Energy Management: Department of Energy's Efforts to Manage Overtime
Costs Have Been Limited (Letter Report, 09/27/94, GAO/RCED-94-282).

The Energy Department's (DOE) direct overtime costs for federal
employees almost doubled from $15.5 million to $30.4 million in 1992.
DOE has paid overtime for everything from carpet installation to the
transport and escort of special nuclear materials. DOE's efforts to
manage overtime and minimize costs have been minimal. First, written
justifications for overtime are often vague and reviewed only by the
employees' immediate supervisors. Thus, some questionable overtime, such
as driving DOE officials to the airport from their homes on weekends,
continues without scrutiny to ensure that this work is essential or
cost-effective. Second, although federal agencies may require that
employees take compensatory time rather than receive pay for overtime,
DOE does not require them to take compensatory time. Finally, contrary
to DOE's policy, employees' annual leave is not always planned to
minimize the use of overtime. In some cases, employees took annual
leave, worked several regular hours, and then worked overtime after
regular working hours.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-94-282
     TITLE:  Energy Management: Department of Energy's Efforts to Manage 
             Overtime Costs Have Been Limited
      DATE:  09/27/94
   SUBJECT:  Overtime compensation
             Cost control
             Planning
             Federal employees
             Personnel management
             Annual leave
             Federal personnel law
             Compensatory time
             Documentation
             Human resources utilization

             
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Cover
================================================================ COVER


Report to Congressional Requesters

September 1994

ENERGY MANAGEMENT - DEPARTMENT OF
ENERGY'S EFFORTS TO MANAGE
OVERTIME COSTS HAVE BEEN LIMITED

GAO/RCED-94-282

DOE's Overtime Costs


Abbreviations
=============================================================== ABBREV

  BPA - Bonneville Power Administration
  DOE - Department of Energy
  FLSA - Fair Labor Standards Act
  GAO - General Accounting Office

Letter
=============================================================== LETTER


B-258030

September 27, 1994

The Honorable Mike Synar
Chairman, Environment, Energy
 and Natural Resources Subcommittee
Committee on Government Operations
House of Representatives

The Honorable David E.  Skaggs
House of Representatives

Department of Energy (DOE) employees are entitled to direct pay or
compensatory time for overtime work that is essential and cannot be
accomplished during regular working hours.\1 This report responds to
your concerns about how much DOE has paid its federal employees in
overtime over the last several years and whether such costs are
justified.  As agreed with your offices, we are providing information
on DOE's (1) overtime costs for calendar years 1989 through 1993 and
(2) efforts to manage overtime and minimize costs. 


--------------------
\1 Compensatory time is an alternative to paid compensation for an
employee who works overtime.  The employee is compensated by being
authorized to take paid leave during regular work hours that is equal
to the number of overtime hours worked. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

DOE's direct overtime costs for federal employees almost doubled from
$15.5 million in 1989 to $30.4 million in 1992.  In 1993, DOE's
direct overtime costs were $26.5 million.  In addition, DOE pays, on
average, another $1.5 million per year in indirect overtime costs
that result from its share of Social Security contributions and in
payments for unused compensatory time.\2 DOE has paid overtime for a
variety of activities, ranging from carpet installation to the
transport and escort of special nuclear materials. 

DOE's efforts to manage overtime and minimize costs have been
limited.  First, written justifications for overtime are often vague
and reviewed only by the employees' immediate supervisors.  Thus,
some questionable overtime work, such as driving DOE officials to the
airport from their homes on weekends, continues without detailed
scrutiny to ensure that this work is essential or cost-effective. 
Second, although federal agencies may, in some cases, require that
employees take compensatory time rather than receive pay for
overtime, DOE does not require them to take compensatory time. 
Furthermore, if compensatory time is taken and not used within a
year, DOE pays for the unused compensatory time at the overtime rate. 
Finally, contrary to DOE's policy, employees' annual leave is not
always planned to minimize the use of overtime.  We identified
instances in which, in the same day, employees took annual leave,
worked several regular hours, and then worked overtime after regular
working hours. 


--------------------
\2 DOE's policy establishes a time limit of 1 year within which
compensatory time must be used.  If the compensatory time is unused
after 1 year, the employee is paid for the unused time at his or her
overtime rate. 


   BACKGROUND
------------------------------------------------------------ Letter :2

In general, DOE's policy requires that overtime be held to a minimum
and used only when essential work cannot be accomplished during
regular working hours.  DOE requires overtime to be scheduled and
approved in advance to the maximum extent possible.  In addition,
overtime should be minimized through careful planning of work and
scheduling of annual leave and other absences.  To document
compliance with its overtime policies, DOE requires that an overtime
request and authorization form be completed; the form records the
advanced scheduling of overtime, the actual overtime worked, and the
justification for the overtime worked for every 2-week pay period. 
In addition, a record of an employee's actual hours--including
overtime hours worked and the form of compensation (compensatory time
or direct payment)--is kept on the employee's time and attendance
form for each pay period. 

DOE's policies and procedures for compensating employees for overtime
worked must fall within the parameters established by title 5 of the
U.S.  Code, which provides guidelines for the administration of all
federal employees' pay--including overtime pay.\3 In general,
employees are paid for overtime at 1-1/2 times their hourly rate of
basic pay, but they may request compensatory time for irregular or
occasional overtime--overtime work that is not part of their
regularly scheduled workweek.  However, the overtime pay guidelines
differ somewhat for employees who are exempt from the Fair Labor
Standards Act and are paid yearly salaries exceeding $30,000.\4 These
higher-paid employees are subject to a paid overtime limit of about
$22 an hour.\5

In addition, when overtime for exempt employees whose yearly salaries
exceed $40,000 is not part of their regularly scheduled workweek, an
agency can require that compensatory time be taken.  However, DOE's
overtime policy does not require higher-paid employees to accept
compensatory time if their overtime is not regularly scheduled,
although they may request compensatory time.  In addition, all DOE
employees, including higher-paid employees, are paid at their
overtime rate for any compensatory time that remains unused after 1
year. 

In 1989, DOE's Inspector General (IG) issued a report on overtime
that made a number of recommendations to substantially reduce
overtime costs.  In general, the IG recommended that the agency (1)
better document in writing that overtime was approved, actually
worked, and necessary; (2) require that higher-paid employees receive
compensatory time as an alternative to direct payment for overtime
worked; and (3) prohibit the approval of overtime and annual leave
within the same workweek so that annual leave did not unnecessarily
increase overtime. 

In response to the IG's recommendations, DOE established an overtime
approval and authorization form to provide written documentation on
the approval of overtime, the actual overtime hours worked, and the
justification for the overtime.  However, DOE did not concur with the
IG's recommendation that higher-paid employees should receive
compensatory time in lieu of pay for overtime.  DOE said that since
higher-paid employees are limited to $22 an hour for overtime pay,
many of these employees are earning less than their regular hourly
rate for overtime hours worked and that the agency is getting a
bargain for the employees' time.  Furthermore, if overtime is
required, the supervisor and the employee should decide whether
direct payment or compensatory time should be provided.  Finally, DOE
did not agree that annual leave should not be approved in the same
week that an employee works overtime.  DOE said that various
circumstances could require overtime and annual leave in the same
week without the overtime being worked as a result of the annual
leave. 


--------------------
\3 Certain federal employees may be paid overtime under the Fair
Labor Standards Act (FLSA). 

\4 Executive, administrative, or professional employees are exempt
from coverage under FLSA, and their overtime is computed under the
provisions of title 5 of the U.S.  Code. 

\5 Employees whose basic rate of pay exceeds the minimum rate of a
GS-10 ($30,603 in 1993) receive overtime computed at that GS-10 rate. 


   DOE'S OVERTIME COSTS HAVE GROWN
------------------------------------------------------------ Letter :3

DOE's total direct overtime costs almost doubled from $15.5 million
in 1989 to $30.4 million in 1992.  In 1993, the agency's overtime
costs dropped slightly to $26.5 million.  In addition, the agency
annually pays another estimated $1.5 million in indirect overtime
costs from the resulting increase in its share of Social Security
contributions and in payments for unused compensatory time.  Within
the agency, 62 different organizations contribute to the total costs
for overtime; their activities range from escorting vehicles carrying
special nuclear materials to preparing travel vouchers and ordering
supplies. 


      DOE'S DIRECT OVERTIME COSTS
      ALMOST DOUBLED IN 3 YEARS
---------------------------------------------------------- Letter :3.1

When the IG reviewed overtime in 1989, DOE paid its employees $15.5
million in direct overtime wages.  However, over the next 3 years the
annual amount of direct overtime costs rose 96 percent, to $30.4
million in 1992.  During this same period, total paid overtime hours
grew by 58 percent, from 769,512 in 1989 to 1,212,821 in 1992.  Most
recently, DOE's overtime costs dropped to $26.5 million in 1993,
largely on the basis of a decrease of $3.5 million in overtime costs
at the Bonneville Power Administration (BPA).\6 Table 1 shows the
growth in DOE's direct overtime costs since 1989. 



                           Table 1
           
                 DOE's Direct Overtime Costs

                    (Dollars in millions)

                                                        Paid
                                        Direct      overtime
Calendar year                   overtime costs         hours
------------------------------  --------------  ------------
1989                                     $15.5       769,512
1990                                     $17.9       825,820
1991                                     $23.8     1,022,673
1992                                     $30.4     1,212,821
1993                                     $26.5     1,029,677
------------------------------------------------------------

--------------------
\6 According to BPA officials, the decrease in overtime was part of
an effort to reduce operating costs to address a deteriorating
financial condition. 


      INDIRECT COSTS ADD TO
      OVERTIME EXPENDITURES
---------------------------------------------------------- Letter :3.2

In addition to the direct costs of overtime, DOE pays some indirect
costs for its share of Social Security contributions associated with
the overtime paid to employees.  The indirect cost paid varies,
depending on whether the employee working overtime is subject to the
Federal Employees Retirement System or the Civil Service Retirement
System.  On the basis of retirement system information provided to us
by DOE, we determined that in 1993, the agency paid an estimated $1
million in indirect costs for its share of Social Security
contributions, in addition to the total direct overtime costs of
$26.5 million. 

Another source of indirect overtime costs is unused compensatory
time.  DOE employees may choose to take compensatory time in lieu of
direct payment for irregular or occasional overtime work.  However,
if compensatory time remains unused after 1 year, an employee is paid
for those unused hours at an overtime rate.  In 1993, DOE paid
employees an additional $490,357 for 23,092 hours of unused
compensatory time. 


      ACTIVITIES DRIVING OVERTIME
      COSTS VARY WIDELY
---------------------------------------------------------- Letter :3.3

The organizations and types of activities contributing to DOE's
overtime costs vary significantly.  The overtime costs incurred at
DOE organizations range from annual overtime costs of less than
$10,000, at several offices, such as the Office of Arms Control and
Nonproliferation, to annual overtime costs of over $9 million, at the
BPA.  (See app.  II for a list of overtime costs for major DOE
offices in 1993.)

Two DOE organizations, BPA and the Albuquerque Field Office, account
for over 60 percent of DOE's total overtime costs.  Over 90 percent
of the overtime costs at Albuquerque can be attributed to a program
that provides couriers who transport and escort special nuclear
material throughout the country.  At BPA, the types of activities
driving overtime differ significantly from those at most DOE
organizations.  BPA is basically an electric utility responsible for
electrical service throughout the Pacific Northwest; its typical
overtime activities therefore include emergency electrical repairs. 

Within the organizations, the types of activities driving overtime
can vary significantly.  For example, at the Rocky Flats Field
Office, most overtime work included activities such as conducting
plutonium remediation, providing on-site duty officers, training
radiation workers, and preparing briefings and reports.  However, in
some cases employees worked overtime to process payroll information,
prepare travel vouchers, and order supplies.  Within DOE's Office of
Human Resources and Administration at headquarters, employees worked
overtime to install carpeting, provide drivers for senior DOE
officials, staff the mail room, and provide courier service. 


   DOE'S EFFORTS TO MANAGE
   OVERTIME AND MINIMIZE COSTS
   HAVE BEEN LIMITED
------------------------------------------------------------ Letter :4

DOE's efforts to manage overtime and minimize costs have been limited
by (1) vague written justifications for overtime and a lack of review
beyond the level of the employees' immediate supervisors, (2) no
requirement to use compensatory time as an alternative to direct
payment and a policy that pays employees for unused compensatory time
at the overtime rate, and (3) failure to plan annual leave to
minimize the use of overtime. 


      VAGUE JUSTIFICATION FOR AND
      LIMITED REVIEW OF OVERTIME
---------------------------------------------------------- Letter :4.1

A lack of both detailed justification for overtime and upper-level
management review limits DOE's efforts to manage overtime and
minimize costs.  The agency's policy states that overtime should be
limited to "essential" work that cannot be completed during regular
working hours.  DOE, on its overtime request and authorization form,
requests that supervisors provide a written justification or
explanation for the overtime they approve.  However, many of the
explanations provided at the offices we reviewed were vague and added
little value to the management of overtime.  For example: 

  Office of Administrative Services.  The same explanation--"support
     required by office"--was routinely provided as the justification
     for all the overtime worked. 

  Logistics Operations Branch.  Explanations included "special
     project" and "supervisory duties."

  Logistics Management Division.  The explanation was the same for
     all those employees who claimed an estimated 14,000 hours of
     overtime in 1992:  "dispatch vehicles, standby for and
     transporting VIPS, backup driver, courier duty, maintenance, and
     burn bag detail."

  Rocky Flats Office.  Explanations for overtime in one pay period in
     1993 included "inadequate number of staff at present time,"
     "compliance issues," and "complete activities that cannot be
     accomplished during normal working hours."

Although DOE asks supervisors to provide written justification for
all overtime worked, it has no guidance on what constitutes
sufficient justification to demonstrate that the overtime work is
"essential." In addition, although some offices may request
higher-level review, DOE does not require that the justification for
overtime be reviewed at a level above an employee's immediate
supervisor.  As a result, supervisors are basically writing the
justifications to themselves.  DOE supervisors responsible for
approving employees' overtime at the offices we reviewed said that
anything can be written to justify overtime.  The overtime request
and authorization form is simply a formality that adds little value
to their management of overtime.  The DOE officials responsible for
developing and reviewing DOE offices' budgets--including overtime
budgets--confirmed that they do not examine any of the detailed
justifications provided for actual overtime worked.  Nor have these
officials conducted any assessments or studies on the use of and need
for overtime within the agency.  According to these officials, the
overtime budgets are mostly based on past cost history and do not
require detailed justification. 

The lack of detailed written justifications and reviews beyond the
level of the immediate supervisors does not place DOE in a strong
position to weigh the relative importance of the different activities
that drive overtime throughout the agency.  Many of the offices we
visited attributed the need for overtime to an inadequate level of
staffing to meet increasing work requirements.  However, DOE is not
in a position to assess what types of activities are driving overtime
to determine whether additional staff should be hired or work
requirements should be reduced.  As a result, some questionable
overtime work continues without detailed scrutiny to ensure that it
is essential or cost-effective.  For example, DOE drivers provide
weekend car service for up to 45 senior DOE officials at
headquarters.  These assignments include picking officials up at
their homes and driving them to the local airport.  Although the
actual trip may take less than an hour, any employee called in on a
weekend receives a minimum of 4 hours of overtime.  In addition, a
minimum of two drivers are called in for any trip--one to actually
drive and the other to staff the motor pool office and serve as
backup.  As a result, trips in the Washington, D.C., metropolitan
area can cost DOE over $150 for 8 hours of overtime plus the costs of
operating the vehicles.  Comparable cab fare ranges from $15 to $40. 


      OVERTIME COSTS FOR
      HIGHER-PAID EMPLOYEES COULD
      BE REDUCED
---------------------------------------------------------- Letter :4.2

DOE could reduce its overtime costs by requiring compensatory time as
an alternative to paying overtime wages to higher-paid
employees--those with regular annual salaries in excess of $40,000.\7
Specifically, when overtime is irregular or occasional--not part of
an employee's regularly scheduled workweek, with specific days and
hours scheduled in writing before the workweek--DOE may require that
compensatory time be granted to its higher-paid employees.\8

The extent to which savings will be realized, however, will depend on
how DOE manages the activities driving overtime.  If the agency
simply hires additional staff to perform these activities, then
overall costs could actually increase.  However, if the agency
eliminates some activities or is able to offset peak work demands by
requiring that compensatory time be taken when the work demand
recedes, savings can be realized.  Current agency policy does not
provide its managers with the option of requiring its higher-paid
officials to take compensatory time. 

By providing compensatory time instead of paid compensation to its
higher-paid employees, DOE may realize cost savings because these
employees earn a large amount of overtime.  Overall, in 1993
higher-paid employees earned an estimated $4.7 million (about 18
percent) of the total $26.5 million that DOE paid in overtime.  At
some offices, the percentage of overtime earned by higher-paid
employees is even greater.  For example, higher-paid employees earned
85 percent ($417,578 of $490,644) of the total paid overtime at the
Rocky Flats Field Office in 1992.\9 Compensatory time could be
provided instead of direct payment to higher-paid employees for any
overtime that was irregular or occasional. 

While DOE has no overall data on how much overtime is irregular or
occasional, we found that overtime is often not regularly scheduled. 
For example, 21 of 33 higher-paid employees at the Rocky Flats Field
Office worked unscheduled overtime during a 2-week period. 
Furthermore, of the remaining 12 employees who had scheduled overtime
in advance, we believe that in every case the overtime was, in
actuality, irregular.  In this regard, supervisors at Rocky Flats,
without knowing how much overtime would be needed or when it would be
needed, routinely approved a schedule of overtime that far exceeded
actual needs.  In our example, the 12 employees with scheduled
overtime were scheduled for a total of 383 hours of overtime;
however, they actually worked only 108 hours, often at times that
were different from the scheduled times. 

According to an Office of Personnel Management official, many federal
agencies do not pay their higher-paid employees for overtime because
of budget constraints.  In many cases, these agencies require that
compensatory time be granted to higher-paid employees as a means of
reducing costs.  At one time, DOE required its higher-paid employees
to take compensatory time.  However, according to DOE's Office of
Personnel Policy, the agency discontinued this practice because
higher-paid employees would often not use their compensatory time
within a year and would be paid for the unused compensatory time at
the overtime rate anyway.  However, federal personnel regulations do
not require DOE to pay its higher-paid employees for unused
compensatory time.  Furthermore, an agency may provide that employees
who fail to use compensatory time within a fixed time limit will lose
the compensatory time without payment, unless they could not use the
compensatory time because of work circumstances beyond their control. 

When the IG raised these same issues in 1989, DOE responded that
since higher-paid employees are limited to $22 an hour for overtime
pay, many of these employees are earning less than their regular
hourly rate for overtime hours worked and that the agency is getting
a bargain for the employees' time.  Supervisors we spoke with added
that those employees who must work overtime are often too busy to
take their own annual leave, let alone compensatory hours.  If
overtime is required, the employees should decide whether they want
direct payment or compensatory time.  However, an agency that
requires the use of compensatory time and sets a time limit for its
use may make exceptions when work circumstances beyond the control of
the employees prevent them from using compensatory time. 


--------------------
\7 Employees must be "exempt" from FLSA.  An exempt employee is
defined as someone in an executive, administrative, or professional
position, as classified by the agency. 

\8 When overtime is part of an employee's regularly scheduled
workweek, the employee must be paid for overtime. 

\9 DOE officials at Rocky Flats noted that almost 90 percent of their
employees are higher-paid and that most of their overtime work
requires higher-paid employees.  Thus, they would expect most
overtime to be worked by higher-paid employees. 


      ANNUAL LEAVE IS NOT PLANNED
      TO MINIMIZE OVERTIME
---------------------------------------------------------- Letter :4.3

Annual leave is not planned to minimize overtime despite DOE's policy
that overtime should be limited through careful scheduling of leave
and other absences.  Specifically, the DOE order on leave
administration states that

     "except to meet specific management requirements and bona fide
     employee emergencies, annual leave should not be approved for an
     employee when such approval will require that employee to work
     overtime shortly before or after the requested absence, e.g., on
     the same day or following day."

However, we found a lack of awareness of this overtime-related
requirement and a failure to follow it at the offices we reviewed. 
For example: 

  Logistics Management Division.  Of 19 employees who claimed
     overtime in 1992, we found that 18 took annual leave either the
     day before, the same day, or the day after working overtime at
     least once during the year. 

  Logistics Operations Branch.  Of 15 employees who claimed overtime
     in 1992, 12 took annual leave the day before, the same day, or
     the day after working overtime at least once during the year. 

  Rocky Flats Field Office.  Of 60 employees who worked overtime
     during a 2-week period in 1993, 15 took annual leave the day
     before, the same day, or the day after working overtime. 

  Office of Administrative Services.  Of 10 employees who worked
     overtime in 1992, 4 took annual leave the day before, the same
     day, or the day after working overtime at least once during the
     year. 

Noncompliance with this requirement on scheduling leave can lead to
potential abuses.  For example, we identified employees who took
annual leave the first 4 hours of a work day, worked 4 regular hours,
and then worked an additional 4 hours at an overtime rate that was
above their regular rate.  As a result, these employees were paid at
the overtime rate for half of an actual 8-hour day of work. 

Many DOE supervisors at the offices we reviewed were not aware of
this requirement.  A major factor contributing to the lack of
awareness is that the requirement is not included in DOE's policies
on overtime but is contained in a separate policy on leave
administration.  However, the supervisors we interviewed did not
believe that taking overtime and annual leave close together was
necessarily wrong.  The officials said that various circumstances may
require overtime to be worked close to the time an employee takes
annual leave but that this proximity does not mean that the annual
leave caused the overtime.  However, the officials agreed that the
routine use of annual leave and overtime on the same day is an abuse
that should not be allowed. 


   CONCLUSIONS
------------------------------------------------------------ Letter :5

With the increase in DOE's overtime costs, it is important that the
agency put itself in the best position to manage overtime and
minimize its costs--especially in light of tighter budgets throughout
the federal government.  DOE can further strengthen and more
effectively implement its overtime policies in three areas. 

First, although DOE instituted an overtime authorization and approval
form in response to the IG's 1989 report, the agency did not go far
enough in documenting the justification for overtime.  No guidance
exists as to what constitutes adequate justification for overtime,
nor is the justification reviewed from an agencywide perspective by
management.  As a result, some questionable overtime work--such as
providing weekend car service for senior DOE officials--has become
institutionalized within the agency. 

Second, DOE does not provide its managers with the option of
requiring higher-paid employees to accept compensatory time instead
of payment for irregular or occasional overtime.  Although the IG
made a similar recommendation in 1989, DOE did not concur because it
thought that overtime pay for higher-paid employees was a bargain and
that the decision on how to compensate employees for overtime should
be left to the employees and their immediate supervisors.  However,
in our view DOE managers should have the option of requiring the use
of compensatory time because of the potential cost savings.  This
practice is commonly used by other federal agencies as a means to
minimize overtime costs but is not an option available in DOE. 

Finally, DOE did not agree with the recommendation in the IG's 1989
report that annual leave and overtime should not be approved in the
same week because various circumstances could require overtime and
annual leave in the same week without necessarily causing the
overtime.  However, the routine scheduling of overtime and annual
leave on the same day that we identified is an obvious abuse of
overtime and unnecessarily increases its use. 


   RECOMMENDATIONS
------------------------------------------------------------ Letter :6

To put DOE in a better position to manage overtime and minimize
costs, we recommend that the Secretary of Energy take the following
actions: 

  Revise the agency's overtime policy guidance to more specifically
     define what constitutes adequate written justification to
     demonstrate that overtime is needed and cost-effective.  Also,
     such justification should be reviewed periodically by DOE
     management to assess overall trends and ensure that the types of
     activities driving overtime are essential from an agencywide
     perspective. 

  Develop a more restrictive policy on overtime payments to
     higher-paid employees.  Specifically, for higher-paid employees,
     amend DOE's policy to allow DOE managers the option of requiring
     that compensatory time be granted for irregular or occasional
     overtime and that payments for unused compensatory time after a
     specified time be eliminated, unless the employee had no chance
     to use the compensatory time because of work demands.  DOE
     should also ensure that supervisors are not routinely scheduling
     excessive amounts of overtime. 

  Ensure more effective implementation of DOE's policy on overtime
     and annual leave by clarifying and increasing awareness of the
     requirement that annual leave and overtime should not be planned
     and approved close together (e.g., on the same day or the
     following day).  This could be accomplished by ensuring that all
     overtime requirements are included in a single overtime policy
     directive and by periodically monitoring the implementation of
     this policy. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :7

We discussed the information in this report with DOE officials,
including the Deputy Director of the Office of Human Resources and
Administration, and with personnel specialists and managers within
the Office of Personnel Policy and at DOE's Rocky Flats Field Office. 
These officials generally agreed with the facts as presented. 
However, the officials wanted to emphasize that the primary cause of
overtime is an inadequate number of staff available to meet
ever-increasing work requirements and that the only way to reduce
overtime is to reduce work requirements or increase staffing levels. 
In our view, more adequate information on the type of work driving
overtime, along with more detailed review and analysis by higher
levels of DOE management, will put DOE in a better position to weigh
the trade-off between increasing staffing levels or reducing work
requirements to reduce overtime.  As agreed with your offices, we did
not obtain written agency comments on a draft of this report. 


---------------------------------------------------------- Letter :7.1

We conducted this review at DOE headquarters and the Rocky Flats
Field Office between September 1993 and July 1994 in accordance with
generally accepted government auditing standards.  To obtain
information for this report, we reviewed federal personnel statutes
and guidance and DOE orders and employee records, interviewed DOE
program officials and contractors, and discussed overtime policies
with Office of Personnel Management and personnel specialists in
other federal agencies.  (See app.  I for a more detailed discussion
of our scope and methodology.)

As arranged with your offices, unless you publicly announce the
contents earlier, we plan no further distribution of this report
until 30 days after the date of this letter.  At that time, we will
provide copies of the report to the Secretary of Energy; the
Director, Office of Management and Budget; interested congressional
committees; and other interested parties.  We will also make copies
available to others on request. 

Please call me at (202) 512-3841 if you or your staff have any
questions.  Major contributors to this report are listed in appendix
III. 

Sincerely yours,

Victor S.  Rezendes
Director, Energy and
 Science Issues


OBJECTIVES, SCOPE, AND METHODOLOGY
=========================================================== Appendix I

Our objectives in this review were to provide information on (1) the
amount of overtime expense for federal employees incurred throughout
the Department of Energy (DOE) and (2) how well DOE manages overtime
and minimizes its costs. 

For our first objective, we obtained and reviewed payroll data for
1989 through 1993 from DOE's Office of Payroll to determine how much
overtime expense the agency had incurred for federal employees and
how much each DOE office had incurred.  In addition, we obtained the
same detailed information from the Bonneville Power Administration,
which has a payroll system separate from DOE's. 

For our second objective, we obtained and reviewed all federal
government and DOE policies pertaining to overtime for DOE employees. 
We discussed these policies with officials from DOE's Office of
Personnel Policy and the Office of Personnel Management as well as
with personnel specialists at other federal agencies and individual
DOE managers at the offices we examined.  We also examined employees'
time and attendance records in detail at several units within DOE's
Office of Human Resources and Administration at headquarters and at
DOE's Rocky Flats Field Office in order to assess the implementation
of the agency's overtime policies.  These offices were selected
because of their relatively high use of overtime. 


DOE'S DIRECT OVERTIME COSTS IN
TOTAL DOLLARS BY OFFICE FOR 1993
========================================================== Appendix II

DOE office                                        1993 costs
------------------------------------------------  ----------
Bonneville Power Administration                   $9,083,774
Albuquerque                                        7,183,588
Western Area Power Administration                  3,145,429
Headquarters' Administration and Management        1,423,542
Environmental Restoration & Waste Management         819,921
Savannah River                                       530,097
Rocky Flats                                          389,032
Southwestern Power Administration                    356,547
Environment Safety & Health                          286,463
Defense Programs                                     270,730
Richland                                             269,413
Oak Ridge                                            195,830
Office of the Secretary                              136,977
Idaho                                                131,624
Others                                             2,315,782
============================================================
Total                                             $26,538,74
                                                           9
------------------------------------------------------------
Source:  DOE's and the Bonneville Power Administration's Payroll
Information Systems. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III

RESOURCES, COMMUNITY, AND ECONOMIC
DEVELOPMENT DIVISION,
WASHINGTON, D.C. 

Jim Wells, Associate Director
Carlotta C.  Joyner, Associate Director
William F.  Fenzel, Assistant Director
Robert J.  Baney, Assignment Manager
Mark E.  Gaffigan, Evaluator-in-Charge
Robert V.  Dolson, Staff Evaluator

