[Senate Report 108-216]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 407
108th Congress 
 1st Session                     SENATE                          Report
                                                                108-216
_______________________________________________________________________

                  GAO HUMAN CAPITAL REFORM ACT OF 2003

                               __________

                              R E P O R T

                                 of the

         COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE

                              to accompany


                                S. 1522

TO PROVIDE NEW HUMAN CAPITAL FLEXIBILITIES WITH RESPECT TO THE GAO, AND 
                           FOR OTHER PURPOSES




                December 9, 2003.--Ordered to be printed





                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania          RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois        MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire        FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama           MARK PRYOR, Arkansas

           Michael D. Bopp, Staff Director and Chief Counsel
            Jennifer A. Hemingway, Professional Staff Member
     Andrew G. Richardson, Staff Director, Oversight of Government 
                              Management,
    the Federal Workforce and the District of Columbia Subcommittee
  Michael Dovilla, Professional Staff Member, Oversight of Government
    Management, the Federal Workforce and the District of Columbia 
                              Subcommittee
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                  Lawrence B. Novey, Minority Counsel
  Emily J. Kirk, Minority Counsel, Oversight of Government Management,
    the Federal Workforce and the District of Columbia Subcommittee
        Jennifer Tyree, Minority Counsel, Financial Management,
          the Budget, and International Security Subcommittee
                      Amy B. Newhouse, Chief Clerk









                                                       Calendar No. 407
108th Congress                                                   Report
                                 SENATE
 1st Session                                                    108-216

======================================================================
 
                  GAO HUMAN CAPITAL REFORM ACT OF 2003

                                _______
                                

                December 9, 2003.--Ordered to be printed

                                _______
                                

Mr. Collins, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 1522]

    The Committee on Governmental Affairs, to whom was referred 
the bill (S. 1522) to provide new human capital flexibilities 
with respect to the GAO, and for other purposes, having 
considered the same, reports favorably thereon with amendments 
and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................2
III. Legislative History..............................................9
 IV. Section by Section Analysis......................................9
  V. Estimated Cost of Legislation...................................15
 VI. Evaluation of Regulatory Impact.................................17
VII. Changes in Existing Law Made by the Bill, as Reported...........17

                         I. Purpose and Summary

    The purpose of S. 1522 is to provide new human capital 
flexibilities with respect to the General Accounting Office 
(GAO). The bill would permanently extend GAO's authority to 
offer voluntary early retirement and voluntary separation 
incentive payments to its workforce, and would provide new 
authority for GAO to modify its personnel and workforce 
practices to allow greater flexibility in determining pay 
increases, pay retention rules, and other compensation matters. 
S. 1522 would also rename the GAO as the ``Government 
Accountability Office.''

                             II. Background

    The General Accounting Office was established in 1921 by 
the Budget and Accounting Act \1\ to ensure that federal 
resources were spent in an economical, efficient, and effective 
manner. The GAO is recognized as an independent agency within 
the legislative branch, whose primary client is the Congress. 
Today, GAO is a multidisciplinary professional services 
organization, comprised of about 3,250 employees, that conducts 
a wide range of financial and performance audits, program 
evaluations, management reviews, investigations, and legal 
services spanning a broad range of government programs and 
functions.\2\
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    \1\ Public Law 13, 67th Congress, 42 Stat. 20.
    \2\ Hearing on Oversight of GAO: What Lies Ahead for Congress' 
Watchdog?, Statement of David M. Walker, Comptroller General, before 
the Committee on Governmental Affairs, September 16, 2003 (GAO-03-
1167T), (referred to as ``Walker testimony (GAO-03-1167T),'' pp. 51-52.
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                       GAO Personnel Act of 1980

    Until 1980, GAO's personnel system was indistinguishable 
from those of executive branch agencies--that is, GAO was 
subject to the same laws, regulations, and policies as they 
were. However, with the expansion of GAO's role in 
congressional oversight of federal agencies and programs, 
concerns grew about the potential for conflicts of interest. As 
a result, legislation, originally introduced at GAO's request, 
was favorably reported by the Committee and, on February 15, 
1980, was enacted as the GAO Personnel Act of 1980, the 
principal goal of which was to avoid potential conflicts by 
making GAO's personnel system more independent of regulation by 
executive branch agencies.\3\ Along with this independence, the 
act gave GAO greater flexibility in hiring and managing its 
workforce. Among other things, while requiring GAO to abide by 
the same merit system principles and other key rights and 
protections that are applicable to the executive branch, the 
1980 Act granted the Comptroller General authority to: appoint, 
promote, and assign employees on the basis of fitness and merit 
but without regard to title 5, U.S. Code, requirements in these 
areas; set employees' pay without regard to the federal 
government's General Schedule (GS) pay system's classification 
standards and requirements; and establish a merit pay system 
for certain officers and employees. By excepting GAO from the 
above requirements, the GAO Personnel Act of 1980 allowed GAO 
to pursue significant innovations in managing its people, 
including the establishment of a ``broad banding'' or ``pay 
banding'' approach for classifying and paying its Analyst and 
Attorney workforce in 1989. Therefore, as the Comptroller 
General recently testified before this Committee, while certain 
other agencies are now requesting authority to establish broad 
banding and pay for performance systems, GAO has had almost 15 
years of experience with such systems.\4\
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    \3\ S. Rep. 96-540 (Dec. 20, 1979); Public Law 96-191.
    \4\ Walker testimony (GAO-03-1167T), note 2 above, pp. 52-53.
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                    GAO Personnel Flexibilities Act

    In early 2000, GAO sought legislation affording additional 
flexibilities to enable it to modernize and update its human 
capital policies and performance management system. GAO made a 
specific, fact-based demonstration that the requested 
flexibilities were necessary and appropriate.\5\ Such 
legislation was introduced by this Committee's then-Chairman, 
Senator Thompson, and Ranking Member, Senator Lieberman, and 
was incorporated, with their consent, into spending legislation 
that passed the Senate; \6\ and revised legislation was 
reintroduced, passed by the House and Senate, and, on October 
13, 2000, enacted into law.\7\
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    \5\ S. Rep. 106-304 (May 23, 2000), pp. 37-42; Congressional 
Record, H7802-H7803 (September 19, 2000).
    \6\ S. 2529, incorporated into S. 2603, as reported, see S. Rep. 
106-304 (May 23, 2000), pp. 37-42, further incorporated into H.R. 4516, 
as passed by the Senate on July 17, 2000.
    \7\ Public Law 106-303.
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    This legislation, sometimes referred to as the ``GAO 
Personnel Flexibilities Act,'' authorized the Comptroller 
General to offer voluntary early retirement to certain 
employees in order to realign the workforce to meet budgetary 
constraints or mission needs; correct skill imbalances; or 
reduce high-grade, managerial, or supervisory positions. The 
voluntary early retirement authority was authorized through 
December 31, 2003. In fiscal years 2002 and 2003, GAO granted 
voluntary early retirement to 52 employees in fiscal year 2002 
and 37 employees in fiscal year 2003.\8\ GAO believes, and the 
Committee concurs, that careful use of voluntary early 
retirement can be an important tool to assist federal agencies 
in incrementally improving their overall human capital profile.
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    \8\ Walker testimony (GAO-03-1167T), note 2 above, p. 19.
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    In addition to voluntary early retirement authority, the 
GAO Personnel Flexibilities Act gave the Comptroller General 
the authority to offer voluntary separation incentive payments, 
through December 31, 2003, in order to realign the workforce to 
meet budgetary constraints or mission needs; correct skill 
imbalances; or reduce high-grade, supervisory, or managerial 
positions. Although GAO has not yet used its buyout authority 
under the Act, and the Comptroller General has indicated to the 
Committee that GAO has no plans to do so in the foreseeable 
future, \9\ GAO is seeking to retain this flexibility. Similar 
authorities for voluntary early retirement and voluntary 
separation incentive payments were provided to most federal 
agencies under the Homeland Security Act of 2002.\10\
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    \9\ Id., p. 61.
    \10\ Public Law 107-296, Sec. 1313.
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    The GAO Personnel Flexibilities Act also established 
senior-level scientific, technical, and professional positions, 
and provided those positions with the same pay and benefits 
applicable to the Senior Executive Service. At present, GAO has 
filled 8 senior level positions, including that of a Chief 
Accountant, Chief Economist, Chief Statistician, and Chief 
Actuary, as a result of the authority granted under the 
Act.\11\
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    \11\ GAO, Report to Congressional Committees, ``Assessment of 
Public Law 106-303: The Role of Personnel Flexibilities in 
Strengthening GAO's Human Capital,'' (June 2003, GAO-03-954SP), p. 13.
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    Upon enactment of the GAO Personnel Flexibilities Act, GAO 
began the process of developing regulations to implement its 
new authorities. The Comptroller General used the flexibilities 
to address significant issues involving succession planning and 
imbalances in the structure, shape, and skills of its 
workforce.

 GAO's Development and Presentation of the Business Case for Personnel 
                             Flexibilities

    GAO identified human capital as one of three risk areas in 
its FY2002 Performance and Accountability Report.\12\ Upon 
further review of the range and limits of the GAO's existing 
administrative and legislative authorities, the Comptroller 
General concluded that GAO needed to seek from Congress 
additional human capital flexibilities so that GAO could 
enhance its ability to attract, retain, and reward a high-
performing workforce and lead by example in the area of human 
capital management.
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    \12\ GAO Strategic Plan 2002-2007, GAO-02-430SP.
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    GAO has been a leader in assisting Congress to stem the 
human capital challenges facing the federal government. For 
example, David Walker, Comptroller General, testified before 
the Subcommittee on the Oversight of Government Management in 
2001, on the role of Congress and the agencies when requesting 
additional flexibilities to meet workforce needs. Mr. Walker 
said,

          For agencies that request legislative exceptions from 
        current civil service constraints, Congress can require 
        that they make a sound business case based on rational 
        and factbased analyses of their needs, the constraints 
        under which they presently operate, and the 
        flexibilities available to them. For example, before we 
        submitted human capital legislative proposals for GAO 
        last year, we applied the due diligence needed not only 
        to identify in our own minds the flexibilities we 
        needed to better manage our human capital, but also to 
        give Congress a clear indication of our needs, our 
        rationale, and the steps we were committed to taking in 
        order to maximize the benefits while managing the 
        risks. The process we followed included a thorough 
        analysis of our human capital needs and flexibilities, 
        clear standards for implementation, and multiple 
        opportunities for employee involvement and feedback. 
        The legislative flexibilities we eventually received, 
        tailored as they were to our specific needs, may not be 
        appropriate for other federal employers. However, the 
        process we followed in identifying and making a sound 
        business case for these flexibilities is one that would 
        be sensible for other agencies to follow.\13\
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    \13\ Hearing on Human Capital: Meeting the Governmentwide High-Risk 
Challenge, Statement of David M. Walker, Comptroller General, before 
the Subcommittee on Government Oversight and Management, February 1, 
2001, GAO-01-357T, p. 15.

    The Committee agrees and believes that for agencies to 
request additional personnel flexibilities they should first 
use existing human capital flexibilities responsibly and 
strategically, have the infrastructure and safeguards in place 
to use the flexibilities requested, work with employees in 
developing the request for new flexibilities, and provide the 
Congress with detailed information stating the reasons for the 
request and how the new flexibilities will be used. The 
Committee believes that GAO has followed this process and has 
presented a sound business case for the need for additional 
flexibilities.
    In the Comptroller General's testimony regarding this 
legislation he explained to the Committee that GAO has 
effectively and strategically used existing flexibilities to 
meet its workforce needs.\14\ Using the authority granted in 
2000, GAO established a corps of senior level executives who 
have the pay and benefits of the Senior Executive Service but 
need not be generalist managers. In addition, GAO has 
instituted a new knowledge transfer and succession planning 
program that would allow select retirees to be reemployed as 
annuitants for up to two years following retirement in order to 
facilitate the transfer of knowledge in critical areas and 
allow for a smooth transfer of responsibilities. To retain 
staff with critical skills and staff with less than three years 
of GAO experience, the GAO implemented legislation authorizing 
federal agencies to offer student loan repayments in exchange 
for certain federal service commitments. GAO ranks as one of 
the top agencies in providing student loan repayments. As a 
result of the student loan repayment program and other 
innovative programs at the agency, GAO was listed by 
Washingtonian magazine as one of the best federal agencies to 
work.\15\
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    \14\ Walker testimony (GAO-03-1167T), note 2 above, pp. 19-23.
    \15\ Sherri Dalphonse, Cindy Rich, Ellen McLellan, and Wayne 
Nelson, 50 Great Places to Work, Washingtonian Mag., November 2003, p. 
93.
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    The Comptroller General also explained that GAO has the 
infrastructure and safeguards in place to effectively use 
additional flexibilities.\16\ In fiscal year 2002, GAO 
completed an overhaul of its performance assessment system and 
implemented a new, modern, effective, and credible performance 
appraisal system for analysts and specialists; adapted the 
system for attorneys; and began modifying the system for 
administrative professional and support staff. GAO's 
performance standards were revised to incorporate its core 
values and strategic goals. GAO also updated descriptions of 
performance to better reflect the current nature of its work 
and implemented other key concepts, such as leadership by 
example, client service, measurable results, matrix management, 
open and constructive communications, and balancing people and 
product considerations. The GAO performance management system 
also includes safeguards to prevent arbitrary, discriminatory, 
or retaliatory performance assessments. The GAO system allows 
employees who are dissatisfied with their performance appraisal 
to consult with the Human Capital Office, the Office of 
Opportunity and Inclusiveness, or file a grievance. As a result 
of its credible and meaningful performance assessment system--
with adequate safeguards--GAO was able to reward those with 
outstanding performance. Given the positive results of this new 
performance program, the Committee believes GAO is in a 
position to handle an expanded pay for performance system.
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    \16\ Walker testimony (GAO-03-1167T), note 2 above, pp. 23, 70-71.
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    The Comptroller General also described how GAO has worked 
with employees in developing and presenting its business case 
for the requested flexibilities. GAO has an ongoing 
communication program with its employees by conducting employee 
surveys, holding meetings with the Employee Advisory 
Council,\17\ soliciting employee suggestions for agency 
improvements, and engaging in telecast chats with employees. In 
addition, GAO has worked extensively with employees in the 
development of this legislative proposal. GAO undertook a 
phased approach that involved (1) developing a straw proposal, 
(2) vetting the straw proposal broadly both externally and 
internally, and (3) making appropriate adjustments based on 
comments and concerns raised during the vetting process.\18\ 
Within GAO, members of the Executive Committee, which includes 
GAO's Chief Operating Officer, General Counsel, and Chief 
Mission Support Officer, as well as the Comptroller General, 
worked with the managing directors and members of the Employee 
Advisory Council. GAO consulted with the Office of Personnel 
Management in developing its legislative proposal. The 
Comptroller General testified that their outreach process was 
both necessary and appropriate given the importance of the 
proposed changes.\19\
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    \17\ The Employee Advisory Council, which is comprised of employees 
elected to represent a cross-section of the agency, was formed in 1999 
by the Comptroller General to advise him on issues pertaining to 
management and employees.
    \18\ Walker testimony (GAO-03-1167T), note 2 above, p. 56.
    \19\ Id., p. 58.
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    As detailed in the next section and in GAO's testimony 
before the Committee, GAO also explained why additional 
flexibilities are needed and how current law has impeded its 
efforts to build and maintain a high-quality workforce.\20\ 
Based on GAO's work in presenting a solid business case for 
additional personnel flexibilities, particularly its current 
utilization of available flexibilities, extensive employee 
outreach efforts, and the presence of the necessary 
infrastructure and safeguards, the Committee believes that the 
requested targeted flexibilities are a logical incremental 
advancement in modernizing GAO's human capital policies. The 
process used by GAO to develop and request new human capital 
flexibilities serves as an example for other agencies seeking 
similar authority.
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    \20\ Id., p. 61-76.
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             S. 1522, GAO Human Capital Reform Act of 2003

    On July 31, 2003, Senators George Voinovich and Susan 
Collins introduced legislation, S. 1522, the GAO Human Capital 
Reform Act of 2003, based on the Comptroller General's 
recommendations arising from review of GAO's existing 
administrative and legal authorities and from the outreach 
program discussed above. The Committee evaluated this 
legislation, received and considered testimony from the 
Comptroller General and from GAO's Employee Advisory 
Council,\21\ and developed amended legislation that the 
Committee reported favorably by voice vote, with no dissent, on 
October 22, 2003.
---------------------------------------------------------------------------
    \21\ Walker testimony (GAO-03-1167T), note 2 above; Statement for 
the Record by GAO's Employee Advisory Council (September 16, 2003, GAO-
03-1162T).
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    The legislation is designed to allow GAO to continue to 
invest in its human capital and attract, recruit, and retain 
staff with the critical skills needed by GAO to accomplish its 
mission both now and in future years. This legislation is 
appropriate for GAO considering its role and responsibilities 
in the legislative branch and its unique relationship to 
Congress, and taking account of the sound business case that 
GAO has presented to the Committee showing why the additional 
flexibilities are needed and appropriate.
    S. 1522 would make permanent the voluntary early retirement 
authority and voluntary separation incentive payments 
authorized under the GAO Personnel Flexibilities Act. Both 
authorities were originally enacted to allow the Comptroller 
General to realign GAO's workforce to address budgetary or 
mission constraints; correct skills imbalances; and/or reduce 
high-grade, supervisory, or managerial positions. The voluntary 
early retirement authority that would be extended by S. 1522 is 
limited to no more than 10 percent of the workforce in any one 
year. The authority to offer voluntary separation incentive 
payments is limited to no more than 5 percent of the workforce 
in any given year. GAO is also required to use existing 
resources to cover the cost of any voluntary separation 
incentive payment offered. As detailed in the legislative 
history of GAO's personnel flexibilities legislation enacted in 
2000, these authorities include a number of provisions to 
assure that employees are not subject to arbitrary or 
unreasonable action.\22\ S. 1522 would also codify the sense of 
Congress that the implementation of these authorities is 
intended to reshape, not downsize, the GAO workforce.
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    \22\ S. Rep. 106-304 (May 23, 2000), pp. 37-42; Congressional 
Record, H7802-H7803 (September 19, 2000).
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    The GAO Human Capital Reform Act of 2003 would allow GAO to 
adjust the rates of basic pay on a basis separate from the 
annual adjustment authorized for employees of the executive 
branch. The alternative pay system will be put into place after 
a minimum 2 yeartransition period. The provision would grant 
the Comptroller General discretion to set annual pay increases by 
taking into account alternative methodologies, and is designed to help 
GAO allocate pay adjustments based on performance.
    GAO already has a number of key systems and safeguards in 
place, such as a validated performance measurement system for 
its analysts and attorneys, and opportunity periods for 
employee improvement, which will help guide the implementation 
of the proposed compensation system. Absent extraordinary 
circumstances or serious budgetary constraints, employees or 
officers who perform at a satisfactory level would receive an 
annual base pay adjustment based on compensation surveys that 
are tailored to the nature, skills, and composition of GAO's 
workforce. The base pay adjustment will be designed to protect 
purchasing power and address differences in compensation ranges 
by the local pay area.\23\ The Comptroller General estimates 
that at least 95 percent of the workforce will qualify for an 
additional performance-based increase once the proposed 
compensation system is fully implemented.\24\
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    \23\ Walker testimony (GAO-03-1167T), note 2 above, p. 81.
    \24\ Id., p. 68.
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    S. 1522 would ensure that an employee demoted as a result 
of workforce restructuring or reclassification will be entitled 
to pay retention, although he or she will not be eligible for 
any automatic increase in basic pay until his or her current 
rate is less than the maximum rate of the new position. This 
safeguard will help ensure a smooth transition for employees 
who are reclassified into a position with a lower level of 
compensation. When GAO's analysts and attorneys were converted 
to a broad band system, former Comptroller General Charles A. 
Bowsher provided these employees with a guarantee that the 
analysts and attorneys rated as meeting expectations in all 
categories would fare at least as well under pay bands as under 
the General Schedule system. Comptroller General Walker has 
stated his intent to the Committee that he will honor his 
predecessor's pay protection guarantee. In addition, the 
Comptroller General has stated that mission support staff will 
also receive this protection upon their conversion to pay 
bands.\25\
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    \25\ Id., p. 72.
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    Before finalizing and implementing the modified pay system 
authorized under S. 1522, the Comptroller General will seek the 
advice of GAO's managing directors and the Employee Advisory 
Council. Employees will have the opportunity to review and 
comment on the draft regulations for the modified pay system.
    S. 1522 would grant GAO the authority, in appropriate 
circumstances, to reimburse employees or officers for some 
relocation expenses when a transfer benefits GAO but does not 
meet the current requirements for reimbursement. Under current 
law, employees who qualify for relocation benefits are entitled 
to full benefits; however, there is no partial relief 
available.\26\ The provision grants GAO the flexibility to 
promulgate regulations in order to provide employees such 
relief.
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    \26\ 5 USC Sec. 6303.
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    S. 1522 would authorize GAO to provide 160 hours of annual 
leave to key officers and employees who have under 3 years of 
federal service. GAO has found that, in recruiting experienced 
mid- and upper-level hires, the loss of leave they would incur 
upon moving from the private to the federal sector is a major 
disincentive.\27\ By increasing the annual leave that certain 
newly hired officers and employees may earn, the provision will 
assist GAO in its recruitment efforts.
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    \27\ Walker testimony (GAO-03-1167T), note 2 above, p. 74.
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    The GAO Human Capital Reform Act of 2003 would establish an 
executive exchange program between GAO and private sector 
entities, to help GAO address certain skills imbalances. 
Currently, GAO has the authority to conduct such an exchange 
with public entities and nonprofit organizations.\28\ Private 
sector participants would be subject to the same conflict of 
interest laws and regulations, and would receive their salaries 
and benefits from their employers. Participation in the 
executive exchange program would be limited to no more than 15 
GAO employees or officers, and 30 private sector employees at 
any one time. The legal framework to establish the regulations 
for the exchange program will be based on the Information 
Technology Exchange Program authorized under the E-Government 
Act of 2002.\29\
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    \28\ The GAO is one of many agencies covered by the 
Intergovernmental Personnel Act of 1970, Public Law 91-648, 5 USC 
Sec. Sec. 3371-3376. Under this Act, federal agencies including GAO, 
can detail their employees to State and local governments and nonprofit 
organizations.
    \29\ Public Law 107-347.
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    S. 1522 would change the name of the agency from the 
``General Accounting Office'' to the ``Government 
Accountability Office.'' GAO requested this name change, which 
maintains the well-known acronym, ``GAO,'' to better reflect 
the current mission of the General Accounting Office as 
incorporated into its strategic plan for serving Congress. When 
established, GAO's workforce consisted primarily of accounting 
clerks. Today, less than 15 percent of agency resources are 
devoted to traditional accounting activities. GAO has said it 
believes this name change will help avoid confusion among job 
applicants, members of the public, the press, and within the 
Congress, since it is often incorrectly assumed that GAO is 
still solely a financial auditing agency.\30\
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    \30\ Walker testimony (GAO-03-1167T), note 2 above, p. 76.
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                        III. Legislative History

    S. 1522 was introduced by Senator George Voinovich and 
Senator Susan Collins on July 31, 2003, and was referred to the 
Committee on Governmental Affairs. A hearing on S. 1522 was 
held before the Committee on Governmental Affairs on September 
16, 2003. The witnesses included Comptroller General David 
Walker, General Accounting Office and Maurice McTigue,of the 
Mercatus Center. The Employee Advisory Council of the General 
Accounting Office submitted written testimony.
    Proposed manager's amendments were developed, on a 
bipartisan basis, to clarify a number of provisions and to set 
forth certain commitments by GAO to ensure a fair and prudent 
exercise of the new authorities. Among other things, the 
proposed managers' amendments--(i) stated the sense of Congress 
that the implementation of voluntary early retirement and 
voluntary separation incentive authorities is intended to 
reshape, not downsize, the GAO workforce; (ii) codified GAO's 
intent to consider the protection of employees' purchasing 
power in making annual pay adjustments; (iii) clarified the 
terms of the executive exchange program to ensure that private 
sector employees will be subject to federal ethics laws and 
will not have access to trade secrets; and (iv) required GAO to 
submit annual reports to Congress detailing its use of the 
flexibilities in the bill. The Committee also received a 
commitment from the Comptroller General that, absent 
extraordinary circumstances or serious budgetary constraints, 
employees or officers who perform at a satisfactory level will 
receive an annual base-pay adjustment designed to protect their 
purchasing power.
    On October 15, 2003, the Subcommittee on Oversight of 
Government Management, the Federal Workforce, and the District 
of Columbia favorably polled out S. 1522. On October 22, 2003, 
the Committee on Governmental Affairs met in open session and 
by voice vote agreed to manager's amendments to S. 1522, 
offered by Senator Voinovich, and by voice vote, ordered S. 
1522 reported favorably with the amendments. Senators present: 
Voinovich, Coleman, Bennett, Fitzgerald, Levin, Akaka, 
Lautenberg, Pryor, and Collins.

                    IV. Section-by-Section Analysis


Section 1. Short title

    Section 1 of the bill would entitle the Act the ``GAO Human 
Capital Reform Act of 2003''.

Section 2. Amendments to Public Law 106-303

    Subsection (a) would make permanent the authority of the 
General Accounting Office (GAO) under Public Law 106-303, 
sections 1 and 2, to offer voluntary early retirements and 
voluntary separation payments to certain employees of GAO when 
necessary to realign GAO's workforce in order to meet budgetary 
or mission needs, correct skill imbalances, or reduce high-
grade positions. Originally, these authorities were to lapse on 
December 31, 2003.
    Subsection (b) would make an employee who, during the 36-
month period preceding separation performed services for which 
a student loan repayment benefit was or is to be paid, 
ineligible for a voluntary separation incentive payment.
    Subsection (c) expresses the Sense of Congress that the 
implementation of section 2 is intended to reshape the General 
Accounting Office workforce and not downsize the General 
Accounting Office workforce.

Section 3. Pay adjustments

    This section would amend paragraph (3) of section 732(c) of 
title 31, United States Code, to enable the Comptroller General 
to annually adjust the pay rates for officers and employees of 
the General Accounting Office without having to adjust the GAO 
pay rates at the same time and to the same extent as the annual 
statutory adjustments are made to the General Schedule.
    Subsection (a) would accomplish this for all GAO employees 
other than members of the Senior Executive Service (SES) and 
Senior Level (SL) staff. Subsection (b) would accomplish this 
for members of the SES and SL staff.
    Paragraph (3) of section 732(c) would be amended to include 
a number of requirements for the Comptroller General to 
consider when annually adjusting the pay rates for officers and 
employees of the General Accounting Office. This provision 
would enable the Comptroller General to annually adjust the pay 
rates for GAO officers and employees whose performance is at a 
satisfactory level after reviewing various factors such as the 
need to protect the purchasing power of employees of the Office 
and pay disparities between GAO employees and private sector 
employees in the local pay areas. In considering certain of 
these factors related to economic data, the data would be 
specifically related to positions at GAO. The provision also 
would enable the Comptroller General to determine what other 
factors, such as the overall agency performance and funding 
levels, would be relevant to adjusting pay rates for GAO 
officers and employees. Methodologies to support the 
compensation of employees would be developed only after 
consultation with the Employee Advisory Council and Managing 
Directors, and employees would be given the opportunity for 
notice and comment to any regulations promulgated to implement 
this provision.
    The provision is designed, among other reasons, to afford 
additional flexibility to the Comptroller General to increase 
the amount of merit or performance based compensation that 
could be provided to reward employees at different rates, based 
on their knowledge, skills, position, and performance rather 
than on the passage of time, the rate of inflation and 
geographic location. This would be accomplished in certain 
years by increasing the funding for performance-based 
compensation, the amounts of which can vary by performance 
category. At the same time, employees could receive less annual 
across the board base pay increases than they would receive 
under the existing law. However, for some employees increases 
in performance-based compensation would make up for this loss.
    Under paragraph (3)(A) of subsection 732(c), the 
Comptroller General would be required to consider the principle 
that equal pay should be provided for work of equal value 
within each local pay area. Paragraph (3)(B) of subsection 
732(c) would require the Comptroller General to consider the 
need to protect the purchasing power of officers and employees 
of the General Accounting Office, and to take into 
consideration the Consumer Price Index or other appropriate 
indices. Paragraph (3)(C) of subsection 732(c) would require 
the Comptroller General to consider any existing disparities 
between officers and employees of the General Accounting Office 
and non-federal employees in each local pay area, while 
paragraph (3)(D) of subsection 732(c) would require 
consideration of the pay rates for the same levels of work for 
officers and employees of the General Accounting Office and 
non-federal employees in each local pay area. Paragraph (3)(E) 
of subsection 732(c) would require the Comptroller General to 
consider the appropriate distribution of agency funds between 
annual adjustments under section 3 and performance-based 
compensation. Paragraph (3)(F) of 732(c) would state that the 
Comptroller General will consider other criteria as 
appropriate, including, but not limited to, the funding level 
for the General Accounting Office, amounts allocated for 
performance-based compensation, and the extent to which the 
General Accounting Office is succeeding in fulfilling its 
mission and accomplishing its strategic plan.
    Subsection (c) would conform section 3 of the Act by 
amending section 732(b)(6) of title 5, United States Code.

Section 4. Pay retention

    This section would amend paragraph (5) of section 732(c) of 
title 31, United States Code, to require the Comptroller 
General to prescribe regulations ensuring employees or officers 
of the General Accounting Office who are demoted due to a 
reduction-in-force, other adjustment-in-force, reclassification 
or other specified reasons as determined by the Comptroller 
General are entitled to pay retention, if such a decision 
results in their placement in a lower grade or band with a 
maximum rate of basic pay less than their previous band or 
grade.
    This section would allow the Comptroller General to 
immediately place employees in the band or grade that is 
commensurate with the roles and responsibilities of their 
positions. At the same time, the Comptroller General could not 
reduce the basic pay of employees whose basic pay exceeds the 
maximum rate of the grade or band in which the employees are 
placed. The employees would retain this rate, without receiving 
any increases to basic permanent pay, until their basic pay was 
less than the maximum for their grade or band. These employees, 
however, could be eligible for performance awards. As with 
section 3, this provision would be implemented only after 
consultation with the Employee Advisory Council and Managing 
Directors, and opportunity for notice and comment by employees 
to any pay retention regulations.

Section 5. Relocation benefits

    Subsection (f) would grant the Comptroller General the 
ability to provide employees who relocate but do not qualify 
for the relocation benefits set forth in subchapter II of 
chapter 57 of title 5, United States Code, partial relief from 
the costs of relocating. Presently, employees whose transfer is 
deemed to be in the interest of the Government are reimbursed 
for most of their costs (i.e. travel expenses, real estate 
expenses, moving expenses, and other related expenses) while 
employees who are not eligible receive no reimbursements even 
though their transfer may be of some benefit or value to the 
agency. This provision would allow the Comptroller General to 
promulgate regulations permitting employees who would otherwise 
not receive any reimbursement for their relocation costs to 
receive a portion of such costs in appropriate circumstances.

Section 6. Increased annual leave for key employees

    Subsection (g) would allow the Comptroller General to 
provide 160 hours of annual leave to key officers and employees 
of the General Accounting Office who have less than 3 years of 
Federal service, in accordance with section 6303(a)(2) of title 
5, United States Code. Under the annual leave provision in 
section 6303 of title 5, United States Code, employees earn 
annual leave based on Federal years of service. Until an 
employee has 3 years of service, the employee earns 104 hours 
(13 days) of annual leave in a year. Between 3 and 15 years, 
the employee earns 160 hours (20 days) of annual leave in a 
year. The Comptroller General would be required to award such 
increased annual leave as appropriate for the recruitment or 
retention of key officers and employees, consistent with 
regulations which would define key officers and employees, and 
set forth the factors in determining which officers and 
employees should be allowed to accrue such leave.

Section 7. Executive exchange program

    This section would establish an executive exchange program 
for the General Accounting Office.
    Subsection (h) would authorize the Comptroller General, by 
regulation, to establish an executive exchange program under 
which officers and employees of the General Accounting Office 
would have the ability to be assigned to private sector 
organizations, and employees of private sector organizations 
could be assigned to the General Accounting Office. Subsection 
(h) makes it clear that the purpose of the exchange program is 
to further the institutional interests of the General 
Accounting Office or Congress, including for the purpose of 
providing training to officers and employees of the General 
Accounting Office.
    Paragraph (1) of subsection (h) states that the regulations 
to carry out the exchange program shall include provisions 
consistent with sections 3702 and 3704 of title 5, United 
States Code, which refers to the Information Technology 
Exchange Program, for matters concerning the duration and 
termination of assignments, reimbursements, and the benefits 
and obligations of program participants.
    Paragraph (2) of subsection (h) limits the number of 
officers and employees who are assigned to private sector 
organizations at any one time to not more than 15, and the 
number of employees from private sector organizations who are 
assigned to the General Accounting Office at any one time to 
not more than 30.
    Paragraph (3) of subsection (h) would make all private 
sector participants subject to the same laws that are 
applicable to the participants in the Information Technology 
Exchange Program, relating to such matter as conflict of 
interest and financial disclosure.
    Paragraph (4) of subsection (h) would require that for an 
employee of a private sector organization assigned to the 
General Accounting Office, the Comptroller General must 
determine that the assignment is an effective use of the GAO's 
funds, and takes into account the best interests of the General 
Accounting Office and the costs and benefits of alternative 
methods of achieving the same results and objectives.
    Paragraph (5) of subsection (h) states that the executive 
exchange program would be sunset, with no assignments 
permissible to begin under the exchange program, 5 years after 
the date of enactment.
    Subsection (i) lists sections of existing law that will 
apply to any employee of a private sector organization assigned 
to the General Accounting office under the executive exchange 
program.

Section 8. Redesignation

    Subsection (a) would change the name of the General 
Accounting Office to the Government Accountability Office.
    Subsection (b) states that any reference to the General 
Accounting Office on the date of enactment shall be considered 
to refer and apply to the Government Accountability Office.

Section 9. Performance management system

    This section would amend section 732(d)(1) of title 31, 
United States Code, to state that the performance management 
system for the General Accounting Office must meet the 
requirements of section 4302 of title 5, and adds a number of 
new requirements. Specifically, the performance management 
system would be required to include a link between the 
performance management system and the agency's strategic plan; 
adequate training and retraining for all employees, 
supervisors, and managers in the performance management system; 
a process for ensuring ongoing performance feedback and 
dialogue between supervisors, managers, and employees 
throughout the appraisal period and setting timetables for 
review; effective transparency and accountability measures to 
ensure that the management of the system is fair, credible, and 
equitable; and a means to ensure that adequate resources are 
allocated for the performance management system.

Section 10. Consultation

    This section states that before the implementation of any 
changes authorized under the Act, the Comptroller General will 
consult with interested groups or associations that represent 
employees of the General Accounting Office.

Section 11. Reporting requirements

    Currently, under section 719(a) of title 31, United States 
Code, the Comptroller General reports annually to the Congress. 
Subsection (a) would require that for a 5-year period beginning 
on the date of enactment of the Act, the annual report under 
719(a) of title 31, United States Code, would summarize all 
actions taken under section 2, 3, 4, 6, 7, 9, and 10 of the 
Act.
    Additionally, subsection (a)(1)(A) would require specific 
information to be included in the report for certain 
provisions, such as the number of officers and employees 
separating from service under section 2, the number of officers 
and employees receiving pay retention under section 4, the 
number of officers and employees engaging in the Executive 
Exchange Program under section 7, and the number of officers 
and employees receiving annual leave under section 6.
    Subsection (a)(1)(B) states that the annual report under 
section 719(a) of title 31, United States Code, should include 
a description of all actions with regard to the pay adjustments 
under the Act in the annual report, including the methodology 
applied, the amount of the annual pay adjustments, and any 
extraordinary economic conditions or serious budget constraints 
that significantly impacted on the determination of the 
adjustments.
    Subsection (a)(1)(C) states that the annual report under 
section 719(a) of title 31, United States Code, must include an 
assessment of the role of sections 2, 3, 4, 6, 7, 9, and 10 of 
this Actin contributing to the General Accounting Office's 
ability to carry out its mission, meet its performance goals, and 
fulfill its strategic plan.
    Subsection (a)(2) states that in each report submitted to 
Congress under section 719(a) of title 31, United States Code, 
after the effective date of section 3 of this Act and before 
the close of the 5-year period referred to in paragraph (1), 
the Comptroller General must include a detailed description of 
the methodologies applied under section 3 of this Act and the 
manner in which such methodologies were applied to determine 
the appropriate annual pay adjustments for officers and 
employees of the General Accounting Office. Subsection 
(a)(2)(B) states that the report must include the amount of the 
annual pay adjustment afforded to officers and employees of the 
General Accounting Office under section 3 of this Act. Section 
(a)(2)(C) states that the report must include a description of 
any extraordinary economic conditions or serious budget 
constraints that had a significant impact on the determination 
of the annual pay adjustments for officers and employees of the 
General Accounting Office.
    Subsection (b) would require a final report not later than 
6 years after the enactment of the Act, which summarizes the 
information included for the prior 5 years in the annual report 
regarding this Act, makes recommendations for any legislative 
changes to sections 2, 3, 4, 6, 7, 9, or 10, and includes any 
assessment of the GAO Personnel Appeals Board or interested 
groups representing officers and employees.
    Subsection (c) states that the reporting requirement under 
subsection (a)(2)(C) shall apply to any report submitted under 
section 719(a) of title 31, United States Code, whether during 
the five year period beginning on the date of enactment of this 
Act or at any time thereafter.

Section 12. Technical amendment

    This section would correct a reference in subsection 
732(h)((3)(A) of title 31, United States Code, so that the 
existing term ``reduction force'' is changed to ``reduction in 
force''.

Section 13. Effective dates

    Subsection (a) states that except as provided in subsection 
(b), the effective date of the Act will be the date of 
enactment.
    Subsection (b) states that section 3 would take effect for 
any pay adjustments on or after October 1, 2005. Subsection (b) 
states that two interim authorities would be in place prior to 
any pay adjustments that would take effect on or after October 
1, 2005. The first exception, (b)(2)(A), would give the 
Comptroller General the authority to prescribe regulations that 
would immediately preclude employees who are not performing at 
a satisfactory level from receiving the annual adjustment to 
the pay rates, instead of having to wait until section 4 is 
effective. The second exception, (b)(2)(B), would authorize the 
Comptroller General to prescribe regulations that would enable 
him to give less than the full amount of the adjustments under 
existing law, if the agency encounters serious budget 
constraints or extraordinary economic conditions.
    Subsection (b)(3) states that the Comptroller General would 
be authorized to delay the implementation of sections 3 and 4 
for groups of employees or officers if he deemed such action 
appropriate.

                    V. Estimated Cost of Legislation


               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

S. 1522--GAO Human Capital Reform Act of 2003

    Summary: S. 1522 would authorize the General Accounting 
Office (GAO) to modify its personnel and workforce practices to 
allow greater flexibility in determining pay increases, pay 
retention rules, and other compensation matters. The bill also 
would permanently extend GAO's authority to offer separation 
(buyout) payments and early retirement to employees who 
voluntarily leave GAO. Finally, S. 1522 would rename GAO as the 
Government Accountability Office.
    CBO estimates that enacting S. 1522 would increase direct 
spending for retirement annuities and related health benefits 
by about $1 million in fiscal year 2004, by $19 million over 
the 2004-2008 period, and by $40 million over the 2004-2013 
period. Several provisions of S. 1522 could affect GAO employee 
compensation costs, but the net budgetary effect of such 
provisions would depend on how GAO exercises its new 
authorities and on whether future agency appropriations are 
adjusted to reflect any savings or costs. Finally, we expect 
that any addition discretionary costs associated with changing 
the agency's name would not be significant.
    S.1522 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandate Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
impact of S. 1522 on direct spending is shown in the following 
table. The costs of this legislation fall within budget 
function 800 (general government).

----------------------------------------------------------------------------------------------------------------
                                                          By fiscal year, in millions of dollars--
                                           ---------------------------------------------------------------------
                                             2004   2005   2006   2007   2008   2009   2010   2011   2012   2013
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING
 Estimated Budget Authority................      1      3      5      5      5      5      4      4      4      4
Estimated Outlays.........................      1      3      5      5      5      5      4      4      4      4
----------------------------------------------------------------------------------------------------------------

Basis of estimate

            Direct spending
    S. 1522 would give GAO permanent authority to offer 
retirement to employees who voluntarily leave the agency early. 
GAO's existing buyout authority, which will expire on December 
31, 2003, allows the agency to offer certain employees a lump 
sum payment of up to $25,000 to voluntarily leave the agency. 
In addition, certain qualified employees who leave (whether 
they collect a separation payment or not) are entitled to 
receive immediate retirement annuities earlier than they would 
have otherwise. CBO estimates that extending this authority 
would increase direct spending by $1 million in 2004, by $19 
million over the 2004-2008 period, and by $40 million over the 
2004-2013 period.
    Based on information provided by GAO about use of its early 
retirement authority over the past several years, CBO estimates 
that each year about 35 agency employees would begin receiving 
retirement benefits three years earlier than they would have 
under current law. Inducing some employees to retire early 
results in higher-than-expected benefits from the Civil Service 
Retirement and Disability Fund (CSRDF). CBO estimates that the 
additional retirement benefits would increase direct spending 
by $1 million in 2004, by $16 million over the 2004-2008 
period, and by $32 million over the 2004-2013 period.
    Extending GAO's buyout and early retirement authority also 
would increase direct spending for federal retiree health 
benefits. Many employees who retire early would continue to be 
eligible for coverage under the Federal Employees' Health 
Benefits (FEHB) program. The government's share of the premium 
for retirees is classified as mandatory spending. Because many 
of those accepting the buyouts under the bill would have 
retired later under current law, mandatory spending on FEHB 
premiums would increase. CBO estimates these additional 
benefits would increase direct spending by less than $500,000 
in 2004, by $3 million over the 2004-2008 period, and by $8 
million over the 2004-2013 period.
            Spending subject to appropriation
    The authorities provided by S. 1522 would allow GAO to 
create a performance-based employee compensation system to 
govern basic pay adjustments, pay retention for employees 
affected by reductions in force, relocation reimbursements, and 
annual leave accruals beginning in fiscal year 2006. (Under 
existing law, GAO is required to follow personnel management 
policies determined by the Office of Personnel Management.) 
Implementing the new authorities that would be provided by S. 
1522 could affect GAO's total costs of providing employee 
compensation, but CBO cannot predict any costs or savings 
associated with these new authorities, or the net effect of all 
such changes on the federal budget. Ultimately, the net 
budgetary effect of the proposed authorities would depend on 
the features of the compensation system adopted by GAO and on 
how the agency applies that new system to individual employees. 
Moreover, any resulting savings or costs would only be realized 
if the agency's annual appropriations are adjusted accordingly.
    Providing GAO with the option of providing voluntary 
separation payments could also increase GAO's costs, but CBO 
estimates that any new costs would average less than $500,000 
annually over the 2004-2013 period. Section 2 of the bill would 
allow GAO to offer certain employees payments of up to $25,000 
to voluntarily leave the agency. The bill also requires that 
GAO make a deposit amounting to 45 percent of each buyout 
recipient's basic salary toward the CSRDF. Unlike an increase 
in retirement benefits, these two payments would be from the 
agency's discretionary budget and are thus subject to 
appropriation. Since GAO's current buyout authority was first 
authorized in October 2000, no one at the agency has received a 
buyout payment. As such, CBO expects that relatively few 
employees would receive a buyout payment over the next 10 years 
and that the cost of any buyout payments and required deposits 
toward the CSRDF would be negligible in any given year.
    Intergovernmental and private-sector impact: S. 1522 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Ellen Hays, Geoffrey 
Gerhardt, and Deborah Reis; and Impact on State, Local, and 
Tribal Governments: Sarah Puro; and Impact on the Private 
Sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                  VI. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b)(1) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill. CBO states that 
there are no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act and no costs on 
state, local, or tribal governments. The legislation contains 
no other regulatory impact.

       VII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic and existing law, in which no 
change is proposed, is shown in roman):

     [PUBLIC LAW 106-303, ENACTED OCTOBER 13, 2000, 114 STAT. 1063]


 AN ACT TO MAKE CERTAIN PERSONNEL FLEXIBILITIES AVAILABLE WITH RESPECT 
TO THE GENERAL ACCOUNTING OFFICE AND FOR OTHER PURPOSES

           *       *       *       *       *       *       *



SECTION. 1. [5 U.S.C. 8336 NOTE.] VOLUNTARY EARLY RETIREMENT AUTHORITY.

    (a) Civil Service Retirement System.--Effective [for 
purposes of the period beginning on the date of the enactment 
of this Act and ending on December 31, 2003] October 13, 2000, 
paragraph (2) of section 8336(d) of title 5, United States 
Code, shall, with respect to officers and employees of the 
General Accounting Office be applied as if it had been amended 
to read as follows:

           *       *       *       *       *       *       *

    (b) Federal Employees' Retirement System.--Effective [for 
purposes of the period beginning on the date of the enactment 
of this Act and ending on December 31, 2003] October 13, 2003, 
subparagraph (B) of section 8414(b)(1) of title 5, United 
States Code, shall, with respect to officers and employees of 
the General Accounting Office, be applied as if it had been 
amended to read as follows:

           *       *       *       *       *       *       *

    (e) Sense of Congress.--It is the sense of Congress that 
the implementation of this section is intended to reshape the 
General Accounting Office workforce and not downsize the 
General Accounting Office workforce.

SEC. 2. [5 U.S.C. 5597 NOTE.] VOLUNTARY SEPARATION INCENTIVE PAYMENTS.

    (a) In General.--Effective [for purposes of the period 
beginning on the date of the enactment of this Act and ending 
on December 31, 2003] October 13, 2003, the authority to 
provide voluntary separation incentive payments shall be 
available to the Comptroller General with respect to employees 
of the General Accounting Office.

           *       *       *       *       *       *       *

    (b) Terms and Conditions.--The authority to provide 
voluntary separation incentive payments under this section 
shall be available in accordance with the provisions of 
subsections (a)(2)(e) of section 663 of the Treasury, Postal 
Service, and General Government Appropriations Act, 1997, as 
contained in Public Law 104-208 (5 U.S.C. 5597 note), except 
that--

           *       *       *       *       *       *       *

          [(2) subsection (a)(2)(g) of such section shall be 
        applied by construing thecitations therein to be 
references to the appropriate authorities in connection with employees 
of the General Accounting Office;]
          (2)(A) subsection (a)(2)(G) of such section shall be 
        applied by construing the citations therein to be 
        references to the appropriate authorities in connection 
        with employees of the General Accounting Office; and
          (B) employees excluded under subsection (a)(2)(G) of 
        such section, shall include any employee who, during 
        the 36-month period preceding the date of separation of 
        that employee, performed service for which a student 
        loan repayment benefit was or is to be paid under 
        section 5379 of title 5, United States Code.

           *       *       *       *       *       *       *

    (g) Sense of Congress.--It is the sense of Congress that 
the implementation of this section is intended to reshape the 
General Accounting Office workforce and not downsize the 
General Accounting Office workforce.

                           UNITED STATES CODE

                      TITLE 31--MONEY AND FINANCE

                          Subtitle I--General

                  CHAPTER 7--GENERAL ACCOUNTING OFFICE


Subchapter III--Personnel

           *       *       *       *       *       *       *



Sec. 731. General

           *       *       *       *       *       *       *


    (f) The Comptroller General shall prescribe regulations 
under which officers and employees of the Office may, in 
appropriate circumstances, be reimbursed for any relocation 
expenses under subchapter II of chapter 57 of title 5 for which 
they would not otherwise be eligible, but only if the 
Comptroller General determines that the transfer giving rise to 
the relocation is of sufficient benefit or value to the Office 
to justify such reimbursement.
    (g) The Comptroller General shall prescribe regulations 
under which key officers and employees of the Office who have 
less than 3 years of service may accrue leave in accordance 
with section 6302(a)(2) of title 5, in those circumstances in 
which the Comptroller General has determined such increased 
annual leave is appropriate for the recruitment or retention of 
such officers and employees. Such regulations shall define key 
officers and employees and set forth the factors in determining 
which officers and employees should be allowed to accrue leave 
in accordance with this subsection.
    (h) The Comptroller General may by regulation establish an 
executive exchange program under which officer and employees of 
the Office may be assigned to private sector organizations, and 
employees of private sector organizations may be assigned to 
the Office, to further the institutional interests of the 
Congress, including for the purpose of providing training to 
officers and employees of the Office. Regulations to carry out 
any such program--
          (1) shall include provisions (consistent with 
        sections 3702 through 3704 of title 5) as to matter 
        concerning--
                  (A) the duration and termination of 
                assignments;
                  (B) reimbursements;
                  (C) status, entitlements, benefits, and 
                obligations of program participants;
          (2) shall limit--
                  (A) the number of officers and employees who 
                are assigned to private sector organizations at 
                any one time to not more than 15;
                  (B) the number of employees from private 
                sector organizations who are assigned to the 
                Office at any one time to not more than 30;
          (3) shall require that an employee of a private 
        sector organization assigned to the Office may not have 
        access to any trade secrets or to any other nonpublic 
        information which is of commercial value to the private 
        sector organization from which such employee is 
        assigned;
          (4) shall require that, before approving the 
        assignment of an officer or employee to a private 
        sector organization, the Comptroller General shall 
        determine that the assignment is an effective use of 
        the Office's funds, taking into account the best 
        interests of the Office and the costs and benefits of 
        alternative methods of achieving the same results and 
        objectives; and
          (5) shall not allow any assignment under this 
        subsection to commence after the end of the 5-year 
        period beginning on the date of enactment of this 
        subsection.
    (i) an employee of a private sector organization assigned 
to the Office under the executive exchange program shall be 
considered to be an employee of the Office for purposes of--
          (1) chapter 73 of title 5;
          (2) sections 201, 203, 205, 207, 208, 209, 603, 606, 
        607, 643, 654, 1905, and 1913 of title 18;
          (3) sections 1343, 1344, and 1349 (b) of this title;
          (4) chapter 171 of title 28 (commonly referred to as 
        the Federal Torts Claims Act) and any other Federal 
        Tort liability statute;
          (5) the Ethics in Government Act of 1978 (5 U.S.C. 
        App.);
          (6) section 1043 of the Internal Revenue Code of 
        1986; and
          (7) section 27 of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 423).

Sec. 732. Personnel Management System

           *       *       *       *       *       *       *


    (b) The personnel management system shall--

           *       *       *       *       *       *       *

          (6) provide that the Comptroller General shall fix 
        the basic pay of officers and employees of the Office 
        not fixed by law consistent with section 5301 of [title 
        5] title 5, except as provided under subsection (c)(3) 
        of this section and section 733(a)(3)(B) of this title.
    (c) Under the personnel management system--

           *       *       *       *       *       *       *

          (3) except as provided under section 733(a)(3)(B) of 
        this title [or section 5349(a) of title 5], basic pay 
        rates of officers and employees of the Office shall be 
        adjusted [at the same time and to the same extent as 
        basic pay rates of the General Schedule are adjusted] 
        annually to such extent as determined by the 
        Comptroller General, and in making the determination 
        the Comptroller General shall consider--
                  (A) the principle that equal pay should be 
                provided for work of equal value within each 
                local pay area;
                  (B) the need to protect the purchasing power 
                of officers and employees of the Office, taking 
                into consideration the Consumer Price Index or 
                other appropriate indices;
                  (C) any existing pay disparities between 
                officers and employees of the Office and non-
                Federal employees in each local pay area;
                  (D) the pay rates for the same levels of work 
                for officers and employees of the Office and 
                non-Federal employees in each local pay area;
                  (E) the appropriate distribution of agency 
                funds between annual adjustments under this 
                section and performance-based compensation;
                  (F) such other criteria as the Comptroller 
                General considers appropriate, including, but 
                not limited to, the funding level for the 
                Office, amounts allocated for performance-based 
                compensation, and the extent to which the 
                Office is succeeding in fulfilling its mission 
                and accomplishing its strategic plan;
        notwithstanding any other provision of this paragraph, 
        an adjustment under this paragraph shall not be applied 
        in the case of an officer or employee whose performance 
        is not at a satisfactory level, as determined by the 
        Comptroller General for purposes of such adjustment;

           *       *       *       *       *       *       *

          (5) [officers and employees of the Office are 
        entitled to grade and basic pay retention consistent 
        with subchapter VI of chapter 53 of title 5] the 
        Comptroller General shall prescribe regulations under 
        which an officer or employee of the Office shall be 
        entitled to pay retention if, as a result of any 
        reduction-in-force or other workforce adjustments 
        procedure, position reclassification, or other 
        appropriate circumstances as determined by the 
        Comptroller General, such officer or employee is placed 
        in or holds a position in a lower grade or band with a 
        maximum rate of basic pay that is less than the rate of 
        basic pay payable to the officer or employee 
        immediately before the reduction in grade or band; such 
        regulations--
                  (A) shall provide that the officer or 
                employee shall be entitled to continue 
                receiving the rate of basic pay that was 
                payable to the officer or employee immediately 
                before the reduction in grade or band until 
                such time as the retained rate becomes less 
                than the maximum rate for the grade or band of 
                the position held by such officer or employee; 
                and
                  (B) shall include provisions relating to the 
                minimum period of time for which an officer or 
                employee must have served or for which the 
                position must have been classified at the 
                higher grade or band in order for pay retention 
                to apply, the events that terminate the right 
                to pay retention (apart from the ones described 
                in subparagraph (A)), and the exclusions based 
                on the nature of the appointment; in 
                prescribing regulations under this 
                subparagraph, the Comptroller General shall be 
                guided by the provisions of sections 5362 and 
                5363 of title 5.

           *       *       *       *       *       *       *

    (d) The personnel Management System shall provide--
          (1) for a system to appraise the performance of 
        officers and employees of the General Accounting Office 
        that meets the requirements of section 4302 of title 5 
        [;] and in addition includes--
                  (A) a link between the performance management 
                system and the agency's strategic plan;
                  (B) adequate training and retraining for 
                supervisors, managers, and employees in the 
                implementation and operation of the performance 
                management system;
                  (C) a process for ensuring ongoing 
                performance feedback and dialogue between 
                supervisors, managers, and employees throughout 
                the appraisal period and setting timetables for 
                review;
                  (D) effective transparency and accountability 
                measures to ensure that the management of the 
                system is fair, credible, and equitable, 
                including appropriate independent 
                reasonableness, reviews, internal assessments, 
                and employee surveys; and
                  (E) a means to ensure that adequate agency 
                resources are allocated for the design, 
                implementation, and administration of the 
                performance management system.

           *       *       *       *       *       *       *

    (h)(1)(A) * * *

           *       *       *       *       *       *       *

    (3)(A) Except as provided in subparagraph (B), an employee 
may not be released due to a [reduction force] reduction in 
force, unless such employee is given written notice at least 60 
days before such employee is so released. Such notice shall 
include--

           *       *       *       *       *       *       *


Sec. 733. Senior Executive Service

    (a) The Comptroller General may establish a General 
Accounting Senior Executive Service--

           *       *       *       *       *       *       *

        (3) providing rates of basic pay--

           *       *       *       *       *       *       *

                  (B) [adjusted at the same time and to the 
                same extent as rates in the Senior Executive 
                Service under section 5882 of title 5 are 
                adjusted] adjusted annually by the Comptroller 
                General after taking into consideration the 
                factors listed under section 732(c)(3) of this 
                title, except that an adjustment under this 
                subparagraph shall not be applied in the case 
                of an officer or employee whose performance is 
                not at a satisfactory level, as determined by 
                the Comptroller General for purposes of such 
                adjustment;

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