Report to the Chairman, Committee on

Ways and Means, House of

Representatives

United States General Accounting Office

GAO

September 2001 PERSONNEL

PRACTICES

Circumstances

Surrounding U.S.

Customs Service’s

Use of Schedule A

Appointment

Authority

GAO-01-1103
Page 1 GAO-01-1103 Customs’ Schedule A Authority

September 13, 2001

The Honorable William M. Thomas

Chairman, Committee on Ways and Means

House of Representatives

Dear Mr. Chairman:

The Office of Personnel Management (OPM) approved a request of the

Department of the Treasury on August 21, 1998, to amend U.S. Customs

Service’s existing Schedule A appointment authority for 300 criminal

investigator positions, to include 10 additional special law enforcement

positions. While the majority of candidates for federal employment must

compete for jobs under the merit system by applying through the

competitive civil-service examination process, Schedule A appointees do

not. Schedule A authority allows an agency to noncompetitively appoint

individuals to positions in the excepted service for which it is not

practicable to apply the qualification standards and requirements

established for the competitive service. The use of Schedule A

appointments is an important tool for agencies to use as they try to recruit

and retain the best employees. While GAO has encouraged agencies to use

such tools and other flexibilities in managing their human capital, as with

any tool, agencies need to avoid situations and appearances that could

compromise the credibility and integrity of the merit system.

On the basis of your request and discussions with your office, we agreed to

report on

• the nature of and reasons for the request for the U.S. Customs Service’s

Schedule A appointment authority and OPM’s approval of the request;

• the number, types, and circumstances of appointments made under

Customs’ Schedule A authority, and any subsequent personnel actions

related to the appointments, including whether those actions complied

with merit system principles or OPM policies; and

• OPM’s oversight of Customs’ Schedule A authority.

The Treasury Department, on behalf of the Customs Service, requested

OPM approval for Schedule A appointment authority on August 6, 1998, for

10 positions for oversight policy and direction of sensitive law

enforcement activities. Treasury’s request stated that “due to the sensitive

nature of the operations, these positions require a unique blend of special

United States General Accounting Office

Washington, DC 20548

Results in Brief
Page 2 GAO-01-1103 Customs’ Schedule A Authority

characteristics, skills and abilities that cannot be announced to the general

public, and for which it is not practicable to examine.” Treasury’s request

did not identify the specific positions the authority would be used for.

OPM approved Treasury’s request on August 21, 1998. According to OPM

officials, no detailed criteria are applied when OPM considers such

requests. Rather, OPM approved the request based primarily on Treasury’s

assertion that the positions to be filled were sensitive in nature, involved

law enforcement activities, and were impracticable to advertise and

examine for. OPM also found that the request was for positions similar to

ones at Treasury that OPM had approved previously.

In using the Schedule A authority between September 1998 and January

2001, Customs made nine appointments to various positions—such as law

enforcement and public affairs specialists and a strategic trade adviser.

The circumstances surrounding five of the nine appointments can in our

opinion, give the appearance of inconsistency in the application of the

Schedule A appointment authority or possible favoritism toward former

political employees. The remaining four appointments did not raise any

similar issues. The following describes the circumstances surrounding the

five appointments.

• While the criteria used to justify all 10 positions were that their duties and

responsibilities were impracticable to advertise and competitively

examine (applicants for their qualifications), for three of the Schedule A

appointments, identical positions were ultimately advertised and

examined in the competitive service. Two individuals, after having spent

over a year in Schedule A positions, were selected for identical

competitive positions. (The third appointee was selected for a different

competitive service position.) In discussing this issue with Customs’

officials, they stated that when it was initially decided that the subject

positions were needed, no such positions existed at Customs. Accordingly,

to facilitate hiring, given the unique combination of skills required for the

positions, they used the Schedule A authority. Officials also stated that

subsequently it became apparent that the positions would be needed

permanently, and they also concluded that such positions could be

advertised and competed. While not disagreeing that the positions could

have been advertised competitively originally, Customs’ officials stated

that when they initially used the Schedule A authority, they believed it was

appropriate and that they were acting in good faith in attempting to meet

their goal of hiring needed expertise as quickly as possible. Also, while the

circumstances surrounding the appointments give the appearance of

providing an unfair advantage to the two appointees—allowing them to

serve in identical Schedule A positions for over 1 year—we could not
Page 3 GAO-01-1103 Customs’ Schedule A Authority

determine that they would not ultimately have been selected for the

competitive service positions based on their education and work

experiences prior to coming to Customs. After the conversions, these

three original Schedule A positions were eliminated by Customs and no

longer exist, and Customs has stated that it has no plans to convert any of

the remaining six (of the nine) Schedule A positions or any future

positions created under the authority to competitive service positions.

• Two other Schedule A appointments were made to noncareer appointees

in Customs’ Senior Executive Service (SES) several days before the

Presidential transition. The timing of such actions can give the appearance

of political favoritism. Treasury subsequently questioned the appearance

of political favoritism in these appointments and asked OPM whether the

appointments complied with the Schedule A authority. OPM determined

that they did comply.

The conversions of the three Schedule A employees—who had been in

Schedule A positions identical to two newly created competitive service

positions—to competitive service positions complied with merit system

principles and the limited-term SES appointment of another Schedule A

appointee complied with OPM guidance.

OPM performs periodic oversight reviews of agencies’ use of certain

appointment authorities, including Schedule A and other excepted

appointments, every 4 or 5 years. The most recent review of Customs was

for appointments made during 1999. However, the judgmental sample of

appointments selected and reviewed by OPM did not include the two

Schedule A appointments that had been made under this authority at that

time. These appointees were in the law enforcement and public affairs

specialist positions that were subsequently converted to competitive

service positions. OPM also conducts occasional surveys that require

agencies to justify the continuing need for each of its appointment

authorities. In the case of Customs, the most recent survey was in 1998 in

which Treasury supported the continuing need for Customs’ single-agency

authority for criminal investigators, prior to OPM’s approval of Customs’

authority for the 10 positions. The only OPM review of appointments made

under Customs’ specific authority for the 10 policy-related positions was

that made at Treasury’s request in February 2001 concerning the 2

appointments of the noncareer SES employees.
Page 4 GAO-01-1103 Customs’ Schedule A Authority

A number of human capital management tools and flexibilities are

available to assist agencies in their recruitment and hiring processes. The

competitive service and excepted service hiring approaches provide

different and complementary ways to acquire employees in the general

schedule (GS) grades of GS-15 and below. In addition, agencies may also

appoint individuals to SES positions through a competitive process or

make noncareer SES appointments without competition. While

recognizing the need for flexibility in hiring employees, the federal

government also seeks to assure that appointments are based on merit.

The Civil Service Reform Act of 1978 (P.L. 95-454) set out a number of

merit system principles and required that federal personnel management

be implemented in a manner consistent with those principles. The

principle pertaining to appointments states that “[r]ecruitment should be

from qualified individuals from appropriate sources in an endeavor to

achieve a work force from all segments of society, and selection and

advancement should be determined solely on the basis of relative ability,

knowledge, and skills, after fair and open competition which assures that

all receive equal opportunity.”

1

OPM is responsible for implementing the Civil Service Reform Act and

other personnel-related laws and for developing regulations to ensure that

the intent of merit system principles is implemented.2

 OPM delegated

examining authority to Treasury—on behalf of Customs—on December

20, 1995. The delegated examining authority requires Customs to conduct

competitive examinations that comply with merit system laws and

regulations as interpreted by OPM’s Delegated Examining Operations

Handbook.

The majority of the federal civilian workforce obtained their positions by

competing against others through the competitive service examination

process. The examination process is one of the processes intended to

assure merit system principles are complied with and includes notifying

the public that the government will accept applications for a job, rating

applications against minimum qualification standards, and assessing

 1

5 U.S.C. 2301 (b)(1).

2

5 U.S.C. 1104.

Background
Page 5 GAO-01-1103 Customs’ Schedule A Authority

applicants’ relative competencies or knowledge, skills, and abilities (KSA)3

against job-related criteria to identify the most qualified applicants.

The law provides for necessary exceptions to the competitive service

process, however, when conditions of good administration warrant.4

 OPM

has been delegated broad authority for excepting positions from the

competitive service when it determines that competitive examination for

those positions is impracticable. “Impracticable to examine” means that it

is impractical or unreasonable to apply the qualification standards and

procedural and other requirements established for the competitive service.

If OPM decides a position should be in the excepted service, OPM

authorizes the positions to be filled by excepted appointment under

Schedules A, B, or C. The Schedule A authority is for positions in the

excepted service, other than those of a confidential or policy-determining

character, for which it is impracticable to hold a competitive examination

and the appointments are not subject to the basic qualification standards

established by OPM.5

While there are many types of Schedule A positions excepted by OPM

governmentwide, such as chaplains, attorneys, and certain positions for

which a critical hiring need exists, agencies may also petition OPM to

establish Schedule A appointing authority specifically applicable to their

agency. OPM decides on such single-agency requests on a case-by-case

basis. Treasury’s Schedule A authority for Customs Service positions has

been approved and amended several times over a period of almost 35

years. For example, in 1963, OPM approved Treasury’s request for singleagency Schedule A appointing authority for 25 criminal investigator

positions at Customs.6

 In 1991 and 1997, OPM amended Customs’ Schedule

 3

KSAs are the knowledge, skills, and abilities required to perform the duties and

responsibilities of a specific position.

4

5 U.S.C. 3302 states that the President may provide for the necessary exceptions of

positions from the competitive service.

5

Schedule B is also for positions other than those of a confidential or policy-determining

character for which it is impracticable to hold a competitive examination. However, unlike

Schedule A positions, appointments under Schedule B authority are subject to the basic

qualification standards established by OPM for that occupation and grade level. In contrast,

Schedule C positions are positions that are policy determining or which involve a close and

confidential working relationship with the head of an agency or other key appointed

official.

6

Schedule A authority: 5 C.F.R. 213.3105 (b)(6) (1964).
Page 6 GAO-01-1103 Customs’ Schedule A Authority

A authority by increasing the number of criminal investigator positions at

Customs to 200 and 300 positions, respectively.

Individuals appointed to Schedule A positions may be converted to

publicly announced competitive service positions by competing for those

positions. In addition, employees in certain types of Schedule A

positions—such as positions filled by mentally retarded and severely

physically handicapped persons—may be converted without competition

to competitive service positions upon the completion of 2 years of

satisfactory service. Employees in Schedule A positions may also compete

for career appointments to SES positions, or be given noncareer or

limited-term SES appointments noncompetitively. Depending on the

position and the status of the individual, the noncompetitve appointments

may require OPM authorization and approval from the White House’s

Office of Presidential Personnel. The agency appointing official

determines whether an individual meets the qualification requirements of

the SES position.

Treasury requested, on August 6, 1998, that OPM amend Customs’

Schedule A authority to include 10 positions for oversight policy and

direction of sensitive law enforcement activities. Treasury’s request

letter—on behalf of Customs—explained that Customs had almost

reached its limit of 300 criminal investigator positions previously

authorized by its Schedule A authority. Treasury requested an amendment

to the authority to authorize Customs to fill an additional 10 positions and

to broaden the authority so that the positions included providing oversight

and direction to sensitive law enforcement projects and coordinating such

initiatives with other federal agencies at the national level, including

undercover and intelligence work. The justification for including the

additional 10 positions under a Schedule A authority was that “due to the

sensitive nature of the operations, these positions require a unique blend

of special characteristics, skills and abilities that cannot be announced to

the general public, and for which it is not practicable to examine.”

OPM approved the authority for the 10 positions on August 21, 1998. In

making the approval, OPM officials said that they had evaluated Treasury’s

request and had based their decision on (1) Treasury’s assessment of

whether the positions were impracticable to examine for and (2) prior

Schedule A approvals that OPM had granted for circumstances similar to

Treasury’s newly requested positions. Neither statute nor regulations

define detailed criteria for determining which positions are impracticable

to examine for. OPM officials told us they use their knowledge of the

Treasury Requested

and OPM Approved

Customs’ Authority

Based on

Impracticability to

Examine
Page 7 GAO-01-1103 Customs’ Schedule A Authority

duties and responsibilities of the positions and the examination process to

make a judgment as to which positions are impracticable to examine for.

The OPM official who reviewed the request and recommended its approval

said that her determination that it was impracticable to examine for such

positions was based primarily on Customs’ assertion that the positions

were sensitive in nature and involved law enforcement activities. In

addition, an OPM official said that the positions, as generally described in

the request, were similar to law enforcement type positions that OPM had

approved in Treasury’s Office of the Under Secretary for Enforcement.

In amending the Schedule A authority, OPM did not restrict its use to any

specific job or occupational series. OPM said that granting general

authority—without specific positions or occupational series—is a

standard OPM practice. For example, OPM approved Schedule A authority

at Treasury for no more than 20 positions supplementing permanent staff

studying international financial, economic, trade, and energy policies and

programs, with employment not to exceed 4 years.7

Customs appointed nine individuals to Schedule A positions using the

amended authority granted by OPM between the time of OPM’s approval

on August 21, 1998, and the most recent appointment on January 14, 2001.

These appointments were two identical law enforcement specialists, a

public affairs specialist, a law enforcement appropriations officer, a

strategic trade adviser, a special assistant in the Office of Internal Affairs,

a program manager for air interdiction, a deputy executive director of

air/marine interdiction, and a senior adviser on various aspects of

oversight policy and direction of law enforcement activities. Customs can

currently create 4 new Schedule A positions under the authority for the 10

positions because 1 position was not filled and the positions—of the 3

appointees that subsequently converted to competitive service positions—

were terminated and no longer exist.

Although the circumstances surrounding the initial appointments of six

individuals did not appear inconsistent with the authority, events

subsequent to three appointments were apparently inconsistent with the

justification Treasury used in first requesting the authority and may have

provided two of the three appointees with an unfair competitive

advantage. In addition, while the six initial Schedule A appointments did

 7

Schedule A authority: 5 C.F.R. 213.3105 (c)(1)(f) (1975).

Circumstances of

Some Appointments

Give the Appearance

of Inconsistent

Application of the

Authority or Political

Favoritism
Page 8 GAO-01-1103 Customs’ Schedule A Authority

not appear inconsistent with the authority, the timing of two of the six

appointments could give the appearance of political favoritism.

The circumstances resulting in two Schedule A appointees eventually

being hired into identical competitive service positions appear to have

been inconsistent with the justification used in the original request for the

Schedule A authority. The appointees—a law enforcement specialist and a

public affairs specialist—were initially placed in Schedule A positions that

Treasury’s request to OPM asserted could not be announced to the public

and were not practicable to examine for. After the appointees performed

the duties and responsibilities of these positions for over a year, Customs

created identical competitive service positions, advertised the positions,

examined applicants, and filled the positions with the two Schedule A

appointees. Customs’ ability to ultimately hold a competition for these

positions appears to have conflicted with Customs’ original justification

when requesting the Schedule A authority. Further, the appointees may

have gained an unfair competitive advantage while serving in the Schedule

A positions.

Customs’ officials stated that when it was decided that the law

enforcement and public affairs specialist positions were needed, no such

positions existed at Customs. Accordingly, to facilitate hiring, given the

unique combination of skills required for the positions, they believed that

using the Schedule A authority was appropriate and the best mechanism.

About 13 months after appointing one of the law enforcement specialists

and about 19 months after appointing the public affairs specialist, Customs

determined that these positions should be established as competitive

service positions identical to their former Schedule A positions. Customs

officials justified competitively recruiting for the law enforcement position

because the former Commissioner had determined that there was a

permanent need for the position to improve Customs’ efforts in combating

various types of crimes. Similarly, the public affairs position was created

in the competitive service because the Assistant Commissioner for Public

Affairs determined there was a permanent need for the position (1) to

establish and maintain effective working relationships with top officials of

other federal, state, and local agencies and members of the media and

(2) to oversee Customs’ antidrug enforcement public affairs program.

While not disagreeing that the positions could have been advertised

competitively originally, Customs officials stated they acted in good faith

in initially making the appointments under the Schedule A authority to

meet their goal of hiring needed expertise as quickly as possible.

Two Appointments Appear

to Give Unfair Competitive

Advantage
Page 9 GAO-01-1103 Customs’ Schedule A Authority

The plans that Customs ultimately developed for examining the applicants

for each of the two competitive positions contained criteria or standards

for measuring the relative qualifications of the applicants, including the

KSAs considered essential for successful or enhanced performance of the

position’s duties and responsibilities. For example, in the law enforcement

specialist plan, one KSA on which applicants were evaluated was

“knowledge of federal laws, regulations, and procedures and, specifically,

criminal laws enforced by Customs.”

Customs advertised the law enforcement specialist and public affairs

specialist positions to the public on February 4 and August 14, 2000,

respectively. Customs officials said that both positions were announced to

the public to attract and retain the most highly qualified candidates. The

selection processes for both positions were completed in about 2 months,

and the law enforcement and public affairs incumbents—who had

originally been hired as Schedule A appointees—were appointed on April

23, 2000, and October 8, 2000, respectively. Although the circumstances

suggest that the two appointees may have received an unfair competitive

advantage by serving in positions with the same duties for more than a

year prior to the competitive positions being announced publicly, we could

not determine that they would not ultimately have been selected for the

competitive service positions based on their education and work

experiences prior to coming to Customs.

Customs’ officials acknowledged that the duties and responsibilities of the

Schedule A law enforcement and public affairs specialist positions, and

the KSAs needed to perform those positions, had not changed so as to

provide a basis for Customs to announce the positions to the public and

examine the applicants. Rather, Customs’ Director of Executive Services

Staffing said that the use of the Schedule A appointment authority for the

law enforcement specialist and public affairs specialist positions originally

was appropriate because, in addition to the unique combination of KSAs

required, there was an urgent need to fill such positions in an expeditious

manner. However, neither Treasury’s request for the appointment

authority nor OPM’s approval of the authority cited urgency as a reason.

Furthermore, OPM officials stated that urgency was not a factor they had

considered in granting the approval. While the first appointment was made

within 1 month of the authority’s being granted, the next two

appointments were not made until January 1999—about 5 months after the

authorization was granted.

The three original Schedule A positions no longer exist at Customs, and

Customs has stated that it has no plans to convert any of the remaining six
Page 10 GAO-01-1103 Customs’ Schedule A Authority

positions or any future positions created under the authority to the

competitive service.

Two other Customs’ appointments were questioned at the department

level. Treasury officials told us they were concerned about whether the

positions complied with Schedule A authority and whether the timing of

the appointments of two former noncareer SES appointees—just before

the new Administration took office—gave the appearance of political

favoritism. While appointments of noncareer individuals to permanent

positions late in an Administration do not violate merit system principles,

they could give the appearance of political favoritism. The effect of these

appointments was to move two employees from noncareer SES

appointments—from which incumbents are usually asked to resign upon

the advent of a new Administration—to Schedule A appointments in

positions which have some similar duties and indefinite tenure. Customs’

officials stated that the two employees would not have appeal rights until

they have served 2 years under their current Schedule A appointments,

which will not occur until January 2003.8

Treasury’s Deputy Assistant Secretary for Human Resources said that she

was contacted on two occasions in January 2001 by Customs’ Assistant

Commissioner for Human Resources regarding the pending appointments

of two noncareer SES employees to the Schedule A positions of law

enforcement appropriations officer and strategic trade adviser. As a result

of these discussions, the Deputy Assistant Secretary said that she was

concerned about whether the appointments would “withstand the scrutiny

inherent in the procedures in place for the review of conversions of

political employees,” given that the former positions were political

appointments and a new Administration would be taking office on January

20, 2001. Customs’ officials said they believed the appointments—made on

January 14, 2001—were in full conformance with civil service laws, rules,

and regulations.

The newly created Schedule A positions included some similar—but not

identical—duties to those of the SES positions of the political, noncareer

appointees. For example, the law enforcement appropriations officer’s

responsibilities, which included establishing and maintaining effective

working relationships with congressional staff, were similar but not

 8

5 C.F.R. 432.102 and 432.106 (a)(4) and 5 C.F.R. 752.401 (c)(5).

Two Appointments Raised

Treasury’s Concern About

Appearance of Favoritism
Page 11 GAO-01-1103 Customs’ Schedule A Authority

identical to responsibilities of the appointee’s former SES position to

maintain contact with congressional staff whose actions have a direct

bearing on Customs’ programs and policies. Similarly, the responsibilities

of the strategic trade adviser’s Schedule A position included advising the

Assistant Commissioner and other Customs’ executives regarding trade

enforcement strategies and programs, while the responsibilities of the

former SES position included providing executive-level advice and counsel

in planning long-range regulatory programs.

In early February 2001, the Deputy Assistant Secretary expressed her

concerns to the Associate Director of OPM’s Employment Service about

whether the appointments complied with the Schedule A authority and

whether the timing of the appointments could give the appearance of

political favoritism. Subsequently, the Deputy Assistant Secretary referred

the appointments to OPM and asked OPM to determine whether the

appointments were an appropriate use of the authority. One month later,

on March 12, 2001, OPM informed the Treasury that both appointments

were within the scope of the authority. OPM officials said they based their

determination on justifications provided by Customs that described

several special skills and abilities required for each position that were

impracticable to examine and that OPM did not consider the political

nature of the employees’ former positions or the appointments.

Notwithstanding the issues discussed above, the conversions of the three

Schedule A employees—who had been in Schedule A positions identical to

two newly created competitive service positions—to competitive service

positions complied with merit system principles and the appointment of

another Schedule A appointee to a limited-term SES position complied

with OPM guidance. Two of the appointees were converted to positions—

a public affairs specialist and a law enforcement specialist—with identical

duties and responsibilities as those they had filled under the Schedule A

authority. The third appointee—who also had previously been a law

enforcement specialist—converted to a different position, chief of staff.

OPM regulations do not address the conversion of excepted service

appointees to the identical positions in the competitive service if

conducted in compliance with merit system principles.

Records in Customs’ merit-staffing files and other agency documents

indicated that merit-staffing procedures had been followed and the

principal requirements had been met for each of the three competitive

selections. For example, each of the job announcements for the three

positions was open for 5 business days—meeting OPM’s minimum

Conversions of

Appointees Met Merit

System Principles and

OPM Policies
Page 12 GAO-01-1103 Customs’ Schedule A Authority

requirement for an open period. In addition, Customs made the

competitive area of consideration for each of the three job announcements

worldwide and open to all qualified candidates. Customs also complied

with OPM regulations for the selection of eligible applicants, including the

regulation that the selectee must be from among the three highest-rated

applicants. Otherwise, the agency must provide a justification. For all

three positions, the selectees were the top-rated applicants for those

positions. As also required by OPM regulations, the selecting officials for

each position did not participate in rating or ranking the applicants for

that position.

The establishment of an SES position—senior adviser—to be filled by a

limited-term appointment and the selection of a Schedule A appointee also

complied with OPM requirements for such SES appointments. OPM

regulations require the position’s term to be limited to 3 years or less and

the position’s duties and responsibilities to be primarily for project-type

activities that will expire in 3 years or less. Customs limited the term of the

position to 3 years, and most of the position’s duties appeared likely to be

completed within 3 years or less. For example, the incumbent is

responsible for implementing programs to ensure integrity and credibility

within the Office of Internal Affairs. The performance of such activities

could be completed within a limited period of time. OPM’s guidance

governing selection of an appointee does not require competition for such

appointments, but it does require the appointee to be qualified for the

position. In compliance with these regulations, Customs’ appointing

official determined that the individual’s KSAs met the qualifications

necessary to perform the duties and responsibilities of the position and

made the selection.

OPM conducts oversight of federal agencies’—including Customs’—singleagency Schedule A appointments and determines whether those

appointments comply with Schedule A authority. However, OPM’s

sampling of Customs’ appointments did not include any of the

appointments made under the Schedule A authority. The occasional OPM

survey that addresses, in part, the continuing need for Schedule A

authority was last conducted at Customs in 1998, prior to OPM’s approval

of Customs’ authority for 10 positions. Only the review conducted at

Treasury’s request addressed any of the nine positions. OPM found the two

positions to be within the scope of Customs’ authority.

The Civil Service Reform Act of 1978 requires OPM to carry out an

oversight program to ensure that agencies exercise their personnel

OPM Performs

Oversight of Customs’

Schedule A Authority
Page 13 GAO-01-1103 Customs’ Schedule A Authority

management authorities in accordance with merit system principles and

with the law and regulations that implement those principles.9

 OPM’s

Office of Merit Systems Oversight and Effectiveness (OMSOE) performs

periodic oversight reviews of each agency’s human capital practices,

including the use of excepted service appointment authorities. Each of the

departmental agencies and independent agencies with larger numbers of

employees—including the Department of the Treasury—is subject to

review every 4 years, and each of the smaller independent agencies is

reviewed every 5 years. However, each office within an agency—such as

Customs—is not necessarily reviewed each time the agency is reviewed.

The Assistant Director for OMSOE said that each audit team determines

which offices within an agency will be reviewed based on a pre-site

assessment of prior audit reports and other sources.

OMSOE conducted an oversight review of Customs’ appointments made

during 1999 and issued a report in November 2000. The overall objective of

the review was to examine how managers, supervisors, and human capital

specialists work together to make decisions that support the mission of

the agency, contribute to public policy objectives, and are consistent with

merit system principles. The review covered three broad areas—staffing,

workforce management, and human capital management accountability.

As part of the staffing review, OMSOE reviewed appointment authorities

granted to Customs by OPM. In reviewing these authorities, OMSOE

performed its standard audit procedure of selecting a judgmental sample

of the appointments for review.

The two appointments that Customs had made under its Schedule A

authority at the time of the review of 1999 appointments were not selected

as part of OPM’s sample. The Assistant Director of OMSOE stated that

OMSOE uses “problem oriented” sampling to select appointments. That

means that if OMSOE officials have identified problems with a specific

type of appointment through such sources as employee complaints and

periodic employee attitude surveys, the audit team will include some of

those appointments in the sample of appointments it reviews. For

example, during the Customs review, OMSOE officials said that they

randomly selected 9 of 174 Veterans Readjustment Act appointments for

that reason. The audit team’s decision to limit its review to nine cases,

according to an OMSOE auditor, was based on the time and resources

available.

 9

5 U.S.C. 1104 (a)(2).
Page 14 GAO-01-1103 Customs’ Schedule A Authority

During the entire review of Customs, OMSOE sampled 54 (or about 3

percent) of approximately 2,061 appointments, including 15 Schedule A

appointments, made during 1999. The Assistant Director said that because

of the limited sample, any conclusions developed from the analysis of

appointments sampled could not be projected as being representative of

all the appointments for the organization as a whole. The Assistant

Director believes the judgmental sampling technique is adequate because

OMSOE is looking for systemic problems.

OPM’s oversight of appointment authorities also includes occasional

surveys by OPM’s Employment Service. These surveys are not conducted

regularly and, in the case of Customs, were conducted most recently in

1982 and 1998. The surveys primarily consisted of OPM’s requesting that

Treasury justify the continuing need for each of its appointment

authorities. Treasury’s response to OPM’s survey in July 1998 addressed

the continuing need for Customs’ single-agency authority for criminal

investigators. The response did not apply to the 10 positions because the

authority for those positions was not granted to Customs until August 21,

1998, after the survey.

As discussed previously, at Treasury’s request, OPM reviewed the use of

Customs’ Schedule A authority for two of the nine appointments made.

That review was limited to an assessment of whether the positions’ duties

and responsibilities appeared to comply with the criteria for the authority.

We obtained comments on this report from the Director, OPM, and the

Deputy Assistant Secretary for Human Resources, Treasury, responding on

behalf of the Secretary of the Treasury. The Director said that OPM agreed

with the report’s conclusions that the appointments complied with merit

system principles and OPM guidance. The Director also expressed concern

about the appearance of political favoritism that surrounded two

appointments and consequently planned to conduct a review. In addition,

because our report presented information from Customs’ representatives

that appeared inconsistent with Customs’ original justification for the

Schedule A authority, OPM indicated it plans to review the basic

justification for that authority.

Treasury’s Deputy Assistant Secretary for Human Resources provided

technical comments that were incorporated in the report where

appropriate.

OPM’s comments are reprinted in appendix II.

Agency Comments

and Our Evaluation
Page 15 GAO-01-1103 Customs’ Schedule A Authority

We performed our work in Washington, D.C., from October 2000 through

May 2001 in accordance with generally accepted government auditing

standards. Additional information on the scope and methodology of our

review is presented in appendix I.

As arranged with your office, unless you publicly announce its contents

earlier, we plan no further distribution of this report until 30 days after the

date of this letter. At that time, we will send copies to the Secretary of the

Treasury and the Director, OPM. We will also make copies available to

others on request at that time.

Major contributors to this report were Richard W. Caradine, Assistant

Director; Thomas C Davies, Jr., Project Manager; and John Ripper, Senior

Analyst. If you or your staff have any questions about this report, please

contact Mr. Davies or me at (202) 512-9490.

Sincerely yours,

George H. Stalcup

Director, Strategic Issues
Appendix I: Scope and Methodology

Page 16 GAO-01-1103 Customs’ Schedule A Authority

In order to determine the nature of and reasons for Treasury’s request for

Customs’ Schedule A appointment authority for 10 positions, we asked

Customs’ officials to explain their justification for requesting the authority.

We also reviewed the request letters and supporting documentation that

the Treasury Department submitted to OPM on behalf of Customs. To

determine OPM’s process for reviewing Treasury’s request, we interviewed

OPM officials, obtained and reviewed documents related to OPM’s review

and justification for approving the request, and obtained and reviewed the

pertinent laws and Code of Federal Regulations (C.F.R.) governing the

granting of Schedule A authorities.

To identify the circumstances surrounding the appointments Customs

made under the Schedule A authority and whether Customs used the

authority appropriately, we obtained from OPM and Customs listings of all

Schedule A appointments made under the single-agency Schedule A

authority (5 C.F.R. 213.3105 (b)(6) (1964)) from August 21, 1998—the date

the authority was approved—until May 31, 2001, and the related personnel

files.1

 Based on our reviews of these files and interviews with Customs’

officials, we identified the dates that the positions were created and

appointments were made, the titles and grades of the positions, and the

duties and responsibilities of each position. At our request Customs

provided justifications explaining why each of these positions met the

criteria for its Schedule A authority. We also reviewed laws, regulations,

and procedures that govern the use of Schedule A authority and

determined that the regulations do not specify criteria for determining

when it is impracticable to examine for a position. We compared the

general requirements to the position’s duties and responsibilities and

exercised professional judgment in assessing whether appointments

appeared to be an appropriate use of the single-agency Schedule A

authority.

In addition, we met with Treasury Department officials to discuss

Customs’ appointment of two of the agency’s noncareer SES employees to

the Schedule A positions of strategic trade adviser and appropriations

officer. We did this because Treasury officials had expressed concern

regarding the two appointments and had contacted OPM regarding

whether these appointments would be appropriate under Customs’ single-

 1

We did not evaluate Customs’ approach to identifying potential appointees or the

qualifications of the appointees because it was outside the scope of the request.

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 17 GAO-01-1103 Customs’ Schedule A Authority

agency authority. We also discussed with OPM officials their decisions

regarding these two appointments.

To determine whether Customs complied with merit system principles in

converting three of its nine Schedule A appointees to competitive service

positions, we applied the merit system principles established in Title 5 of

the United States Code (5 U.S.C. 2301) and OPM’s interpretation of those

principles in its Delegated Examining Operations Handbook. The

handbook describes the procedures and requirements intended to ensure

compliance with the merit system objective of fair and open competition.

We compared the handbook’s requirements to actions taken by Customs

in announcing the positions, evaluating the applicants, and making the

selections. In addition, to assess Customs’ appointment of a Schedule A

appointee to an SES limited-term appointment, we applied the SES

appointment criteria in OPM’s Guide to the Senior Executive Service to

the circumstances surrounding the appointment.

To describe OPM’s oversight process and the extent of its oversight of

Customs’ Schedule A appointments, we interviewed OPM officials and

obtained copies of OPM’s Oversight Evaluation Handbook, audit reports

of Customs, and OPM’s correspondence with Customs concerning the

Schedule A authority, from the date the authority was approved through

May 31, 2001.
Appendix II: Comments From the Office of

Personnel Management

Page 18 GAO-01-1103 Customs’ Schedule A Authority

Appendix II: Comments From the Office of

Personnel Management

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