[Audit Report on Administratively Uncontrollable Overtime, Department of the Interior]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 97-I-548

Title: Audit Report on Administratively Uncontrollable Overtime,
       Department of the Interior

Date: February 27, 1997


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E-IN-MOA-023-97

United States Department of the Interior
OFFICE OF INSPECTOR GENERAL
Washington, D.C. 20240

AUDIT REPORT

Memorandum

To:  Assistant Secretary - Policy, Management and Budget
     Assistant Secretary - Indian Affairs
     Assistant Secretary - Fish and Wildlife and Parks
     Assistant Secretary - Land and Minerals Management
     Assistant Secretary - Water and Science

From:  Robert J. Williams
     Acting Assistant

Subject: Audit Report on Administratively Uncontrollable Overtime, Department of the
Interior (No. 97-I-548)

INTRODUCTION

This report presents the results of our audit of the Department of the Interior's use of
administratively uncontrollable overtime. The objective of the audit, which was required by
the Omnibus Consolidated Appropriations Act, 1997 (Public Law 104-208), dated
September 30, 1996, was to determine whether the Department's eligibility criteria for
administratively uncontrollable overtime and the payment of such overtime were in
compliance with Federal statutory and regulatory requirements.

BACKGROUND

The United States Code (5 U.S.C. 5545(c)(2)) authorizes premium pay on an annual basis
for Federal employees who are in positions in which the hours of duty cannot be controlled
administratively; in which the employee is required to perform substantial amcrunts of
irregular, unscheduled overtime duty; and in which the employee generally is responsible for
recognizing, without supervision, circumstances that require the employee to remain on duty.
Work that meets these criteria for premium pay is referred to as administratively
uncontrollable overtime.

Federal guidelines for implementing administratively uncontrollable overtime are contained
in Title 5, Section 550, of the Code of Federal Regulations. The Code authorizes the use of
this premium pay only for those employees "who must remain on duty not merely because

 
it is desirable, but because of compelling reasons inherently related to continuance of his
duties, and of such a nature that failure to carry on would constitute negligence." The Code
further states that the amount of pay should be based on a percentage of not less than 10
percent or more than 25 percent of the employee's base pay as follows:

Average Weekly
Overtime Hours

Premium Pav Rate

3 to 5              10 percent
Over 5 to 7             15 percent
Over 7 to 9            20 percent
Over 9              25 percent

The percentage of pay is to be based on consideration of previously worked irregular or
occasional overtime hours and any other information bearing on the number of hours of duty
that may reasonably be expected in the future. Employees who receive administratively
uncontrollable overtime pay are also eligible for other types of premium pay, such as regular
overtime, night differentials, and Sunday or holiday pay. For law enforcement personnel,
administratively uncontrollable overtime is included as part of their basic pay for
determining retirement and life insurance benefits.

In September 1994, the Congress passed the Law Enforcement Availability Pay Act of 1994
(Public Law 103-329), which provided for the mandatory payment of 25 percent of base pay
to criminal investigators who work or are available to work an average of 2 hours of
unscheduled duty per regular workday. As a result of this law, availability pay superseded
administratively uncontrollable overtime for criminal investigators. Our review did not
cover the Department's use of availability pay.

The 1997 Omnibus Consolidated Appropriations Act required the Inspectors General of each
Federal department or agency that uses administratively uncontrollable overtime to conduct
an audit on the use of this type of overtime. Specifically, the Act required that policies,
extent, costs, and other relevant aspects of the use of administratively uncontrollable
overtime be examined and that a determination be made as to whether eligibility and
payment criteria were in compliance with Federal statutory and regulatory requirements. The
Act also required the Office of Personnel Management, after receipt of the audit reports from
the Inspectors General, to issue revised guidelines that:

(1) limit the use of administratively uncontrollable overtime to employees
meeting the statutory intent of section 5545(c)(2) of title 5, United States
Code, and (2) expressly prohibit the use of administratively uncontrollable
overtime for - (A) customary or routine work duties; and (B) work duties that
are primarily administrative in nature, or occur in noncompelling
circumstances.

 
SCOPE OF AUDIT

The scope of our audit was limited to administratively uncontrollable overtime payments
made to Departmental employees for fiscal year 1996. Because payments to some
employees were based primarily on records of prior year administratively uncontrollable
overtime work, our audit included a review of activities that occurred in fiscal year 1995.
In performing the audit, we reviewed Federal, Departmental, and bureau guidance and
regulations on the use of administratively uncontrollable overtime and bureau records that
supported the eligibility for and approval of administratively uncontrollable overtime
payments. We also reviewed the payroll records of selected employees who received this
premium pay and interviewed bureau officials who were responsible for issuing and
implementing premium pay policy and determining eligibility for these payments. Because
some bureaus did not maintain records on administratively uncontrollable overtime pay, we
relied on information from the Department's automated payroll system, PAY/PER& to
identify the amount of administratively uncontrollable overtime payments made in fiscal year
1996 and used listings generated by PAY/PERS to select employees for review. Although
we did not verify the accuracy of PAY/PERS payroll information, prior Office of Inspector
General audits of PAY/PERS did not find any significant deficiencies in the system. In
addition, during this audit, we found no indication that PAY/PERS information was
materially misstated. However, we found that PAY/PERS information did not include
administratively uncontrollable overtime payments totaling $4,998 made to nine Park
Service employees. Based on PAY/PERS data and on additional information provided by
the Park Service, we identified 91 employees in five bureaus who received $500,534 of
administratively uncontrollable overtime pay in fiscal year 1996 (see Appendix 1).

Our audit was conducted from November 1996 through January 1997. The Departmental
and bureau offices visited or contacted are listed in Appendix 2.

Our audit was conducted in accordance with the "Government Auditing Standards," issued
by the Comptroller General of the United States. Accordingly, we included such tests of
records and other auditing procedures that were considered necessary under the
circumstances. As part of the audit, we evaluated the system of internal controls over the
Department's use of administratively uncontrollable overtime. We found that some bureaus
had not issued adequate guidance on the use of administratively uncontrollable overtime, had
not maintained sufficient documentation to support eligibility determinations, and had not
established uniform methods for computing pay rates for administratively uncontrollable
overtime pay. These internal control weaknesses are discussed in the Results of Audit
section of this report. The recommendations, if implemented, should improve the internal
controls in the use of this premium pay.

We also reviewed the Department of the Interior's Annual Statement and Report, required
by the Federal Managers' Financial Integrity Act of 1982, for calendar years 1994 and 1995
and determined that no material weaknesses directly related to the objective and scope of our
audit were reported.

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PRIOR COVERAGE

During the past 5 years, the Office of Inspector General has issued one audit report and the
General Accounting Office issued a letter report in response to a Congressional request for
information on administratively uncontrollable overtime as follows:

- The September 1994 audit report entitled "Selected Law Enforcement Activities,
Bureau of Land Management" (No. 94-I-1351) stated that 58 of the Bureau of Land
Management's 63 field Special Agents received the maximum amount of administratively
uncontrollable overtime pay allowed by law, even though their extra duty hours did not
qualify for this type of premium pay. In response to the report's recommendations, the
Bureau said that State Directors would take action to ensure that Special Agents' use of
administratively uncontrollable overtime was properly approved in compliance with Bureau
policy. Based on the response, we considered the recommendations resolved.

- An April 14, 1995, letter report by the General Accounting Office to a Congressional
representative provided information on the management of administratively uncontrollable
overtime in the U.S. Forest Service, the Bureau of Land Management, and the National Park
Service.  The report stated that the three agencies generally administered their
administratively uncontrollable overtime in accordance with the criteria established by law
and Office of Personnel Management regulations. The report also stated that while some
field office law enforcement officers claimed administratively uncontrollable overtime for
duties that did not appear to meet the compelling need requirement, the General Accounting
Office found no basis for concluding that employees "systematically abused" their agencies'
programs.

RESULTS OF AUDIT

The Department of the Interior did not ensure that eligibility criteria and payment of
administratively uncontrollable overtime were in compliance with applicable regulations.
This occurred because the Department had not updated its guidance on administratively
uncontrollable overtime and because Departmental and bureau guidance (except for that of
the U.S. Fish and Wildlife Service) did not provide sufficient procedures for preparing and
maintaining documentation to support administratively uncontrollable overtime payments,
computing premium pay rates for employees, establishing employee eligibility, or reviewing
and approving these overtime payments. Also, in some instances, bureaus did not comply
with bureau-issued guidance on the use of administratively uncontrollable overtime. As a
result, three bureaus had no support for their currently authorized rate of administratively
uncontrollable overtime pay; some employees at two bureaus may have received excess
payments totaling as much as $70,000 because of rate computation methods; and some
employees at the five bureaus may have received this premium pay for work that did not
meet Federal eligibility requirements. Accordingly, the Department did not have assurance
that administratively uncontrollable overtime payments were appropriate and computed
properly. Although we concluded that the Department should improve its controls over the

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use of administratively uncontrollable overtime, we found no evidence that the bureaus or
their employees systematically abused this form of premium pay.

Departmental Guidance

Departmental guidance on the use of administratively uncontrollable overtime is contained
in the Departmental Manual (370 DM 550, 1.11). The guidance, issued in June 1967, states
that administratively uncontrollable overtime pay is available on an annual basis and
describes the general eligibility requirements for the pay, the amount of compensation
available (15 percent of base pay), and the minimum period (at least every 6 months) for
reviewing the use of previously approved administratively uncontrollable overtime. The
guidance, however, is outdated and does not provide details on implementing the Federal
regulations on administratively uncontrollable overtime pay. Since issuance of Departmental
guidance, Federal regulations (5 CFR 550.154, revised January 1992) have been issued that
provide for administratively uncontrollable overtime pay to be available at rates ranging from
10 to 25 percent of base pay.

Bureau Guidance

Except for the U.S. Fish and Wildlife Service, none of the bureaus had issued adequate
guidance on the use of administratively uncontrollable overtime.

U.S. Fish and Wildlife Service. Of the five bureaus using administratively
uncontrollable overtime, the Service was the only bureau to have issued complete and
detailed guidance on its use. The Service's Personnel Management Manual (225 FW 8)
includes a complete discussion of Code of Federal Regulations provisions governing the use
of administratively uncontrollable overtime; describes employee responsibilities for
implementing this overtime; and establishes a system for documenting and controlling
overtime use. The Manual also provides for annual certification and verification reports;
monthly reports on work that qualities for administratively uncontrollable overtime pay; and
diaries to detail the nature of overtime work performed, including a description of the
"compelling reasons" for use of administratively uncontrollable overtime. The Manual
further requires that monthly reports provide sufficient information to "enable the supervisor
to make an informed determination concerning the eligibility of the duty" for this premium
pay-

Bureau of Land Management. The Bureau's Division of Fire and Law Enforcement
issued guidance on administratively uncontrollable overtime, Instruction Memorandum No.
93-2023, which describes administratively uncontrollable overtime provisions as defined in
Federal regulations; describes the duties of responsible personnel; and provides for a system
of documentation and control. Although the guidance requires that annual and weekly
reports be prepared to document the number of hours spent on administratively
uncontrollable overtime work, the guidance requires only a general description of the work
performed and does not require sufficient detail to ensure that the work meets Federal
requirements. In addition, the Bureau does not require other substantiating documentation,

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such as the daily diaries required by the Fish and Wildlife Service, to support overtime
worked. As such, the Bureau does not maintain sufficient information to document that the
work meets Federal requirements for the use of administratively uncontrollable overtime.

National Park Service.  Park Service policy on administratively uncontrollable
overtime is contained in National Park Service Personnel Management Letter No. 92-20.
The policy references Code of Federal Regulations provisions for the use of administratively
uncontrollable overtime and states that the authority for approval of administratively
uncontrollable overtime may be delegated to "as low a level as is practicable." The policy
also requires that the use of this premium pay be "clearly documented so that there is an
`audit trail' to be followed." However, the policy does not specify the method to be used to
compute the premium pay or require periodic supervisory reviews of the overtime work or
of the premium pay rates.

Bureau of Indian Affairs. The Bureau of Indian Affairs Personnel Management
Manual (44 BIAM 550) contains limited guidance on administratively uncontrollable
overtime. This guidance briefly summarizes the general requirements for eligibility
contained in Federal regulations but does not specify the method to be used to compute the
premium pay or provide for a system of documentation and control for recording and
reporting administratively uncontrollable hours worked or for periodic supervisory reviews
of overtime rates paid.

U.S. Geological Survey. The Geological Survey has not issued any guidance on the use
of or the controls over administratively uncontrollable overtime.

Rate Determination

Federal regulations require that annual rates of payment for administratively uncontrollable
overtime be based on the average weekly number of irregular or occasional overtime hours
worked. However, only two of the bureaus (the Fish and Wildlife Service and the Bureau
of Land Management) performed analyses to support the rates at which administratively
uncontrollable overtime was paid. Notwithstanding these analyses, the rates used by the two
bureaus may provide employees with excess or inequitable amounts of premium pay. The
three other bureaus either had not performed recent rate analyses or had no basis for the rate
at which administratively uncontrollable overtime was paid.

U.S. Fish and Wildlife Service. To establish fiscal year 1996 premium pay rates, the
Service computed the average number of administratively uncontrollable overtime hours
worked each week: the total number of overtime hours worked in the previous 6-month
period was divided by the total number of base weeks of work during that prior period. The
number of base weeks, however, excluded hours charged to sick, annual, or other leave;
training; temporary assignments; and other "nonqualifying work," even though employees
received the premium pay during such periods. We found no citations in the Federal
regulations that addressed the exclusion of these hours from the rate computation.

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We concluded that the computational method used by the Service inflates the average
number of overtime hours worked and may result in excess premium pay or in inequities in
employee compensation for the same amount of overtime work, depending on the amount
of holiday, leave, training, temporary assignments, and other nonqualifying work that has
been excluded from the base hours used to compute premium pay rates.' (The potential
effect of the Service's computational method is illustrated in Appendix 3.) Based on our
review of the 33 Service employees who received administratively uncontrollable overtime
pay in fiscal year 1996, we estimated that 15 of those employees received excess payments
totaling $33,000 during this period.

Bureau of Land Management. The Bureau used the same method as that used by the
Fish and Wildlife Service to compute the premium pay rates except that it did not deduct
time spent on temporary assignments from the base hours used to compute the average
overtime hours. For 15 of the 27 Bureau employees reviewed, we estimated that excess
payments totaling as much as $37,000 were made in fiscal year 1996 as a result of the
Bureau's practice of deducting nonduty hours from the base hours used to compute the
administratively uncontrollable overtime pay rate.

National Park Service. At Kings Canyon National Park at Three Rivers, California, the
only park unit using administratively uncontrollable overtime, the Park Service had not
performed a recent analysis of historical or future estimated overtime work to justify the
prevailing 10 percent premium pay rate. The most recent rate analysis was based on fiscal
year 1992 overtime use. Also, instead of computing a separate rate for each employee, a
single pay rate of 10 percent was computed and authorized for all eligible employees at the
Park. Our analysis (four pay periods in fiscal year 1996 were sampled) of the payroll records
of 5 of the 16 employees who received administratively uncontrollable overtime pay showed
that the average overtime work of each employee ranged from less than 3 hours per week to
over 9 hours per week. As such, some employees may have been entitled to rates of
overtime pay higher than the authorized 10 percent rate, and some employees may have
performed an insufficient amount of overtime work to qualify for any administratively
uncontrollable overtime pay in accordance with Federal regulations. According to a Park
official, a uniform rate was used to prevent disputes among employees over pay because
different assignments in the park provided employees with the opportunity to earn greater
or lesser amounts of overtime pay.

Bureau of Indian Affairs. The Bureau did not have documentation to support the
validity of the premium pay rates for the 11 employees who received administratively
uncontrollable overtime pay during fiscal year 1996. Bureau documents showed that the
rates, which ranged from 10 to 25 percent of basic pay, have been in effect since at least
June 1983, and there was no record that reviews had been performed since that time on

' For example, two employees worked about 112 hours of overtime in the prior 6-month period. One
of the
employees received a 15 percent rate of premium pay while the other received a 25 percent rate. The
employee who received the higher rate had a great amount of nonduty time (such as training)
excluded from
the base hours on which his overtime rate was computed.

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administratively uncontrollable overtime use. Two of the three responsible supervisors said
they were unaware of the requirement that premium pay rates were to be reviewed
periodically.

U.S. Geological Survey. The Geological Survey had no documentation to support the
validity of the 10 percent administratively uncontrollable overtime rate paid to its four
employees in fiscal year 1996. According to Geological Survey officials, the rate was
established in fiscal year 1986 and had not been adjusted since that time. The Geological
Survey justified use of the 10 percent rate, stating that each of the employees was required
to perform an average of over 3 hours of overtime per week. The responsible official stated
that he was unaware that premium pay rates were to be reviewed periodically.

Documentation

Three of the five bureaus documented administratively uncontrollable overtime use.
However, none of the bureaus maintained sufficient documentation to ensure that the
overtime work met Code of Federal Regulations eligibility requirements for the use of
administratively uncontrollable overtime.

U.S. Fish and Wildlife Service.  In compliance with Service policy, employees
prepared diaries to document their administratively uncontrollable overtime use. However,
some diaries contained entries for overtime work that did not qualify as administratively
uncontrollable overtime.  Also, contrary to Service policy, some diaries contained
insufficient information to determine whether the work qualified as administratively
uncontrollable overtime, and none of the diaries reviewed contained evidence of random
supervisory review. We reviewed 455 entries in which nine employees recorded
administratively uncontrollable overtime use. For 7 entries, we found that the work was
ineligible for administratively uncontrollable overtime pay (for example, travel and
"unscheduled office return for paperwork"); for 162 entries, there was insufficient
information to determine whether the overtime met Federal eligibility requirements (for
example, "refuge patrol" and "phone conversation re: case update"); and for 117 entries, there
was no diary entry to support the overtime hours recorded in monthly reports. The remaining
169 entries showed that the work qualified for administratively uncontrollable overtime pay
(for example, continued surveillance of an individual suspected of hunting without a required
permit).

Bureau of Land Management.  We reviewed 540 entries of administratively
uncontrollable overtime use that were recorded by 11 employees in their weekly activity
reports and identified 500 entries in which there was insufficient information available to
determine whether the work qualified for the premium pay and 27 entries in which the work
was ineligible for the premium pay (for example, a staff meeting). Unlike the Service, the
Bureau did not require that daily diaries or other logs be maintained to further document the
circumstances and compelling reasons for working the additional hours. The remaining 13
entries showed that the work qualified for administratively uncontrollable overtime pay (for
example, a security check in response to a bomb threat).

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  National Park Service. We reviewed the activity logs of five employees at Kings
Canyon National Park at Three Rivers, California, who received premium pay in fiscal year
1996 and determined that their overtime work met the Federal criteria for administratively
uncontrollable overtime (for example, protecting park visitors from a bear). The logs
recorded the type and duration of administratively uncontrollable overtime work performed.
Also, the Park Service had prepared memorandums that justified the use of administratively
uncontrollable overtime by rangers performing backcountry duties and that listed the
employees eligible to receive this pay.

  Bureau of Indian Affairs. The Bureau did not maintain documentation to support
the qualifying hours worked by the four employees who were selected for review. With no
record of the actual amount of overtime worked, we could not determine whether employees
were eligible for the premium pay or were paid the appropriate rate. For example:

  - Eight irrigation system operators and one hydrologic technician at the Phoenix Area
Office received administratively uncontrollable overtime pay totaling $22,470, while
irrigation system operators at the Portland Area Office, who performed the same or similar
work, received regular overtime pay. According to personnel officials at the Phoenix Office,
none of these employees were eligible for administratively uncontrollable overtime pay
because the overtime work could be scheduled and the work was performed on a regular
basis. No documentation had been prepared to justify the use of administratively
uncontrollable overtime by the Phoenix Office employees, and no records were maintained
to show the number of overtime hours worked.

  - Two police officers received administratively uncontrollable overtime pay totaling
$7,736 in fiscal year 1996. According to personnel officials, these employees were not
eligible to receive this pay because other types of overtime pay should have been used. The
officials stated that an "erroneous personnel action" and a "coding error" caused the improper
payments and that the Bureau planned to recover these overtime payments from the
employees.

  U.S. Geological Survey. The Geological Survey had four computer center
employees who received administratively uncontrollable overtime pay in fiscal year 1996.
These employees were on "pager duty" 1 out of every 4 weeks, during which time they
would be paged by the system when it was malfunctioning or by customers who had
questions or problems. The employees also were required to verify that the system was
operational by remote computer access from their residences at least once a day. The
Geological Survey had no documentation to support the administratively uncontrollable
overtime hours worked by these employees, and no written justification was prepared and
no records were maintained to show that the work met Federal eligibility requirements for
the use of the premium pay.

9

 
Departmentwide Use of Administratively Uncontrollable Overtime

Overall, we found no indication that the deficiencies identified in the use of administratively
uncontrollable overtime have resulted in significant amounts of excess overtime payments
with the exception of the excess payments ($70,000) resulting from the method used by the
Fish and Wildlife Service and the Bureau of Land Management to compute the
administratively uncontrollable overtime pay rate. Relatively few Departmental employees
are authorized to use administratively uncontrollable overtime, and some of the employees
who received excess or inappropriate administratively uncontrollable overtime pay may have
been eligible to receive regular or other types of overtime pay. Nonetheless, based on the
deficiencies cited in this report, we believe that the Department should take action to ensure
that administratively uncontrollable overtime is used in a manner that is consistent with
applicable Federal regulations and with revised Office of Personnel Management guidelines,
which are required by Public Law 104-208.

Recommendations

We recommend that:

  1. The Assistant Secretary for Policy, Management and Budget issue policies and
procedures which are consistent with the Office of Personnel Management's revised
guidelines on the use of administratively uncontrollable overtime and which:

    Establish criteria on eligibility and rate setting that are consistent with Code of
Federal Regulations provisions for administratively uncontrollable overtime use.

    Provide for a standardized, Departmentwide method for computing
administratively uncontrollable overtime rates, including a definition of base hours used to
compute the overtime rate and a requirement for a periodic updating of the rate.

    Require bureaus to prepare and maintain documentation to show that
employees authorized to use administratively uncontrollable overtime have met the
eligibility requirements contained in the Code of Federal Regulations.

    Require bureaus to document their reasons for using an administratively
uncontrollable overtime rate that differs from the rate of historical overtime work.

    Require bureaus to perform supervisory reviews to ensure that administratively
uncontrollable overtime use meets Federal and revised Departmental requirements.

2.  The Director of the U.S. Fish and Wildlife Service, the Director of the National
Park Service, the Director of the Bureau of Land Management, the Assistant Secretary for
Indian Affairs, and the Director of the U.S. Geological Survey provide for the issuance of
procedures to implement the Departmental guidelines and to ensure compliance with those
guidelines.

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3.  The Assistant Secretary for Indian Affairs ensure that the use of administratively
uncontrollable overtime is discontinued for irrigation system operators, hydrologic
technicians, and police officers for work that does not meet Federal and Departmental
eligibility requirements.

Department of the Interior Response and Office of Inspector General
Reply

For Recommendation 1, we received a response from the Office of Personnel, Office of the
Secretary (February 24,1997) (Appendix 4). For Recommendation 2, we received responses
from the U.S. Fish and Wildlife Service (February 24, 1997) (Appendix 5); the U.S.
Geological Survey (February 18, 1997) (Appendix 6); the National Park Service (February
20, 1997) (Appendix 7); and the Assistant Secretary for Indian Affairs (February 21, 1997)
(Appendix 8) (this response also addressed Recommendation 3). We also received
comments on Recommendation 2 from the Bureau of Land Management at our February 2 1,
1997, exit conference but did not receive a formal reply. Based on these responses and
comments, we consider Recommendations 1 and 3 resolved but not implemented.
Accordingly, these two recommendations will be referred to the Assistant Secretary for
Policy, Management and Budget for tracking of implementation. However, additional
information is needed from the Bureau of Land Management for us to consider
Recommendation 2 fully resolved (see Appendix 9).

Regarding Recommendation 2, the U.S. Fish and Wildlife Service, the U.S. Geological
Survey, the National Park Service, and the Bureau of Land Management all agreed to issue
procedures to implement Departmental guidelines on the use of administratively
uncontrollable overtime. Although the response from the Assistant Secretary for Indian
Affairs stated that the Bureau of Indian Affairs "partially concurs" with the recommendation,
the response stated that it is "highly probable that no BIA [Bureau of Indian Affairs]
positions will qualify for AU0 [administratively uncontrollable overtime] and that the
revised OPM [Office of Personnel Management] regulations and implementing instructions
from the Department will be sufficient." The response from the Assistant Secretary further
stated, "The cost of establishing further administrative controls and reviewing the
compliance with these controls would outweigh any possible benefits to be derived from
such additional administrative actions." We agree that the Bureau does not need to develop
formal procedures if it determines that no employees qualify for administratively
uncontrollable overtime. However, if the Bureau decides to continue using or to implement
use of the premium pay in the future, formal procedures should be developed.

Additional Comments on Report

Although the Park Service agreed to develop procedures to implement the Department's
guidelines for computing administratively uncontrollable overtime rates, the Park Service
stated that the "few NPS [National Park Service] employees receiving AU0
[administratively uncontrollable overtime] in the past do not, arguable, justify performing
rate analyses at the Service level." The Park Service also stated that the 10 percent rate

11

 
currently in effect "appears quite modest." As discussed in the report, we believe that the use
of the 10 percent rate may have resulted in inappropriate amounts of overtime payments.
Specifically, based on individual records of administratively uncontrollable overtime work,
we found some employees who may not have qualified for the 10 percent rate and some who
may have qualified for a rate higher than 10 percent. We do not agree with the statement that
the use of the 10 percent rate "to prevent disputes arising from different assignments seems
reasonable." Instead, we believe that the rate should be in compliance with regulatory
requirements. Therefore, we believe that analyses of overtime work must be performed for
each employee to ensure that proper premium pay rates are established in accordance with
applicable regulations.

The Park Service also said that the statement in our report that coding errors made by the
Park Service resulted in PAY/PERS not including $4,998 is "misleading" because the
"inherent problems in the PAY/PERS system" caused this problem. Accordingly, because
a review of the controls in PAY/PERS was beyond the scope of our audit, we have revised
the report to delete reference to the cause of this problem.

In her response, the Assistant Secretary for Indian Affairs said that the report should be
revised to place the use of administratively uncontrollable overtime by the Department in the
proper context, stating that: (1) the 91 employees and the $500,534 in overtime payments
represent a small percentage of the Department's employees and salaries, respectively, and
(2) these payments "do not meet the audit threshold for materiality." While we are aware of
the relatively limited use of administratively uncontrollable overtime in the Department, as
acknowledged in the report, we believe that adequate controls are essential to ensure that
potential abuses within the Department are prevented. In addition, we do not know what
"audit threshold of materiality" is being referred to in the Assistant Secretary's response, but
we believe that there is no materiality threshold when the potential exists for fraud, waste,
and abuse.

Other Matters

We found that relatively few employees in the Department of the Interior received
administratively uncontrollable overtime pay during fiscal year 1996. However, our
discussions with bureau officials indicated that some bureaus may be using different forms
of overtime compensation for employees in the same positions or for employees who
perform similar duties. For example, at the Geological Survey, we found employees who
received stand-by pay rather than administratively uncontrollable overtime pay for overtime
work spent on pager duty. Also, only one of the Fish and Wildlife Service's seven regions
(the Southeastern Region) was using administratively uncontrollable overtime pay for its
refuge law enforcement officers, and not all law enforcement officers in the Bureau of Land
Management were receiving this form of premium pay. In both of these bureaus, employees
in similar positions to those who received administratively uncontrollable overtime pay were
compensated for overtime work through regular overtime pay or with compensatory time off.

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Our review was limited to the use of administratively uncontrollable overtime and did not
include an evaluation of the use of other forms of premium pay. However, we believe that
the bureaus should evaluate the cost effectiveness, equity, and propriety of providing
employees in the same positions with different types of premium pay for their overtime
work.

In accordance with the Departmental Manual (360 DM 5.3), we are requesting that the
Director, Bureau of Land Management, provide a written response to this report by May 2,
1997. The response should include the information requested in Appendix 9.

The legislation, as amended, creating the Office of Inspector General requires semiannual
reporting to the Congress on all audit reports issued, actions taken to implement audit
recommendations, and identification of each significant recommendation on which corrective
action has not been taken.

We appreciate the cooperation of Departmental and bureau officials in the conduct of our
audit.

cc: Director, U.S. Fish and Wildlife Service
Director, National Park Service
Director, Bureau of Land Management
Director, U.S. Geological Survey

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APPENDIX 1

EMPLOYEES RECEIVING ADMINISTRATIVELY
  UNCONTROLLABLE OVERTIME PAY
     IN FISCAL YEAR 1996

Bureau/Position      Number of Emnlovees     Amount

U.S. Fish and Wildlife Service
Wildlife Biologist
Refuge Law Enforcement Officer
Refuge Operations Specialist
Police Officer
Hydrologic Technician

11       $ 118,971
19        131,902
1         676
1         4,544
--I         5.285
33        261,378

Bureau of Land Management
Law Enforcement Ranger

27        180,552

Bureau of Indian Affairs
Irrigation System Operator
Hydrologic Technician
Police Officer

8        19,365
1         3,105
2        10.881
11        33,35 1

National Park Service
Law Enforcement Ranger

16         9,302

U.S. Geological Survey
Technical Editor
Computer Specialist
Hydrologist
Electronics Technician

1
1

1
1
4

2,53 1
3,729
5,300
4.391
15,951

Total

$ 500,534

14

 
APPENDIX 2
Page 1 of 2

OFFICES VISITED OR CONTACTED

Offices

Location

Office of the Secretary
Office of Financial Management
Office of Personnel

Washington, D.C.
Washington, D.C.

U.S. Fish and Wildlife Service
Washington Office
Denver Regional Office
Headquarters Region 9*
North Central Regional Office
Pacific Regional Office
Southeast Regional Office*
Southwest Regional Office
Alaska Regional Office

Bureau of Land Management
Washington Office
Arizona State Office
Wyoming State Office
Utah State Office
Nevada State Office
Grand Junction District Office
Craig District Office
Las Cruces District Office
Medford District Office
Montana State Office

National Park Service
Washington Office*
Accounting Operations Division
Alaska Area Field Office
Intermountain Area Field Office
Midwest Area Field Office
National Capital Area Field Office
Northeast Area Field Office
Pacific West Area Field Office
Southeast Area Field Office

Washington, D.C.
Denver, Colorado
Arlington, Virginia
Ft. Snelling, Minnesota
Portland, Oregon
Atlanta, Georgia
Albuquerque, New Mexico
Anchorage, Alaska

Washington, D.C.
Phoenix, Arizona
Cheyenne, Wyoming
Salt Lake City, Utah
Reno, Nevada
Grand Junction, Colorado
Craig, Colorado
Las Cruces, New Mexico
Medford, Oregon
Billings, Montana

Washington, D.C.
Reston, Virginia
Anchorage, Alaska
Denver, Colorado
Omaha, Nebraska
Washington, D.C.
Philadelphia, Pennsylvania
San Francisco, California
Atlanta, Georgia

* Sites visited

15

 
Offices (continued)

Bureau of Indian Affairs
Office of Audit and Evaluation
Denver Field Office
Phoenix Area Office
Colorado River Agency
San Carlos Irrigation Project
Albuquerque Area Office
Portland Area Office

U.S. Geological Survey
Office of the Director
Western Regional Office
Washington District Office
Central Regional Office

Bureau of Reclamation
Denver Administrative Service Center
PAY/PERS System Management Division*

APPENDIX 2
Page 2 of 2

Location

Washington, D.C.
Denver, Colorado
Phoenix, Arizona
Poston, Arizona
Coolidge, Arizona
Albuquerque, New Mexico
Portland, Oregon

Reston, Virginia
Menlo Park, California
Tacoma, Washington
Denver, Colorado

Denver, Colorado

16

 
APPENDIX 3

ANALYSIS OF U.S. FISH AND WILDLIFE SERVICE
ADMINISTRATIVELY UNCONTROLLABLE OVERTIME
       PAY CALCULATION

The effects of the U.S. Fish and Wildlife Service's practice of excluding hours spent in
nonwork status in computing administratively uncontrollable overtime pay rates are
illustrated in the following example:

FWS Method  OIG Method

Hours excluded from administratively
uncontrollable overtime (AUO) calculation:

Hours in a nonwork status:
Holiday
Leave

Hours when AU0 work was not performed:
Formal training

Temporary assignment
Other nonqualifying work

Total hours excluded from AU0 base      382.00

Days excluded from calculation
(total hours divided by 8 hours)

Weeks excluded from calculation
(total days divided by 5 days)

Qualifying number of weeks in the computation period
(Fish and Wildlife Service deducts 9.55 weeks from the
26-week computation period)

Total number of hours of AU0 work         174.50     174.50
Weekly average of AU0 work            10.61      6.71

AU0 rate based on average weekly AU0 work

Annual base salary

Amount of annual AU0 pay

.7

24.00
136.00

64.00
71.00
87.00

47.75

9.55     None

16.45     26.00

25%      15%

$35,000    $35,000

$8,750     $5,250

 
APPENDIX 4

United States Department of the Interior

OFFICE OF THE SECRETARY
Washington, D.C. 20240      22 - 4 gJ-j

MEMORANDUM

To:

From:

Robert J. Williams
' g Assistant Inspector General for Audits

3 rekc?-
Acting Director of Personnel

Subject:

Response to Draft Audit Report on Administratively Uncontrollable
Overtime

We have reviewed the subject draft report. We have no comment in regard to findings
of fact and agree that the recommendations offered are appropriate.

All of the recommendations to the Assistant Secretary for Policy Management and
Budget (Recommendation 1, ~~19-20) fall under the responsibility of the Office of
Personnel. In response, the Office of Personnel will:

 

1 . Develop comprehensive policy and procedural guidance to all Department Offices
incorporating each of the 5 specific recommendations listed under general
recommendation 1. This should be completed by September 30, 1997.

2. Publish the policy and procedural guidance in the Department manual (370 DM 532
and 550). This should be completed by January 31, 1997.

Should you have any questions in this regard, please contact Carl Wallace of my staff
at 208-5284.

18

 
APPENDIX 5

United States Department of the Interior

FISH AND WILDLIFE SERVICE
  Washington, D.C. 20240

In Reply Refer To:
FWS/DPM

Memorandum

To:  ,ir Acting
/` _
  '
From?ezljJ@ector

Subject: Draft Audit Rep&t on Administratively Uncontrollable Overtime (E-IN-MOA-023-97)

In response to your undated transmittal, following are the comments of the U.S. Fish and Wildlife
Service with respect to the subject draft audit report.

The draR report recommends that the U.S. Fish and Wildlife Service provide for the issuance of
procedures to implement the Departmental guidelines and to ensure compliance with those
guidelines.
Within 6 months of receipt of Departmental guidelines, the Service will review current
administrative
guidance and issue any revisions necessitated by the Departmental guidelines. This action is the
responsibility of the Assistant Director - Policy, Budget and Administration.

The drafl report also noted that the Service's method for computing administratively uncontrollable
overtime rates may result in excess or inequitable amounts of overtime payments. Although it is
correct to state that there is no authority that supports the computation of AU0 in the manner
employed by the Service, there does not appear to be any authority that prohibits this method of
computation. Accordingly, the Service will wait until the Department provides for a standardized
Departmentwide method for computing AU0 and a definition of base hours used to compute the
overtime rate. Within 3 months of receipt of such policy, the Service will make any necessary
revisions to the current method of computing AU0 for Service employees. This action is the
responsibility of the Assistant Director - Policy, Budget and Administration.

It was further noted that there were entries in some AU0 diaries for overtime that did not qualify as
AUO, some diaries contained insufficient information to determine whether the work qualified as
AUO, and none of the diaries contained evidence of random supervisory review. By March 3 1,
1997,
the Service will issue formal notice to supervisors, as well as employees, to remind them of their
responsibilities and obligations with respect to maintaining and reviewing AU0 diaries. This action
is the responsibility of the Assistant Director - Policy, Budget and Administration.

If you have any questions or need additional information, you may contact Juanita Knutson of the
Division of Personnel Management at (202) 208-4562.

19

 
APPENDIX 6

United States Department of the Interior

U.S. GEOLOGICAL SURVEY
Reston. Virginia 20192

In Reply Refer To:
Mail Stop 601

MEMORANDUM

To:   Acting Assistant Inspector General for Audits
From:  ;&ordon P. Eaton
    Director. U.S.

Subject: Draft Audit Report "Administratively Uncontrollable Overtime,
    Department of the Interior" (Assignment No. E-IN-MOA-023-97)

We have reviewed the draft report and agree with the findings and
recommendations suggested for the U.S. Geological Survey (USGS).

Upon issuance by the Assistant Secretary for Policy, Management and Budget of
departmental guidelines and standardized methods for administratively
uncontrollable rate computation, the USGS will:

-- prepare and maintain documentation to support the requirements of the CFR:

-- document our reasons for using administratively uncontrollable overtime;

-- conduct periodic supervisory reviews to assure compliance: and

-- issue procedures to implement departmental guidelines.

Questions concerning our response to the draft report should be directed to
Bill Fordyce at (703) 648-7442 or by email at WF[email protected].

20

 
APPENDIX 7
Page 1 of 2

United States Department of the Interior

IV REPLY REFER TO

February 20, 1997

NATIONAL PARK SERVICE
   P.O. Box 37127

Washington. D. C. 20013-7 127

To:

Through:

From:

Subject:

Assistant Inspector General for Audits

NPS Comments on OIG Draft Report (E-IN-MOA-023-97)
Audit of Administratively Uncontrollable Overtime,
Department of the Interior

The draft OIG report recommends that the Department issue policies and procedures that are
consistent with OPM's revised guidelines on AU0 and that the bureaus issue implementing
procedures.  The recommendation calls for the Department to provide a standardized,
Departmentwide method for computing AU0 rates, including a definition of base hours used to
compute the overtime rate and a requirement for a periodic updating of then rate.

The NPS agrees with the recommendation that the Department issue policies and procedures
that are consistent with OPM's revised guidelines on AU0 and that the bureaus issue
implementing procedures. We feel that the Department should stipulate a single method, if
possible, for computing AU0 rates, taking into account the operations of the various bureaus.

The NPS will adopt the method to be specified by the Department for computing AU0 rates,
but the few NPS employees receiving AU0 in the past do not, arguably, justify performing rate
analyses at the Service level. NPS's published AU0 policy provides guidance for NPS units'
use of AUO, and SEKI's use of AU0 and the 10% rate to prevent disputes arising from
different a.$gmnents seems reasonable. OIG auditors informally expressed a belief that the
10% rate41 bably lower th;m the AU0 payments might be legitimately calculated, so NPS's
historic u  of AUCl appeals quite mcdest. It is therefore possible that the Department's
agreement ith the OIG recommendation would likely generate a greater use of AUO.

The OIG's draft report's assertion (on page 5) that coding errors by NPS resulted in PAY/PERS
failing to include $4,998 is misleading. We believe the OIG report should specifically address
the defective PAY/PERS report generator which relies upon a separate and different payroll
coding scheme which, in addition to being duplicative of the accounting system (FFS)`s payroll
coding scheme, does not appear to work very well. This may explain why, during the course of
the audit, NPS's accounting system produced a greater number of listed employees than did

21

 
APPENDIX 7
Page 2 of 2

PAY/PERS. It is also noteworthy that PAYIPERS is scheduled to be replaced by FPPS, which
is currently under systems development by the Department. At the current time, NPS is
scheduled to convert to FPPS, in October 1997, although informal information suggests the
schedule might be pushed back further.

These circumstances lead NPS to conclude that the accountable cause of PAY/PER's failure to
generate accurate AU0 reports is inherent to PAY/PERS, and not attributable to coding by
bureaus.

Thank you for the opportunity to comment on the OIG draft report (E-IN-MOA-023-97).

22

 
                          APPENDIX 8
                          Page 1 of 4
United States Department of the Interior

OFFICE OF THE SECRETAARY
Ltilshingtorl. L).CI. 20240
         FEE 2 I 1997

Memorandum

To:    Assistant Inspector General for Audits

From:

mtN&ssistant Secretary - Indian Affairs

Subject:

Draft Audit Report on Administratively Uncontrollable Overtime, Department of the
Interior (Assignment No. E-IN-MOA-023-97)

In response to a statutory requirement contained in the Omnibus Consolidated Appropriations Act,
1997 (Public Law 104-208) an audit was conducted of administratively uncontrollable overtime
(AUO) payments in the Department of the Interior. According to the statutory requirement, the
results of this audit are to be provided to the Office of Personnel Management.

Since the audit was mandated by Congress and the results will be provided to another Federal
agency,
we believe that the value of the report would be substantially enhanced by providing some context
for the number of employees receiving AU0 and for the amounts spent within DOI.

.   On page 5, the report states that: ". we identified 91 employees in five
  bureaus who received $500,534 of administratively uncontrollable overtime
  pay in fiscal year 1996." To place this in context, we recommend adding the
  following sentence: "This represents just one-tenth of one percent of the
  Department's employees and AU0 payments represent just one-hundredth of
  one percent of DO1 obligations for employee salaries and benefits."

.   On page 6, the report states that: "The recommendations, if implemented,
  should improve the internal controls in the use of this premium pay." We
  suggest that the following be added: "It should be noted, however, that the
  AU0 payments in the Department of the Interior do not meet the audit
  threshold for materiality."

Two recommendations in the audit report affect the Bureau of Indian Affairs, and our responses are
included below:

Recommendation 2: The Director of the U:.S. Fish and Wildlife Service, the Director of the
National Park Service, the Director of the Bureau of Land Management, the Commissioner of the
Bureau of Indian Afftirs, and the Director of the U.S. Geological Survey provide for the issuance of
procedures to implement the Departmental guidelines and to ensure compliance with those
guidelines.

23

 
APPENDIX 8
Page 2 of 4

Response: The Bureau partially concurs. As noted in the report, only 11 BIA employees, (one-tenth
of one percent of total BIA employees) received AU0 payments in FY 1996. The report accurately
notes that the two police officers who received AU0 should have been using other types of overtime
and the Phoenix Area Office indicated that none of the employees in that Area should have been on
AUO. It is highly probable, therefore, that no BIA positions will qualify for AU0 and that the revised
OPM regulations and implementing instructions from the Department will be sufficient. Of course,
ifthe DO1 guidance directs the bureaus to issue additional implementing procedures, we will
comply.
While we will follow-up with the Phoenix and Albuquerque Area Directors, we do not believe that
it is necessary to "implement procedures to ensure compliance with these guidelines." The BIA spent
only $33,35 1 on AU0 in FY 1996, which is .006% of total BIA obligations for salaries and benefits.
The cost of establishing further administrative controls and reviewing the compliance with these
controls would outweigh any possible benefits to be derived from such additional administrative
actions.

Recommendation 3: The Assistant Secretary for Indian Affairs ensure that the use of
administratively uncontrollable overtime is discontinued for irrigation system operators, hydrologic
technicians, and police officers for work that does not meet Federal and Departmental eligibility
requirements.

Response: The Bureau concurs. Attached is a copy of a memorandum sent to the Phoenix and
Albuquerque Area Directors instructing them to correct the pay status for the employees in question.
We consider this recommendation to be resolved and implemented.

Attachment

24

 
United States Department of the Interior

BUREAU OF INDIAN AFFAIRS
  Washington. D.C. 20240

IN REP1.Y REFER TO

FEB 2 1 1997

Memorandum

To:

Albuquerque Area Director
Phoenix Area Director

APPENDIX 8
Page 3 of 4 I
V" :.I Em
;& ,;; ,NI
' !; :zlCA=
-
-g
   I  I

Deputy Commissioner of Indian AfTairs ikU& 6/

Subject:

Draft OIG Audit Report (E-IN-MOA-023-97) on Administratively Uncontrollable
Overtime, Department of the Interior

The Omnibus Consolidated Appropriations Act, 1997 (Public Law 104-208) dated September 30,
1996, required all Federal agencies that use administratively uncontrollable overtime to conduct an
audit to determine whether eligibility and payment criteria are in compliance with Federal statutory
and regulatory requirements, After receipt of the audit reports, the Office of Personnel Management
is directed to issue revised guidelines that:

(1)

limit the use of administratively uncontrollable overtime to employees meeting
the statutory intent of section 5545(c)(2) of title 5, United States Code, and

(2)

expressly prohibit the use of administratively uncontrollable overtime for
(A)  customary or routine work duties; and
(B)  work duties that are primarily administrative in nature, nor occur in
  noncompelling circumstances.

The subject audit report [Attachment 1] was issued on February 6, 1997 and included findings about
the 11 employees in the Bureau of Indian Affairs who received premium pay for AU0 in FY 1996.
The report indicates that Area Personnel Officers determined that neither the two police officers or
the irrigation staff should have been on AUO. One of the recommendations contained in the report
is that we "ensure that the use of administratively uncontrollable overtime is discontinued for
irrigation system operators, hydrologic technicians, and police officers for work that does not meet
Federal and Departmental eligibility requirements."

A copy of the current Federal regulations (5 CFR 550.10 1 et seq.) which control eligibility criteria
and rates of pay for administratively uncontrollable overtime is provided for your information
[Attachment 21. Please review the records for the employees in your area [Attachment 31 who
currently receive pay for administratively uncontrollable overtime against these regulations. If, after
review of these regulations, you believe that some employees do qualify for AUO, please provide
a
written justification for this decision to the Director, Office of Management and Administration. A
copy should be sent to the Office of Audit and Evaluation.

25

 
APPENDIX 8
Page 4 of 4

If, however, you concur with the audit findings that none of the employees should be receiving
AUO,
the appropriate personnel action should be completed prior to the end of Pay Period 7

Your prompt attention to this matter is appreciated

Attachments

[ATTACHMENTS NOT INCLUDED By ASSISTANT SECRETARY - INDIAN AFFAIRS]

26

 
APPENDIX 9

STATUS OF AUDIT REPORT RECOMMENDATIONS

Finding/Recommendation
  Reference

land3

2

Status        Action Reauired

Resolved; not
implemented.

No further response to
the Office of Inspector
General is required. The
recommendations will be
referred to the Assistant
Secretary for Policy,
Management and Budget
for tracking of
implementation.

Management
concurs; additional
information needed.

The Bureau of
Land Management needs
to provide a formal
response, including the
target date and the title of
the official responsible
for implementation.

27

 
ILLEGAL OR WASTEFUL ACTIVITIES
   SHOULD BE REPORTED TO
THE OFFICE OF INSPECTOR GENERAL BY:

Sending written documents to:

Calling:

Within the Continental United States

U.S. Department of the Interior
Office of Inspector General
1849 C Street, N.W.
Mail Stop 5341
Washington, D.C. 20240

Our 24-hour
Telephone HOTLINE
l-800-424-5081 or
(202) 208-5300

TDD for hearing impaired
(202) 208-2420 or
l-800-354-0996

Outside the Continental United States

Caribbean Region

U.S. Department of the Interior
Office of Inspector General
Eastern Division - Investigations
1550 Wilson Boulevard
Suite 410
Arlington, Virginia 22209

(703) 235-9221

North Pacific Regjon

U.S. Department of the Interior
Office of Inspector General          (700) 550-7428 or
                    COMM 9-011-671-472-7279

North Pacific Region
238 Archbishop F.C. Flares Street
Suite 807, PDN Building
Agana, Guam 96910

 
           D
Toll Free Numbers:
l-800-424-5081
TDD l-800-354-0996
FTS/Commercial Numbers:
(202) 208-5300
TDD (202) 208-2420
HOTLINE

1849 C Street, N.W.
Mail Stop 5341
Washington, D.C. 20240