#" A
U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Spending Taxpayer Dollars
EPA OIG Not Fully Compliant
With Overtime Policies
Report No. 15-B-0075	February 4, 2015

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Report Contributors:	Jean Bloom
Angela Bennett
Abbreviations
AIGA
Assistant Inspector General for Audit
CFR
Code of Federal Regulations
EPA
U.S. Environmental Protection Agency
IGEMS
Inspector General Enterprise Management System
OA
Office of Audit
OCOS
Office of Chief of Staff
OIG
Office of Inspector General
OMS
Office of Mission Systems
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U.S. Environmental Protection EPA
Office of Inspector General
At a Glance
15-B-0075
February 4, 2015
Why We Did This Review
On April 9, 2014, a member of
the U.S. Senate requested the
U.S. Environmental Protection
Agency's (EPA's) Office of
Inspector General (OIG) to
provide clarification on the
process used to determine and
track overtime compensation
for EPA employees. The
Senator requested that the
OIG examine whether the
agency: (1) properly
documents how overtime is
distributed and identify the
process that is used, (2) has a
specific breakdown of activities
for employees who received
overtime during the last 2 fiscal
years, and (3) has an effective
means to ensure employees
are not compensated overtime
for travel. As part of our
agency audit, we conducted an
audit of the OIG's compliance
with applicable overtime
policies.
This report addresses the
following OIG goal:
• To be responsible
stewards of taxpayer
dollars.
Send all inquiries to our public
affairs office at (202) 566-2391
or visit www.epa.gov/oiq.
The full report is at:
www.epa.aov/oia/reports/2015/
20150204-15-B-0075.pdf
EPA OIG Not Fully Compliant With
Overtime Policies
What We Found
The OIG did not always use the EPA Form
2560-7, Request for Authorization of
Overtime Work, for overtime requests and
authorization as required by EPA Pay
Administration Manual 3155. Also, the OIG
did not always comply with the OIG Policy
323, Time and Attendance Reporting Policy,
pertaining to the use of the planned
timesheet for the advance approval of
overtime. This occurred because:
•	Management did not provide oversight to ensure compliance with
policies pertaining to the authorization of overtime.
•	OIG policies were not clear on the use of the EPA authorization
form for overtime requests versus the use of the planned
timesheets for advance approval of overtime.
•	There was no oversight or emphasis by management to ensure
planned timesheets were submitted and approved in advance.
Also, the OIG did not retain the EPA authorization forms supporting the
overtime requests.
As a result of the issues noted, the OIG may have incurred overtime
charges without proper authorization, may have made after-the-fact
approvals, and did not comply with records management requirements.
Recommendations and Planned Corrective Actions
We recommend that the Deputy Inspector General: (1) revise OIG policy
to clarify EPA overtime authorization requirements and appropriate
levels of approval and stipulate use of EPA Form 2560-7 for overtime
requests; and (2) inform management and employees of the
requirement to comply with EPA overtime policies, use EPA Form
2560-7, obtain advance approval for scheduling of overtime hours in the
planned timesheet, and retain supporting documents as required by OIG
and EPA records management policies. The Deputy Inspector General
agreed with our recommendations and provided corrective actions and
planned completion dates to address all recommendations.
The OIG may have
incurred overtime
charges without
proper authorization
and advance approval,
and did not maintain
overtime authorization
forms as required.

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
INSPECTOR GENERAL
February 4, 2015
MEMORANDUM
SUBJECT: EPA OIG Not Fully Compliant With Overtime Policies
Report No. 15-B-0075
FROM: Kevin Christensen, Assistant Inspector General
Office of Audit

TO:
Charles Sheehan, Deputy Inspector General
At the request of a member of the U.S. Senate, we initiated an audit of the U.S. Environmental
Protection Agency's (EPA's) internal controls pertaining to overtime pay. As part of our agency audit,
we conducted an audit of the Office of Inspector General (OIG) to determine its compliance with
applicable OIG and EPA policies covering the use of overtime. During the OIG audit, we identified
issues that impact the OIG and require your immediate attention. We are reporting these issues to you
separately.
Action Required
During the exit conference, you provided corrective actions that addressed the recommendations and
planned completion dates. The OIG must demonstrate that the proposed corrective actions are resolved
before the report can be closed.
We will post this report to our website at http://www.epa.gov/oig.

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EPA OIG Not Fully Compliant With
Overtime Policies
15-B-0075
Table of C
Purpose		1
Background		1
Overtime Costs Incurred by OIG		1
Requirements for Overtime Authorization and Approval		1
Requirements for Records Management		3
Scope and Methodology		3
Results of Review		4
EPA's Request for Authorization of Overtime Work Forms
Not Always Prepared or Retained		5
Overtime Schedule Not Always Approved in Advance		6
Recommendations		7
Exit Conference and Planned Corrective Action		7
Status of Recommendations and Potential Monetary Benefits		8
Appendix
A EPA OIG Distribution	 9

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Purpose
We conducted this audit to determine whether the U.S. Environmental Protection
Agency (EPA) Office of Inspector General (OIG) complied with applicable OIG
and EPA policies for the authorization and approval of overtime payments.
Background
On April 9, 2014, a member of the U.S. Senate requested the EPA OIG to provide
clarification on the process the EPA uses to determine and track overtime
compensation for employees. In particular, the Senator requested that the OIG
examine whether the EPA:
•	Properly documents how overtime is distributed and identify the process
that is used.
•	Has a specific breakdown of activities for employees who received
overtime during the last 2 fiscal years.
•	Has an effective means for ensuring employees are not compensated
overtime for travel.
As part of our agency audit, we conducted an audit of the OIG to determine its
compliance with applicable OIG and EPA policies covering the use of overtime.
Overtime Costs Incurred by OIG
For the period October 2011 through September 2013, the OIG incurred 2,560.50
hours of overtime at an estimated cost of $168,736.95.1 As shown in Table 1, the
OIG's Office of Audit (OA) Financial Audit Team incurred the majority of the
overtime hours in connection with the annual audit of EPA's financial statements.
In addition, the OIG's Office of Mission Systems (OMS) incurred overtime
charges in support of the Financial Audit Team.
Table 1: Overtime hours and costs incurred
OIG office
Overtime hours
Overtime costs
OA
2,482.50
$163596.75
OMS
78.00
5140.20
Total
2,560.50
$168,736.95
Source: OIG-generated table.
Requirements for Overtime Authorization and Approval
The OIG must adhere to applicable federal regulations and EPA and OIG policies
related to the authorization and approval of overtime.
1 For estimating purposes, costs are based on OA's latest average billing rate of $65.90 per hour for fiscal year 2014.
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The Code of Federal Regulations (CFR), at 5 CFR § 550. Ill, provides guidance
on the authorization of overtime pay. The regulation defines overtime as work in
excess of 8 hours in a day or in excess of 40 hours in an administrative work
week. The regulation also provides that overtime must be officially ordered or
approved only in writing by an officer or employee to whom this authority has
been specifically delegated.
EPA Pay Administration Manual 3155, Chapter 4, "Overtime Pay and Compensatory
Time" (May 17, 1990), addresses overtime pay. Section 5E provides that overtime
must be officially authorized and approved in writing on EPA Form 2560-7, Request
for Authorization of Overtime Work.2 Section 6 provides agency officials, including
the Inspector General, the authorization to approve overtime in accordance with
governing laws, regulations, and EPA rules and procedures. This section also
provides that this authority may be re-delegated to a level that will assure compliance
with legal and regulatory requirements.
The OIG does not currently have an internal policy that addresses the rules and
regulations of overtime pay. Prior OIG Policy 304, Overtime Pay, Compensatory
Time, Administratively Uncontrollable Overtime, and Law Enforcement
Availability Pay (April 24, 2007), was rescinded on June 25, 2013. The OIG
rescinded the policy because the basic rules and regulations for overtime pay are
covered in EPA Pay Administration Manual 3155 and do not require further
interpretation by the OIG. This policy had stated that the OIG strives to achieve
its mission in a manner that minimizes the need for employees to work overtime.
However, when employees are required to work overtime, the OIG must follow
the EPA's rules and procedures regarding overtime pay and compensatory time.
OIG staff are also required to follow OIG Policy 323, OIG Time and Attendance
Reporting Policy (July 7, 2011). This policy provides general guidance and
procedures concerning the OIG's time and attendance reporting process in the
Inspector General Enterprise Management System (IGEMS) and in the EPA's
PeoplePlus payroll system. Section 2.1 of the policy, Roles and Responsibilities,
discusses requirements for the advance approval of overtime. The OIG uses the
Time Planning and Timesheet modules within IGEMS to document the approval
of overtime. Employees are required to use the planned timesheet in the Time
Planning module to document the advance approval of the specific days and
hours overtime will be worked. Supervisors are responsible for approving planned
timesheets for the upcoming pay period no later than the last Friday of the current
pay period. The actual timesheet in the Timesheet module records daily activities
for submission to the supervisor every 2 weeks. The OIG uses both modules for
internal reporting purposes only.
The EPA's PeoplePlus system is the OIG's official payroll and time and
attendance system. Assistant Inspectors General are required to ensure that
2 EPA Form 2560-7 is required for the authorization of overtime and compensatory time off in lieu of payment for
overtime.
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employees, timekeepers and supervisors comply with the provisions of this
policy, including maintaining any required supporting documentation in
accordance with agency retention schedules.
Requirements for Records Management
The OIG is responsible for maintaining all records pertaining to the approval of
overtime in accordance with OIG records management policies. OIG Policy 420,
OIG Records Management Policy (February 28, 2014), says the OIG shall operate
a records management program in its headquarters and regional offices consistent
with federal regulations, as required by the Federal Records Act.
The OIG is also required to follow EPA records management policies related to
time and attendance. EPA Resource Management Directive Systems 2540-08-P1,
Payroll: Time and Attendance Reporting, dated September 5, 2014, requires
timekeepers to maintain supporting documentation for approved leave, overtime,
compensatory time and other time and attendance reports in accordance with EPA
records management requirements. EPA records management requirements
applicable to time and attendance source records are covered in EPA Records
Schedule 0300 and 1005.
EPA Records Schedule 0300 (December 31, 2013) provides that the agency's
PeoplePlus time and attendance data may be closed and destroyed after an audit
by the U.S. Government Accountability Office or when the data are 6 years old,
whichever is sooner. EPA Records Schedule 1005 (December 31, 2013) pertains
to financial management records and provides that time and attendance source
records may be closed and destroyed after a U.S. Government Accountability
Office audit or when the records are 6 years old, whichever is sooner.
Scope and Methodology
We conducted our audit from May 13, 2014, through October 10, 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. Based on the request from the
Senator, we limited the scope of our audit to overtime charges3over a 2-year
period.
We held an entrance conference with the OIG's Office of Chief of Staff (OCOS)
on May 13, 2014, in our headquarters in Washington, D C. We made return site
visits to headquarters the weeks of June 2, 2014, and July 7, 2014, to perform
3 Overtime charges included some compensatory time that was converted to paid overtime. Our audit did not include
unconverted compensatory time.
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fieldwork. To determine the OIG's compliance with applicable overtime policies,
we performed the following steps:
•	Met with representatives from OCOS to identify and discuss applicable
OIG policies and procedures covering overtime.
•	Met with the EPA's Office of Human Resources to identify and discuss
applicable EPA policies covering overtime.
•	Reviewed overtime data obtained from IGEMS for the period of
October 2011 through September 2013 to determine overtime charges
categorized by OIG offices and employees.
•	Met with OA and OMS representatives to discuss their respective office
procedures for authorizing and approving overtime.
•	Obtained and reviewed the OIG's Request for Authorization of Overtime
Work forms and planned timesheets to determine whether overtime was
authorized, approved in advance and justified.
Because travel associated with the OIG's overtime work was minimal, we did not
include travel compensation in the scope of the audit.
Results of Review
The OIG did not comply with certain overtime policies. Specifically, EPA Form
2560-7 was not always prepared as required by EPA Pay Administration Manual
3155. In addition, planned timesheets were not always submitted for advance
approval of overtime as required by OIG Policy 323. This occurred because:
•	Management did not provide oversight to ensure compliance with EPA
policies pertaining to overtime, including the use of EPA Form 2560-7.
•	OIG policies were not clear on the use of the EPA authorization form for
overtime requests versus the use of the planned timesheets for advance
approval of overtime.
•	There was no oversight or emphasis by management to ensure that
planned timesheets were submitted and approved in advance.
Also, the OIG did not retain the EPA authorization forms supporting overtime
requests as required by OIG and EPA records management policies.
As a result of the issues noted, the OIG may have incurred overtime charges
without proper authorization, may have made after-the-fact approvals, and did not
comply with records management requirements. Without adequate controls and
oversight, there is limited assurance that overtime charges are properly authorized
or approved in advance or that supporting records are appropriately retained.
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EPA's Request for Authorization of Overtime Work Forms
Not Always Prepared or Retained
Our analysis of the OIG's compliance with the EPA policy for authorizing
overtime showed that the OIG did not always follow the policy in EPA Manual
3155. EPA policy requires the completion of EPA Form 2560-7 for overtime
requests and authorization. Also, the OIG used two different processes for
authorizing and approving overtime—the OA process used the authorization form
but OA did not retain the forms as required, while the OMS process did not
include the use of the authorization form.
OA Process
The overtime request process used by OA is a multistep process that
occurs as needed each pay period. The process begins with the Project
Manager submitting the EPA authorization form to the Director. The EPA
authorization form requires, among other things: a justification or reason
for the overtime request, the employee's name, estimated hours and dates,
and the signature of the requester and approver.
The OIG Director signs the EPA Form 2560-7 as the requester and
forwards the form to the Assistant Inspector General for Audit (AIGA) for
approval. The AIGA, as the approver, maintains the EPA authorization
forms.
IGEMS showed 158 actual timesheets with overtime charges incurred
during the period October 2011 through September 2013. Our analysis of
OA overtime charges (incurred on 149 of the 158 actual timesheets)
showed that OA could not locate authorization forms to support the
authorization of overtime incurred on 90 of the 149 actual timesheets.
Also, although OA provided copies of the forms to support authorization
of overtime incurred on the remaining 59 actual timesheets, the forms
lacked signatures by the requester and approver. Consequently, we could
not confirm whether the authorization forms were reviewed by the
Director or approved by the AIGA.
During the period of our review, the Deputy AIGA said the forms would
have been submitted to, and approved by, the prior AIGA. Searches of the
prior AIGA's files and records by the Deputy AIGA were unsuccessful.
Based on evidence provided, the authorization process appears to have
been followed but the signed forms were not retained as required by OIG
and EPA records management policies.
The EPA's records management schedule for time and attendance
documentation provides for record closure and disposal after a
U.S. Government Accountability Office audit or when the records are
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6 years old, whichever is sooner. Therefore, according to the schedule, the
OIG should have retained the authorization forms for the period covered
by our review (October 2011 through September 2013).
OMS Process
Our analysis of OMS overtime charges (incurred on nine of the 158 actual
timesheets) showed that OMS did not prepare the authorization form.
OMS said the authorization form is no longer required because advance
approval of overtime is documented with the planned timesheets. OMS
further stated that the electronic workflow process within the IGEMS
Time Planning module can capture the same data that employees would
have provided were they still using the EPA's authorization form. Our
analysis showed that the IGEMS Time Planning module may have the
potential to capture the required information. However, the advance
approval of overtime within IGEMS is generally at a nonsupervisory level
and by a person who is not knowledgeable about the budgetary impacts
that need to be considered prior to authorizing overtime. In addition, OIG
is still required to follow EPA Manual 3155, which mandates the
completion of EPA Form 2560-7.
Related Causes
Inconsistencies between the processes used by OA and OMS to authorize
and provide advance approval of overtime occurred because there is no
OIG policy for overtime that requires the use of the EPA authorization
form. While OIG Policy 323 discusses the use of planned timesheets for
the advance approval of overtime, the policy is silent on the authorization
of overtime and the use of the EPA authorization form. The EPA's
authorization form must be used to capture all applicable information
needed to meet the EPA's requirements for authorization (e.g.,
justification and approval at the appropriate level). In addition, oversight is
needed by management to ensure compliance with EPA policies
pertaining to overtime, including the use of EPA Form 2560-7.
Overtime Schedule Not Always Approved in Advance
As part of the audit, the OIG conducted analysis to determine whether employees
had submitted planned timesheets for the advanced approval of scheduled
overtime hours. Our analysis showed that:
•	For 12 of the 158 actual timesheets, employees did not submit planned
timesheets for advance approval as required by OIG Policy 323.
•	For the remaining 146 actual timesheets, employees had submitted
planned timesheets, but we could only confirm that 47 of the 146 planned
timesheets had actually been approved prior to incurring overtime charges.
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Because the history of a planned timesheet is limited to 1 year from the current
pay period, we could not determine whether the remaining 99 planned timesheets
had been approved prior to incurring overtime charges. OMS said it has the ability
to retrieve the information from IGEMS, but it would take time to gather the
history. As a result, we did not request the history for the 99 remaining planned
timesheets. We consider the results of our analysis sufficient to support the
findings and recommendations.
Recommendations
We recommend that the Deputy Inspector General:
1.	Revise OIG Policy 323, OIG Time and Attendance Reporting Policy, to
clarify EPA overtime authorization requirements and appropriate levels of
approval, and to stipulate the requirement to use EPA Form 2560-7 to
document overtime authorization.
2.	Inform management and employees of the requirements to:
•	Comply with EPA overtime policies, including the requirement to
use EPA Form 2560-7 to document overtime authorization.
•	Obtain advance approval of specific overtime hours in the IGEMS
planned timesheet.
•	Retain overtime documents in accordance with OIG and EPA
records management policies.
Exit Conference and Planned Corrective Action
We conducted a preliminary exit conference with the Deputy Inspector General
on July 28, 2014. On August 14, 2014, we issued finding outlines to the Deputy
Inspector General who, in turn, distributed the finding outlines to the OIG Senior
Leadership Team.
We received numerous comments and suggestions from Senior Leadership Team
members during August 18-19, 2014. We reviewed the comments and
suggestions and made changes to the findings as needed. We did not issue revised
finding outlines. Instead, the results were incorporated into this final report.
On November 18, 2014, we conducted a final exit conference with the Deputy
Inspector General to discuss our recommendations and his proposed corrective
actions. The Deputy Inspector General agreed with our recommendations and
provided proposed corrective actions and completion dates for all
recommendations. We agree with the proposed actions and consider the
recommendations open with corrective actions ongoing.
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Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)
Rec.
No.
No.
Subject
Status1
Action Official
Planned
Completion
Date
Claimed
Amount
Ag reed-To
Amount
7 Revise OIG Policy 323, OIG Time and Attendance
Reporting Policy, to clarify EPA overtime
authorization requirements and appropriate levels
of approval, and to stipulate the requirement to use
EPA Form 2560-7 to document overtime
authorization.
7 Inform management and employees of the
requirements to:
•	Comply with EPA overtime policies, including
the requirement to use EPA Form 2560-7 to
document overtime authorization.
•	Obtain advance approval of specific overtime
hours in the IGEMS planned timesheet.
•	Retain overtime documents in accordance
with OIG and EPA records management
policies.
0 Deputy Inspector General 9/30/15
0 Deputy Inspector General 2/12/15
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-0075

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