 

 
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The FEMA website also lists the “elements of viable continuity capability”:

Essential Functions—a subset of government and other 

organizational functions that are determined to be critical 

activities used to identify supporting tasks and resources that 

must be included in the agency’s and organization’s 

continuity planning process.

Orders of Succession—essential part of an agency’s and 

organization’s continuity plan to ensure that agency and 

organizational personnel know who assumes the authority 

and responsibility of the agency’s and organization’s 

leadership if that leadership is incapacitated or becomes 

otherwise unavailable during a continuity situation. 

Delegations of Authority—establish who has the right to 

make key decisions during a continuity situation.

Continuity Facilities—alternate facilities from which an 

agency and organization can perform its Essential Functions 

in a threat-free environment.

Continuity Communications—the availability and redundancy 

of critical communications systems to support connectivity to 

internal and external organizations, customers, and the 

public is vital to the success of agency and organization 

operations.

Vital Records Management—the identification, protection 

and ready availability of electronic and hard copy 

documents, references, records, information systems, data 

management software and equipment needed to support 

essential functions during a continuity situation.

Human Capital—provides guidance to emergency 

employees and other special categories of employees who 

are activated by an agency and organization to perform 

assigned response duties during a continuity event.

 effective relationships with foreign nations; (5) protecting against threats to the homeland and bringing to 

justice perpetrators of crimes or attacks against the nation, its citizens, or interests; (6) providing rapid, 

effective response to and recovery from an attack or other incident; (7) protecting and stabilizing the nation’s 

economy and ensuring confidence in financial systems; and (8) providing for critical federal government 

services. Department of Homeland Security, Federal Continuity Directive 1 (FCD 1), Federal Executive 

Branch National Continuity Program and Requirements (February 2008), annex D, 

http://www.fema.gov/pdf/about/offices/fcd1.pdf . 
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Tests, Training, and Exercises (TT&E)—Provisions made for 

the identification, training, and preparedness of personnel 

capable of relocating to alternate facilities to support the 

continuation of the performance of essential functions.

Devolution of Control and Direction—capability to transfer 

statutory authority and responsibility for essential functions 

from an agency’s and organization’s primary operating staff 

and facilities to other agency and organization employees 

and facilities, and to sustain that operational capability for an 

extended period.

Reconstitution—the process by which surviving and/or 

replacement agency and organizational personnel resume 

normal agency operations from the original or replacement 

primary operating facility.95

Elements of Viable Capability Continuity in Regional Office 

COOP Plans

During our review, we examined the COOP plans of each of the 11 SEC regional 

offices to determine whether they contained the elements of viability continuity 

capability listed in FCD 1 and on FEMA’s website. Table 4 summarizes the 

results of this examination. 

 

95 http://www.fema.gov/about/org/ncp/coop/index.shtm#4.
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Table 4: Elements of Viable Continuity Capability in SEC Regional Offices’ 

COOP Plans

Atl. Bos. Chi. Den.

Ft.

Worth L.A. N.Y. Miami Phil. S.F.

Salt

Lake

City

Essential

functions X X X X X X X X X

Orders of 

succession X X X X X X X X

Delegation of 

authority

Continuity of 

facilities X

Continuity of 

communications X

Vital records 

management X X X X X X X

Human 

capital X X X X X X X X

Tests, training, 

and exercises X X X X X X X X

Devolution of 

control X X X X X X X X

Reconstitution

X X X X X X X X

Source: OIG. 

As shown in table 4, we found that none of the 11 regional offices’ COOP plans

addressed more than 7 of the 10 elements of viability continuity capability and 

that 1 regional office’s plan addressed only 1 element. We also found that no 

single element was addressed by all 11 offices. The element addressed most 

often—by 8 of the offices—was “essential functions.” None of the regional 

offices’ plans covered “delegation of authority,” however, and only 1 addressed 

continuity of facilities and COOP. 

Role of SEC Regional Offices in Meeting Commission-wide 

COOP Objectives 

The SEC’s COOP Plan, developed in accordance with FCD 1, contains the 

following continuity objectives: 

• Ensuring that the SEC can perform its essential functions under all 

conditions

• Reducing loss of life, safeguarding the SEC workforce, and 

minimizing property damage and loss 

• Executing a successful order of succession in the event of a 

disruption 

• Reducing or mitigating disruptions to operations 
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• Ensuring that the SEC has facilities where it can continue to 

perform its essential functions 

• Protecting essential facilities, equipment, records, and other assets 

• Achieving a timely and orderly recovery and reconstitution 

• Ensuring and validating continuity readiness through testing, 

training, and exercises 

The plan also states that the SEC’s ability to sustain its essential functions under 

all foreseeable conditions “requires considerable planning throughout the SEC 

and in all regional offices, strong and redundant communications capabilities, as 

well as a sustained program of training, testing, and exercises.” 

We found that the SEC is not meeting its continuity planning objectives at the 

regional level. As noted earlier and as shown in table 4, the SEC regional offices 

lack fully developed COOP plans and are therefore not adequately prepared to 

fulfill their role in helping to ensure that the SEC can meet its Commission-wide 

COOP objectives. 

The SEC COOP Plan specifies that if catastrophic conditions were to prevent the 

Commission from conducting essential operations at its headquarters location, 

those operations would be conducted first, at the SEC Operations Center in 

northern Virginia, and second, at the SEC’s principal long-term relocation site in 

Richmond, Virginia.

96 If an emergency event made it impossible, unlawful, or 

imprudent for the Commission’s mission-essential workforce to deploy to either of 

those locations, and devolution of control became necessary, the agency’s New 

York Regional Office would assume responsibility for conducting essential SEC 

functions. If the New York Regional Office were also unable to conduct essential 

SEC functions, the Chicago Regional Office would serve as the primary back-up. 

The Chairman or her designee has the authority to order that certain successor 

personnel disperse to other offices or locations when circumstances warrant. We 

determined that neither the New York Regional Office COOP plan nor the

Chicago Regional Office COOP plan includes a strategy for supporting SEC 

headquarters in case of a relocation of personnel and transfer of responsibilities. 

Without adequate, comprehensive regional office COOP plans, the 

Commission’s ability to meet its COOP objective of sustaining essential functions 

under all foreseeable conditions may be compromised.

Effective July 25, 2011, the SEC’s Continuity Program Office realigned from the 

Office of the Executive Director to the Office of Security Services. The Office of 

Security Services is located within the Office of FOIA, Records Management, and 

Security, which is under the Office of the Chief Operating Officer. The Director of 

the Office of FOIA, Records Management, and Security informed us that senior 

SEC management has directed the Office of the Chief Operating Officer to

96 The “principal long-term relocation site” is the primary alternate location from which the SEC’s Emergency 

Relocation Group would perform essential functions for up to a period of 30 days.

 
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perform a thorough review of the entire COOP program to ensure that the 

program complies with FEMA requirements.

Recommendation 25: 

The Office of FOIA, Records Management, and Security should instruct 

regional office directors to revise their regional office continuity of 

operations plan to address all the essential elements of viable continuity 

capability specified by the Federal Emergency Management Agency. To 

ensure that the plans are reviewed and modified timely and presented in a 

standard format, the Office of Security Services should establish timelines 

and submission criteria for the revised plans. 

Management Comments. OFRMS concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OFRMS concurred with this 

recommendation. 

Recommendation 26: 

The Office of FOIA, Records Management, and Security should instruct 

the directors of the appropriate regional offices to include in their continuity 

of operations plans strategies for supporting headquarters essential 

functions during devolution of control.

Management Comments. OFRMS concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OFRMS concurred with this 

recommendation.

Finding 9: The SEC Has Not Tested the Maximum 

User Limit for Remote Access to the SEC Network

The maximum user limit for the SEC’s remote access 

technology has not been tested to determine whether it 

would perform adequately when fully utilized during an 

emergency or catastrophic event.

The SEC has a variety of remote access tools for teleworkers, as shown in table 5. 
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Table 5: SEC Remote Access Tools for Teleworkers

Remote Access Tool Definition

Outlook Web Access 

(OWA)

A web-based application used to check e-mail through a website. 

Users need an RSA token to use the site.

Citrix

Software that enables a user to remotely access the SEC Remote 

Electronic Terminal portal via an SEC-issued laptop or the user’s 

non-SEC computer. Users need an RSA token to access the 

SEC Remote Electronic Terminal portal.

SEC Virtual Private 

Network (VPN)

A remote access solution that requires an SEC laptop configured 

for VPN and an RSA token for authentication.

RSA SecurID token

A secure authentication device that allows users to connect to the 

SEC network and meets the National Institute of Standards and 

Technology two-factor authentication requirement. One 

authentication is the user’s network password or personal 

identification number (PIN), and the other is a password 

generated by the RSA token, which changes every 60 seconds.

G/On stick

A USB-based device that allows a user to connect to the SEC 

network and access common SEC applications or direct access 

to the user’s SEC office computer.

Source: OIG.

Remote Access Capabilities for SEC Teleworkers

We asked respondents to our work/life survey to rate the ease of accessing the 

SEC network remotely and the timeliness of OIT’s response to access issues

they encountered. About 69 percent of respondents rated “ease of accessing 

the network” as above average or excellent. About 54 percent rated “timeliness 

of OIT’s response” as above average or excellent. Some respondents also 

provided comments along with their responses to these questions. Positive 

comments included the following:

• “OIT deserves special recognition for the outstanding remote 

access systems they provide to employees.” 

• “VPN and OWA work well in my case.” 

• “Our local IT employee is outstanding in addressing needs and 

issues.” 

Negative comments included the following:

• “I have consistently had a bad experience trying to access the SEC's 

network remotely. I usually am unable to connect using Citrix. This is the 

reason I occasionally forward work to access on my home computer.” 

• “There is so much security software on my SEC laptop computer, it 

causes my connection to the server to be very slow or I will be dropped off 

the system without any explanation. Very frustrating.” 
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• “I have had nothing but problems with Citrix and therefore carry my SEC 

laptop back and forth to work which is not an ideal situation.”

According to OIT, its help desk processed 3,411 failure tickets related to remote 

access connectivity in fiscal year 2010. OIT told us that these 3,411 tickets

represented 12.6 percent of all failure tickets reported for that year. In addition, 

OIT provided us with data, summarized in table 6, on the number of failure tickets 

for each remote access technology. Nearly half of the failure tickets involved 

Citrix. 

 Table 6: OIT Help Desk Failure Tickets Related to 

 Remote Access Technology, Fiscal Year 2010

Technology

Number of 

Service Desk 

Failure Tickets

Percentage of All Failure 

Tickets Related to Remote 

Access Failures

VPN 538 15.8

RSA token 323 9.5

G/On 677 19.8

Citrix 1,655 48.5

Othera 218 6.4

 Source: OIT. a

“Other” includes, for example, problems with OWA, password reset when 

 connecting remotely, and drive mapping through remote access.

As of the date of our fieldwork, OIT had issued approximately 3,600 RSA tokens

and approximately 1,700 G/On sticks. According to OIT, the number of devices 

issued is not necessarily the same as the number actually in use. 

Maximum User Limits for SEC Remote Access Technology

OIT has recently begun producing remote access reports that include daily 

connections statistics. The reports track connections during weekdays, weekday 

evenings, weekends, and weekend evenings for G/Ons, Citrix, VPN, and OWA. 

However, OIT’s Remote Access Manager told us that OIT has not tested the 

maximum user limits of the SEC’s remote access technology. OIT also told us

that the highest number of actual G/On connections to the SEC network at one 

time was approximately 400. In addition, OIT stated that Citrix, G/On, OWA, and 

VPN have not been fully stress-tested and expressed uncertainty about whether

the network could sustain full utilization of remote access devices. In a 

comment, a respondent to the work/life survey expressed the same uncertainty:

I worry about the operational capacity of remote access overall, 

should we experience an actual COOP-type of event in which all 

SEC HQ employees with remote access may have to work at home 

for several days or weeks. This includes technical infrastructure, 

and the crisis-essential staff's own ability to access the SEC 

network remotely. In this regard, we would benefit from conducting 

actual tests of wide-scale work-at-home drills—say, quarterly drills 
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of at least one or two full workdays at home for, at the least, all HQ 

and regional office crisis-essentials and their subject matter expert 

staff upon whom they rely. . . .[O]nly by conducting live, large-scale, 

in-the-field exercises could you somewhat gauge your readiness for 

the real event.

The OIT Assistant Director for Customer Support and End-User Services said

that she and her staff had discussed a structured and systemic test of the 

maximum user limit for remote access but that the testing had not been pursued. 

She told us that the stress test could be performed using simulated traffic 

generators to mimic the maximum user limit but that the test is best performed by 

actual teleworkers because a variety of SEC applications would need to be 

tested. In addition, she said that a stress test involving actual teleworkers would 

give OIT the opportunity to examine its ability to respond if any issues arose 

during testing.

Because of the failure to conduct stress tests of remote access capabilities, we 

are concerned that significantly greater use of remote access devices and 

systems could stress SEC remote access resources, including the SEC network, 

and strain help desk resources. As a result, SEC users might be unable to gain 

access to the system, necessary applications, and other work materials when 

they cannot work on-site, and the Commission’s ability to function effectively 

during emergencies or catastrophic events would be impaired. Even increased 

nonemergency use, such as use resulting from increased staff size or increased 

participation in the Commission’s telework program, could impair remote access 

functionality. 

Recommendation 27: 

The Office of Information Technology should perform server stress tests. 

Testing should incorporate a variety of applications used with remote 

access. 

Management Comments. OIT concurred with this recommendation. 

See Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OIT concurred with this 

recommendation. 
Appendix I

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Abbreviations

CBA collective bargaining agreement

COOP continuity of operations

FEMA Federal Emergency Management Agency

GSA General Services Administration

MEF mission-essential function

NTEU National Treasury Employees Union

OHR Office of Human Resources

OIG Office of Inspector General 

OIT Office of Information Technology

OPM Office of Personnel Management 

OWA Outlook Web Access

PMEF primary mission-essential function

POPPS Personnel Operating Policies and Procedures

SEC or Commission U.S. Securities and Exchange Commission

SES Senior Executive Service

SO Senior Officer

VPN virtual private network
Appendix II

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Scope and Methodology

Scope. We conducted our fieldwork from December 2010 to August 2011. In 

general, we reviewed SEC activities related to the work/life issues addressed in 

this report for fiscal years 2008 through 2010. We cited data from fiscal year 

2011 with respect to SO employees’ use of credit hours. In addition, we 

examined the Commission’s telework-related activities from fiscal year 2005 

through fiscal year 2010 to assess changes in telework participation at the SEC 

since the December 2004 enactment of Public Law 108-447, which required the 

SEC to certify within two months “that telecommuting opportunities are made 

available to 100 percent of the eligible workforce.” 

Methodology. To carry out our review, we obtained an understanding of how 

laws passed by Congress and guidance issued by the National Institute of 

Standards and Technology, GSA, and OPM govern telework, alternative work 

schedules, and overtime compensation. We reviewed the Commission’s internal 

policies and procedures and the portions of its 2007 CBA with NTEU that apply 

to telework, alternative work schedules, and overtime compensation. In addition, 

we assessed the Commission’s enterprise technologies used for telework, 

alternative work schedules, and overtime; examined the SEC’s Commission-wide 

COOP plan and regional office COOP plans to determine whether they 

adequately addressed telework and other components necessary to conduct 

essential operations remotely; reviewed and assessed responses to the work/life 

survey that we administered; and interviewed OHR and OIT staff with 

responsibilities related to telework, alternative work schedules, and overtime.

Internal Controls. To determine whether OHR had established work/life and 

COOP policies and procedures in compliance with applicable federal laws, 

regulations, and guidance and consistently followed these policies and 

procedures, we obtained copies of all work/life, overtime, and COOP policies and 

procedures from OHR and copies of the applicable federal laws, regulations, and 

guidance. We reviewed and compared the SEC’s policies and procedures to the 

applicable federal laws, regulations, and guidance. 

OHR staff provided documentation of two internal control evaluations related to 

telework at the SEC. The first, undertaken by the SEC Telework Coordinator and 

completed during fiscal year 2008, summarized telework services and utilization 

at the SEC. The second, completed in June 2010 by the interagency Telework 

Advisory Group established by OPM, assessed whether SEC telework policies 

(1) could be clearly understood and easily used and (2) incorporated criteria 

fundamental to the development and support of an effective telework program. 

In addition, OHR provided us with information on the telework-related results of a 

May 2010 evaluation of the SEC’s COOP program by FEMA. OHR has not 
Appendix II

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conducted internal control assessments of SEC alternative work schedule 

programs or overtime compensation. 

Prior Audit Coverage. In March 2004, we issued an audit report on the SEC 

work/life program.97 The objective of the audit was to determine whether the 

Office of Human Resources and Administrative Services (now OHR) managed 

the SEC work/life program effectively and efficiently; whether the program met its 

intended goals and objectives; whether the program was run consistent with 

OPM guidance; and whether the program compared favorably with work/life 

programs at other agencies. We found that implementation of the program was 

generally effective, efficient, and in compliance with applicable guidance and that 

it compared favorably with other agencies’ programs. The audit also included 

four recommendations for improving the program, all of which have been closed. 

 

97 OIG, Commission Work/Life Program, Report. No. 379 (Mar. 29, 2004); http://www.secoig.gov/Reports/AuditsInspections/2004/379fin.pdf 
Appendix III

Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page 58

Criteria

Federal Employees Flexible and Compressed Work Schedules Act of 1982, 

5 U.S.C. § 6120 et seq. Authorizes executive agencies to establish programs 

that allow the use of flexible work schedules, including compressed work 

schedules.

Voluntary Services Prohibition of the Antideficiency Act, 31 U.S.C. § 1342. 

Prohibits officers or employees of the United States from accepting voluntary 

services except for emergencies involving the safety of human life or protection 

or property.

Public Law 106-346, Oct. 23, 2000, § 359. Required that all executive branch 

agencies establish telework policies.

Public Law 107-123, Jan.16, 2002. Established pay parity for the SEC by 

allowing the SEC to create a compensation system similar to the systems of 

other federal financial regulators, including the authority to appoint and fix the 

compensation of senior officers, and excepted the SEC from the definition of 

agency for purposes of the Senior Executive Service.

Public Law 108-447, Dec. 8, 2004, § 622. Required the SEC to certify, no later 

than two months after the date of the law’s enactment, that telecommuting 

opportunities were made available to 100 percent of the eligible workforce. It 

further requires that the SEC designate a telework coordinator to be responsible 

for overseeing the implementation and operations of telecommuting programs.

Telework Enhancement Act of 2010, Public Law 111-292, Dec. 9, 2010. 

Requires that, no later than 180 days after enactment, executive agencies (1) 

establish telework policies; (2) determine telework eligibility for all employees; 

and (3) notify all employees of their eligibility to telework. It requires the head of 

each agency to establish telework training programs for workers and managers 

and designate a Telework Managing Officer to oversee telework. In addition, it 

requires that each agency integrate telework into its COOP planning and provide 

yearly progress reports to OPM.

5 C.F.R. § 534.408. Provides that members of the SES are not eligible for 

compensatory time except for religious purposes.

5 C.F.R. § 610.408. Prohibits members of the SES from accumulating credit 

hours under an alternative work schedule.
Appendix III

Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page 59

GSA, Federal Management Regulation Bulletin 2006-B3, Guidelines for 

Alternative Workplace Arrangements, Mar. 13, 2006. Establishes guidelines 

for implementing and operating alternative workplace arrangements.

U.S. Office of Personnel Management, Guide to Telework in the Federal 

Government, April 2011. Outlines practical information about telework to assist 

federal agencies, managers, supervisors, other staff responsible for 

implementing telework, and employees. 

U.S. Office of Personnel Management, Handbook on Alternative Work 

Schedules. Provides a framework for federal agencies to consult in establishing 

alternative work schedules and contains additional information to assist agencies 

in administering such programs.

SEC Personnel Operating Policies and Procedures (POPPS Manual), SECM 

6-1, Chapter 6.10A, Alternate Work Schedules, Jan. 20, 1995. Establishes

SEC policies and procedures for administering the Commission’s alternate work 

schedule program. 

SEC Personnel Operating Policies and Procedures (POPPS Manual), SECM 

6-1, Chapter 6.10B, Alternate or Flexible Work Locations, Jan. 20, 1995. 

Establishes SEC policies and procedures for administering work-at-home 

arrangements and authorizes a one-year experimental flexiplace pilot program.

SEC Personnel Operating Policies and Procedures (POPPS Manual), SECM 

6-1, Chapter 6.10C, Compressed Work Schedules, Jan. 20, 1995. 

Establishes SEC policies and procedures for administering authorized 

compressed work schedule programs.

SEC Personnel Operating Policies and Procedures (POPPS Manual), SECM 

6-1, Chapter 6.30B, Compensatory Time, Jan. 17, 1992. Sets forth SEC 

policies and procedures for approving and using compensatory time. 

SEC Memorandum. Jayne Seidman, Associate Executive Director, Office of 

Administrative and Personnel Management, Nov. 8, 2002, Collective 

Bargaining Agreement and Non-Bargaining Unit Employees. Clarified the 

applicability of some provisions of the CBA implemented on August 30, 2002, to 

nonbargaining unit employees.

SEC Memorandum. Diego T. Ruiz, Executive Director, Oct. 16, 2007, 

Telework for Continuity Assurance. Approved telework for designated crisisessential employees in all COOP situations and for all SEC employees directed 

to work away from their official workplace during a specified stage influenza 

pandemic.
Appendix III

Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page 60

Collective Bargaining Agreement Between the United States Securities and 

Exchange Commission and the National Treasury Employees Union, 2007, 

Article 7, Work Schedules, Article 10, Overtime and Compensatory Time, 

and Article 11, Telework Program. Outlines the benefits and rights of the SEC 

and bargaining unit employees with respect to work schedules, overtime and 

compensatory time, and telework. 
Appendix IV

Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page 61

List of Recommendations

Recommendation 1:

The Office of Human Resources should take necessary actions to ensure that 

employees do not work unauthorized alternative work schedules, including 

required revisions to the collective bargaining agreements and steps to ensure 

that all Commission managers and staff are fully informed about which 

alternative work schedules are authorized.

Recommendation 2:

The Office of Human Resources should ensure that the

2 a. new Human Capital Directive addresses all alternative work schedules 

available to Securities and Exchange Commission employees; and 

2 b. contents of the Human Capital Directive are and remain consistent with 

the alternative work schedule components of the collective bargaining 

agreement.

Recommendation 3: 

The Office of Human Resources should ensure that the new Human Capital 

Directive addresses all Securities and Exchange Commission employees—

supervisory, managerial, professional, nonprofessional, bargaining unit, and 

nonbargaining unit employees—and contains up-to-date information on all 

alternative work schedule programs authorized by the Commission. 

Recommendation 4: 

The Office of Human Resources should

4 a. provide comprehensive training to all employees and managers on all 

available alternative work schedule programs. This training should be 

provided to all new employees during employee orientation and to all 

employees and managers whenever significant changes to the policy 

occur, such as upon completion of the Human Capital Directive or 

adoption of a new collective bargaining agreement; and 

4 b. make up-to-date information on alternative work schedules and policy 

available electronically to all employees on the Securities and 

Exchange Commission intranet site and periodically notify employees 

of its availability and location.
Appendix IV

Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page 62

Recommendation 5: 

The Office of Human Resources should develop an alternative work schedule 

request form. The form should contain sections for the requesting employee’s 

information and certification; the type of alternative work schedule requested, 

including specific work hours and, if applicable, workdays; the immediate 

supervisor’s approval; and, if applicable, the approving official’s decision.

Recommendation 6:

The Office of Human Resources, in developing the new Human Capital Directive, 

should work with the National Treasury Employees Union to determine whether 

additional alternative work schedules, such as the gliding, variable day, variable 

week, three-day workweek, and Maxiflex options described in the Office of 

Personnel Management Handbook on Alternative Work Schedules, should be 

adopted as options for Securities and Exchange Commission employees.

Recommendation 7: 

The Office of Human Resources should include in the new Human Capital 

Directive clear, up-to-date information on the laws, policies, guidelines, and 

procedures related to credit hours, compensatory time off, payment for overtime 

worked, and voluntary and uncompensated services. 

Recommendation 8: 

The Office of Human Resources should negotiate revisions to the language in 

the collective bargaining agreement between the Commission and the National 

Treasury Employees Union with respect to the use of credit hours by employees 

working conforming schedules, ensuring that the revised language conforms with 

applicable law.

Recommendation 9:

The Office of Human Resources should institute appropriate controls to ensure 

that Senior Officers do not receive compensatory time off. 

Recommendation 10: 

The Office of Human Resources should consult with the Office of the General 

Counsel and the Office of Personnel Management to determine whether the 

Securities and Exchange Commission should adopt an official policy that 

addresses whether Senior Officers are permitted to earn credit hours.
Appendix IV

Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page 63

Recommendation 11: 

The Office of Human Resources should ensure that the recommendations made 

by the Telework Advisory Group in its assessment of the Securities and 

Exchange Commission’s telework policy are considered, including the 

recommendation that OHR use the Telework Advisory Group’s telework policy 

evaluation checklist as a resource to further develop the Commission’s telework 

policy.

Recommendation 12:

The Office of Human Resources should revise the one-page overview of telework 

provided to new employees to include website references for telework resources; 

the name, telephone number, and e-mail address of the Securities and Exchange 

Commission Telework Coordinator; and page references to article 11, Telework 

Program, of the 2007 collective bargaining agreement. 

Recommendation 13:

The Office of Human Resources should provide comprehensive telework training 

sessions to Securities and Exchange Commission employees that address, 

among other things, telework tools; policies and procedures for discontinuing 

telework; what happens when an employee is promoted, reassigned, or detailed; 

duty station policy; employee availability during telework; employee personal 

computer usage; mandatory telework-related forms; office supplies and 

equipment; and protection of government records.

Recommendation 14:

The Office of Human Resources should provide comprehensive telework 

training sessions to Securities and Exchange Commission managers that 

address, among other things, telework tools, policies and procedures 

related to managers’ approval and denial of employee telework,

managers’ right to direct employees to report to work on their telework 

day, and managers’ ability to suspend or terminate telework.

Recommendation 15:

The Office of Human Resources should require training and recertification for 

current teleworkers and managers of teleworkers at least every two years.
Appendix IV

Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page 64

Recommendation 16:

The Office of Human Resources should send administrative notice e-mails to all 

Securities and Exchange Commission employees twice each year reminding 

them of the Commission’s telework options and the benefits of participating in the 

program.

Recommendation 17:

The Office of Administrative Services should establish and enforce procedures to 

ensure that employees who telework three or more days a week do not maintain 

private offices, but rather share office space. 

Recommendation 18:

The Office of Human Resources should develop an improved telework database 

that will track the processing of telework agreements and store telework 

agreements to ensure that the data it reports to the Office of Personnel 

Management are reliable and valid.

Recommendation 19: 

The Office of Human Resources should require that Securities and Exchange 

Commission managers provide the Telework Coordinator with copies of denied 

or terminated telework agreements to facilitate tracking of such agreements.

Recommendation 20: 

The Office of Human Resources should develop goals and objectives for 

accomplishing the work listed in the telework program work plan for fiscal year 

2011 and for increasing telework participation by Securities and Exchange 

Commission employees.

Recommendation 21: 

The Office of Human Resources should establish a process to monitor progress 

in meeting the Commission’s telework-related goals and objectives. If the goals 

and objectives are not being met, the Office of Human Resources should take 

action to identify and eliminate barriers to meeting the goals and objectives. 
Appendix IV

Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page 65

Recommendation 22: 

Consistent with governing Federal Emergency Management Agency and Office 

of Personnel Management directives, and the SEC Collective Bargaining 

Agreement, the Office of Human Resources, in conjunction with the Office of 

FOIA, Records Management, and Security, should require all mission-essential 

personnel to enter into telework agreements that specifically allow them to 

conduct their continuity of operations responsibilities and the mission-essential 

functions they will perform during emergencies or agency closures.

Recommendation 23: 

Consistent with governing Federal Emergency Management Agency and Office 

of Personnel Management directives, and the SEC Collective Bargaining 

Agreement, the Office of Human Resources, in conjunction with the Office of 

FOIA, Records Management, and Security, should require mission-essential 

personnel who have telework agreements to telework periodically to practice 

their assigned mission-essential and primary mission-essential functions.

Recommendation 24: 

The Office of FOIA, Records Management, and Security should update the 

continuity communications section of the Securities and Exchange Commission’s 

Continuity of Operations Plan and expand it to expressly address conducting 

essential functions by telework consistent with governing Federal Emergency 

Management Agency and Office of Personnel Management directives, and the 

SEC Collective Bargaining Agreement. It should include subsections addressing 

telework capability, training staff to telework effectively, and exercising agency 

telework competence as detailed in the Commission’s Pandemic Influenza 

Preparedness Plan.

Recommendation 25: 

The Office of FOIA, Records Management, and Security should instruct regional 

office directors to revise their regional office continuity of operations plan to 

address all the essential elements of viable continuity capability specified by the 

Federal Emergency Management Agency. To ensure that the plans are 

reviewed and modified timely and presented in a standard format, the Office of 

Security Services should establish timelines and submission criteria for the 

revised plans.
Appendix IV

Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011

Report No. 491

Page 66

Recommendation 26:

The Office of FOIA, Records Management, and Security should instruct the 

directors of the appropriate regional offices to include in their continuity of 

operations plans strategies for supporting headquarters essential functions 

during devolution of control.

Recommendation 27: 

The Office of Information Technology should perform server stress tests. Testing 

should incorporate a variety of applications used with remote access.
Management’s Comments

MEMORANDUM 

September 26. 201 I 

H. David Kotz 

Inspector Gene.!

1 j � 

FROM: Cri"'� 

Acting Direaor/CblefHuman Capital Officer 

Oft"ece ofHwnan 

1bomas A. Bayer 

DirectoclChief Info . 

Reso�. 

Office of Inforination Technology 

Jayne Seidman 

ActinlDI� 

otrlCe of Administrativ

B"", W.. R. .... <.Vt 

Dircc � 

e � 

Appendix V

Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011

Report No. 491

Page 67

SUBJECT: 

This memorand

 is in response to the Of of Inspector GencnI's Draft Report No. 491, /leYiew of 

AlJem 

Thank 

W01'kArrangeme OvmbM ComptmSal

, and COOP-Related Activities of the SEC. 

areas were 

you for the oppornmity to review and respond. to this report. Efforts to enhance these program 

already undCfWl and continued during this audit process to the extent possible given our 

cunent uniQn negotiat

. In particular, significant improvements have be made within our Tekwork 

program in ac

 with the Telework Enhancement Act of20IO. We concur with the twenty-cigbt 

rocommendatio pftsente In the report and have begun taking appropriate stepS to implement them. 

OHR 

negotiations. 

concurs. 

Once 

OHR 

the 

will 

revised 

contin

will infonn managers and staff 

tteco._e.dati •• :r:a: 

OHR concurs. OHR wil

 ensure 

sdlodules available to Securiti

ue to stay abr"cast of the cur

 collective batpining �t (CBA) 

article on allcmative work !lChedules is finalized in the negotiations, OHR 

of the options available. 

that the new Human Capital DIRCtive ad

sses all alternative work 

es and EJtcbang

 ComnaiSlion (SEC) employe. 

Office ofFOIA, Records Management, and Security 

OHR Manapment Response to o.

 Report No. 491, Ikview of Alurnoftve Work 

Arrangements, Overlime CompensatiOlf, and COOP-Related Acliviliell allhe SEC 

torlChiefFOIA
Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page 68

Appendix V

Recommendation lb, 

ORR concurs. ORR wil ensure that the ne;" Human Capital Directive identified in Recommendation 2b 

is consistent with the alternative work schedule components of the collective bargaining agrent. 

Reeommeadation 3, 

ORR concurs. OHR will ensure that the new Human Capilal Directive addresses all SEC employees and 

contains up-to-date information on all altemative work schedule progrsms authorized by the Conunission. 

Reeommeadatlon 48, 

OHR concurs. OHR will provide comprehensive training to all employes and managers on all available 

alternative work schedule programs. This will be included in new employee orienlation and as neces

 

when mllior changes occur to policy or CBA articles. ORR will . deliver this training once this article is 

agred upon in the current CBA negotiations. 

Recommendation 4b, 

ORR concurs. ORR will provide up-to-date information on alternative work schedules and policies in an 

electronic fonnat to all SEC employees on the SEC intranet. OHR will periodically notifY employees of 

its availability and location. This will occur once this article is agred upon in the current CBA 

negotiations. 

Recommendation 5, 

ORR concurs. ORR will develop an alternative work schedule request form to include the items outlined 

by the OIG in this report's recommendatinn and in compliance with the final CBA article once complete. 

Once a more robust IT solution is in place, ORR wil

 store this infonnation electronically. 

Recommendation 6, 

ORR concurs. OUR. in collaboration with NTEU and CBA negotiations, will detennine wbether 

additional alternative work schedules as outlined in this report should be adopted as options for the 

Securities and Exchange COmmission. 

RecommeDdatioD 7, 

OHR concurs. ORR will develop a new Human Capital Directive which includes clear, up-to-date 

infmmation on the laws, policies, guidelines, and procedures related to credit hours, compensatory time 

off, payment for overtime worked, and volunlary and uncompensated services. This will be completed at 

the completion of the CBA article negotiation. 

Recommendation 8, 

OHR concurs. ORR will continue to collaborate with the SEC management negotiation team to address 

the use of credit hours by employees working conforming schedules. OHR will work with the team to 

negotiate and ensure that the revised lan�age confonns with applicable law. 
Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page 69

Appendix V

RecommeDdation 9: 

OHR concurs. OHR will review and identity measures to ensure that Senior Officers do not receive 

compensatory time off. 

Reeommendation 10: 

OHR concurs. OHR, in coilaboration with the Office of General Counsel and the Office of Personnel 

Management, will determine whether the SEC should adopt °an official policy that addresses whether 

Senior Officers are pennitted to earn credit hours. 

Reeommcndation 11: 

OHR concurs. OHR continues to consider and implement the recommendations set forth by the Telework 

Advisory Group. These were incorporated into the OHR's draft telework policy. This policy has been 

provided to the SEC management team responsible for current Collective Bargaining Unit negotiations 

underway. We will continue to communicate with the SEC negotiation team U; stress the importance of 

union adoption of the policy. 

Recommendation 12: 

OHR concurs. OHR will revise the telework infonnation provided to new SEC employees to include the 

information recommended. 

Recommendation 13: 

OHR concurs. OHR will develop and deliver comprehensive teleworl< training for employees in FY12, to 

include the recommended items outlined in the recoinmendation. Training will be offered through SEC 

University at the completion of union/management negotiations on the telework policy and CBA article. 

RecommeDdation 14: 

OHR concurs. OHR will develop and deliver comprehensive telework training specifically geared 

towards managers in FYI2, to include the recommended items outlined in the recommendation. Training 

will he offered through SEC University at the completion of union/management negotiations on the 

otelework policy and CBA article. 

Recom_ndallon 15: 

OHR concurs. OHR will offer the comprehensive telework training for emploYees and supervisors at least 

biannually and will provide customized telework training to individual offices and divisions as requested. 

OHR's draft telework policy includes the annual recertification of telework arrangements. This training 

will commence after completion of the CBA negotiations. 

Recom_ndatioa 16: 

OHR concurs. OHR will increase awareness oithe SEC Telework Program, including telework options 

and the benefits of teleworl<ing.lnfonnation will be distributed via administrative notices at least once a 

year and more frequently as appropriate/necessary. 
Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page 70

Appendix V

RemmeDdatiOD 17: 

OAS concurs. OAS will establish and eafo"" procedures to ensure that employees who telework three or 

more day a week do not maintain private offices, ·but rather share office space. OAS will coordinate with 

the union as required. 

ReeommelldatioD 18: 

OHR concurs. OHR will collaborate with OIT in FYI2 to identitY options and an IT solution for 

developing an improved telework database, within budgetaJy constraints. This database will address the 

procesing and storage oftelework agrements to ensure reliable and valid data is reported to the Office 

of Personnel Management. OHR will continue to impress and monitor time and attendance tracking for 

telework in acce with the August 2011 SEC Administrative Notice. 

ReeommeDdation 1': 

OHR concurs. OHR will establish this requirement. OHR will notitY Division Heads and administrative 

office contacts of the requirement to provide a copy of denied or terminated telework agreements. 

ltecommeDdatioD 20: 

OHR concurs. OHR will develop goals and objectives for accomplishing those items on the telework 

program work plan. Many items were completed in FY II and OHR will continue to set goals and 

objectives to accomplish the remaining work in FYI2. 

ReeommeDdatioD 21: 

OHR concurs. OHR will establish telework-related goals and objectives in FY12. OHR will monitor 

progress to achieve goals and objectives and work with pertinent psrties to improve IT solutions to 

monitor progress of the telework program. 

ReeommeDdatioDoIIaDd 23: 

OHR and.OFRMS concur with both recommendations. OHR, in collaboration with OFRMS, will amend 

the CWTent SEC Form lOll, SEC Telework Reqll

lfldAgf'U" Form. The language will address 

COOP responsibilities, barg/lIning unit status, and eligibility criteria. Additionally, in the next COOP 

Plan revision, OFRMS intends to include language that reinforces this recommendation. 

RecommeDdattoD 24: 

OFRMS concurs. OFRMS will amend the SEC Continuity of Operations (COOP) Plan by expanding the 

section on telework as recommended. 

·ReeommeDdatlou:ZS aDd 26: 

OFRMS concurs with both recommendations. OFRMS will establish timelines and submission criteria, 

and will work with staff members In the Regional Off"",s to insure that their COOP Plan updates include 

the FEMA essential elements: 
Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page 71

Appendix V

• Es

tial FWl(;tions • Vital Records Mana_t 

• 0rdCrs of Suc

n • Human Capital • DelegatioDs of Authority • Test, Training one! Ex...,is. (IT&E) • Continuity Facilities • Devolution of Control and Direction 

• Continuity Com

unication • Reconstitution 

es 

OFRMS will 

functions. 

also wort with staf in the Headquarters and ap

 Regional Of to identifY 

then insure that proces to assume those functions are incorporated into the 

_ropriate COOP plans. 

Recomm.eDdatioD 27: 

OIT concurs. orr will acquire the tools required and coinate testing of some key aplications used 

with remote ac

. 
Appendix VI

Review of Alternative Work Arrangements, Overtime Compensation, and COOP September 28, 2011 

Report No. 491

Page 72

OIG Response to Management’s Comments

The Office of Inspector General is pleased that the Office of Human Resources, 

the Office of FOIA, Records Management, and Security, the Office of 

Administrative Services, and the Office of Information Technology have 

concurred with all 27 recommendations addressed to their respective offices. 

We are also encouraged that these offices have indicated that efforts to enhance 

these program areas are already underway. 

We believe that swift implementation of all of these important recommendations 

will significantly enhance SEC employees’ work arrangements as well as improve 

the agency’s telework and COOP-related programs. These improvements will 

result in a more productive and efficient work environment for all SEC 

employees.
Audit Requests and Ideas

The Office of Inspector General welcomes your input. If you would like to 

request an audit in the future or have an audit idea, please contact us at

U.S. Securities and Exchange Commission

Office of Inspector General

Attn: Assistant Inspector General, Audits (Audit Request/Idea)

100 F Street, N.E.

Washington D.C. 20549-2736

Telephone: 202-551-6061

Fax: 202-772-9265

E-mail: oig@sec.gov

Hotline 

To report fraud, waste, abuse, and mismanagement at the SEC, 

contact the Office of Inspector General at

Telephone: 877.442.0854

Web-Based Hotline Complaint Form:

www.reportlineweb.com/sec_oig