[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]




 
     H.R. 3268, GOVERNMENT ACCOUNTABILITY OFFICE [GAO] ACT OF 2007

=======================================================================

                                HEARING

                               before the

                   SUBCOMMITTEE ON FEDERAL WORKFORCE,
                    POSTAL SERVICE, AND THE DISTRICT
                              OF COLUMBIA

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                   ON

                               H.R. 3268

 TO MAKE CERTAIN REFORMS WITH RESPECT TO THE GOVERNMENT ACCOUNTABILITY 
                     OFFICE, AND FOR OTHER PURPOSES

                               __________

                             MARCH 13, 2008

                               __________

                           Serial No. 110-71

                               __________

Printed for the use of the Committee on Oversight and Government Reform


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 HENRY A. WAXMAN, California, Chairman
EDOLPHUS TOWNS, New York             TOM DAVIS, Virginia
PAUL E. KANJORSKI, Pennsylvania      DAN BURTON, Indiana
CAROLYN B. MALONEY, New York         CHRISTOPHER SHAYS, Connecticut
ELIJAH E. CUMMINGS, Maryland         JOHN M. McHUGH, New York
DENNIS J. KUCINICH, Ohio             JOHN L. MICA, Florida
DANNY K. DAVIS, Illinois             MARK E. SOUDER, Indiana
JOHN F. TIERNEY, Massachusetts       TODD RUSSELL PLATTS, Pennsylvania
WM. LACY CLAY, Missouri              CHRIS CANNON, Utah
DIANE E. WATSON, California          JOHN J. DUNCAN, Jr., Tennessee
STEPHEN F. LYNCH, Massachusetts      MICHAEL R. TURNER, Ohio
BRIAN HIGGINS, New York              DARRELL E. ISSA, California
JOHN A. YARMUTH, Kentucky            KENNY MARCHANT, Texas
BRUCE L. BRALEY, Iowa                LYNN A. WESTMORELAND, Georgia
ELEANOR HOLMES NORTON, District of   PATRICK T. McHENRY, North Carolina
    Columbia                         VIRGINIA FOXX, North Carolina
BETTY McCOLLUM, Minnesota            BRIAN P. BILBRAY, California
JIM COOPER, Tennessee                BILL SALI, Idaho
CHRIS VAN HOLLEN, Maryland           JIM JORDAN, Ohio
PAUL W. HODES, New Hampshire
CHRISTOPHER S. MURPHY, Connecticut
JOHN P. SARBANES, Maryland
PETER WELCH, Vermont
------ ------

                     Phil Schiliro, Chief of Staff
                      Phil Barnett, Staff Director
                       Earley Green, Chief Clerk
               Lawrence Halloran, Minority Staff Director

Subcommittee on Federal Workforce, Postal Service, and the District of 
                                Columbia

                        DANNY K. DAVIS, Illinois
ELEANOR HOLMES NORTON, District of   KENNY MARCHANT, Texas
    Columbia                         JOHN M. McHUGH, New York
JOHN P. SARBANES, Maryland           JOHN L. MICA, Florida
ELIJAH E. CUMMINGS, Maryland         DARRELL E. ISSA, California
DENNIS J. KUCINICH, Ohio, Chairman   JIM JORDAN, Ohio
WM. LACY CLAY, Missouri
STEPHEN F. LYNCH, Massachusetts
                      Tania Shand, Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 13, 2008...................................     1
Text of H.R. 3268................................................     6
Statement of:
    Copeland, Curtis, Specialist in American National Government, 
      Congressional Research Service; Shirley Jones, Employee 
      Advisory Counsel, U.S. Government Accountability Office; 
      Janet C. Smith, president, Ivy Planning Group, LLC; and 
      Jacqueline Harpp, interim council representative, 
      International Federation of Professional and Technical 
      Engineers, AFL-CIO.........................................    70
        Copeland, Curtis.........................................    70
        Harpp, Jacqueline........................................   122
        Jones, Shirley...........................................    88
        Smith, Janet C...........................................    99
    Coran, Paul, chairman, Personnel Appeals Board, U.S. 
      Government Accountability Office; and Anne Wagner, General 
      Counsel, Personnel Appeals Board, U.S. Government 
      Accountability Office......................................    49
        Coran, Paul..............................................    49
        Wagner, Anne.............................................    60
    Dodaro, Gene, Acting Comptroller General, U.S. Government 
      Accountability Office, accompanied by Gary Keplinger, 
      General Counsel, U.S. Government Accountability Office.....    25
Letters, statements, etc., submitted for the record by:
    Copeland, Curtis, Specialist in American National Government, 
      Congressional Research Service, prepared statement of......    73
    Coran, Paul, chairman, Personnel Appeals Board, U.S. 
      Government Accountability Office, prepared statement of....    51
    Davis, Hon. Danny K., a Representative in Congress from the 
      State of Illinois, prepared statement of...................     4
    Dodaro, Gene, Acting Comptroller General, U.S. Government 
      Accountability Office, accompanied by Gary Keplinger, 
      General Counsel, U.S. Government Accountability Office, 
      prepared statement of......................................    28
    Harpp, Jacqueline, interim council representative, 
      International Federation of Professional and Technical 
      Engineers, AFL-CIO, prepared statement of..................   124
    Jones, Shirley, Employee Advisory Counsel, U.S. Government 
      Accountability Office, prepared statement of...............    91
    Smith, Janet C., president, Ivy Planning Group, LLC, prepared 
      statement of...............................................   101
    Wagner, Anne, General Counsel, Personnel Appeals Board, U.S. 
      Government Accountability Office, prepared statement of....    62


     H.R. 3268, GOVERNMENT ACCOUNTABILITY OFFICE [GAO] ACT OF 2007

                              ----------                              


                        THURSDAY, MARCH 13, 2008

                  House of Representatives,
Subcommittee on Federal Workforce, Postal Service, 
                      and the District of Columbia,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:10 p.m., in 
room 2154, Rayburn House Office Building, Hon. Danny K. Davis 
(chairman of the subcommittee) presiding.
    Present: Representatives Davis, Norton, Clay, and Marchant.
    Staff present: Tania Shand, staff director; William Miles, 
professional staff member; Lori J. Hayman, counsel; LaKeshia N. 
Myers, clerk; and Alex Cooper, minority professional staff 
member.
    Mr. Davis. The subcommittee will come to order.
    Welcome, Ranking Member Marchant and members of the 
subcommittee and hearing witnesses and all of those in 
attendance. Welcome to the Federal Workforce, Postal Service, 
and the District of Columbia Subcommittee hearing on H.R. 3268, 
the Government Accountability Office [GAO] Act of 2007.
    The hearing will examine H.R. 3268, the Government 
Accountability Office [GAO] Act of 2007, and various other 
legislative proposals that may be introduced before the hearing 
that address certain GAO reforms. It will also examine the 
results of the survey I requested last May that the Employee 
Advisory Council conduct of all GAO employees on the Band II 
restructuring and the Watson Wyatt compensation study and the 
Ivy Group study.
    Hearing no objection, the Chair, ranking member and 
subcommittee members will each have 5 minutes to make opening 
statements, and all Members will have 3 days to submit 
statements for the record.
    Today the Government Accountability Office [GAO], has an 
opportunity: It has an opportunity to regain its footing as an 
agency that not only touts that its employees are the best and 
the brightest, but treats them as if they are the best and the 
brightest. GAO has an opportunity to hold itself to the same 
standards of accountability and forthrightness that it demands 
of other agencies. GAO has an opportunity to work with, not 
against, the subcommittee when it raises legitimate concerns 
about its personnel reforms and other issues pertaining to the 
administration of the agency.
    It appears that GAO is going to seize this opportunity. I 
have met with Mr. Gene Dodaro, the Acting Comptroller General, 
and he has indicated that he intends to work collaboratively 
with the subcommittee to address any concerns that we have, and 
the subcommittee is committed to doing the same. Mr. Dodaro has 
over 30 years of service with GAO, and I hope he will restore 
GAO's legacy as a model agency.
    Mr. Dodaro, welcome to your first hearing as Acting 
Comptroller General of the United States.
    Mr. Dodaro. Thank you.
    Mr. Davis. That said, after 2 years of investigating GAO's 
personnel reforms, the subcommittee has unfinished business to 
address.
    I am pleased to announce that I will be introducing 
legislation that restores the 2006 and 2007 across-the-board 
increase to all GAO employees who met expectations but did not 
receive it. The bill also includes a provision that establishes 
an across-the-board full guarantee that will govern how pay 
adjustments are to be administered at GAO in the future. The 
legislation has the support of GAO and its union, the 
International Federation of Professional and Technical 
Engineers.
    While the subcommittee is pleased that the proposal has the 
support of GAO, it is unfortunate that it took 2 years of 
employees being demoralized and worrying about their pay before 
we received it. Last winter, the best and the brightest at GAO 
finally had to vote to unionize to get management's attention. 
The compromise legislation which will be discussed today will 
be introduced and marked up when Congress returns from the 
March recess.
    In November 2007, at my request, members of GAO's Employee 
Advisory Council surveyed all GAO employees on GAO's personnel 
reforms. Seventy-one percent of GAO employees responded to the 
survey, and we will hear testimony about the results of that 
survey today.
    Another troublesome issue that the subcommittee will 
continue to address at future hearings is the historic 
disparity between the ratings of African Americans and their 
Caucasian counterparts at GAO.
    At a hearing the subcommittee held in November 2007 on 
diversity in legislative branch agencies, Ron Stroman, Managing 
Director of GAO's Office of Opportunity and Inclusiveness, 
testified that he alerted David Walker that if GAO went through 
with its personnel reforms of Band II restructuring that it 
would have a negative impact on African Americans. When pressed 
as to why GAO would go through with a restructuring that it 
knew would adversely impact African Americans, Mr. Stroman 
stated it was a decision that the Comptroller General made.
    Last August, almost a year and a half after the 
restructuring took place, GAO hired the Ivy Group to research 
the rating disparities between African American and Caucasian 
employees at GAO. The Ivy Group will not complete its final 
report until next month. However, what they have learned to 
date is troubling and raises serious questions about GAO's 
performance management system.
    Mr. Walker officially resigned from GAO yesterday. 
Therefore, the question of why he moved forward with the 
restructuring, given the disparity in ratings, cannot be posed 
to him directly. Nevertheless, the subcommittee will continue 
its oversight of this issue and is pleased that Mr. Dodaro has 
indicated that he is committed to addressing the problem.
    I thank you, all of you who have come, and look forward to 
hearing from the witnesses.
    And now it is my pleasure to yield such time as he would 
consume to the ranking member, Mr. Marchant.
    [The prepared statement of Hon. Danny K. Davis and the text 
of H.R. 3268 follow:]

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    Mr. Marchant. Thank you, Mr. Chairman.
    The Government Accountability Office is a critical research 
arm of the Federal Government which we rely on for unbiased, 
high-quality information. This information is frequently 
instrumental in our legislative process and can determine the 
course of ongoing oversight and legislation.
    Last year, the GAO presented a request for legislative 
improvements to Congress. That request is currently embodied in 
H.R. 3268, the Government Accountability Office Act of 2007, 
which was introduced by Chairman Henry Waxman. This bill would 
require the Comptroller General to appoint a Deputy Comptroller 
General who shall serve at the Comptroller General's pleasure; 
establish an Office of Inspector General in the GAO; and 
require the Comptroller General's annual report to Congress to 
assess the overall degree of Federal agency cooperation with 
GAO audits. The bill would also make certain adjustments to 
salary rules to increase retention and improve recruitment.
    I understand, Mr. Chairman, that you are planning to 
introduce a new legislation that would incorporate the changes 
described above as well as other changes that are in response 
to the subcommittee's oversight hearings last year. I look 
forward to seeing a final version of that new legislation.
    And as we move forward, I hope that the chairman and 
members of the committee will be open to some discussion on 
this legislation.
    Again, I thank the chairman for holding this hearing and 
the witnesses for being before us today. Thank you.
    Mr. Davis. Thank you very much, Mr. Marchant.
    I see that Mr. Clay has arrived.
    Mr. Clay, let me ask, do you have any opening remarks?
    Mr. Clay. I will forego opening remarks in the interest of 
time.
    Mr. Davis. Thank you very much, Mr. Clay.
    And we will then proceed with the witnesses.
    It is the committee's policy that all witnesses are sworn 
in, so if you would rise and raise your right hands.
    [Witnesses sworn.]
    Mr. Davis. The record will show that the witnesses answered 
in the affirmative.
    Gentlemen, of course you know the usual drill with these. 
The green light indicates that you have 5 minutes in which to 
summarize your testimony. The full testimony is in the record. 
Of course, the yellow light means that there is a minute left, 
and the red light means it is time to stop. So thank you very 
much.
    Let me, first of all, congratulate you, Mr. Dodaro, and 
indicate that not only are we pleased that you are here today, 
but I certainly look forward to a solid working relationship 
over an extended period of time. And we are delighted to work 
with you and to have you here today. So you may proceed.

  STATEMENT OF GENE DODARO, ACTING COMPTROLLER GENERAL, U.S. 
     GOVERNMENT ACCOUNTABILITY OFFICE, ACCOMPANIED BY GARY 
  KEPLINGER, GENERAL COUNSEL, U.S. GOVERNMENT ACCOUNTABILITY 
                             OFFICE

    Mr. Dodaro. Thank you very much, Mr. Chairman. I appreciate 
the kind words and introduction. I'm determined to live up to 
the commitments that I made to work collaboratively with this 
committee.
    Mr. Marchant, it is a pleasure to see both of you here 
today. I appreciate the opportunity to be here today to discuss 
legislative proposals to bolster the ability of GAO to attract 
and retain a highly skilled and diverse work force and help 
improve our operations.
    I also plan to update you on our evolving relationship with 
our new union and to also underscore my commitment to making 
sure there is equal and fair treatment for all GAO employees.
    As backdrop for my remarks, I would like to point out that, 
over the past several years, there have been many changes at 
GAO. Some of those changes have strengthened the organizations. 
Other changes have evoked controversy and, in some cases, 
created new challenges. We've addressed some of these 
challenges, but many remain. And we're committed to working to 
resolve those challenges, in cooperation with our employees and 
with this subcommittee and other parts of the Congress.
    It is important to note, I think, that during this whole 
time period throughout the GAO people have continued to produce 
high-quality work for the Congress and generate positive 
organizational results. I think this is a real tribute to the 
professionalism of our work force and their dedication to GAO's 
mission to support the Congress and to improve Government for 
the benefit of the American people.
    And I'm committed to making sure that GAO not only 
maintains the high quality of its work to support the Congress, 
but also to confronting and resolving the challenges that are 
before us today.
    Now, the legislative proposals before the subcommittee can 
help us in this regard. We support the adding of the floor 
guaranteed provision to govern annual pay increases for GAO by 
adding that to our existing authorities. Under this approach, 
existing GAO people meeting expectations will at least receive 
the annual increase for the GS annual adjustment for their 
locality that they're in.
    My statement provides details on how this would work. And 
the bottom line of this floor guarantee provision, from our 
standpoint, is this gives out employees greater certainty and a 
link to the executive branch for pay parity while preserving 
the incentives and rewards of the GAO performance appraisal 
system. So we think it is a solid approach, and we are looking 
forward to working with the committee to get this into the 
legislation.
    I would also seek the subcommittee's support for our 
proposal to raise the GS-15 cap to Executive Level III. We 
think this is very important. Currently, the agencies that are 
the financial institution regulators, such as FDIC, have this 
authority to pay higher than the GS-15 cap, as does DOD and 
DHS. So we are at a real competitive disadvantage by not having 
this authority, and we need it in order to make sure we have 
the senior, experienced people in order to best serve the 
Congress.
    Now, turning to some of the operational improvements, there 
are many in the bill. I'll highlight three right now. One is 
the creation of a statutory Inspector General to replace our 
administrative Inspector General that's been in place for a 
number of years. This would put our Inspector General on an 
equal footing with the Inspector Generals of other legislative 
branch agencies and provide an appropriate level of 
independence and autonomy.
    Second, we are seeking a requirement where GAO would issue 
an annual report card on the cooperation that we received in 
executive branch agencies in carrying out our audit work, in 
terms of their timely provision of records and access to people 
needed to complete our work for the Congress. We think this 
would create greater transparency over the level of cooperation 
we receive and, ultimately, lead to more efficient GAO 
operations and timely services to the Congress.
    And last, I would, in the operational area, seek your 
approval of the provision by which we would receive 
reimbursement for audit costs.
    I'd quickly like to touch on two other work force issues.
    First, we are committed to working constructively with our 
new union to forge a positive labor management relations 
environment. Since the union was voted in in September, we have 
provided a lot of resources and training to create a good 
environment, and we were pleased to negotiate a very prompt 
agreement with them on pay decisions for 2008.
    Also, we're committed to ensuring fair and equal treatment 
for our work force. As was mentioned, we have commissioned the 
Ivy Group to come in and do a study. We are looking to them for 
insights, best practices and recommendations. We are looking 
forward to receiving a final report and have committed to 
following up on the recommendations and keeping this 
subcommittee apprised of our progress going forward.
    In closing, Mr. Chairman, since this is my first day as 
Acting Comptroller General, I want to assure this subcommittee 
that I'm committed to improving GAO and making sure we have the 
highest-quality work possible to support the Congress. And I am 
very honored and privileged to lead such a highly skilled and 
talented work force at the GAO, and I will be working with 
them, as with this committee.
    Thank you for your time and attention, and I'd be happy to 
take any questions.
    [The prepared statement of Mr. Dodaro follows:]

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    Mr. Davis. Thank you very much, Mr. Dodaro. And we 
certainly look forward to all of our follow-ups and follow-
throughs.
    As you know, pay adjustment has been at the top of the 
discussion list for a while now. And the subcommittee staff has 
been working on a pay adjustment provision for the fiscal year 
2006 and 2007 for GAO employees who met expectations but did 
not receive them--that is, did not receive an across-the-board 
adjustment for those years.
    You've expressed some position, but would you reaffirm your 
views on the retroactive vision that I have included in the 
legislation that I am going to introduce to address this 
problem, and also rearticulate for us your views on the across-
the-board floor guarantee?
    Mr. Dodaro. I would be happy to, Mr. Chairman.
    First, on the 2006 and 2007 payments for those people who 
didn't receive the across-the-board adjustment, we believe the 
discussions we've had with the subcommittee have been very 
fruitful. And we have arrived at a practical and reasonable 
approach for addressing that issue, should the Congress decide 
to legislate on that issue. We are pleased that it contains the 
necessary legal authorities and funding authorities for GAO to 
carry out that provision once enacted. And we would be very 
pleased to have this issue behind us and moving forward.
    As it relates to the floor guarantee, we think this is a 
really solid approach going forward that preserves the intent 
of the pay-for-performance system at GAO but strikes a better 
balance with giving our employees some certainty going forward 
and a link to the executive branch.
    So we are supportive of these proposals and hope that they 
are enacted.
    Mr. Davis. Thank you very much.
    As you know, last summer GAO contracted with the Ivy Group 
to study why African American employees at GAO were receiving 
lower ratings than their Caucasian counterparts. The Ivy Group 
found that not only were there disparities in the ratings 
between African Americans and Caucasians, but that GAO's 
dropping of two rated competencies in 2004, while not 
significant, were the two competencies that African Americans 
performed better on.
    What do these facts tell us about GAO's performance 
management system, if anything? And once the Ivy Group 
completes its final report, what steps do you intend to take to 
address the concerns raised in the report?
    Mr. Dodaro. First of all, Mr. Chairman, this study is very 
important to GAO, and I am personally committed to making sure 
that we forthrightly address the recommendations out of the 
study.
    Now, the competencies were realigned back in 2004, 
effective for fiscal 2005 ratings. We went from 12 competencies 
down to 8. That was largely based on input from our managers 
and our Employee Advisory Council, at that point in time, that 
the new system we had put in place in 2002 was burdensome and 
there was some overlap in the competencies.
    Now, the competencies themselves, the performance standards 
and work activities were actually merged in with our 
competencies, so it wasn't eliminated. We did not have any 
reason to believe, at that time, that it would have a negative 
effect on any particular group, but it was to streamline the 
system that we had in place at that time and respond to 
concerns that were fairly broad-based at that time in the 
agency.
    Now, given the fact that Ivy has already raised this in 
their Task 1 briefing, I've already asked our human capital 
people to go back and take a look at what we could do. That 
competency system was validated by a large number of GAO 
people, and we may have some ability to make some changes to 
that system. And, of course, you know, we'll have to work with 
the union to make any further changes, but we are already 
looking at that issue.
    Mr. Davis. We're going to have to go and vote. But before I 
do, let me ask you, how do you reconcile GAO's second-place 
position on the best-places-to-work ranking with the concerns 
employees expressed in the Employee Advisory Council's 
restructuring survey?
    Mr. Dodaro. Well, the best-places-to-work survey is based 
upon OPM questions that are asked throughout the Federal 
Government, and then there are comparisons made. And its 
questions we incorporate in the GAO employee feedback survey, 
so that we can be bench-marked against other agencies. They 
take a fairly broad view of the workplace and the workplace 
environment, and on that score we do very well. We ranked No. 2 
in large Federal agencies across the Government.
    Now, the Employee Advisory Council survey that was 
conducted was focused on some of the most controversial aspects 
of our changes, which was the pay system and the Band II 
restructuring. But it also had a section on organizational 
climate. And, in that section, the results on the issues other 
than pay were very consistent with what we received in an 
employee feedback survey.
    It was also conducted before we reached the agreement with 
the union on 2008 pay adjustments and we developed this floor 
guarantee approach. And I also think, you know, in retrospect, 
if we would have had the floor guarantee in place for 2006 and 
2007, while we would have had some issues to deal with, they 
wouldn't have been anywhere near as magnified as they were 
otherwise.
    Mr. Davis. OK. So the controversy that, sort of, existed 
around those issues in all likelihood helped to pull down how 
people ranked the----
    Mr. Dodaro. In this particular survey that was just 
conducted at the committee's request by the Employee Advisory 
Council, I believe that was a contributing factor. There was 
some provision in there that asked about the COLA, and a lot of 
people felt it was unfair that wasn't applied to everybody 
going forward.
    I'm not saying that would have resolved all the 
controversies, Mr. Chairman, but I do think it would have 
reduced the angst.
    Mr. Davis. Mr. Keplinger.
    Mr. Keplinger. Mr. Chairman, I also think that if we are 
successful in getting your legislation passed, it will be 
responsive to a number of the concerns identified in the EAC 
survey.
    And I would add to what Gene said, and I would second it 
too, I think there is also a significant amount of pride 
amongst our work force in the work that they do, and that comes 
through in these surveys.
    So, hopefully, we can deal with the problems that we've 
had, get those resolved and move forward.
    Mr. Davis. Well, thank you both, gentlemen. We're going to 
have to recess for a minute and run and vote, and we'll be 
back.
    [Recess.]
    Mr. Davis. We will return to session.
    I'm going to go to Ms. Norton. Mr. Marchant hasn't gotten 
back yet, and we will just go to Ms. Norton for her questions.
    Ms. Norton. Thank you, Mr. Chairman. I think this is a very 
important bill and one that you have done the kind of oversight 
that is respected before changes are made in existing 
legislation.
    I don't have a great many questions for these witnesses. 
However, I would like to just say a word about the COLA 
adjustment, which has come up time and again in our hearings.
    I saw the appropriation committee of the Defense Department 
adjust the COLA for DOD employees, some of whom, for various 
reasons, were captured by the same problems, because of the new 
pay system, as the GAO employees. So guess what? They went to 
one of the most powerful committees, subcommittees, in the 
Appropriation Committee, and they got their COLA.
    I want to know if you see any justification--I indicated, 
when we were discussing the changes, that I had recommended for 
this bill to equate the kinds of independence that the 
appointing authority has in the executive branch with the kind 
of authority the Speaker and the minority ought to have here 
and in the Senate.
    I must say that I don't--uniformity, for its own sake, 
doesn't work with me. But inequality doesn't work either. There 
are good reasons, sometimes, for changes, and if they are 
justified then, of course, it seems to me if they are 
functionally justified, they should occur.
    Looking to the COLA, would either of you see any 
justification for making people who did not receive their COLA 
in the years that have been acknowledged without, at the same 
time, making these employees whole for the entire period? Could 
that possibly be justified?
    Mr. Dodaro. I----
    Ms. Norton. In other words, could you get a little bit 
pregnant? If you concede that you must make them whole for a 
couple years, aren't you already pregnant? Go ahead and have 
the baby.
    Mr. Dodaro. With regard to the 2006-2007 situation, we 
think we've worked with subcommittee staff and have come up 
with a really reasoned and practical approach for providing the 
cost-of-living adjustment to those employees who did not 
receive the cost-of-living adjustment at that time. That would 
be provided in a lump-sum payment to them, as well as their 
salaries adjusted going forward, and so their salaries would be 
brought up to the level going forward that they would have been 
assuming they had received those adjustments. So we think 
that's a reasonable----
    Ms. Norton. Excuse me, OK, don't--because reasonable people 
can disagree on what's reasonable. I just want to make sure we 
have on the record whatever justification is appropriate.
    Now, 2006 and 2007 you believe are appropriate.
    Mr. Dodaro. Yes.
    Ms. Norton. You believe they are reasonable.
    Mr. Dodaro. Yes.
    Ms. Norton. That being the case, why is it not appropriate 
to make these employees whole for the entire period? I can 
understand you may be limited----
    Mr. Dodaro. Right, right.
    Ms. Norton [continuing]. In what you can do. If that's your 
answer, I would understand that. But is there any justification 
for not making these employees whole for the years that they 
did not receive their COLA if they should have received them--
--
    Mr. Dodaro. Right.
    Ms. Norton [continuing]. For the 2 years that you believe 
clearly they should have? I'm looking for a justification. I'm 
not looking for what was reasonable.
    Mr. Dodaro. Right, right.
    Ms. Norton. I was looking for why it was reasonable or why 
it is reasonable, if you think it is, to deny them their COLAs 
for the years that proceeded it. It may have seemed reasonable 
at the time. I'm now saying--that's why I said ``at this moment 
in time.''
    Mr. Dodaro. Right, right.
    Ms. Norton. Could the Congress possibly justify giving back 
the COLA for 2 years--and, by the way, isn't this a part of the 
pension? Isn't COLA included in the pension? Your COLA is part 
of your wages and is included in your pension.
    So you understand what I'm talking about here.
    Mr. Dodaro. Right, right.
    Ms. Norton. We're not talking just about people's salaries. 
We are talking about their pensions as well, their base pay.
    Mr. Dodaro. Right.
    Ms. Norton. So I'm saying, that considered, what is the 
justification? I'm not saying at the time there may have seemed 
justification.
    Mr. Dodaro. Right, right.
    Ms. Norton. At this point in time, people get 2 years. Is 
there any justification for saying you can have it for 2 years, 
but you cannot have it for the period, the entire period that 
you were denied your COLA?
    And, if so, I want to hear the justification, specifically, 
not that it was reasonable. If your justification is it seemed 
reasonable at the time, we understand the difference, fine. 
What would be the justification now for making people partially 
whole?
    Mr. Keplinger. Mrs. Norton, maybe I could take a crack at 
this.
    When we considered these two issues of dealing with the 
past and the pay decisions that were made with respect to 2006 
and 2007, as Gene mentioned before, we want to prospectively 
adjust their salary and we want to give them a lump sum.
    The three principles that we brought to bear as we were 
talking internally and with staff about how to approach this is 
that we wanted to, one, have something that budgetarily we can 
afford; second, that it's administratively doable and not 
overly burdensome; and third, that it is fair.
    Now, we have structured a proposal which, you know, in an 
ideal sense it may not be everything that everybody wants and 
every detail, but we think, on balance, it's a very fair 
proposal. And it also deals with the retirement issue, too, 
through directions to OPM to include the prospective pay 
adjustments in our employees' high-3 going forward.
    I hope that helps.
    Ms. Norton. Well, according to the staff memo, what we are 
doing is authorizing--seeks to provide an opprobrium for those 
employees who were denied all or part of their annual 
adjustment for 2006 and 2007 or both years.
    Are those the only years----
    Mr. Dodaro. Yes.
    Ms. Norton. Perhaps that makes them whole, but----
    Mr. Keplinger. Yes, those are the only 2 years.
    Mr. Dodaro. This takes care of everything in the past.
    Ms. Norton. Thank you.
    Mr. Dodaro. Yeah. Prior to that, Congresswoman, I'm sorry, 
I didn't understand either. Basically up to 2005, we were 
giving the same across the board as the executive branch.
    Ms. Norton. Only for those years.
    Mr. Dodaro. Only for those years. And the floor guarantee 
provision we're seeking that's also included in there----
    Ms. Norton. The what?
    Mr. Dodaro. It is a floor guarantee going forward; that 
would take care of the issue going forward as well.
    We're hoping to never to talk about this issue again.
    Ms. Norton. Talk about putting an issue to rest.
    Mr. Dodaro. Yes, yes. That is our objective.
    Ms. Norton. So we are fully pregnant; the baby has been 
born.
    Mr. Dodaro. Yes.
    Ms. Norton. Thank you very much.
    Mr. Dodaro. As has been pointed out to me, I am not able to 
do that. [Laughter.]
    But I am able to be empathetic, and I can try.
    Ms. Norton. Well, like every father, you all were very 
necessary. [Laughter.]
    If you want to cutoff these metaphors, I'm perfectly 
willing to. [Laughter.]
    The part of me that still teaches law enjoyed our 
conversation on the effort I'm seeking in the chairman's bill 
to equate what happens in the executive agencies with GAO as 
well. And there was some thought that maybe there were some 
agencies, smaller agencies, where the agency head may appoint 
the IG. Perhaps that is the case.
    I must say I'm familiar with many agencies, having headed 
one myself, and am aware of no agency of any consequence where 
Congress hasn't appointed a GAO. And that may be because 
Congress looks at the size and importance of the agencies to 
public policy. Surely it wouldn't be the size alone, because 
agencies differ vastly in size.
    But I do want to get on the record that, in terms of the 
kinds of work the GAO does, which depends upon your 
independence, would you believe that, for an agency of 
consequence, whose policy concerns were of importance to the 
public, that an independent IG would help it or assist it in 
being credible to the Congress of the United States and to the 
general public?
    Mr. Dodaro. We definitely support the IG concept and the 
principal. And we are prepared to have ourselves held to the 
same standards as any other agency. And we believe firmly in 
that process.
    I mean, that is why we've had an Inspector General created 
administratively for over a decade. So we have voluntarily put 
that system in place, the way we have for many management 
principles and laws that are applied to the executive branch 
that don't normally apply to the legislative branch or GAO.
    And so we are very committed to that. I mean, we have put 
forth the statutory IG provision in our bill in an attempt to 
further enhance the independence and autonomy of that position. 
And, you know, we're willing to entertain discussions about the 
best way to appoint that person to have credibility, you know.
    There are only one political appointees, maybe two, in GAO 
all together. One is the Comptroller General position, which 
the Congress creates a list of at least three people with a 
congressional commission, sends names to the President; the 
President can ask for additional names but has to pick from 
that list. Now, that's different because we're in the 
legislative branch than it would be for just the President to 
pick somebody on their own, for a Presidential appointee in a 
legislative branch agency. So there are differences.
    The only other political appointed position in the GAO has 
been Deputy Comptroller General, and that's been vacant for a 
while, because that has not worked, that process hasn't worked. 
And while we were originally seeking to change that process 
with this legislative proposal, given the departure of Mr. 
Walker we think those things ought to be held in abeyance for a 
while.
    Mr. Keplinger. And, Mrs. Norton, I would be happy to supply 
the committee, for the record, the list of the entities in the 
executive branch--I don't want to pass judgment on whether they 
are or are not of any consequence at this moment--where the 
heads of the agencies point the IG.
    In the legislative branch, the Architect of the Capitol, 
the Librarian of Congress and, I believe, the Public Printer 
all appoint the Inspector Generals in their institutions.
    Mr. Dodaro. And I'm certainly open to having consultation 
with our oversight committees as part of this process. I mean, 
I think that just makes sense, so that you have confidence in 
that individual.
    Ms. Norton. Well, I certainly want to commend the GAO for 
understanding that, when Congress hadn't appointed one, at the 
very least he should appoint one. And I do want to indicate I 
certainly have seen nothing to indicate that the lack of formal 
independence has affected the PAB or has affected the IG or has 
affected the Comptroller General. I really have not.
    As I indicated to you, I am sick and tired of Congress 
waiting until something happens before it then runs to do the 
obvious. That, really, is all I'm about, because the chairman 
was doing a number of other things in the bill. We don't just 
shoot bills through here, that seem the appropriate time. I 
certainly don't think--far be it from me to say that the 
Architect of the Capitol, Library of Congress and the Public 
Printer are not agencies of consequence, but you will forgive 
me if I do not equate them with the Government Accounting 
Office, which then gets to pass judgment on everybody in and 
the U.S. Government, much to their displeasure, because 
whenever the GAO is talking about you, it normally isn't saying 
anything you want to hear. [Laughter.]
    So I must say, if those are the agencies, they tend to 
prove my point, that I--my own sense is that if a Member of 
Congress wants to require things of their constituents, we have 
an Office of Compliance, and it says we're going to apply the 
same laws to ourselves. Those of us who sit in stations of 
power of one kind or the other are most vulnerable, terribly 
vulnerable, if, in fact, we don't live up to the same standards 
or structure ourselves by the same standards.
    So without meeting in fact-finding, I've sat in hearings 
and heard General Counsel testify about the employee matters. 
That seemed to me to be a straight-up-and-down counsel who 
looked at the law and just called it as she saw it.
    So the last thing I'm saying is that I see some evidence, 
but I have to tell you, this committee is part of oversight and 
reform. The reason that we have oversight and reform, a whole 
committee on that, largest committee in the House, is precisely 
because there are so many things that blow up, and then it is 
our job to look at why it blew up. And then they say, why in 
the world didn't somebody do something about it? The reason is 
it wasn't broken. It wasn't broken.
    In the global economy, the United States better figure out 
this is not a world of ours any longer. This is not about 
economics. But it is about the habit of the Congress of saying, 
unless it's broken, we aren't going to do anything about it. So 
I would like to do something about it this time.
    And I thank you, Mr. Chairman.
    Mr. Davis. Thank you very much, Ms. Norton.
    Gentlemen, I think that concludes our questions for you. 
And so thank you very much, and we appreciate your being here.
    Mr. Dodaro. Thank you, Mr. Chairman.
    Mr. Davis. We will now go to our second panel for the 
afternoon.
    Panel two is Mr. Paul Coran. He is the chairman of the 
GAO's Personnel Appeals Board. The Personnel Appeals Board 
adjudicates personnel disputes involving employees or 
applicants to GAO, as well as monitors equal employment 
opportunities at GAO.
    Ms. Anne Wagner is the General Counsel for the GAO's 
Personnel Appeals Board.
    And I see that you are both standing, so I will just stand 
with you and administer the oath.
    [Witnesses sworn.]
    Mr. Davis. The record will show that the witnesses answered 
in the affirmative.
    Thank you both for coming, and thank you both for being 
here.
    Mr. Coran, we will begin with you. You've got 5 minutes to 
summarize your testimony. The yellow light indicates that you 
are down to 4. And, of course, the red light means that we've 
exhausted the time.
    Thank you very much, and you may begin.

 STATEMENTS OF PAUL CORAN, CHAIRMAN, PERSONNEL APPEALS BOARD, 
U.S. GOVERNMENT ACCOUNTABILITY OFFICE; AND ANNE WAGNER, GENERAL 
       COUNSEL, PERSONNEL APPEALS BOARD, U.S. GOVERNMENT 
                     ACCOUNTABILITY OFFICE

                    STATEMENT OF PAUL CORAN

    Mr. Coran. Good afternoon, Chairman Davis and 
Representative Norton. I am Paul Coran. I've served on the 
Personnel Appeals Board since January 2005, and I've been the 
Chair since September 2007. I'm honored to be here today before 
you to share my impressions of the Board's structure and 
processes.
    The PAB is charged with all of the investigatory and 
adjudicatory functions of the MSPB, the EOC, the Office of 
Special Counsel, and the FLRA. As an adjudicatory body, the PAB 
must be independent, impartial, informed, effective and 
efficient. The Congress and GAO's employees and managers are 
entitled to no less.
    One might ask how the PAB may entertain such broad 
jurisdiction, exist in the GAO's structure, and yet maintain 
strict standards of an adjudicatory body. The answer is that, 
in creating the PAB, Congress was very careful to design the 
Board, its jurisdiction and structure in a way that would 
maintain the requisite independence and be both efficient and 
effective.
    I believe that the PAB is structured to and has 
consistently performed its statutory mission very well by 
providing a just forum for resolution of employment disputes 
and by providing independent oversight of equal employment 
opportunity at GAO for nearly 30 years.
    My perspective I derive from serving a term in the so-
called school of hard knocks. Before joining the PAB, I served 
for 36 years in Federal employment in labor law capacities in 
both the executive and legislative branches, as a neutral with 
the NLRB, the Department of Labor, the old Federal Labor 
Relations Council, and the Office of Compliance. And I served 
in advocate roles at two ends of the pole: as a president of a 
local labor organization and as a management attorney with the 
Department of State.
    These experiences allowed me to observe and participate 
before an array of Federal-sector employment adjudication 
agencies with governmentwide jurisdiction. I've also had the 
opportunity to observe and participate before boards which are 
limited to the executive branch foreign affairs agencies.
    In preparing for today, I reviewed the excerpts from last 
year's hearing and noted Representative Norton's concerns about 
Board members' independence, in particular how they are 
appointed. I would like to address those concerns.
    The PAB's independence goes well beyond its separate 
physical location in a building closer to Capitol Hill than it 
is to GAO. It goes beyond its complete freedom to create its 
own personality, such as in its own report covers not having 
the iconic GAO blue covers. It goes beyond its ability to keep 
its employees in the GS, general schedule, pay system, while 
the rest of GAO became pay-banded. It goes beyond the fact that 
the PAB has its own logo and its own Web site.
    In my 3 years with the PAB, I've had no reason to conclude 
anything but that my colleagues and I serve as totally free 
agents in meeting our statutory responsibility.
    As part of the GAO, we enjoy the excellent logistical 
resources that GAO provides us for our administrative needs. In 
prior service, I have seen the small free-standing agency 
overburdened with having to provide for nearly all of its 
administrative needs. I am grateful that we are not so diverted 
from our mission.
    At the same time, our autonomy evokes the sense of actual 
separateness throughout our staff and through the Board. I 
recognize that the appearance of independence can be as 
important as the actuality. While the Comptroller General 
appoints the PAB members, that act is the result of a nearly 
year-long collegial process.
    I'm running short on time, and I want to summarize that 
process just by saying that the process is exhausting. 
Employees and their involvement is integrated throughout the 
process. And the Comptroller General may appoint the members, 
but it's only after this careful vetting process.
    I'm sorry that I've gone past my time.
    Mr. Davis. Go right ahead. You can finish up.
    Mr. Coran. Oh, OK.
    I'd like to point out the people with whom I serve, which 
is indicative of the quality of appointments through this 
process. Throughout the history of the board, they have all 
been labor and employment law specialists. Some have 
represented management, some been employee advocates, some have 
been neutral. I, myself, have moved across those roles. But 
I've never worked with anyone on the Board who would ever serve 
in a situation where doctrinaire policies govern rather than 
applying the rule of law and equity to cases on an individual 
basis.
    I do believe that the Board has fulfilled its function 
through its decisions and its oversight on EEO matters 
throughout its almost 30 years of existence. And I would be 
pleased to answer any questions the committee may have. Thank 
you.
    [The prepared statement of Mr. Coran follows:]

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    Mr. Davis. Thank you very much.
    Ms. Wagner.

                    STATEMENT OF ANNE WAGNER

    Ms. Wagner. Thank you, Mr. Chairman. Good afternoon.
    Good afternoon, Mrs. Norton.
    I am here at your request, Mr. Davis, to answer your 
questions concerning the Office of General Counsel's 
investigations into a number of charges that have been filed 
with the PAB General Counsel's Office dealing with GAO's pay 
system.
    As a preliminary matter, I would just like to reiterate 
what I had stated in my previous testimony before the 
subcommittee, that the PAB General Counsel, by statute and 
regulation, conducts investigations into charges that are 
brought before it, in order to make a reasonable-grounds 
determination as to whether a violation has been committed and, 
if so, to offer representation to the charging party, to 
adjudicate that claim before the Personnel Appeals Board.
    Therefore, the entire thrust for our investigation is 
really directed at determining whether that offer of legal 
representation is to be made.
    The ultimate decisionmaking with regard to those claims is, 
of course, statutorily committed to the Personnel Appeals Board 
itself, which makes findings of fact and draws conclusions of 
law with regard to the claims.
    With regard to the status of the investigations, I would 
point out that there were 274 charges that were filed in toto 
dealing with various aspects of the GAO pay system. These 
charges can generally be characterized as having challenged a 
market-based pay system that was established at GAO, the 
elimination of the 2006 and 2007 annual adjustment, otherwise 
known as the COLA.
    The charges also raised the question or raised claims as to 
the deviation of the GAO COLA in 2006 and 2007 from that which 
was accorded the executive branch employees under the GS 
schedule.
    Some of these charges also challenged the use of a 
standardized ratings score in calculating the performance-based 
compensation that is afforded employees at GAO.
    In addition, some of these charges dealt with the 
calculation of locality pay, the use of a ``speed bump'' with 
regard to some of the band-level pay ranges, the lack of 
uniformity in the rating system across the teams at GAO, as 
well as some challenge to the Band II restructuring decisions.
    In addition, there were 14 individuals who challenged the 
pay decisions based on claims of discrimination. That is, some 
of them have alleged that the pay decisions were unlawful based 
on discrimination due to age, race, as well as sexual 
orientation.
    Since these charges have been filed, eight individuals have 
withdrawn, which has left us with 266 charges currently pending 
in our office in investigation.
    Our office has now completed its investigation, and I am 
particularly sensitive at this point to enter into any public 
disclosure with regard to our preliminary assessment as to the 
merits of any or all of those claims. However, the question as 
to the Comptroller General's statutory authority to eliminate 
the COLA entirely in 2006 and 2007 was a question that was 
raised as part of the Band II restructuring cases that my 
office handled last year which settled and which was the basis 
of the testimony that I gave last year. So I do feel--I don't 
feel constrained with regard to any issues of confidentiality 
in discussing that issue with you today.
    My determination with regard to the statutory authority 
question has not changed since last year. I do believe that the 
plain language as well as the legislative history of Public Law 
108-271 manifestly supports the conclusion that the Comptroller 
General lacked statutory authority to eliminate the COLA 
entirely.
    That said, and with due regard for the rights of the 
employees whose claims are still pending in our office and 
still under investigation, I would be more than happy to answer 
any of the questions that you have with regard to the cases 
that we are handling.
    Mr. Davis. Thank you very much, and thanks to both of you.
    [The prepared statement of Ms. Wagner follows:]

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    Mr. Davis. As you know, the subcommittee staff has been 
working on pay adjustment provisions for the fiscal year 2006 
and 2007 for GAO employees who met expectations but did not 
receive an across-the-board adjustment for those years. What I 
would like to know is your views on the retroactive provision 
that I have included in the legislation that I will introduce 
to address the problem and also your views on the across-the-
board floor guarantee provision that will ensure that, in 
future years, GAO employees will get the general schedule 
annual pay adjustment.
    Ms. Wagner. Mr. Chairman, I have to say that I don't have 
a--it would be entirely speculative to pass judgment or to 
address the questions directly.
    I was given a draft proposal, proposed language, Friday or 
Monday. I raised concerns about whether or not the language as 
it was given to me at that point would fully redress the claims 
with regard to the COLA. I don't--I have not seen any 
subsequent revisions, if, in fact, there have been. At that 
point, if there have been revisions, I certainly would be happy 
to review that and provide you with my assessment as to whether 
that would redress fully the claims concerning the COLA.
    Mr. Davis. All right. Let me ask you, also, what drives if 
you--many of the appeals that you get? Many of the appeals that 
come before the Board? I mean, what do you think actually 
drives them or cause the individuals to appeal?
    Ms. Wagner. I think there are two aspects to that question, 
the first being what drives people to our office filing a 
charge, and then what would compel them to take a case forward 
to the Board.
    I think that in my short experience as the General Counsel 
at the Personnel Appeals Board, I have seen that employees 
uniformly come to our office because they genuinely feel that 
they have--somehow, their rights have been violated or that 
they have been wronged in some way. If they can't articulate 
specifically how their rights have been violated, I find that 
perfectly understandable, but it is genuinely that they feel 
that they have been wronged.
    After we have had an opportunity to do an investigation and 
to examine the factual and legal grounds for that, their claim, 
they then have to step back and analyze whether there is a 
viability from a legal standpoint in terms of going forward. 
That is assuming, you know, whether or not we offer to 
represent them or not.
    And at that point, I think that--again, I can only 
speculate--but I suspect that the extent to which individuals 
take those cases forward or want to take them forward is 
probably a function of a number of factors: how strong the case 
is, what personal toll they anticipate this having on them.
    Mr. Davis. Do you feel that passage of the provisions 
relative to the claims before the PAB that pertain to the 
denial of across-the-board increases for 2006 and 2007 would 
decrease the number of appeals that would in all likelihood 
come before the Board?
    Ms. Wagner. Again, without having the language to--having 
really reviewed the language that may be currently under 
consideration, if I could simply state more sort of broadly and 
generally. If the legislation that is being proposed plainly 
manifests congressional intent to make these individuals whole 
with regard to their annual pay adjustments, then I think the--
one could say that much of the relief that the employees might 
have gotten through the adjudicative process would have been 
afforded them through the legislative process.
    Mr. Davis. Thank you very much. I have no further 
questions.
    Ms. Norton.
    Ms. Norton. Could I have your view, if a system may be used 
to determine job-related matters, such as promotion, for 
example, does that system have to be validated?
    Mr. Coran. Representative Norton, we only get it at the 
Board level after it goes through the General Counsel's 
investigative process. We get live cases where the employee has 
exhausted the administrative process and is--either the General 
Counsel represents the employee, if the employee accepts, or 
else the employee comes forward.
    And what you are bringing up is a question of possible or 
legal failing of a charge. Someone may claim that the standards 
by which they were not promoted do not--they have an adverse 
impact and a prescribed basis, and they haven't been validated. 
That could be a case that could properly be brought before the 
Board and would have to be adjudicated.
    Ms. Norton. I didn't ask you about the outcome. I asked you 
about the standard. I am asking about the standard of 
validation of matters used for various decisions and an 
employee's work have to be validated. I am not asking you for 
the outcome. Obviously, they have to show whether or not they 
are job related. I am asking validated. Of course, validated 
means job related.
    Mr. Coran. I would be speaking just personally and not for 
the Board. But from my dealing in these cases, particularly at 
the State Department, where there was a women's class action 
where the written examination had an adverse effect on women 
and it couldn't be shown to be strictly job related, the 
Department settled that case because the matter hasn't been 
validated. Yes.
    Ms. Norton. Thank you.
    Ms. Wagner, isn't that the current state of the law, that 
terms and conditions used for such matters as promotion--I just 
give an OA system of ratings, you can name it, that--that, 
subject to challenge, if in fact the entity could be a private 
employer or Federal agency cannot validate the use of the 
particular system?
    Ms. Wagner. The question as to whether--what factors must 
be taken into account with regard to----
    Ms. Norton. Now, don't answer another question I wasn't 
asking you. I wouldn't begin to ask you what factors. I'm 
asking you a conclusion of law, based on what I presume you 
understand about the existing case law.
    That is all Mr. Coran gave me. He couldn't give me anything 
pertaining to a specific case.
    If I were to ask a Supreme Court Justice, do you--what 
does--a conclusion of law, he could probably tell me what the 
law is. What applied to a specific fact, he couldn't tell me 
anything because you have to look at that set of circumstances.
    I am simply asking whether the factors that an employer 
uses, public or private, to make judgments about major aspects 
of a person's employment such as promotion or how the person's 
rating--you can name it. I don't know what it is, because I 
don't know what job I am talking about yet. I am simply asking. 
The bottom-line question is, would not that system have to be 
validated as a matter--does not the case law show that?
    Ms. Wagner. The case law talks specifically in terms of a 
Title 7 challenge to a personnel action. Oftentimes, the party 
will look to whether the factors were validated. I don't think 
that the law supports the concept that there is any one 
particular method for validating a particular system, and the 
only reason why I was talking----
    Ms. Norton. I will grant you that. I wouldn't ask you about 
any of the specifics of validation. It is a very technical 
process. It varies from job to job. It is a very difficult 
process. I am simply trying to ask the bottom-line question 
about validation itself.
    Ms. Wagner. I think that it would--it is reasonable to say 
that any decision, whether it is a promotion or pay, would have 
to be--arise out of a system that is valid.
    Ms. Norton. That is all I am asking.
    Let me understand--I understand your role, Mr. Coran. Your 
role, obviously, is much like the adjudicatory role of any 
body, of any similar body, for example, in the executive 
branch, where you sit in judgment and you wait for the specific 
cases to come before you.
    Could I ask whether the General Counsel renders advice to 
anybody other than the PAB? Who renders advice to the 
Comptroller General?
    Ms. Wagner. The PAB General Counsel does not render advice 
to the Comptroller General, and I would assume that the Office 
of General Counsel at GAO provides----
    Ms. Norton. So they have their own General Counsel?
    Ms. Wagner. Yes.
    Ms. Norton. Could I ask you--Ms. Wagner, I think it is 
probably the case--and I can't find a way out of this. 
Apparently, 12 employees did file for the PAB and did get a 
remedy; and, of course, that left everybody else out, and they 
didn't get a remedy. They hadn't filed. That is why this action 
here has been necessary, to make those people who did not file 
whole.
    Is there anything that could have been done so that we did 
not have to go through this laborious process? When there were 
12 people who had shown for the class, there was an error made 
and most of the class was left out because they haven't filed--
--
    Now, obviously, we are in Federal court. There is ways to 
deal with those things. It is pretty formal, class actions and 
the like. But here you have this anomalous situation where the 
PAB had found, I believe, that--I believe you had argued, I 
believe you had argued that the Comptroller General lacked the 
authority to deny the COLAs. I believe Mr.--the PAB found to 
that effect and that, as a result, 12 people who filed, they 
settled before it went to the PAB.
    Ms. Wagner. Yes----
    Ms. Norton. You argued, and then they settled. Is that it? 
You made the--you made the case that you believed he--he, the 
Comptroller General, lacked the authority. At that point, a 
settlement occurred. Is that how?
    Ms. Wagner. If I can just address what I believe is the 
underlying concern, which is why the relief wasn't extended 
more broadly from the 12 to the rest of the 308 individuals who 
were denied COLA in 2006.
    At the time, that the 12 individuals--actually, there were 
more. But at the time those individuals filed, the case, what 
they were challenging, the personnel decisions that they were 
challenging had to do with the restructuring. They all arose 
out of the split of the Band II analysts and specialists work 
force. That--one of the effects of the split for some of those 
people was the elimination of their COLA because they, having 
been placed in a Band II A, they capped out and then, 
therefore, were denied a COLA.
    But the fundamental thrust of those cases was then, and 
remained throughout, whether this restructuring process itself 
was valid and whether those individuals--I mean, assuming--and, 
ultimately, the case--ultimately, though, the decisions had to 
do with whether those individuals were demoted. And the factors 
that were taken into account in that process with regard to 
whether those 12 individuals were demoted not only took into--
not only involved sort of general policy decisions that the 
Comptroller General made but, ultimately, came down to their 
performance. So that, in assessing whether this was the type of 
case that would be amenable to a class action, I had to look at 
whether it was going to require individual evidentiary showings 
with regard to those--each particular individual. And it just 
didn't strike me that was going to be amenable to class action 
treatment.
    The impact with regard to the COLA was, in fact, more 
broad-based, but the 12 cases that I had before me that we were 
investigating had to do with the demotions of 12 individuals. 
And, again, it was a judgment call with regard to whether, 
ultimately, those cases were going to be amenable to class 
certification. Because the evidence was going to have to 
ultimately--in order to demonstrate that they should not have 
been demoted, if all of my theories about the policies were 
wrong, then ultimately we are going to have to show that each 
of those people qualified to get into Band II B. And so to do 
that on a broad basis was going to be--was beyond the scope----
    Ms. Norton. Of course, that may be the case, Ms. Wagner. 
But if the underlying issue was whether the system itself was 
job related, regardless of the individual differences in 
performance, those individual differences would have to have 
been judged by a job-related system for each aspect of their 
performance that was involved. Is that not in fact the case?
    Ms. Wagner. What was at issue there was whether their 
ratings over the last--the 3-year period prior to the 
restructuring were legitimate reflections of their 
qualifications to remain in Band II B.
    The issue as to--there was an issue concerning, and we 
would have been prepared to challenge the rating system as such 
to show that these individuals' ratings did not accurately 
reflect their performance. It did not--the challenges that we 
were looking at were, again, specific to these particular 
individuals in that we were looking at issues, like did this 
individual's performance manager accurately capture that 
individual's performance during this period of time, as opposed 
to the sort of systemic issues that I think are implicated by 
your question.
    Ms. Norton. I just want to say for the record, Ms. Wagner, 
your answer does not indicate that you are in touch with the 
complexity of validation cases.
    When somebody challenges the system for promoting--let's 
just give me a very simple-minded answer--but the way it has 
happened where these notions have been developed, in an entire 
corporation, with hundreds of thousands of employees, the 
complaint will say, these people up and down the corporation 
who are black, who are female--you name it--have systematically 
gotten performance ratings. There is a pattern of performance 
ratings reflected in pay, etc., that is less than, let us say, 
white males.
    If you want to see something complicated, much more 
complicated than 300-some employees who you say you have to 
capture the individual job, their performance on the job, their 
qualifications, that is precisely the nomenclature, the words 
that describe validation cases. And the reason that employers 
go to all the trouble to validate is, once you get into the 
morass of trying to explain differences the way you are, you 
are out of court.
    So you have to understand it is very complicated here. This 
is based on whether you are capturing everything they do--and 
everything these women do is really different from what these 
men--hey, fine. The burden shifts to the employer. And that is 
the point.
    But once you show statistically the difference, don't think 
that employers haven't been able, particularly with validated 
systems, to overcome this. But once you show the difference, 
the burden shifts entirely to the employer. Because, obviously, 
the employee and its lawyer doesn't have the information. It is 
you who are saying these women are being paid equal to men, if 
you knew what I knew. OK, fine. Tell us what you know. All we 
have done is shift the burden to you.
    Now the thing that troubles me about your answer is that if 
employees challenged performance or ratings systems from some 
other agency before--I don't know--the EOC or some such agency, 
MSBP, that system would be fully understood. So I am bothered 
by the notion that, you know, that there is some difference 
here, whether you are saying to me that there is some 
difference here given your independence that we in the 
legislative branch have granted you and the PAB, which we saw 
as no different from the kind of application of the law that we 
would expect for other employees.
    Ms. Wagner. Mrs. Norton, I wasn't suggesting that we 
treated these cases any differently than how they would have 
been treated by any other similar agency in the Federal 
Government. In fact, there were cases, as I pointed out 
earlier, that--our office handled 12, but there were initially 
more cases, more individuals who filed charges challenging the 
restructuring decisions. Which, again, I want to point out, is 
different from the GAO order concerning pay, to some extent. I 
mean, those were two separate processes.
    The three individuals who filed discrimination allegations 
concerning the restructuring were, by virtue of the mechanism 
that is set forth in the PAB regulations and GAO orders, were 
transferred, in effect, to the GAO's Office of Opportunity and 
Inclusiveness for investigation; and they are still there. So 
we did not take it upon ourselves to examine these claims for 
the determination as to whether reasonable grounds existed to 
believe that the restructuring process was discriminatory, 
because those questions were to be addressed first at OOI. They 
can still come to the PAB once that process is completed 
where----
    Ms. Norton. I understand this. That is why I asked you for 
the law. And I asked Mr. Coran for the law, too. Frankly, I am 
at a loss, Ms. Wagner.
    Let me just ask both of you a final question. I am not 
asking you anything that I think is outside of what you know, 
and I don't think saying what the black letter law is or that 
somebody settled it--you know, you settled a case, too. I am 
not saying why you settled it--you, the GAO--but you settled a 
case after looking at the law.
    Let me ask both of you. Are you prepared to follow existing 
anti-discrimination law as it applies to other Federal 
employees?
    Mr. Coran. Absolutely. Unqualified.
    Ms. Norton. Ms. Wagner.
    Ms. Wagner. Yes.
    Ms. Norton. That is really all I am getting at. I want to 
make sure that we are not still dealing with a different 
standard in the GAO.
    My final question is, would either of you have any 
objection to the Speaker of the House, the majority leader of 
the Senate, together with the minority leader of the House and 
the minority leader of the Senate, appointing the members of 
the PAB, the General Counsel, and the IG?
    Mr. Coran. Well, it is certainly, Representative Norton, 
within the purview and the best judgment of Congress who should 
serve in such positions that are under Congress. However, my 
view is that the present system has worked extremely well 
because the employees are so integral to the selection process, 
and the way the screening has taken place has been----
    Ms. Norton. You notice, Mr. Coran, that I have been at 
great lengths to say that I regarded both your work and--your 
work, PAB's work, and Ms. Wagner's work to be above reproach 
during the controversy that has been before us. So I am not 
indicating whether it has worked well or not. I asked, would 
you object? Would you see any problem to these four members 
being the appointing authority? That is my only question.
    Mr. Coran. I certainly couldn't object to that.
    Ms. Norton. Ms. Wagner.
    Ms. Wagner. I have no objection to that.
    Ms. Norton. Thank you, Mr. Chairman.
    Mr. Davis. Thank you very much.
    I have no further questions and thank you all very much.
    Our third panel is going to consist of Mr. Curtis Copeland. 
Mr. Copeland is currently a Specialist in American Government 
at the Congressional Research Service [CRS], within the U.S. 
Library of Congress. His specific area of research expertise is 
Federal rulemaking and regulatory policy. He is also head of 
the Executive and Judiciary Section with the CRS Government and 
Finance Division.
    Mr. Copeland, thank you.
    Ms. Shirley Jones is the current president of the GAO 
Chapter of Blacks in Government. She was first elected 
president in 2005 and was reelected January 2007. Ms. Jones is 
Assistant General Counsel in the Office of General Counsel at 
the U.S. Government Accountability Office. In this role, she is 
responsible for supervising the legal support for the Strategic 
Issues [SI], Mission Team, work related to tax policy and 
administration.
    Ms. Jones, thank you.
    Ms. Janet Crenshaw Smith is co-founder and president of Ivy 
Planning Group, an 18-year-old management consulting and 
training company that specializes in diversity strategy and 
change management.
    Ms. Smith, thank you very much.
    Ms. Jacqueline Harpp is on GAO's International Federation 
of Professional and Technical Engineers Interim Counsel. She is 
a senior analyst on GAO's Education, Workforce and Income 
Security Team. She has nearly 34 years of experience working at 
GAO.
    Thank you all for being here. And, as you know, we swear 
all of our witnesses in, so if you will raise your right hands.
    [Witnesses sworn.]
    Mr. Davis. The record will show that the witnesses answered 
in the affirmative. Thank you all very much.
    And, of course, you know that your testimony is included in 
the record. If you would take 5 minutes and summarize. The 
green light indicates that you have the full 5 minutes going. 
When it gets down to yellow, you have a minute left. And, of 
course, the red means that you have concluded your testimony 
and thank you very much.
    Dr. Copeland, we will begin with you.

STATEMENTS OF CURTIS COPELAND, SPECIALIST IN AMERICAN NATIONAL 
  GOVERNMENT, CONGRESSIONAL RESEARCH SERVICE; SHIRLEY JONES, 
   EMPLOYEE ADVISORY COUNSEL, U.S. GOVERNMENT ACCOUNTABILITY 
OFFICE; JANET C. SMITH, PRESIDENT, IVY PLANNING GROUP, LLC; AND 
JACQUELINE HARPP, INTERIM COUNCIL REPRESENTATIVE, INTERNATIONAL 
  FEDERATION OF PROFESSIONAL AND TECHNICAL ENGINEERS, AFL-CIO

                  STATEMENT OF CURTIS COPELAND

    Mr. Copeland. Thank you, Mr. Chairman, members of the 
subcommittee. Thank you for inviting me today.
    I am here to discuss several issues that CRS was asked to 
address related to the implementation of the new pay system 
under the GAO Human Capital Reform Act of 2004.
    The first such issue was whether the Comptroller General 
told Congress and GAO employees during consideration of the 
legislation that all employees who received a ``meets 
expectation'' performance evaluation would receive annual 
adjustments in their base pay. As I described in detail in my 
written statement and as I testified before this subcommittee 
last year, the record indicates that the Comptroller General 
gave such assurances in writing and orally on multiple 
occasions to both congressional committees and individual 
Members of Congress. House and Senate committee reports on the 
legislation repeated the Comptroller General's commitments.
    GAO's employees' concerns were reportedly assuaged by those 
assurances; and documents published before and after the 
statute's enactment that are still on GAO's Web site continue 
to indicate that, ``all GAO employees who perform at a 
satisfactory level will receive an annual base pay 
adjustment.''
    However, the record indicates that 308 GAO analysts and 
specialists did not receive the 2.6 percent permanent increase 
that other GAO employees received in January 2006. All of the 
308 employees had meets expectations ratings or better on all 
relevant performance dimensions.
    In 2007, 138 GAO analysts and specialists with at least 
meets expectations ratings did not receive any of the 2.4 
percent permanent pay increases provided to other GAO 
employees, and 66 others received only partial increases. 
Thirteen GAO administrative staff members with at least 
satisfactory ratings also did not receive the full 2007 pay 
increase.
    During the May 2007, hearing before this subcommittee, the 
Comptroller General said his decisions to withhold those annual 
pay increases were fully consistent with the authority provided 
him in the GAO Human Capital Reform Act. GAO told CRS that the 
act permitted the Comptroller General to determine the size of 
the annual adjustments, including the option of providing no 
adjustment at all to some or all GAO employees. However, the 
General Counsel of the GAO Personnel Appeals Board testified at 
the May 2007, and repeated just now that the Comptroller 
General appeared to have exceeded his statutory authority.
    The General Counsel and a CRS attorney who also testified 
at the May 2007, hearing testified that the legislative history 
of the act indicated that Congress believed all GAO employees 
who met performance expectations would receive an annual pay 
adjustment.
    In February 2008, as a result of negotiations with union 
representatives, GAO agreed to provide all of its employees 
with a meets expectations rating with at least a 4.49 percent 
increase that was provided to General Schedule employees in the 
Washington, DC, area. However, this action does not restore the 
salaries or income lost by the employees who did not receive 
the 2006 or 2007 annual adjustments.
    For example, a table in my testimony illustrates, because 
those two adjustments were not provided, a GAO employee who is 
making $110,000 a year in 2005 who was placed in Band II A, 
which is roughly a grade 13 in General Schedule, will have 
foregone a total of more than $14,000 in base pay increases by 
the end of 2008. If that employee then retires under the Civil 
Service Retirement System, her pension will be nearly $2,700 a 
year lower than if she had received the 2006 and 2007 
adjustments. Therefore, after a 20-year retirement, the 
employee will have foregone nearly $68,000 in wages and 
pensions since 2005.
    A variety of factors can influence the size of the wage and 
pension differential, including the employee's starting salary, 
whether the PBC is started as base pay, and whether the 
employee receives an annual increase in 1 year or the next.
    Mr. Chairman, that concludes my prepared statement. I would 
be happy to answer any questions.
    Mr. Davis. Thank you very much.
    [The prepared statement of Mr. Copeland follows:]

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    Mr. Davis. We will proceed to Ms. Jones.

                   STATEMENT OF SHIRLEY JONES

    Ms. Jones. Mr. Chairman and Representative Norton, I am 
pleased to be here today to discuss the results of the survey 
that you requested on the Band II restructuring and the Watson 
Wyatt market-based compensation study.
    My name is Shirley Jones, and I am an Assistant General 
Counsel at GAO. I had the opportunity to testify before you 
last November in my capacity of the GAO chapter of Blacks in 
Government to share the concerns that our chapter had 
previously raised regarding the impact of the Band II 
restructuring on African American staff in particular.
    In addition to being Chapter president for the last 4 
years, I have also served as the attorney representative to the 
Employee Advisory Counsel; and since your hearing last May, I 
have worked with the EAC committee that conducted this survey.
    I will highlight just a few points.
    The survey was sent to all GAO employees except SES and 
interns. Seventy-one percent of eligible employees responded. 
To provide a picture of those responding, demographic questions 
were asked regarding position, years at GAO, age, race, 
ethnicity, sex, and location. Not surprisingly, the highest 
area of nonresponse to the demographic questions was in the 
answer to the question about race identification. In addition, 
the highest nonresponse to the survey itself was from Asian and 
African American employees.
    Several survey questions asked about staff involvement, 
input, and transparency with regard to the Watson Wyatt study.
    Starting with the Watson Wyatt focus groups, 19 percent of 
administrative professional and support staff reported 
participating, compared to only 4 percent of analysts and 8 
percent of attorneys. Only 4 percent of those responding 
reported being interviewed by Watson Wyatt for the study. Of 
particular note, no Band I or Band II respondents reported 
being interviewed by Watson Wyatt.
    A much higher number of staff, 94 percent, reported that 
they listened to CG Chats or attended town hall meetings. An 
overwhelming majority, 81 percent, of respondents reported that 
they felt they were only slightly involved or not at all 
involved in providing input to management on the transition to 
market-based pay. Similarly, 81 percent also felt that employee 
input was ultimately only slightly or not at all considered.
    A majority of those responding had concerns with the level 
of transparency of the Watson Wyatt study and the GAO 
decisionmaking process.
    We also asked about satisfaction with GAO's market-based 
pay system. There were notable differences based on position, 
age, and race. Band II A's and Band II B's, respondents age 40 
and over, and African Americans had higher percentages of 
respondents who said they were generally or very dissatisfied 
with GAO's market-based pay system. Eighty-one percent of 
respondents thought morale in general was worse or much worse 
now than before the transition. Forty-eight percent responded 
that their own morale was worse or much worse now. A higher 
percentage of respondents age 40 and over and African Americans 
reported that their morale was worse or much worse.
    Turning to the restructuring of Band II and to Band II A 
and Band II B, 54 percent of respondents disagreed or strongly 
disagreed with the restructuring, while 29 percent strongly 
agreed or agreed. Certain demographics disagreed or strongly 
disagreed at a higher rate: African Americans again, Band II A 
staff, those at GAO 10 years or longer, and employees 40 years 
or older.
    Regarding the current general climate at GAO, lower 
percentages of Band II analysts and administrative professional 
and support staff, 33 percent and 38 percent respectively, felt 
their professional contributions at GAO were highly or very 
highly valued, compared to attorneys and Band III staff, with 
that rate at 67 percent and 63 percent respectively.
    A lower percentage of respondents with 10 or more years of 
service and respondents age 40 and older felt that their 
contributions were highly valued. A lower percentage of African 
Americans, only 27 percent compared to other racial groups, 
felt that their contributions were highly valued.
    1,113 survey respondents provided substantive narrative 
comments at the end of the survey, which we coded into 29 
categories. Although not generalizable to the overall GAO 
population, we noted that more than twice as many respondents 
specifically commented that the Band II restructuring was 
damaging to employee morale or otherwise provided disincentives 
than those that responded that it was the right thing to do, 
217 compared to 74.
    133 respondents commented that GAO's pay for performance 
system is damaging to employee morale or otherwise provides 
disincentives, while 80 respondents said that they believed 
that PFP at GAO is helpful or worthwhile.
    108 respondents noted their belief that PFP ratings are 
inaccurate. 107 respondents noted their belief that GAO 
employees should receive the same cost of living adjustment as 
employees at executive branch agencies.
    Staff also used the narrative comments to express other 
concerns, such as GAO losing talented staff because of the 
recent changes, GAO's overall processes being discriminatory, 
lack of trust overall, locality pay decisions being flawed, 
concerns about the lack of domestic partner benefits, and 
concerns about the treatment of communications analyst 
positions under the restructuring.
    It is important to note that some narrative comments 
conveyed positive thoughts, including the belief that the 
Comptroller General should be given credit for moving the 
agency in the right direction, that GAO has excellent benefits, 
and that our work is cutting edge.
    In conclusion, I would like to end with a personal 
observation, having served on the EAC for over 4 years. From my 
perspective, it wasn't surprising that Band II A staff reported 
more unfavorable responses, particularly as it relates to the 
compensation ranges and the Band II restructuring. It is also 
not surprising that African American staff generally had less 
favorable responses, since we know that African American staff 
had expressed concerns with the disparities in appraisal scores 
leading up to the restructuring.
    But more than just confirming what was perhaps the obvious, 
it is notable that staff at all levels and in all positions, 
not just Band II A and not just African American staff, 
expressed concerns about transparency levels, the 
restructuring, COLAs, and locality pay decisions.
    Having worked on the content analysis myself, it was 
striking to me that while more Band III staff responded that 
they felt their own personal contributions were highly or very 
highly valued compared to Band II A staff, Band III staff were 
also among those who shared concerns with the PFP system and 
the Band II restructuring providing disincentives or otherwise 
being damaging to morale, or that the PFP ratings are 
inaccurate.
    It is clear from the survey's high response rate and the 
voluminous narrative comments that staff at all levels and in 
all positions and of all races that they appreciated the 
subcommittee's interest and the opportunities to share their 
thoughts, both positive and negative, with you directly. On 
their behalf, I thank you.
    This concludes my statement, and I am happy to answer any 
questions.
    Mr. Davis. Thank you very much, Ms. Jones.
    [The prepared statement of Ms. Jones follows:]

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    Mr. Davis. Ms. Smith.

                  STATEMENT OF JANET C. SMITH

    Ms. Smith. Chairman Davis and members of the subcommittee, 
I am pleased to be here today to discuss the U.S. Government 
Accountability Office African American and Caucasian Analysts' 
Performance Assessment Study, Tasks 1 and 2.
    My name is Janet Crenshaw Smith, and I am president of Ivy 
Planning Group.
    In 2002, GAO issued a solicitation seeking a third-party 
assessment of the factors influencing the performance rating 
average differences between African American and Caucasian 
analysts. Ivy Planning Group was retained by GAO as the prime 
contractor for this contract; SRA International is the 
subcontractor to Ivy.
    This project was divided into three tasks. We have 
completed the first two.
    Task one is an analysis of 2002 to 2006 performance data 
for African American and Caucasian analysts. The purpose of 
this task is to confirm that there were differences between the 
ratings of African Americans and Caucasian analysts. The Ivy 
team performed a statistical analysis to determine if there are 
significant differences in the performance ratings of the two 
groups.
    Task two is an assessment and comparison of abilities, 
education, engagement roles, and performance of new GAO analyst 
hires and onboard employees rated from 2002 to 2006. The 
purpose of this task is to determine if African American 
analysts and Caucasian analysts have the same abilities and 
backgrounds when they arrive at GAO and to begin to look at 
what happens to them during their tenure at GAO.
    The Ivy team evaluated key characteristics to determine if 
both groups are equal at time of hire; controlled statistically 
for differences in education, experience, key roles and gender; 
assessed rater demographics on outcomes; and reviewed human 
capital processes for consistency with agency goals.
    Task three is an assessment of internal and external best 
practices in implementing performance management systems, and 
preparation of a final report that brings tasks one, two, and 
three together. Task three involved looking at best practices 
in the private sector, the Federal sector, and within GAO; 
collecting qualitative data from African American and Caucasian 
analysts and raters at GAO; and presenting our overall 
recommendations to GAO. We are scheduled to present our final 
report at the end of next month.
    I will discuss tasks one and two today. However, as the 
project is really the culmination of all three tasks, I look 
forward to having the opportunity to return to discuss with you 
task three and the final report and particularly Ivy's 
recommendations in the future. I will report where we are in 
the project, highlighting a few points around what we have 
learned thus far.
    First, yes, there are differences in ratings between 
African American analysts and Caucasian analysts in general. 
Also, by competency, pay band, team, location, and regardless 
of the race of the rater. And the differences are statistically 
significant.
    There are some differences between African American 
analysts and Caucasian analysts at their time of hire. They 
come from different schools and proportionally do not have the 
same level of education. Please note that our data on school 
and degree are based on the highest degree earned by the 
analyst and that, while most analysts earned their highest 
degrees prior to being hired, some analysts may have earned 
their highest degree after joining GAO.
    We also learned that the same factor impacts African 
American analysts and Caucasian analysts ratings differently. 
For example, having a Ph.D. has a statistically significant 
positive effect for Caucasian analysts but no effect for 
African American analysts. Caucasian analysts receive a ratings 
benefit from being assigned to high-risk projects, compared to 
African American analysts who receive no statistically 
significant effect of having been assigned to a high-risk 
project. African American analysts with some college but no 
degree receive no statistically significant negative ratings 
correlation, compared with Caucasian analysts with some college 
but no degree who do.
    The final report will provide our full synthesis and 
analysis of the data in the context of our overall findings 
and, more importantly, our recommendations to mitigate these 
differences.
    I look forward to continuing the open communication with 
you and your staff and reporting those findings. Thank you for 
the opportunity.
    Mr. Davis. Thank you very much, Ms. Smith.
    [The prepared statement of Ms. Smith follows:]

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    Mr. Davis. We will proceed to Ms. Harpp.

                 STATEMENT OF JACQUELINE HARPP

    Ms. Harpp. Thank you, Mr. Chairman.
    Mr. Chairman and Ms. Norton and members of the 
subcommittee, my name is Jacqueline Harpp; and I am a senior 
analyst on GAO's Education, Workforce and Income Security Team. 
I am also a representative of GAO's newly elected union, 
including a bargaining unit of about 1,900 employees, 
affiliated with the International Federation of Professional 
and Technical Engineers [IFPTE].
    I am pleased to be here today to discuss GAO's reforms and 
the impact on staff of human capital transformation efforts, 
such as the restructuring of one pay band under pay for 
performance, changes to employee classification and 
compensation using a market-based pay study, and proposed 
legislation that is before the Congress today, referred to as 
the Government Accountability Office Act of 2007.
    Over the past 2 years, GAO employees have experienced major 
changes in the way we do our work and how we are compensated. 
The restructuring of Pay Band II analysts and the use of a 
market-based pay study have led to charges of unfair treatment 
as Federal employees with respect to pay and discrimination 
based on race and age in job classification and pay.
    While GAO employees continue to have a tremendous respect 
for the agency and the service GAO brings to the Congress and 
the American people, GAO's analysts have formed GAO's first 
bargaining unit to address our concerns, and now we have a way 
to ensure that our concerns are heard and actions are taken.
    A summary of our major concerns are: GAO employees' pay 
should be on par with that of other Federal employees. 
Employees' purchasing power should be protected, particularly 
since this has been a longstanding promise and a key selling 
point for the pay for performance initiative. Major changes in 
personnel systems should be assessed to ensure that employees 
or groups of employees are not harmed by the use of criteria 
that would put them at a distinct disadvantage.
    GAO has a long history that show disparities in performance 
appraisals of African Americans, and job leadership 
opportunities have varied widely for all staff. Yet these two 
criteria were central to restructuring positions and pay of 
about 800 employees, leading to charges of discrimination based 
on race and prohibited personnel practices because employees 
believed they had been demoted without cause.
    We applaud GAO's efforts to examine the reasons for 
disparities in ratings, and we look forward to a briefing on 
the results of the study. We appreciate and endorse the 
legislation proposed to remedy concerns raised with GAO's 
implementation of its new authorities, pay parity and 
protection of employees' purchasing power. The minimum 
requirement of a floor guarantee to ensure pay parity will be 
very helpful as the GAO Employees' Organization and GAO 
management bargain for future negotiated pay agreements.
    We endorse retroactive compensation to those employees 
denied full annual pay adjustments in 2006 and 2007 as provided 
in this legislation; and we would ask, Mr. Chairman, that 
pending employee grievances or discrimination complaints 
involving issues in addition to or other than the denial of 
past annual adjustments be held harmless in this legislation.
    We also support the legislative provision for a statutory 
Inspector General, along with requirements to ensure 
independence of the Inspector General, the Office of 
Opportunity and Inclusiveness, and the Personnel Appeals Board.
    The GAO Employees' Organization stands ready to work with 
GAO management to ensure that the needs of the agency, the 
Congress, and the American people are met. We appreciate the 
opportunity to testify before you today and look forward to 
working with you to help ensure that GAO continues to improve 
its transparency, employee communications, as well as its pay 
and performance management systems.
    Mr. Chairman, I want to thank the members of this 
subcommittee, other Members of Congress, and your staff for the 
support you have provided GAO employees from the time the first 
person contacted you about individual concerns over 2 years ago 
through the entire unionizing efforts. Members of this 
committee and others made it clear that our rights to organize 
would be protected, and for that we are especially grateful. We 
appreciate the Members and staff who were empathetic to our 
concerns and did not brush us aside as just a few disgruntled 
staff.
    Today is an historic occasion for GAO employees, since it 
is the first time a member of GAO's newly formed union is 
testifying before a congressional committee.
    This concludes my statement, and I will be happy to answer 
any questions.
    Mr. Davis. Thank you very much.
    [The prepared statement of Ms. Harpp follows:]

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    Mr. Davis. I want to thank each one of you for your 
testimony.
    Mr. Copeland, let me ask you. You have testified before the 
subcommittee regarding the personnel reforms and Band II 
restructuring at the Government Accountability Office. In your 
opinion, would the lump sum payments and the pension changes in 
my draft legislation make whole the GAO employees who met 
expectations but did not receive their annual across-the-board 
increases in 2006 and 2007?
    Mr. Copeland. Mr. Chairman, I would first like to point out 
that CRS doesn't take a position on any legislation. But, 
technically, I have reviewed it; and it appears that, in 
general, the lump sum payments and the pay adjustment 
provisions would, in general, make those employees whole vis-a-
vis other GAO employees who had their PBC as annual--as bonus 
payments in those years. That is correct.
    Mr. Davis. Also let me ask you, if GAO employees received 
the floor guarantee in the future, which is similar to what GAO 
and the union agreed to implement this year, what impact do you 
think it would have on GAO's overall performance-based 
compensation program?
    Mr. Copeland. In 2006 and 2007, GAO funded the performance-
based compensation program in part by reducing the size of the 
annual adjustments. And so the annual adjustments are provided 
on par with the GS increases, and the amount of funds available 
for performance-based compensation would be less, which means 
either the performance-based compensation bonuses would become 
less, fewer people would receive them, or both.
    Mr. Davis. In H.R. 3268, GAO included a provision that 
would remove the current Executive Level IV cap and allow GAO 
employees to be paid up to Executive Level III. As a result 
non-SES GAO employees' maximum salaries would go from $149,000 
to $158,000. What do you think of this provision?
    Mr. Copeland. I would note that the Executive Level IV cap 
currently affects GS employees in 12 locality pay areas across 
the government. So GAO is not the only agency that is affected 
by the Executive Level IV cap. And next year if current trends 
continue, then five more pay areas will be covered. If GAO is 
granted this relief, then it is likely that other agencies will 
seek similar types of relief.
    Mr. Davis. Thank you very much.
    Ms. Jones, I thank you for your testimony. Let me ask you, 
what was the survey response and how many respondents took the 
time to write comments for the open ended survey question and 
how meaningful are the survey's response rates?
    Ms. Jones. The overall survey response rate was 71 percent, 
which is almost identical to the survey response rate for GAO's 
employee feedback survey. And we consider that a very good 
response rate, especially considering employees' previous 
concerns with survey confidentiality.
    We had 1,113 respondents to actually provide narrative 
comments to the open ended question. And having been a part of 
the two-person team that did the content analysis, I can tell 
you that they were voluminous. And they were indeed thoughtful 
and considerate of the issues going on at GAO, and I would even 
characterize many of them as passionate. It was clear to me in 
reading them that they really wanted the Congress to hear their 
concerns.
    Mr. Davis. In your opinion why was there a higher non-
response rate for Asian and African-American employees?
    Ms. Jones. Well, as I mentioned in my testimony, my oral 
testimony, I wasn't surprised at that fact at all. As I 
mentioned a few moments ago, there have been previous concerns 
with survey confidentiality across the board at GAO, but that 
concern is always heightened for minority staff because 
generally there are fewer of them on the teams. And so there is 
the concern that they can more readily be identified 
personally. And so often they choose to not respond to surveys 
at all or they choose not to respond to the demographic 
questions.
    Mr. Davis. Are you saying that in your experiences that 
minority staff have a tendency to have a higher level of 
concern about retribution?
    Ms. Jones. Yes.
    Mr. Davis. And that may mitigate against revealing 
information?
    Ms. Jones. Right, I believe that to be true. And even 
though in our testimony, our full written statement and the 
products that we previously supplied to your staff, we noted 
concerns with under representation of the staff and we noted 
concerns with the missing demographic information. However, 
since our response rate is essentially identical to the 
employee feedback survey response rate, I'm not sure--I have no 
evidence that it is any different for our survey than it is for 
any other survey at GAO or for that matter any survey at 
another agency. I think that's a concern that is across the 
board with minority staff that they can be personally 
identified and in some instances they fear retribution and 
retaliation.
    Mr. Davis. How do you reconcile the majority of negative 
comments to the survey with the previous high marks on the GAO 
employee feedback survey that in 2007 led to GAO being second 
place on the best place to work survey?
    Ms. Jones. I think GAO staff were very honest. I think they 
answered questions with integrity. They can give credit when 
credit is due. And when there are concerned they can provide 
negative feedback. I think that was the case with our survey. 
We asked--we touched a nerve, so to speak, by asking questions 
about very sensitive topics such as the Band II restructuring 
and the PFP system and the lack of COLAs, and the staff stood 
up and expressed their concerns about those issues.
    On the other hand, the best places to work survey has a 
much more limited focus and essentially asks considering 
everything how satisfied are you with your job. And GAOers, 
they are very satisfied with their work, they feel that they 
are providing a great service to the Congress and to the 
taxpayer. So it is clear that on the one hand they could be 
very satisfied with their job, but still have very serious 
concerns with a Band II restructuring and with loss of COLAs 
and the PFP system.
    Mr. Davis. Thank you very much.
    Ms. Smith, let me ask you, the Ivy Group consulting/
training company that specializes in diversity strategy and 
change management, would you recommend an agency implement 
personnel reforms that would impact employees' promotions and 
pay if it had evidence of rating disparities based on race?
    Ms. Smith. Well, Mr. Chairman, we will be making 
recommendations next month after we have fully synthesized the 
information. But certainly if we find that there are 
differences that we can attribute to race that are unfair, we 
will make recommendations to the agencies to address any of 
those disparities.
    Mr. Davis. And those findings would then obviously at least 
raise a red flag in your mind or in the mind of you and your 
colleagues?
    Ms. Smith. Would you repeat the question, please?
    Mr. Davis. If you found such disparities, would they at the 
very least raise what I will call a red flag in the minds of 
you and your colleagues?
    Ms. Smith. Well, in task 1 and task 2 we have already found 
that there are differences in the performance ratings of 
African American analysts and Caucasian analysts. However, we 
have not found answers to the why. In fact the data can say 
that there is a difference, the data doesn't necessarily 
explain the differences. So our recommendations can address 
those differences and performance ratings without necessarily 
understanding why the differences exist.
    Mr. Davis. Would you view that information as certainly 
being helpful and directive for management as it continues to 
program and make decisions?
    Ms. Smith. I do believe that our recommendations will be 
helpful to management and to the analysts in terms of assisting 
them in their career, their transition and actually delivering 
the work.
    Mr. Davis. Thank you very much.
    Ms. Harpp, let me ask you, the subcommittee staff has been 
working on pay adjustment provisions for fiscal year 2006 and 
2007, the GAO employees who met expectations but did not 
receive an across-the-board adjustment for those 2 years. What 
are your views on the retroactive provision that we've included 
in the legislation that I'm introducing, and do you think it 
will effectively address the problem?
    Ms. Harpp. Mr. Chairman, while we believe that a full 
remedy would have been to include the across-the-board increase 
that staff had in addition to the performance-based pay that 
they have received, we feel that the retroactive provision 
provided in the legislation represents a compromise that will 
provide additional compensation to our employees now and in the 
future, and we support it and thank you for providing that to 
the employees.
    Our understanding in the legislation also is that it will 
not effect any outstanding claims that GAO employees have that 
relate to discrimination and/or placements or promotions that 
have--that are included in these claims. And so employees are 
happy to support the legislation.
    Mr. Davis. Thank you very much. And let me ask you, what 
are your views on the across-the-board floor guarantee?
    Ms. Harpp. We support the floor guarantee. We feel this 
concept gives us a minimum threshold to ensure that GAO 
employees, through a combination of GAO across-the-board and 
increase in performance-based pay, will receive the percentage 
of their salary that many Federal employees received just by 
coming to work every day. So we are very pleased with the floor 
guarantee and that it assures that everyone who performs 
satisfactorily at GAO, which is a high standard, will have 
their purchasing power not eroded as was the case with 
management decisions made in 2006 and 2007.
    Mr. Davis. Do you have the same feeling that was expressed 
with the hope that it might put to rest the anxiety or 
controversy surrounding whether or not individuals can simply 
expect with a tremendous amount of reliability that if they 
meet expectations that they will and shall indeed receive their 
cost of living adjustment?
    Ms. Harpp. Yes, sir, Mr. Chairman. We do believe that will 
go a long way to relieving the anxiety of staff, because in the 
past with the Comptroller General's discretion as to how he 
would divide the pot of money for pay staff were concerned 
particularly with the ranges, where some staff would not be 
subject to getting any across-the-board, so this will greatly 
assist staff and relieve their anxiety.
    Mr. Davis. Well, let me thank all of you for your 
participation, as well as your patience. Our hearings seem to 
be getting longer and longer and it requires an amount of 
patience to be a part of them, but we certainly thank you and 
we look for to seeing you again soon. And this hearing is 
adjourned.
    [Whereupon, at 5 p.m., the subcommittee was adjourned.]

                                 
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