Inspector General's Statement

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Summary of Significant Management Challenges

The following is a summary of the four issues the Office of Inspector General considers the most significant management challenges facing the U.S. Equal Employment Opportunity Commission (EEOC). All of these challenges were included in earlier OIG reports. They include the Private-Sector Charge Inventory, Budget and Performance Integration, Strategic Management of Human Capital, and State and Local Partner Performance Management.

On July 22, 2010, the Senate Appropriations Committee, in its recommendation for the EEOC's Fiscal Year 2011 appropriation, stated, "The Committee remains concerned at the rising backlog in charges of employment discrimination at the EEOC…The Committee is disturbed that this issue has not been addressed in a systematic or strategic manner. The Committee is concerned that there is a lack of leadership response and will at the EEOC to adequately address this problem and it could affect the ability of the EEOC to meets its mission and mandate to promote equal opportunity at the workplace."

In both fiscal years 2009 and 2010, the EEOC received funding increases to its annual appropriation. In our view, the Agency needs to show congressional appropriators that the EEOC is using the increased funding from 2009 and 2010 to achieve improved performance, especially in reducing the private-sector case inventory.

In April 2010, Jacqueline A. Berrien was sworn in as Chair of the EEOC.  The new Chair possesses an opportunity to convert the EEOC to a performance management culture, but will need to overcome the resistance of some senior agency leaders.  As we stated in previous reports, the Agency must fundamentally change its management culture to effectively meet major challenges--including the reduction of the case inventory.  While pursuing such change carries risk, without it, the EEOC cannot become a high-performing organization better positioned to succeed in its efforts to overcome these challenges.

Private-Sector Charge Inventory

The EEOC continues to face a major challenge in adequately addressing the large backlog of private-sector discrimination charges.  According to preliminary data, the charge inventory at the end of FY 2010 was 86,338, charge receipts numbered 99,922. The inventory at the end of FY 2009 was 85,768, and 73,951 at the end of FY 2008. In FY 2009, the EEOC received 93,277 new private-sector charges.

The primary negative effect of a large inventory is the delay in charge resolution for thousands of EEOC customers and stakeholders. To help address the backlog, The EEOC invested some of its additional funding in FY 2009 and 2010 to hire new staff, including investigators and mediators. For example, EEOC hired about 100 investigators in the June-August, 2010 period.

The Office of Field Programs indicated that the hiring and other efforts resulted in more resolutions, but the increased charge filings diluted the impact of the resolutions on reducing the charge inventory. Regardless of whether these efforts were successful, the EEOC needs to introduce case processing efficiencies in order to make major inroads on the inventory.

The EEOC has not implemented any major program 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. Most recently, in its FY 2011 budget justification, the EEOC failed to propose major improvements in charge processing.

Budget and Performance Integration

Budget and performance integration remains a key challenge. Without better performance measures and corresponding data, Agency managers cannot know how well the EEOC performs given the resources it expends. As we have previously stated, until the EEOC's senior managers, particularly those responsible for private-sector case processing, accept the need to gather and use performance data to improve charge processing, this challenge is likely to remain.

The EEOC lacks, in key areas, performance measures and/or adequate performance data. For example, the EEOC still lacks solid performance data to adequately support target performance levels for the private-sector charge inventory. Therefore, the EEOC will continue to face challenges in determining and justifying performance targets. The EEOC also does not use performance measures and accompanying data to manage the performance of its state and local partners.

Strategic Management of Human Capital

Although the EEOC made progress in this area, it did not commence implementation of two key elements in the strategic management of human capital. An example of EEOC's progress is the July 2010, launch of its Mentoring Program. The EEOC Mentoring Program partners a group of 25 established EEOC employees (mentors) who understand the Agency and its culture with junior employees (mentees) to provide opportunities for mentees to learn more about the organization and develop and broaden core competencies and leadership skills to enhance their professional growth and development. Due to demand for the program, OHR expanded the number of mentors/mentees relationships to 40.

The Office of Human Resources finalized the EEOC's draft human capital plan and, after obtaining input and approval from the U.S. Office of Personnel Management, completed its draft leadership succession plan. While the EEOC has made progress on both of these initiatives, it has failed to commence implementation of either plan. These plans are being reviewed by senior Agency officials.

State and Local Partner Performance Management

The EEOC provides substantial annual funding, ($30,000,000 for FY 2010) to state and local partners, known as Fair Employment Practice Agencies (FEPAs), through its State and Local Programs office, to conduct investigations and resolutions of employment discrimination charges. Work performed by FEPAs, both the EEOC funded and non-EEOC funded, is critical to fighting employment discrimination.

In 2007, the EEOC agreed with OMB to adopt such a measure, but has not done so, despite a workgroup report and accompanying recommendations for a performance measure.

In September 2010, the OIG began a review of the EEOC's oversight of its State and Local Programs. The firm of Williams, Adley & Company-DC, LLP, will conduct the review. The OIG plans to issue draft and final reports in the second quarter of FY 2011.

Management Response to the Inspector General's Summary of Significant Management Challenges

Private Sector Charge Inventory

We agree that managing the private sector charge inventory continues to be a significant challenge for the EEOC.  However, the focus of the Office of the Inspector General (OIG) on "major program initiatives" is far too narrow.  The Commission has, in fact, taken significant steps in the last few years to address charge resolutions.  Initially, however, it is helpful to recognize a few important factors that led to the growth in the pending inventory.  As noted by the OIG, our charge receipts have been increasing significantly for several years - rising from just over 75,000 in FY 2005 to nearly 100,000 in FY 2010.  Additionally, and most importantly, between FY 2004 and FY 2008 the EEOC lost 25% of our investigators without the ability to backfill those positions.  

As noted earlier in this report, the EEOC launched an effort in FY 2009 to rebuild resources and capacity and focus on managing the pending inventory.  This initiative included working to hire front-line staff, revitalizing our Priority Charge Handling Procedures (PCHP), using best practices from our field offices and investing in training for new and existing employees.  As a result of these efforts, at the close of FY 2010 EEOC was able to resolve 105,000 charges.  In contrast, in FY 2007 there were 72,000 charge resolutions.  The end result is that EEOC was able to end the fiscal year adding fewer than 600 charges to the pending inventory – a dramatic success.  We believe that this sustained effort constitutes a major program initiative.

One of the most important lessons from the past, however, is that charge processing backlogs are not a transitory operational challenge addressed by short-term redirection of resources or temporary increases in staffing or funding; rather, they require sustained management attention and commitment of resources and consistent implementation of systems developed to ensure that charges are processed fairly and efficiently.  There must be sustained attention to case management and implementation of systems that facilitate efficient charge processing.  We are committed to finding long-term answers for inventory management.  However, this process must, out of necessity, be thoughtful and thorough.  Accordingly, as the IG notes, we have set aside funds in the FY 2011 and FY 2012 budgets to address the backlog.  We have also launched a series of "benchmarking" conversations with several federal and state agencies to learn as much as possible about strategies we might employ to address our charge processing challenges.

Budget and Performance Integration

We recognize the OIG concern about budget and performance integration and are deeply committed to ensuring that the Commission is effective as a law enforcement agency and, at the same time, a good steward of public funds.  Senior leadership in both our field offices and headquarters have worked diligently to ensure that the Commission achieves the agency's strategic goals.  The Commission has had remarkable achievements in many of our measures, including maintaining a high quality in our charge investigations, in our mediation satisfaction and most demonstrably, in our Workplace Impact changes, where more than 6 million individuals have benefitted from our enforcement actions in just the past year. 

While targets for private sector charge processing were lowered in FY 2008, those responsible for private sector enforcement have incorporated the strategic goals under the current Strategic Plan into its data collection and management practices.  As we move forward on the development of a new Strategic Plan we will work to establish a robust data collection and verification process, as well as the establishment of challenging and realistic targets.

Strategic Management of Human Capital

The greatest resource the EEOC has is our employees – their dedication to the mission of the agency and their institutional knowledge are invaluable.  Because of this, the ability to manage our workforce in a strategic manner and provide for appropriate succession planning is both important and a challenge.  Since Chair Berrien was sworn in as Chair in April 2010 we have been working with the Office of Human Resources on the EEOC's Human Capital Plan and Leadership Succession Plan.  We look forward to the approval and implementation of these plans; however, we already have launched a number of activities to strengthen our human capital efforts.

State and Local Partner Performance Management

The EEOC partners with 96 state and local agencies, called Fair Employment Practices Agencies (FEPAs) to enforce laws prohibiting employment discrimination.  In FY 2007 we began the process of working with the FEPAs to explore an appropriate and accurate way to measure their performance.  This work has resulted in the establishment of a workgroup and the development of a set of recommendations.  As we conduct a full evaluation of our Strategic Plan in FY 2011 we will consider the recommendations of the workgroup as we move toward establishing a shared performance measure with our state and local partners.

Concerning Agency Compliance with FMFIA

November 10, 2010

MEMORANDUM

TO  : Jacqueline A. Berrien, Chair

FROM :  Milton A. Mayo, Jr., Acting Inspector General

SUBJECT :  FY 2010 Agency Compliance with the Federal Managers' Financial Integrity Act (OIG Report No. 2010-08-AIC) 

The Federal Managers' Financial Integrity Act (FMFIA), P.L. 97-255, as well as the Office of Management and Budget's (OMB) Circular A-123, Management Accountability and Control, establish specific requirements for management controls.  Each agency head must establish controls to reasonably ensure that: (1) obligations and costs are in compliance with applicable laws; (2) funds, property and other assets are safeguarded against waste, loss, unauthorized use, or misappropriation; and (3) revenues and expenditures applicable to agency operations are properly recorded and accounted for in order to permit the preparation of reliable financial and statistical reports, as well as to maintain accountability over the assets.  FMFIA further requires each executive agency head, on the basis of an evaluation conducted in accordance with applicable guidelines, to prepare and submit a signed statement to the President disclosing that agency's system of internal accounting and administrative control fully comply with requirements established in FMFIA. 

EEOC Order 195.001, Internal Control Systems requires the Office of Inspector General (OIG) to annually provide a written advisory to the Chair on whether the management control evaluation process complied with OMB guidelines.  On November 5, 2010, the Office of Research, Information and Planning (ORIP) submitted EEOC's Fiscal Year 2010 FMFIA Assurance Statement to the Chair and to the OIG for review. The OIG reviewed: (1) assurance statements submitted by headquarters and district directors attesting that their systems of management accountability and control were effective and that resources under their control were used consistent with the agency's mission and complied with FMFIA; (2)  all functional area summary tables, and functional area reports; and (3) ORIP's Fiscal year 2010 Federal Managers' Financial Integrity Act Assurance Statement, and Assurance Statement Letter, and attachments.  Based on our limited independent assessment of this year's process, OIG is pleased to advise you that the Agency's management control evaluation was conducted in accordance with OMB and FMFIA regulations. 

Further, based on the results of audits, evaluations, and investigations conducted by OIG during Fiscal Year 2010, OIG concurs with ORIP's assertion that the Agency had no material weaknesses during this reporting cycle. 

OIG concurs with ORIP's reporting of sixteen instances of financial non-conformances. One of the financial non-conformances was identified in FY 2009 and two were identified in FY 2008. The Agency has or is in the process of implementing corrective action plans to resolve the remaining non-conformances during FY 2011.