Results-Oriented Cultures: Office of Personnel Management Should Review Administrative Law Judge Program to Improve Hiring and Performance Management
Published: 2010-01-15T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Administrative Procedure Act established unique conditions for administrative law judges' (ALJ) hiring and employment to protect their decisional independence. However, the potential for a wave of retirements and other events have focused attention on how ALJs are hired and managed. In response to the Consolidated Appropriations Act of 2008, this report examines, among other things, (1) the process for hiring ALJs and selected agencies' observations of the process; (2) ALJs' retirement eligibility and retirement issues; (3) and agency managers' reported ALJ performance management practices and stakeholders' views of these practices. To address these objectives GAO reviewed relevant statutes, regulations, Office of Personnel Management (OPM) retirement-related data, and other program-related documents, and interviewed officials from OPM, ALJ professional associations, and the two largest federal agencies employing ALJs--the Social Security Administration (SSA) and the Department of Health and Human Services (HHS).
section_title: What GAO Found
paragraphs: SSA and HHS officials responsible for hiring new ALJs reported they were satisfied with the quality of the judges hired from OPM's ALJ register of qualified candidates in 2008. Despite their satisfaction with these ALJ candidates, agency officials raised several issues regarding ALJ hiring and offered suggestions to improve the process, including (1) opening the OPM registry to accept new candidates more frequently, (2) giving greater consideration to agency-specific knowledge and experience, and (3) providing additional agency flexibility in meeting the procedural requirements associated with selecting from the three best qualified candidates and awarding veterans' preference. OPM officials reported they are working to address these issues and develop new approaches, where appropriate. ALJ agencies could experience skill and competency gaps in the ALJ workforce in the near future. As of September 2008, the most currently available data, 51 percent of all ALJs were already eligible to retire. Moreover, by 2013, 78 percent of all ALJs employed as of September 2008 will be eligible to retire, while at 9 of the 25 ALJ agencies, all of the ALJs were eligible to retire. Retiring employees can leave gaps in institutional knowledge and technical skills due, in part, to the time required for new hires to become fully productive. To ensure agencies have talented staff to accomplish their missions, OPM requires agencies to make meaningful progress toward closing skills, knowledge, and competency gaps/deficiencies in all occupations in the agency. Despite the significant proportion of ALJs who were eligible to retire from 2008 to 2013, OPM officials reported that, as of October 2009, they had no record of any federal agency designation of ALJ skill gaps or competency issues. OPM, as ALJ program manager and lead agency in federal human capital management, could use its annual review of federal agencies' human capital accountability plans to assure that ALJ agencies appropriately identify and plan for future ALJ related skill and competency gaps. To safeguard the independence of ALJ decisionmaking, ALJ agencies are prohibited from rating or tying an ALJ's compensation to their performance. Nevertheless, SSA and HHS officials reported using numerous other practices to manage ALJ performance. ALJ association officials were concerned some SSA performance management practices could affect ALJs' decisional independence. The use of competencies in ALJ performance management might help OPM and ALJ agencies define needed ALJ skills and behaviors, ensure objective and balanced performance discussions between managers and ALJs, and enhance consistency in ALJ performance, while not influencing ALJ compensation. Given its role as ALJ program manager and its expertise in performance management, OPM is well-positioned to lead a review of all agencies' ALJ-related management practices.

section_title: Letter
paragraphs: Each year, federal administrative law judges (ALJ) adjudicate hundreds of  thousands of disputes between federal agencies and private parties  relating to such issues as entitlement to benefits, professional licensing,  regulations, and contracts. Collectively, their decisions can simultaneously  affect a substantial number of Americans and make significant  commitments on behalf of the federal government. For example, each  year, ALJs at the Social Security Administration (SSA) decide cases that,  collectively, commit the federal government to pay out millions of dollars  in disability benefits to thousands of Americans. In 2008, 25 federal  agencies employed approximately 1,400 ALJs, with SSA employing over  three-quarters of all federal ALJs.
For decades, policymakers have debated ALJ hiring and employment  issues, in the context of protecting the decisional independence of ALJs  and promoting the ability of agencies to effectively and efficiently resolve  their cases. Because recent events and trends could affect, in part, the  capacity of the ALJ workforce to effectively adjudicate current and future  cases in a timely fashion, the importance of addressing these issues has  become more pressing.
For example, at the same time that a growing proportion of ALJs was  becoming eligible for immediate retirement, the Office of Personnel  Management (OPM) was involved in protracted litigation over the manner  in which veterans’ preference was applied to the rating of applicants for  ALJ positions. As a result, OPM was under a series of administrative  orders to suspend the use of its list of qualified candidates, referred to as  the ALJ register, in hiring new ALJs and to suspend accepting new  applications from 1999 to 2003 (except for short periods in 2001). In 2003,  after prevailing in the lawsuit that triggered the administrative order, OPM  updated and reopened the ALJ register for use by the agencies but  generally did not permit new applicants to take the examination. From  2003 through 2006, OPM generally did not accept new applications to the  register but retained the ALJ register so that the ALJ agencies could hire  new ALJs from among the eligible candidates. In October 2007, OPM  established a new ALJ register based on a new examination and the  previous ALJ register was terminated. Agencies began hiring from the new  register in fiscal year 2008. Meanwhile, the growth in the number of  disability cases awaiting disposition at SSA prompted a number of SSA  management initiatives aimed at reducing the backlog of these cases as a  means of increasing ALJ productivity.
Based on a mandate accompanying the Consolidated Appropriations Act  of 2008, this report examines (1) the process for hiring ALJs and selected  agencies’ observations on the process; (2) ALJ retirements and retirement  eligibility; (3) the reported ALJ management practices at SSA and HHS,  and the stakeholders’ views of these practices; and (4) the options that  have been proposed to improve the management of the ALJ workforce,  either within existing authorities or requiring new authorities.
To address these four objectives, we reviewed related statutes,  regulations, testimonies, announcements, correspondence, manuals, and  other program documentation gathered from OPM, and the two federal  agencies employing about 88 percent of ALJs—SSA and the Department of  Health and Human Services (HHS). We also obtained testimonies,  announcements, correspondence, contracts, guidelines, and other related  documentation from the Association of ALJs (AALJ), a union representing  ALJs at SSA and HHS; the Federal ALJ Conference (FALJC), a professional  association of federal ALJs and ALJ managers; and the American Bar  Association’s (ABA) National Conference of the Administrative Law  Judiciary, a professional association of federal ALJs who are also  members of the ABA. In addition, we interviewed officials from these  agencies and associations. At SSA we interviewed ALJ managers from the  Office of Disability Adjudication and Review, who conduct impartial  hearings and make decisions on appealed determinations involving  retirement, survivors, disability, and supplemental security income  benefits. At HHS, we interviewed ALJ managers from the Office of  Medicare Hearings and Appeals, who conduct appeal hearings for the  Medicare program and who make a new and impartial decision in  accordance with the applicable law, and managers from the Departmental  Appeals Board, who provide impartial, independent review of disputed  decisions in a wide range of HHS programs under more than 60 statutory  provisions. Due to ongoing litigation, we did not collect detailed  information regarding OPM’s use of its ALJ register in 2007 and 2008. In  addition to the research methods described above, we undertook other  data collection and analyses to address specific objectives. To review ALJ  retirement and retirement eligibility, we analyzed employment data from  OPM’s Central Personnel Data File (CPDF), which is OPM’s human  resources reporting system. To identify the proposed options to improve  ALJ performance management, we reviewed numerous related legislative  proposals and proposals from OPM, SSA, the three associations, and the  Social Security Advisory Board. We selected three proposals because,  collectively, they contained the major design features of other more  narrowly focused options and compared these three proposals with the  current ALJ program features. See appendix I for more information on our  scope and methodology.
We conducted this performance audit from September 2008 through  January 2010 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The ALJ position was created by the Administrative Procedure Act of 1946  (APA) The APA separated the rulemaking functions from administrative  adjudication proceedings in federal agencies, and sought to ensure  fairness and due process in both. The APA provides for formal hearings in  certain cases where a party has been affected by an agency decision or  determination.
Typically, ALJs have two primary duties in the administrative adjudication  process. The first duty is to preside over the taking of evidence at agency  hearings and act as the finder of facts in the proceedings. An ALJ’s other  main duty is to act as a decision maker by making or recommending an  initial determination about the resolution of the dispute. In these regards,  ALJs, who are executive branch employees, function much like trial judges  in the judicial branch. In general, ALJs hear cases that fall into four  different categories: (1) enforcement cases; (2) entitlement cases; (3)  regulatory cases; and (4) contract cases. Depending on the rules relevant  to the particular issue in dispute, the hearings can be either adversarial,  where the parties or their representatives debate evidence and law before  the ALJ, or non-adversarial, where the ALJ investigates the facts and  develops the arguments both for and against each party.
In fiscal year 2008, the federal government employed 1,436 civilian ALJs at  25 agencies. The ALJ agencies are extremely diverse, ranging from  components of cabinet-level agencies, such as the U.S. Coast Guard at the  Department of Homeland Security, to independent agencies such as SSA,  the National Transportation Safety Board and the Securities and Exchange  Commission. SSA employed the largest number of federal ALJs with 1,192  ALJs (83 percent of the federal ALJ workforce), distantly followed by HHS,  which employed 72 ALJs, about 5 percent of the ALJ workforce. Seventeen  ALJ agencies each employed 5 or fewer ALJs.
subsections: section_title: OPM and ALJ Agencies Share ALJ Hiring, Pay, and Performance Management Responsibilities
paragraphs: The conditions of employment for ALJs are unique among federal  employees. In order to ensure ALJs carry out their duties impartially, the  Administrative Procedure Act (APA) stipulates that ALJs are to be  independent of their employing agencies in matters of appointment, tenure  and compensation. To achieve this objective, the APA assigns  responsibilities for the ALJs to three agencies: OPM, the ALJ agency, and  the Merit Systems Protection Board (MSPB).
The ALJ agencies are responsible for managing the ALJs they hire. MSPB  has a role in disciplining ALJs. Under its authority to issue regulations  implementing the APA, the OPM regulations divide the responsibilities for  hiring, pay and performance management among OPM, the ALJ agency  and the MSPB. Table 1 lists how the major hiring, pay and individual  performance management responsibilities are divided between OPM and  the ALJ agency.
OPM has a number of responsibilities for ALJs under the statutory  framework of the APA. OPM is responsible for administering the exam and  creating a register of qualified candidates for ALJ positions. OPM also has  the authority to prescribe regulations regarding (1) various sections of the  APA governing ALJs; (2) implementing the section governing the  appointment of ALJs; (3) implementing the requirements that ALJs be  assigned cases in rotation as so far as is practicable and not perform  duties inconsistent with their duties and responsibilities as ALJs; (4)  implementing the detail provisions of the APA, which allow details of ALJs  to agencies with occasional or temporary needs for ALJs as selected by  OPM; (5) regulations excluding ALJs from the definition of employee for  the purposes of performance appraisals; and (6) implementing the three  levels of basic pay for ALJs and allowing OPM to provide for appointment  of an ALJ in the lowest level at an advanced rate where OPM deems it  appropriate.
In the hiring of ALJs, OPM is responsible for examining applicants and  certifying qualified candidates, while the ALJ agency is responsible for  identifying the number of new ALJs they require and appointing individual  ALJs from OPM’s list of certified candidates. As required by the APA, OPM  sets the three levels of pay for ALJs, determines the qualifications required  for appointment to each level, assigns each of the agency’s ALJ positions  to one of the pay levels, and determines the time-in-service required to  advance to a higher pay level. OPM must provide prior approval before an  ALJ agency can appoint retired annuitants, pay an ALJ applicant a higher  rate of pay due to superior qualifications, promote ALJs to higher pay  levels, or execute noncompetitive placements (e.g. transfers), intra-agency  details or temporary assignments. Once the ALJ is employed, OPM and the  ALJ agency share responsibility for managing the ALJ’s performance. For  example, OPM defines those management practices that ALJ agencies may  not perform, such as issuing performance ratings and awards and the ALJ  agency is responsible for day-to-day management. According to its  implementing regulation, OPM shares the responsibility with the ALJ  agency for ensuring the ALJ’s decisional independence. The APA divides  the responsibility for disciplining of ALJs between the ALJ agency and the  MSPB. The APA permits the agencies to take serious disciplinary action  against an ALJ only for good cause as established and determined by the  MSPB on the record, after an opportunity for hearing before the board.
Policymakers, ALJ agencies, and other stakeholders have been discussing  aspects of ALJ management for decades. Over the years, several options  have been proposed to change the roles and responsibilities for the  administration of the ALJ program. Three of these options are described in  more detail later in this report. Over this same timeframe, to help support  deliberations on ALJ issues, we have issued more than 10 reports where  the focus was either on ALJs at specific agencies or on the federal ALJ  program (see list of related GAO products at the end of this report). Most  recently, we issued two reports relating to ALJ performance at SSA and  the Department of Homeland Security.
section_title: SSA and HHS Officials Are Satisfied with Recent ALJs Hired from Register, but Officials Believe Their Needs Could Be Better Met with More Hiring Flexibility
paragraphs: In 2007, OPM revised its examination of ALJ applicants by, among other  things, revising the minimum qualification requirements, developing a set  of competencies, assessing applicants against the competencies, and  changing the examination scoring method. According to OPM, in fiscal  year 2008, SSA hired 185 ALJs and HHS hired 7 ALJs from the register  established as a result of OPM’s new ALJ examination. SSA officials told  us that they are very pleased with the quality of ALJs they hired. HHS  officials stated that they are satisfied that the process provided them with  highly qualified candidates.
OPM is responsible for scoring the results of the competitive examination  and maintaining a register of qualified candidates in rank order of their  final scores. According to OPM officials, after the job announcements in  2007 and 2008, it took about 6 months for OPM to complete the  examination process and assign the final ratings to qualified applicants.
The pool of potential ALJ applicants appears to be large because in 2007  and 2008 OPM was able to receive the requested number of applications in  only a few days. According to OPM officials, when OPM reopened the ALJ  register in 2007, they received the desired number of applications within 1  week of posting an ALJ vacancy announcement. In 2008, OPM received its  desired number of applicants within 3 days. In November 2009, OPM  opened a new vacancy announcement for ALJ vacancies. It received the  requested number of applicants within 2 days.
Upon request, OPM provides ALJ agencies with a certified list, referred to  as a certificate, of the highest scoring candidates from the register who are  available to serve at the vacancy locations. If agency officials choose to fill  a vacant ALJ position with a new ALJ, then the agency must appoint one of  the candidates listed on OPM’s certificate. The interview and selection  processes vary across ALJ agencies, but all agencies must comply with  federal law and regulations regarding competitive employment. For  example, agencies must comply with the veterans’ preference requirement  and the “rule of three”—agencies must select from the highest scoring  three candidates available to serve in a given location. SSA and HHS  officials told us that it took 8 to15 weeks from the date the agency  requested an OPM certificate of candidates until a selected candidate  reported to work.
Despite their satisfaction with the quality of the ALJ candidates, SSA and  HHS officials stated that the ALJ hiring process should have more  flexibility in order for them to appoint candidates that best meet their  agency-specific needs. According to SSA officials, OPM uses a one-size- fits-all approach in establishing its register of candidates. SSA officials’  reported position was that OPM’s ALJ examination of applicants should  also weigh the specialized knowledge and skills needed to adjudicate SSA  cases such as the ability to manage a large docket because SSA ALJs  adjudicate a high volume of cases, and the temperament to work on non- adversarial cases with unrepresented claimants. SSA was also concerned  about the process for assessing whether an ALJ candidate on an OPM list  of certified candidates was actually suitable for selection and  appointment. SSA officials told us that they currently try to assess the  specialized abilities and the potential suitability of ALJ candidates through  SSA’s ALJ interviewing process and investigating the candidates’  backgrounds. SSA officials told us that, in their opinion, the process was  laborious, and requested that OPM assess the suitability of candidates  listed on the certificates provided to agencies. Lastly, SSA raised concerns  about the adequacy of the register to meet their hiring needs. Given SSA’s  plans to hire more than 226 ALJs during fiscal year 2010, SSA officials  reported to us their concern that the register would not provide an  adequate number of suitable candidates to consider for selection. SSA  requested that OPM refresh the register with new candidates as soon as  possible and plan to do so, on a regular basis.
The Chief ALJ of HHS’s Office of Medicare Hearings and Appeals (OMHA)  also noted that OPM’s examination process does not provide HHS with  candidates who have specialized knowledge important for adjudicating  cases in HHS. He thought, for example, that having 3 years of Medicare  experience would be an asset for an incoming OMHA ALJ. He suggested  that there should be a more flexible process to enable the agency to select  candidates who might be a better fit for the agency’s work. The Chair of  HHS’s Departmental Appeals Board did not have specific comments  regarding the current hiring process. This board had not had an ALJ  vacancy to fill from 2003 through 2008, and thus, had not hired an ALJ  from the OPM register in 2007 or 2008.
The OPM official responsible for the competitive examination process  reported that OPM experts concluded that having certain specialization or  expertise would not produce a better cadre of ALJs. In OPM’s view, the  most important characteristic that ALJs need is the ability to master lots of  facts rather than specialized knowledge. Consideration of any additional  flexibility in ALJ hiring must await the conclusion of pending litigation.
With regard to SSA’s interest in assessing the suitability of all ALJ  candidates on the register, OPM reported in July 2009 that it was reviewing  the documentation SSA provided regarding specific candidates. OPM  noted that the suitability review process encompassed both a background  investigation and an adjudication, either at the hiring agency or at OPM,  depending upon the nature of any issues identified during the  investigation. Agencies are required to reimburse OPM for each  background investigation it conducts. Although ALJ agencies could  request OPM undertake a suitability investigation at any point in the  process, selecting officials usually commence the suitability assessment  process only when the agency is ready to make a selection because of the  expense associated with conducting a proper suitability investigation.  OPM indicated that there was no appropriate mechanism whereby OPM  could undertake suitability assessments in advance on all the candidates  on the ALJ register, and has not received an appropriation to conduct  investigations at its own expense.
Regarding SSA’s request for a routine refreshment of the ALJ register,  OPM indicated that it refreshes its register of ALJ candidates by offering  its ALJ examination to new applicants and completing its examination of  the applicants. As examining ALJ applicants requires significant assistance  of retired and sitting ALJs, OPM does not want to overburden these ALJs  by offering the examination too frequently. According to OPM, the ALJ  register was most recently refreshed in March 2009. The timing for  opening the examination is based on several considerations, such as future  hiring needs. OPM regularly queries agencies about their projected ALJ  hiring needs and uses the agencies’ responses to plan when to re- administer the ALJ examination. As of July 2009, they anticipated they  could issue certificates that would provide an ample number of choices  from which to select candidates to meet the agencies’ reported hiring  needs. OPM and SSA officials are addressing the issues SSA raised and,  where appropriate, are developing new approaches and solutions.
section_title: Agencies Could Experience Skill and Competency Gaps in ALJ Workforce Due to Potential Retirements
paragraphs: ALJ agencies could face skill and competency gaps unless ALJ agencies  and OPM take concerted action to assure that, in the face of significant  retirement eligibility, the ALJ agencies have developed ALJ hiring and  succession plans. As of September 2008, the most current data available,  51 percent of employed ALJs were eligible to retire by the end of 2008. By  2013, 79 percent of ALJs will be eligible for retirement. To put these  numbers in perspective, we recently reported that about one-third of the  federal workforce on board at the end of fiscal year 2007 will be eligible to  retire by 2012.
The proportion of ALJs who were eligible to retire was not the same at  each of the 25 ALJ agencies (see table 2). As of September 2008, at 9 of the  25 ALJ agencies, all of the ALJs were already eligible to retire and at 21 of  the agencies half or more of the ALJs were eligible to retire. At 4 of the 25  agencies, less than half of the ALJ workforce was eligible to retire.
Administrative law judges are typically older and have served the public  longer than other federal employees. For example, as of fiscal year 2008,  these ALJs were, on average, about 61 years old and had about 21 years of  federal service. In contrast, as of 2005, the average age of the federal  workforce governmentwide was about 46 with about 15 years of service.
Despite the widespread retirement eligibility of the ALJ workforce, most  ALJs do not retire immediately upon becoming eligible to retire. In 2007,  about 72 percent of administrative law judges were still in the federal  workforce more than 5 years after their eligibility date. Overall, the ALJ  program has experienced a low annual retirement rate, ranging from 2 to 5  percent from 2002 through 2006, which was about the same as the total  federal workforce, which we noted is younger and generally has fewer  years of service.
ALJ retirements could significantly affect agencies’ adjudication capacities  in two ways. First, retirements could significantly affect those agencies  employing a small ALJ workforce. For the 15 agencies employing fewer  than 5 ALJs, one retirement represents a loss of 25 percent or more of  their ALJ capacity, at least temporarily. Secondly, ALJ retirements could  also have a more pronounced effect at those agencies facing increasing  case workloads because the agency would be losing experienced ALJs at a  time when demand for their services is increasing. For example, in 2008,  SSA hearing offices received nearly 590,000 claims, an increase of about 6  percent from 2006. In March 2009, the SSA Commissioner projected that,  due to the economic downturn, SSA would receive approximately 50,000  more hearing requests in fiscal year 2009 than in fiscal year 2008. HHS’s  Office of Medicare Hearings and Appeals has also experienced an  increasing workload in recent years. In January 2009, the HHS Inspector  General reported that, from July 2006 to May 2008, the office’s caseload  increased 37 percent to over 28,000 cases, while the number of cases with  the 90-day decision requirement more than tripled, from 6,079 to 20,720  cases.
Although it appears there are abundant candidates to fill vacant positions,  we have reported that retiring employees can leave gaps in institutional  knowledge and technical skills. These gaps can arise because, among  other reasons, it can take several months for new hires to become fully  productive. For example, at SSA, it takes 1 to 2 months to train a new ALJ,  plus an additional 9 months of on-the-job experience, before SSA  considers a new ALJ to be fully productive.
While actual ALJ retirements lag eligibility by several years, the agencies  cannot rely on either the low ALJ retirement rate or the lag between  eligibility and retirement to remain constant. According to OPM, although  demographic factors such as age and years of service can help predict time  of retirement, other factors that are not available are likely to have a much  larger impact on retirement decisions. Such factors include familial  situations, illness, caretaker status, children in college, the cost of tuition  for their children, and others. The lack of data for some of these factors  may limit the accuracy of retirement forecasts.
OPM is the lead agency in guiding federal human capital management at  executive branch agencies. To assess federal agencies’ human capital  management, OPM established the Human Capital Assessment and  Accountability Framework (HCAAF). One of the assessment standards  relates to ensuring agencies have the talented staff that their mission  requires. To meet this standard, OPM requires agencies to make  meaningful progress toward closing skills, knowledge, and competency  gaps in all occupations used in the agency. Furthermore, the standard  requires the agencies particularly to close skills, knowledge, and  competency gaps in mission-critical occupations. For example, SSA’s  Fiscal Year 2009-2011 Strategic Human Capital Plan, SSA identified ALJs  as a mission-critical occupation and developed a set of ALJ-specific  competencies to guide its ALJ recruitment, retention, and workforce  development initiatives. Despite the significant proportion of ALJs who  were eligible to retire between 2008 and 2013, OPM officials told us that,  as of October 2009, they had no record or knowledge of any federal agency  designation of ALJ skill gaps or competency issues.
section_title: Agencies Manage ALJs without the Use of Performance Ratings or Competencies
subsections: section_title: SSA and HHS Use Numerous Practices Other Than Performance Ratings to Manage ALJ Performance
paragraphs: Performance management systems can be powerful tools in helping an  agency achieve its mission and ensuring employees are working toward  common ends. Performance management systems should help employees  understand their responsibilities and how their day-to-day work  contributes to meeting their agency’s strategic goals as well as providing a  mechanism for giving employees candid, specific feedback on how well  they are meeting their performance expectations. According to OPM’s  performance management guidance, employee performance management  in the federal sector generally includes planning work and setting  expectations, continually monitoring performance, developing the  capacity to perform, periodically rating performance in a summary  fashion, and rewarding good performance. However, in order to ensure  that an ALJ is not unduly influenced by his or her employing agency,  renders impartial decisions, and appears impartial, the APA and OPM  regulations do not permit the employing agency to rate or tie an ALJ’s  compensation to the ALJ’s performance.
Nevertheless, SSA and HHS managers reported that they employed a  variety of practices other than ratings to directly and indirectly manage  ALJ performance. An example of the variety in management practices is  observed at HHS. There, the Chief ALJ of the Office of Medicare Hearings  and Appeals (OMHA), a large hearing office, assigned more staff  management responsibilities to his ALJs than the Chair of the  Departmental Appeals Board (DAB), a smaller hearing office, assigned to  her ALJs. At HHS’s OMHA, which employed 65 ALJs at the end of fiscal  year 2008, ALJs directly supervised their legal teams, attorney, paralegal  specialist and legal assistant. In contrast, at HHS’s DAB, which employed 6  ALJs at the end of fiscal year 2008, the ALJs did not supervise support  staff.
Agency managers and ALJs described the ALJs’ performance as  significantly influenced by the hearing office performance, although the  degree of dependency varies by ALJ agency. Within this context, agency  managers reported using a wide variety of practices to either directly  influence ALJ performance, or to indirectly influence ALJ performance by  addressing hearing office performance. The practices focused on such  areas as hearing office management and staffing, case management,  quantity and quality of adjudications, tools to expedite adjudication,  workplace privileges, and progressive discipline. We did not assess the  extent to which various practices were used at SSA and HHS, nor their  effectiveness or appropriateness.
The direct practices reported are common to managing the performance of  all federal employees. For example, SSA and HHS ALJ managers reported  providing informal feedback and coaching. The indirect practices reported  addressed aspects of the hearing process that were not directly under the  control of the ALJ. For example, one indirect approach was to improve the  efficiency of case processing by using electronic document processing,  standardizing process procedures, and tele- and videoconferencing.
section_title: ALJ Stakeholders Raised No Concerns about HHS Practices, but Are Concerned with SSA’s Use of Productivity Goals
paragraphs: ALJ agency managers and officials from ALJ-related associations  expressed differing views regarding current performance management  practices. Managers at HHS’s OMHA and DAB thought that statutory and  regulatory deadlines were helpful in managing ALJ productivity. The Chief  ALJ for OMHA thought that their most significant performance  management problem was having enough resources to meet the demands  of their work. He felt there were sufficient safeguards in place to  effectively manage the performance of his supervisory ALJs, while  avoiding interference in the ALJs’ decision making. The Chair of HHS’s  Departmental Appeals Board found she could effectively manage the ALJs’  performance by engaging them in improving the hearing process. Yet,  while each thought either a performance rating or award could be a useful  management tool in certain situations, if available, they reported they were  able to manage effectively without such tools. AALJ and FALJC did not  raise concerns about specific ALJ management practices at either HHS  office.
At SSA, however, ALJ performance management was of much greater  concern among ALJ stakeholders, especially pertaining to ALJ  productivity. In 2007, in order to help SSA reduce its disability hearing  backlog, the Chief ALJ requested the ALJs to manage their dockets in such  a way that they would be able to issue 500-700 legally sufficient decisions  each year. As of July 2009, SSA reported that the request had been an  effective tool, among several others, in helping to raise ALJ productivity.  Officials from the AALJ and FALJC questioned the use of a productivity  goal as a major tool to manage ALJ performance for several reasons,  including their view that SSA had not conducted a systematic study to  validate the appropriateness of the numerical range of cases in the goal.  According to AALJ, FALJC, and ABA officials, SSA’s emphasis on  productivity is detrimental to maintaining or improving other important  dimensions of ALJ performance, such as the quality of ALJ decision  making. In addition, AALJ and the Social Security Advisory Board raised  concerns that the agency’s emphasis on ALJ productivity may result in  unintended consequences. For example, the AALJ and the Social Security  Advisory Board noted an increase in the number of favorable decisions.  The Advisory Board found that as the number of decisions increases, the  percentage of favorable decisions tend to increase. The AALJ and the  Social Security Advisory Board expressed concern because rendering a  decision favorable to a party appealing an agency determination requires  less ALJ time than rendering an unfavorable decision. SSA’s emphasis on  ALJ productivity may lead to more favorable decisions and result in  increasing long-term costs to the federal government. The Social Security  Advisory Board suggested SSA monitor the correlation between the  number of decisions and the number of favorable decisions. In contrast,  SSA reported in December 2009 that the rate of favorable decisions  (allowance rate) had not changed significantly from fiscal year 2001  through the first quarter of fiscal year 2010.
section_title: Competencies Provide a Fuller Picture of Performance
paragraphs: We have reported that high-performing organizations both in the United  States and abroad have applied, among other strategies, a set of  competencies in their employee performance management to provide a  fuller picture of performance. Importantly, we found that systematically  applying competencies to guide employee performance management had  several advantages beyond using competencies to rate or reward  individual performance. These advantages include helping managers to  structure their performance discussions, enhancing consistency in  performance, and ensuring an objective, balanced review of all the areas  significant to the performance of the individual. Lastly, we have reported  that high-performing organizations that actively involve employees and  stakeholders in developing the performance management systems and  provide ongoing training on the systems help increase their employees’  understanding and ownership of the organizational goals and objectives.
OPM and SSA have developed competencies to support other aspects of  ALJ employment. As noted earlier, OPM uses a set of competencies in its  examination of ALJ applicants, while SSA uses a set of ALJ competencies  to assist in their workforce planning. However, OPM has not established  performance competencies to guide ALJ agencies in their day-to-day  management of ALJs. As noted earlier, APA and OPM regulations prohibit  ALJ agencies from issuing performance ratings and awards to ALJs. Yet,  recently, the ALJ associations urged OPM to implement a particular set of  performance standards. Particularly, in 2006, the presidents of several ALJ- related associations, including AALJ and FALJC, urged OPM to support  codifying into law or regulation ABA’s Model Code of Judicial Conduct as  a standard for satisfactory ALJ conduct and performance to which ALJs  must adhere. That same year, the ABA stated that they believed ALJs  should be subject to, and accountable under, appropriate ethical standards  adapted from its Model Code of Judicial Conduct. We did not assess the  appropriateness or relative strengths of these different sets of  competencies or standards.
The use of competencies might also help OPM and the ALJ agencies to  ensure the ALJs’ decisional independence, a responsibility unique to ALJ  management and which OPM and the ALJ agency share. Even though the  competencies may not be used to influence compensation, a set of  validated competencies would help managers and ALJs to define the skills  and supporting behaviors that ALJs need to effectively contribute to  organizational results, and thereby a shared framework for discussing  employee performance and management practices. Moreover, a set of  validated competencies would also help ensure objective and balanced  discussions between managers and ALJs regarding performance, and  enhance the consistency of ALJ performance. Furthermore, OPM has  expertise in providing performance management consulting to federal  agencies.
Without the systematic application of standards or competencies and  other safeguards to employee performance management, contention over  managing performance, such as at SSA, can arise and persist. For example,  we have previously reported on the use of performance standards related  to the quality and quantity of ALJ decisions to evaluate ALJ performance,  first recommending their use in 1978. In 1990, we noted that the lack of a  study to support SSA’s use of an ALJ performance goal (case dispositions  per month) led to long-standing conflict between SSA and its ALJs. In  setting its ALJ productivity expectation in October 2007, SSA officials  indicated that they relied on recent historical ALJ productivity data, rather  than conducting a systematic study. Officials from AALJ reported to us  that SSA did not consult with them prior to issuing their ALJ productivity  goal in October 2007. As noted earlier, the conflict between SSA and its  ALJs over SSA’s use of an ALJ productivity goal continues into its third  decade.
section_title: Several Options Have Been Proposed to Revamp ALJ Program Management
paragraphs: Over the last 25 years, several statutory options have been proposed to  change the employment and management of ALJs. The options have  addressed to varying degrees several key issues, such as which federal  agency manages the ALJ program, which agency employs ALJs, whether  ALJs receive a performance appraisal, the purpose of the appraisal, and so  forth. In this section, we summarize three statutory options which have  been proposed, without assessing the strengths and weaknesses of each  proposal. We selected these three proposals because, collectively, these  proposals contained the major design features of other more narrowly  focused options.
subsections: section_title: ALJ Corps Option
paragraphs: The ALJ Corps option was proposed repeatedly in Congress between 1983  and 1995. The 1995 version of the legislation was intended to ensure the  impartial resolution of cases by changing the APA in order to establish an  independent corps of ALJs within the executive branch of government.  The corps would organize ALJs into divisions of practice areas; each led  by a supervisory division chief ALJ who would serve as a liaison between  the division and the agency that required ALJ services. The head of the  ALJ Corps, the Chief ALJ, would be a presidential appointee with Senate  confirmation. The Chief ALJ and the division chief ALJs would serve on  the Corps Council. This body and a Complaint Resolutions Board would  review complaints against ALJs. The council would have the authority to  take disciplinary action against ALJs if MSPB determined there was “good  cause.” The legislation did not provide additional details regarding ALJ  performance management.
A major difference between the ALJ Corps option and the current system  is that ALJs would no longer be employed by the agency whose cases they  are hearing. Instead, they would be employed by the corps. The Corps  Council and the division chief ALJs would assign ALJs to the agencies,  manage their workload, establish a code of conduct and establish the rules  of the judicial practice. OPM’s role would be limited to selecting  candidates from among job applicants and maintaining the register of  qualified candidates. This legislation passed the Senate in 1993, but was  not considered for a vote by the House of Representatives.
section_title: ALJ Conference Option
paragraphs: The ALJ Conference option was proposed in the House of Representatives  in May of 1998 and September of 2000. The 2000 version of the legislative  proposal changes the APA in order to create the ALJ Conference of the  United States to, among other objectives, “promote efficiency,  productivity, and the improvement of administrative functions,  to  enhance public service and public trust in the administrative resolution of  disputes.” The conference would be led by a Chief ALJ who would be a  presidential appointee with Senate confirmation and who could serve a  maximum of two 5-year terms. Unlike the ALJ Corps option, this option  proposed to eliminate OPM’s ALJ program responsibilities. This proposed  legislation was not considered for a vote by the House or the Senate.
The major difference between the ALJ Conference option and the current  system is that all of OPM’s current program responsibilities, such as the  applicant examination and maintaining a register of qualified candidates,  would be transferred to the ALJ Conference. The legislation would also  allow the Chief ALJ to adopt and issue rules of judicial conduct for ALJs as  long as those rules were consistent with the ABA’s Model Code of Judicial  Conduct for ALJs. The rules of conduct would provide for a voluntary  alternative dispute resolution process conducted at the request of the ALJ.  The legislation did not provide additional details regarding managing ALJ  performance.
section_title: Social Security Advisory Board Option
paragraphs: The latest proposed option came from the Social Security Advisory Board  in 2006. The board’s option suggested making statutory changes to allow  for case processing guidelines and rating of ALJs. The intended purpose of  the board’s suggestions was to increase accountability in the hearing  process, and, according to board officials, provide useful information to  ALJs and management. To protect against any interference with their  decisional independence, this option would have the agency establish a  system to investigate allegations from ALJs of such interference and to  take appropriate action. OPM would have oversight responsibility for this  activity and could review the agency’s response to allegations and  recommend further action. ALJs would also continue to have the other  protections for decisional independence that are provided by statute: their  pay would be set in accordance with OPM guidelines and the agency must  provide an ALJ an opportunity for a hearing before the Merit Systems  Protection Board and their establishment of good cause before taking any  adverse action against the ALJ.
The major difference between the Advisory Board’s option and the current  system is that the board’s option allows the ALJ agency, through the  agency’s Chief ALJ, to conduct performance appraisals for ALJs. These  reviews would consider ALJ performance relative to such criteria as case  processing guidelines, judicial comportment and demeanor, and  adherence to law, regulation, and binding agency policy. The guidelines  would be set in collaboration with the ALJs’ union, agency members, and  others. The reviews would not include a numerical rating or ranking or  determine pay, but would provide feedback on performance to assist ALJs  in improving themselves and their general discipline. According to  Advisory Board officials, the board recommendation would not affect  ALJs’ pay.
To date, these three proposed options have not progressed to  consideration by both houses of Congress.
section_title: Conclusions
paragraphs: Officials from SSA, the largest ALJ employer, told us they were satisfied  with the quality of their 2008 ALJ candidates, as did officials from HHS’s  Office of Medicare Hearings and Appeals, the next largest employer of  ALJs. However, these officials told us that, in their opinion, there should  be more flexibility in the ALJ hiring process in order to better meet their  needs. OPM is responsible for the examination of ALJ applicants and the  certification of qualified ALJ candidates, the first phase in the ALJ hiring  process. ALJ agencies must select their new ALJs from an OPM certificate  of qualified candidates. Beyond these two largest ALJ employers, which  were the focus of our work, OPM could benefit from collecting the views  from ALJ agencies employing smaller numbers of ALJs about the new  hiring process and the potential need for additional flexibilities. As the  federal agency authorized to administer the governmentwide ALJ program,  including prescribing hiring regulations, OPM could help ALJ agencies  develop strategies to address any concerns, either within the existing  hiring process or by revising the process.
To ensure federal agencies have talented staff, OPM requires agencies to  make meaningful progress toward closing skills, knowledge, and  competency gaps/deficiencies in all occupations used in the agency. A  review of the ALJs’ retirement eligibility raises concerns about potential  vulnerabilities in the future ALJ workforce. Given the high percentage of  retirement-eligible ALJs across the federal government, the ALJ workforce  is vulnerable to knowledge and skill gaps. Yet despite this vulnerability  and OPM’s human capital management standard, OPM officials reported  they had no record or knowledge of any federal agency designation of ALJ  skill gaps or competency issues. OPM is well-positioned through its role as  the ALJ program manager and its annual review of federal agencies’  human capital accountability plans to assure that ALJ agencies  appropriately identify and plan for future ALJ-related skill and competency  gaps. The identification of such gaps will enable OPM to provide ALJ  agencies with necessary guidance, tools, and technical assistance to  address agency ALJ workforce gaps. In addition, OPM can take a  comprehensive view of the risks that retirements pose to the capacity of  the ALJ workforce, and lead programwide initiatives, if necessary, to  identify, minimize, and mitigate potential skill gaps.
Given the many practices reportedly used to manage ALJ performance, the  concerns raised by the ALJ-related associations regarding SSA emphasis  on ALJ productivity, and the ALJ agency’s need to balance meeting its  organizational goals with ensuring the ALJ’s decisional independence,  OPM should review the state of ALJ performance management across all  ALJ agencies. OPM is well-positioned to lead in reviewing the agencies’  ALJ-related management practices because it is the only federal agency  with the statutory authority to investigate the entire ALJ program and, by  regulation, defines those management practices that ALJ agencies may not  perform. Moreover, OPM and the ALJ agency share responsibility for  managing the ALJ’s performance. Such a review could (1) identify the  practices currently used to manage ALJ performance, (2) collect the views  of ALJ managers and ALJs regarding effective ALJ performance  management, (3) determine if the ALJ performance concerns raised at SSA  are shared by ALJ managers across all ALJ agencies, or if such concerns  are limited to a few ALJ agencies, and (4) ensure current practices do not  infringe on ALJ decisional independence. If OPM and/or the ALJ agencies  determine that the current ALJ performance management needs  programwide or agency-level improvement, these agencies could develop  agreed-upon competencies, using existing agency and professional  competencies as starting points. While the agreed-upon competencies  could not be used to influence ALJ compensation, they could help improve  ALJ performance management by defining the skills and supporting  behaviors that ALJs need to effectively contribute to organizational  results, ensuring objective and balanced discussions between managers  and ALJs regarding performance, and enhancing consistency of ALJ  performance.
section_title: Recommendations for Executive Action
paragraphs: Given OPM’s statutory authority for administering the ALJ program, we  recommend the Director of OPM take the following five actions related to  hiring and managing the performance of ALJs in order to (1) identify  opportunities for continuous improvement of the ALJ hiring process, (2)  identify and address potential competency gaps, and (3) identify  opportunities for improved performance management practices while  maintaining ALJs’ decisional independence:    After current hiring related litigation is resolved, solicit ALJ agencies’  feedback on the new examination process and determine whether  additional agency flexibilities are needed in the ALJ hiring process.
Assure ALJ agencies have identified the extent to which their ALJ  workforce is vulnerable to knowledge and skill gaps and addressed  these gaps in their annual human capital plans, if appropriate. OPM  should assist agencies by providing guidance, tools and technical  assistance to enable agencies to identify and address any skill or  competency gaps in its ALJ workforce.
Moreover, consistent with the need for ALJ decisional independence, lead  a program-wide review with ALJ stakeholders of ALJ performance  management options. This review should:    Determine the degree to which current practices are meeting the goals  of the ALJ agencies and ensuring ALJs’ decisional independence.
Consider the use of competencies in ALJ performance management  while not influencing ALJ compensation.
Consider the development and distribution of programwide guidance  for ALJ performance management and the involvement of ALJs and  stakeholders in the development of such guidance in order to gain  employee and management ownership of performance management  systems.
section_title: Agency and Third- Party Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Secretary of HHS, the  Commissioner of SSA, and the Director of OPM for review and comment.  The Acting Assistant Secretary for Legislation of HHS and the  Commissioner of SSA provided technical comments which we  incorporated as appropriate. The Director of OPM responded with written  comments, which we have reprinted in appendix II. Consistent with our  protocols, we provided a summary of the performance management  section of the draft report to the officials from AALJ, the ALJ union, ABA,  and FALJC for their comments. They also offered technical comments  which we incorporated as appropriate. Collectively, they thought the  report’s discussion of performance management was helpful and  appreciated the effort made to ensure their views were presented  accurately. Additionally, SSAB provided technical comments on our  presentation of their results and ALJ option from their 2006 report, which  we incorporated as appropriate.
OPM said it agreed with our recommendation that OPM consult with  agencies prior to designing the next examination and was already planning  to do so. Additionally, OPM expressed concern about the report’s focus on  “performance management” a term OPM does not normally apply to ALJs.  In OPM’s view, the term performance management, as defined in its  regulations, is the effective use of performance appraisals, which are not  used with ALJs. In OPM’s opinion, “tying the discussion in the report to a  concept applied to employees who may be evaluated and provided with  awards is somewhat confusing and could lead to unintended  consequences in terms of agencies’ interactions with their ALJs.” OPM  also commented that the report appeared to assume that OPM’s role in  ALJ management was “well established and not subject to dispute.”  Although OPM indicated that it was open to considering our “suggestions  for the greater involvement of OPM in the management of ALJs,” OPM  thought we should “tie that discussion to the statutory framework that  actually applies to ALJs and indicate how it believes OPM could become  more involved, within that framework.”
Our report notes that, as described by OPM guidance, performance  management in the federal sector includes planning work and setting  expectations, continually monitoring performance, developing the  capacity to perform, periodically rating performance in a summary  fashion, and rewarding good performance. Our report recognizes that, in  accordance with APA and OPM regulations, ALJs are excluded from  performance appraisals and awards. Nevertheless, other performance  management practices are available to agencies to manage ALJ  performance and agency managers reported to us that they are using such  practices. As stated in our report, OPM could help employing agencies use  these other practices to improve ALJ performance management, while  helping both OPM and the ALJ agency ensure the ALJs’ decisional  independence.
Additionally, statutory provisions authorize OPM to prescribe regulations  governing nearly all aspects of ALJ employment (the exception being that  the Merit Systems Protection Board is responsible for discipline or  removal of ALJs). Further, OPM is the only agency in the federal  government with authority to issue regulations on ALJ employment. OPM’s  authority to prescribe regulations includes the authority to “implement,  interpret or prescribe law or policy…” For these reasons, we believe  OPM has the authority to take a more active role in the management of the  ALJ program, and that it should do so. OPM also provided technical  comments which we incorporated, as appropriate.
We are sending copies of this report to the congressional committees with  jurisdiction over HHS and its activities; the Secretary of HHS; and the  Director of OMB. In addition, the report will be available at no charge on  the GAO Web site at http://www.gao.gov.
If you have any questions about this report, please contact me at (202) 512- 2757. Key contributors to this report are listed in appendix VI. Contact  points for our Offices of Congressional Relations and Public Affairs may  be found on the last page of this report.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Based on a mandate accompanying the Consolidated Appropriations Act  of 2008, this report examines: (1) the process for hiring administrative law  judges (ALJ) and selected agencies’ observations on the process; (2) the  level of retirement and retirement eligibility for ALJs; (3) the reported ALJ  management practices at the Social Security Administration (SSA) and the  Department of Health and Human Services (HHS), and the stakeholders’  views of these practices; and (4) the options that have been proposed to  improve the management of the ALJ workforce, either within existing  authorities or requiring new authorities.
We focused our data collection on the ALJ hiring process since 2007 and  reported performance management practices as described by agency and  association officials. As noted earlier, due to ongoing litigation, we did not  collect detailed information regarding Office of Personnel Management’s  (OPM) use of its ALJ register in the 2007 and 2008 hiring.
To address these four objectives, we reviewed related legal  documentation, program documentation gathered from OPM, the two  federal agencies employing about 88 percent of ALJs—SSA and HHS—and  three major professional associations for ALJs: the Association of ALJs,  the Federal ALJ Conference, and the American Bar Association’s National  Conference of the Administrative Law Judiciary. We also conducted  interviews with key officials from each of these organizations to gather  information regarding each objective.
subsections: section_title: Descriptions of ALJ Organizations Providing Hiring and Performance Information
paragraphs: The following provides a brief description of each of the ALJ-related  organizations providing hiring and performance information for this  report.
subsections: section_title: Office of Personnel Management
paragraphs: OPM has managed the ALJ program since the agency was created in 1979.  The ALJ program was managed through an Office of Administrative Law  Judges until OPM disbanded the office in 2003. OPM divided the program  responsibilities among OPM units, as follows:    General Counsel serves as the initial contact for ALJ issues    Strategic Human Resources Policy (SHRP) Division has the lead for  ALJ policy and regulations.
Human Resources Products & Services (HARP) Division generates the  ALJ examination, ranking, and register.
Human Capital Leadership & Merit System Accountability (HCLMSA)  Division handles the ongoing interaction with agencies and identifies  their needs. They have the day-to-day agency liaison responsibility.
section_title: SSA Office of the Deputy Commissioner for Disability Adjudication and Review
paragraphs: SSA administers two disability programs—Disability Insurance and  Supplemental Security Income—that provide cash benefits to claimants  who believe that they can no longer work because of severe physical or  mental impairments. SSA’s Office of the Deputy Commissioner for  Disability Adjudication and Review (ODAR) oversees the adjudication of  those cases where disability claimants appeal the agency determinations  of their benefits. The ODAR consists of the Office of the Chief  Administrative Law Judge—the principal consultant and advisor to the  Deputy Commissioner on all matters concerning the ALJ hearing function;  Office of Appellate Operations (Appeals Council)—the final level of  administrative review under the Administrative Procedure Act for  disability claims; and the Office of Management which provides  administrative support for all related management and office automation  activities. According to OPM data, as of September 2008, SSA employed  1,192 ALJs. These ALJs were supervised by the Chief Administrative Law  Judge, Deputy Chief ALJ, Regional ALJs, and Hearing Office ALJs.
section_title: HHS’s Office of Medicare Hearings and Appeals
paragraphs: HHS’s Office of Medicare Hearings and Appeals (OMHA) was created in  July 2005 when the responsibility for conducting appeals of Medicare  benefit determinations transferred from SSA to HHS, Office of the  Secretary. The Office of Medicare Hearings and Appeals (OMHA) is under  the direction of the Chief Administrative Law Judge, who reports directly  to Secretary of HHS. The Office’s ALJs issue decisions to appeals of  agency determinations regarding Medicare claims brought under Parts A,  B, C, and D of Title XVIII of the Social Security Act. Claimants who are  dissatisfied with an ALJ decision can seek a further review and decision  from the Medicare Appeals Council. In January 2009, the office employed  65 ALJs, including the Chief ALJ, 4 managing ALJs, and 60 supervisory  ALJs.
section_title: HHS Departmental Appeals Board
paragraphs: HHS’s Departmental Appeals Board (DAB), a component within the Office  of the Secretary, is responsible for (1) reviewing certain disputes between  grantees and constituent agencies of the department; (2) adjudicating  certain civil remedies cases pursuant to delegations from the Secretary;  and (3) performing other review, adjudication, and mediation services as  assigned. The board’s ALJs hear and decide civil remedies cases and other  cases as assigned. These cases include (1) sanctions against persons and  entities associated with participation as a provider in federally funded  health care programs or as an employee, contractor, or other fiscal  relationship with the department; (2) contract abuses; and (3) termination  of federal funding for alleged civil rights violations. In January 2009, the  Board Chair reported she supervised five ALJs and one retired ALJ  annuitant.
section_title: Association of Administrative Law Judges
paragraphs: The Association of Administrative Law Judges (AALJ) is a professional  union representing the ALJs employed at SSA and HHS’s DAB. The AALJ  has a collective bargaining agreement (CBA) with SSA which is in effect  until 2010, and has had an interim CBA with HHS’ DAB since 2003. As of  March 2009, according to the union president, the AALJ represented about  1,100 of the approximately 1,400 federal administrative law judges, or over  78 percent of ALJs in the federal workforce.
section_title: Federal Administrative Law Judges Conference
paragraphs: The Federal Administrative Law Judges Conference (FALJC) is a voluntary  professional association of federal administrative law judges who perform  judicial functions within the executive branch of the government. FALJC  was organized over 60 years ago. In 2008, FALJC reported that its  membership includes judges from virtually every federal agency that  employs administrative law judges. As of March 2009, FALJC officials  reported there were 174 members (136 are active ALJs and 38 are retired  ALJs) that included management-level ALJs and line ALJs.
section_title: American Bar Association’s Judicial Division and National Conference of Administrative Law Judiciary
paragraphs: The American Bar Association’s (ABA) Judicial Division represents judges  who are members of ABA. As of March 2009, according to association  officials, the Judicial Division had over 3,200 members. The division is  comprised of six conferences: five judicial conferences and one lawyer  conference. Federal ALJs formed what is now the National Conference of  the Administrative Law Judiciary (NCALJ), as one of the Judicial  Division’s six conferences, in 1971. According to association officials, both  federal and state ALJs can be members of the NCALJ, and, as of March  2009, the NCALJ had 233 members. According to an ABA official, there  may be federal ALJs who are ABA members who are not also members of  the Judicial Division or NCALJ since membership in these ABA  suborganizations is voluntary.
section_title: ALJ Retirement-Eligibility and Retirement Rates
paragraphs: To describe demographic data relating to the retirement eligibility of the  ALJs, we analyzed employment data from OPM’s human resource  reporting system, Central Personnel Data File (CPDF) for the federal  agencies employing ALJs. We used the pay plan code to identify and  analyze ALJ data in OPM’s CPDF. We analyzed data on age, years in  federal service, retirement eligibility, projected retirement rates, new  hires, and similar characteristics of the ALJs. For most of the groupings,  we examined the data from 1991 through 2008 and projected retirement  eligibility through 2013.
To determine the percentage of ALJs eligible to retire, we examined the  fiscal year in which an employed ALJ is first eligible for voluntary  (optional) retirement with an unreduced annuity. For example, employees  under the Federal Employment Retirement System (FERS) are eligible to  retire with reduced annuities at any age from 55 to 62 with 10 years of  service or less. The penalty for FERS employees retiring from age 55 to 61  with less than 20 years of service is that their annuity is reduced 5 percent  for every year they are under age 62. We considered the penalty for  retiring with less than 20 years under age 62 a disincentive and therefore  did not include this methodology in the definition of “eligible to retire.” By  including FERS employees that were eligible to retire on reduced annuity  in the definition of eligible to retire inflates the percentage of ALJs eligible  to retire. Thus, eligible to retire is defined as “eligible to retire with an  unreduced annuity.” Moreover, we did not include temporary and term  employees when calculating retirement eligibility because again, doing so  inflates the percentage of employees that are eligible to retire in any given  year. We defined age at the time the retirement action data was recorded;  and the years of federal service was the effective date of service  computation date as of September 30 of each CPDF file year. New hires  data sets were created by comparing the employee identification numbers  of the ALJs in the current year to that of the previous year. Any ALJ new to  the data set in an analysis year was categorized as a new hire.
For the purposes of our report, we did not independently verify these data  for the years we reviewed; however, in a 1998 report, we found that  governmentwide data from CPDF for key variables in this study (agency,  age, retirement plan, pay plan used to identify ALJs, and type of personnel  action that identified new hires) were 97 percent accurate or better. Since  our 1998 report, we have monitored OPM’s reporting requirements and  data checks used to assure that CPDF data are reliable. We also reviewed  OPM reports which note exceptions to OPM’s reporting requirements.
In addition, to assess the reliability of data specifically used in the ALJ  analyses we performed a variety of checks on the CPDF data to ensure  they were complete, valid, and consistent with the OPM Guide to  Personnel Data Standards. Although there were minor differences  between agency reported numbers of ALJs and CPDF data, these  differences would not change the findings of this report. Because the OPM  CPDF data quality processes have not substantially changed since the  cited 1998 GAO report, our monitoring of CPDF data, and the specific  checks we performed on the ALJ data prior to our analyses, we conclude  that CPDF data for the years covered in this report are sufficiently reliable  for our purposes.
subsections: section_title: Identifying ALJ Performance Management Practices
paragraphs: To identify ALJ performance management practices and stakeholder views  of these practices, we interviewed agency and association officials and  reviewed prior reports and testimonies from OPM, SSA, SSAB, and HHS.  We reviewed previous audits on ALJs conducted by GAO, and HHS’s and  SSA’s Inspectors General. We also reviewed position papers and  testimonies from a number of ALJ professional associations, AALJ, FALJC,  and ABA. We also reviewed these documents to identify the factors  affecting hearing office and ALJ performance. Given the scope of our data  collection, it is not clear the extent to which the views offered by the  officials from these agencies or ALJ-related associations are shared across  all ALJ agencies or ALJs. We did not assess the extent to which various  practices were used at SSA and HHS, nor their effectiveness or  appropriateness.
Contemporaneously with this study, another GAO team was conducting an  analysis of SSA’s plan for reducing the hearings level backlog and  preventing its recurrence, titled Summary of Initiatives to Eliminate the  SSA Hearings Backlog. This team conducted site visits to the National  Hearing Center in Falls Church, Virginia and to three SSA regional  offices—Atlanta, Georgia; Chicago, Illinois; and Seattle, Washington—to  identify the factors contributing to, among other things, the agency’s  hearings backlog. During these site visits, they interviewed a variety of  staff, including Hearing Office Directors, ALJs, attorneys, and support  staff. They also interviewed officials from three regional ODAR offices,  two state Disability Determination Services (DDS) offices, one program  service center, one SSA field office, and related professional associations.  We collated from these interviews those responses germane to ALJ hiring  and performance and added them to those comments obtained directly  through this engagement.
section_title: Identifying Proposed Options
paragraphs: To identify the proposed options to improve ALJ performance  management, we reviewed those options that had been proposed to  Congress over the last 30 years. We drew on information collected through  interviews, and our review of related reports, legislation and proposals  from OPM, SSA, HHS, the three associations, and the Social Security  Advisory Board (SSAB). Given the scope of our data collection, it is not  clear if the concerns that prompted the proposals are shared across all ALJ  agencies or ALJs. We selected the ALJ Corps, ALJ Conference and SSAB  options because, collectively, they contained the major design features of  other more narrowly focused options. We did not assess the relative  strengths or weaknesses of these proposed options.
section_title: Appendix II: Comments from the Office of Personnel Management
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, William Doherty, Assistant  Director; Patricia Farrell Donahue, analyst-in-charge; Sara Daleski; Sharon  Hogan; Sabrina Streagle; Gregory Wilmoth; Melanie Papasian; and William  Trancucci made key contributions to this report.
section_title: Related GAO Products
paragraphs: Coast Guard: Administrative Law Judge Program Contains Elements  Designed to Foster Judges’ Independence and Mariner Protections  Assessed Are Being Followed. GAO-09-489. Washington, D.C.: June 12,  2009.
Human Capital: Trends in Executive and Judicial Pay. GAO-06-708.  Washington, D.C.: June 21, 2006.
Social Security Administration: Agency Is Positioning Itself to  Implement Its New Disability Determination Process, but Key Facets  Are Still in Development. GAO-06-779T. Washington, D.C.: June 15, 2006.
Medicare: Incomplete Plan to Transfer Appeals Workload from SSA to  HHS Threatens Service to Appellants. GAO-05-45. Washington, D.C.:  October 4, 2004.
SSA Disability Decision Making: Additional Steps Needed to Ensure  Accuracy and Fairness of Decisions at the Hearings Level. GAO-04-14.  Washington, D.C.: November 12, 2003.
Social Security: Many Administrative Law Judges Oppose Productivity  Initiatives. GAO/T-HRD-90-39. Washington, D.C.: June 13, 1990.
Social Security: Many Administrative Law Judges Oppose Productivity  Initiatives. GAO/HRD-90-15. Washington, D.C.: December 7, 1989.
Additional Management Improvements Are Needed to Speed Case  Processing at the Federal Energy Regulatory Commission. EMD-80-54.  Washington, D.C.: July 15, 1980.
Management Improvements In the Administrative Law Process: Much  Remains to Be Done. FPCD-79-44. Washington D.C.: May 23, 1979.
Administrative Law Judge Activities and the Hearing Process at the  Federal Regulatory Commission. EMD-79-28. Washington, D.C.: February  13, 1979.
Administrative Law Process: Better Management Is Needed. FPCD-78-25.  Washington, D.C.: May 15, 1978.