May 29, 1998
 
 
 

MEMORANDUM FOR:         MARVIN KRISLOV
                                                  Acting Solicitor
 

                                                         / s /
FROM:                                     JOHN J. GETEK
                                                  Assistant Inspector General
                                                       for Audit

SUBJECT:                             Human Resource Management in the
                                                 Solicitor's Office
                                                 Final Letter Report No. 17-98-002-08-001

The Office of Inspector General completed an audit of the Solicitor's (SOL) management of its human resources covering Fiscal Years (FY) 1996 and 1997.  The objective of our review was to determine whether SOL managed its human resources in compliance with applicable laws and regulations.

We found that SOL detailed 42 employees in FY 1996 and 29 employees in FY 1997 in order to meet its obligations and not violate the Anti-Deficiency Act.  We believe that SOL's budget problems can be attributed in part to excessive hiring in prior years and a lack of management oversight of its obligations. To help resolve this situation, SOL replaced its budget director in July 1996; instituted new budgetary procedures and controls; began monitoring more closely obligations especially new hires; and eliminated control of FTEs from the regional and national office directors.

Through a hiring freeze in FY 1997, detailed employees, attrition, and closer managing of its human resources, SOL was able to reduce its staff to meet its FTE ceiling.  For FY 1998, SOL received increased S&E funding and an increase in FTEs.  During FY 1998, SOL has hired 18 employees and is in the process of hiring about 40 more entry level (GS 11-12) attorneys.  SOL was given the authority to hire since it is below its approved FTE ceiling.

Although 12 employees have been detailed in FY 1998, SOL indicated that three employees were detailed to Congress, one employee to the U.S. Attorney's office, one to the International Labor Organization, and the balance to client agencies at their request. The details to the Congress and the U.S. Attorney are being paid by SOL and client agencies are paying for persons detailed to their offices. We were informed that details to agencies outside DOL have been a common practice for SOL even before its fiscal constraints.
 

Due to the fiscal controls instituted by the Director of SOL's Budget Office and monitoring more closely all expenditures, SOL has regained control over its expenditures for human resources which account for 80 percent of SOL's budget. We believe that SOL is now managing all its resources especially its human resources and has adequate controls to ensure that its human resources expenditures remain within its budget.

BACKGROUND

The Office of the Solicitor is responsible for providing the Secretary of Labor and departmental officials with the legal services required to accomplish the mission of the Department and the priority goals established by the Secretary.  SOL supports enforcement and promotes voluntary compliance with departmental programs.

Prior to the beginning of FY 1996, SOL announced to its employees that they would have to take 13-15 furlough days and later revised the number of days to 12 -13 in order not to exceed the budget.  Some employees volunteered to take furlough days to ease the budget situation.  After receiving a budget for FY 1996 in late April with a reduction of 30 FTEs and $2 million dollars, SOL was given approval to detail employees.  Forty-two employees were detailed in SOL including the regions in FY 1996.

In September 1996, Administrative Officers were informed that SOL was again over ceiling and would be unable to fund all the employees on board.  Agencies were asked to utilize SOL staff to keep SOL from having to institute a reduction-in-force ( RIF) of employees.  In FY 1997, SOL detailed 29 employees to client agencies.

OBJECTIVES AND SCOPE

The OIG performed an audit of the Office of Solicitor to determine whether SOL had adequately managed its human resources. Our scope covered FYs 1996 and 1997 transactions, and a limited review of FY 1998 activities.

We interviewed SOL's Director of Administration, Management and Litigation Support, SOL's budget staff and the Office of the Assistant Secretary for Administration and Management's (OASAM) Business Operation Center Director of Financial Management. Additionally, OASAM Regional Personnel Officers provided information on SOL staff detailed in the field offices. Also, various budgetary and financial reports prepared by the Department and SOL were reviewed and analyzed.

This audit was conducted from April 1997 through January 1998. Additional followup work was performed in April 1998. Our audit work was performed in accordance with Generally Accepted Government Auditing Standards.

RESULTS OF AUDIT

SOL's Management of Its Human Resources

The Solicitor's Office did not effectively manage and monitor its human resources in prior years and in FY 1996, as a result of a severe budget cut, had to detail 42 employees to client agencies in order not to RIF employees or to violate the Anti-Deficiency Act. In FY 1997, SOL's FTE ceiling was reduced from FY 1996 thereby reducing SOL's budget for salaries and expenses. As a result, SOL detailed 29 employees in FY 1997. Following are the details concerning the management of SOL's human resources in FYs 1996 and 1997.

In FY 1995, SOL had a budget of $70 million with a ceiling of 744 FTEs. In its FY 1996 Congressional budget submission, SOL requested $75.8 million and 760 FTEs. During the Congressional budget proceedings, the House Appropriations Committee proposed a budget for SOL of $63.5 million and 676 FTEs. This proposed budget was a 10 percent decrease from the requested budget.

SOL was informed of the drastic proposed cut and began making preparations for furloughs. In late 1995, SOL announced to its employees that each employee would have to take 13-15 furlough days in FY 1996. The 13-15 days were initially revised to 7-8 days and again to 12-13 days. At the beginning of FY 1996, SOL had on board 730 employees or 706 FTEs.

To compound SOL's problem, the Department began FY 1996 without a budget and operated under a Continuing Resolution. SOL was required to operate at the House Appropriations proposed budget level. For SOL, whose budget is approximately 80 percent salaries and expenses, this posed a serious problem, for it had about 30 FTEs more than it could fund. Additionally, the Department and SOL did not receive an approved budget until April 1996.

In February 1996, the Director of OASAM's Financial Management Services Center provided SOL with a status of funds indicating a projected deficit of $2.4 million operating with the proposed budget of $63.5 million and 676 FTEs. At that time, SOL had on board staff equivalent to 711.3 FTEs. SOL's FY 1996 budget was approved in late April for $64.3 million and 698 FTEs.

The lack of an approved budget until midyear and a reduction in SOL's budget in FY 1996 led SOL to detail employees in order to prevent reductions-in-force. In FY 1996, SOL detailed 42 employees and repaid employees who had previously taken furlough days.

Also, in July 1996, SOL replaced the Director, Office of Administration, Management and Litigation Support who oversees SOL's budget.

For FY 1997, SOL requested from Congress a budget of $67.7 and 711 FTEs. The FY 1997 budget was approved for $66.1 million and 666 FTEs. At the beginning of FY 1997, SOL had 700 employees on board. It was announced in an Administrative Officers meeting in September 1996 that SOL was over its personnel budget and would need to detail staff in FY 1997 because the Secretary was opposed to RIFS.

Prior to 1997, each SOL operating office and regional office were given a budget with an FTE or employee ceiling level. Managers were not held to their FTE ceilings and personnel budgets, resulting in some offices exceeding their FTEs. In FY 1997, the new SOL Budget Director with approval from the Acting Solicitor, changed that procedure to give the SOL National Office control over FTEs and associated personnel costs. A hiring freeze was initiated and FTEs and personnel ceilings were monitored every pay and controlled by the SOL budget office. All hires for any office within SOL had to be approved by the SOL Budget Office. As a result, only 29 employees were detailed in FY 1997.

In order to ensure that SOL is currently managing its human resources, we followed up with SOL to determine the status of its FY 1998 budget. In FY 1998, SOL received a budget of $70.8 million and 682 FTEs. At the beginning of FY 1998 , SOL had on board staff of 676 employees. As of January 31, 1998, SOL had an FTE equivalency of 666. For FY 1998, SOL received an increase from FY 1997 of about $4.6 million dollars and 16 FTEs. We were informed that SOL has hired 18 persons (10 attorneys, 2 para-professionals, and 6 clericals) and is in the process of hiring 40 additional entry level (GS 11-12) attorneys this fiscal year.

SOL informed us that 12 persons have been detailed this fiscal year as a result of requests from client agencies, the U.S. Congress, and the International Labor Organization, and the U.S. Attorney at no financial gain to SOL. SOL is paying for the three employees detailed to the U.S. Congress and one person detailed to the U.S. Attorney. Client agencies are paying for the persons detailed to their specific offices. Because SOL is under its personnel ceiling, it assured us that the 12 detailed employees could be paid by SOL without exceeding its budget. Additionally, some of the details have ended. OASAM's Director of Financial Management Services Center Status of Funds report dated February 19, 1998, projected a surplus in S&E funds based on a ceiling of 682 FTEs and SOL's current rate of expenditures.

A review of the justification supporting these details to Congress and other such agencies was performed. We determined that the documentation and justifications supporting these details were in compliance with applicable laws and regulations.

Due to the fiscal controls instituted by the Director of SOL's Budget Office and monitoring more closely all expenditures, SOL has regained control over its expenditures for human resources which account for 80 percent of SOL's budget. We believe that SOL is now managing all its resources especially its human resources and has adequate controls to ensure that it human resources expenditures remain within its budget.

This report contains no recommendations and a response is not required. We appreciate the cooperation and assistance provided by your staff during this audit.