Management's Discussion and Analysis

Introduction

This FY 2014 Performance and Accountability Report (PAR) was prepared in accordance with the Reports Consolidation Act of 2000 and the Office of Management and Budget's (OMB) Circular A-136, Financial Reporting Requirements. It presents the U.S. Equal Employment Opportunity Commission's ("EEOC, "Commission," or "the agency") program results and financial performance and identifies management challenges. Agency efforts in each of these areas are summarized below. A more detailed discussion can be found in the following sections of the report:

• Performance Results: Highlight the progress made in meeting the agency's performance measures, which are articulated in the EEOC's Strategic Plan for Fiscal Years 2012 through 2016.
• The Inspector General's Statements: Present key management challenges identified by the Inspector General, the agency's progress and plans to address them, and a statement of compliance with the Federal Managers' Financial Integrity Act (FMFIA).
• The Consolidated Financial Statements: Demonstrate efforts to monitor the funds the agency receives to carry out its mission. Included in this section is an independent auditor's opinion on the agency's financial statements.

This report also satisfies the EEOC's obligation to provide Congress with annual reports of the agency's significant accomplishments achieved during the fiscal year.

Agency Overview

FY 2014 marked the 50^th anniversary of the Civil Rights Act of 1964. Title VII of the Act makes it unlawful to discriminate on the basis of race, color, national origin, sex or religion. The Act created the EEOC to enforce the law, and promote equal employment opportunity. The agency opened its doors on July 2, 1965, a year after the landmark legislation was signed.

Today, the EEOC is the leading federal law enforcement agency dedicated to eradicating employment discrimination on the basis of race, color, national origin, sex, religion, age, disability, and family medical history or genetic information. The EEOC receives, investigates, and resolves charges of employment discrimination filed against private sector employers, employment agencies, labor unions, and state and local governments. Where the agency does not resolve these charges through conciliation or other informal methods, it may file suit in court against private sector employers, employment agencies and labor unions (and against state and local governments in cases alleging age discrimination or equal pay violations). The EEOC also leads and coordinates equal employment opportunity efforts across the federal government, and conducts administrative hearings and issues appellate decisions on complaints of discrimination filed by federal employees and applicants for federal employment. Finally, the agency engages in extensive communication and outreach, provides technical assistance, and promulgates regulations and written enforcement guidance to help employers and employees better understand their rights and responsibilities under the laws the EEOC enforces.

A more detailed explanation of the EEOC's structure and the laws it enforces can be found in Appendix A.

Agency Results under the Strategic Plan Performance Measures

The Government Performance and Results Modernization Act, enacted on January 4, 2011, requires federal agencies to prepare a Strategic Plan every four fiscal years, beginning in 2012. (5 U.S.C. 306, as amended). The Commission approved a new Strategic Plan for Fiscal Years 2012-2016 ("Strategic Plan," "Plan") on February 22, 2012, which is located at: http://www.eeoc.gov/eeoc/plan/strategic_plan_12to16.cfm.

The EEOC's Strategic Plan established a national framework for achieving the EEOC's mission to "stop and remedy unlawful employment discrimination," in support of the Commission's vision of "justice and equality in the workplace." To that end, the EEOC has committed to pursuing the following strategic objectives and goals:

• Strategic Objective I. Combat employment discrimination through strategic law enforcement. The correlated goals are to: 1) have a broad impact on reducing employment discrimination at the national and local levels; and 2) remedy discriminatory practices and secure meaningful relief for victims of discrimination;
• Strategic Objective II. Prevent employment discrimination through education and outreach. The correlated goals are to have: 1) members of the public understand and know how to exercise their right to employment free of discrimination; and 2) employers, unions and employment agencies (covered entities) better address and resolve equal employment opportunity (EEO) issues, thereby creating more inclusive workplaces; and
• Strategic Objective III. Deliver excellent and consistent service through a skilled and diverse workforce and effective systems. The correlated goals are to have interactions with the public that are timely, of high quality, and informative.

The Plan also identified strategies for achieving each outcome goal and identified 14 performance measures for gauging the EEOC's progress as it approaches FY 2016. The agency's progress in meeting these measures is displayed below and discussed in detail in the Performance Results section of this report.

EEOC FY 2014 Performance
Measures	Imagen Targets Met or Exceeded	Imagen Targets Partially Met1	Imagen Targets Not Met	Not Applicable in FY 2014
14	7	7	0	0
1 Imagen Targets Partially Met: A rating assigned to target results where (1) at least half of the activities targeted for completion were completed, or (2) EEOC was unable to assess the results because full year data was not yet available.

Related Program Results and Activities Highlights

Strategic Enforcement of the Nation's EEOC Laws

To better respond to the changing dynamics of the workplace in the 21^st century, the EEOC adopted a Strategic Enforcement Plan (SEP) in December 2012 to implement the first objective of its Strategic Plan. The SEP establishes priorities and integrates all components of the EEOC's private, public, and federal sector enforcement. Its purpose is to focus and coordinate the EEOC's programs in order to have a sustainable impact in reducing and deterring discriminatory practices in the workplace.

Over the past three fiscal years, the agency has implemented the priorities outlined in the SEP. These national priorities are coordinated with local priorities in District Complement Plans (DCPs) for private sector enforcement, and a Federal Sector Complement Plan (FCP), addressing issues unique to federal employment practices.

Each district office developed a DCP setting forth specific law enforcement strategies to implement the SEP's national priorities and identifying local priorities, as well as strategies for legal-enforcement collaboration and for coordination with other offices, Fair Employment Practice Agencies (FEPAs), federal agencies, and other organizations. The DCPs reflect the key partnership between enforcement and legal units in the field and were approved by the Chair in November 2013.

Similarly, the FCP identified strategies for implementing SEP priorities in the federal sector, as well as identifying additional federal sector specific priorities. The Commission approved the FCP in July 2013.

During FY 2014, the agency focused on providing guidance and training to staff on the SEP priorities, as well as the DCP and FCP priorities.

To gauge the implementation of the priorities set forth in the SEP, DCPs, and FCP, the agency instituted changes to its processes, protocols and reports for both private sector charges and federal sector complaints and appeals. In January 2014, the agency rolled out scheduled changes to the document management system and Integrated Mission System (IMS) for charge intake and categorization and began training in all field offices.

Along with this emphasis on coordinated enforcement and outreach on priority issues, the agency also directed its resources to hiring critical front line staff. By year's end, hiring of investigators, mediators, attorneys and other field office staff had ameliorated significant losses that occurred from years of hiring freezes. Coupled with the technology enhancements discussed later in this section, this reflects a continued commitment to improving customer service and expanding access to agency services.

Enforcing the Law More Effectively

The agency filed 133 merits lawsuits during FY 2014 through its field legal units. These included 105 individual suits, 11 non-systemic class suits, and 17 systemic suits. Legal staff resolved 136 merits lawsuits for a total monetary recovery of $22.5 million. At the end of FY 2014, the EEOC had 228 cases on its active docket, of which 31 (14 percent) were non-systemic class cases and 57 (25 percent) involved challenges to systemic discrimination - the largest proportion of systemic suits since tracking began in FY 2006.

In FY 2014, the EEOC's field offices completed work on 260 systemic investigations resulting in 78 settlements and conciliation agreements and recovering approximately $13 million. In addition, reasonable cause findings were issued in 118 systemic investigations in FY 2014.

In FY 2014, the EEOC secured more than $74.0 million in relief for federal employees and applicants who requested hearings. In the federal sector, the agency's hearings program resolved a total of 6,347 complaints. The EEOC received 8,086 requests for hearings on federal sector complaints in FY 2014 compared to 7,077 in FY 2013.

In appeals of federal sector complaints, the agency resolved 3,767 appeals, including 43 percent of them within 180 days of their receipt. FY 2014 was the third full year in which the agency applied an approach that balanced efforts to more quickly resolve both the newest and oldest appeals, rather than just focusing on resolution of aged inventory. During FY 2014, the EEOC received 4,003 appeals of final agency actions in the federal sector, a 5.7 percent decrease from the 4,244 such appeals received in FY 2013.

Leadership in Federal Civil Rights Enforcement

During these fiscally challenging times, the EEOC has leveraged its resources by coordinating its work with other federal agencies. These interagency partnerships provide opportunities to maximize the benefit of each agency's work, avoid duplication of effort, and ensure the most efficient use of agency resources. In FY 2014, the EEOC participated in a number of interagency partnerships, including the White House Initiative on Asian American and Pacific Islanders (WHIAAPI) (https://www.commerce.gov/bureaus-and-offices/os/whiaapi), the National HIV/AIDS Strategy (https://obamawhitehouse.archives.gov/administration/eop/onap/nhas), the Federal Interagency Reentry Council (https://csgjusticecenter.org/about-us/), the National Equal Pay Enforcement Task Force, (https://obamawhitehouse.archives.gov/blog/2013/06/10/equal-pay-equal-work), the Tri-Agency (EEOC, Department of Justice, and Department of Labor) Working Group, the Curb Cuts to the Middle Class Initiative, and the President's Interagency Task Force to Monitor and Combat Human Trafficking (PITF) (https://www.state.gov/agencies-of-the-presidents-interagency-task-force-to-monitor-and-combat-trafficking-in-persons/), and the Senior Policy Operating Group (SPOG).

In FY 2014, the EEOC published final regulations and guidance or assistance on substantive issues under the laws it enforces. Most significantly, the Commission approved updated guidance on pregnancy discrimination, and an Advanced Notice of Proposed Rulemaking (ANPRM) on Section 501 of the Rehabilitation Act of 1973.Technical assistance factsheets about employment background checks, Background Checks: What Employers Need to Know, and Background Checks: What Job Applicants and Employees Should Know, were jointly issued by the EEOC and the Federal Trade Commission. The Commission also issued technical assistance on Religious Garb and Grooming in the Workplace: Rights and Responsibilities, and updates of how changes in the definition of "disability" as a result of the 2008 Americans with Disabilities Act Amendments Act (ADAAA) may affect who is covered under the ADA. The pregnancy guidance and the technical assistance documents provide practical advice for stakeholders.

Extending the EEOC's Reach

The agency's no-cost outreach programs reached 233,856 persons in FY 2014. EEOC offices participated in 3,477 no-cost educational, training, and outreach events. Additionally, in FY 2014, the Training Institute, which is managed under a separate statutory authority that enables the agency to offer in-depth and specialized programs on a fee basis supplementing the free general informational and outreach activities, trained 18,000 individuals at more than 420 events, including 100 field "Customer Specific Training" events with approximately 4,600 attendees.

These efforts targeted small businesses, vulnerable workers, underserved geographic areas and communities, and emphasized new statutory responsibilities, issues related to migrant workers, human trafficking and youth.

Improved Labor-Management Relations

During FY 2014, the agency continued to work toward improving the labor and employee relations climate. These efforts included regular meetings between the Office of the Chair and Union leadership on conditions of employment affecting bargaining unit employees. Both labor and management jointly modified the agency's national telework policies now published on the agency's internal website. The parties also reviewed and jointly modified the awards program that applies to non-Senior Executive Employees. Grievances and unfair labor practice charges were also reduced this year. The Union filed only two unfair labor practice charges in 2014 compared to seven in 2013, and filed only five grievances in 2014 compared to eight in 2013. In addition, over 90 percent of the agency's Headquarters and Field Offices have completed negotiations on their Telework and Alternative Work Schedules local agreements, in accordance with the newly negotiated collective bargaining agreement.

The Federal Employees' Viewpoint Survey shows that EEOC employees continue to like the kind of work they do, believe their work is important, are willing to give extra effort to get a job done, and are looking for ways to do their jobs better. In fact, employees rate the overall quality of work done in their work unit above 83 percent. Employees also say they are held accountable for achieving results and know how their work relates to agency goals. The survey also showed a five percent increase in the number of employees reporting that they have sufficient resources to get their job done; however, nearly half of all employees do not believe they have sufficient resources. The survey reflected a one percent decrease in employees reporting that their workload is reasonable, an issue that remains a significant concern to many employees.

Management Assurances

Federal Managers Financial Integrity Act (FMFIA)

The EEOC's internal controls and financial management systems were sound during FY 2014, with the exception of one finding of financial non-conformance, which carried over from the previous year. The financial non-conformance was identified in an audit report prepared by the Office of Inspector General (OIG): OIG Report No. 2013-FIN-01, December 15, 2013. The agency has implemented a corrective action plan to resolve the uncorrected financial, non-conformance in FY 2015.

Based on the actions taken, and considering the agency's controls environment as a whole, the agency concludes that during FY 2014, its financial and internal controls systems were in compliance with the Federal Managers' Financial Integrity Act (FMFIA). The agency has a plan in place to resolve the financial non-conformance in FY 2015. The controls systems were effective; agency resources were used consistent with the agency's mission; the resources were used in compliance with applicable laws and regulations; and, there was minimal potential for waste, fraud, and mismanagement of the resources.

The EEOC's management is responsible for establishing and maintaining effective internal control over financial reporting, which includes safeguarding of assets and compliance with applicable laws and regulations. The EEOC conducted its assessment of the effectiveness of the agency's internal control over financial reporting in accordance with OMB Circular A-123, Management's Responsibility for Internal Control. Based on the results of this evaluation, the EEOC can provide reasonable assurance that internal control over financial reporting as of September 30, 2014 was operating effectively and no material weaknesses were found in the design or operation of the internal controls over financial reporting.

Imagen

Jenny R. Yang
Chair, U.S. Equal Employment Opportunity Commission
November 17, 2014

Financial Highlights

The Office of Management and Budget (OMB) Circular Number A-136 Revised dated September 18, 2014 was used as guidance for the preparation of the accompanying financial statements. The EEOC prepares four financial statements: the Consolidated Balance Sheets, Consolidated Statements of Net Cost, Consolidated Statement of Changes in Net Position, and the Combined Statements of Budgetary Resources.

Consolidated Balance Sheets

The Consolidated Balance Sheets present amounts that are owned or managed by EEOC (assets); amounts owed (liabilities); and the net position of the agency divided between the cumulative results of operations and unexpended appropriations.

Imagen

EEOC's balance sheets show total assets of $82 million at the end of FY 2014 and $62 million for FY 2013. The change in assets resulted in an increase of appropriation for FY 2014.

The Net Position is the sum of Unexpended Appropriations and the Cumulative Results of Operations. At the end of FY 2014, EEOC's Net Position on its Balance Sheets and the Statement of Changes in Net Position is $20 million, an increase of $14 million, or 233 percent changed from the FY 2013 ending Net Position of $6 million. This increase is due primarily to an increase in EEOC's Unexpended Appropriations for Fiscal Year 2014.

Consolidated Statements of Net Cost

The Consolidated Statements of Net Cost presents the gross cost incurred by all programs less any revenue earned. Overall, in FY 2014, EEOC's Consolidated Statements of Net Cost of Operations increased by $10 million or 3 percent. The allocation of costs for FY 2014 shows that the net cost for the private sector and outreach increased by $3 million, or 1 percent, while the net cost for Federal Sector Programs increased by $5 million or 11 percent.

Imagen

Consolidated Statement of Changes in Net Position

The Consolidated Statement of Changes in Net Position represent the change in the net position for FY 2014 and FY 2013 from the cost of operations, appropriations received and used, net of rescissions, and the financing of some costs by other government agencies. The Consolidated Statement of Changes in Net Position increased over last year by $14 million, or 233 percent. EEOC's total assets exceeded total liabilities (funded and unfunded) by approximately $20 million, or 32 percent.

Combined Statements of Budgetary Resources

The Combined Statements of Budgetary Resources shows how budgetary resources were made available and the status of those resources at the end of the fiscal year. In FY 2014, EEOC received a $364 million in budget authority. EEOC ended FY 2014 with an increase in total budgetary resources. Resources not available for new obligations at the end of the year totaled $7 million and $9 million in FY 2014 and FY 2013, respectively. The unobligated balance not available represents expired budget authority from prior years that is no longer available for new obligations.

Use of Resources

The pie chart displays EEOC's FY 2014 use of resources by major object class. The chart shows that Pay and Benefits, State & Local, Rent to GSA and Other Contractual Services consumed 96 percent of EEOC's resources, and other expenses (e.g., travel & transportation, equipment, supplies & materials, etc.) consumed less than 4 percent of EEOC's resources for FY 2014.

Imagen

The dual axis chart below depicts EEOC's compensation and benefits versus full-time equivalents (FTE) over the past six years. EEOC ended FY 2014 with 2098 FTEs, a net decrease of 49, or 2 percent, below FY 2013.

Imagen