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OFFICE OF INSPECTOR GENERAL

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SEMIANNUAL REPORT TO CONGRESS

April 1, 2007 – September 30, 2008


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Office of Inspector General

October 30, 2008

The Honorable Naomi C. Earp Chair
Equal Employment Opportunity Commission
Washington, D.C. 20507

Dear Madam Chair:

The Office of Inspector General’s (OIG) Semiannual Report to Congress, summarizing our activities for the six-month period of April 1, 2008 through September 30, 2008, is provided for your review. The Inspector General Act of 1978, as amended, Public Law 95-451, Section 5(B),requires that you submit this report to the Congress within 30 days of receipt.

During this period, the OIG issued three audit reports and three evaluation reports; completed four investigationsand received 199 investigative inquiries. Highlights include the results of the Performance Audit of the EEOC’s Education, Training and Technical Assistance Program Revolving Fund, the Independent Audit of the EEOC Privacy Program, the Agency’s Compliance with the Federal Information Security Management Act (FISMA), and the Evaluation of the Oversight of Federal Agency Reporting Management Directive 715 and Related Topics.

The OIG also identified the most significant management challenges confronting the Agency. These matters will require a change in the management culture, commitment of significant Agency resources, and sound decision-making by Agency leadership.

Also during this reporting period, both the audit and evaluations unit and the investigative unit of the OIG underwent peer reviews. The Farm Credit Administration (FCA) conducted the peer review of the audit and evaluation function and issued an unqualified opinion on the system of quality control. The National Endowment for the Humanities (NEH) conducted the peer review of the investigations function and issued an unqualified opinion on the system of internal safeguards and management procedures.

The OIG staff would like to thank you for your support and thank the EEOC employees for their continued cooperation and support of our mission to prevent and detect fraud, waste and abuse within the Agency.

Sincerely,

Aletha L. Brown signature


Aletha L. Brown
Inspector General


CONTENTS

Organizational Chart

Executive Summary

Introduction

The Equal Employment Opportunity Commission
The Office of Inspector General
Summary of Significant Management Challenges

The Audit and Evaluation Programs

Completed Projects
Ongoing Audit and Evaluation Projects
Other Audit and Evaluation Activities

The Investigation Program

Core Values Statement
Investigative Inquiries
Completed Investigations
Ongoing Investigation Activities

Professional Development Activities

Appendixes

Appendix I Final OIG Audit and Evaluation Reports
Appendix II Index of Reporting Requirements
Appendix III Single Audit Act Reports


Office of Inspector General Organization Chart

EXECUTIVE SUMMARY

This semiannual report is issued by the Equal Employment Opportunity Commission’s (EEOC’s) Office of Inspector General (OIG) pursuant to the Inspector General Act of 1978, as amended. It summarizes the OIG’s activities and accomplishments for the period of April 1, 2008, through September 30, 2008. During this period, the OIG issued three audit reports and three evaluation reports, completed four investigations,and received 199 investigative inquiries, of which 106 were charge-processing issues, 58 were Title VII complaints, and 35 were other investigative allegations.

The OIG’s completed and ongoing audit, evaluation, and investigative projects include the following:
  • The OIG contracted with WithumSmith+Brown to conduct a performance audit of EEOC’s Education, Training, and Technical Assistance Program Revolving Fund (RF). A final report was issued in August 2008. The auditors concluded that the management of the RF lacks the vision needed to keep pace with the fast-moving world of technology and private competition in which the RF operates; that there is a risk of discontinuity of operations; and that improvements in the preparation of spending plans and budget formulation and in developing useful reports from the Agency’s financial system were needed.
  • The OIG contracted with Cotton & Company, LLP, to perform an independent audit of EEOC’s privacy program. Overall, findings of the independent audit determined that EEOC is substantially meeting privacy-related requirements set forth by Congress, the Office of Management and Budget (OMB), and the National Institute of Standards and Technology (NIST). However, the contractors identified specific areas where privacy policies, procedures, and practices could be strengthened. The contractors found that safeguards over hard-copy sensitive personally identifiable information (PII) were needed; that Web site policies were incomplete and inconsistently applied; that applicable privacy laws and regulations were not identified and documented; and that two-factor authentication when using remote access was not implemented.
  • The OIG conducted an independent evaluation of the Agency’s compliance with the Federal Information Security Management Act (FISMA) of 2002. The evaluation determined that overall, the processes employed by the Office of Information Technology (OIT) for securing information and information systems complied with FISMA. Findings were noted in developing requirements for security awareness and training programs that comply with NIST standards; in the storage of old Agency computers; in the failure to secure user passwords; and in the failure to conduct on-site reviews of field offices’ information security practices.
  • The OIG reporting template was completed as required by the Office of Management and Budget (OMB) Memorandum 08-21, FY 2008 Reporting Instructions for the Federal Information Security Management Act. It was noted that the Agency needed to take steps to ensure that all Windows XP and Vista computing systems meet the OMB and NIST Federal Desktop Core Configuration Security settings, and that the Agency identify all e-authentication applications and that they meet the required assurance levels in accordance with NIST standards.
  • The OIG conducted a self-assessment of its internal control program relating to the procurement of goods and services. Among the recommended corrective actions were that the approving official review the purchase cardholder’s official invoices; that training be provided to ensure that employees have the skills to carry out their responsibilities; that documentation be submitted to support sole-source purchases; and that purchase cards be safeguarded at all times.
  • The OIG conducted an evaluation of the EEOC’s activities related to the oversight of Federal agency equal employment opportunity (EEO) reporting in accordance with the EEOC’s Management Directive 715 (MD 715). The OIG concluded that the EEOC Office of Federal Operations (OFO) faces several major challenges in its oversight efforts. Among our recommendations were that a written plan including a schedule be used to ensure that staff with major oversight responsibilities receive training; that a plan for making MD 715 a Web-based submission process be developed; and that OFO determine a precise date for providing draft and final responses to all agencies.
  • Completed investigations include those involving conflict of interest, reports of asbestos at the NOMA 1 location, mismanagement of and inappropriate file destruction, and alleged breach of PII.
  • Ongoing audit and evaluation projects include the annual consolidated EEOC financial statement audit and review of EEOC’s compliance with the Federal Managers Financial Integrity Act (FMFIA).Also, the OIG is conducting an independent internal control review of the Atlanta District Office. Work continues in the evaluation of the Agency’s succession planning initiatives, and a draft report is expected to be issued during the first quarter of fiscal year (FY) 2009.
  • Ongoing investigative activities involve such matters as falsification of records, malicious mischief, harassment, false statements, theft of government property, conflict of interest, and other ethics violations.

INTRODUCTION

The Equal Employment Opportunity Commission

The Equal Employment Opportunity Commission (EEOC) is the Federal agency responsible for enforcement of Title VII of the Civil Rights Act of 1964, as amended; the Equal Pay Act of 1963; the Age Discrimination in Employment Act of 1967 (ADEA); Section 501 of the Rehabilitation Act of 1973 (in the Federal sector only); Title I of the Americans with Disabilities Act of 1990 (ADA); and the Civil Rights Act of 1991. These statutes prohibit employment discrimination based on race, sex, color, religion, national origin, age, or disability. EEOC is also responsible for carrying out Executive Order 12067, which promotes coordination and minimizes conflict and duplication among Federal agencies that administer statutes or regulations involving employment discrimination.

The EEOC is a bipartisan commission comprising five presidentially appointed members, including a Chair, a Vice Chair, and three commissioners. The Chair is responsible for the administration and implementation of policy and for the financial management and organizational development of the Commission. The Vice Chair and the commissioners equally participate in the development and approval of the policies of the Commission, issue charges of discrimination where appropriate, and authorize the filing of lawsuits. Additionally, the President appoints a General Counsel, who provides legal advice and leadership, including coordination and supervision, to EEOC’s litigation program.

The Office of Inspector General

The United States Congress established an Office of Inspector General (OIG) at the EEOC through the 1988 amendments of the Inspector General Act of 1978, which expanded authority to Federal entities and designated Federal entities to create independent and objective OIGs. Under the direction of the Inspector General (IG), the OIG meets this statutory responsibility by conducting and supervising audits and investigations relating to the programs and operations of the Agency, providing leadership and coordination, and recommending policies for activities designed to promote economy, efficiency, and effectiveness in the administration of and to prevent and detect fraud and abuse in such programs and operations. The IG keeps the Chair and Congress fully and currently informed about problems and deficiencies relating to the administration of such programs and operations and the necessity for and progress of corrective action by issuing semiannual reports to Congress.

The OIG is under the supervision of the IG, an independent EEOC official subject to the general supervision of the Chair. The IG must not be prevented or prohibited by the Chair or any other EEOC official from initiating, carrying out, or completing any audit, investigation, evaluation, or other inquiry or from issuing any report. The IG provides overall direction, coordination, and leadership to the OIG; establishes program priorities, provides final review on all significant matters, and approves the general course of action to be followed by OIG staff; is the principal advisor to the Chair in connection with all audit and investigative matters relating to the prevention, identification, and elimination of waste in any EEOC program or operation and recommends the proper boundaries of audit and investigation jurisdiction between the OIG and other EEOC organizations; develops a separate and independent annual budget for the OIG; and responds directly to inquiries from the public, Congress, or the news media and prepares press releases, statements, and other information about OIG activities.

The Deputy Inspector General (DIG) serves as the alternate to the IG and participates fully in the policy development and management of the diverse audit, investigative, evaluation, and support operations of the OIG. The DIG also ensures that the Audit, Evaluation, and Investigation Programs (AEIP) address their mission, goals, and objectives in accordance with the Inspector General Act, other laws, Agency policy, and congressional requests. The DIG provides overall direction, program guidance, and supervision to the AEIP. The AEIP staff conducts audits, evaluations, and investigations of EEOC operations and activities and prepares reports for issuance to the Chair, EEOC management, and Congress. Conducting audits, evaluations, and investigations is the primary mission of the OIG.

The Counsel to IG (CIG) is the sole legal advisor in the OIG, providing advice in connection with matters of importance to the OIG. The CIG provides day-to-day supervision and guidance to the OIG’s investigation team and is the primary liaison with Agency legal components and the Department of Justice. The CIG assists the IG and DIG; coordinates and participates in the development and implementation of OIG policies and procedures; reviews all audit, evaluation, and investigation reports for legal sufficiency; and reviews proposed and revised legislation and regulations and recommends appropriate responses and actions.

Summary of Significant Management Challenges

The following is a summary of issues the IG considers the most serious management challenges the Agency is confronting. These matters require not only the commitment of significant Agency resources, sound decision making by the Agency’s leadership, and continued oversight by the OIG, but also a change in management culture. Specifically, EEOC management needs to break the cycle of continuing to use its standard methods and embark on innovative processes that are more efficient and productive. Without addressing each of the following issues, the ability of the Agency to continue to meet its mission and the challenges of the 21st century may be compromised.

Strategic Management of Human Capital

The Agency’s strategic management of human capital remains a major management challenge, and progress appears slow. In its June 2008 report to the Chairman of the U.S. Senate’s Subcommittee on Commerce, Justice, Science, and Related Agencies, Committee on Appropriations, the Government Accountability Office (GAO) notes that after four years, the EEOC’s efforts to develop, communicate, and implement a strategic human capital plan are still incomplete. In the report, GAO recommended that the Chair finalize the strategic human capital plan on the basis of skills and competencies assessments and develop an implementation plan for the strategies identified in the plan with stakeholder input that identifies necessary resources, responsible parties, timelines for completion, and milestones to measure progress. The Office of Human Resources (OHR) last updated the draft plan in September 2008, and it was submitted to the Chair’s office for review. The OIG requested a copy of the document but was told by OHR officials that senior management requested that the draft report not be released until after their review was complete.

The OIG notes that another human capital concern is the vacancy left by the retirement of its Chief Human Capital Officer in June 2008. This is a key position within the Agency, and the individual selected for this position will serve as the Agency’s chief policy advisor on all human resources management issues. Several managers within the OHR will be serving as Acting Chief Human Capital Officer on a rotating basis until the position is filled. The fact that the Agency has not advertised for a Chief Human Capital Officer more than four months after the retirement indicates that the strategic management of human capital is not considered a high priority in the Agency. Other OHR staffing issues, such as the absence of critical skill sets and continued vacancies, further support the lack of attention to this critical Agency function. Management needs to finalize its human capital plan and ensure that it is linked to the EEOC’s strategic plan and annual performance goals.

Finally, the Agency must take steps now to ensure that a pipeline exists within the current workforce to provide leaders equipped with the necessary skills, knowledge, and abilities to lead the Agency in meeting its mission and strategic goals in the future. In Chair Naomi Earp’s testimony before Congress in April 2008, she explained that there is no fully fleshed-out succession planning system in the Agency and that the strategic human capital plan will include provisions for succession planning. In a document prepared by OHR entitled Leadership Succession Management Plan: Leading into the Future, September 2007, key and mission-critical leadership positions were identified, but the plan did not contain information addressing movement of current employees into leadership positions. Additionally, steps must be taken to link the Agency’s succession planning efforts with the Agency’s strategic plan and to integrate succession planning into the budgetary planning process. The OHR managers indicated that they recently met with senior management to discuss a revised draft leadership succession plan. Senior management requested that the plan be submitted to the Senior Executive Service Advisory Council, established in September 2008, to obtain its input and recommendations. The OIG will receive a copy of the plan after that review is completed.

Private Sector Charge Inventory

EEOC faces a major challenge in adequately addressing the growing backlog of private-sector discrimination cases. This backlog, known as “charge inventory,” is growing rapidly and is expected to continue growing. The primary negative effect is the delay in case resolution for thousands of EEOC primary customers, the people who believe they have been discriminated against.

Preliminary FY 2008 information indicates that EEOC received 95,000 new private-sector charges—12,000 more than last year—resulting in a beginning FY 2009 inventory of nearly 75,000 charges. This presents an enormous challenge, according to the Director of the Office of Field Programs, and to slow growth in and then eventually decrease inventory, EEOC needs either dramatic budget increases, allowing hiring of many more staff to process cases, or major improvements in how efficiently it processes cases. Based on trends relating to agency appropriations, dramatic budget increases are extremely unlikely, so EEOC needs to focus on major improvements in case processing.

In its FY 2009 budget justification, EEOC did not propose major improvements in charge processing. EEOC has not embarked on major initiatives to reduce the inventory or to reduce the growth of the inventory in over 10 years. The last major initiative was the Priority Charge Handling Process (PCHP), instituted in 1995. As reported by Chair Earp in her April 2008 testimony before Congress, “the charges that we receive are increasingly nuanced and more complex. This requires refocusing and making a strategic alignment to enable the Commission to continue to be effective in this 21st century environment.”

Without a focus on majorimprovements, there will not be a fundamental change in how well EEOC succeeds in its most important and resource-intensive activity. One of the key findings of the GAO report relating to the private-sector charge inventory was the Agency’s failure to share promising management practices with all field offices. We agree with GAO that EEOC needs to develop criteria for identifying offices that ensure quality outcomes in a timely manner and share promising practices across the Agency. These efforts will contribute to the efficiency and effectiveness of handling private-sector charge case processing in a timely manner.

Budget and Performance Integration

EEOC remains challenged in integrating budget and performance. Without better data in this area, it is difficult to know how well EEOC performs with the resources it is given. The Agency still has the lowest possible OMB Program Assessment Rating Tool score (“Results Not Demonstrated”), which means that EEOC cannot yet measure performance adequately. To address this deficiency, EEOC in 2007 adopted an improvement plan, and the Agency has made significant progress, including work in the reporting period on identification of specific performance targets and goals. EEOC is also continuing to work with its Fair Employment Practices Agencies to determine effective ways to measure their contributions.

In July 2008 the Agency adopted a strategic plan that greatly reduced processing-time goals and targets for private-sector case resolution. For 2012, the target for cases resolved within 180 days was reduced from 75 percent to 54 percent. However, OMB did not accept the new targets, leaving the authority of the Agency’s strategic plan in doubt. Without solid performance data to support lowering performance levels, as decided by the Commission, the EEOC will likely face renewed and major challenges in determining and justifying short- and long-term performance targets. Until EEOC senior managers, particularly those responsible for private-sector case processing, accept the need to gather and use data to assess performance accurately, these long-standing challenges will continue.

Reduced Targets for Private Sector Charge Resolution

Reduced Targets for Private Sector Charge Resolution

Such performance data can be captured using a cost-accounting system. While EEOC has made progress in improving its labor hour distribution system, the system is not robust. Without adopting and fully utilizing a more-detailed cost-accounting system, the Agency will make many resource and management requests and decisions without vital information. For example, EEOC staff were unable to provide adequate support to the Chair for systemic litigation resource requests, making budget requests to Congress difficult and inferior to requests that include cost data. As a result, the annual EEOC budget request contains much information on what and how much was done, rather than how well it was done.

Change in Information Technology Culture

One of the major issues facing the Office of Information Technology (OIT) is change management in providing timely and appropriate information technology resources. As the Agency and its stakeholders have faced workforce changes due to technology innovation, OIT has had to reengineer itself and its business processes to meet current and future stakeholder needs. According to the Chief Information Officer (CIO), a change in the Agency’s information technology culture is required. OIT is in the process of implementing a number of recommendations suggested in an independent consultant’s report that focused on OIT customer service and its ability to provide for stakeholder needs.

Also, as part of this change, the CIO is challenged with developing business relationships with stakeholders to aid in the identification of critical needs so that OIT can better assist Agency program offices in accomplishing the Agency’s mission. The CIO has made initial strides in developing business relationships through tactical planning and by involving stakeholders in IT decision-making processes. This is being accomplished through:

  • Senior executive engagement;
  • Sharing the CIO’s philosophy with senior OIT staff concerning how to deal with business partners (stakeholders); and
  • Modeling the behavior that is to be exhibited by OIT staff.

nformation gathered through the development of business partner relationships, by implementation of the independent consultant’s recommendations, and from other sources will aid OIT in developing a new IT strategic plan. This replaces an earlier plan that, according to the Agency’s CIO, is out of date and does not reflect the changes now occurring inside and outside of EEOC.

THE AUDIT AND EVALUATION PROGRAM

The Audit and Evaluation Program supports OIG’s strategic goal to improve the economy, efficiency, and effectiveness of EEOC programs, operations, and activities.

Completed Projects

Performance Audit of the Equal Employment Opportunity Commission’s (EEOC’s) Education, Training, and Technical Assistance Program Revolving Fund (OIG Report No. 2007-11RFPERF)

The OIG contracted with the firm WithumSmith+Brown to conduct a performance audit of the efficiency and effectiveness of the EEOC’s Education, Training, and Technical Assistance Program Revolving Fund (RF). The auditors had these conclusions:

  • The RF Director needs to be independent of RF stakeholders so that differences in perspective can be balanced and no single stakeholder has undue influence.
  • RF management lacks a vision that keeps the RF from achieving its mission. The RF program lacks a forward-thinking strategy to ensure that the program continues to meet the needs of its customers and remains competitive in the marketplace. RF management had not updated their latest business plan, which covered the period FY 2003–2005. The business plan serves as the RF’s strategic guide for achieving its objectives. Without a written business plan, there is no common understanding by EEOC stakeholders of the RF program’s future direction.
  • RF management risk discontinuity of operations. There are very limited written policies and procedures related to the operations of the division. Additionally, there is no staff cross-training to help ensure that operations can continue when someone is out.
  • Improvements are needed in the preparation of spending plans, in budget development, and in the development of useful reports from the Agency’s financial system. Even though cost data is readily available in electronic format that can be summarized and used, RF staff lack technical skills needed to effectively use the data. As a result, RF staff continue to prepare spending plans in a piecemeal, time-consuming manner, which also contributes to a lack of reconciliation procedures between the accounting system and the spending plans.

The auditors made these recommendations:

  • The RFD should operate as an independent program within the Agency to ensure that the interests of its customers are balanced among stakeholders.
  • An EEOC Training Institute Steering Committee should be established, with the RF Director as chair of the committee.
  • The RF business plan should be updated to reflect the strategic direction, vision, and goals of the program for the next 3–5 years and include a policy and process for developing and approving new course offerings.
  • Management should ensure that written policies and procedures be developed for all aspects of RFD operations and that cross-training between job functions be initiated.
  • The RFD should continue working with the Office of Chief Financial Officer to design useful system-generated reports that provide more detailed financial information.
  • RF spending plans should be reconciled with amounts recorded in the accounting system.
  • RF should seek professional assistance to develop a more effective budget methodology to project financial information with which to plan training events and monitor costs.

Fiscal Year 2008 Independent Audit of EEOC Privacy Program (OIG Report No. 2008-12-AEP)

The OIG contracted with Cotton & Company, LLP, to perform an independent audit of the Agency’s Privacy Program. During this audit, Cotton & Company, LLP, assessed the Agency’s compliance with applicable Federal security and privacy laws and regulations, as well as EEOC’s policies and procedures related to identifying and securing privacy-related data. Cotton’s audit determined that overall EEOC is substantially meeting privacy-related requirements set forth by Congress, OMB, and the National Institute of Standards and Technology (NIST). Generally, Agency management agreed with the facts in the report and the OIG’s findings, conclusions, and recommendations.

Cotton & Company, LLP, identified the following areas in which Agency improvement was necessary:

  • Safeguards over hard-copy sensitive personally identifiable information (PII)
  • Incomplete and inconsistently applied Web site privacy policies
  • Identification and documentation of applicable privacy laws and regulations
  • Implementation of two-factor authentication when using remote access

Fiscal Year 2008 Independent Evaluation of the Agency Compliance with the Federal Information Security Management Act (OIG Report No.2008-13-AEP)

During the reporting period, the OIG conducted an independent evaluation of Agency compliance with the Federal Information Security Management Act (FISMA). The E-Government Act of 2002 (P.L. No. 107-347), which includes Title III, FISMA, was enacted to strengthen the security of Federal government information and information systems. FISMA outlines information security compliance criteria for agencies, including the requirement for annual review and independent evaluation by agency inspectors general.

OIG’s independent evaluation determined that overall the processes employed by the Office of Information Technology (OIT) for securing Agency information and information systems complied with FISMA. OIT agreed with all findings and recommendations in the evaluation report.

OIG found the following control deficiencies that require management’s attention:

  • The EEOC’s Security Awareness Training Policy, dated June 2008, does not fully meet NIST requirements concerning the development of a security awareness and training program.
  • Old Agency computers were found stacked in an open area.
  • User passwords for the general support system (network) were found displayed in open common areas.
  • On-site reviews of the information security practices are not conducted at EEOC field offices.

FY 2008 Reporting Instructions for the Federal Information Security Management Act—Reporting Template for the Inspectors General (OIG Report No. 2008-15-AEP)

During the reporting period, the OIG completed the reporting template included in OMB Memorandum 08-21, FY 2008 Reporting Instructions for the Federal Information Security Management Act. This memorandum provides instructions for meeting the Agency’s FY 2008 reporting requirements under FISMA (Title III, Pub. L. No. 107-347).

Within the template, the OIG identified only two specific areas in which the Agency’s OIT had not fully complied with the FY 2008 reporting requirements:

  • All Windows XP and Vista computing systemshave not implemented theFederal Desktop Core Configuration security settings as mandated by OMB and the National Institute of Standards and Technology.
  • The Agency has not identified all e-authentication applications and validated that the applications have operationally achieved the required assurance level in accordance with the NIST Special Publication 800-63, Electronic Authentication Guidelines.

Review of OIG Internal Controls Over the Procurement of Goods and Services (OIG Report No. 2008-08-PUR)

The OIG conducted an assessment of its internal control program relating to the procurement of goods and services. OIG management is responsible for establishing and maintaining internal controls. Management agreed with the facts in the report and OIG findings, conclusions, and recommendations.

During our assessment, we identified four internal control areas where improvements are needed:

  • During the review of Bank of America purchase card statements and supporting documentation, there was no indication of an approving official signature or notes reflecting that approval or that a review had been performed.
  • The approving official had not received any training relating to responsibilities of the purchase card program, such as the approval process, spending practices, or the authorization process.
  • There was one instance noted when transcription services were procured from a new vendor without authorization from management to change the vendor. Internal standard operating procedures are imperative in selection of vendors not included in the General Services Administration Schedule or the Central Contractor Registry.
  • Of the two purchase cards authorized for the OIG by the Office of Chief Financial Officer, it was noted that one of those cards was not properly secured to prevent possible card theft or fraudulent use.

We recommended that the following actions be taken:

  • The approving official should review and approve purchase cardholders’ purchase card statements and supporting documentation by including a signature or note on these documents prior to submitting for payment.
  • Purchase card training should be comprehensive to ensure that all cardholders and approving officials are adequately trained. Records should indicate training taken, when it was taken, and if appropriate, when refresher training is due.
  • Authorization from management for using new vendors should be granted in advance before obtaining any services. Also, documentation must be submitted that supports sole-source purchases. Documentation should clearly identify what was purchased, from where, and by whom.
  • The purchase card and account number must be kept in a secured place. The card should not be kept in an unlocked desk or other unsecured location. The cardholder may keep the purchase card on his/her person only when on official government business.

Oversight of Federal Agency Reporting—Management Directive 715 and Related Topics (OIG Report No. 2008-03-AMR)

The OIG conducted an evaluation of the EEOC’s activities related to the oversight of Federal agency Equal Employment Opportunity (EEO) reporting, focusing on the reporting described in the EEOC’s Management Directive 715 (MD 715). MD 715 describes Federal agency standards for developing model EEO programs. Generally, management agreed with the report’s findings, conclusions, and recommendations.

We concluded the following:

  • EEOC’s Office of Federal Operations (OFO), while providing useful feedback on agency reporting and customer service in some areas, faces several major challenges in its oversight efforts.
  • OFO recently began providing three-year trend analysis to Federal agencies, thereby improving its oversight capabilities through the provision of more-detailed feedback on agency progress in reaching EEO goals.
  • Federal EEO managers generally approve of OFO’s customer service efforts.

The OIG recommended that the following actions be taken:

  • Develop a written plan, including a schedule, to ensure timely training for staff with major oversight assignments.
  • Assess the Federal sector programs’ organizational structure based on the currently authorized positions in order to create more stability in leadership and management positions.
  • Develop a plan with milestones for making MD 715 a Web-based submission process.
  • Ensure that all agencies receive OFO feedback on MD 715 in time to fully prepare for FY 2008 submissions. Ensuring timely feedback begins with OFO determining a precise date for providing draft and final responses and generating project plans to manage the feedback effort.
  • Obtain customer feedback on MD 715 and other oversight issues using a real-time blog or similar mechanism.
  • Require Federal agencies to submit Part G, their internal EEO assessment, with their annual MD 715 submissions.

Ongoing Audit and Evaluation Projects

FY 2008 Audit of the Equal Employment Opportunity Commission’s Financial Statements

The OIG contracted with Cotton & Company, LLP, to perform the financial statement audit of the EEOC, which is required by the Accountability of Tax Dollars Act of 2002.Field work is currently in progress, and it is expected that the audit opinion will be issued by November 14, 2008, to meet OMB’s accelerated reporting deadline of November 15, 2008, and for inclusion in the Agency’s 2008 Performance and Accountability Report. Additionally, a Management Letter Report will be issued shortly after the financial statement audit identifying any internal weaknesses noted.

Agency Compliance with the Federal Managers’ Financial Integrity Act

The purpose of the OIG’s independent assessment is to determine if the Agency’s management control evaluation process was conducted in accordance with OMB’s standards. EEOC Order 195.001, Internal Control Systems, requires the OIG to annually provide the Chair a written advisory on whether EEOC’s management control evaluation process complied with OMB guidelines. To make this determination, OIG is reviewing:

  • system assurance statements submitted by headquarters and district directors;
  • functional area summary tables and functional area reports submitted by headquarters and field offices; and
  • EEOC’s Office of Research, Information, and Planning’s FY 2005 Federal Managers’ Financial Integrity Act (FMFIA) Assurance Statement and Assurance Statement Letter, with supporting documents.

OIG’s advisory to the Chair will be issued prior to the reporting deadline of November 15, 2008, and will be available for inclusion in the Agency’s 2008 Performance and Accountability Report.

Review of Atlanta District Office Federal Manager’s Financial Integrity Act (FMFIA) Internal Control Testing

The OIG is conducting an independent review of the Atlanta District Office’s compliance with certain internal control areas as they relate to FMFIA. The review includes verification and validation of Freedom of Information Act reporting, purchase cards and convenience checks reporting, time and attendance reporting, and property management reporting. A final report is planned for issuance in the first quarter of FY 2009.

Succession Planning

The OIG is finalizing its review of the Agency’s succession planning efforts. The objective of our review is to determine actions taken by EEOC to address the core requirement of the President’s Management Agenda for strategic management of human capital dealing specifically with succession planning. A draft report is planned for issuance in the first quarter of FY 2009.

Other Audit and Evaluation Activities

Review of Single Audit Act Reports

During the reporting period, the OIG reviewed 11 audit reports issued by public accounting firms concerning Fair Employment Practices Agencies (FEPAs) that have work-sharing agreements with EEOC. There were no audit findings for the FEPAs that involved EEOC funds (see Appendix III). The Single Audit Act of 1984 requires recipients of Federal funds to arrange for audits of their activities. Federal agencies that award these funds must receive annual audit reports to determine whether prompt and appropriate corrective action has been taken in response to audit findings.

Briefing on Project Management

As part of the OIG’s efforts to assist Agency management in improving their business processes and other management efforts, the OIG Senior Evaluator and the Deputy Inspector General provided a half-day program-evaluation course to staff from EEOC’s Office of Federal Operations. In addition, the OIG Senior Evaluator and the Deputy Inspector General briefed EEOC’s Office of Federal Operation staff on project management principles and related issues.

Internal Controls Training Provided to the Atlanta District Office

An OIG auditor provided a training session to management and staff of the Atlanta District Office regarding staff responsibilities for internal controls and the importance of the Federal Management Financial Integrity Act (FMFIA). The training addressed the components of internal controls, the results of weak internal controls, how to strengthen internal controls, safeguarding government assets, and accurately reporting internal control weaknesses to headquarters.

Audit and Evaluation Peer Review

A peer review of the system of quality control of the OIG’s audit function was conducted from June through August 2008 by the Inspector General of the Farm Credit Administration. The final report, issued September 4, 2008, found OIG’s system of quality control for its audit function in compliance with the quality standards established by the Comptroller General of the United States for a Federal government audit organization and provided reasonable assurance of conformance with applicable auditing standards, policies, and procedures.

Audit Follow-Up

Section 5(a)(1) of the Inspector General Act of 1978, as amended, requires that semiannual reports include a summary description of significant problems, abuses, and deficiencies relating to the Agency’s administration of programs and operations disclosed by the OIG during the reporting period. The following table shows reports issued during this reporting period (April 1, 2008 – September 30, 2008) that contained findings:

Fiscal Year Report Number Report Title Date Issued Recommendations
2008 2007-11-FIN Performance Audit of the Equal Employment Opportunity Commission’s Education, Training, and Technical Assistance Program Revolving Fund 8/26/08 Yes
2008 2008-12-AEP FY 2008 Independent Audit of EEOC Privacy Program 9/30/08 Yes
2008 2008-13-AEP Independent Evaluation of Agency Compliance with Federal Information Systems Management Act (FISMA) 9/24/08 Yes
2008 2008-15-AEP FY 2008 Reporting Instruction for FISMA Reporting Template for Inspectors General 9/16/08 Yes
2008 2008-08-PUR Review of OIG Internal Controls Over Procurement of Goods and Services 9/11/08 Yes
2008 2008-03-AMR Oversight of Federal Agency Reporting Management Directive 715 and Related Topics 9/26/08 Yes

As required by Section 5(a)(3) of the Inspector General Act of 1978, as amended, semiannual reports shall provide an identification of each significant recommendation described in previous semiannual reports on which corrective action has not been completed. The following table shows those activities noted in previous semiannual reports for which corrective actions have not been completed:

Fiscal Year Report Number Report Title Date Issued
2007 2007-09-FIN FY 2007 Management Letter Report 01/16/08
    Open Recommendation:  
    OCFO coordinate with the Director of RFD to establish procedures to recognize revenue on a full accrual basis consistent with generally accepted accounting principles.  
    EEOC complete background investigations for all employees and contractors in accordance with Federal and EEOC guidelines.  
    EEOC develop, document, and implement policies and procedures for reviewing user accounts on all systems. Also, review user listings against terminated and separated employee listings.  
2006 2006-04-FIN FY 2006 Management Letter Report 02/09/07
    Open Recommendations:  
    EEOC’s CFO should report headquarters offices to the Office of the Chair (OCH) and field offices to the Director, Office of Field Programs (OFP) for their noncompliance with the property certification policy.  
    Ensure that all Forms 629 (Reports of Loss, Theft, or Incident ) are provided to the Security Specialist in a timely manner.  
    EEOC’s CFO should refine the accounts payable and UDO review process to ensure that all recorded balances at year end are valid and require personnel to contact vendors to obtain invoices for accounts payable over threee months old.  
    CFO improve quality control for reviewing final versions of the financial statements and related footnotes to ensure that financial information is complete, accurate, consistent, and timely.  
2007 2007-12-AMR Evaluation of EEOC Field Office Continuity of Operations 3/27/08
    Open Recommendations:  
    Direct field office directors to prepare COOP plans and activities to ensure that field offices are adequately prepared for a COOP event.  
    Ensure that all field office staff take the COOP Awareness Course.  
    Develop and implement policy and procedures instructing field office staff to store all mission-critical electronic files on Agency-managed network drives.  

As required by Section 5(a) (10) of the Inspector General Act of 1978, as amended, semiannual reports must include a summary of each audit report issued before the commencement of the reporting period for which no management decision has been made by the end of the reporting period. The OIG has no audit or evaluation reports that were issued before commencement of the reporting period for which no management decisions have been made.

OIG Shield

THE INVESTIGATIVE PROGRAM




The Investigation Program supports the OIG’s strategic goal to focus limited investigative resources on issues that represent the greatest risk and offer the maximum opportunity to detect and prevent fraud, waste, and abuse in EEOC programs and operations.

Core Values Statement

The Investigation Program is a professional investigative team committed to ensuring the integrity of EEOC’s programs, operations, and personnel. We endeavor to protect Agency resources and prevent fraud by maintaining our core values in accomplishment of the Agency’s mission.

To that end, the investigative division considers initiative, professionalism, and objectivity to be the core values of its special agents. These values reflect the philosophy and commitment of our team.

Initiative: Special agents are motivated to act responsively and energetically in executing their fiduciary responsibility to the OIG.
Professionalism: Special agents sustain and strive for the highest level of investigative proficiency, accountability, and expertise to the OIG and the Agency. Agents exhibit superior performance, knowledge, and skills and possess sound ethical judgment.
Objectivity: Special agents maintain a strong sense of truth, impartiality, and independence in conducting investigations and related tasks. Decisions and findings are free of personal and professional bias.

Investigative Inquiries

Investigative Inquiries Received April 1, 2008 – September 30, 2008
Allegations Total
Charge Processing
106
Other Statutes
8
Title VII
58
Mismanagement
0
Ethics
3
Backgrounds
7
Theft
2
Other Criminal Violations
9
Fraud
6
TOTALS
199

Completed Investigations

Conflict of Interest

The OIG was referred an allegation from the Office of Legal Counsel, resulting from its review of the Financial Disclosure Report filed by an Agency employee, for possible violation of Title 18 U.S.C. §208. During the course of the investigation, the OIG reviewed the charge of discrimination investigative files, conducted interviews with the assigned investigators for the specific case files, and interviewed the supervisory investigator. It was determined that a reasonable person with knowledge of the facts would find that the Agency employee did not participate “personally and substantially” in the questioned charges of discrimination. The employee’s actions can be classified as strictly perfunctory or administrative acts since the employee made no decision, conducted no investigation, or made a determination in these matters. The matter was closed.

Reports of Asbestos

The OIG received a request for assistance from the Chief Operating Officer (COO) regarding rumors circulating within the Agency that NOMA 1, located at 131 M Street, NE, Washington, D.C., is an unsafe building and that current building residents, U.S. Alcohol, Tobacco, and Firearms (ATF) employees, are complaining about health problems related to asbestos in the building.

The OIG observed no evidence of potential environmental problems during this visit. The OIG requested copies of all environmental impact statements and abatement orders related to NOMA 1. In addition, OIG agents conducted several interviews of key officials related to NOMA 1. One official informed OIG that the General Services Administration (GSA) contracted with a vendor, MacTec, to test work areas in the three divisions of ATF on June 26, 2008. MacTec conducted tests for air quality, dust, mold, temperature readings, and carbon monoxide readings inside and outside of NOMA 1. After completion of the on-site visit and appropriate interviews, the OIG turned the matter over to the COO.

Mismanagement/Inappropriate File Destruction

The OIG received a complaint from a confidential complainant (CC) alleging that management officials were mismanaging the office by harassing employees, inappropriately destroying charge files, and mismanaging time and attendance and that the CC was being retaliated against for complaining about the alleged mismanagement. The OIG closed this matter because the preliminary investigation did not uncover criminal conduct by management officials.

Ongoing Investigation Activities

The OIG has ongoing cases in the following areas: falsification of records, malicious mischief, harassment, false statements, theft of government property, conflict of interest, and other ethics violations.

Investigative Peer Review

In July 2008, a peer review of the system of internal safeguards and management of the OIG’s investigative operation was conducted by the Inspector General of the National Endowment for the Humanities. The final report, issued in September 2008, found the OIG to be in full compliance with the quality standards established by the President’s Council on Integrity and Efficiency and the Executive Council on Integrity and Efficiency and with the Attorney General’s Guidelines.

PROFESSIONAL DEVELOPMENT ACTIVITIES

The OIG staff participated in conferences of the President’s Council on Integrity and Efficiency and the Executive Council on Integrity and Efficiency and completed these formal courses:

  • Inspector General Advanced Interviewing for IG Investigators
  • Behavioral Interviewing
  • Association of Government Accountants (AGA) Professional Development Conference
  • National Intergovernmental Audit Forum
  • Succession Planning Webinar
  • Association of Inspector General Certified Inspector General Auditor Training
  • Key Executive Leadership Certificate Program for Inspector General Leaders

OIG staff retained membership in the following professional organizations:

  • American Bar Association
  • American Evaluation Association (AEA)
  • American Institute of Certified Public Accountants (AICPA)
  • Association of Certified Fraud Examiners (ACFE)
  • Association of Government Accountants (AGA)
  • Certified Inspector General Investigator, Association of Inspectors General (AIG)
  • Certified Inspector General Auditor, Association of Inspectors General (AIG)
  • Certified High Technology Crime Investigator, High Tech Crime Institute
  • Council of Counsels to Inspectors General (CCIG)
  • Federal Law Enforcement Officers Association (FLEOA)
  • Information Systems Audit and Control Association (ISACA)
  • International Association of Privacy Professionals (IAPP)
  • Maryland Association of Certified Public Accountants (MACPA)
  • National Organization for Black Law Enforcement Executives (NOBLE)
  • The Institute of Internal Auditors (IIA)

OIG staff served as facilitators or presenters for the following:

  • Special agent facilitated the IG Investigative Training Program at the IG Academy at the Federal Law Enforcement Training Center.
  • Special agent served as a facilitator for the Equal Employment Opportunity Commission’s Can We Talk program to promote diversity awareness
  • Deputy Inspector General presented a workshop on OIG investigations at the Association of Inspectors General Institute at American University

APPENDIXES

APPENDIX I – FINAL OIG AUDIT AND EVALUATION REPORTS

Report Title Date Issued Questioned Costs Funds Put to Better Use Unsupported Costs
Performance Audit of EEOC’s Education, Training, and Technical Assistance Program Revolving Fund 8/26/08 $0 $0 $0
Review of OIG Internal Controls Over Procurement of Goods and Services 9/11/08 $0 $0 $0
FY ’08 Reporting Instruction for FISMA Reporting Template for Inspectors General 9/16/08 $0 $0 $0
Independent Evaluation of Agency Compliance with Federal Information Systems Management Act (FISMA) 9/24/08 $0 $0 $0
Oversight of Federal Agency Reporting Management Directive 715 and Related Topics 9/26/08 $0 $0 $0
FY 2008 Independent Audit of EEOC Privacy Program 9/30/08 $0 $0 $0

APPENDIX II – INDEX OF REPORTING REQUIREMENTS

IG ACT CITE REPORTING REQUIREMENTS PAGE
Section 4(a)(2) Review of Legislation and Regulations N/A
Section 5(a)(1) Significant Problems, Abuses, and Deficiencies 18
Section 5(a)(2) Recommendations with Respect to Significant Problems, Abuses, and Deficiencies 11-16
Section 5(a)(3) Significant Recommendations Included in Previous Reports on Which Corrective Action Has Not Been Completed 19-20
Section 5(a)(4) Matters Referred to Prosecutive Authorities N/A
Section 5(a)(5) Summary of Instances Where Information Was Refused N/A
Section 5(a)(6) List of Audit Reports 26
Section 5(a)(7) Summary of Significant Reports 11-16
Section 5(a)(8) Questioned and Unsupported Costs N/A
Section 5(a)(9) Recommendations That Funds Be Put to Better Use N/A
Section 5(a)(10) Summary of Audit Reports Issued Before the Commencement of the Reporting Period for Which No Management Decision Has Been Made N/A
Section 5(a)(11) Significant Management Decisions That Were Revised During the Reporting Period N/A
Section 5(a)(12) Significant Management Decisions with Which the OIG Disagreed N/A

APPENDIX III – SINGLE AUDIT ACT REPORTS

The State of Louisiana, FY 2005 The State of Utah, FY 2007
The State of Kansas, FY 2005 The State of Alaska, FY 2005
The State of Alaska, FY 2007 The State of Massachusetts, FY 2007
The State of Maine, FY 2006 The State of New Jersey, FY 2006
The State of Ohio, FY 2006 The State of Pennsylvania, FY 2006
The State of Maryland, FY 2007  

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