Department of Homeland Security
 

United States Customs and Border 


Protection’s Management of the Federal 


Employees’ Compensation Act Program 


OIG-12-63 March 2012
 
Ojjice of Inspector Genera! 

u.s. Department of I-Iomeland Security 

Washington. DC 20528 

Homeland 

Security 

MAR 2 7 2011 

Prefacc 

The Department of Homeland Security (DHS) Officc of Inspector General (OlG) was 

established by the Homeland Security Act of 2002 (Public Law 107-296) by mnendment 

to the Inspector General Act 0./1978. This is one ofa series of audit, inspection, and 

special reports prepared as part of our oversight responsibilities to promote economy, 

efficiency. and effectiveness within the Department. 

This rcport addresses the strengths and weaknesses of the United States Customs and 

Border Protection's Federal Employees) Compensation Act program. It is based on 

interviews with employees and officials of relevant agencies and institutions, direct 

observations, and a review of applicable documents. 

Tht; recommendations herein have been developed to the best knowledge available to our 

offi~e, and have been discussed in draft with those responsible for implementation. We 

trust this report will result in more effective, efficient, and economical operations. We 

express our appreciation to all of those who contributed to the preparation of this report. 

;/ ? I!2Jl -wr 

nne L. Ri €h~ds Assistant Inspector General for Audits 
Executive Summary .............................................................................................................1
 

Background..........................................................................................................................2
 

Results of Audit ...................................................................................................................4
 

CBP Has Not Effectively Managed Its Federal Employees’ Compensation Act
 

Program To Control Costs .............................................................................................4 


Recommendations..........................................................................................................9 


Management Comments and OIG Analysis ..................................................................9 


Appendices 

Appendix A: 

Appendix B: 

Appendix C: 

Appendix D: 

Purpose, Scope, and Methodology.......................................................13 


Management Comments to the Draft Report .......................................15 


Major Contributors to this Report........................................................18 


Report Distribution ..............................................................................19 


Abbreviations 

CBP United States Customs and Border Protection 


DHS 

DOL 

FECA 

FY 

HRM 

ICC 

ICS 

OIG 

United States Department of Homeland Security 


United States Department of Labor 


Federal Employees’ Compensation Act 


fiscal year 


CBP Office of Human Resources Management 


injury compensation coordinator 


injury compensation specialist 


Office of Inspector General 


Table of Contents/Abbreviations 
 

OIG
 

Department of Homeland Security 

Office of Inspector General 

Executive Summary 

We reviewed United States Customs and Border Protection’s 

(CBP) management of its Federal Employees’ Compensation Act 

program. The objective of our audit was to determine whether 

CBP is managing this program to minimize lost workdays and 

related compensation costs. 

CBP has not effectively managed its Federal Employees’ 

Compensation Act program to control costs. Specifically, it does 

not conduct comprehensive reviews of its annual workers’ 

compensation bills and quarterly reports to validate costs, nor does 

it consistently manage and maintain Federal Employees’ 

Compensation Act compensation case files. We attribute these 

deficiencies to CBP’s organizational structure, which may not be 

suited to effectively manage the number of Federal Employees’ 

Compensation Act cases. CBP also lacks policies and procedures 

to ensure consistent and effective case management. As a result, it 

has not minimized lost workdays and related compensation costs 

and has been billed for inappropriate costs. Its 2010 workers’ 

compensation bill consisted of 11,229 cases totaling more than 

$62 million in compensation and medical payments. 

We are making six recommendations to CBP to improve 

management of its Federal Employees’ Compensation Act 

program. CBP concurred with all recommendations. 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 1 
Background 

The Federal Employees’ Compensation Act (FECA), as amended, 

(5 U.S.C. § 8101, et seq.) provides wage loss compensation, 

medical care, vocational rehabilitation, and survivors’ benefits to 

civilian employees and officers of the United States, and certain 

other categories of individuals, for employment-related traumatic 

injuries and occupational diseases. According to the United States 

Department of Labor (DOL) Publication CA-810, Injury 

Compensation for Federal Employees, a traumatic injury is a 

wound or condition of the body caused by external force, including 

stress or strain. It must be identifiable by time and place of 

occurrence and member of the body affected, and caused by a 

specific event or incident or series of such within a single day or 

work shift. An occupational disease is a physical condition 

produced in the work environment over a period longer than a 

single workday or shift. FECA also provides for payment of 

benefits to dependents if a work-related injury or disease causes an 

employee’s death. 

FECA benefits are financed by the Employees’ Compensation 

Fund, which is replenished annually by charges to employing 

agencies (“chargebacks”). Federal agencies are responsible for 

advising employees of their FECA rights and responsibilities and 

for managing compensation cases. Compensation case 

management includes the following: 

• Initiating FECA claims; 

• Assisting employees in returning to work; 

• Challenging questionable claims; 

• Keeping in contact with injured employees; 

• Advising the employee about continuation of pay; and 

• Managing compensation costs. 

United States Department of Labor 

The United States Department of Labor Office of Workers’ 

Compensation Programs administers the FECA program. DOL 

adjudicates all workers’ compensation claims and determines 

workers’ compensation eligibility based on the medical and factual 

evidence provided by injured employees. Under FECA and 

accompanying regulations at 20 CFR 10.401, employees 

permanently disabled by a work-related injury or illness are 

compensated at a rate equal to 66.67% of the pay rate (without 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 2 
 

dependents) or 75% (with dependents). Employees are 

compensated for partial disability according to 20 CFR 10.403. 

Each year, for the accounting period July 1 through June 30, DOL 

provides agencies with four quarterly chargeback reports. Each 

quarterly report is a statement of payments made from the 

Employees’ Compensation Fund because of injuries to the 

agencies’ employees. According to DOL, the final quarterly 

chargeback report is an annual bill for total charges from the 

1-year accounting period for compensation and medical payments 

that agencies must reimburse the Employees’ Compensation Fund. 

Agencies can use the quarterly reports to identify and correct errors 

before they appear on the final bill. According to DOL, agencies 

have 1 year after the final bill is issued to identify and report errors 

to DOL. DOL then includes the adjustments on the next year’s 

chargeback bill. 

United States Customs and Border Protection 

CBP is responsible for guarding nearly 5,000 miles of land border 

with Canada, 1,900 miles of land border with Mexico, and 95,000 

miles of shoreline. In fiscal year (FY) 2010, CBP had 58,724 

employees. The CBP Office of Human Resources Management 

(HRM) manages its FECA program. According to CBP, prior to 

2007, HRM had 15 injury compensation specialists (ICSs) who 

served as FECA subject matter experts for 200 injury compensation 

coordinators (ICCs). The ICCs managed compensation cases as 

collateral duties at field offices and ports, and they did not report to 

HRM. 

According to CBP, HRM reassigned case management 

responsibilities to the ICSs and expanded their role from acting as 

subject matter experts to performing all aspects of case 

management. ICCs were limited to initial claims processing in 

2007. Since 2007, the number of ICCs assigned to CBP field 

offices and ports has increased to more than 400. The 14 ICSs 

who currently manage all compensation cases have the following 

duties: 

•	 Administering all aspects of case management; 

•	 Performing final reviews of claims for compensation; 

•	 Submitting supporting documentation to DOL; 

•	 Collaborating with delegated supervisors or managers to 

establish productive and suitable light-duty job assignments 

for employees who can return to work; and 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 3 
•	 Maintaining up-to-date information on each worker’s 

compensation claim. 

According to CBP, HRM implemented eComp, a web-based data 

tracking system for submitting compensation claims electronically 

to DOL, in June 2009, but decided not to input cases opened prior 

to June 2009, which are consequently in printed form only. The 

eComp system is also used to manage workers’ compensation 

cases and to store case documents electronically. Therefore, CBP 

uses both printed and electronic files to manage its workers’ 

compensation cases. 

Table 1 lists the number of CBP workers’ compensation cases and 

related charges included in DOL’s annual chargeback bills to CBP 

for 2007 through 2010. 

Table 1. CBP Workers’ Compensation Cases and Costs 

Chargeback Year 

(July 1–June 30) 

Total FECA cases Total Costs 

2007 9,160 $57,639,011 

2008 10,191 $62,538,259 

2009 11,424 $67,686,399 

2010 11,229 $62,650,987 

Source: OIG analysis of annual chargeback bills. 

Results of Audit 

CBP Has Not Effectively Managed Its Federal Employees’ 

Compensation Act Program To Control Costs 

CBP does not comprehensively review its annual chargeback bills and 

quarterly chargeback reports and does not consistently manage and 

maintain its compensation case files. Consequently, CBP has been unable 

to minimize lost workdays and related compensation costs and has been 

billed for inappropriate costs. We attribute these deficiencies to CBP’s 

organizational structure, which may not be suited to effectively manage 

the number of FECA cases, and to the lack of policies and procedures that 

would ensure effective case management. 

CBP Does Not Comprehensively Review Annual Chargeback 

Bills and Quarterly Chargeback Reports 

Because it does not perform comprehensive reviews, CBP has been 

unable to validate the accuracy of annual chargeback bills for more 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 4 
than 28,245 compensation cases from 2007 through 2009, 

amounting to $163 million in claims. CBP has not verified the 

accuracy of annual chargeback bills and quarterly reports, so it 

cannot determine whether DOL has been correctly billing the 

agency, and it may continue to incur inappropriate costs. 

CBP has not completed comprehensive reviews of its 2007, 2008, 

and 2009 annual chargeback bills. CBP has no record of a review 

of the 2007 chargeback bill, which contained $57.6 million in 

medical and compensation charges. CBP has reviewed and 

verified fewer than 5% of the cases reported on its 2008 

chargeback bill and fewer than 18% of the cases reported on its 

2009 chargeback bill. The cases in the 2008 chargeback bill that 

CBP did not review amount to more than $48.5 million, or 78% of 

the total medical and compensation payments made in 2008. The 

cases in the 2009 bill that were not reviewed amount to more than 

$56.4 million, or 83% of the total medical and compensation 

payments made in 2009. 

CBP’s partial reviews of the 2008 and 2009 chargeback bills 

identified cases billed to CBP in error. In 2010, CBP recovered 

more than $3 million from other components of DHS for workers’ 

compensation costs incorrectly included in its 2008 chargeback 

bill. Further, according to CBP, it had identified 98 cases 

belonging to other DHS components before suspending its review 

of the 2009 chargeback bill in January 2011. At the time of our 

review, CBP was in the process of recovering $3.8 million 

associated with workers’ compensation cases included in its 2009 

chargeback bill that should have been charged to other DHS 

components. 

CBP has not reviewed DOL quarterly chargeback reports. 

According to CBP, it does not review the quarterly reports because 

the data are included in the annual chargeback bills. However, 

DOL stated that agencies can use the quarterly reports to prevent 

errors in the final chargeback bill. Without comprehensive review 

of its quarterly reports, CBP is at greater risk of paying for 

incorrect charges in annual chargeback bills. 

In addition to heightening the risk of paying for incorrect charges, 

incomplete review of chargeback bills and the lack of review of 

quarterly reports may increase the risk of fraudulent activity or 

abuse of compensation. We identified the following examples: 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 5 
 

•	 The 2009 chargeback bill included 110 instances in which 

claimants’ Social Security numbers did not match CBP’s 

records and are likely in error. Since compensation claimants’ 

Social Security numbers may be used to obtain medical 

documentation, employment, or earnings information, incorrect 

numbers could pose a risk of individuals receiving 

compensation under a false identity or fraudulently. 

•	 The 2009 chargeback bill included compensation charges for 

an employee who did not work for DHS. CBP had identified 

this error, but since the deadline for correcting charges (1 year) 

had passed, DOL would not credit the $40,742 in incorrect 

charges to the following year’s chargeback bill. 

•	 CBP did not identify incorrect compensation payments to a 

claimant over a 2-year period. The claimant had returned to 

work but continued to receive compensation from DOL. These 

incorrect payments, totaling $45,581, were evident in two 

annual chargeback bills and six quarterly reports. 

•	 In the 2010 chargeback bill, 30 compensation claimants did not 

have a payroll record with the National Finance Center to 

substantiate employment by CBP. These 30 claimants were 

paid more than $2.6 million in compensation from 2008 

through 2009. CBP may be paying these compensation claims 

in error. 

CBP’s policy states that Assistant Commissioners and equivalent 

offices, as well as the Chief of Border Patrol, are responsible for 

controlling workers’ compensation costs. However, the CBP 

Workers’ Compensation Program Office provides annual 

chargeback bills or quarterly reports to CBP offices only if 

requested. Since these bills and reports are not routinely provided 

to all stakeholders, CBP cannot be assured that management in 

these offices is aware of the compensation costs associated with 

staff members. 

CBP’s incomplete reviews of annual chargeback bills, its lack of 

review of quarterly reports, and the fact that it does not routinely 

share chargeback data with all stakeholders call into question the 

accuracy of the 28,245 compensation cases in the chargeback bills 

from 2007 through 2009 that were not reviewed and the 

corresponding $163 million in compensation and medical payments. 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 6 
CBP Does Not Consistently Manage and Maintain 

Compensation Case Files 

CBP has not used a single system of record to manage its FECA 

case files since implementing its web-based data tracking system 

in June 2009. CBP has both paper and electronic versions of 

compensation case documentation. Files are also maintained at 

multiple locations. Some case files are not maintained at the 

location of the ICS assigned to those cases. 

According to CBP, ICCs retain case files for employees injured 

prior to January 1, 2007, but the ICSs responsible for case 

management can request these files as needed. However, CBP was 

unable to provide 45 of the 92 case files we requested from this 

period. According to the 2010 chargeback bill, these missing case 

files represent more than $1.6 million paid to claimants. Thus, 

CBP was billed for compensation paid to these claimants without 

sufficient knowledge of the nature or degree of their injuries or 

their ability to return to work. 

We identified case files that were missing documentation or 

missing up-to-date documentation. Further, documentation in 

some files indicated that claimants were not offered opportunities 

to return to work at the earliest date recommended in medical 

reports. In particular, we identified the following: 

•	 In 114 of 140 case files reviewed, the files were missing 

DOL-required forms or supporting medical documentation, 

including notices of claims and reports of disability 

termination. For example, one file indicated that a claimant 

had received $299,543.12 between 2003 and 2011, but the 

file did not include supporting medical documentation to 

justify compensation. 

•	 In 15 of 140 case files reviewed, the files included medical 

reports indicating that the employees’ physicians had cleared 

the employees to return to work on light duty or without 

restrictions. CBP paid these employees $951,195 in 

compensation after they had been medically cleared to 

work. 

CBP’s lack of a single system of record to maintain files increases 

the risk of paying for compensation costs that are not justified. 

Our review of 140 out of the 11,229 workers’ compensation cases 

reported on the 2010 annual chargeback bill showed that 81% of 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 7 
the cases were missing documentation to support the associated 

$4.5 million in compensation and medical payments billed to CBP. 

The number of errors identified during our limited review calls into 

question the supporting documentation for the remaining 11,089 

cases and the associated $56.8 million billed to CBP. 

CBP’s Organizational Structure May Not Be Suited 

To Effectively Manage FECA Cases, and Policies and 

Procedures Need Revision 

CBP’s organizational structure may not be suited to effectively 

manage the number of FECA compensation cases. Further, CBP 

does not have up-to-date or detailed policies and procedures for the 

ICSs and ICCs, and the current policies and procedures do not 

provide sufficient detail or guidance for case management. 

According to CBP, 200 ICCs managed the workers’ compensation 

caseload prior to 2007. With the 2007 change in policy, 14 ICSs 

are responsible for managing the 11,299 compensation cases 

identified on the 2010 chargeback bill, which means that each ICS 

is handling an average of 802 cases. CBP did not conduct a 

workload analysis to determine the number of ICSs required to 

effectively manage FECA cases. 

CBP uses policies and procedures from the Workers’ 

Compensation Program Handbook – US Customs Service, issued 

in March 2002. This handbook established case management 

responsibilities for ICCs, but these responsibilities were reassigned 

to the ICSs in 2007. CBP stated that an updated Workers’ 

Compensation Program Handbook has been in draft since April 

2010, but as of December 21, 2011, it had not been finalized. 

CBP has not developed detailed and appropriate guidance for case 

management. Currently available policies and procedures do not 

provide enough guidance to effectively manage the compensation 

cases. The three CBP guides we reviewed primarily contained 

information either reproduced verbatim or summarized from DOL 

publications. In addition, CBP’s standard operating procedures are 

not sufficiently detailed to ensure consistent and effective review 

of annual chargeback bills and quarterly chargeback reports. 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

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Recommendations 

We recommend that the Assistant Commissioner, Office of Human 

Resources Management, Customs and Border Protection: 

Recommendation #1: Revise current standard operating 

procedures to ensure a systematic and timely process to review, 

verify, and correct data contained in the quarterly chargeback 

reports and annual chargeback bills. 

Recommendation #2: Revise current policy to require the 

distribution of quarterly chargeback reports and annual chargeback 

bills to United States Customs and Border Protection stakeholders 

responsible for controlling workers’ compensation costs. 

Recommendation #3: Use a single system of record to maintain 

and manage all of United States Customs and Border Protection 

workers’ compensation cases. 

Recommendation #4: Conduct a workload analysis to identify the 

organizational structure necessary to effectively manage the number 

of FECA compensation cases and implement changes, as applicable. 

Recommendation #5: Review, develop, and approve policies and 

procedures that detail compensation case management 

responsibilities to provide a systematic process for injury 

compensation coordinators and injury compensation specialists. 

Recommendation #6: Review all workers’ compensation cases 

for employees who have been medically cleared to return to work 

and return those employees to work. 

Management Comments and OIG Analysis 

CBP Comments to Recommendation 1 

Concur. According to CBP, it has revised existing standard 

operating procedures to ensure more systematic and timely reviews 

of quarterly and annual chargeback reports to identify errors. The 

new standard operating procedures outline formal procedures for 

quarterly and annual reviews by HRM and program offices to 

identify and correct erroneous chargeback data. CBP plans to have 

its corrective action implemented by July 31, 2012. 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 9 
OIG Analysis 

We consider the recommendation resolved because CBP’s actions 

satisfy the intent of the recommendation, and CBP has provided a 

plan of action and milestones to implement the corrective actions. 

However, the recommendation will remain open until we can 

verify through review of supporting documentation that the revised 

standard operating procedures have resulted in the review and 

correction of data contained in the quarterly chargeback reports 

and annual chargeback bills. 

CBP Comments to Recommendation 2 

Concur. CBP is revising the CBP Workers’ Compensation 

Handbook. The revised handbook will outline policies and 

procedures for distribution and review of quarterly and annual 

chargeback reports by all CBP program offices. Each program 

office, as a stakeholder in the workers’ compensation process, will 

participate in the review of its respective chargeback as the first 

step in reducing costs by understanding where and how charges are 

incurred. Additionally, on February 2, 2012, the HRM Assistant 

Commissioner signed CBP Directive No. 51810-005. The directive 

provides policy guidance to all participants in the workers’ 

compensation process. HRM has developed a communication plan 

to disseminate the directive, to work with program offices to 

implement the review of the chargeback reports, and to facilitate 

early return-to-work efforts to reduce costs. CBP plans to have all 

of its corrective action implemented by June 1, 2012. 

OIG Analysis 

We consider the recommendation resolved because CBP’s stated 

actions satisfy the intent of the recommendation, and it has 

provided a plan of action and milestones to implement the 

corrective actions. However, the recommendation will remain 

open until we can review supporting documentation to verify that 

quarterly chargeback reports and annual chargeback bills are 

distributed and reviewed by all CBP program offices. 

CBP Comments to Recommendation 3 

Concur. CBP implemented eComp in April 2009 and has 

reiterated its intention to use eComp as the system of record for the 

workers’ compensation program. To achieve this, CBP said that it 

is currently transferring all active pre-April 2009 hard copy cases 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 10 
into eComp. CBP expects to have all its workers’ compensation 

cases in eComp by May 31, 2014. 

OIG Analysis 

The corrective action proposed by CBP satisfies the intent of the 

recommendation, and the plan includes milestones for 

implementation. We consider this recommendation resolved. 

However, the recommendation will remain open until we can 

review supporting documentation to verify that all active workers’ 

compensation cases are managed in eComp. 

CBP Comments to Recommendation 4 

Concur. CBP states that it has completed a workload analysis, 

which revealed a workload beyond the industry standard. 

CBP will convene a team, which includes representatives from 

operational program offices, to assess the current business 

practices, benchmark with other agencies on their processes, and 

develop recommendations to create the most efficient ways of 

conducting business. CBP plans to complete these corrective 

actions by July 31, 2012. 

OIG Analysis 

The corrective actions proposed by CBP satisfy the intent of the 

recommendation, and the plan CBP provided includes a milestone 

for implementation. Accordingly, we consider this 

recommendation resolved. However, the recommendation will 

remain open until we can review supporting agency documentation 

to verify that— 

•	 a workload analysis supporting CBP’s conclusion on a 

workload beyond the industry standard was conducted; and 

•	 the CBP team assembled to assess current business 

practices identifies efficient ways of conducting business. 

CBP Comments to Recommendation 5 

Concur. According to CBP’s response, the CBP Workers’ 

Compensation Handbook is being revised to include all facets of 

case management and to incorporate the review of the quarterly 

chargeback report. CBP intends to complete the revision by 

June 1, 2012. 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

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OIG Analysis 

The corrective action proposed by CBP satisfies the intent of the 

recommendation, and the plan CBP provided includes a milestone 

for implementation. We consider this recommendation resolved. 

However, the recommendation will remain open until we can 

review agency documentation to verify that the updates to the CBP 

Workers’ Compensation Handbook were completed. 

CBP Comments to Recommendation 6 

Concur. According to CBP’s response, the agency will develop a 

plan to review all disability cases to identify cases in which the 

medical evidence indicates the employee could return to duty. 

Additionally, HRM management stated that they will expand 

coordination with program offices to identify medically suitable 

positions for these employees. CBP anticipates completing these 

corrective actions by April 15, 2012. 

OIG Analysis 

The corrective actions proposed by CBP satisfy the intent of the 

recommendation, and the plan CBP provided includes a milestone 

for implementation. We consider this recommendation resolved. 

However, the recommendation will remain open until we can 

review agency documentation to verify that a review was 

completed and that HRM is coordinating with other program 

offices. 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 12 
Appendix A 

Purpose, Scope, and Methodology 

The objective of our audit was to determine whether CBP is 

managing the FECA program to minimize lost workdays and 

FECA-related compensation costs. 

We reviewed applicable laws, regulations, and CBP internal policies 

and guidance concerning workers’ compensation. Also, we 

reviewed prior OIG audit reports and Government Accountability 

Office reports on the federal workers’ compensation program. 

We interviewed officials from the DHS Chief Human Capital 

Officer and CBP’s HRM staff, including the Director and Deputy 

Director of the Benefits, Medical, and Worklife Division. We also 

met with the Branch Chief, Workers Compensation Program 

Office; and Workers Compensation Program Office staff, 

including ICSs. Additionally, we interviewed ICCs and other CBP 

staff assigned to CBP offices outside of HRM. 

We conducted site visits at CBP offices in Washington, DC; 

Tucson, Arizona; El Paso, Texas; and Orlando, Florida. 

To determine whether CBP is effectively managing its workers’ 

compensation cases, we conducted two tests of cases reported on 

the 2010 chargeback bill. In the first test, we judgmentally 

selected workers’ compensation case files until we reviewed 140 

cases. We selected daily roll, periodic roll, and medical payments 

only roll cases with the highest total compensation and medical 

benefits paid for 6 of the 14 ICSs. We reviewed CBP’s printed and 

electronic workers’ compensation case files, in addition to the 

corresponding DOL electronic records. For the second test, we 

reviewed all workers’ compensation cases with dates of injury 

prior to January 1, 2007, assigned to one ICS. 

We determined that the DOL annual chargeback bills and quarterly 

reports were sufficiently reliable to serve as the universe of CBP 

workers’ compensation cases from which to select files for review. 

We assessed CBP’s review of 2007, 2008, and 2009 chargeback 

data to determine if CBP had been verifying the accuracy of the 

data contained in the DOL annual chargeback billings and 

quarterly reports. Additionally, we compared CBP staff roster data 

for FYs 2006 through 2010 with the 2009 chargeback bill. We did 

not independently verify the information in CBP’s staff rosters. 

Finally, we compared periodic roll cases from the 2010 chargeback 

bill with National Finance Center employee data. 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 13 
We evaluated CBP’s internal controls to the extent necessary to 

accomplish our objective. Specifically, we developed an 

understanding of internal controls over the CBP FECA program by 

reviewing agency policies and procedures, and interviewing CBP 

officials assigned to manage and administer the CBP FECA 

program. We planned the audit and determined the nature, timing, 

and extent of the tests we performed from the understanding we 

gained of the CBP FECA program. 

We conducted this performance audit between November 9, 2010, 

and May 18, 2011, pursuant to the Inspector General Act of 1978, 

as amended, and according to generally accepted government 

auditing standards. Those standards require that we plan and 

perform the audit to obtain sufficient, appropriate evidence to 

provide a reasonable basis for our findings and conclusions based 

upon our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusions based 

upon our audit objectives. 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

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Appendix B 

Management Comments to the Draft Report 

1300 Pelms),I\"ilDia Avenue NW 

Washington, DC 2021 9 

u.s. Cust01Il5 md 

Border Protection 

February 23, 2012 

MEMORANDUM FOR: Anne L. Richards 

Assistant Inspector General for Aud its 

Office of Inspector General 

FROM: JarT1e~ Tomsheck -y) /J~: Assistant Commissionet' r ru rt-'<L 

Office of Internal Affairs 

SUDJECT: Response to the Office of Inspector General Draft Rcport Entitled, 

"United States Customs and Border Protection's Management of the 

Federal Employees' Compensation Act Program" 

Tbank you for the opportunity to review and comment on the OtTice of Inspector General (OIG) draft 

report entitled "United States Customs and Border Protection's Management of the Federal 

Employees' Compensation Act Program. " The OIO's objective was to determine whether CBP is 

managing its Federal Employee 's Compensation Act program to minimize lost workdays and related 

compensati on costs. 

U.S. Customs and Border Protcction (CBP), Office of Human Resources Management (HRM) concurs 

with the draft report and recommendations. A summary ofCBP actions and correcti ve plans to 

address the recommendations is provided below. CA P further ;:Jdd resses these issues in-<.leplh in the 

attached CBP Corrective Action Pl an. 

Recommendation #1 : Review curren. standard operating procedures 10 ensure a systcmatic and 

timely process to review. verity. and correct data contained in tbe quarterly chargcback reports 

and annua l chargcbnek bills. 

CDP,HRM has revised the existing Standard Operating Procedures (SOP) to ensure more systematic 

and timely reviews of quarterl y and annual chargebaek reports to identify errors. The new SOPs 

outline fOlmal procednres for quarterly and annual reviews by HRM and program offices to identity 

and correct erroneous ehargeback data. 

CB P/HR1'vI has recouped money from other Department of Homeland Security (DHS) components for 

erroneous charges identified 011 CBP's Fisca l Year (FY) 2009 chargt:hack . The tutal amuunt refunded 

to CB P was $3.4 million. Revi ews of FY 2010 and FY 201 1 ehargcbaek reports will be conducted to 

identify erroneous charges when the reports are received from the Department of Labor; this process 

will be repeated in future fisca l years. HRM also irlentitial and corrected errors in social security 

numbers made on claim forms. 

Cnrnpletion Date: 7/3112012 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 15 
Appendix B 

Management Comments to the Draft Report 

2 

Recommendation #2 : Revise current policy to require (he distribution of quart erly chargeback 

reports and annual chargeback bills to United States Customs and Border Protection 

stakeholders responsible for controlling workers' compensation costs. 

CBPIHRM staff is revising the CBP Workers' Compensalion Handbook. The revised Handbook will 

outline policies and procedures for distribution and rev iew of quarterly and annual cha rgeback reports 

by all CBP Program Offices. The handbook will contain SOPs outlining how the reviews will be 

conducted. As stakeholders in the workers' compensation process, each program office will 

participate in the review of their respective chargeback as the first step in reducing costs by 

understanding where and how charges are incurred. 

CI3P Directive No. 51810-005 was signed by the Assistant Commissioner, HRM on February 2, 2012. 

The directive provides policy guidance to all participants in the workers' compensation process. 

CI3P/HRM has developed a communication plan to disseminate the directive, to work with program 

offices to implement the review of the chargeback, and to facilitate early return-to-work efforts to 

affect reduction of costs. 

Complction Date: 6/01n0J2 

Ileeommendation #3: Use a single system of record to mainlain and manage all of United Slates 

Customs and Border Prolection workers' compensation cases. 

In April 2009, CBPIHRM implemented eComp, a web-based electronic submission and case 

management system. Since then, all CBP cases have been filed and maintained in eComp. CBPIHRM 

is currently transferring all active pre-April 2009 cases (hard copy cases) into eComp. When the 

process is completed, CI3P will have attained a single system of record for compensation cases. 

Completion Date: 5/31 /2014 

Recommendation #4: Conduct a workload ana lysis to identify the organizationa l structure 

necessary to effecth'ely manage the number ofFECA compensation cases and implement 

changcs, as applicable. 

CBPIHRM has completed a workload analysis, which revealed a workload beyond the industry 

standard. CI3PIHRM will convene a "Tiger Team" which will include representatives from operational 

program offices to assess current business practices. benchmark with other agencies 011 their processes, 

and develop recommendations to create the most efficient ways of conducting business. 

Completion Date: 713 1/2012 

Recommendation #5: Review, develop, and apl)rove policies and I>rocedures that detail 

compensa tion case management responsibilities to provide a systemati c process for injury 

compensation coordinators and injury compensation specialists. 

Revision of the CBP Workers' Compensation Handbook is currently underway to be inclusive of alJ 

facets of case management and to incorporate the review of the quarterly charge back report. 

Completion Date: 6/01120 12 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 16 
Appendix B 

Management Comments to the Draft Report 

3 

Recommendation 6: Review all workers' compensation cases for employees who have been 

medically cleared to return to work and return those employees to work. 

CBPIHRM will develop a plan to review all disability cases to identify those cases where medical 

evidence indicates that the employees could return to duty. HRM will expand its coordination with 

program offices to identify medically suitable positions for these employees, and move the employees 

into these positions. 

Completion Date: 4/1 5120J 2 

CBP appreciates the extensive work that the Office of Inspector General has performed in the review 

of the CBPIHRM Federal Employee Compensation Program. 

With regard to the classification of the draft report, cap did not identify sensitive infonnation Ihal 

would require a "For Official Use Only" designation. In addition, CBP has no technical comments 10 

the draft report. 

If you have any questions, please have a member of your staff contact Ms. Kristin Walls, Audit 

Liaison, Office of Internal Affairs, at (202) 344-1218. 

Anachment 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 17 
Appendix C 

Major Contributors to this Report 

Sandra John, Director 

John Shiffer, Audit Manager 

Robert Greene, Program Analyst 

Alejandro Jaca-Mendez, Auditor 

Kelly Herberger, Communications Analyst 

Irene Aultman, Auditor 

Terrell Tindull, Auditor 

Jason Kim, Auditor 

David Kinard, Auditor 

Douglas Bozeman, Program Analyst 

Lorinda Couch, Independent Report Referencer 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 18 
Appendix D 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff 

General Counsel 

Executive Secretariat 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs 

Assistant Secretary for Office of Legislative Affairs 

Commissioner for U.S. Customs and Border Protection 

Audit Liaison for U.S. Customs and Border Protection 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as 

appropriate 

United States Customs and Border Protection’s Management of the 


Federal Employees’ Compensation Act Program
 

Page 19
 
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