Inspector General's Statement

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SUMMARY OF SIGNIFICANT MANAGEMENT CHALLENGES

Three of the most significant management challenges facing the U.S. Equal Employment Opportunity Commission (EEOC) in FY 2013 are in strategic management, budget and financial management, and reduction of the private-sector charge inventory. How well EEOC responds to the multi-faceted challenges of implementing a new strategic plan; budget and financial management in the current environment of Federal budgetary uncertainty; and continuing its recent gains in reducing the private-sector charge inventory; may well hold the key to how close the agency comes to realizing its vision of "Justice and Equality in the Workplace".

STRATEGIC MANAGEMENT

In July 2011, the EEOC launched the planning process for its FY 2012-2016 Strategic Plan. The plan, which was approved in February 2012, reflects the leadership's commitment to exploring different and new approaches to improving organizational performance in pursuit of its mission to "Stop and Remedy Unlawful Employment Discrimination." However, achieving the plan's goals and desired outcomes will likely require skillful management of the EEOC's limited financial resources, with an increased reliance upon technological innovation to best leverage EEOC's most valuable and productive resource-its human capital.

The OIG recently initiated an evaluation of the plan's performance measures. The results of the evaluation may provide agency management with insight on whether there are opportunities to improve, during the early stages of the plan's implementation, the measures. Key areas of the evaluation include whether: there are performance measures for its key strategic goals and objectives; the measures are effective gauges of the agency's progress in achieving its strategic goals and objectives; and the performance measures are objective, understandable (to all stakeholders), and outcome-based. The OIG will continue to monitor the agency's progress towards implementation during FY 2013.

BUDGET AND FINANCIAL MANAGEMENT

EEOC Chair Jacqueline Berrien's FY 2013 Congressional Budget Justification requested $373,711,000, which included $29,500,000 for State and Local Programs. This figure represented an increase of $13,711 million from the FY 2012 appropriation $360,000,000. The Chair's priorities include: 1) enforcing anti-discrimination laws more effectively; 2) leadership in Civil Rights Enforcement; 3) extending and improving agency outreach efforts; 4) reinvigorating the regulatory and policy agenda of the EEOC; and 5) Labor Management Relations. Specific areas targeted for the funding increases include focusing on key areas such as acquiring updated technology to facilitate improvements in service and responsiveness to primary stakeholders, implementation of a multi-year plan for reduction of the private sector charge inventory, improving training and career development for agency employees at all levels, and hiring to fill critical staff positions.

In light of the fact that the agency may be operating under a continuing resolution for, at minimum, the first half of FY 2013, it is likely that some significant efforts to improve organizational performance and efficiency may be deferred because of limited financial resources. agency leadership faces the daunting challenge of identifying and implementing new and meaningful approaches to continue its momentum to improve organizational performance in line with its mission, particularly as it relates to reducing the private-sector charge inventory and enhancing customer service.

In this era of budgetary austerity, the relevance of effective cost management to maximize the value of limited resources to achieve mission and annual performance goals and objectives, cannot be understated. In his book, Winning the Cost War, Applying Battlefield Management Doctrine to the Management of Government, Lt. Colonel (Retired) Dale R. Geiger, PhD, states that: "…productivity gains will be achieved when the creative power of the organization's workforce is unleashed by continuously challenging them to identify ways to improve performance, cut costs, and reapply resources to higher priority endeavors."

Tactically, the agency has sought to reduce its costs through such leading-edge proposals as the Bring Your Own Device (BYOD) initiative, which may cut agency telecommunications costs by reducing its investment in Blackberry devices and related service plans. However, to meet these budgetary challenges the EEOC should consider embracing a broader, more strategic, approach to cost management. Just as the Agency used an all-inclusive approach in developing its new strategic plan, whereby it solicited and enlisted the participation of staff at-large, it should consider replicating that effort by tapping into its most valued resource-its human capital-for ideas to improve the agency's cost management model. For example, by launching a new campaign that robustly promotes a cost conscious organizational culture, the EEOC's management increases its potential for motivating staff to pursue proven methods of effective cost management. The campaign may also empower employees to seek new and creative approaches to better leveraging the EEOC's financial resources.

PRIVATE-SECTOR CHARGE INVENTORY

The EEOC continues to face a major challenge in addressing the backlog of the private-sector discrimination case inventory. The primary negative effect of the backlog is delayed case resolution for thousands of EEOC customers. The EEOC has made progress in reducing the inventory over the last two fiscal years with an aggregate reduction of 18.6%. At the end of FY 2012, the inventory stood at 70,312, or 7,824 less than the inventory at the end of fiscal year 2011 (78,136). At the end of FY 2010, the inventory was 86,338, or 16,026 higher than at the end of FY 2011.

Assuming EEOC management expects the trend in inventory reduction to continue in FY 2013-and beyond-agency leadership will face difficulties in realizing these expectations given its resource challenges. In this connection, under the current conditions of fiscal austerity faced by Federal agencies, and an EEOC hiring freeze, there will be fewer front line staff (e.g., investigators), to conduct essential enforcement activities-potentially hampering progress in inventory reduction.

In FY 2011, Chair Berrien directed the agency's Office of Field Programs to develop a multi-year plan, to be implemented in FY 2012, designed to reduce the private-sector charge inventory. The plan, which was completed in August 2011, is being used in headquarters and the field. Several other tactics, including improving investigator and mediator training, as well as providing new guidance on best practices in inventory management for senior managers and case management for investigators, have been deployed by EEOC. As noted in the FY 2012-2016 Strategic Plan, EEOC plans to expand its use of technology to manage charges, including: on-line submission of pre-charge inquiry for review; on-line scheduling of appointments for intake interviews; on-line access for charging parties to check the status of their charge; and establishing a secure system for electronic transmittal and receipt of charge-related documents.

The OIG will monitor the EEOC's efforts at reducing the private-sector charge inventory, and endeavor to periodically provide useful observations which identify potential threats to achieving improvements.

Concerning Agency Compliance with FMFIA

November 5, 2012

MEMORANDUM

TO: Jacqueline A. Berrien, Chair

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

SUBJECT: FY 2012Agency Compliance with the Federal Managers' Financial Integrity Act (OIG Report No. 2012-07-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 1, 2012, the Office of Research, Information and Planning (ORIP) submitted EEOC's Fiscal Year 2012 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 2012 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 2012, OIG concurs with ORIP's assertion that the Agency had no material weaknesses during this reporting cycle.

OIG concurs with ORIP's reporting of 3 instances of financial non-conformances. Of the 3 financial non-conformances, all are anticipated to be corrected in FY 2013.