GAO Human Capital Reform Act of 2004: Final Report on GAO's Use of Provisions in the GAO Human Capital Reform Act of 2004
Released: 2010-07-06T00:00:00

Letter

Overview

As required by section 11 of the GAO Human Capital Reform Act of 2004 (Pub. L. No. 108-271), GAO is providing its final report not later than 6 years after the date of the Act’s enactment. This report provides, as required by the Act, (1) a summary of the information included in GAO’s annual reports for the fiscal year 2005 through 2009 reporting cycle for sections 2, 3, 4, 6, 7, 9, and 10; (2) recommendations for any legislative changes to sections 2, 3, 4, 6, 7, 9, and 10; and (3) any assessment furnished by the GAO Personnel Appeals Board or any interested groups or associations representing officers and employees of GAO.

Summary of GAO’s Annual Reports, Fiscal Years 2005 2009

Section 2: Voluntary Early Retirement Authority (VERA)/Voluntary Separation Incentive Payments (VSIP)

Table 1 provides a summary of the number of employees separated from the agency under both the agency-wide and exception provisions for voluntary early retirement in fiscal years 2005 through 2009.

The voluntary separation incentive provision requires us to make the payment out of current appropriations and to pay an additional amount into the retirement fund, which at a minimum is equal to 45 percent of the basic pay of the employee who is receiving the payment. Thus, the cost of using this flexibility is considerable and, given the many demands on our resources, this provision was not used during the 5-year reporting period.

Section 3: Annual Pay Adjustments

Section 3(a) of the Act authorized the Comptroller General to determine the amount of annual pay adjustments for its officers and employees and described the factors to be considered in making those determinations. This provision amended 31 U.S.C. 732(c)—which required employees’ pay to be adjusted at the same time and to the same extent as the General Schedule. Under section 3(b) the Comptroller General’s authority to establish the annual pay adjustment is also applicable to employees in the Senior Executive Service (SES) and in Senior Level (SL) positions. Under both sections 3(a) and 3(b) an employee must be performing at a satisfactory level in order to receive an annual pay adjustment In January 2006, we issued regulations addressing the satisfactory performance requirement for GAO’s analysts and attorneys. Pursuant to the regulation, GAO analysts and attorneys had to be performing at “Meets Expectations” in all competencies to be considered satisfactory. In addition, most Band IIB and Band III analysts, had to have a performance appraisal that was in the top 50 percent or 80 percent, respectively, of their band and team. In subsequent years this added condition was not required. Since the annual adjustment is a significant component of employees’ annual compensation, limiting its applicability to satisfactory performers is critical to the integrity of GAO’s overall pay for performance system.

For calendar years 2006 through 2009, consistent with section 31 U.S.C. 732 (c)(3), the Comptroller General considered various data to determine the amount of GAO’s annual adjustments, including salary planning data reported by the professional services, public administration, and general industry organizations; the General Schedule adjustment; the amount of Performance Based Compensation (PBC) and the appropriate distribution of funds between the annual adjustment and PBC. and GAO’s funding levels.

The Comptroller General provided an annual adjustment in 2006 and 2007 of 2.6 percent and 2.4 percent, respectively, to those who were performing at a satisfactory level and who were paid within applicable competitive compensation limits, except for wage-grade employees, and GAO Personnel Appeals Board employees. In addition to the annual adjustment, GAO employees were eligible for PBC based on their performance appraisal ratings. PBC was calculated using a budget factor of 2.15 percent for both 2006 and 2007. Under section 3(b), the Comptroller General is required to consider the statutory criteria set out in section 3(a) in determining an annual increase for members of the GAO SES and SL employees. The Comptroller General considered these criteria and determined that each member performing at a satisfactory level would receive in 2006 and 2007 a 1.9 percent and 1.7 percent increase, respectively—the same increase that was provided to the Executive Schedule for calendar years 2006 and 2007, respectively. In 2007, SES and SL members were also eligible for PBC using a budget factor of 2.25 percent.

In 2008, after the Comptroller General made preliminary determinations regarding pay adjustments as had been done in 2006 and 2007, GAO management negotiated with representatives of the newly established GAO Employees Association, International Federation of Professional and Technical Engineers (IFPTE) Local 1921 to reach final agreement regarding salary adjustments. In addition to the annual adjustment, GAO employees were eligible for PBC based on their performance appraisal ratings. Pay adjustments for GAO staff included an annual adjustment of 3.5 percent as well as performance based compensation using a budget factor of 2.75 percent.

In 2008, for the first time, GAO implemented a “floor guarantee.” The 2008 floor guarantee provided that if the total increase from the annual adjustment and PBC did not equal at least 4.49 percent of salary, the employee would receive an additional increase to base pay to equal this amount regardless of geographic location. For example, in Washington, D.C., the floor guarantee ensured that all staff received a base pay increase of at least 4.49 percent and was provided without regard to pay range maximums limited only by the GS-15, step 10, statutory maximum rate. In providing the floor guarantee to staff, the additional amount required to bring the base pay adjustment to 4.49 percent of salary was deducted from any PBC bonus. Overall, the average total dollar amount resulting from employees’ annual adjustments, PBC base pay increases and bonuses, and floor guarantees was approximately 6.12 percent of salary.

GAO employees participating in one of GAO’s development programs (Professional Development Program, Attorney Development Program, Communication Analysts Pay Process, Program and Technical Development Program, and Administrative Pay Process) received the 3.5 percent annual adjustment, not to exceed the maximum rate of their bands. These employees were not eligible for the floor guarantee because they received additional performance-based salary increases every 6 months for the 2-year duration of the development program.

GAO’s SES and SL employees were provided the same 2.5 percent increase authorized for the executive branch. SES and SL members were also eligible for PBC using a budget factor of 2.25 percent. The PBC was provided to the SES and SL staff as a base pay increase not to exceed $169,300.

Employees of GAO’s Personnel Appeals Board and student employees are paid according to GS rates, and GAO’s wage grade employees are paid according to the Federal Wage System (FWS) salary rates. These employees received the same percentage across-the-board adjustment on the same effective date as the increases authorized for GS and FWS employees in the executive branch. The pay ranges for these employees incorporated the changes made to the comparable executive branch pay ranges.

Prior to the annual adjustment for 2009, the Government Accountability Office Act of 2008, Public Law 110-323, September 22, 2008, was passed. Under section 2 of this Act, the so called “floor guarantee”, as described above, was enacted into law as section 731(j) of title 31, United States Code.

For year 2009, following preliminary determinations by the Acting Comptroller General and negotiations between management and IFPTE Local 1921, GAO employees received an annual adjustment equal to the “floor guarantee,” which, for example, equaled 4.78 percent in Washington, D.C. In addition, employees were eligible for performance based compensation using a 2.65 percent budget factor.

GAO’s SES and SL employees rated “Fully Successful” were provided a 2.8 percent pay adjustment pursuant to 31 U.S.C. § 733(a)(3)(B) effective January 4, 2009. SES and SL members were also eligible for PBC using a budget factor of 2.65 percent. PBC was provided to the SES and SL staff as a permanent base pay increase not to exceed $174,000.

As in 2008, employees of GAO’s Personnel Appeals Board and student employees were paid according to GS rates, and GAO’s wage grade employees are paid according to the Federal Wage System (FWS) salary rates. These employees received the same percentage across-the-board adjustment on the same effective date as the increases authorized for GS and FWS employees in the executive branch. The pay ranges for these employees incorporated the changes made to the comparable executive branch pay ranges.

In fiscal years 2005 through 2009, there were no extraordinary economic conditions or budgetary constraints that had a significant impact on the determination of the annual pay adjustments.

Section 4: Pay Retention

Section 4 authorizes the Comptroller General to establish pay retention regulations applicable to employees who are placed in lower grades or bands as a result of workforce restructuring, reclassification, or other appropriate circumstances. Table 2 summarizes these data for fiscal years 2005 through 2009.

Section 6: Increased Annual Leave for Key Employees with Less Than 3 Years Service

Under section 6, certain key employees with less than 3 years’ service for purposes of leave accrual may be treated as if they had 3 years of federal service. Therefore, they would earn 160 hours on an annual basis instead of 104 hours. These key employees must be occupying positions that are difficult to fill or have unique or unusually high qualifications and would be difficult to recruit without additional incentives. Table 3 shows the number of employees receiving this flexibility in fiscal years 2005 through 2009.

Section 7: Executive Exchange Program

Section 7 authorized GAO to establish an Executive Exchange Program. After soliciting and analyzing employees’ comments on draft regulations, we issued the final regulations for GAO’s Executive Exchange Program on May 20, 2005. The authority was not used in fiscal years 2006, 2008, or 2009. However, during fiscal year 2007, this authority was used to bring in two executives from private industry, each for a period of 4 months. At GAO, the executives worked on several special projects related to federal agency audits and agency financial statement issues. In addition to helping revise the GAO/PCIE Financial Audit Manual, they used their experience as auditors of agency financial statements to help develop protocols to help GAO interact with the agency-level auditors (inspectors general as well as public accounting firms) during GAO’s audit of the U.S. government’s consolidated financial statement. This program was considered a success from GAO’s standpoint and it met the expectation of the private industry employer that was involved. The authority expired on July 7, 2009.

Section 9: Performance Management System

Section 9 relates to GAO’s performance management system and, among other things, requires a link between the performance management system and the agency’s strategic plan, adequate training on the implementation and operation of the system, and a process for ensuring ongoing performance feedback. Even before the imposition of these requirements, GAO’s performance management system was in conformity with the statutory requirements of section 9.

In fiscal years 2005 and 2006, we conducted annual reviews and assessments of our performance management policies and processes and made improvements, when appropriate. During fiscal year 2007, an evaluation of the fiscal year 2006 appraisal and pay cycle was deferred pending the outcome of the then-ongoing union election.

In fiscal year 2008, GAO undertook various initiatives to ensure the performance management system met its objectives and provided an even playing field for all employees. In response to continuing differences between African American and Caucasian analyst performance appraisal averages, the Ivy Planning Group conducted an independent assessment of the factors that may influence these differences, and was also tasked with identifying what additional steps GAO could take. A final report was issued on April 25, 2008, which contained over 25 major recommendations. GAO is committed to implementing the Ivy Planning Group’s recommendations and has a number of efforts completed and underway to address the recommendations.

In fiscal year 2009, the agency continued to pursue actions designed to ensure that the system met its objectives and was fair and equitable for all employees. GAO established its Management Improvement Priorities Action Plan that includes five areas of concentration: recognizing and valuing diversity; reassessing the performance appraisal system; managing workload, sustaining quality, and streamlining processes; enhancing staffing practices and developing the workforce; and, finally, strengthening recruitment and retention incentives. Projects within these five areas originated from multiple sources, including the Ivy Planning Group's recommendations, CG Special Projects, and suggestions received over time from GAO staff at all levels throughout the agency. These areas also reflect the ongoing efforts of the Office of Opportunity and Inclusiveness, QCI, the Human Capital Office, and the Chief Administrative Office.

GAO completed one of the key management improvement projects—a full, systematic, and inclusive review of the performance appraisal system. The objectives of the review were to examine what works, what does not, and what could be done better. Data collected included a comprehensive content analysis of existing data, the results of 28 focus groups of employees, and 53 semistructured interviews with managing directors and a random sample of SES/SL, Band III, and field office managers. In addition, GAO conducted an agencywide, Web-based survey of employees, with an overall survey response rate of 67 percent. Data from all of these sources were synthesized into a final report issued in November 2009 with extensive findings and short- and long-term recommendations for improving GAO’s performance appraisal system. Planning for implementing the recommendations is in progress with over 50 percent of the short-term recommendations already under way. GAO has also established a steering committee composed of managers and employees including representatives from IFPTE Local 1921 to guide the direction of a more extensive contractor review of the current system to address the findings from the systematic review of the appraisal system.

GAO continues to provide continuing training on the performance appraisal system and the roles and responsibilities of staff, supervisors, and managers. To ensure that all designated performance managers are knowledgeable about appraisal policies, procedures, and practices, GAO required all raters to take online training prior to preparing fiscal year 2008 ratings. Each subsequent year, all new designated performance managers must take online training. GAO also continues to expand staff, supervisory and managerial training and development to include offerings in how to give and receive feedback.

Lastly, during this period, GAO instituted consistent practices across the organization with regard to the review of ratings. Designated performance managers present their preliminary ratings of staff to all Senior Executive Service reviewers. This panel helps to ensure that all raters are consistently applying the rating criteria.

Section 10: Consultation

Section 10 requires us to consult with any interested groups or associations representing officers and employees of GAO when implementing changes brought about by this Act. Typically, in implementing changes such as those in this Act, we have consulted with interested groups and associations within GAO, provided them with draft policies and regulations, and obtained input from them on suggested clarifications or changes to the policies and regulations. We carefully considered this input and have incorporated it, when appropriate, before distributing policies and regulations for comment to all employees.

In 2007, GAO Band I and Band II analysts, auditors, specialists, and investigators, and staff in the Professional Development Program, elected to be represented by a union and established IFPTE, Local 1921. In 2008, GAO and IFPTE, Local 1921, reached an interim collective bargaining agreement. GAO is committed to continuing to work constructively with IFPTE, Local 1921, to finalize and implement a master term collective bargaining agreement.

GAO management actively consults with IFPTE Local 1921; the Employee Advisory Council-which is comprised of headquarters and field administrative, professional, and support staff (APSS), as well as Assistant Directors in analyst and analyst-related positions, and attorneys-and the Diversity Advisory Council-comprised of diversity representatives of IFPTE, Local 1921, and employee liaison groups for employees who are disabled, Asian-American, African-American, Hispanic, veterans of the armed forces, people over 40, and advocates for nondiscrimination based on sexual orientation or gender identity-to hear and consider employee needs, concerns, and suggestions as they arise. IFPTE, Local 1921; the Employee Advisory Council; and the Diversity Advisory Council (DAC) are the primary mechanisms for fostering collaboration and open communication between GAO management and staff.

GAO provided all employees with the opportunity to comment on draft orders concerning proposed policies and regulations prior to publication in final form. These steps were taken in regard to the promulgation of all policies and regulations implementing the provisions of the Human Capital Reform Act of 2004. The Executive Committee considered all input from Employee Advisory Council and Diversity Advisory Council members and other GAO employees before implementing any changes.

Assessments Furnished by Groups Representing Employees

Although GAO specifically solicited comments from the PAB, IFPTE Local 1921, the DAC, and the EAC, only the PAB responded to this request with comments. These are included in appendix I. IFPTE Local 1921 informed GAO management that it will provide its input directly to Congress.

Conclusion

The flexibilities provided in the GAO Human Capital Reform Act of 2004, along with the human capital flexibilities provided in the 2002 and 2008 Acts, have provided GAO with the ability to attract and retain high caliber employees so that GAO can meet its responsibilities to the Congress and the American people.

Recommendations for Legislative Change

GAO is making no recommendations for legislative change.

Appendix I: Comments from the Personnel Appeals Board