Merit Systems Protection Board 

Annual Report 

Fiscal Year 2005 

April 2006 

Foreword 

In accordance with section 1206 of Title 5 United States Code, 

the Merit Systems Protection Board (MSPB or the Board) 

provides this annual report on the significant actions of the 

Board during FY 2005. This report includes summaries of the 

most significant Board and Court decisions issued during the 

year, case processing statistics, summaries of the Board’s merit 

systems studies, summaries of the significant actions of the 

Office of Personnel Management (OPM), and a summary of 

financial results. In addition, where there have been significant 

activities since the end of the fiscal year, we provide updated 

information as a service to the reader. 

Additional information about FY 2005 performance results and 

financial audit information is included in our separate 

Performance and Accountability Report (PAR). This Annual 

Report and the PAR as well as other information about the 

MSPB can be found on our Web site: www.mspb.gov. 

Table of Contents 

Fiscal Year 2005 in Review 

 Protecting merit in multiple alternative human capital 

management systems 

 Board membership 

 Adjudication
 Merit systems studies

 Management support

 Legislative activity

 Significant actions of the Office of Personnel Management

Board Members and Board Organization 

 Board members

 Board offices and structure

 Organization chart

Significant Board decisions and Court opinions issued in FY 

2005 

 Significant Board decisions 

 Decision issued by the Special Panel

 Significant opinions issued by the United States Court of Appeals 

for the Federal Circuit

FY 2005 Case Processing Statistics 

 Summary of cases decided by MSPB

 Regional case processing

 Headquarters case processing 

Summaries of Merit Systems Studies 

 The Probationary Period: A Critical Assessment Opportunity

 Building a High-Quality Workforce: The Federal Career Intern 

Program 

 Reference Checking in Federal Hiring: Making the Call 
 The 2005 merit principles survey 

Significant Actions of the Office of Personnel Management 

 OPM policy initiatives

 Actions related to OPM oversight

 Actions related to other Governmentwide programs 

Financial Summary 

Fiscal Year 2005 in Review

Protecting merit in multiple alternative human capital 

management systems

The continued development of alternative human capital 

management policies and procedures was the most significant 

trend affecting the Federal merit systems in FY 2005. Among 

the most notable of these alternative systems are the ones in 

the Department of Homeland Security (DHS) and the 

Department of Defense (DoD). When these systems are fully 

implemented, almost 1 million Federal employees -- well over 

half of the Federal civilian workforce – will be managed under 

alternative systems that could differ significantly from the 

traditional procedures contained in Title 5 of the United States 

Code. 

The DHS and DoD laws include flexibilities in hiring, 

performance management, pay, and labor and employee 

relations. The laws also include provisions to alter their appeals 

procedures which are currently being reviewed by the courts. 

Regardless of the outcomes of this judicial review, the increase 

in the number of agency-specific systems increases the 

complexity of our adjudication work. The case law upon which 

decisions will be made for the employees in these agencies 

could change significantly. In addition, the case workload could 

change over time depending on DHS and DoD policies and 
practices, as well as possible changes in personnel authorities 

at other agencies or Governmentwide. 

The increase in alternative management systems will also 

impact our merit systems studies function as it increases the 

need for oversight and evaluation of new procedures. The DHS 

and DoD personnel authorities, like the flexibilities granted to 

other agencies in recent years, provide that the Title 5 

provisions governing merit system principles and prohibited 

personnel practices may not be waived, modified, or otherwise 

affected. Therefore, there will be an even greater need for 

studies of these new personnel systems to ensure that they 

operate in accordance with merit principles and are free from 

prohibited personnel practices. 

We will perform our role as chief protector of the Federal merit 

systems in accordance with the determinations made by the 

Congress and the President. We are confident that our 

experience in independently adjudicating appeals will continue 

to provide effective and efficient protection for the merit 

systems throughout the Federal government and assure the 

public of the Government’s commitment to merit-based 

management and oversight of the civil service. 

Board membership

The President and Congress took several actions in FY 2005 

and early FY 2006 to complete the appointments of three 

Board members, providing MSPB with a full complement of 

Board members. On November 21, 2004, Neil A. G. McPhie was 

confirmed as Chairman and Barbara J. Sapin was confirmed as 

Member of the U.S. Merit Systems Protection Board. On June 

23, 2005, the President nominated Mary M. Rose to serve as a 

Member of the Board and the Senate confirmed her nomination 

on December 17, 2005. On January 27, 2006, the President 

designated Member Rose as Vice Chairman of the Board. 

Adjudication
The Board continued to decide appeals and petitions for review 

(PFRs) in accordance with the law and regulations governing 

such appeals. The Board continued to issue timely, high quality 

decisions on appeals in the regional and field offices. In 

addition, the Board significantly improved the timeliness of 

headquarters case processing, and reduced the inventory of 

pending cases at headquarters by almost half, while 

maintaining the quality of decisions at this level. The case 

processing statistics presented in this report give considerable 

information regarding the adjudication of cases filed with the 

Board. The Board continued to provide a full menu of dispute 

resolution options to its customers, including the successful 

operation of its settlement programs for appeals at the 

regional and field offices, and at headquarters. In addition, the 

Meditation Appeals Program (MAP) continued to grow with 

nearly 50 percent of selected cases successfully mediated. The 

Board continued to improve its automated appeals and case 

processing systems and the proportion of automated and Webbased appeals continued to increase. 

This report also contains brief summaries of the most 

significant judicial and Board decisions made in FY 2005. Some 

of the more significant Board decisions addressed issues such 

as: the ‘current continuous service’ jurisdictional requirement, 

as it applies to seasonal and other categories of employees; the 

use of outstanding scholar appointments when preference 

eligibles’ rights are involved; the assessment of credibility, 

over the appellant’s objection, on the basis of a 

videoconference hearing; and, various issues related to the 

Uniformed Services Employment and Reemployment Rights Act 

of 1994 (USERRA). In addition, a Special Panel consisting of 

the Chairman of the MSPB, the Chair of the Equal Employment 

Opportunity Commission (EEOC), and the appointed Chairman 

of the Special Panel heard and decided a case involving 

interpretation of administrative versus civil service law. The 

significant court opinions addressed issues such as the 

definition of ‘gross mismanagement’ as it applies in 

whistleblower cases; the Board’s scope of review in appeals 
from suitability determinations; and, who has appeal rights to 

the Board. 

Merit systems studies

The Board completed six merit systems studies and issued 

reports on such issues as the probationary period, the Federal 

Career Intern Program (FCIP), and reference checking. The 

Board also completed data collection for the FY 2005 Merit 

Principles Survey (MPS)—the largest ever and first web-based 

survey administered to approximately 80,000 employees. The 

Board issued four editions of the Issues of Merit newsletter 

which included articles advocating merit systems and human 

capital management reform efforts, providing practical advice 

for human resources professionals and sharing specific 

analyses of ongoing studies. 

Management support

The Board continued to effectively and efficiently manage its 

fiscal resources and human capital in support of its 

adjudication and studies missions. As a result, MSPB ranked 4th

in the small agency and agency subcomponent category in the 

“Best Places to Work in the Federal Government 2005” with an 

overall score of 77.5—higher than the highest scoring “large 

agency” for the year. 

Legislative activity

The FY 2005 appropriation for the Board was enacted on 

December 8, 2004 as part of the Consolidated Appropriations 

Act of 2005 (P.L. 108-447). The amount appropriated for the 

Board was $34,677,000 plus up to $2,626,000 in 

reimbursements from the Civil Service Retirement and 

Disability Fund. This amount was subject to a .8% rescission, 

which resulted in a $277,416 reduction in the appropriations 

amount and a reduction of $21,008 in the reimbursement 

limitation. The net funds available to the Board during FY 2005 

were $34,399,584 in appropriated funds and a reimbursement 

limitation of $2,604,992, for a total of $37,004,576. 
The legislative activity for the Board during FY 2005 included 

briefing congressional staff and testifying at congressional 

hearings. At the request of the minority staff of the House 

Government Reform Subcommittee on the Federal Workforce 

and Agency Organization, the MSPB Chief of Staff, the General 

Counsel and the Legislative Counsel conducted a briefing for 

that staff on the Board’s potential role in the employee appeals 

systems under development by the Department of Homeland 

Security and the Department of Defense. Chairman McPhie 

submitted a statement for the record in connection with the 

hearing conducted by the Senate Homeland Security and 

Governmental Affairs Subcommittee on Oversight of 

Government Management, the Federal Workforce, and the 

District of Columbia. This Senate hearing was entitled: 

“Unlocking the Potential within Homeland Security: The New 

Human Resources System,” and was held on February 10, 

2005. On March 2, 2005, the Chairman testified before the 

House Government Reform Subcommittee on the Federal 

Workforce and Agency Organization during its hearing entitled: 

“The Countdown to Completion: Implementing The New 

Department of Homeland Security Personnel System.” The 

Chairman also testified before the same subcommittee during 

its hearing entitled: “NSPS: the New Department of Defense 

Civilian Personnel System – Reaching Readiness,” which was 

held on April 12, 2005. 

Chairman McPhie met with Congressman Jon Porter, Chairman 

of the House Government Reform Subcommittee on the Federal 

Workforce and Agency Organization, in September 2005 to 

brief him further on the Board’s missions and operations. In 

short, the Board engaged in an active schedule of 

congressional relations during FY 2005. We expect to continue 

this work during FY 2006. 

Significant actions of the Office of Personnel Management

The Board is responsible for providing an independent, 

nonpartisan review of the actions of OPM to ensure that these 

actions conform with merit principles and do not result in 

prohibited personnel practices. The Board reviewed significant 
policy actions of OPM ranging from drafting DHS proposed 

regulations and creating a framework for civil service reform to 

issuing SES pay and performance regulations and interim 

regulations for the No FEAR Act. OPM also completed its 

internal reorganization to better enable it to serve agencies. 

OPM and DoD also began discussions to effect the combination 

of military and civilian background investigations including the 

transfer of DoD investigators to OPM. In addition, OPM 

continued to provide valuable leadership and oversight 

regarding the human capital portion of the President’s 

Management Agenda (PMA). Finally, OPM made progress on 

other governmentwide initiatives including e-Government 

programs and employee benefits. 

Board Members and Board Organization 

Board members

The bipartisan Board consists of a Chairman, a Vice Chairman, 

and a Member, with no more than two of its three members 

from the same political party. Board members are appointed by 

the President, and confirmed by the Senate, and serve 

overlapping, non-renewable 7-year terms. 

Chairman 

NEIL A.G. McPHIE was confirmed as Chairman of the 

U.S. Merit Systems Protection Board on November 21, 

2004. Mr. McPhie had served as Acting Chairman since 

December 10, 2003, when President Bush designated 

him to be Vice Chairman. He was sworn in as a 

member of the Board on April 23, 2003, following his 

recess appointment by President Bush. Chairman 

McPhie’s term expires on March 1, 2009. Prior to 

joining the Board, he was Senior Assistant Attorney 

General in the Office of the Attorney General of 

Virginia. Among other responsibilities, he defended 

employment discrimination claims brought under 

Federal law and wrongful discharge claims brought 

under state law. Previously, he was Executive Director 

of the Virginia Department of Employment Dispute 

Resolution (EDR). In that position, he directed 

implementation of EDR’s statewide grievance, 

mediation, training, and consultation programs. He 
was an Assistant Attorney General in the Office of the 

Attorney General of Virginia from 1982 to 1988. From 

1976 until he joined the Attorney General’s Office, he 

was a Trial and Appellate Attorney in the Office of the 

General Counsel at the U.S. Equal Employment 

Opportunity Commission. He received his J.D. degree 

from Georgetown University Law Center in 1976. He 

received a B.A. in Economics from Howard University 

in 1973, graduating magna cum laude. He is a member 

of Phi Beta Kappa. He is admitted to the bars of the 

District of Columbia, Virginia, New York and Iowa, the 

United States Supreme Court, the United States District 

Court for the District of Columbia, several of the United 

States circuit courts of appeals, and district courts in 

Virginia. 

 

Vice Chairman 

MARY M. ROSE was nominated by President Bush to 

serve as a Member of the U.S. Merit Systems Board on 

June 23, 2005. On December 17, 2005, the Senate 

confirmed the nomination, and Mrs. Rose was sworn in 

as a Board Member on December 28, 2005. On 

January 27, 2006, the President designated Member 

Rose as Vice Chairman of the Board. Vice Chairman 

Rose’s appointment will expire on March 1, 2011. Prior 

to joining the Merit Systems Protection Board, Mrs. 

Rose was appointed by the President to serve as Vice 

Chairman of the Federal Salary Council. She was 

Chairman of the Federal Prevailing Rate Advisory 

Committee where she advised the Director of the U.S. 

Office of Personnel Management on Federal pay, 

benefits, and other policy issues. Previously, Mrs. Rose 

served as Deputy Associate Director of the Office of 

Presidential Personnel at the White House. She served 

four years as the Elected Clerk of the Circuit Court, 

Anne Arundel, Maryland. Mrs. Rose has also served as 

Assistant Director for Executive Administration, Office 

of Personnel Management; Director of Personnel, 

White House Personnel Office; and Deputy 

Undersecretary for Management at the Department of 

Education. Her private sector experience includes 

positions as a Consultant with an Annapolis law firm 

and as a Visiting Fellow with The Heritage Foundation 

where she recruited, interviewed, and recommended 

Presidential appointments to the George W. Bush 

transition team. Mary M. Rose received an R.N. degree 

from the Bon Secours Hospital School of Nursing, and 

she completed the Maryland Registered Nurse 
Recertification Program in May 2000. Ms. Rose is 

married to Philip D. Rose, M.D., and has four children. 

 

Member 

BARBARA J. SAPIN was confirmed as a Member of the 

Merit Systems Protection Board on November 21, 

2004. Previously, Ms. Sapin served as Vice Chairman 

during a recess appointment (December 2000 – 

December 2001). Ms. Sapin’s appointment will expire 

on March 1, 2007. Before joining the Merit Systems 

Protection Board, Ms. Sapin served in a number of 

labor and employment law related positions, including 

General Counsel and Labor Counsel to the American 

Nurses Association from 1990 to 2001. In addition, Ms. 

Sapin held several positions at the National Labor 

Relations Board from 1981 to 1990, including attorney 

for the Appellate Court Branch in Washington, D.C., 

field attorney in the Chicago Regional Office, and 

Senior Counsel to a Board Member. Prior to 1981, Ms. 

Sapin’s Government service included positions with the 

Occupational Safety and Health Review Commission 

and the U.S. Environmental Protection Agency. Ms. 

Sapin received her B.A. in Psychology from Boston 

University and a Juris Doctorate from the Columbus 

School of Law, Catholic University of America. She is 

admitted to the District of Columbia and Maryland 

Bars. 

 

Board offices and structure

The Board is divided into several functional offices organized 

according to its statutory missions to adjudicate appeals and 

conduct studies and the functions required to support these 

missions. In addition to its three appointed Board members, 

the Board has approximately 225 employees assigned to 

headquarters and other locations throughout the United 

States. 

The Board Members adjudicate cases brought to the Board. The 

Chairman, by statute, is the chief executive and administrative 
officer of the Board. Office heads report to the Chairman 

through the Chief of Staff. 

The Office of the Administrative Law Judge (ALJ) adjudicates 

and issues initial or recommended decisions on petitions for 

corrective action and disciplinary action complaints (including 

Hatch Act complaints) brought by the Special Counsel, 

proposed agency actions against administrative law judges, 

MSPB employee appeals, and other cases assigned by the 

Board. (The functions of this office are currently performed by 

administrative law judges at the National Labor Relations 

Board with staff support from the MSPB headquarters legal 

offices under an interagency agreement.) 

The Office of Appeals Counsel (OAC) conducts legal research 

and prepares proposed decisions for the Board in cases where 

a party, an intervenor, OPM, or the Special Counsel petitions 

for review of a judge’s initial or recommended decision, and in 

most other cases decided by the Board. The office conducts the 

Board’s PFR settlement program, prepares proposed decisions 

on interlocutory appeals of rulings made by judges, makes 

recommendations on reopening cases on the Board’s own 

motion, and provides research and policy memoranda to the 

Board on legal issues. 

The Office of the Clerk of the Board (OCB) receives and 

processes cases filed at Board headquarters, rules on certain 

procedural matters, and issues the Board’s decisions and 

orders. The office serves as the Board’s public information 

center, coordinates media relations, publishes public 

information, operates the Board’s library and on-line 

information services, and administers the Freedom of 

Information Act and Privacy Act programs. The office also 

certifies official records to the courts and Federal 

administrative agencies, and manages the Board’s records and 

directives systems, legal research programs, and the 

Government in the Sunshine Act program. 

The Office of Equal Employment Opportunity (EEO) plans, 

implements, and evaluates the Board’s equal employment 
opportunity programs. It processes complaints of alleged 

discrimination and furnishes advice and assistance on 

affirmative action initiatives to the Board’s managers and 

supervisors. 

The Office of Financial and Administrative Management (FAM) 

administers the budget, accounting, travel, time and 

attendance, procurement, property management, physical 

security, and general services functions of the Board, and 

manages the Board’s financial audit function. It develops and 

coordinates internal management programs and projects, 

including review of internal controls agency-wide. It also 

administers the agency’s cross-servicing agreements with the 

USDA’s National Finance Center for payroll services and the 

Department of the Treasury’s Bureau of the Public Debt for 

accounting services. In addition, the office provides oversight 

of the agency’s human resources management function and 

administers the cross-servicing agreement with the U.S. 

Department of Agriculture’s Business Services for human 

resources management services. 

The Office of the General Counsel (OGC), as legal counsel to 

the Board, provides advice to the Board and MSPB offices on 

matters of law arising in day-to-day operations. The office 

represents the Board in litigation, prepares proposed decisions 

for the Board on assigned cases, and coordinates the Board’s 

legislative policy and congressional relations functions. The 

office also drafts regulations, conducts the Board’s ethics 

program, manages investigations, and oversees audit functions 

in other Board offices. 

The Office of Information Resources Management (IRM) 

develops, implements, and maintains the Board’s automated 

information systems to help the Board manage its caseload 

efficiently and carry out its administrative and research 

responsibilities. 

The Office of Policy and Evaluation (OPE) carries out the 

Board’s statutory responsibility to conduct special studies of 

the civil service and other merit systems. Reports of these 
studies are directed to the President and the Congress and are 

distributed to a national audience. The office responds to 

requests from Federal agencies for information, advice, and 

assistance on issues that have been the subject of Board 

studies. OPE also conducts special projects for the Board and 

has responsibility for preparing the Board’s reports required by 

the Government Performance and Results Act (GPRA). 

The Office of Regional Operations (ORO) oversees the six MSPB 

regional and two field offices, which receive and process 

petitions for appeal and related cases. Administrative Judges in 

the regional and field offices are responsible for adjudicating 

assigned cases and for issuing fair and well reasoned initial 

decisions. 

Organization chart 

Merit Systems Protection Board 
Human Resources Management services are provided by 

USDA's Agricultural Plant and Health Inspection Service 

(APHIS) Business Services. 

Payroll services are provided by USDA's National Finance 

Center. 

Accounting services are provided by the Department of the 

Treasury‘s Bureau of the Public Debt. 

Significant Board decisions and Court opinions issued in FY 2005

The Board issued a substantial number of noteworthy decisions 

in fiscal year 2005, several of which are summarized here. In 

addition, we include a summary of the decision issued by the 

Special Panel. As a service to our readers, we also present brief 

summaries of a number of significant opinions issued by the 

United States Court of Appeals for the Federal Circuit. 

Significant Board decisions
In Johnston v. Department of the Treasury, 100 M.S.P.R. 78 

(August 29, 2005), the Board ruled that a prevailing appellant 

in an individual right of action appeal is not entitled to 

consequential damages under 5 U.S.C. § 1221(g)(1)(A)(ii) for 

interest lost. This rule was applied to the appellant’s requests 

for interest during the delay in granting her Voluntary 

Separation Incentive Plan payment, on her lump-sum payment 

for annual leave, for interest lost on loans she took, and on her 

own money she used during the period following her removal, 

as well as the individual retirement account early withdrawal 

penalty she incurred. The Board held that Congress intended a 

narrow construction of the term “consequential damages,” that 

interest cannot be recovered against the government in the 

absence of an express waiver of sovereign immunity, and that 

consequential damages cover only items similar to the specific 

items listed in the statute, such as back pay and related 

benefits, medical costs incurred, and travel expenses. 

The Board in Bartels v. U.S. Postal Service, 98 M.S.P.R. 280 

(March 14, 2005), followed its decision in Lloyd v. Small 

Business Administration, 96 M.S.P.R. 518 (2004), finding that 

Board jurisdiction over a constructive removal appeal is 

established only upon proof of a constructive removal, and not 

merely by the assertion of a non-frivolous constructive removal 

claim. Bartels is noteworthy because it was issued by two of 

the Board’s three current members, who expressed the view 

taken in the concurring opinion of then-Acting Chairman 

McPhie in Lloyd, and asked the U.S. Court of Appeals for the 

Federal Circuit to clarify its case law and determine whether 

Cruz v. Department of the Navy, 934 F.2d 1240 (Fed. Cir. 1991) 

(en banc), remains good law, or whether, as the two Board 

members would prefer, the full court will adopt the reasoning 

of the panel decision in Spruill v. Merit Systems Protection 

Board, 978 F.2d 679, 689 (Fed. Cir. 1992). In Spruill, the court 

found that the Board should take jurisdiction on a “wellpleaded complaint” based on a non-frivolous allegation of 

jurisdiction. 

In another case involving jurisdiction, the Board in Ellefson v. 

Department of the Army, 98 M.S.P.R. 191 (February 28, 2005), 
following the reasoning in Van Wersch v. Department of Health 

& Human Services, 197 F.3d 1144 (Fed. Cir. 1999), and 

McCormick v. Department of the Air Force, 307 F.3d 1339 

(2002), pet. for reh'g en banc denied, 329 F.3d 1354 (Fed. Cir. 

2003), held that, if an appellant in the competitive service 

meets the condition of either subsection (i) or (ii) of 5 U.S.C. § 

7511(a)(1)(A), he is an “employee” with Board appeal rights. 

The Board noted that § 7511(a)(1)(A)(ii) refers only to 

“current continuous service,” with no requirement that such 

service must be in the same or similar positions, as set forth in 

subsections (B) and (C), and that the court in McCormick

apparently did not construe “current continuous service” as 

requiring such service to be in the “same or similar positions.” 

Thus, the Board held that current continuous service need not 

be in the same or similar positions in order for an individual in 

the competitive service to qualify as an “employee” under 5 

U.S.C. § 7511(a)(1)(A)(ii). It also held that for competitive 

service employees, “current continuous service” means a 

period of employment or service immediately preceding an 

adverse action without a break in federal civilian employment 

of a workday. 

Another case influenced by the court’s decision in McCormick, 

Gutierrez v. Department of the Treasury, 99 M.S.P.R. 141 (July 

12, 2005), decided an issue that had not previously been 

addressed, namely, whether an individual serving under a 

competitive service appointment as a seasonal employee 

whose appointment lasted more than one year, but who 

actually only worked for ten months due to periods in a 

nonduty, nonpay status, can be considered to have completed 

one year of current continuous service, thereby rendering her 

an “employee” with Board appeal rights under 5 U.S.C. § 

7511(a)(1)(A)(ii). The Board found that, under that set of 

facts, the appellant was an “employee” because 5 C.F.R. §§ 

340.401 and 340.402 provide that there is no break in Federal 

civilian employment when a seasonal employee is placed in a 

nonduty, nonpay status. Thus, a seasonal employee who is in a 

probationary period as a result of the extension of her 

probationary period for time spent in a nonpay, nonduty status 
nonetheless meets the definition of an employee under § 

7511(a)(1)(A)(ii) if she was on the rolls for more than one 

year. The Board reversed this appellant’s termination because 

she did not receive the Constitutional minimum due process 

right to respond prior to her separation. 

In a third decision applying McCormick, the Board in Porter v. 

Department of Defense, 98 M.S.P.R. 461 (March 25, 2005), 

affirmed the administrative judge’s determination that the 

appellant was an “employee” with appeal rights from an 

adverse action and that her resignation amounted to a 

constructive removal. The Board noted that, under McCormick, 

an individual who is not an “employee” under 5 U.S.C. § 

7511(a)(1)(A)(i) is nevertheless an “employee” if she meets 

the definition at 5 U.S.C. § 7511(a)(1)(A)(ii). It then rejected 

the argument, advanced by the agency, that McCormick should 

not be applied to the instant action because that action was 

appropriate and in accordance with the law when the appellant 

resigned. The Board found that Harper v. Virginia Department 

of Taxation, 509 U.S. 86 (1993), not Chevron Oil Co. v. Huson, 

404 U.S. 97 (1971), controls on the issue of retroactive 

application of a new court decision, and that under Harper, 

although McCormick announced a new rule of law, because the 

court applied that rule to the parties before it, all courts are 

obligated to treat it as “retroactive.” As to the evidence that 

the appellant was informed of the agency’s requirement that 

she serve a probationary period and accepted the position 

nonetheless, the Board held that, even if the appellant agreed 

to a period of probation, that would not change her status 

under McCormick. The Board found that, because the appellant 

was an “employee” but was told she was a probationer and 

would have no appeal rights to the Board from a termination, 

she relied on misleading information when she resigned. 

Accordingly, her resignation was involuntary and thus 

appealable. 

Fourth and finally, the Board issued Johnson v. Department of 

Veterans Affairs, 99 M.S.P.R. 362 (August 12, 2005), which 

addressed the application of McCormick to temporary 

employees. The Board held that, when an appellant does not 
have the type of appointment referred to in 5 U.S.C. § 

7511(a)(1)(A)(i), because temporary appointees are not 

required to serve “a probationary or trial period,” she must 

have the requisite one year of current continuous service 

required by subsection (A)(ii) in order to have Board appeal 

rights. Otherwise, an unreasonable outcome would result 

because every temporary appointee would have tenure – the 

right to be removed only for cause and a right of appeal – 

beginning on the first day of work. 

The Board in Fulks v. Department of Defense, 100 M.S.P.R. 228 

(September 30, 2005), re-examined an issue that had become 

clouded over time. Specifically, the Board reaffirmed earlier 

decisions finding that mitigated penalties are inappropriate 

when they are “determined by accident,” i.e., by reference to 

the length of time taken by the appeal or other administrative 

review process, even if the adjudicators considered factors 

identified in Douglas as relevant to the penalty. To the extent 

that prior Board decisions were inconsistent with this 

reasoning, they were overruled. Because the arbitrator in this 

case had imposed a time-served suspension of over twenty 

months, his penalty setting was flawed, so the Board did not 

defer to it in mitigating the penalty to a 120-day suspension. 

Lee and Wellein v. Department of Justice, and Collins v. 

Department of Agriculture v. Department of Justice, 99 

M.S.P.R. 256 (July 15, 2005), arose as a result of the court’s 

decision in Butterbaugh v. Department of Justice, 336 F.3d 

1332, 1343 (Fed. Cir. 2003), which held that federal employees 

had to take military leave under 5 U.S.C. § 6323(a) only for 

those days spent training with the military reserves on which 

they were otherwise required to work at their federal jobs. 

These cases arising under the Uniformed Services Employment 

and Reemployment Rights Act of 1994 (USERRA) were certified 

as interlocutory appeals of the administrative judge’s ruling 

that the Back Pay Act, 5 U.S.C. § 5596(b)(4), limits the 

appellants’ recovery to compensation for losses incurred no 

more than six years before the date they filed their appeals. 

The Board, however, found that neither the Barring Act of 

1940, 31 U.S.C. § 3702, nor OPM’s regulations implementing it, 
limits the appellants’ potential recovery in these appeals, and 

that the Back Pay Act also does not limit such recovery because 

USERRA itself provides authority to grant the relief sought, 

namely, compensation for “any loss of wages or benefits” 

caused by a violation of a substantive provision of USERRA. 

In Dean v. Department of Agriculture, 99 M.S.P.R. 533 (August 

5, 2005), the question presented was “whether the agency 

violated the appellant’s veterans’ preference rights under 5 

U.S.C. §§ 3302, 3304(b) when it used the Outstanding Scholar 

Program, the product of a consent decree in a Title VII lawsuit 

[Luevano Consent Decree, 1981 WL 402614 (1981); Luevano v. 

Campbell, 93 F.R.D. 68 (D.D.C. 1981)(court order approving 

decree)] to select a nonpreference eligible who had not taken 

an examination for the position in question, rather than the 

appellant, a veteran, who was found qualified for the position 

under a competitive examination process.” The Board 

answered the question in the affirmative. Absent specific 

legislation or Executive Order, rights accrue under the Veterans 

Employment Opportunities Act of 1998 when a statute 

“relating to veterans’ preference” is violated; 5 U.S.C. § 

3304(b), which provides that an individual may be appointed in 

the competitive service only if he has passed an examination or 

is specifically excepted from examination, “relat[es] to 

veterans preference” rights. Despite its role in advancing the 

goals of Title VII, the Luevano consent decree did not purport 

to create an exception that supersedes veterans’ preference 

rights under the competitive process, so that the Outstanding 

Scholar Program cannot be relied upon to avoid the 

competitive examination process when veterans’ rights are at 

issue, absent specific legislation or Executive Order, and the 

Board found no such specific exception. The Board further held 

that the appropriate remedy under 5 U.S.C. § 3303c is not 

retroactive appointment, but for the agency to comply with the 

applicable law. An award of compensation is to be made under 

the statute only if the person whose rights were violated would 

have been hired by the agency in the absence of that violation. 

The Board in Koehler v. Department of the Air Force, 99 

M.S.P.R. 82 (June 28, 2005), overruled the holding of Crickard 
v. Department of Veterans Affairs, 92 M.S.P.R. 625 (2002), and 

similar cases that, absent a showing of good cause, an 

administrative judge may not hold a video hearing over the 

appellant’s objection when the administrative judge will have 

to make credibility determinations. In so holding, the Board 

noted that, while under 5 U.S.C. § 7701(a)(1) an appellant who 

was subjected to an action that is appealable to the Board has 

“the right ... to a hearing for which a transcript will be kept,” 

the statute does not mandate an unlimited entitlement to an 

in-person hearing. Videoconference hearings are less costly 

and still allow an appellant to “appear before” an 

administrative judge. The Board ruled that, subject to a caseby-case review for abuse of discretion, administrative judges 

may hold videoconference hearings in any case, regardless of 

whether the appellant objects. As to this appellant’s request 

for an in-person hearing, which was based on her claim that 

the administrative judge was briefly out of camera range when 

she testified, the Board concluded that this failed to show that 

she was denied a fair and just adjudication when her hearing 

was held by videoconference. 

In Rawls v. U.S. Postal Service, 98 M.S.P.R. 98 (December 1, 

2004), the Board held that, while a valid indefinite suspension 

must have an ascertainable end, there is no basis for holding 

that an agency’s failure to identify a condition subsequent 

explicitly in its decision notice warrants reversal of the 

suspension. Rather, the condition may be implicit from the 

circumstances of the case and the reason for the imposition of 

the suspension. The Board did not resolve whether the 

condition-subsequent requirement was substantive or 

procedural, holding that no harmful error was shown under the 

circumstances of the case. 

In Harding v. Department of Veterans Affairs, 98 M.S.P.R. 296 

(March 14, 2005), the Board (with Ms. Sapin dissenting) held 

that a physician, registered nurse, or other medical 

professional employed under the Department of Veterans 

Affairs’ special appointing authorities, who is subjected to a 

major adverse action (such as removal) based on performance, 

has no right to appeal to the Board claiming that the action 
was taken in retaliation for his or her whistleblowing. For the 

Board to take jurisdiction over such a case would interfere with 

the internal DVA body that Congress intended to have 

exclusive authority to consider administrative challenges to 

performance-based actions against DVA medical professionals. 

Finally, in Clavin v. U.S. Postal Service, 99 M.S.P.R. 619 

(September 14, 2005), the appellant brought an appeal 

claiming that the Postal Service violated his rights under the 

Uniformed Services Employment and Reemployment Rights Act 

(USERRA), following his absence from civilian employment for 

active military duty. The parties seemed to disagree over just 

what part of USERRA covered the appellant’s claim, and the 

Board took the opportunity to reiterate some important 

distinctions that had apparently become unclear. The Board 

explained that it can consider two main kinds of cases under 

USERRA: (i) Reemployment cases, in which the employee 

claims that an agency has not met its statutory obligations to 

return him to his former position or one of like seniority, 

status, and pay, following his absence from civilian 

employment to perform uniformed service; and (ii) what have 

come to be known by the shorthand label as “discrimination” 

cases, in which the appellant claims that an agency has taken 

one of seven actions specified in USERRA (e.g., denial of initial 

employment; denial of a promotion; retaliation) because of his 

performance of uniformed service or a related reason. The 

Board stated that these two kinds of cases differ in significant 

ways. First, an individual’s rights under the reemployment 

provisions of USERRA do not depend on the motivation for an 

agency’s action (or inaction), whereas an essential element of 

a discrimination claim is that the contested agency decision 

was based on an improper motivation. Second, in a 

reemployment case the agency bears the burden of proving 

that it met its statutory obligations, whereas in a 

discrimination case the appellant bears the burden of proof on 

the merits, and if that burden is met the agency can avoid relief 

by showing that it would have taken the same action in the 

absence of the improper motivation. 

Decision issued by the Special Panel
In Boots v. U.S. Postal Service, 98 M.S.P.R. 268 (March 10, 

2005), the appellant was removed from his position as a 

Tractor-Trailer Operator for medical inability to perform the 

essential duties of his position. The agency found him to be 

medically disqualified for a commercial driver’s license under 

the regulations promulgated by the Federal Motor Carrier 

Safety Administration, U.S. Department of Transportation 

(DOT), in 49 C.F.R. part 391, and accompanying DOT guidance. 

The administrative judge affirmed the agency’s action and 

found the appellant’s claim of disability discrimination 

unsupported. The Board denied his petition for review of that 

initial decision, but on review, the Equal Employment 

Opportunity Commission (EEOC) disagreed, holding instead 

that the Postal Service was not bound by the DOT regulations, 

and that it should have conducted an individualized 

assessment of the appellant to determine whether he posed a 

direct threat that could not be eliminated or reduced by 

reasonable accommodation. It therefore remanded the case to 

the Board. In its decision, the Board found that EEOC 

misinterpreted civil service law in holding that the Postal 

Service’s compliance with DOT regulations concerning the 

qualifications for a commercial driver’s license was strictly 

voluntary. An agency is obligated to conform to the procedures 

it adopted, and here the Postal Service had adopted the DOT 

rules, as it was authorized to do. The case was therefore 

certified to the Special Panel pursuant to 5 U.S.C. § 7702(d)(1). 

In its decision, Boots v. U.S. Postal Service, 100 M.S.P.R. 513 

(Spec. Pan. June 23, 2005), a majority of the Panel, with Board 

Chairman McPhie dissenting, adopted the EEOC’s position. 

Using Ignacio v. U.S. Postal Service, 30 M.S.P.R. 471 (Spec. 

Pan. 1986), as guiding precedent, the Panel noted the limited 

circumstances in which the Board may disagree with EEOC. 

Contrary to the Board, it held that whether an agency is bound 

by the regulations it adopts may be a matter of general 

administrative law, but it is not inherently a matter of civil 

service law; that EEOC’s decision did not, in fact, involve an 

interpretation of civil service law; and that it was not so 

unreasonable that it violated civil service law. Rather, although 

there is room for disagreement on the merits, a reasonable 
basis for the EEOC decision does exist. Thus, the Panel ruled 

that EEOC’s decision must prevail. 

Significant opinions issued by the United States Court of Appeals for 

the Federal Circuit

Czarkowski v. Merit Systems Protection Board, 390 F.3d 1347 

(Fed. Cir. Nov. 8, 2004) Only the President or his lawful 

delegate may exempt an agency’s employees from 

whistleblower review rights upon an explicit determination 

that the agency has as its principal function foreign intelligence 

or counter-intelligence activities. 

Conyers v. Merit Systems Protection Board, 388 F.3d 1380 

(Fed. Cir. Nov. 9, 2004), cert. denied, 125 S.Ct. 1360 (2005) 

The Board does not have jurisdiction to adjudicate appeals 

from TSA screeners. 

White v. Department of the Air Force, 391 F.3d 1377 (Fed. Cir. 

Dec. 15, 2004) To show that a lawful agency policy constitutes 

‘gross mismanagement,’ as that term is used in 5 U.S.C. § 

2302(b)(8) and in the context of disclosures regarding agency 

policy, means such serious errors by the agency that a 

conclusion that the agency erred is not debatable among 

reasonable people. The Whistleblower Protection Act does not 

require that whistleblowers establish gross mismanagement by 

irrefragable proof. 

Moravec v. Office of Personnel Management, 393 F.3d 1263 

(Fed. Cir. Dec. 22, 2004); Dowling v. Office of Personnel 

Management, 393 F.3d 1260 (Fed. Cir. Dec. 22, 2004) Active 

duty military service may not be counted toward a civilian 

annuity if the employee intended to make a career in the 

military after he left his civilian job. Congress’ intent in 

enacting USERRA was to encourage non-career military service 

as opposed to career military service. 

Langston v. Office of Personnel Management, 395 F.3d 1349 

(Fed. Cir. Jan. 26, 2005) Dependent children seeking student 

benefits under the Federal Employees’ Retirement System 
meet the “in residence” requirement if they are enrolled in a 

“full-time course of study” that requires some form of 

attendance at the learning institution. 

Carson v. Department of Energy, 398 F.3d 1369 (Fed. Cir. 

March 1, 2005) A petition for enforcement is barred by claim 

preclusion when the claims could have been litigated as part of 

an earlier enforcement petition. Further, an enforcement 

petition cannot exceed the scope of relief awarded by the final 

decision in a successful individual right of action appeal. 

Folio v. Department of Homeland Security, 402 F.3d 1350 (Fed. 

Cir. April 5, 2005) The Board has a broader scope of review in 

suitability determinations than merely reviewing the facts 

underlying the charges. The Board’s review of an agency’s 

suitability determination includes an evaluation of all of the 

criteria set forth at 5 C.F.R. § 731.202. 

McEntee v. Merit Systems Protection Board, 404 F.3d 1320 

(Fed. Cir. April 15, 2005), cert. denied, 126 S.Ct. 381 (2005) A 

federal employee’s participation in a nonpartisan election is 

presumed to be permissible under the Hatch Act. However, that 

presumption may be rebutted by evidence showing that 

partisan politics actually entered the campaign of a candidate 

(e.g., when a candidate and a major political party act in 

concert with each other). 

Oja v. Department of the Army, 405 F.3d 1349 (Fed. Cir. April 

28, 2005) The 60-day time limit for appealing an MSPB 

decision to the Federal Circuit is not subject to equitable 

tolling. 

Tunik v. Merit Systems Protection Board, 407 F.3d 1326 (Fed. 

Cir. May 11, 2005) The Board may not repeal by adjudication 

its rule recognizing an action for “constructive” removal of 

administrative law judges because the rule was adopted 

pursuant to notice and comment rulemaking under the 

Administrative Procedures Act. 
Johnston v. Office of Personnel Management, 413 F.3d 1339 

(Fed. Cir. June 28, 2005), modified, 430 F.3d 1376 (Fed. Cir. 

Nov. 30, 2005) The 1-year deadline for filing a disability 

retirement application after an employee has been separated 

may be waived if the agency has failed to provide notice that 

the employee has been terminated for medical reasons. 

Baker v. Department of Transportation, 418 F.3d 1369 (Fed. 

Cir. Aug. 16, 2005) It was harmful error for the Board not to 

consider the employee’s challenge to the propriety of his 

discharge from a substance abuse treatment facility where his 

successful completion of the treatment program would have 

entitled him to retain his position at the agency. 

Thompson v. Merit Systems Protection Board, 421 F.3d 1336 

(Fed. Cir. Aug. 25, 2005), petition for cert. filed (U.S. Nov. 30, 

2005) (No. 05-7916) Only federal employees -- not contractors 

or employees of contractors -- have appeal rights to the Board. 

Even if a petitioner had been successful in obtaining a security 

clearance, he would have remained an employee of a 

contractor and would not have met the statutory definition of 

“employee.” 

Stanley v. Department of Justice, 423 F.3d 1271 (Fed. Cir. Sept. 

9, 2005) United States Trustees are excluded from the 

definition of “employee” pursuant to 5 U.S.C. § 7511(b) and, 

therefore, are not entitled to appeal to the Board from their 

dismissal. 

FY 2005 Case Processing Statistics

Summary of cases decided by MSPB

Cases Decided in MSPB Regional/Field Offices RO/FOs: 

Appeals 6,337 

Addendum Cases1 429 

Stay Requests2 58 
TOTAL Cases Decided in RO/FOs 6,824 

Cases Decided by Administrative Law Judges (ALJs) – 

Original Jurisdiction3

23 

Cases Decided by the Board: 

Appellate Jurisdiction: 

Petitions for Review (PFRs) – Appeals 1,383 

Petitions for Review (PFRs) – Addendum Cases 130 

Reviews of Stay Request Rulings 0 

Requests for Stay of Board Order 2 

Reopenings4 4 

Court Remands 8 

Compliance Referrals 31 

EEOC Non-concurrence Cases5 2 

Arbitration Cases 9 

Subtotal – Appellate Jurisdiction 1,569 

Original Jurisdiction6 13 

Interlocutory Appeals 11 

TOTAL Cases Decided by the Board 1,593 

TOTAL Cases Decided (Board, ALJs, RO/FOs) 8,440 

FOOTNOTES TO TABLE 

1. Includes 107 requests for attorney fees, 4 requests for compensatory damages 

(discrimination cases only), 3 requests for consequential damages (whistleblower cases 

only), 212 petitions for enforcement, 89 Board remand cases, and 14 court remand cases. 

2. Includes 38 stay requests in whistleblower cases and 20 in non-whistleblower cases. 

3. Initial Decisions issued by ALJ. Case type breakdown: 2 OSC corrective actions, 2 nonHatch Act disciplinary actions; 14 Hatch Act cases; and 5 actions against ALJs. 

4. In the absence of a petition for review, 2 cases were reopened by the Board on its own 

motion and OPM requested reconsideration in 2 cases. 

5. Includes one Special Panel decision. 

6. Final Board decisions. Case type breakdown: 6 OSC initial stay requests, 3 PFRs in an action 

against an ALJ, 1 request for regulation review, and 3 Hatch Act cases. 

Regional case processing
DISPOSITION OF INITIAL APPEALS DECIDED IN FY 2005 BY TYPE OF CASE 

 Type of Case Decided Dismissed Not 

Dismissed 

 Settled Adjudicated 

Adverse Action by 

Agency 

2788 1268 45% 1520 55% 1018 67% 502 33% 

Termination of 

Probationers 

309 277 90% 32 10% 29 91% 3 9% 

Reduction in Force 188 144 77% 44 23% 20 45% 24 55% 

Performance 142 29 20% 113 80% 73 65% 40 35% 

Acceptable Level of 

Competence 

(WIGI) 

35 16 46% 19 54% 14 74% 5 26% 

Suitability 87 26 30% 61 70% 37 61% 24 39% 

CSRS Retirement: 

Legal 

537 224 42% 313 58% 15 5% 298 95% 

CSRS Retirement: 

Disability 

150 81 54% 69 46% 3 4% 66 96% 

CSRS Retirement: 

Overpayment 

115 33 29% 82 71% 50 61% 32 39% 

FERS Retirement 618 295 48% 323 52% 93 29% 230 71% 

FERCCA 36 23 64% 13 36% 2 15% 11 85% 

Individual Right of 

Action 

196 142 72% 54 28% 28 52% 26 48% 

Other 1136 791 70% 345 30% 268 78% 77 22% 

 Total 6337 3349 53% 2988 47% 1650 55% 1338 45% 

1. Dismissed and Not Dismissed columns are percentages of 

Decided column. 

2. Settled and Adjudicated columns are percentages of Not 

Dismissed column. 

TYPES OF INITIAL APPEALS DECIDED IN FY 2005 [Text]
Total Number of Appeals: 6,337 (Percentages do not total 100 

because of rounding) 

DISPOSITION OF INITIAL APPEALS IN FY 2005 THAT WERE 

NOT DISMISSED [Text]
Total Number of Appeals that were Not Dismissed: 2,988 

DISPOSITION OF INITIAL APPEALS ADJUDICATED ON THE 

MERITS [Text] (i.e., Not Dismissed or Settled) IN FY 2005

Based on 1,338 appeals adjudicated on the merits 
INITIAL APPEALS DECIDED IN FY 2005 BY AGENCY 

 

Decided 

 Dismissed1 Not 

Dismissed1 

 Settled2 Adjudicated2

OPM* 1341 576 43.0% 765 57.0% 165 21.6% 600 78.4% 

US Postal Service 965 581 60.2% 384 39.8% 272 70.8% 112 29.2% 

Veterans Affairs 618 385 62.3% 233 37.7% 161 69.1% 72 30.9% 

Army 550 275 50.0% 275 50.0% 206 74.9% 69 25.1% 

Homeland Security 376 212 56.4% 164 43.6% 101 61.6% 63 38.4% 

Navy 351 182 51.9% 169 48.1% 98 58.0% 71 42.0% 

Justice 292 136 46.6% 156 53.4% 101 64.7% 55 35.3% 

Treasury 274 136 49.6% 138 50.4% 92 66.7% 46 33.3% 

Interior 262 162 61.8% 100 38.2% 48 48.0% 52 52.0% 

Air Force 258 138 53.5% 120 46.5% 66 55.0% 54 45.0% 

Defense 253 143 56.5% 110 43.5% 81 73.6% 29 26.4% 

Agriculture 180 96 53.3% 84 46.7% 65 77.4% 19 22.6% 

Transportation 108 63 58.3% 45 41.7% 28 62.2% 17 37.8% 

Health & Human 

Services 

80 45 56.3% 35 43.8% 24 68.6% 11 31.4% 

Social Security Adm. 65 32 49.2% 33 50.8% 21 63.6% 12 36.4% 

Labor 62 32 51.6% 30 48.4% 18 60.0% 12 40.0% 

Commerce 49 20 40.8% 29 59.2% 23 79.3% 6 20.7% 

Housing & Urban Dev. 33 14 42.4% 19 57.6% 18 94.7% 1 5.3% 

Smithsonian Institution 25 8 32.0% 17 68.0% 15 88.2% 2 11.8% 

General Service Adm. 22 14 63.6% 8 36.4% 3 37.5% 5 62.5% 

Energy 19 8 42.1% 11 57.9% 6 54.5% 5 45.5% 

NASA 16 10 62.5% 6 37.5% 5 83.3% 1 16.7% 

State 15 9 60.0% 6 40.0% 3 50.0% 3 50.0% 

Securities & Exchange 

Com 

12 9 75.0% 3 25.0% 3 100.0% 0 0.0% 

TVA 12 4 33.3% 8 66.7% 0 0.0% 8 100.0% 

EPA 11 6 54.5% 5 45.5% 5 100.0% 0 0.0% 

SBA 11 7 63.6% 4 36.4% 0 0.0% 4 100.0% 

EEOC 9 2 22.2% 7 77.8% 2 28.6% 5 71.4% 

Court Services & 

Offender Supervision 

7 2 28.6% 5 71.4% 4 80.0% 1 20.0% 

Adm. Office of US 

Courts 

6 6 100.0% 0 0.0% 0 0.0% 0 0.0% 

Other 5 4 80.0% 1 20.0% 1 100.0% 0 0.0% 

Education 4 4 100.0% 0 0.0% 0 0.0% 0 0.0% 

Export-Import Bank of 

US 

4 2 50.0% 2 50.0% 2 100.0% 0 0.0% 

NARA 4 2 50.0% 2 50.0% 2 100.0% 0 0.0% 

Armed Forces 

Retirement Home 

3 3 100.0% 0 0.0% 0 0.0% 0 0.0% 

FDIC 3 0 0.0% 3 100.0% 3 100.0% 0 0.0% 

Fed Retirement Thrift 

Investment Bd 

3 3 100.0% 0 0.0% 0 0.0% 0 0.0% 

Gov Printing Office 3 2 66.7% 1 33.3% 1 100.0% 0 0.0% 

Peace Corps 3 3 100.0% 0 0.0% 0 0.0% 0 0.0% 

African Dev. Foundation 2 1 50.0% 1 50.0% 1 100.0% 0 0.0% 

Agency for Int’l Dev. 2 2 100.0% 0 0.0% 0 0.0% 0 0.0% 
Consumer Product 

Safety Com. 

2 2 100.0% 0 0.0% 0 0.0% 0 0.0% 

Corp for Nat’l & 

Community Serv 

2 2 100.0% 0 0.0% 0 0.0% 0 0.0% 

Nat’l Credit Union Adm. 2 0 0.0% 2 100.0% 2 100.0% 0 0.0% 

Office of Gov Ethics 2 0 0.0% 2 100.0% 1 50.0% 1 50.0% 

Broadcasting Board of 

Governors 

1 1 100.0% 0 0.0% 0 0.0% 0 0.0% 

Fed Mediation & 

Conciliation Service 

1 0 0.0% 1 100.0% 1 100.0% 0 0.0% 

Federal Trade 

Commission 

1 0 0.0% 1 100.0% 1 100.0% 0 0.0% 

Gov of the District of 

Columbia 

1 1 100.0% 0 0.0% 0 0.0% 0 0.0% 

Government 

Accountability Office 

1 0 0.0% 1 100.0% 0 0.0% 1 100.0% 

Int’l Boundary & Water 

Com 

1 1 100.0% 0 0.0% 0 0.0% 0 0.0% 

MSPB 1 1 100.0% 0 0.0% 0 0.0% 0 0.0% 

Nat’l Foundation for the 

Arts 

1 0 0.0% 1 100.0% 1 100.0% 0 0.0% 

NLRB 1 0 0.0% 1 100.0% 0 0.0% 1 100.0% 

Nat’l Mediation Board 1 1 100.0% 0 0.0% 0 0.0% 0 0.0% 

Office of Special 

Counsel 

1 1 100.0% 0 0.0% 0 0.0% 0 0.0% 

TOTAL 6337 3349 52.8% 2988 47.2% 1650 55.2% 1338 44.8% 

Most appeals in which OPM is the agency are retirement cases 

involving decisions made by OPM as the administrator of the 

Civil Service Retirement System and the Federal Employees 

Retirement System. 

Percentages in columns "Dismissed" and "Not Dismissed" are 

of "Decided." 

Percentages in columns "Settled" and "Adjudicated" are of 

"Not Dismissed." 

INITIAL APPEALS ADJUDICATED* IN FY 2005 BY AGENCY 

 Adjudicated Affirmed Reversed Mitigated 

Modified 

 Other 

OPM 600 462 77.0% 132 22.0% 1 0.2% 5 0.8%

US Postal Service 112 89 79.5% 16 14.3% 7 6.3% 0 0.0%

Veterans Affairs 72 62 86.1% 8 11.1% 2 2.8% 0 0.0%

Army 69 63 91.3% 5 7.2% 1 1.4% 0 0.0%

Homeland Security 63 54 85.7% 8 12.7% 0 0.0% 1 1.6%

Navy 71 60 84.5% 11 15.5% 0 0.0% 0 0.0%

Justice 55 44 80.0% 9 16.4% 2 3.6% 0 0.0%

Treasury 46 40 87.0% 5 10.9% 1 2.2% 0 0.0%

Interior 52 45 86.5% 7 13.5% 0 0.0% 0 0.0%

Air Force 54 51 94.4% 3 5.6% 0 0.0% 0 0.0%

Defense 29 25 86.2% 1 3.4% 2 6.9% 1 3.4%
Agriculture 19 18 94.7% 1 5.3% 0 0.0% 0 0.0%

Transportation 17 14 82.4% 3 17.6% 0 0.0% 0 0.0%

Health & Human 

Services 

11 9 81.8% 2 18.2% 0 0.0% 0 0.0%

Social Security Adm. 12 10 83.3% 1 8.3% 1 8.3% 0 0.0%

Labor 12 11 91.7% 1 8.3% 0 0.0% 0 0.0%

Commerce 6 6 100.0% 0 0.0% 0 0.0% 0 0.0%

Housing & Urban Dev. 1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

Smithsonian Institution 2 1 50.0% 1 50.0% 0 0.0% 0 0.0%

General Service Adm. 5 2 40.0% 1 20.0% 2 40.0% 0 0.0%

Energy 5 2 40.0% 2 40.0% 1 20.0% 0 0.0%

NASA 1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

State 3 3 100.0% 0 0.0% 0 0.0% 0 0.0%

TVA 8 7 87.5% 1 12.5% 0 0.0% 0 0.0%

SBA 4 4 100.0% 0 0.0% 0 0.0% 0 0.0%

EEOC 5 5 100.0% 0 0.0% 0 0.0% 0 0.0%

Court Services & 

Offender Supervision 

1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

Office of Gov. Ethics 1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

Gov Accountability 

Office 

1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

Nat’l Labor Relations 

Board 

1 1 100.0% 0 0.0% 0 0.0% 0 0.0%

 TOTAL 1338 1093 81.7% 218 16.3% 20 1.5% 7 0.5% 

ADJUDICATED means adjudicated on the merits, i.e., not 

dismissed or settled. Percentages may not total 100 because of 

rounding.

Headquarters case processing

DISPOSITION OF PETITIONS FOR REVIEW OF INITIAL DECISIONS ON APPEALS 

DECIDED IN FY 2005 BY TYPE OF CASE 

 Type of 

Case 

 Decided Dismissed Settled Denied Denied But 

Reopened 

 Granted 

Adverse Action 

by Agency 

638 32 5.0% 12 1.9% 533 83.5% 18 2.8% 43 6.7% 

Termination of 

Probationers 

52 1 1.9% 0 0.0% 41 78.9% 5 9.6% 5 9.6% 

Reduction in 

Force 

32 2 6.3% 0 0.0% 26 81.3% 0 0.0% 4 12.5% 

Performance 33 2 6.1% 0 0.0% 27 81.8% 0 0.0% 4 12.1% 

Acceptable 

Level of 

Competence 

(WIGI) 

7 114.3% 114.3% 4 57.1% 0 0.0% 1 14.3% 

Suitability 23 417.4% 0 0.0% 16 69.6% 1 4.4% 2 8.7% 

CSRS 

Retirement: 

Legal 

164 6 3.7% 3 1.8% 137 83.5% 6 3.7% 12 7.3% 

CSRS 

Retirement: 

29 0 0.0% 0 0.0% 25 86.2% 2 6.9% 2 6.9% 
Disability 

CSRS 

Retirement: 

Overpayment 

14 0 0.0% 0 0.0% 11 78.6% 1 7.1% 2 14.3% 

FERS 

Retirement 

102 6 5.9% 0 0.0% 84 82.4% 4 3.9% 8 7.8% 

FERCCA 9 0 0.0% 0 0.0% 9100.0% 0 0.0% 0 0.0% 

Individual 

Right of Action 

85 3 3.5% 2 2.4% 62 72.9% 7 8.2% 11 12.9% 

Other 195 2412.3% 12 6.2% 140 71.8% 8 4.1% 1 5.6% 

 Total 1383 81 

5.9% 

 30 

2.2% 

 1115 

80.6% 

 52 3.8% 105 7.6% 

DISPOSITION OF PETITIONS FOR REVIEW OF INITIAL 

DECISIONS ON APPEALS DECIDED IN FY 2005 [Text]

Total Number of Petitions for Review: 1,383 

DISPOSITION OF PETITIONS FOR REVIEW OF INITIAL DECISIONS ON 

APPEALS GRANTED IN FY 2005 [TEXT] Based on 105 Petitions for 

Review Granted
DISPOSITION OF PETITIONS FOR REVIEW OF INITIAL 

DECISIONS ON APPEALS DENIED BUT REOPENED IN FY 2005

[TEXT]

Bases on 52 Petitions for Review Denied but Reopened
PETITIONS FOR REVIEW DECIDED IN FY 2005 BY AGENCY 

Decided Dismissed Settled Denied Denied But 

Reopened 

 Granted 

OPM* 311 12 3.9% 3 1.0% 260 83.6% 13 4.2% 23 7.4% 

US Postal Service 239 16 6.7% 3 1.3% 199 83.3% 5 2.1% 16 6.7% 

Veterans Affairs 111 6 5.4% 3 2.7% 91 82.0% 5 4.5% 6 5.4% 

Army 97 7 7.2% 5 5.2% 72 74.2% 7 7.2% 6 6.2% 

Navy 90 1 1.1% 3 3.3% 75 83.3% 4 4.4% 7 7.8% 

Air Force 74 10 13.5% 4 5.4% 53 71.6% 1 1.4% 6 8.1% 

Homeland Security 66 6 9.1% 1 1.5% 49 74.2% 4 6.1% 1 9.1% 

Justice 60 4 6.7% 1 1.7% 46 76.7% 1 1.7% 8 13.3% 

Treasury 58 1 1.7% 0 0.0% 45 77.6% 4 6.9% 8 13.8% 

Defense 54 4 7.4% 0 0.0% 44 81.5% 2 3.7% 4 7.4% 

Interior 39 4 10.3% 0 0.0% 32 82.1% 1 2.6% 2 5.1% 

Agriculture 33 3 9.1% 2 6.1% 24 72.7% 1 3.0% 3 9.1% 

Transportation 32 1 3.1% 3 9.4% 26 81.3% 0 0.0% 2 6.3% 

Social Security 

Adm. 

16 1 6.3% 0 0.0% 13 81.3% 1 6.3% 1 6.3% 

Health & Human 

Serv 

13 2 15.4% 0 0.0% 11 84.6% 0 0.0% 0 0.0% 

Commerce 12 0 0.0% 0 0.0% 9 75.0% 0 0.0% 3 25.0% 

Housing & Urban 

Dev. 

12 0 0.0% 0 0.0% 12 100.0% 0 0.0% 0 0.0% 

Labor 11 0 0.0% 0 0.0% 11 100.0% 0 0.0% 0 0.0% 

Energy 7 1 14.3% 1 14.3% 2 28.6% 1 14.3% 2 28.6% 

SBA 6 0 0.0% 0 0.0% 5 83.3% 0 0.0% 1 16.7% 

EPA 5 0 0.0% 0 0.0% 5 100.0% 0 0.0% 0 0.0% 

General Service 

Adm. 

5 1 20.0% 1 20.0% 3 60.0% 0 0.0% 0 0.0% 

State 4 0 0.0% 0 0.0% 3 75.0% 1 25.0% 0 0.0% 
Adm. Office of US 

Courts 

3 0 0.0% 0 0.0% 3 100.0% 0 0.0% 0 0.0% 

EEOC 3 0 0.0% 0 0.0% 2 66.7% 0 0.0% 1 33.3% 

Gov Printing Office 3 1 33.3% 0 0.0% 2 66.7% 0 0.0% 0 0.0% 

TVA 3 0 0.0% 0 0.0% 3 100.0% 0 0.0% 0 0.0% 

Agency for 

International Dev 

2 0 0.0% 0 0.0% 2 100.0% 0 0.0% 0 0.0% 

Securities & 

Exchange Comm 

2 0 0.0% 0 0.0% 2 100.0% 0 0.0% 0 0.0% 

American Battle 

Monuments Comm 

1 0 0.0% 0 0.0% 1 100.0% 0 0.0% 0 0.0% 

CIA 1 0 0.0% 0 0.0% 1 100.0% 0 0.0% 0 0.0% 

Consumer Product 

Safety Comm 

1 0 0.0% 0 0.0% 1 100.0% 0 0.0% 0 0.0% 

Court Services & 

Offender 

1 0 0.0% 0 0.0% 1 100.0% 0 0.0% 0 0.0% 

Education 1 0 0.0% 0 0.0% 0 0.0% 1 100.0% 0 0.0% 

FDIC 1 0 0.0% 0 0.0% 1 100.0% 0 0.0% 0 0.0% 

Gov of the District 

of Columbia 

1 0 0.0% 0 0.0% 1 100.0% 0 0.0% 0 0.0% 

Gov Accountability 

Office 

1 0 0.0% 0 0.0% 1 100.0% 0 0.0% 0 0.0% 

MSPB 1 0 0.0% 0 0.0% 1 100.0% 0 0.0% 0 0.0% 

NASA 1 0 0.0% 0 0.0% 1 100.0% 0 0.0% 0 0.0% 

Office of Special 

Counsel 

1 0 0.0% 0 0.0% 1 100.0% 0 0.0% 0 0.0% 

Smithsonian Inst 1 0 0.0% 0 0.0% 1 100.0% 0 0.0% 0 0.0% 

TOTAL 1383 81 5.9% 30

2.2% 

1115

80.6% 

52 3.8% 105 7.6% 

Most appeals in which OPM is the agency are retirement cases 

involving decisions made by OPM as the administrator of the 

Civil Service Retirement System and the Federal Employees 

Retirement System. Percentages may not total 100 because of 

rounding. 

Summaries of Merit Systems Studies

The Probationary Period: A Critical Assessment Opportunity

This report discusses the role of the probationary period as an 

assessment tool and how it is being used in the Federal 

Government. Additionally, it contains recommendations to 

improve the effectiveness of the probationary period. 
The probationary period is one of the more effective 

assessment tools available to determine if an individual should 

be granted a permanent appointment to the civil service. 

However, it is only as effective as its use. In response to a 

survey we conducted, we found that some supervisors would 

not choose to select their probationer if they could do the 

selection over. However, more than half of these same 

supervisors intended to allow the individuals to become 

tenured Federal employees. 

We also found that some agencies treated probationers as if 

they were fully appointed employees. In these agencies, the 

procedures to remove probationers were the same as the 

procedures that are required for fully appointed employees. 

Supervisors told us that this burden, and a lack of support from 

their agency, often caused them to retain problem 

probationers. Agencies also neglected to communicate the 

importance of the probationary period. Many supervisors did 

not receive training or guidance on the probationary period, 

and a third of surveyed probationers informed us they were not 

aware of the probationary period before they began work. In 

addition, we found that the length of the probationary period, 

currently 1 year, may not be sufficient for trainee and similar 

positions where it can take more time to demonstrate the full 

range of skills necessary for success. 

The report recommended that agencies create a culture in 

which the probationary period is taken seriously and is used to 

determine who should—and should not—receive an 

appointment. The report also recommended that Congress 

consider amending the law to permit longer probationary 

periods. 

Building a High-Quality Workforce: The Federal Career Intern 

Program

The Federal Career Intern Program was established in July 

2000 by Executive Order 13162. The purpose of the program is 

to “attract exceptional men and women to the Federal 

workforce ...and prepare them for careers in analyzing and 
implementing public programs.” Under this program, agencies 

can hire as many interns as they need for two-year internships 

at the GS-5, 7, or 9 level. Through this program, agencies can 

create a pipeline of individuals at various stages of proficiency 

who will be available to fill positions that will be vacated by 

those who will retire. Career interns are hired in the excepted 

service and can be converted noncompetitively into the 

competitive service if they successfully complete the program. 

As an alternative to the Government’s traditional hiring 

method, the competitive examining process, the FCIP has 

relatively few eligibility and procedural requirements, giving 

agencies flexibility in recruiting, assessing, and selecting 

candidates. Nevertheless, agencies hiring under the FCIP must 

still comply with merit system principles as well as veterans’ 

preference and equal employment opportunity rules. 

Our study served as an early look at the process agencies use 

to recruit, assess, and select interns and to determine how 

effective the program is in providing agencies with a steady 

stream of qualified employees who are ready to advance and 

assume greater responsibilities. We used three major sources 

of information for this study. First, we used OPM's Central 

Personnel Data File to find the demographics of career interns; 

second, we sent an interrogatory to agencies’ human resources 

office staff to find their views and experiences about the 

program; and third, we surveyed career interns and their 

supervisors to determine the effectiveness of the program in 

meeting their needs. 

Based on our findings, the program has had an auspicious 

beginning. The number of FCIP hires dramatically increased 

from about 400 in fiscal year 2001 to over 7,000 in 2004. 

Further, our survey of career interns and their supervisors 

shows that both groups have positive views and experiences 

about the program. However, our study found that agencies 

relied on limited tools to recruit applicants to the program, 

used weak pre-hire assessment tools, and failed to use the 

internship as a trial period to correct for weak assessment 

tools, and some did not provide training and development 

activities to career interns as required. To maximize the value 
of the FCIP, we recommended that agencies improve the way 

they recruit and assess applicants to the program. For example, 

agencies can meet the “fair and open” requirement of the merit 

systems principles by using more varied recruitment tools to 

ensure that interested applicants are given the opportunity to 

apply and to effectively use the internship as a trial period to 

assess performance and convert only those interns who are 

fully fit and qualified for duty. We also recommended that OPM 

provide clearer guidance to agencies, including guidance 

regarding the role of the trial period during the internship. And 

we recommended that OPM more fully exercise its oversight 

role to ensure that agencies observe the merit principles, 

veterans’ preference, and equal opportunity rules when 

implementing the FCIP. 

Reference Checking in Federal Hiring: Making the Call

OPE completed a best practices review and report about 

reference checking. This report has been published and 

distributed to the President and Congress, as well as to many 

practitioners who conduct and do research about reference 

checking. 

The reference checking report contains guidance for reference 

checkers, for reference providers, and for Federal job 

applicants who use references. It dispels several 

misconceptions about the legal constraints on checking 

references in the public sector. Key recommendations in the 

report include: 

• Federal agencies should conduct reference checks for all 

hires. 

• Agencies should increase standardization of the reference 

checking process and provide training in doing this 

effectively. 

• There should be increased applicant responsibility for 

making the reference checking process work. 

• Agencies should use the “Declaration for Federal 

Employment” (OF-306) form early in the application 
process to set applicant expectations that references will 

be checked. 

• Agencies should review their "fair use" policies for 

performance records to ensure that the records can be 

consulted by supervisors when providing reference 

information for former employees. 

During FY 2006, OPE will make a number of presentations to 

agencies and HR professionals to encourage use of the best 

practices we have identified in this report. 

The 2005 merit principles survey

MSPB has conducted the MPS every 3-5 years for the past two 

decades. Each administration of the MPS tracks the incidence 

of prohibited personnel practices among Federal employees, 

assesses the degree to which merit principles are followed, and 

gathers information to support OPE research studies. OPE 

conducted preparatory work for the MPS during FY 2004 and 

administered the survey during FY 2005. 

The MPS 2005 was the first MPS administered via the World 

Wide Web. Nearly 37,000 full-time civilian Federal employees 

completed the MPS 2005. The participants were randomly 

sampled from 14 agencies and represent viewpoints of 

employees at the non-supervisory, team leader/supervisor, and 

manager/SES levels. OPE worked closely with OPM and 

representatives from other agencies to obtain a representative 

sample of email addresses, coordinate survey administration 

with OPM to avoid overlap with the Federal Human Capital 

Survey, and respond to concerns raised by participants in the 

MPS. During the summer and fall of 2005, data gathering was 

completed for the MPS. OPE is currently analyzing the data 

from this survey and preparing a report for release by the end 

of FY 2006. 

Significant Actions of the Office of Personnel Management

As required by statute, MSPB reports on the significant actions 

of OPM. The Board is presenting in the Annual Report a 
summary of the significant actions by OPM with the greatest 

long-term implications on merit systems. 

The past few years have seen some of the greatest changes in 

Federal human capital management since the Civil Service 

Reform Act of 1978. Accordingly, OPM has taken many actions 

in response to legislative action and as the President’s agent 

for Federal human resources management. Below, we list and 

briefly discuss the OPM actions with the greatest long-term 

implications for the Federal civil service. This list is not, 

however, by any means exhaustive. 

OPM policy initiatives

New personnel systems in the Department of Homeland 

Security (DHS) and the Department of Defense (DoD) 

Final regulations have been issued for the DHS and DoD 

personnel systems. The regulations were issued jointly by OPM 

and the agency involved. These systems, although established 

under Title 5, United States Code, depart from longstanding 

Title 5 practice in the areas of pay, performance management, 

appeal rights and procedures, and collective bargaining. 

Significance 

The DoD and DHS personnel systems are expected to lay the 

groundwork for broader civil service reform. Although the 

development of these systems included consultation with 

employee representatives, there has been concern over how 

these systems will affect employee pay, bargaining rights, and 

appeal procedures. The implementation of many of the 

components of these systems has been delayed because of 

these concerns. In addition, the labor relations and employee 

appeals components of both systems have been barred from 

implementation by recent court decisions (NTEU v. Chertoff , 

05-201, (D.D.C. Oct. 7, 2005) and AFGE v. Rumsfeld, 05-2183, 

(D.D.C. Feb. 27, 2006)). Successful implementation of these 

systems will require sustained effort from DHS, DoD and OPM 

in order to address the legal issues regarding these systems, to 
train managers to use these new delegated authorities, and to 

build employee buy-in which is essential for success. 

Proposals for Governmentwide civil service reform 

OPM has developed and circulated draft legislation for 

Governmentwide civil service reform. The draft legislation, 

referred to as the Working for America Act (WFAA), would give 

agencies access to practices such as pay banding under a 

Governmentwide framework. 

Significance 

Agency-level personnel reforms, including those at DHS and 

DoD, have given selected agencies flexibilities unavailable to 

Federal agencies operating under normal provisions of Title 5. 

That has raised concerns about “fragmentation” of the civil 

service – a counterproductive divergence in Federal agency 

human resources (HR) policies and practices. WFAA attempts 

to address this problem, providing agencies with greater 

flexibility, while retaining a Governmentwide framework for 

managing and overseeing HR. 

Emphasis on hiring flexibilities 

Over the past year, OPM has encouraged agencies to use 

available hiring flexibilities to improve the efficiency of Federal 

hiring. OPM has pushed agencies to employ faster hiring 

models (30-day hiring model for senior executives and 45-day 

hiring model for employees). It has also encouraged agencies 

to use flexibilities such as category rating, the Federal Career 

Intern Program (FCIP), direct hire, and veteran hiring 

appointments. 

Significance 

Since the Federal merit system was established, the 

Government has added rules, regulations, and even shortcuts 

in an attempt to make the hiring process more efficient and 

sometimes more effective. What has resulted, however, is a 
long, complex process that too often makes it difficult to hire 

the best person for the job. Ultimately, the current hiring 

system frequently does not work in the best interests of 

applicants, mission accomplishment, or the public. The time 

may be right to achieve significant reform by re-thinking what 

Federal hiring should look like—and pursuing additional legal 

and regulatory changes to that end—rather than emphasizing 

existing flexibilities. 

Implementation of the Notification and Federal Employee 

Antidiscrimination and Retaliation Act 

OPM issued proposed regulations to implement the notification 

and training provisions of the Notification and Federal 

Employee Antidiscrimination and Retaliation Act of 2002 (NO 

FEAR Act). 

Significance 

The NO FEAR Act is intended to reduce illegal discrimination by 

strengthening Congressional oversight, increasing agency 

accountability, and improving compliance with the law. The 

President has delegated to OPM responsibility for several 

requirements of the Act, making OPM leadership essential to 

the Act’s implementation. One pending requirement is a study 

of best practices related to disciplinary actions taken against 

Federal employees who engage in illegal discrimination. OPM 

issued proposed regulations pertaining to this planned study in 

January 2006. 

Actions related to OPM oversight

Implementation of the President’s Management Agenda 

OPM continues to evaluate agency performance on the human 

capital element of the President’s Management Agenda (PMA). 

Currently, OPM seeks to institutionalize a strategic approach to 

managing human capital, reflected in its goal of “[m]oving 

agencies beyond scoring and into active, comprehensive, and 

continuous improvement of human capital management.” 
Significance 

Agencies have improved their scores in the human capital area, 

and OPM reports that 14 of 26 PMA agencies have significantly 

reduced skills gaps in mission-critical occupations. Although 

the long-term effects of the PMA and the human capital 

scorecard remain unknown, such efforts to increase attention 

to workforce needs and to improve agency HR practices are 

welcome. 

Agency annual survey requirement regulations 

As part of the National Defense Authorization Act for Fiscal 

Year 2004, Congress directed each executive agency to 

conduct an annual employee survey and post the results on its 

agency Website. In September 2005, OPM issued proposed 

regulations that prescribe 28 core questions to be included on 

all agency surveys and how agencies will be expected to report 

their annual data. 

Significance 

There are several potential drawbacks to the annual survey 

requirement. First, an annual requirement may not allow 

sufficient time to administer, analyze, and act on the results 

between survey administrations. Second, annual surveys may 

cause survey fatigue, in which employees will tire in filling 

them out. Finally, many agencies may lack the resources and 

expertise needed to carry out an annual survey. Therefore, in 

addition to proposing regulations for what questions agencies 

will ask and how agencies will report the annual data, OPM 

needs to play a significant role in evaluating the impact the 

new requirement has on the Government’s ability to effectively 

use surveys. 

Oversight of agency use of delegated authorities 

OPM continued its oversight of agency delegated examining 

units (organizations that evaluate and refer applicants for jobs 

in the Federal competitive service) and evaluated its agency 
compliance program using the Program Assessment and Rating 

Tool (PART). 

Significance 

OPM clearly recognizes the importance of oversight of agency 

management of human resources, including compliance with 

law and regulation. OPM’s Human Capital Assessment and 

Accountability Framework (the document that contains the 

standards used to evaluate agency performance on the human 

capital component of the PMA) establishes the expectation that 

agencies conduct risk analyses to identify problems that 

jeopardize organizational integrity and develop measures to 

evaluate compliance with legal requirements. However, OPM 

reports that only two agencies have established internal 

compliance systems. Also, OPM’s compliance-related 

performance indicators address only delegated examining, 

veterans’ preference (a statutory requirement, rather than a 

merit principle), and pay and classification appeals. Given the 

scarcity of functioning agency-level compliance programs, the 

relevance of merit system principles to all aspects of HR 

management, and increasing agency flexibility in areas such as 

pay and performance management, these performance 

indicators seem somewhat narrow in scope. 

Actions related to other Governmentwide programs

Merger with the Department of Defense’s Defense Security 

Services 

In February 2005, the investigative function of the Department 

of Defense was transferred to OPM. The purpose of this 

consolidation is to improve the efficiency of Governmentwide 

background investigations and help reduce the backlog of 

Federal background investigations. In particular, the merger is 

hoped to reduce duplication, increase economies of scales, and 

enable better clearance reciprocity among agencies. 

Significance 
With the increased emphasis on homeland security, 

background investigations have become an especially 

important part of the hiring process. These investigations are 

crucial to ensuring that Federal employees and contractors are 

suitable for holding security clearances or positions of public 

trust. MSPB reported in a 2000 study that background checks 

are a key barrier to timely job offers. This problem goes as far 

back as 1981 when the General Accounting Office (GAO, now 

the Government Accountability Office) first reported on delays 

in processing clearance requests at the Department of Defense. 

The problem only worsened after September 11, 2001, with an 

increase in agency clearance requests, a backlog of up to 

500,000 cases, and upwards of one year to complete many 

investigations. 

GAO reported in June 2005 that the transfer of functions 

actually appeared to be hindering the process of granting 

clearances rather than helping it (GAO-05-842T). However, the 

Director of OPM and the Office of Management and Budget’s 

Deputy Director for Management testified before Congress in 

November 2005 that the consolidation, along with other 

security reforms recently enacted, were beginning to ease the 

backlog. 

Selection of shared service providers under the Human 

Resources Line of Business initiative 

In April 2004, OPM was designated the managing partner for 

the HR LOB initiative. In August 2005, OPM selected five 

agencies to be shared service center providers as part of the 

Human Resources Line of Business (HR LOB) initiative. The 

purpose of the HR LOB is to allow agencies to obtain HR 

products and services through shared service centers to: (1) 

improve human capital management, (2) achieve operational 

efficiencies in HR management systems, (3) reduce HR 

administrative costs, and (4) improve customer service. 

Significance 
This line of business approach allows for economies of scale 

among agencies. For instance, if an agency needs to build a 

new HR system or faces a major upgrade, it could contract out 

its HR needs to a shared-services provider. In addition, having 

a set number of service providers could enable the Government 

to standardize HR business functions and processes. 

Ultimately, OPM projects saving taxpayers $1.1 billion over the 

next 10 years. 

This initiative presents a number of implications for the HR 

community. The Government is looking at how to use its 

resources more efficiently and effectively, and the tasks that 

HR performs may be affected. This may be a good chance for 

agencies to divest themselves of routine, non-mission related 

HR work and focus their resources on a more consultative, 

strategic role. In addition, standardizing some of our basic HR 

processes will help the Government streamline its currently 

complex HR system. However, fundamental change in some 

areas of Federal HR management, particularly hiring, is needed 

to attain the simplified, standardized, and functional processes 

needed for the HR LOB initiative to realize its full potential. 

Management of Federal Employee Benefit Programs 

OPM continued efforts to contain increases in health insurance 

costs, promote work/life programs, and implement a 

dental/vision benefits program. OPM has also established a 

performance goal of “[e]nsuring the competitiveness of Federal 

benefits” and commissioned a benefits benchmarking study 

that compares Federal employee benefit programs with those 

provided by other employers. 

Significance 

Employee benefit programs do not have immediate 

implications for public trust and merit system integrity. 

Nevertheless, these programs are essential to recruiting and 

retaining good employees, account for a substantial portion of 

personnel costs, and have significant long-term fiscal 

implications. 
At present, OPM has no explicit goals or performance measures 

for “modernizing” or greatly altering Federal employee benefit 

programs. However, OPM’s benchmarking study is to be 

followed by “an independent evaluation of ... Federal benefits 

programs,” after which OPM may consider changes to benefit 

programs. Proposals for significant change are not 

inconceivable, in light of continuing changes to benefits in the 

private sector, the anticipated retirement of many Federal 

employees, and concerns about Federal Government finances. 

Financial Summary

Fiscal Year 2005 Financial Summary

(dollars in thousands) 

Financial Sources

Appropriations $34,400

Civil Service Retirement and Disability Trust Fund 2,605

Total Revenue $37,005

Obligations Incurred 

Personnel Compensation $22,810 

Personnel Benefits 5,169 

Benefits to Former Employees 10 

Travel of Persons 581 

Transportation of Things 175 

Rental Payments 3,028 

Communications, Utilities, and Miscellaneous 247 

Printing and Reproduction 225 
Other Services 3,014 

Supplies and Materials 384 

Equipment 1,096 

Total Obligations Incurred $36,739

Obligated Balance $266 

 

Text Alternatives 

Pie Chart 1 Type of Initial Appeals Decided in FY 2005 -- Pie 

chart shows that of a total of 6,337 appeals, adverse action 

cases accounted for 2,788 or 44%; suitability cases accounted 

for 87 or 1%; reduction in force cases accounted for 188 or 

3%; termination of probationers cases accounted for 309 or 

5%; acceptable level of competence cases accounted for 35 or 

1%; other appeal cases accounted for 1,136 or 18%; 

performance cases accounted for 142 or 2%; CSRS retirement 

(legal) cases accounted for 537 or 8%; CSRS Retirement 

(disability) cases accounted for 150 or 2%; CSRS retirement 

(overpayment) cases accounted for 115 or 2%; FERS 

retirement cases accounted for 618 or 10%; FERCCA cases 

accounted for 36 or 1%; and individual right of action cases 

accounted for 196 or 3%. 

Pie Chart 2 Disposition of Initial Appeals in FY 2005 That Were 

Not Dismissed -- Pie chart shows that of the 2,988 cases that 

were not dismissed, 1,093 or 37% were affirmed; 218 or 7% 

were reversed; 20 or 1% were mitigated; 1,650 OR 55% were 

settled; and, 7 (less than 1%) were other. 

Pie Chart 3 Disposition of Initial Appeals Adjudicated on the 

Merits -- Pie chart shows that of the 1,338 appeals adjudicated 

on the merits, 1,093 or 82% were affirmed; 218 or 16% were 
reversed; 20 or 1% were mitigated; and, 7 or 1% were other. 

Pie Chart 4 Disposition of Petitions for Review of Initial 

Decisions on Appeals Decided in FY 2005 -- Pie chart shows 

that of 1,383 petitions for appeal, 1,115 or 80% were denied; 

52 or 4% were denied but reopened; 105 or 8% were granted; 

30 or 2% were settled; and, 81 or 6% were dismissed. 

Pie Chart 5 Disposition of Petitions for Review of Decisions on 

Appeals Granted in FY 2005 -- Of the 105 petitions for review 

granted, 29 or 56% were affirmed; 4 or 8% were reversed; 11 

or 21% were remanded; and, 8 or 15% were other. 

Pie Chart 6 DISPOSITION OF PETITIONS FOR REVIEW OF 

INITIAL DECISIONS ON APPEALS DENIED BUT REOPENED IN 

FY 2005 -- Of the 52 petitions for review that were denied but 

reopened, 63 or 60% were remanded; 25 or 24% were 

reversed; 16 or 15% were affirmed; and, 1 or 1% were other.