Appendix C

Request for Leave or Approved Absence

1, Name (Last, first, middle) 2.

3, Organization

4. Type of Leave/Absence 5. Family and Medical Leave
Gheok serccoten eaten Date - Time Total Hours] if annual leave, sick leave, or leave without
Cannan From. Jo fom, Jo pay will be used under the Family and
spate iaimitcaig Medical Leave Act of 1993 (FMLA), please
7 Hi Restored annual leave : provide the following information:
Advance annual leave i
: I hereby invoke my entitlement
[J Accrued sick leave to family and medical leave for:
Advance sick lea
O Sick leave [_JBirtwAdoption/Foster care
7
Purpose: [[_| tiness/injurylincapacitation of requesting employee Serious health condition of
Oo Medicalidentaloptical examination of ing er spouse, son, daughter, or parent
[Ly Cate fay member, incixing medicaldentalopical exainaton of family member, or [TJserious health condition of self

1) Care of family member with a serious heath condton

otter Contact your supervisor and/or
personnel office to obtain additional
information about your entitlements and

[EJ Compensatory time off] - responsibilities under the FMLA. Medical

[oer ot tee meadunaeae
(speciy in remarks)

[Leave without pay

6. Remarks

7. Certification: | certify that the leave/absence requested above is for the purpose(s) indicated. | understand that | must comply with my
employing agency's procedures for requesting leavelapproved absence (and provide additional documentation, including medical
certification, if required) and that falsification of information on this form may be grounds for disciplinary action, including removal.

7a. Employee signature 7b. Date signed

Ba. Official action on request

; (if disapproved, give reason. If annual leave,
1 Approved [7 disapproves riiate action to reschedule.)

8b. Reason for disapproval

8c. Signature 8d. Date signed

Privacy Act Statement

Section 6311 of title 5, United States Code, authorizes collection of this information. The primary use of this information is by
management and your payroll office to approve and record your use of leave. Additional disclosures of the information may be: To the
Department of Labor when processing a claim for compensation regarding a job connected injury or illness; ‘to a State unemployment
compensation office regarding a claim; to Federal Life Insurance or Health Benefits carriers regarding a claim; to a Federal, State, or
local law enforcement agency when your agency becomes aware of a violation or possible violation of civil or criminal law; toa Federal
agency when conducting an investigation for employment or security reasons; to the Office of Personnel Management or the General
Accounting Office when the information is required for evaluation of leave administration; or the General Services Administration in
connection with its responsibilities for records management.

Public Law 104-134 (April 26, 1996) requires that any person doing business with the Federal Government furnish a social security
number or tax identification number. This is an amendment to title 31, Section 7701. Furnishing the social security number, as well as
other data, is voluntary, but failure to do so may delay or prevent action on the application. If your agency uses the information furnished
on this form for purposes other than those indicated above, it may provide you with an additional statement reflecting those purposes.

Oputom 7
Jue 2001
Forerty Standard Form (SF) 71

Offa of Porvanne! Manogoront "5 =
SCFR 620 Local Reproduction Authorized


Table. 2 Leave Audit Results

The GAO Standards for
Internal Controls states
transactions should be
promptly recorded to maintain
their relevance and value to
management in controlling
operations and making
decisions. The CO 64, also
states timekeepers will keep
accurate records and
supervisors will carefully
monitor the use of advance annual leave. With incorrect leave balances, employees may be
using leave that they are not entitled too.

Recommendation 6. We recommend the timekeeper maintain the Annual Attendance Record for
CY 2008 to reflect reconciliation based on leave slips, FMC-109 and STAR
reports, to ascertain the correct leave balances for its employees and
provide FMC-183 to OFM for corrections in NFC and STAR.

11


Timekeepers and alternates are designated by the Director of the office/bureau on FMC-
81, Designation of Authorized Representative (See Appendix D). The alternate timekeeper is
responsible for entering time and attendance information when the primary timekeeper is not
available. To ensure that no individual enters his/her own T&A information into STAR the
alternate timekeeper also enters the primary timekeeper’s T&A bi-weekly. The OS has one
timekeeper and one alternate timekeeper.

In OS, the timekeeper relies on the information provided by the employee (i.e. the hours
worked/leave used) for STAR system input. The timekeeper also relies upon an internally
developed optional form (See Appendix E) which captures much of the same information as the
FMC-109, and adds leave codes (for use by the timekeeper) and dates for each day in the pay
period. It does not, however, capture the specific arrival and departure times of the employee or
certification from the employee that the information is accurate — two key internal controls over
misreporting and abuse.

Once the employee’s hours worked/leave used are entered into STAR, a report is printed
for each employee for that pay period. The timekeeper, employee and the supervisor all certify
to the STAR report’s accuracy and that leave used was in keeping with federal laws and
regulations. It is, therefore, critical that the reports are accurate and supported by detailed
records.

Timekeepers are required to maintain each employee’s leave on FMC-183, Annual
Attendance Record, for each pay period (See Appendix F). The maintenance of this form
requires the timekeeper to enter the number of annual/sick leave hours an employee uses each
day of the pay period. The electronic version of the form automatically calculates the leave
balances based on carryover balances at the beginning of the year, the hours an employee accrues
each pay period and the number of hours of leave used (when applicable). OFM provides the
timekeeper with this form at the beginning of the leave year.

Objectives, Scope and Methodology

According to the Government Accountability Office (GAO), the primary objectives of
internal control in a T&A system are to ensure that the system complies with applicable legal
requirements, supports reporting of reliable financial information, and operates effectively and
efficiently.

The objective of this review was to assess whether OS complied with agency policies and
government regulations concerning employee time and attendance. At the time of our audit, OS
had a staff of six, including the timekeeper. We selected two employees from the office and the
timekeeper for detailed review of their respective leave slips, STAR reports, work schedule
requests, employee maintenance data sheets and annual attendance record. The review scope
included all pay periods in calendar year (CY) 2008.

We began the review by gaining an understanding of T&A practices used in the OS and
compared these practices with OPM and FMC timekeeping rules and regulations. For each


Appendix D

FEDERAL MARITIME COMMISSION

DESIGNATION OF AUTHORIZED REPRESENTATIVE

INSTRUCTIONS: A new form must be completed and forwarded to the Office of
Financial Management whenever the designee or alternate changes.

cz
NAME OF DESIGNEE (Print above, last name first SIGNATURE OF DESIGNEE

NAME OF ALTERNATE (Print last name first) =SIGNATURE OF ALTERNATE

ORGANIZATIONAL AREA OF RESPONSIBILITY

DESIGNEE (or Alternate) IS AUTHORIZED TO ADMINISTRATIVE LIMITATIONS

This cancels previously issued FMC-84
Qo 4. CERTIFY/APPROVE TIME AND ATTENDANCE CARDS

o 2. ACT IN THE CAPACITY OF TIME AND ATTENDANCE
CLERK.

a 3. REQUEST/APPROVE TRAVEL AUTHORIZATIONS,
TRAVEL VOUCHERS AND LOCAL TRAVEL
REIMBURSEMENTS.

is} 4. OTHER (SPECIFY)

SIGNATURE AND TITLE OF OFFICIAL AUTHORIZED TO DESIGNATE REPRESENTATIVE DATE

Signature “

Title

Form FMC-81
(Rev. 11/06)


Appendix F

ANNUAL LEAVE RECORD - 2009

A - Annual

S_- Sick

H - Holiday

Daily Record of Leave Used During Each Pay Period
Example: If you are sick 4 hrs. enter S-4 under the appropriate day.
If you take a day of annual leave, enter A-8 for that day.

Note: Annual leave
learned each pay
period depends on
your length of service

0-3 years...
3 - 15 years...

4 hrs.
.. 6 hrs.

(10 hrs. in last pay period)

8 hrs.

Annual
Leave

Sick
Leave

Comp
Hours

Carry

Over

Carry Over

Carry Over.

Eames

[Used Balance|

Earned] Used] Balance|

Eamed] Used] Balance

Pay Period

Jan 4 - Jan 17

Jan 18 - Jan 31

Feb 1 - Feb 14

SUN |MON|TUE |WED|THU [FRI

SAT_|SUN |MON|TUE [WED [THU [FRI

SAT

Feb 15 - Feb 28

Mar 4 - Mar 14

Mar 15 - Mar 28

Mar 29 - Apr 14

Apr 12 - Apr 25

eo Joo Jw Jom Jon | Joo Jr |

Apr 26 - May 9

iS

May 10 - May 23

11|May 24 - Jun6

42} Jun 7 - Jun 20

13} Jun 21 - Jul 4

4

KS

Jul 5 - Jul 18

45} Jul 19 - Aug 1

16

Aug 2 - Aug 15

17|Aug 16 - Aug 29

18|Aug 30 - Sep 12

19|Sep 13 - Sep 26

20|Sep 27 - Oct 10

21/Oct 11 - Oct 24

22] Oct 25 - Nov 7

23|Nov 8 - Nov 21

24|Nov 22 - Dec.'5

25|Dec 6 - Dec 19

26|Dec 20 - Jan 2

Form FMC-183 (Front)

Last, First, MI

Leave Cat. Code

Service Comp Date



Appendix A

FEDERAL MARITIME COMMISSION
EMPLOYEE REQUEST FOR WORK/TELEWORK SCHEDULE

To:
Tc I request a regular work schedule.
- I request that the following flexible hours be established for
me.
Arrival time
Departure time :
Cc I request that the following compressed work AND/OR telework

schedule be approved for me. Please indicate 8-hour day, day
off, or telework day, as appropriate. If requesting episodic
teleworking, designate work hours and check the episodic
teleworking line.

First week of pay period.

Monday a.m. to p.m.
Tuesday a.m. to er.
Wednesday a.m. to a
Thursday a.m. to ——P -m.
Friday a.m. to tas

IT Episodic teleworking
Second week of pay period.

Monday : a.m. to p.m.
Tuesday a.m. to — Pa.
Wednesday a.m. to Se as
Thursday a.m. to —— FP -n.
Friday a.m. to SS
Employee's Signature Date
SUPERVISORY RECOMMENDATION
[[ Approve
[" Approve as modified
[[ Disapprove (justification attached)
Supervisor's Signature Date
[7 Approved [- Approved as modified [- Disapproved
Bureau or office director's signature Date

ec: Employee
Timekeeper

FMC-110
(Rev. 12/2001)


OIG that they had already implemented the recommendation. The OIG will monitor OS
implementation during our semiannual audit recommendation update.

Employee Arrival and Departure Record

CO 92 requires employees on compressed work schedules (AWS or four 10-hour days) to
submit a written record of arrival and departure times on FMC-109, Employee Arrival and
Departure Record, at the end of each pay period. The form is to be certified by the employee
before it is submitted to the timekeeper. Employees working a “regular” work schedule (eight
hours per day) are also encouraged to use the form to document hours worked and leave used.
When signed by the employee, it provides an audit trail which can be used to validate the
accuracy of the T&A.

OS staff uses an optional form/FMC-109 to enter hours worked/leave taken in a pay
period. The form contains additional useful information for the employee and timekeeper. For
example, OS’s form includes the STAR transaction codes for each type of possible leave, total
hours for each day and week, and when the timecards are due. We found all three sample
employees provided either form for each pay period in CY 2008, with the minor exception of
one employee who provided the form 23 of the 26 pay periods. (This employee was on an
alternate work schedule.)

Two of the three employees worked an alternate work schedule. One of the two
employees that worked an AWS used FMC-109 and the other used the optional form. The
employee that worked an AWS used the optional form for all 26 pay periods. To comply with
agency policy we encourage staff that work an alternate work schedule to maintain FMC-109 bi-
weekly, or annotate the OS optional form with daily arrival and departure hours.

Finding 3. Certification of STAR

The STAR report is generated by the timekeeper after T&A information has been entered
into the STAR system. The STAR report is printed and certified for accuracy by the timekeeper,
employee and the supervisor. The T&A SOP states that when an employee is not available to
certify the STAR, a notation explaining the employee’s absence shall be made.

Employees and supervisors alike did not always certify all STAR reports. For example,
the supervisor did not certify the STAR on 23 occasions while the two staff in our sample did not
certify the STAR on 21 occasions (in 52 pay periods). Generally, staff was out of the office
(leave, AWS) when the STAR reports were due, which we believe explains many of the missing
signatures. But the certifications play an important role in maintaining an effective control
environment.


same safeguards as the OPM Form 71 and provide no assurances that the leave was requested in
advance.

We also identified some minor noncompliance with recordkeeping requirements, which
do not cause much risk and are easy to address. For example, the T&A files did not contain
employee work schedules for two of the three employees we reviewed and documentation for
compensatory time and time-off awards was missing.

We also identified an employee’s unauthorized use of worker’s compensation leave. The
employee and supervisor completed Department of Labor paperwork (DoL) (CA-1, Federal
Employee's Notice of Traumatic Injury and Claim for Continuation of Pay/Compensation)
within the required time period from the injury. However, the employee charged worker’s
compensation leave without DoL approval. Although OS prepared all documentation within the
allotted deadlines, the affected employee did not submit the paperwork to DoL for its
consideration.

These and other findings, along with recommendations to address the noted deficiencies,
are provided below.

Finding 1. Leave Documentation Requirements were not Routinely Followed

According to GAO’s T&A guidance, Maintaining Effective Control over Employee Time
and Attendance Reporting, leave approval should be made by the employee’s supervisor before
the leave is taken. If leave is not approved in advance, because of an unusual or emergency
situation, it should be reviewed for approval or disapproval as soon as reasonably possible after it
is taken.

Commission Order (CO) 64, Employee Absence and Leave, requires employees to
request annual and sick leave, compensatory time off, leave without pay, family and medical
leave, and other paid absences, on OPM Form 71, Request for Leave or Approved Absence.
These requests are initiated by the employee and approved (or disapproved) by the employee’s
supervisor and, except in extenuating circumstances, are to be submitted in advance of leave
used. The form is given to the timekeeper (i) to validate that leave taken in a given pay period
was approved and (ii) to identify the number of leave hours used in the pay period for entry into
STAR.

We reviewed leave requests forms for the three employees in our sample for each pay
period in 2008 (26 pay periods). Specifically, we reviewed whether leave was requested in
advance using required leave request forms and reconciled to the STAR reports, and whether
leave requests unnecessarily contained Personally Identifiable Information (PII), ¢.g., social
security numbers (SSN).


employee in our sample we reviewed STAR reports and reconciled leave taken with leave
request forms, and verified that each STAR report contained required certifications (timekeeper,
employee and supervisor). We reviewed employee requests for leave to determine whether leave
was requested and approved in advance of the leave taken. We also tied leave requests back to
the STAR system to verify that leave requested matched leave recorded and inspected each form
for Personally Identifiable Information (PII). We reviewed forms FMC-109 and FMC-110 to
determine whether they were completed accurately and, when applicable, evidenced supervisory
approval. Finally, we reviewed the FMC-183 for accuracy and reconciliation with STAR for the
last pay period in the year.”

We conducted the audit in January through June 2009, 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 these objectives.

Audit Findings and Recommendations

According to the Government Accountability Office, supervisory approval is a key part
of ensuring the propriety of T&A information. The supervisor or other authorized official should
review and authorize employees’ planned work schedules and applications for leave, and review
and approve employee submissions of actual time worked and leave taken.

The Office of the Secretary has taken steps to ensure the propriety of its payroll process.
The Secretary approves all leave requests and requires that leave be requested on proper leave
request forms. Employees in our sample appropriately excluded social security numbers from
leave requests. Both primary and alternate timekeepers have been identified and received
targeted training.

OS staff records T&A information on one of two forms: the FMC-109, Arrival and
Departure Record, or an OS time and leave record. The FMC-109 captures arrival and departure
times for each day in the pay period, as well as leave used. The OS “in-house” form does not
record daily arrival/departure times, but captures leave used and hours worked for each day in
the pay period. FMC policy requires use of the FMC-109, but only for staff working an
alternative work schedule. We commend OS for requiring the FMC-109 (or the optional form)
from all staff. We found no instances of employees underreporting leave used but we noted that
OS staff did not routinely complete required leave slips for leave used.

We identified 67 instances totaling 223 hours of leave used by three employees in our
sample without an approved leave request documented in the file. The leave was noted on the
FMC-109 or the OS optional form, but, as we discuss below, these forms do not provide the

? Because the OIG relied on timekeepers to supply much of the documentation we audited, we requested
the OS staff certify, in writing, that the records were not modified (created, deleted or altered) from the date of our
request. The Secretary, primary and alternate timekeeper signed the certification.

3


Appendix B

FEDERAL MARITIME COMMISSION

Employee Arrival and Departure Record

Name

Pay Period Beginning Ending,

ARRIVAL DEPARTURE LEAVE (hours)
DAY TIME TIME ANNUAL SICK

MONDAY
TUESDAY
WEDNESDAY
THURSDAY

| FRIDAY

MONDAY
TUESDAY
WEDNESDAY
THURSDAY
FRIDAY

| hereby certify the accurateness of this
information.

Employee Signature Date

FMC-109
(3/92)


Two of the three OS employees we reviewed used the discontinued version of the form
on 32 out of 54 documents we reviewed, even though the updated form is provided to FMC
employees on the intranet and as an appendix in the SOP for timekeepers.

During our exit conference, OS management informed us that it had addressed this

finding. Therefore, the OIG is not making a recommendation, however, we will monitor OS
implementation during our semiannual audit recommendation update.

Social Security Numbers on Leave Slips

The SSN is a unique identifier issued to U.S. citizens, and to permanent and temporary
residents. However, with increased awareness of identity theft and the need to protect PII, the
collection of SSNs for routine uses has been significantly curtailed. PII is any information about
an individual which can potentially be used to uniquely identify, contact or locate that individual.

In September 2006, the agency issued guidance to staff regarding the use of PII. The
guidance stated, in part, that the SSN was no longer required on leave slips and other agency-
used forms. Further, the agency disabled the SSN field on the electronic leave request form.
None of the three employees used their SSN on any of the leave slips that were provided. We
commend the OS staff for safeguarding PII.

Finding 2. Adherence to Agency Policies
The Commission establishes policies and procedures for staff (employees, timekeepers
and supervisors) to follow to ensure compliance with government-wide regulations. Review of

timekeeping practices used by the employees in our sample revealed inconsistent compliance
with agency guidelines in the following areas.

Employee Request for Work/Telework Schedule

According to CO 92, Work Schedules, employees are responsible for completing FMC-
110, Employee Request for Work/Telework Schedule and submitting it to the supervisor/Director
(if applicable) for approval. This enables supervisors to monitor employee arrival and
departures. Supervisors are responsible for providing each employee with a copy of the
approved or disapproved form FMC-110. This form can be found on the agency’s intranet.

One of the three sampled employees, who worked an alternate work schedule (AWS),
properly completed the FMC-110. This employee’s supervisor approved the schedule. Further,
this individual used the revised edition, which includes scheduling for the telework option. The
remaining employees did not have a FMC-110 on file.

The OIG recommended that all OS staff update their FMC-110 to reflect their current
work hours and obtain approval by the supervisor and/or the Secretary. OS managers told the


Office of Inspector General

Review of the Office of the
Secretary
Time and Attendance Practices
A09-05

pitiMe
sme CG

July 2009



initiated on form FMC-79, Recommendation for Performance or Incentive Award, by the
immediate supervisor for periods not exceeding 8 hours. For longer periods, FMC-79 is
reviewed and approved by an official at a higher level than the official who made the initial
decision and submitted to the Director of Office of Human Resources (OHR). Use of the
time- off award should be documented on the OPM Form 71, under “other paid absences.”

Once the award is approved the hours are entered into NFC’s database by OHR staff and
entered into STAR by the timekeeper. Copies of the approved FMC-79 are provided to the
employee, the employee’s supervisor, the recipient’s timekeeper and OFM. The timekeeper is
provided a copy of FMC-79 to enter the hours into STAR. The T&A SOP provides instructions
to the timekeeper on the processes of entering the time-off award into STAR. An employee
cannot use the time-off award until it has been entered into both systems (NFC & STAR).

For two of three employees that we sampled, we could not locate an FMC-79 in the T&A
files. We were able to obtain the documents, however, from OFM. We determined that the
FMC-79 was accurately completed, but noted that the 18 hours, when used by the employee,
were not requested or documented on OPM Form 71, but were accurately noted on the
FMC-109.

Recommendation 4. We recommend the OS timekeeper maintain supporting documents for all
transactions entered into STAR.

Worker’s Compensation

The Federal Employees’ Compensation Act of 1993 is administered by the Office of
Workers’ Compensation Programs (OWCP) of the U.S. Department of Labor (DoL). It provides
compensation benefits to civilian employees of the United States for disability due to personal
injury sustained while in the performance of duty or to employment-related disease.

The FMC’s policy on workers’ compensation is found in CO 59, Occupational Safety & Health
(June 14, 2000).

An employee who sustains a disabling, job-related traumatic injury may request
continuation of regular pay for the period of disability not to exceed 45 calendar days. When an
injury occurs the employee must complete Form CA-1, Federal Employee's Notice of Traumatic
Injury and Claim for Continuation of Pay/Compensation, (DoL form) within 30 days of the date
of injury to receive continuation of pay for a disabling traumatic injury. Until approved by DoL,
the employee cannot use Worker’s Compensation leave — s/he must use sick or annual leave until
approval, then substitute all leave used with the approved OWCP leave. If the claim is
ultimately denied by the DoL, the employee will not be able to reimburse his/her sick or annual
leave accounts with OWCP leave.

CO 59, Occupational Safety & Health provides employees with regulations and guidance
to ensure that the work environment fully complies with applicable legislation and regulations
governing the occupational safety and health of Federal employees. However, the T&A SOP
does not provide specific guidance to timekeepers regarding OWCP leave requirements,
processes and DoL determinations.


Recommendation 2. We recommend that the Secretary delegate responsibility for certifying the
STAR report to the Assistant Secretary when she is out of the office. Also,
the OS timekeeper should note the reason an employee was not available
to certify on the STAR report.

Finding 4. Maintenance of Other Types of Earned Leave

Employees at the agency can earn compensatory time or a time-off award. Both types of
leave must be approved by the supervisor in advance of earning the leave, and both must be
documented on OPM Form71 when used by the employee. Employees are also entitled to
workers’ compensation when involved in a work-related personal injury.

Compensatory Time

Compensatory time is earned in lieu of overtime pay when permitted under agency
flexible work schedule programs for regularly scheduled or irregular or occasional work.
Compensatory time is requested and reported on form FMC-70, Request, Authorization, and
Report of Overtime/Compensatory Time.

The exact compensatory hours worked are to be reported on the FMC-70, and must be
approved by the reporting official. This approved form is provided to OFM staff and the
timekeeper. An employee cannot use the compensatory hours earned until it is entered by OFM
staff into NFC and the timekeeper enters the hours into STAR.

Both GAO’s T&A guidance and CO 64, Employee Absence and Leave, require that
requests for leave approval be approved in advance to allow supervisors time to adjust workload
and assignments, and identify hours to be worked. CO 64 also states that requests to use
compensatory time are to be submitted to the supervisor for authorization on OPM Form 71.

One of the three staff sampled by the OIG earned seven hours of compensatory time
during two pay periods in 2008. The timekeeper did not have supporting documentation (FMC-
70) in the file to support time requested and earned, although OFM did have the documents on
file. The requests exhibited supervisory approval, but were approved by the requesting and
authorizing officials after the compensatory time was earned. When the compensatory time was
used by the employee, only five of the seven hours were documented on the OPM Form 71. The
remaining two hours were documented on the FMC-109.

Recommendation 3. We recommend the Secretary approve FMC-70 for staff before hours are
worked.
Time-Off Award

According to CO 62, Performance and Incentive Awards (August 30, 2004), a time-off
award is a future excused absence without charge to leave or loss of pay. Award approval is


Leave Slips were not Routinely Used to Request Leave in Accordance with OPM and
FMC Regulations

The OS requires staff to request all leave on OPM Form 71, but we found that this policy
is generally followed, although there is room for improvement. However, even when we
identified exceptions, OS staff noted the hours that were used on FMC-109 or the office’s
optional form. This “compensating control” helps to ensure that leave is appropriately recorded.
OS managers further explained to the OIG that the office head reviews the FMC-109, STAR
report and all other leave documentation for each employee at the end of each pay period and
that the Secretary approves all leave in advance. Requests may come via e-mail or a handwritten
note summarizing a telephone call. OS staff admitted that many of these documents are not
maintained and, thus, it would difficult to reconstruct leave usage from the leave files. Table 1.
illustrates the number of hours of leave used during the year without the OPM Form71request
form:

Table 1. Employee Leave without OPM Form 71

The OIG identified 67 instances, totaling 223
hours of leave charged by two OS staff, where
no approved leave slip was provided for leave
used. We relied upon the FMC-109/office
optional form to reconcile leave taken with leave
entered in STAR. Again, we found leave was
appropriately recorded in the payroll system for
all leave identified on the optional forms. However, without leave slips signed by the supervisor,
coupled with management’s practice to not require leave slips, it is possible that leave used by
staff could be unintentionally overlooked (or intentionally withheld), resulting in missed leave
deductions.

Recommendation I. The OIG recommends that the Secretary require staff to make all requests
for leave on OPM Form 71, and that such request be made in advance

when possible.

Use of Updated OPM Form 71

We reviewed completed leave slips (when available) to determine whether employees
used the revised OPM Form 71 and to identify PII.

The Standard Form 71 was provided to federal employees through OPM in December
1997 until OPM re-issued an updated OPM Form 71 in June 2001. The revised OPM Form 71
requires an employee who requests sick leave to indicate the purpose for the leave, when
applicable, which includes (i) il/ness/injury/incapacitation of requesting employee and (ii) care
of family member with a serious health condition. CO 64 requires an employee who invokes
his/her right to Family and Medical Leave to provide medical certification. These requirements
provide the employee’s supervisor with additional information relating to the use of sick leave.


Appendix E

Employee Name:

From: Jan. 7 2008

To: Jan. 18, 2008

Pay Period No. 1

Note:

TC Totals Totals
Code Mon Tue | Wed | Thu Fri Week 1 Mon | Tue | Wed | Thu Fri Week 2
Regular Hours Worked 01
Annual Leave 61
Donated Annual Leave 61/61
Sick Leave 62
Family Friendly Sick 62/62
Holiday/Admin/Jury Duty 66
LWOP 71
Comp Time 64
Dates Jan | Jan | Jan | Jan |} Jan Jan | Jan | Jan | Jan Jan
7 8 9 10 11 14 iS 16 17 18

Timecards Due: January 21,

2008



Review of the Office of the Secretary
Time and Attendance Practices

The Office of Inspector General (OIG) completed a review of time and attendance (T&A)
practices in the Federal Maritime Commission’s (FMC) Office of the Secretary (OS). This audit
was part of a coordinated review of T&A practices in five Commission bureaus and offices. The
audit objective was to assess whether OS complies with agency policies and government
regulations concerning T&A reporting.

Background

The FMC has a Service Level Agreement with the U.S. Department of Agriculture,
National Finance Center (NFC), to process agency time and attendance records and to pay its
employees. The System for Time and Attendance Reporting (STAR), a web-based application,
is used by timekeepers to prepare and transmit attendance reports to the NFC as a first step in
pay and leave administration. Employees are responsible for accurately recording their time and
attendance and certifying the accuracy of their T&A records. Supervisors are responsible for
approving work schedules, leave requests and certifying T&A biweekly submissions.

The FMC’s Office of Financial Management (OFM) issued Standard Operating
Procedures ( ) for T&A in July 2007 and again in April 2008. The SOPs identify procedures
and responsibilities relating to the documentation and transmission of the agency’s T&A records
and processes. The agency also provides guidance to its employees in Commission Order (CO)
64, Employee Absence and Leave (December 3, 2004), and CO 92, Work Schedules, (December
15, 2003). CO 92 requires employees to document their work schedules on FMC-110, Employee
Request for Work/Telework Schedule (See Appendix A) and the actual hours worked on FMC-
109, Employee Arrival and Departure Record.' (See Appendix B)

Employee requests for leave (sick, annual or other) are to be made to the supervisor on
Office of Personnel Management (OPM) Form 71, Request for Leave or Approved Absence (i.¢.,
leave slip) in advance of the proposed leave (See Appendix C). The supervisor can approve,
disapprove or modify the request. When the supervisor approves the leaye slip it is provided to
the timekeeper to reconcile with other supporting documents at the end of the pay period. The
employee’s signature on the leave request form is a strong control over leave abuse, as it certifies
that the leave/absence requested is for the purpose(s) indicated... and that falsification of
information on the form may be grounds for disciplinary action, including removal. OPM Form
71 provides employees with the option to include their social security number (SSN) on the form
when requesting leave. However, in September 2006, the Commission notified its staff that this
identifier was no longer needed to process the leave requests.

' Employees on compressed work schedules are required to complete FMC-109, however the agency
recommends that all employees use the form to document time and attendance.


rormemc-2 UNITED STATES GOVERNMENT FEDERAL MARITIME COMMISSION

(Rev. 07-89)

Memorandum
TO : Inspector General DATE: July 16, 2009
FROM : Secretary

SUBJECT: Response of OS Management to the OIG’s Audit Report on OS Time and
Attendance Practices

This memorandum constitutes management's response to the subject
OIG Audit Report transmitted in draft form on May 21, 2009. Subsequently, the
OIG conducted an exit conference to discuss the report's findings, and on June
6, 2009, transmitted a slightly modified report. The OIG’s modifications did not
alter the initial draft report message.

The OIG found that the OS has taken steps to ensure the integrity of the
T&A process and safeguards personally identifiable information. The Audit
Report noted that the Secretary approves all leave requests and requires that
leave be requested on proper leave request forms (Audit Report at 3). The OIG
commended the OS for requiring all OS staff to use Form FMC-109 or its
optional “in-house” form to document leave use, regardless of whether a staff
member is on an alternative work schedule (/d. at 3). The Audit Report also
noted that while there were some instances of non-compliance with select
agency policies and procedures and some minor recordkeeping issues that did
not cause much risk and were easy to correct, the Audit did not identify any
instances of fraud in the use or administration of leave (/d. at 4 and draft OIG
cover memo transmitting the Audit Report).

In the report and in the exit conference, the OIG noted the OS’s
supplemental office procedures and documentation designed to record and track
staff arrival and departure. In addition to the required and optional forms used to
capture staff leave use, the OS uses a shared electronic office calendar to
capture employee leave, training, and other events. It also uses email messages
to document leave, and the Secretary routinely notes staff leave on her personal
calendar. These measures as well as use of required and optional forms for
documenting leave use, evidences a staff approach that takes seriously the
importance of the Commission’s time and attendance regulations.


4.

5.

We recommend the OS timekeeper maintain supporting documents
for all transactions entered into STAR.

We concur with the recommendation and have discussed it with the current
timekeeper. OS management also anticipates training and shifting this
responsibility to a new staff member in the very near future.

We recommend that the timekeeper request OFM to adjust the
employee’s leave balance to reflect 11 hours of OWCP hours improperly
used.

We concur with the recommendation and have directed the timekeeper to
make the specified adjustments to the employee's leave balance.

We recommend the timekeeper maintain the Annual Attendance
Record for CY 2008 to reflect reconciliation based on leave slips, FMC-
109 and STAR reports, to ascertain the correct leave balances for its
employees and provide FMC-183 to OFM for corrections in NFC and
STAR.

We concur with the recommendation and have directed the timekeeper to
maintain and reconcile the Annual Attendance Record for CY 2008 against
specified documentation for the 3 sampled employees, verify and confirm
their correct leave balances, and provide FMC-183 to OFM for corrections in
NFC and STAR for these employees. In addition, we have directed the
timekeeper to maintain and reconcile the Annual Attendance Record for CY
2008 against specified documentation for all other OS staff, verify and
confirm their correct leave balances, and provide FMC-183 to OFM for any
other corrections needed in NFC and STAR for these employees.

Karen Kao Ud
Secretary


Other observations and findings, and recommendations to address them, are provided in
the attached report. We thank OS staff for its help and cooperation during the audit.

(eH Deputy Director, Office of Administration
Special Assistant, Office of Administration
Director, Office of Financial Management
Director, Office of Human Resources


FEDERAL MARITIME COMMISSION
Office of Inspector General
Washington, DC 20573-0001

July 20, 2009

Office of Inspector General

TO: Karen V. Gregory
Secretary

1D.
FROM: 4A am tin cig

Inspector General
Subject: Review of Office of the Secretary’s Time and Attendance Practices

The Office of Inspector General (OIG) conducted a review of the Office of the
Secretary’s (OS) Time and Attendance (T&A) practices. The primary objectives of internal
control in a T&A system are to ensure that the system complies with applicable legal
requirements, supports reporting of reliable financial information, and operates effectively and
efficiently. The objective of this review was to assess whether OS complied with agency
policies and government regulations concerning employee time and attendance.

The OIG selected T&A records for three employees to test payroll procedures and
processes used in OS. One of the employees selected was the lead timekeeper. All records
pertained to the 2008 leave year.

The OIG found that OS has implemented controls to ensure the integrity of the T&A
process. The Secretary approves all leave requested by staff. Leave is recorded on agency forms
which are reviewed by the Secretary before being provided to the timekeeper to record in the
payroll system. OS has designated an alternate timekeeper who records the lead timekeeper’s
T&A. We identified no instances of fraud in the use or administration of leave.

On the other hand, we identified instances of noncompliance with select agency policies
and procedures that could ultimately impact the integrity of the T&A process if not corrected.
For example, employees did not routinely submit leave requests on OPM Form 71, Request for
Leave or Approved Absence. In total, we identified 223 hours of leave used without a leave slip
by the three sampled employees.

‘The audit also raised some concerns regarding the administration of compensatory
(“comp”) time and worker’s compensation leave. Specifically, documentation to support earned
“comp” time was not available in the payroll file and worker’s compensation leave was used
without Department of Labor required approvals.


One of the three employees we sampled suffered an on-the-job injury in March 2008. OS
completed Form CA-1 which was then certified by the employee and the immediate supervisor
within the required timeframe. The employee used 11 hours of OWCP leave in pay periods 5
and 6. At the time of the injury, the employee had a negative annual leave balance and a
beginning balance of 6 hours of sick leave.

According to OWCP regulations, the employee should have used sick or annual leave
until DoL approved the claim. (When an employee does not have sufficient annual or sick leave
to cover job-related injuries, as occurred in this example, CO 64, Employee Absence and Leave,
allows an employee to request advance sick leave with proper documentation.) Further, review
of the employee’s T&A files found no documentation to indicate that DoL approved the claim.
The timekeeper, employee and supervisor certified the STAR reports for the charge of OWCP
leave.

Our follow up to DoL found that the FMC did not submit a claim request to DoL for this
injury. According to the Director, OHR, it is the employee’s responsibility to submit the claim
to DoL. Once received, DoL then notifies OHR when the claim is accepted. No notification was
received for this claimant in OHR. As a result, the employee made an improper charge to
OWCP leave. The employee’s leave balance should be charged 11 hours of sick leave (or annual
leave).

Recommendation 5. We recommend that the timekeeper request OFM to adjust the employee's
leave balance to reflect 11 hours of OWCP hours improperly used.

Finding 5. Maintenance of the Annual Attendance Record with Errors

The T&A SOP states that T&A clerk shall record all leave taken during the pay period to
the employee’s FMC-183, Annual Attendance Record, which is available manually or
electronically. Each calendar year the timekeeper is provided a blank FMC-183 for this purpose.
This record is to be maintained regularly, as it is used to.create and verify leave balances, and it
is routinely used by OFM to make corrections to the NFC database when errors occur.

We used a modified version of this form to perform a leave audit for the three employees
in our sample using balances carried over from the last pay period CY 2007, leave slips,
FMC-109 and hours charged on STAR and compared it to the FMC-183 maintained by the
timekeeper. 3 The modified version had other elements relating to our testing of the records.
Only one of the three sample employees’ leave balances (sick leave) reconciled with FMC-183,
our leave audit and STAR. For the other leave balances for the sampled employees we found
discrepancies in annual and sick leave balances that carried over into CY 2009. Adjustments to
correct these leave balances must be performed by OFM staff.

The results of the OIG’s leave audit are provided on the following page:

3 A leave audit reconciles opening leave balances, leave earnings and usage, with closing leave balances for
a predetermined time period.

10


The OS concurs with the OIG’s recommendations even though they are not
designed to address a determination of waste, fraud or abuse. Below are our
comments.

1. The OIG recommends that the Secretary require staff to make all
requests for leave on OPM Form 71, and that such request be made in
advance when possible.

We concur with the recommendation. All staff have been reminded of the
need to use Form 71, and to use this form to request leave in advance when
possible. However, we note that in every instance when a staff member
requests leave, a decision was/is made by the supervisor in advance of leave
use, as to whether the leave will be approved or not. This is the case
especially when family matters or extenuating circumstances prevent a staff
member from preparing and submitting Form 71 prior to taking leave.

2. We recommend that the Secretary delegate responsibility for
certifying the STAR report to the Assistant Secretary when she is out of
the office. Also, the OS timekeeper should note the reason an employee
was not available to certify on the STAR report.

We concur with the recommendation and have taken the necessary steps to
give the Assistant Secretary authority to both approve leave and certify the
STAR report. This has been in place since early calendar year 2009 with the
appointment of the new Assistant Secretary. Please note that during the time
period for which the audit was conducted, the Commission's Secretary
position was vacant for 9 months, and with the appointment of the Assistant
Secretary to the Secretary position, the Assistant Secretary position was
vacant for the remainder of the audit period.

3. We recommend the Secretary approve FMC-70 for staff before hours
are worked.

We concur with the recommendation and have reminded staff of the
procedures applicable and proper documentation for requesting and using
compensatory time earned.