Page 1 GAO-12-508R Federal Employees’ Compensation Act

United States Government Accountability Office

Washington, DC 20548

March 21, 2012

Congressional Committees

Subject: Federal Employees’ Compensation Act: Status of Previously Identified Management 

Challenges

In 2010, the Department of Labor’s (Labor) Federal Employees’ Compensation Act (FECA)1

program paid approximately $2.8 billion in total cash and medical benefits to federal employees 

who sustained injuries or illnesses while performing federal duties. Because the FECA 

program’s benefit structure has not been significantly amended in 38 years, policymakers and 

others have raised concerns related to its efficiency and efficacy. As a result, there have been a 

number of legislative proposals to manage program costs by changing the benefit type or 

amount that employees receive at retirement age and to enact procedures that may enhance 

program administration. Federal agencies’ Inspectors General (IGs) have identified longstanding programmatic deficiencies at the department and agency level that may make the 

program vulnerable to fraud and abuse.2

To determine the program’s identified management challenges, we reviewed Labor’s 

performance and accountability reports from 2004 to 2010.

For this reason, we were asked to review the FECA 

program’s management challenges and determine the extent to which actions have been taken 

to address them.

3 Using the reports’ themes for the 

FECA program as a framework, we performed a content analysis of 65 reports, issued from 

1994 to 2011—the majority of these reports were issued from 2004 to 2011—by federal IGs and 

others4

 

1

Codified at 5 U.S.C. § 8101 et seq. 

who reviewed the FECA program. We obtained the status for all recommendations in 

these reports from the IGs and conducted more in-depth interviews with officials from Labor and 

2

We recently reported that although departments and agencies have instituted a variety of promising practices to limit 

fraud, several vulnerabilities still exist. See GAO, Federal Employees’ Compensation Act: Preliminary Observations 

on Fraud Control, GAO-12-402, (Washington, D.C.: Jan. 25, 2012).

3

We reviewed the Department of Labor’s 2010 equivalents for its performance and accountability report, the Agency 

Financial Report and its Annual Accountability Report.

4

These reports were issued by federal agency IGs, GAO, and consultants writing on behalf of departments and 

federal agencies.

 
Page 2 GAO-12-508R Federal Employees’ Compensation Act 

select employing agencies to clarify certain recommendations.5 Enclosure I contains a detailed 

description of our scope and methodology. 

We conducted this performance audit from February 2012 to March 2012 in accordance with 

generally accepted government auditing standards. Those standards require that we plan and 

perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that the evidence obtained 

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

Background 

The Division of Federal Employees’ Compensation in the Office of Workers’ Compensation 

Programs within the Labor administers the FECA program, which provides cash benefits and 

medical benefits to federal employees who suffer temporary or permanent disabilities resulting 

from work-related injuries or diseases. After Labor adjudicates and approves claims submitted 

by employees who are injured in the performance of their federal duties, Labor manages 

distribution of program benefits in the form of compensation for lost wages, schedule awards 

(i.e., other payments made for the loss of, or loss of use of, a body part or function), and 

medical benefits. Labor provides these benefit payments from a compensation fund that federal 

departments and agencies pay into with operating appropriations.6

To make benefit determinations, claims examiners at Labor are responsible for proactively 

managing cases for beneficiaries until the workers either return to work, are found to be entitled 

to reduced compensation when they are determined to have a wage-earning capacity, or are 

determined to have no reemployment potential for an indefinite period of time. FECA does not 

limit total benefits received by the age of the recipient.7

When managing claims, Labor places injured workers, or beneficiaries, into two categories—

claims receiving medical benefits only and claims receiving wage-loss benefits. For the wageloss category, Labor has 2 subcategories—long-term rolls or short-term rolls—based on how 

long a beneficiary has received benefits. Long-term beneficiaries are those who have been 

receiving FECA wage-loss compensation for 90 days or longer. Conversely, short-term 

beneficiaries are those who have been receiving FECA wage-loss compensation for less than 

90 days.8

 Regardless of how long a beneficiary remains on the rolls, eligible workers with 

temporary or permanent total disabilities who have no spouse or dependent generally receive 

wage--loss compensation equal to 662/3 percent of their salary at injury. Those with a spouse or 

dependent receive 75 percent. However, based on various eligibility factors, the amount of 

 

5

We determined whether recommendations were open, closed and implemented, or closed and not implemented, for 

example. 

6

Workers’ compensation costs are assigned to employing agencies annually at the end of the fiscal accounting period 

for the program, which runs from July to June. Each year, Labor furnishes each agency with a “chargeback report” 

which is a statement of payments made from the fund that accounts for injuries to federal employees. The agencies 

include these amounts in their budget requests to Congress. The sums appropriated are deposited into the fund. 

7

The compensation benefits paid to injured workers are not subject to federal taxes and are capped at 75 percent of 

the monthly pay of the maximum rate of basic pay for GS-15, step 10. Benefits are subject to an annual cost-of-living 

adjustment. 

8

Labor refers to beneficiaries on the rolls 90 days or longer as being on the periodic rolls and less than 90 days as 

daily roll beneficiaries. For the purposes of the report, we will refer to periodic rolls beneficiaries as long-term 

beneficiaries and daily roll beneficiaries as short-term beneficiaries. 
Page 3 GAO-12-508R Federal Employees’ Compensation Act 

wage-loss compensation can vary widely. Additionally, an employee may also receive a 

schedule award payment even if he or she has returned to full-time work. 

One goal of the program is to return beneficiaries to work as soon as possible.9

 In order to 

continue receiving benefits, injured workers are required to provide each year10 for Labor’s 

review documentation that supports their continued disability and benefit level. Labor also 

provides vocational rehabilitation11 for those ready to return to work and/or refers injured 

workers for second medical opinions to assess continuing disability. 

Employing departments and agencies play a critical role in assisting Labor’s management of the 

claims for injured workers. For example, as part of their responsibilities, departments and 

agencies are to notify employees of their rights under FECA, initiate the FECA claim, and 

provide timely notification of the claim to Labor. In this capacity, departments and agencies 

serve as the program’s first point of contact with the injured worker. Labor does not usually 

assume management of an injured worker’s case until the continuation of pay period has 

passed.12 Program regulations allow agencies to challenge an injured worker’s right to certain 

benefits, such as continuation of pay, and also to contest facts presented in an injured worker’s 

claim for FECA benefits. Once a claim has been accepted by Labor, agencies can no longer 

challenge the validity of the claim, but, according to department officials, agencies can submit 

additional evidence for consideration by Labor. In this capacity, departments and agencies can 

assist Labor in its efforts to return beneficiaries to work when Labor determines that the worker 

is able to work. 

Agency duties include the following: 

 ensuring that agency personnel, such as supervisors, understand their responsibilities under 

FECA; 

 providing and tracking COP when employees are unable to work; 

 assisting employees with their return to work as soon as possible; 

 monitoring the medical status of injured employees to ensure they return to work; and, 

 

9

According to Labor officials, immediately after an injured worker reports a disability without a return to work date, 

Labor places that beneficiary’s claim into its Quality Case Management (QCM) process which consists of a rigorous 

series of disability interventions lasting 30 months or until disability ends, whichever is shorter. During this process, 

Labor assigns a nurse who can accompany the beneficiary to doctor visits and works collaboratively with Labor’s 

claim examiners and employing agency to facilitate a return to work. Nurses are automatically assigned for a 4 month 

timeframe and can be extended up to 6 months by the claims examiner. If the original employing agency cannot reemploy the injured worker or accommodate any physical restrictions resulting from the work injury, Labor may require 

that the beneficiary undergo vocational rehabilitation. If no employment is secured during the QCM process, the 

beneficiary’s claim then moves to the periodic roll management (PRM) process. Whether the case is in QCM or PRM, 

Labor conducts annual reviews to determine continued entitlement. 

10Labor also reviews documentation semiannually to verify a dependent’s status, including the continued 

matriculation of students over 18 years of age. 

11Labor’s Policy Manual states that only permanently disabled employees may participate in vocational rehabilitation 

programs. 

12If employees are unable to return to their duties as a result of the injury, they are generally entitled to up to 45 days 

of continuation of pay (COP), which entails the agency continuing to pay the employee’s regular pay. COP is 

authorized for traumatic injury but not for occupational illnesses or other diseases. If employees are still unable to 

return to work at the end of the 45 days, they are entitled to begin receiving compensation for lost wages. 
Page 4 GAO-12-508R Federal Employees’ Compensation Act

• ensuring that appropriate costs are charged to the agency by Labor, or verifying the 

accuracy of this process.13

Results in Brief

Labor and IGs from employing departments and agencies have consistently reported similar 

FECA program management challenges, such as oversight and information technology, and 

have linked these to increased program costs through improper payments. For example, one IG 

reported in 2007 that its department could not appropriately manage its long-term rolls and 

contain improper payments because staff assigned to this task spent no more than 10 percent 

of their time managing cases. Additionally, citing ongoing program weaknesses—mostly related 

to oversight—IGs have reported avoidable costs at employing departments and agencies, which 

one department reported were as high as $41 million in 2011. Above and beyond the actions 

departments and agencies can take to address these challenges, some IGs have also reported 

that legislative reform is necessary to better manage the program. In an effort to alleviate the 

impact of management challenges, IGs collectively made over 200 recommendations since 

1994, mainly to improve FECA’s oversight, and most of these recommendations have been 

implemented.

Prior FECA Reports Have Identified Four Areas of Management Challenges

Oversight

Beginning with its 2004 Performance and Accountability Report and every year since, Labor has 

indicated that adequately overseeing the FECA program was one of its chief management 

challenges. Specifically, Labor cited oversight difficulties such as verifying beneficiaries’ 

program eligibility, managing payments while balancing timeliness and accuracy, and 

communicating with employing departments and agencies.

Consistent with Labor’s focus on oversight, 52 of the 65 reports we reviewed focused on the 

need to strengthen oversight of the program at the department or agency level. Among the 52 

reports, IGs most often reported that certain policies and procedures did not exist, or when they 

did exist, they were not always followed. When departments and agencies did not have 

procedures, most often this deficiency was related to a lack of controls that would have enabled 

staff to verify beneficiaries’ continued eligibility, monitor chargeback costs submitted by Labor, 

recoup payments that should have been charged to third parties, and return employees to work. 

For example, Labor’s IG recommended that the FECA program develop a working group whose 

purpose would be to determine the readiness of long-term beneficiaries without a wage earning 

capacity designation to return to work. While Labor has made progress in this area,14

 

13Reviewing chargeback reports at the department level provides a quality check on Labor’s assessment. 

Departments and agencies failing to perform this critical function may be charged for inappropriate costs. 

in 2010—

14In 2008, Labor’s IG reported almost twice as many beneficiaries in this category.
Page 5 GAO-12-508R Federal Employees’ Compensation Act

the most recent year for which we have data—over one-third of all long-term disabled workers 

(11,058) did not have a current determination of their wage-earning capacity.15

In over half of the 52 reports that highlighted oversight issues, IGs found that department and 

agency staff did not fully understand their roles or Labor’s when administering the program or 

that they did not always manage program resources in an effective manner. IGs reported that 

workers’ compensation program staff at some agencies did not consistently assess costs 

charged to their agency and address errors. Additionally, staff at one agency believed assessing 

the costs charged to them was Labor’s responsibility. Some staff at other agencies also told IGs 

that they did not have responsibilities for case management. Other reports indicated that staff 

have a range of responsibilities, of which monitoring FECA is only one. For instance, one IG 

reported in 2007 that staff spent no more than 10 percent of their time managing FECA cases 

because managing these cases was not viewed as a priority at that department. As a result of 

this and other deficiencies, the IG concluded that the department was unable to appropriately 

manage its long-term cases. Several IGs emphasized that providing adequate resources, such 

as dedicating staff to a workers’ compensation program and obtaining key data related to 

eligibility, is a key practice and has the potential to lessen the likelihood of beneficiaries 

inappropriately remaining on the rolls.

Overall, the impact of insufficient oversight at the departmental level has been significant 

according to various sources. For instance, one IG reported in 2011 that its department 

unnecessarily paid about $41 million each year due to insufficient program oversight. The report 

identified deficiencies in how that agency returned injured workers to work, monitored its longterm rolls, maintained case files, and detected fraud as significant contributors to FECA program 

costs. Reports we reviewed concluded that agency oversight could be strengthened with a 

variety of techniques including active case management practices such as periodically 

reviewing and updating information on long-term disability cases or intervening early through 

scheduled interactions when new beneficiaries are placed on the rolls.

Information Technology

Our review of the IG reports found that information technology was a critical challenge for 

agencies, with some reporting they did not have an adequate internal system to administer the 

program. Roughly a quarter of the 65 reports we reviewed cited challenges related to deficient 

information technology. IGs reported that a few departments and agencies did not have 

adequate systems to manage new and existing claims from injured workers. At these 

departments, staff responsible for managing claims used paper-based systems to manage 

hundreds of files. One agency reported as recently as 2009 that it did not have the software 

needed to download and review reports regarding what it owed the compensation fund that 

pays out benefits. System inadequacies also contributed to untimely filing of forms and 

documentation that Labor needs to adjudicate and manage claims in a timely manner. 

 

15According to Labor officials, this is largely due to the fact that the medical evidence does not support that the 

injured worker can return to work in any capacity. Alternatively, if partially disabled with some work capacity, the 

beneficiary may not have reached maximum medical improvement yet, and Labor may decide to wait before formally 

issuing a wage earning capacity determination. Once Labor makes a wage earning capacity determination, that 

decision cannot be overturned unless 1) the original rating was made in error; 2) the beneficiary’s medical condition 

has materially changed; or, 3) the beneficiary has been vocationally rehabilitated and can earn at least 25 percent 

more than the current pay of the job for which the beneficiary was originally rated. Because of this, Labor officials 

contend that it is more beneficial and cost-effective for the agency to wait until maximum medical improvement has 

been attained so the beneficiary’s wage earning capacity can be set at a higher rate.
Page 6 GAO-12-508R Federal Employees’ Compensation Act

According to one IG, inadequate systems presented problems with knowing the status of a 

case, projecting current and future costs associated with that case, and following through on an 

employee’s return to work. According to a Labor official, information technology remains a 

critical challenge for employing departments and agencies. Because of the cost of information

technology, relatively few departments and agencies are able to develop and maintain their own 

systems. 

A number of recent developments may lessen the impact of some of the challenges in this area. 

To improve its ability to determine claimant eligibility and reduce improper payments, Labor 

enhanced its FECA information systems in 2008 to include features that remind claims 

examiners when they need to receive status updates, such as changes to income, a 

beneficiary’s dependents going to college, or the remarriage of a widow receiving death 

benefits. Additionally, to further mitigate information technology deficiencies at the department 

and agency level, Labor deployed a new, web-based claims filing system—Employees’ 

Compensation Operations and Management Portal, or ECOMP—in 2012 that allows federal 

departments and agencies to electronically file program claims forms, conduct data mining, and 

perform trend analyses.16

Legislative Reform

As mentioned previously, Congress is currently considering several legislative proposals that 

would reform the FECA program.17 Twelve of the 65 reports we reviewed suggested that 

comprehensive reform of the program is necessary to manage costs and realize greater 

program efficiency. Recently, one IG reported that because the program had not been reformed 

in over three decades, the program did not include market-based characteristics such as 

maximum time and benefit limits, settlement and buyout options,18

Other reports have concluded that there is a need to eliminate statutory limitations that prohibit 

access to the critical federal data needed to better manage claims.

and enhanced return-to-work 

and rehabilitation programs that would help manage costs. The IG estimated that because the 

program was without such mechanisms, its agency will pay an additional $335 million each 

year. In past reports, this IG also indicated that it could potentially realize numerous benefits if it 

administered its own workers’ compensation program. Its proposals have included offering the 

same compensation rate for all beneficiaries and delaying continuation of pay benefits.

19

 

16Labor will offer ECOMP free of charge to any federal department or agency. The system, as designed, will also 

allow employees and employers to upload documents directly to a beneficiary’s file, which may enable Labor to more 

quickly adjudicate claims.

According to work 

completed by these agencies, data obtained from the Internal Revenue Service, Social Security 

Administration (SSA), or Health and Human Services could assist in efforts to verify potential 

outside earnings or provide updated eligibility information on beneficiaries. Additionally, we have 

17For example, H.R. 2465 passed by the House in November 2011, would, among other things, authorize the 

Secretary of Labor to require, as a condition of receiving FECA compensation, that a beneficiary consent to the 

release of the beneficiary’s Social Security earnings information. S. 1789, reported by the Committee on Homeland 

Security and Government Affairs in January 2012, would among other things, set the payment an employee receives 

for total disability at retirement age at 50 percent of the pre-injury monthly pay of the employee. 

18Office of Inspector General, U.S. Postal Service, Postal Service Workers’ Compensation Program, HR-AR-11-007, 

Washington, D.C., September, 2011.

19For example, according to Labor’s IG, the Privacy Act of 1974 generally prohibits agencies, including SSA, from 

disclosing earnings without the beneficiary’s authorization.
Page 7 GAO-12-508R Federal Employees’ Compensation Act

previously reported that providing access to data used to validate external information from 

beneficiaries is a key practice that can help reduce program vulnerabilities. Currently, in addition 

to its annual verification process,20 Labor may verify reported incomes by using beneficiaries’ 

Social Security numbers; and income, if earned, can offset program benefits. However, to 

perform this data check, Labor must first obtain permission from the beneficiary.21

Other Factors

In its 2007 

report on automated cross-matching using federal data, SSA found that the absence of access 

to key federal data such as Social Security information resulted in injured workers across all 

departments and agencies receiving FECA benefits totaling $48.8 million while earning another 

$12.6 million in wages unreported to Labor.

To a lesser extent, Labor and a few IGs identified other factors that challenge departments’ and 

agencies’ ability to manage program costs. Labor reported that some of these factors were the 

economy, workplace characteristics, and rising medical costs. With regard to the economy, 

Labor reported that the impact of a downturn in the economy might directly impair the 

effectiveness of program components such as vocational rehabilitation. Specifically, in its 2009 

Performance and Accountability Report, Labor said that its ability to return injured workers to the 

workplace was influenced by the numbers of claimants, types of jobs available, and skills 

required for available federal positions or in the private sector. Additionally, a Labor report noted 

that it would be difficult to understand the impact of an economic downturn on Labor’s ability to 

return beneficiaries to work in a timely manner. Labor also cited modernization of the workplace 

as an impediment to return-to-work efforts. For instance, Labor noted that modernization efforts 

at one agency have eliminated many traditional jobs that the agency previously drew upon for 

return-to-work efforts. Because of these efforts, the agency has reduced its workforce by 27.5 

percent since 2001. Labor also said new compensation claims and the type of care needed 

reflect an aging federal workforce. Consequently, the time needed to recover from these injuries 

has increased in recent years. Labor also found that it generally is more expensive to pay for 

treatments resulting from today’s injuries. In 5 of the 65 reports we reviewed, IGs also described 

some of these other factors as those beyond their control or general workplace conditions that 

contribute to rising workers’ compensation costs. For example, one agency reported that injuries 

sustained by federal workers in health care facilities from violent patients represented as many 

as half of all workers’ compensation cases at one regional facility and about 7 percent 

department-wide as reported in 2004, with a total cost of $7.2 million each year. While the 

department has taken corrective actions to address this issue, our 2011 report provides 

evidence that violent patient incidents remain a challenge.22

 

20Labor currently relies upon self-reported data from claimants to provide information on their continued eligibility for 

benefits. In a prior report, we noted this approach was problematic because of the potential to provide erroneous 

information, making the program vulnerable to improper payments. See GAO, Federal Workers’ Compensation: 

Better Data and Management Strategies Would Strengthen Efforts to Prevent and Address Improper Payments. 

GAO-08-284 (Washington, D.C.: Feb. 26, 2008).

21We also noted in our 2008 report that, unlike other federal agencies such as SSA or Veterans’ Affairs, Labor does 

not conduct a systemic data match of its records against SSA’s wage records to identify unreported earnings. 

Instead, Labor conducts matches on an ad hoc basis for individual claims with suspect, unreported earnings.

22GAO, VA Mental Health: Number of Veterans Receiving Care, Barriers Faced, and Efforts to Increase Access, 

GAO-12-12 (Washington, D.C.: Oct 14, 2011). 
Page 8 GAO-12-508R Federal Employees’ Compensation Act

Most Recommendations from Prior FECA Reports Have Been Implemented

Of the 228 recommendations made since 1994, 178 were closed and implemented. Most of the 

recommendations made in reports we reviewed were to strengthen oversight—183 in total. 

Almost half of these recommendations addressed inadequate or nonexistent internal control 

policies; the remainder addressed communication, guidance, and data. Roughly 90 percent of 

the recommendations related to internal controls were implemented. While information 

technology was the second most discussed deficiency in reports, IGs made far fewer 

recommendations in this area. Fourteen of 19 recommendations made were closed and 

implemented. Of the 9 recommendations made regarding legislative reform of FECA, 2 have 

been closed and implemented. More than half of the 9 recommendations would involve 

changing the benefits or structure of the program. Overall, most of the recommendations that 

remain open are associated with reports published within the last 5 years. Table 1 provides 

more information on the recommendations by program challenge.

Table 1: Status of FECA Recommendations Made since 1994 by IGs and Others, as of March 2012 

Status of recommendations Oversight Information technology Legislative reform Other factors

Closed and implemented 148 14 2 1 

Closed, partially implemented 1 2 0 0

Closed, not implemented 11 0 1 0 

Open 7 2 4 0 

Status not known 16 1 2 0 

Total recommendationsa 183 19 9 1

Source: GAO analysis of findings presented by IGs, GAO, and consultants.

Note: Open recommendations are those recommendations where action has not been taken but may be taken in the future, actions 

are in the planning stage, or actions have been taken on only part of the recommendation. Recommendations that are considered 

“closed, implemented” are those where the action has been fully implemented or action has been taken that essentially meets the 

recommendation’s intent, i.e., the action meets the spirit—rather than the letter—of the recommendation, or all parts of the 

recommendation have been implemented. A recommendation that is “closed, partially implemented” means that one or some of the 

multiple parts of a recommendation have been closed. A recommendation is considered “closed, and not implemented” when the 

agency/Congress has no intention of implementing the recommendation or matter for congressional consideration or circumstances 

have changed and the recommendation or matter is no longer valid.

a

We classified another 16 recommendations in a miscellaneous category. Of these, 13 were closed and implemented.

Even though the majority of recommendations have been closed, recently issued reports 

indicate that the FECA program continues to face management challenges. For example, a 

2012 report by Labor’s IG suggests that oversight remains a challenge.23 The report found that 

Labor did not always take timely action to terminate benefits when notified of FECA claimants’ 

death; had not designed effective procedures to ensure that benefit payments were reduced for 

FECA claimants who were collecting SSA retirement benefits; and had not yet implemented 

additional training for claims examiners on preventing improper payments by ensuring payment 

accuracy.24

 

23Labor, OWCP’s Effort to Detect and Prevent FECA Improper Payments Have Not Addressed Known Weaknesses. 

DOL-03-12-001-04-431, February 2012.

Similarly, in 2012, we reported that limited access to necessary data was potentially 

reducing agencies’ ability to effectively monitor claims and wage-loss information, and that the 

24Labor officials informed us that staff received training on improper payments in January 2012.
Page 9 GAO-12-508R Federal Employees’ Compensation Act

agencies’ reliance on self-reported data related to wages and dependent status, among other 

things, reduces the program’s ability to prevent and detect fraudulent activity.25

Agency Comments and Our Evaluations

We provided a draft of this report to Labor for review and comment. Labor provided technical 

comments, which we incorporated into the report as appropriate.

As agreed with your offices, unless you publicly announce the contents of this report earlier, we 

plan no further distribution until 30 days from the report date. At that time, we will send copies to 

the appropriate congressional committees, the Secretary of Labor, and other interested parties. 

The report also will be available at no charge on the GAO website at http://www.gao.gov. 

If you or your staff members have questions concerning this report, please contact Andrew 

Sherrill at (202) 512-7215 or sherilla@gao.gov or Phillip Herr at (202) 512-2834 or 

herrp@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs 

may be found on the last page of this report. Key contributors to this report are listed in 

enclosure II.

Andrew Sherrill

Director, 

Education Workforce

 and Income Security Issues

Phillip Herr

Managing Director

Physical Infrastructure Issues

Enclosures: 2

 

25GAO-12-402. 
Page 10 GAO-12-508R Federal Employees’ Compensation Act

List of Committees

The Honorable Susan M. Collins

Ranking Member

Committee on Homeland Security 

and Governmental Affairs

United States Senate

The Honorable Thomas R. Carper

Chairman

Subcommittee on Federal Financial

Management, Government Information,

Federal Services and International Security

Committee on Homeland Security 

and Governmental Affairs

United States Senate

The Honorable Claire McCaskill

Chairman

Ad Hoc Subcommittee on Contracting Oversight

Committee on Homeland Security 

and Governmental Affairs

United States Senate

The Honorable Tom Coburn

Ranking Member

Permanent Subcommittee on Investigations

Committee on Homeland Security 

and Governmental Affairs

United States Senate

The Honorable Darrell Issa

Chairman

Committee on Oversight and Government Reform

House of Representatives
Page 11 GAO-12-508R Federal Employees’ Compensation Act

Enclosure I: Scope and Methodology

To identify the Federal Employees’ Compensation Act (FECA) program management 

challenges, we reviewed the Department of Labor’s (Labor) Performance and Accountability 

Reports from 2004 to 2010 and identified common themes from each of these reports related to 

the management of the FECA program.26

Reviewing the Work of IGs

Our analysis resulted in four commonly identified 

themes for program management challenges. We used these themes as a framework to group 

other work developed by Inspectors General (IG) government-wide.

To identify findings related to the management challenges of the FECA program from the 

perspectives of the 75 departments and agencies that participate in FECA, we conducted a 

search of all Inspectors General (IG) websites utilizing a web search engine to identify reports 

authored by the IGs on the FECA program. To complete this search we used key words such as 

“Federal Employees’ Compensation Act,” “workers’ compensation,” “federal workers’ 

compensation,” and “FECA” to narrow the results of the search. We identified 74 reports issued 

since 1994 from these websites. We identified another 4 through other means. We also 

contacted departments and agencies with significant FECA costs in chargeback year 2010, as 

well as those for which the web search engine failed to identify any publicly available reports on 

FECA. There were three departments—Department of Defense, Army, and Air Force—for which 

neither the search engine nor officials identified any reports.

Content Analysis

We performed a content analysis on 65 reports identified through our search and other 

methods. These reports were issued by IGs, GAO, and consultants writing on behalf of 

departments and agencies. To complete the content analysis, reviewers independently read 

each report and coded them into separate data collection instruments using the FECA program 

challenges framework described above. Reports could be defined by more than one category. 

The reviewers later met to discuss their coding and to reach agreement where there were 

discrepancies. For each report, reviewers were asked to identify such information as the key 

program challenge(s), key practices departments and agencies identified as remedies to the 

challenge(s), and the monetary implications of these challenges. Where IGs noted potential 

future savings or forfeited savings, reviewers recorded the amount.

To determine what actions have been taken to address the program challenges, we identified 

the actions taken by departments and agencies by reviewing the recommendations made in the 

reports mentioned above. Reviewers grouped these recommendations using the established 

themes for program management challenges. Additionally, we followed up by e-mail and 

telephone with each of the IGs issuing reports to determine the status of these 

recommendations. We coded the status in terms of “closed and implemented”, “closed and not 

implemented,” “closed, partially implemented” and “open.” We used semi-structured interviews 

with Department of Labor officials and others to obtain clarification on the status of some 

recommendations.

 

26We reviewed the Department of Labor’s 2010 equivalents for its performance and accountability report, the Agency 

Financial Report and its Annual Accountability Report.
Page 12 GAO-12-508R Federal Employees’ Compensation Act

We also utilized data from Labor’s claims management system to provide additional detail on 

the numbers of claimants on the FECA rolls. We assessed the reliability of these data by (1) 

electronically testing required data elements, (2) reviewing existing information about the data 

and the system that produced them, and (3) interviewing agency officials knowledgeable about 

the data. We determined that the data we reviewed were reliable for the purposes of this report.
Page 13 GAO-12-508R Federal Employees’ Compensation Act

Enclosure II: GAO Contacts and Staff Acknowledgments

GAO Contacts 

Andrew Sherrill at (202) 512-7215 or sherrilla@gao.gov and Phillip Herr at (202) 512-2384 or 

herrp@gao.gov. 

Staff Acknowledgments

In addition to the contact named above, key contributors to this report were Patrick DiBattista, 

Brandon Haller, Carla Craddock, Michelle Bracy, Tonnye Conner-White, Robert Heilman, David 

Forgosh, Elke Kolondinski, Jodi Munson Rodriguez, Erin Cohen, Melinda Cordero, Walter 

Vance, James Rebbe, James Bennett, and Kathleen van Gelder.

(131157)
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