Improvements Needed by EPA OIG to Reduce Risk in Employee Hiring Process


# Q
I® | U.S. ENVIRONMENTAL PROTECTION AGENCY
%%PR0^ OFFICE OF INSPECTOR GENERAL
Spending Taxpayer Dollars
Improvements Needed by
EPA OIG to Reduce Risk in
Employee Hiring Process
Report No. 15-B-0076
February 5, 2015

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Report Contributors:	Jean Bloom
Kevin Collins
Abbreviations
EPA	U.S. Environmental Protection Agency
OIG	Office of Inspector General
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U.S. Environmental Protection Agency	15-B-0076
f	\ Office of Inspector General	February 5,2015
\	I
At a Glance
Why We Did This Review
On August 27, 2013,
Congress requested that the
U.S. Environmental Protection
Agency (EPA) Office of
Inspector General (OIG) initiate
work in connection with a fraud
committed by John C. Beale, a
former Senior Policy Advisor
with the EPA's Office of Air and
Radiation. In particular,
Congress requested the OIG to
determine EPA policies and
processes that "facilitated"
Beale's fraud.
We initiated an audit on EPA's
employee vetting process. As
part of the assignment, we also
conducted an audit on the
OIG's own employee vetting
process.
This report addresses the
following OIG goal:
• To be responsible stewards
of taxpayer dollars.
Improvements Needed by EPA OIG to
Reduce Risk in Employee Hiring Process
Without verification of
prior employment or
references the EPA
OIG may not hire the
best job candidates.
What We Found
The EPA OIG does not have a requirement to verify
information in a job application, including job
employment history or references. Once an
applicant meets the minimum requirements and is
considered eligible for the position, the office relies
extensively on the applicant self-certifying the
information they submitted on their resume and application. Without verification
of prior employment or references for eligible job candidates, the potential exists
that the OIG will not hire the best possible candidate, or hire a job applicant
based on misleading information.
U.S. Office of Personnel Management and EPA policies and procedures do not
have a requirement to verify prior employment or references for eligible job
candidates. According to OIG guidance, the selecting official is responsible for
ensuring that references are checked prior to making final selections and for
maintaining all documentation used for selection. However, there is no assurance
that the verifications are performed and documentation is consistently
maintained. Like the guidance for the Office of Personnel Management and EPA,
the OIG guidance does not require the verification of prior employment history.
Recommendations and Planned Corrective Actions
We recommend the Deputy Inspector General require selecting officials to verify
prior employment and references prior to making final selection and retain
documentation as outlined in OIG guidance and procedures. In addition, the
Deputy Inspector General should establish OIG policies to enhance internal
controls for employee vetting.
The Deputy Inspector General agreed with the recommendations and provided
corrective actions with planned completion dates to address all
recommendations.
Send all inquiries to our public
affairs office at (202) 566-2391
or visit www.epa.gov/oia.
The full report is at:
www.epa.gov/oig/reports/2015/
20150205-15-B-0076.pdf

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
INSPECTOR GENERAL
February 5, 2015
MEMORANDUM
SUBJECT: Improvements Needed by EPA OIG to Reduce Risk in Employee Hiring Process
Report No. 15-B-0076
As part of our continuing work on internal controls, we initiated an audit of the U.S. Environmental
Protection Agency's employee vetting process. As part of this assignment, we conducted an audit of the
Office of Inspector General's (OIG's) own employee vetting process. Our audit identified areas where
improvements should be made by the OIG to reduce risk in the employee hiring process. We are
reporting the issues to you separately.
Action Required
During the exit conference, you provided corrective actions that addressed all the recommendations and
established planned completion dates. The OIG must demonstrate that the proposed actions are resolved
before the report can be closed.
FROM: Kevin Christensen, Assistant Inspector General
Office of Audit

TO:
Charles Sheehan, Deputy Inspector General
We will post this report on our website at http://www.epa.gov/oig.

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Improvements Needed by EPA OIG to
Reduce Risk in Employee Hiring Process
15-B-0076
Table of C
Purpose		1
Background		1
Memorandum of Agreement and Statement of Work Between
EPA OIG and U.S. Office of Personnel Management		1
Memorandum of Understanding Between EPA OIG and
Office of Administration and Resources Management		2
EPA Human Resources Bulletin 08-007B		2
EPA OIG Guidance and Procedures for Hiring Process		4
Scope and Methodology		4
Results of Review		5
Recommendations		6
Exit Conference and Planned Corrective Actions		6
Status of Recommendations and Potential Monetary Benefits		8
Appendix
A EPA OIG Distribution	 9

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Purpose
As part of our continuing work on internal controls in response to a request from
Congress, we conducted an audit on the U.S. Environmental Protection Agency
(EPA) Office of Inspector General's (OIG's) employee vetting process. The
purpose of the audit is to evaluate the OIG's current vetting process for new
employee hires to determine whether proper verification of applicant assertions is
conducted.
Background
On August 27, 2013, Congress requested that the OIG initiate work in connection
with a fraud committed by John C. Beale, a former Senior Policy Advisor with the
EPA's Office of Air and Radiation. In particular, Congress asked the OIG to
determine EPA policies and processes that "facilitated" Beale's fraud. We initiated
an audit on EPA's vetting process. As part of the assignment, we also conducted an
audit on the OIG's employee vetting process. For purposes of our audit, we defined
vetting as the process of verifying an applicant's assertions made during the hiring
process.
As of August 31, 2014, the OIG employed 295 staff, consisting of auditors,
program analysts, investigators and others with extensive expertise. During
fiscal year 2013 (October 1, 2012, to September 30, 2013), the OIG hired 15 new
employees. At the time of our review the OIG was in process of filling numerous
vacancy announcements.
The Human Resources Directorate within the OIG's Office of Chief of Staff is
responsible for administering, executing and advising on OIG human resource
operations in accordance with governing laws, regulations, policies and practices.
According to the EPA OIG Organization Function, "the directorate serves as the
principal advisor and conducts the full range of human resources operational
activities, including position classification and management, recruitment, and
staffing."
Memorandum of Agreement and Statement of Work Between
EPA OIG and U.S. Office of Personnel Management
The November 2008 Memorandum of Agreement and Statement of Work Between
the U.S. Environmental Protection Agency Office of Inspector General and the
U.S. Office of Personnel Management, Center for Talent Services for Human
Resources Management Services, outlines the agreement for direct examining
services. Under the agreement, the Center for Talent Services "will provide a
variety of staffing and consulting services to assist EPA-OIG in the assessment
and referral of candidates for multiple occupations, locations, and grade levels."
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Under the Memorandum of Agreement, Section V2, Scope of Work, Candidate
Assessment and Referral, some of the services provided by the Center for Talent
Services include:
•	Develop assessment questionnaires to be used for candidate screening and
rating.
•	Verify minimum qualification requirements for all candidates referred for
consideration. Minimum qualifications will be determined by closely
reviewing the candidates' supporting documentation (i.e., resumes and/or
transcripts) and verifying that they possess the minimum level of
education and/or experience.
•	Review documentation and adjudicate veterans' preference prior to
assignment of preference points on the final referral list.
•	Verify candidates' claims of eligibility under the Interagency Career
Transition Assistance Plan.
•	Rate applicant responses to the assessment questionnaire.
•	Issue competitive, merit promotion, and/or noncompetitive
certificates/referral lists in accordance with merit system principles and
delegated examining procedures.
The agreement does not make any reference to verifying prior employment.
Memorandum of Understanding Between EPA OIG and
Office of Administration and Resources Management
The March 2011 Memorandum of Understanding Between the Office of
Administration and Resources Management and the Inspector General of the
Environmental Protection Agency outlines the human resources activities and
responsibilities between the OIG and EPA's Office of Human Resources. Under
the Memorandum of Understanding, the "OIG will perform the full range of
activities related to staffing and recruitment, including but not limited to delegated
examining and merit promotions activities[,] Senior Executive Service
recruitment, and special program recruitment." In addition the "OIG will perform
full range of activities for H[uman] Resources] records administration for
recruitment. The EPA will provide services related to employee on-boarding and
orientation." The agreement does not make any reference to verifying prior
employment.
EPA Human Resources Bulletin 08-007B
EPA Human Resources Bulletin 08-007B, Quality Assurance in the Hiring
Process, dated September 29, 2008, highlights the legal and regulatory procedures
that servicing human resources offices must follow in the hiring process and the
procedures that managers and supervisors should use to ensure quality.
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The bulletin states that, as part of the hiring process, "a variety of pre-and post-
appointment actions and review are conducted by the servicing human resources
office to help provide confidence and credibility in employee recruitment efforts
and contributes toward the selection of quality hires." Pre-appointment "actions
and reviews measure whether the candidates meet legal and regulatory
requirements for positions and are suitable for employment in the Federal
Service." One of the pre-appointment actions is an applicant's assessment, rating
and ranking. EPA uses an automated tool—EZhire—to attract, assess, rate and
rank candidates. The bulletin further states: "EZhire electronically calculates
applicants' rates, assigns points for veteran's preference and ranks applicants
scores. A quality review is performed by the EPA human resources specialist to
ensure the validity of the applicant's response against the assessment instrument
and the applicants' resumes."
Other pre-appointment actions include reference checks/pre-employment
inquiries. According to the Procedures Section Ia3 of the bulletin:
Reference checks or pre-employment inquiries can be a valuable
tool when selecting applicants for employment. They not only can
be helpful in authenticating information provided in the
resume/application, but also in obtaining additional information
about an applicant's work performance and habits, and other
information not provided in the resume but relevant to the job
opening. Servicing HR Offices will advise selecting officials
about the importance of reference checks in verifying
applicants' statements on their resumes or applications and/or
during the interview for assessing personal effectiveness traits
that have an impact on an employee's ability to perform in a
quality manner. (OIG emphasis added). Supervisors should also
be advised to obtain references from former employers or school
officials, rather than solely relying on personal references or other
references submitted with the application or resume.
Because a current supervisor may have other motives for giving a
current employee either a glowing recommendation or an
unsatisfactory one, at least two other references checks should be
made with other reliable individuals who are knowledgeable of the
candidate's skills abilities, and other work-related characteristics.
The bulletin does not require human resources or the selection official to perform
reference checks or a verification of statements on an applicant's resume. Instead,
the bulletin requires the servicing human resources office to advise (OIG emphasis
added) selection officials about the importance of verifying applicants' statements
or resumes, and includes a sample reference-check template with questions.
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EPA OIG Guidance and Procedures for Hiring Process
We requested the current policies and procedures used by the OIG Human
Resources Directorate for vetting employees. The OIG Human Resources
Directorate did not provide us with any policies and procedures. However, our
search of the OIG human resources services webpage disclosed the OIG Hiring
Process: Guidance and Procedures document, which provides general guidance
and procedures to delineate roles and responsibilities, the process for approval,
and filling of OIG positions. According to the guidance, the selecting official is
responsible for ensuring that references are checked prior to making final
selections and for maintaining all documentation on the selection for a minimum
of 2 years after the selected candidate starts in a new position (Sections 2.5.1
and 2.5.5). The selecting official may delegate the interviewing of job candidates
to other OIG employees (Section 2.5.3).
Scope and Methodology
We conducted our audit from June 16, 2014, through August 19, 2014, in
accordance with the generally accepted government auditing standards issued by
the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.
To determine the OIG's employee hiring process and whether applicants' assertions
made during the hiring process are validated, we performed the following steps:
•	Met with representatives from the OIG Office of Chief of Staff, Human
Resources Directorate, to obtain an understanding of the OIG employee
hiring process; and to identify and discuss applicable federal, EPA and
OIG policies and procedures
•	Obtained and reviewed criteria identified by the U.S. Office of Personnel
Management, EPA and OIG associated with employee hiring to obtain an
understanding of the requirements. Specifically we:
o Obtained and reviewed the March 2011 Memorandum of
Understanding Between the Office of Administration and Resources
Management and the Inspector General of the Environmental
Protection Agency to determine human resource responsibilities,
o Obtained and reviewed the November 2008 Memorandum of
Agreement and Statement of Work Between the U.S. Environmental
Protection Agency Office of Inspector General and the U.S. Office of
Personnel Management, Center for Talent Services for Human
Resources Management Services, to determine human resource
responsibilities
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o Obtained and reviewed the OIG Hiring Process: Guidance and
Procedures to obtain an understanding of the OIG hiring process,
o Obtained from the EPA Office of Human Resources a listing of
new hires for fiscal year 2013 (October 1, 2012 - September 30,
2013) to determine the number of employees hired by the OIG and
the type of hiring appointment.
Because there is no formal requirement to perform a reference check or
verification of statements on an applicant's resume, we did not conduct any
detailed testing of OIG new hires.
Results of Review
The OIG does not have a requirement to verify information in a job application,
including employment history or references. Once an applicant meets the
minimum requirements and is considered eligible for the position, the office relies
extensively on the applicant self-certifying the information they submitted on
their resume and application. According to OIG guidance, the selecting official is
responsible for ensuring that references are checked prior to making final
selection and for maintaining all documentation used for selection. However,
there is no assurance the verifications are performed or documentation is
consistently maintained. Without verification of prior employment or references
for prospective eligible job candidates the potential exists that the OIG will not
hire the best possible qualified candidate, or hire an applicant employee based on
misleading information.
The EPA's Office of Human Resources and the U.S. Office of Personnel
Management are not involved in or required to perform vetting under the
applicable memorandum. The OIG is responsible for the vetting process for OIG
employment (qualification reviews, pre-employment screening, official
employment tentative offers and official job offer notification, and
pre-employment personnel security process).
EPA Human Resources Bulletin 08-007B does not require a selecting official or
initiating office to perform and document a reference check on prospective
employees. However, it does state that the human resources servicing offices will
advise selecting officials of the importance of reference checks and how it is a
valuable tool in authenticating information provided in the resume. We consider
the verification of prior employment and references to be a best practice if
conducted, and recommend that it should be conducted for all recruiting actions.
The OIG Hiring Process: Guidance and Procedures provides the process to be
followed in the hiring of new employees. This guidance was not provided to us by
the OIG Human Resources Directorate; rather, our search of the OIG human
resource services webpage disclosed the document. According to the guidance,
the selecting official is responsible for making selections, ensuring that references
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are checked prior to making the final selection (Section 2.5.1), and maintaining all
documentation used for selection of the position for a minimum of 2 years after a
selected candidate starts in new position (Section 2.5.5). It also allows the
selecting official to delegate the interviewing and checking of references to other
OIG employees. This guidance assigns responsibility, but does not make it a
requirement for selecting officials.
The previous Director of the OIG Human Resources Directorate (the individual
left the OIG in July 2014) stated the directorate really does not do anything to
identify false statements in an applicant's information, including job history or
accomplishments. The office relies extensively on the applicant self-certifying the
information they submitted on their resume and application. This is contrary to
the guidance and best practice of verifying prior employment and references. We
did not attempt to verify whether individual offices within the OIG verified prior
employment and references.
On August 18, 2014, we met with and provided the findings and
recommendations to the acting Director, Human Resources Directorate. The
acting Director took no exception to the finding and recommendation and
suggested we include a time period of at least 7 years for verifying applicants'
prior employment. In addition, the acting Director suggested that the selection
official could use the form contained in EPA Human Resources Bulletin 08-007B.
We agree with the acting Director's suggestions and believe the OIG should
consider implementing these suggestions when addressing the report
recomm endati ons.
Recommendations
We recommend that the Deputy Inspector General:
1.	Require selecting officials to verify prior employment and references prior
to making final selection and retain documentation as outlined in the OIG
guidance and procedures.
2.	Establish OIG policies to enhance internal controls for employee vetting.
Exit Conference and Planned Corrective Actions
We conducted a preliminary exit conference with the Deputy Inspector General
on August 12, 2014, and issued the finding outline on August 19, 2014. On
September 5, 2014, we distributed the finding outline to the OIG Senior
Leadership Team for review and comment. Three Senior Leadership Team
members provided comments and suggestions. We reviewed the comments and
suggestions and made changes to the findings as considered necessary. We
incorporated the changes into this report.
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We conducted a final exit conference with the Deputy Inspector General on
November 18, 2014, to discuss our recommendations and proposed corrective
actions. The Deputy Inspector General agreed with our recommendations and
provided corrective actions and completion dates for all recommendations. We
agree with proposed corrective actions and consider the recommendations open
with agreed-to corrective actions pending.
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Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)
Rec.
No.
No.
Subject
Status1
Action Official
6 Require selecting officials to verify prior
employment and references prior to making final
selection and retain documentation as outlined in
the OIG guidance and procedures.
6 Establish OIG policies to enhance internal controls
for employee vetting.
Planned
Completion
Date
0 Deputy Inspector General 3/31/15
0 Deputy Inspector General 9/30/15
Claimed
Amount
Ag reed-To
Amount
1 0 = Recommendation is open with agreed-to corrective actions pending.
C = Recommendation is closed with all agreed-to actions completed.
U = Recommendation is unresolved with resolution efforts in progress.
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EPA OIG Distribution
Inspector General
Deputy Inspector General
Counsel to the Inspector General
Chief of Staff, Office of Inspector General
Assistant Inspector General for Investigations
Assistant Inspector General for Mission Systems
Assistant Inspector General for Program Evaluation
Deputy Assistant Inspector General for Congressional and Public Affairs
15-B-0076

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