United States General Accounting Office

GAO Report to the Chairman, Committee on

Veterans’ Affairs, House of

Representatives

February 1996 VETERANS’

PREFERENCE

Data on Employment

of Veterans

GAO/GGD-96-13

GAO United States

General Accounting Office

Washington, D.C. 20548

General Government Division

B-265702 

February 1, 1996

The Honorable Bob Stump

Chairman, Committee on Veterans’

 Affairs

House of Representatives

Dear Mr. Chairman:

Under federal law, agencies are to give preferential hiring consideration to

eligible veterans as a measure of national gratitude for their military

service. Agencies are also to give preference to veterans in retaining their

jobs during a reduction-in-force (RIF).

This report responds to your request for information on the veterans’

preference practices of executive branch agencies. As agreed with your

office, we are providing information on

• whether statistics indicate that the Office of Personnel Management (OPM)

and other federal agencies have given veterans hiring preference;

• how OPM has implemented its veterans’ preference oversight

responsibilities;

• whether the Merit Systems Protection Board’s (MSPB) authority over

veterans’ preference appeals was weakened by the Civil Service Reform

Act of 1978 (P.L. 95-454); and

• how RIFs have affected women and minorities when veterans’ preference

was applied.

Results in Brief Veterans represented a generally increasing share of the new hires made

by OPM in recent years. In fiscal year 1994, for example, over 18 percent of

OPM’s new hires had veterans’ preference, up from 6.6 percent in fiscal year

1990. The increased representation of veterans among new hires at OPM

was generally reflected governmentwide. Among all agencies, the

percentage of new hires with veterans’ preference increased from

12 percent in fiscal year 1990 to 14.8 percent in fiscal year 1994. OPM’s

policies encourage the employment and career enhancement of veterans.

OPM’s guidance explains the various ways veterans can be hired and details

the responsibilities of OPM’s veterans program coordinator.

In terms of OPM’s oversight of agencies’ implementation of veterans’

preference regulations, our prior work found that veterans’ preference

procedures were being properly applied in virtually all of the hiring

Page 1 GAO/GGD-96-13 Veterans’ Preference
B-265702 

instances we examined.1 We did not examine whether agencies were

correctly applying veterans’ preference during RIFs.

With regard to MSPB’s authority over veterans’ preference appeals, we

believe the current legal framework to protect veterans’ rights was not

weakened by the Civil Service Reform Act. While the act extended appeal

rights to other competitive service employees, veterans’ rights to appeal

RIFs and adverse personnel actions were not affected.

In our prior work on how women and minorities were affected during a RIF

at three Department of Defense (DOD) installations, we found that women

and minorities were disproportionately separated, in part because they

ranked lower than white males in one of three retention factors, including

veterans’ preference.2

Background To help reward veterans for their military service, the Veterans’ Preference

Act of 1944, as amended, requires that eligible veterans be given enhanced

consideration for federal jobs. This is done by adding either 5 or 10 points

to the passing examination scores of honorably discharged veterans

meeting certain military service requirements. The basic preference to

which applicants are entitled is the 5-point preference. The 10-point

preference is given to disabled veterans and Purple Heart recipients, as

well as to the eligible spouses, unmarried widows and widowers, and

mothers of disabled or deceased veterans.

Candidates are listed on civil service registers in order of their

examination ratings augmented by their preference points, except that

disabled veterans who have compensable service-connected disabilities of

10 percent or more automatically rise to the top of civil service registers

for nonprofessional, nonscientific positions below GS-9. Federal agencies

have discretionary authority to give noncompetitive appointments to any

veteran who has a service-connected disability of 30 percent or more.

Federal law also gives eligible veterans certain protections that help them

retain their jobs during a RIF. These protections are discussed in greater

detail in a later section of this report.

1

Federal Hiring: Does Veterans’ Preference Need Updating? (GAO/GGD-92-52, Mar. 20, 1992).

2

Federal Personnel: The EEO Implications of Reductions-In-Force (GAO/T-GGD-94-87, Feb. 1, 1994).

Page 2 GAO/GGD-96-13 Veterans’ Preference
B-265702 

Scope and

Methodology

Data on OPM’s veterans’ preference employment statistics were provided

by OPM’s Personnel Programs and Systems Division. Governmentwide data

on veteran employment was obtained from OPM’s Central Personnel Data

File. The file includes information on federal workers in most agencies,

the major exclusions being Members of Congress and employees of

Congress, the Judicial Branch, and the Postal Service. The time period

covered by both sets of data was fiscal years 1990 through 1994. We did

not verify the accuracy of the OPM data.

To obtain information on OPM’s oversight of veterans’ preference

regulations, we used our prior work that examined whether OPM and other

executive agencies were giving veterans the preference to which they were

entitled.3

 In producing this report, we reviewed 1,136 randomly selected

certificates (lists of eligible candidates) and 1,862 federal job applications

submitted by persons on those certificates. We determined whether the

applicants received appropriate preference points and certificate rankings

and whether they were hired. The applications included 342 from veterans

and 1,520 from nonveterans. OPM and other executive agencies prepared

the certificates between July 1990 and June 1991. To obtain information on

OPM’s current role in monitoring agencies’ implementation of veterans’

preference hiring procedures, we interviewed OPM’s Associate Director for

Employment.

To obtain information on MSPB’s authority over veterans’ preference

appeals, we analyzed applicable laws, regulations, and other pertinent

documents. We also interviewed an official from MSPB’s Office of Policy

and Evaluation.

To determine how RIFs affect women and minorities when veterans’

preference is applied, we used our earlier work that focused on RIFs at

DOD, the only federal agency to have significant RIFs in fiscal year 1991.4

For that analysis, we selected for review one location each from the Army,

Navy, and Air Force.

We performed our review from July 1995 through September 1995 in

accordance with generally accepted government auditing standards. We

obtained comments on a draft of our report from OPM and MSPB. These

comments and our evaluation are discussed in the Agency Comments

section.

3

GAO/GGD-92-52.

4

GAO/T-GGD-94-87.

Page 3 GAO/GGD-96-13 Veterans’ Preference
B-265702 

Employment Statistics

Show Veterans

Comprise an

Increasing Share of

New Hires at OPM

and Governmentwide,

but a Smaller Share of

the Federal Workforce

as a Whole

The percentage of new hires with veterans’ preference at OPM has generally

increased in recent years, even as the agency has scaled back its hiring

because of downsizing. As shown in figure 1, in fiscal year 1994,

18.4 percent of OPM’s new hires had veterans’ preference, compared with

6.6 percent in fiscal year 1990.

The proportional increase in veteran hires at OPM was generally reflected

governmentwide. Among all agencies, the percentage of new hires with

veterans’ preference (including dependents of veterans with veterans’

preference) increased overall from 12 percent in fiscal year 1990 to

14.8 percent in fiscal year 1994 (see fig. 1). According to an official from

OPM’s Employment Service, one reason for this increase could be that, as

the demand for new employees has diminished, agencies have not needed

to go as far down on employment registers as they have in the past.

Because candidates at the top of registers are more likely to have veterans’

preference, a larger proportion of these new hires would be veterans.

Another factor suggested by OPM is the popularity of the Veterans

Readjustment Appointment (VRA) authority, which allows agencies to

directly hire veterans.5

 In comparing OPM’s performance in hiring

preference eligibles with that of other agencies, the comparatively large

percentage of employees claiming preference hired by OPM in fiscal year

1994 is noteworthy because OPM has generally lagged behind other

agencies in previous years.

5

VRA is a special authority by which agencies, at their discretion, can appoint an eligible veteran

without competition. VRA employees are initially hired for a 2-year period, after which they are eligible

for a permanent appointment.

Page 4 GAO/GGD-96-13 Veterans’ Preference
B-265702 

Figure 1: Agencies Are Hiring

Proportionately More Candidates With

Veterans’ Preference

Percentage of total new hires with veterans’ preference

0

5.0

10.0

15.0

20.0

FY 1990 FY 1991 FY 1992 FY 1993 FY 1994

All agencies

Defense agencies

Non-Defense agencies

OPM

Note: Data includes dependents of veterans with veterans’ preference.

Source: OPM’s Central Personnel Data File.

Defense agencies, led by the Army and Navy, hired a higher percentage of

veterans with preference than did non-Defense agencies in fiscal years

1990 through 1994. In fiscal year 1994, for example, 20 percent of the

Army’s new hires and 21.4 percent of the Navy’s new hires had veterans’

preference. Among non-Defense agencies, the Department of Veterans

Affairs had the largest proportion of veterans in its new hires. In fiscal year

1994, nearly 18 percent of its new hires had veterans’ preference.

Page 5 GAO/GGD-96-13 Veterans’ Preference
B-265702 

The Proportion of Veterans

in the OPM Workforce Has

Increased Slightly but

Remains Lower Than in

Other Agencies

Over the last several years, OPM has substantially reduced the size of it

workforce, going from 7,023 employees at the end of fiscal year 1992 to

5,618 employees at the end of fiscal year 1994. During this period, veterans

with preference, as a share of all OPM employees, slightly increased their

representation. At the end of fiscal year 1992, employees with veterans’

preference made up 17 percent of OPM’s workforce compared with about

18 percent at the end of fiscal year 1994. While veterans with preference

now comprise a larger share of OPM’s workforce than in previous years,

their representation is still lower than in many other agencies.

Governmentwide, 27 percent of the workforce had veterans’ preference at

the end of fiscal year 1994.

Veterans and Nonveterans

Were Equally Distributed

Across Lower and Middle

Grade Levels at OPM

As shown in figure 2, no pattern existed with regard to the distribution of

veterans and nonveterans across grade levels (GS and GS-equivalent) and

pay plan (general schedule or wage grade) at OPM. Both groups were

almost equally concentrated at grade levels 1 to 4 and 9 to 12. At the same

time, there were proportionately more veterans at the higher grade

levels—GS-13 to Senior Executive Service (SES)—compared with

nonveterans, and a larger percentage of veterans than nonveterans were

blue collar employees.

Page 6 GAO/GGD-96-13 Veterans’ Preference
B-265702 

Figure 2: Distribution of OPM

Employees Across Grade Levels and

Pay Plans by Veterans’ Preference

Status, Fiscal Year 1994

Percentage of employees

0

5.0

10.0

15.0

20.0

25.0

30.0

GS 1 - 4 GS 5 - 8 GS 9 -

12

GS 13 -

14

GS 15 SES/EX Blue

collar

Other

Grade level/pay plan

OPM employees with veterans’ preference

OPM employees without veterans’ preference

Note: Percentages are based on 1,035 employees with veterans’ preference and 4,583

employees without veterans’ preference.

Source: OPM.

With regard to the type of preference claimed by veterans at OPM, as shown

in figure 3, of the 1,035 OPM employees that had veterans’ preference at the

end of fiscal year 1994, the vast majority claimed a 5-point preference. This

is the basic veterans’ preference to which eligible employees are entitled.

Page 7 GAO/GGD-96-13 Veterans’ Preference
B-265702 

Figure 3: Types of Veterans’

Preference Claimed by OPM

Employees, Fiscal Year 1994

80.6% • 5-point preference

•

2.5%

10-point (disability)

•

7.0%

10-point (less than 30%

compensable)

•

6.0%

10-point (30% or more

compensable)

•

4.0%

10-point (other)

Note 1: Percentages are based on 1,035 OPM employees with veterans’ preference. Numbers

may not add due to rounding.

Note 2: 10-point (other) preference is that granted to the widow/widower or mother of a deceased

veteran or to the spouse or mother of a disabled veteran.

Source: OPM.

OPM’s Policies Encourage

the Hiring and Career

Development of Veterans

OPM’s policies on its internal employment of veterans are described in its

Recruitment and Special Programs Handbook. The chapter on

employment programs for veterans, for example, lists the various

mechanisms and legal authorities through which veterans may be hired.

OPM also has a veterans program coordinator who is responsible for

Page 8 GAO/GGD-96-13 Veterans’ Preference
B-265702 

recruiting, placing, counseling, and helping to develop veterans’ careers at

OPM. Because of the sporadic need for the program coordinator’s services,

the position is a collateral responsibility of an employee in OPM’s

Employment Service.

To help veterans find employment at OPM, the agency publishes a pamphlet

that describes its general career positions, including how candidates can

qualify for either the VRA authority or the 30-percent-disabled veterans

program. It also lists the forms applicants would need to complete in order

to be considered for the various veterans programs.

The Proportion of Veterans

in the Federal Workforce Is

Declining

As noted earlier, preference-eligible veterans comprised 27 percent of the

federal workforce as of September 30, 1994. This continued a downward

trend in veteran employment that had been ongoing for a number of years.

According to OPM data, preference-eligible veterans made up about

39 percent of the federal workforce at the end of fiscal year 1983, and

34 percent of the workforce at the end of fiscal year 1987.

A likely reason for the decline is that preference-eligible veterans are

leaving the workforce in greater numbers than they are entering it, as a

result of the aging of the veteran workforce and the shrinking of the pool

of preference eligibles. For example, while veterans with preference

accounted for 14.8 percent of all hires in fiscal year 1994, they accounted

for nearly 49 percent of all retirements.

Throughout the 1980s, much of the decline in the number of veterans in

the federal workforce could be attributed largely to the shrinking pool of

preference eligibles. While Operation Desert Storm added to this pool, it is

not known how many of these veterans are interested in applying for

federal employment. Thus, whether the downward trend in veteran

employment will be reversed in future years is unclear.

How OPM Has

Implemented Its

Veterans’ Preference

Oversight

Responsibilities

To ensure that eligible veterans receive the preference due them, federal

law requires that applicants for many federal positions be hired according

to specific scoring, ranking, and selection procedures. These procedures

are to be carried out either by OPM or by agencies when OPM delegates

hiring authority to them.

According to OPM, as part of its oversight of veterans’ preference, its

various offices

Page 9 GAO/GGD-96-13 Veterans’ Preference
B-265702 

• routinely review returned certificates to determine whether agencies

properly gave veterans preference in hiring,

• periodically audit agency-delegated examining units to assess whether

they are applying veterans’ preference properly,

• decide whether to allow agencies to pass over disabled veterans or to

object to the qualifications of a disabled veteran for medical reasons,

• address issues on veterans’ reemployment rights, and

• respond to agency and employee inquiries on RIF policies and procedures.

OPM’s Office of Merit Systems Oversight and Effectiveness has oversight

responsibility for veteran employment programs and authorized

demonstration projects that test alternative veterans’ preference hiring

procedures. According to OPM, the oversight—done in response to specific

complaints—is performed by OPM’s service centers located in various cities

across the country. OPM maintains that very few violations are found

because hiring officials are good at seeing that veterans get the points and

other preference to which they are entitled.

While we did not assess OPM’s oversight practices for this assignment, in

our March 1992 review of veterans’ preference hiring procedures at OPM

and other executive agencies, we found that veterans received the

preference points to which they were entitled in nearly all cases. Of the

1,862 applications we examined, veterans’ preference points were properly

awarded in all but 6 instances. Moreover, veterans were properly placed

on all but 1 of the 1,136 hiring certificates we reviewed. However, we also

found that, at the time of our review, agency managers had returned a

greater percentage of certificates without making a selection when a

veteran appeared at the top (71 percent) than when a nonveteran did

(51 percent).6

 As a result, we recommended, and OPM implemented, a

tracking system to identify and correct problems related to veterans’

preference and the nonuse of certificates.

OPM does not believe that there is a problem with agencies’ implementation

of veterans’ hiring procedures at this time. OPM meets quarterly with

representatives of veterans service organizations to discuss veteran

employment issues. According to an official from OPM’s Employment

Service, the lack of complaints from veterans at these meetings indicates

to OPM that agencies are properly following veterans’ preference hiring

procedures.

6

GAO/GGD-92-52, pp. 27-28.

Page 10 GAO/GGD-96-13 Veterans’ Preference
B-265702 

The Civil Service

Reform Act

Authorized MSPB to

Hear Certain Veterans’

Preference Appeals

Based on our review of pertinent laws and regulations and interviews with

an official from MSPB’s Office of Policy and Evaluation, we believe that the

Civil Service Reform Act did not weaken MSPB’s authority to protect

veterans’ employment rights. Veterans are still entitled to appeal certain

personnel actions to MSPB, and in some cases they are afforded special

rights of redress that nonveterans lack.

Sections 12 and 14 of the Veterans Preference Act of 1944 gave veterans

certain procedural and appeal protections for RIF actions, as well as for

adverse personnel actions such as removals, suspensions of more than 14

days, reductions in grade or pay, and furloughs of 30 days or less. Under

the act, veterans were to appeal their cases to the U.S. Civil Service

Commission. Later, these protections were extended to nonveteran

competitive service employees by executive order.

The Civil Service Reform Act of 1978 created MSPB, which was established

to hear appeals previously taken to the Civil Service Commission. The act

also granted all competitive service employees, not just veterans, a

statutory right to appeal adverse personnel actions to MSPB. Thus, while

the act created some new appeal rights that did not previously exist, it did

not change the existing actions that could be appealed or the kinds of

employees who could file those cases.

Moreover, in some instances, preference-eligible veterans have appeal

rights not granted to others. For example, at certain agencies, such as the

Postal Service, the Postal Rate Commission, the Panama Canal

Commission, and the Tennessee Valley Authority, preference-eligible

veterans can appeal RIFs and adverse actions to MSPB while other

employees of these agencies generally cannot. And, while both veterans

and nonveterans may appeal RIF procedures,7

 under RIF regulations,

employees with veterans’ preference have significantly greater retention

rights. As a result, they have greater substantive rights in their appeals to

MSPB.

While MSPB has authority over certain types of appeals by

preference-eligible veterans, the extent to which veterans actually appeal

cases to MSPB is unclear. MSPB does not keep data on whether appellants

were preference eligible.

7

RIF procedures that can be appealed include, for example, agency failure to make a reasonable offer

of assignment, failure to properly apply veterans’ preference, and improper determination of an

employee’s tenure group or length of service.

Page 11 GAO/GGD-96-13 Veterans’ Preference
B-265702 

The Effect on Women

and Minorities When

Veterans’ Preference

Is Applied During a

RIF

Federal law gives eligible veterans certain protections that help them

retain their jobs during a RIF. As set forth in 5 U.S.C 3501-3504, whether an

employee is retained depends on the following factors (listed in order of

priority): (1)tenure (i.e. career, career conditional, or temporary);

(2)veterans’ preference; and (3)seniority (adjusted for performance

ratings). Using these factors, agencies are to rank each employee where

jobs are to be eliminated and record this ranking in a retention register.

Within each tenure group, disabled veterans are listed first, followed by

veterans. Nonveterans are ranked last. Employees are separated starting at

the bottom of a retention register. As positions are abolished, incumbents

of those positions may have assignment rights to other positions

depending on their retention status and qualifications.

According to OPM, while agencies may consider the impact RIFs may have

on women and minorities, employees in these categories are not afforded

the statutory protections given to veterans during a RIF. Thus, unless the

women and minorities are veterans, they may be separated at a rate that is

unintentionally disproportionate to their numbers.

In our February 1994 testimony on the demographic impacts of RIFs that

occurred at three locations in 1991—Alameda Naval Aviation Depot, Kelly

Air Force Base, and Watervliet Army Arsenal—we found that, at all three

sites, minorities were separated at a rate disproportionate to their

numbers, and that women were separated disproportionate to their

numbers at Watervliet and Alameda.8

 In some cases, these

disproportionate separations occurred because women and minorities

ranked lower than white males in one of the three retention factors,

including veterans’ preference. In other cases, the disproportionate

separations occurred because minorities occupied a large proportion of

the positions abolished and the employees had no assignment rights to

other positions.

For example, at Alameda, although 73 of 147 (50 percent) of wage grade 10

(WG-10) machinists were minorities, 9 of 13 (69 percent) of those

separated were minorities. Similarly, at Watervliet, although only 15 of the

182 (8 percent) WG-8 machine tool operators were women, 13 of 56

(23 percent) of those separated were women. Overall, minorities at

Alameda had slightly lower career tenure status (87 percent compared to

88 percent for nonminorities); 39 percent had veterans’ preference status

compared to 46 percent of nonminorities; and 42 percent had above

8

GAO/T-GGD-94-87, p. 2.

Page 12 GAO/GGD-96-13 Veterans’ Preference
B-265702 

average performance-adjusted seniority compared to 52 percent of

nonminorities.

A variation among the groups in even one of the three retention factors

could markedly affect separation rates. For example, the 13 women at

Watervliet Army Arsenal generally were separated because they lacked

veterans’ preference. On the other hand, tenure was the most significant

factor affecting the separations of the nine minority employees at

Alameda.

Agency Comments

and Our Evaluation

We requested comments on a draft of this report from the Chairman of

MSPB and the Director of OPM. On October 6, 1995, MSPB’s Deputy Director

of Policy and Evaluation provided us with oral comments. MSPB agreed

with our findings but suggested some minor changes to help clarify our

discussion of RIF procedures and who is eligible to appeal them. On

October 11, 1995, we received oral comments from the Associate Director,

Employment Service, OPM. OPM agreed with our findings but suggested that

we attach several additional oversight activities to those already cited in

our report in order to make our discussion of OPM’s oversight of veterans’

preference more complete. We found both agencies’ comments to be

reasonable and have incorporated them in our report where appropriate.

Copies of this report are being sent to the Ranking Minority Member of the

House Committee on Veterans’ Affairs, as well as the Chairmen and

Ranking Minority Members of the Subcommittee on Civil Service, House

Committee on Government Reform and Oversight; the Subcommittee on

Post Office and Civil Service, Senate Committee on Governmental Affairs;

and the Senate Committee on Veterans’ Affairs. Upon request, copies will

Page 13 GAO/GGD-96-13 Veterans’ Preference
B-265702 

be made available to others interested in veterans’ preference and

employment issues. The major contributors to this report are listed in the

appendix. Please call me on (202) 512-3511 if you have any questions

concerning this report.

Sincerely yours,

Timothy P. Bowling

Associate Director

Federal Management and

 Workforce Issues

Page 14 GAO/GGD-96-13 Veterans’ Preference
Page 15 GAO/GGD-96-13 Veterans’ Preference
Contents

Letter 1

Appendix 

Major Contributors to

This Report

18

Figures Figure 1: Agencies Are Hiring Proportionately More Candidates

With Veterans’ Preference

5

Figure 2: Distribution of OPM Employees Across Grade Levels

and Pay Plans by Veterans’ Preference Status, Fiscal Year 1994

7

Figure 3: Types of Veterans’ Preference Claimed by OPM

Employees, Fiscal Year 1994

8

Abbreviations

DOD Department of Defense

MSPB Merit Systems Protection Board

OPM Office of Personnel Management

RIF reduction-in-force

SES Senior Executive Service

VRA Veterans Readjustment Appointment

Page 16 GAO/GGD-96-13 Veterans’ Preference
Page 17 GAO/GGD-96-13 Veterans’ Preference
Appendix 

Major Contributors to This Report

General Government

Division, Washington,

D.C.

Steven J. Wozny, Assistant Director,

 Federal Management and Workforce Issues

Robert Goldenkoff, Evaluator-in-Charge

Office of the General

Counsel

Alan Belkin, Assistant General Counsel

Robert Heitzman, Senior Attorney

Denver Regional

Office

Thomas Kingham, Senior Evaluator

(966677) Page 18 GAO/GGD-96-13 Veterans’ Preference
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