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U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
EPA Compliance With
Retention Incentive
Regulations and Policies
Report No. 14-P-0245
May 2, 2014
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Report Contributors:
Leah Nikaidoh
Darren Schorer
Catherine B. Allen
Abbreviations
CFR
Code of Federal Regulations
DFAS
Defense Finance and Accounting Service
EPA
U.S. Environmental Protection Agency
HR
Human Resource
HRO
Human Resources Officer
OHR
Office of Human Resources
OIG
Office of Inspector General
OPM
Office of Personnel Management
Hotline

To report fraud, waste or abuse, contact us
through one of the following methods:
email:
OIG Hotline@epa.aov
phone:
1-888-546-8740
fax:
1-202-566-2599
online:
http://www.epa.aov/oia/hotline.htm
write:
EPA Inspector General Hotline

1200 Pennsylvania Avenue, NW

Mailcode 2431T

Washington, DC 20460
Suggestions for Audits or Evaluations
To make suggestions for audits or evaluations,
contact us through one of the following methods:
email:	OIG WEBCOMMENTS@epa.gov
phone:	1-202-566-2391
fax:	1-202-566-2599
online:	http://www.epa.g0v/0ig/c0ntact.html#Full Info
write: EPA Inspector General
1200 Pennsylvania Avenue, NW
Mailcode 241OT
Washington, DC 20460

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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
14-P-0245
May 2, 2014
Why We Did This Review
On August 27, 2013, a member
of the U.S. Senate Committee
on Environment and Public
Works 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,
the committee member asked
the OIG to determine EPA
policies and processes that
"facilitated" Beale's fraud.
Although the EPA authorized
retention incentive pay to Beale
until 2003, the agency
continued to make retention
incentive payments to him until
2013.
This report addresses the
following EPA theme:
• Embracing EPA as a high
performing organization.
For further information,
contact our public affairs office
at (202) 566-2391.
The full report is at:
www.epa.qov/oiq/reports/2014/
20140502-14-P-0245.pdf
EPA Compliance With Retention Incentive
Regulations and Policies
What We Found
The EPA did not comply with Office of Personnel
Management regulations or agency policies on
retention incentive pay. From 2006 through 2013,
retention incentives were paid to 13 EPA
employees totaling $667,376. Eleven employees
received retention incentive pay totaling $481,819.
For 10 of the employees, no documentation of the required annual
recertification was available. One employee received retention incentive pay for
4 years beyond the date of a promotion.
EPA employees received unauthorized retention pay due to:
•	Agency and management confusion over the requirement for annual
recertification of retention incentive pay.
•	The agency's human resource system lacking internal controls to track,
notify and automatically discontinue retention incentive pay if not properly
authorized.
•	Lack of follow-up by the EPA's Office of Human Resources regarding
coding errors for terminated retention incentives.
•	Lack of follow-up by EPA managers and employees regarding the status of
outstanding actions being processed by the EPA's Office of Human
Resources.
EPA did not comply with
Office of Personnel
Management regulations
or agency policies on
retention incentive pay.
Recommendations and Agency Corrective Actions
We recommend that the Assistant Administrator for Administration and
Resources Management and the Chief Financial Officer:
•	Determine if any additional evidence exists to justify a retention incentive.
If unjustified, pursue action to recover retention incentive payments made
to EPA employees.
•	Pursue action to recover the unauthorized retention incentive amounts paid
to the EPA employees who received retention incentive pay beyond their
promotion date or authorized end date.
The agency agreed with the recommendations. The agency is working to find
additional evidence to determine if retention incentive payments were justified,
and has initiated the collection processes for the two overpayment cases.

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May 2, 2014
MEMORANDUM
SUBJECT: EPA Compliance With Retention Incentive Regulations and Policies
Report No. 14-P-0245
FROM: Arthur A. Elkins Jr.
TO:	Craig E. Hooks, Assistant Administrator
Office of Administration and Resources Management
Maryann Froehlich, Acting Chief Financial Officer
Office of the Chief Financial Officer
This is our report on the subject audit conducted by the U.S. Environmental Protection Agency (EPA),
Office of the Inspector General (OIG). The report contains findings that the OIG has identified and
corrective action that the OIG recommends. The report represents the opinion of the OIG and does not
necessarily represent the final EPA position. Final determination on matters in this report will be made
by EPA managers in accordance with established audit resolution procedures.
Action Required
In accordance with EPA Manual 2750, you are required to provide a written response to this report
within 60 calendar days. You should include planned corrective actions and completion dates for the
unresolved recommendations. Your response will be posted on the OIG's public website, along with our
memorandum commenting on your response. Your response should be provided as an Adobe PDF file
that complies with the accessibility requirements of Section 508 of the Rehabilitation Act of 1973, as
amended. The final response should not contain data that you do not want released to the public. If your
response contains such data, you should identify the data for redaction or removal, along with
corresponding justification. Because there are two action officials identified in this report, we request
that the Office of Administration and Resources Management take the lead to provide the agency's
response.
We will post this report to our website at http://www.epa.gov/oig.
If you have any questions, please contact Kevin Christensen, acting Assistant Inspector General for
Audit, at (202) 566-1007 or christensen.kevin@epa.gov; or Robert Adachi, Director, Forensic Audits,
at (415) 947-4537 or adachi.robert@epa.gov.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL

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U.S. Environmental Protection Agency
Office of Inspector General
EPA Compliance With Retention Incentive
Regulations and Policies
L Report No. 14-P-0245,
May 2,2014

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Reasons for Review
Part of continuing work on internal controls of
payroll and benefits.
Review initiated on the U.S. Environmental
Protection Agency's (EPA's) policies and procedures
for paying retention incentives.
OFFICE OF INSPECTOR GENERAL
U.S. Environmental Protection Agency
@EPAoig
www.epa.gov/oig

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Scope and Methodology
~	Performed fieldwork from October 31, 2013, to March 20,
2014.
~	Conducted assignment in accordance with generally accepted
government auditing standards issued by the Comptroller
General of the United States.
~	EPA Office of Inspector General (OIG) personnel were covered
in a separate report.
~	Determined whether the EPA paid employees retention
incentives in accordance with federal regulations and EPA
policy.
14-P-0245
V
OFFICE OF INSPECTOR GENERAL
U.S. Environmental Protection Agency	@EPAoig
www.epa.gov/oig

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Scope and Methodology (cont'd.)
~	Obtained a listing of EPA employees who received retention
incentives for calendar years 2006 through August 7, 2013.
~	Reviewed retention incentive request forms, correspondence
and SF-50s (if available) for each employee.
~	Interviewed staff from the EPA's Office of Human Resources
(OHR) and staff from the agency's Shared Service Centers.
~	Interviewed two EPA employees who received retention
incentive pay in 2013.
14-P-0245
V
OFFICE OF INSPECTOR GENERAL
U.S. Environmental Protection Agency	@EPAoig
www.epa.gov/oig

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OPM Regulations
~ Office of Personnel Management (OPM) regulations found in the Code of
Federal Regulations (CFR) at 5 CFR Part 575:
o Authorize payment of incentive for employees:
With unusually high or unique qualifications.
Likely to leave in the absence of an incentive.
o Require annual review of the determination to pay the incentive.
o Require an authorized agency official to annually document in writing its
determination to pay the incentive.
o Require reduction or termination of the retention incentive
authorization whenever conditions change.
14-P-0245
OFFICE OF INSPECTOR GENERAL
U.S. Environmental Protection Agency
@EPAoig
www.epa.gov/oig

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EPA Policies
~	The EPA's Pay Administration Manual:
o Authorizes a 1-, 2- or 3-year retention incentive.
o Requires annual recertification using the EPA authorization form.
o Requires the Human Resources Officer (HRO) to provide
notification in advance of the annual reauthorization date.
o Requires termination if the employee is reassigned or promoted
to a different position.
~	Per the EPA's waiver policy, the employee is required to
notify the supervisor and the HRO about overpayments.
14-P-0245
OFFICE OF INSPECTOR GENERAL
\	U.S. Environmental Protection Agency	@EPAoig
\	www.epa.gov/oig

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Results
~	The EPA did not fully comply with OPM regulations or EPA
policy on retention incentive pay.
~	Thirteen EPA employees received retention incentives from
2006 through 2013 (excluding John C. Beale*).
~	The EPA paid a total of $667,376 in retention incentives to
those 13 employees.
* See OIG Report No. 14-P-0036, issued on December 11, 2013.
14-P-0245
OFFICE OF INSPECTOR GENERAL
\	U.S. Environmental Protection Agency	@EPAoig
\	www.epa.gov/oig

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Results (cont'd.)
Of the 13 EPA employees paid retention incentives,
11 employees received retention incentive pay totaling
$481,819.
o For 10 EPA employees, no documentation of annual
recertification was identified.
o One employee received retention incentive pay for 4 years
beyond the promotion date.
No EPA employees currently receive retention incentives.
14-P-0245
OFFICE OF INSPECTOR GENERAL
U.S. Environmental Protection Agency
@EPAoig
www.epa.gov/oig

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ReSUltS (cont'd.)

Uncertified
Beyond

Employee
Incentive*
Promotion**
Total
1
$72,712

$72,712
2
83,232

83,232
3
33,762

33,762
4
$104,975
104,975
5
1,342

1,342
6
29,356

29,356
7
16,311

16,311
8
13,858

13,858
9
22,156

22,156
10
26,911

26,911
11
77,204

77,204
Total
$376,844
$104,975
$481,819
*Amounts were calculated using data provided by the EPA and are subject to reconciliation with payroll records.
**Amount was calculated by the Defense Finance and Accounting Service (DFAS).
14-P-0245
@EPAoig
www.epa.gov/oig

OFFICE OF INSPECTOR GENERAL
U.S. Environmental Protection Agency

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Uncertified Incentives
~	For 10 employees, no documentation was identified to
support that incentives were authorized annually, as required
by federal regulations and EPA policies.
~	One employee received $77,204 in unauthorized pay. The
agency had approved a 1-year retention incentive, but the
agency continued to make uncertified incentive payments for
over 4 more years.
14-P-0245
OFFICE OF INSPECTOR GENERAL
U.S. Environmental Protection Agency
@EPAoig
www.epa.gov/oig

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Pay Beyond Promotion
~ One employee received incentive pay for 4 years, but the
employee's incentive should have been terminated in 2009
because he was promoted.
o The agency's OHR notified the employee about the termination
of incentive pay in 2009.
o The OHR processed the termination in the human resource (HR)
system in 2009.
o The termination action was miscoded in the HR system, so the
employee continued to receive incentive pay.
o In 2013, DFAS issued a debt notice of $104,975 to the EPA
employee.
14-P-0245
OFFICE OF INSPECTOR GENERAL
U.S. Environmental Protection Agency
@EPAoig
www.epa.gov/oig

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How Did This Happen?
~	Confusion over the requirement for annual recertification.
~	Evidence of the annual recertification was not retained.
~	The EPA's HR system lacks internal controls to track, notify and automatically
discontinue retention incentive pay if the ncentive pay is not authorized by an
annual recertification.
The OHR did not follow up with DFAS to verify that termination of pay took
effect.
Managers and employees did not follow up with the OHR regarding the status of
outstanding actions.
14-P-0245
OFFICE OF INSPECTOR GENERAL
U.S. Environmental Protection Agency
@EPAoig
www.epa.gov/oig

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Why Is This Important?
~	Unauthorized retention payments were made to 11 EPA
employees.
~	Two EPA employees are disputing the collection process for
the overpayment of incentive pay.
~	The John C. Beale case has placed heightened scrutiny on
how EPA manages and controls its payroll and administrative
activities, including retention incentive pay.
14-P-0245
OFFICE OF INSPECTOR GENERAL
U.S. Environmental Protection Agency
@EPAoig
www.epa.gov/oig

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Recommendations
~ We recommend that the Assistant Administrator for Administration and
Resources Management and the Chief Financial Officer:
1.	Determine if any additional evidence exists to justify a retention
incentive. If unjustified, pursue action to recover retention
incentive payments made to EPA employees.
2.	Pursue action to recover the unauthorized retention incentive
amounts paid to the EPA employees who received retention
incentive pay beyond their promotion date or authorized end date.
14-P-0245
V
OFFICE OF INSPECTOR GENERAL
U.S. Environmental Protection Agency	@EPAoig
www.epa.gov/oig

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Agency Response
~	The OIG received comments from EPA's Office of Administration and Resources
Management and the Office of the Chief Financial Officer and at the exit
conference held April 23, 2014. Based upon the exit conference, updated
comments were received from the Office of Administration and Resources
Management and the Office of the Chief Financial Officer on April 28, 2014.
~	Based upon the exit conference and agency comments, we modified some
wording in the report to clarify our position.
~	The agency concurred with key modifications to the report and agreed with the
recommendations.
d The agency's comments and the OIG's response are included in appendix A.
14-P-0245
OFFICE OF INSPECTOR GENERAL
U.S. Environmental Protection Agency
@EPAoig
www.epa.gov/oig

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Agency Initiatives and Corrective Actions
~	In response to recommendation 1, the agency is working to find
additional evidence to determine if retention incentive payments
were justified.
~	In response to recommendation 2, the agency has initiated the
collection processes for the two overpayment cases.
~	The agency also has taken initiatives to strengthen its internal
controls over retention incentives. Specifically, the agency:
~	Created a new retention incentive request justification requiring
detailed documentation.
~	Issued an HR bulletin on retention incentives.
~	Issued communications in the Management Matters newsletter.
~	Developed a new draft human resources incentive policy.
~	Created a quarterly retention incentive report.
14-P-0245

OFFICE OF INSPECTOR GENERAL





V U.S. Environmental Protection Agency @EPAoig
\ www.epa.gov/oig


1

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Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)





Planned


Rec.
Page



Completion
Claimed
Ag reed-To
No.
No.
Subject
Status1
Action Official
Date
Amount
Amount
14 Determine if any additional evidence exists to
justify a retention incentive. If unjustified, pursue
action to recover retention incentive payments
made to EPA employees.
14 Pursue action to recover the unauthorized retention
incentive amounts paid to the EPA employees who
received retention incentive pay beyond their
promotion date or authorized end date.
Assistant Administrator for
Administration and
Resources Management and
Chief Financial Officer
Assistant Administrator for
Administration and
Resources Management and
Chief Financial Officer
4/28/14
$300
$182
$182
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
14-P-0245
17

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Appendix A
Agency's Comments on Discussion Draft Report
and OIG Responses
April 28, 2014
MEMORANDUM
SUBJECT: OIG Review of EPA's Compliance with Retention Incentive
Regulations and Policies
FROM: Craig E. Hooks, Assistant Administrator
Office of Administration and Resources Management
Maryann Froehlich, Acting Chief Financial Officer
Office of the Chief Financial Officer
TO:	Arthur A. Elkins, Jr.
Inspector General
We have reviewed the discussion draft report entitled Review of EPA's Compliance With
Retention Incentive Regulations and Policies. The OIG review complements EPA's on-going
efforts to strengthen its internal controls over payroll management. The EPA believes that the
OIG's conclusions in the report may be flawed if the OIG presumes that retention incentives paid
were in "excess" if certain documentation was not located. That potential conclusion does not
acknowledge the fact that, in at least some of the cases, the record retention schedules had
expired and therefore the documentation may have existed but was properly destroyed. In other
cases, personnel files for the employees in question have been transferred to a new employer or
to OPM (in the case of retired employees) and, therefore, the EPA would no longer have the
documentation sought by the OIG. We have not been provided working papers from OIG and do
not know if documents were sought from OPM or from new employers for at least four of the
reviewed employees. It is inappropriate to conclude that the incentive pay agreement was
somehow flawed in situations where the retention pay was justified but for various reasons no
documentation could be located.
OIG Response 1. We recognize that records may have existed and were properly destroyed in
accordance with retention schedules. Our intent in the discussion draft report was to
acknowledge that evidence was not necessarily retained for all recertifications. However,
documentation provided to the OIG indicates managers and OHR were confused about the
need to determine on an annual basis whether the retention incentive payment is still
warranted. We recognize that the agency will need to review incentive payments without
benefit of the documentation required in accordance with EPA policy to make a determination
whether the incentive pay should be recovered.
14-P-0245
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In the aftermath of the Beale fraud case, the agency implemented a number of changes to the
policies, procedures and processes governing retention incentives. Also, the EPA's migration to
the Department of Interior Business Center will provide additional functionality in our systems
and provide further protection. Finally, OARM and OCFO prepared a joint report, "2014 Internal
Control Assessments: Travel, Payroll, Parking and Transit," which evaluated the effectiveness of
the agency's internal financial management controls in place in 2013.
OIG Response 2. We acknowledge the agency's efforts to strengthen internal controls.
However, no EPA employees are currently receiving retention incentives and we are unable to
assess the implementation and adequacy of the controls.
AGENCY TECHNICAL COMMENTS
1. As a result of the Beale case, the agency has been proactive in taking steps to
strengthen its internal controls over retention incentives which the report does not
recognize. Some of the specific actions the agency has taken are:
•	Created a new retention incentive request justification requiring clear, detailed
documentation including copies of previous retention allowances, if any, explicit
periods of coverage and salary adjustment with explicit not to exceed dates,
signatures by supervisors, management, human resource and financial officials as
well as an employee signature certification.
•	Issued an HR bulletin on retention incentives delineating all requirements for
approval, justification, documentation and annual review of incentives. The Bulletin
was disseminated to HR officers, program managers and the HR Shared Service
Centers.
•	Issued communication in the Management Matters newsletter to all agency managers
dedicated to the topic of appropriate use and management of retention incentives.
•	Developed a new draft human resources incentive policy which clearly delineates
EPA's implementation requirements and processes. The agency will finalize the
policy after OPM issues the new government-wide update of a recruitment, relocation
and rewards incentive directive.
•	Created a quarterly retention incentive report drawn from the data in the payroll
system. The report is provided to the HR Shared Service Centers, the Executive
Resources Division, and HR PMOs to ensure only designated employees are
receiving retention incentives.
In addition to the above, the agency is mapping out and analyzing its payroll management
processes to further strengthen the internal controls over retention incentives. The
assessment will, include:
•	Documenting the internal controls to manage retention incentives and statutory pay
limit payments;
•	Documenting payroll processing (starting payroll, payroll corrections, payroll journal,
garnishment reporting, wage type reports, etc.);
14-P-0245
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•	Documenting OCFO's role in conjunction with the shared service provider, including
payroll posting to COMPASS, debt collection, cash differences, benefit calculations,
and reconciliation processes;
•	Documenting internal controls for each of the office's processes;
•	Analyzing the internal controls and documenting findings;
•	Developing recommendations and corrective action procedures; and
•	Conducting an A-123 review of the new corrective actions.
OIG Response 3. We acknowledge the agency efforts to strengthen internal controls.
We also appreciate that the agency recognizes retention incentives were a
vulnerability and made an extensive effort to update internal controls to prevent
overpayments in the future.
2. The agency does not agree with a potential conclusion that in all cases no documentation
existed to support the retention incentives for the 13 non OIG employees. In the agency's
response to the audit, we have committed to review of a wide variety of documents or other
information which provides evidence of a need for and establishment of a warranted
incentive agreement. Some information located to date may be evidence of valid annual
recertifications. Moreover, as described below, documentation may not currently be
available at the EPA because of records retention schedule expirations or employee
separations from agency. For example:
•	Transition to the electronic Official Personal Folder (eOPF) caused files to be purged
of retention incentive documentation. Agency policy on retention allowances
specifies that servicing Human Resources Officers will maintain retention allowance
records on the temporary side of the employee's eOPF and in a separate allowance
file. The documents were retained in hard copy by the agency in temporary files
until the records retention requirement was satisfied and then the records were
shredded. Since agency policy specified a two year retention of the files, the OIG
assumption that no documents existed to support annual re-certifications may be
inaccurate. In at least one of the cases, we are aware of some documentation of a re-
certification request that was maintained by an HR Specialist. Once our review of
service center re-certification documentation is complete, we will share our findings
with the OIG.
•	With regard to employee separations, there were two employees who retired and
two who left the agency. As a result, official (eOPF) files are not in EPA
possession. For the two retirees, as is custom, official files are in the possession of
OPM's records center in Boyers, PA. For the departed employees, their new
employers, if a federal agency, would possess official personnel files. No
conclusion can be reached on these cases based solely on the fact that
documentation no longer exists at the EPA.
14-P-0245
20

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OIG Response 4. In the discussion draft report we only identified 11 employees as
having received unauthorized retention incentive pay. Of the 11, two received retention
incentive pay beyond their promotion date or authorized end date. We acknowledge that
the agency has initiated the collection processes for these two cases.
As stated in OIG Response 1, we recognize that records may have existed and were
properly destroyed in accordance with retention schedules. Our intent in the discussion
draft report was to acknowledge that evidence was not necessarily retained for all
recertifications. Considering that there was confusion over the need to recertify every
year, there is a risk the annual recertifications were not completed. We did find examples
of the documentation of the initial retention incentive in the employee file but no
recertifications for years two and three. It is not unreasonable to assume that if the
documentation for the initial year is available that documentation prepared for the
subsequent years would also be available.
As stated in the report, OPM regulations and EPA policies require the agency to review
employee retention incentives at least annually to determine whether the pay is still
warranted. An authorized agency official must certify this determination in writing. The
regulations further state that the agency may continue to pay the retention incentive as
long as the conditions giving rise to the original determination still exist. Documentation
provided to the OIG indicates that managers and HR specialists were unclear on the
recertification requirements and that recertifications may not have been authorized for all
years that employees received retention incentives. Therefore, the EPA needs to take steps
to determine if the retention incentives were in fact properly justified for all employees.
3. We disagree with potential conclusions that agreements for which recertification
documentation cannot currently be located are automatically deemed not valid or that the
current absence of, or failure to locate, annual recertification documentation demonstrates
that employees received excess pay. An examination of each case with consideration
given to equity and fairness to employees acting in good faith under a presumption of a
three-year arrangement is warranted. In addition, we note that in the Beale case the OIG
determined that Mr. Beale was "authorized for two, three year periods" of a retention
incentive, even though the OIG did not locate annual recertifications for the second
incentive period. In light of this, similar treatment for the eleven employees with
incentive agreements may be reasonable.
We are in the process of examining documentation for initial agreements and renewal certifications.
While we have located some documentation, we have not completed our review. We are willing to
share relevant documentation uncovered during the review process, if any.
14-P-0245
21

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OIG Response 5. As discussed in OIG Response 4, the discussion draft report identified
11 employees with unauthorized retention incentive payments. We acknowledge that the agency
has already initiated the collection processes for two employees.
The retention incentive regulations and EPA policies are clear on the need to provide a written
recertification annually. OPM regulations at 5 CFR 575.311(f)(3) require an authorized agency
official to reduce or terminate a retention incentive when conditions change. A condition change
could be a promotion with an increase in salary or a change in the labor market conditions making
it more likely to recruit a candidate with similar competencies. The EPA Payroll Administration
Manual requires the recommending official to annually determine whether the retention incentive
is still justified. EPA policy requires this determination must be certified by the approving official
in writing.
While agency employees may have operated in good faith under the assumption that their
incentive pay was for a multi-year period, this does not override the agency's responsibility that
EPA managers and OHR had to ensure that OPM regulations and EPA policies were followed.
Documentation in the files provided to the OIG does show evidence that there were managers
aware of the requirement to recertify annually. Also, a 2008 email from the OHR Policy Division
to the Las Vegas Human Resources Officer provided clarification on retention incentive policy.
The OHR stated that the requirement for annual recertification is in required by regulation and
does not authorize multiple-year incentives.
The agency has recognized that there were vulnerabilities in the internal controls over retention
incentives based on the steps it has taken to strengthen controls. We believe these vulnerabilities
may have resulted in payments of retention incentives that were not justified in accordance with
federal regulations. Our intent in making recommendation 1 was to recognize that other evidence
can be considered by the agency in determining that the retention incentive payments were
justified. For example, the other evidence can include:
- Documentation available in locations other than the human resources offices in Las Vegas,
Cincinnati and Research Triangle Park.
Annual recertifications that had been prepared but destroyed or lost. This could be
confirmed through interviews with the employee's supervisor.
It is at the agency's discretion to take this information to determine if the payments made were
justified or to seek recovery actions.
John C. Beale's retention incentive pay was not audited as part of this review. However, in
OIG Report No. 14-P-0036, Early Warning Report: Internal Control and Management Actions
Concerning John C. Beale Pay Issues, we reported that Beale was first authorized a retention
incentive in 1991 and his retention incentive pay was recertified annually for 1992 and 1993.
No requests were submitted between 1994 and 1999. A new 3-year request was submitted by the
Office of Air and Radiation in 2000, but no recertifications were prepared or submitted for years 2
and 3. From our review of the Office of Air and Radiation's analysis of Beale's retention incentive
pay, the Office of Air and Radiation stated that retention incentive pay "must be reauthorized
every third year." This is not correct, according to OPM regulations and EPA policies, and
reinforces our position that there was confusion over the need for annual recertifications.
14-P-0245
22

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AGENCY'S RESPONSE TO REPORT RECOMMENDATIONS
No.
Recommendation
High-Level Intended
Corrective Action(s)
Estimated Completion by
Quarter and FY
1
Determine if any additional
evidence exists to justify a
retention incentive without
documented, authorized
annual recertification. If no
additional evidence exists,
pursue action to recover
unauthorized retention
incentive payments made
to EPA employees.
The agency will continue the
process of searching for
relevant evidence of initial
retention incentive agreements
and renewal certifications and
determine if any recovery
actions are warranted.
OARM will complete the
documentation review by
May 30, 2014.
2
Pursue action to recover
the unauthorized retention
incentive amounts paid to
the EPA employees who
received retention
incentive pay beyond their
promotion date or
authorized end date.
The agency has already
initiated the collection
processes for the two
overpayment cases.
Completion pending
outcome of the labor
relations process initiated
by the involved
employees.
OIG Response 6. For recommendation 1, the agency has agreed to take corrective action, but
did not provide a milestone date for issuing determinations on any recovery actions that may
be warranted. Therefore, we consider this recommendation to be unresolved, pending a
corrective action plan that includes milestones dates for the determination.
The agency agreed with recommendation 2 and has taken corrective action. Therefore, we
consider the agency's actions to be complete and we will close out this recommendation upon
issuance of our report.
Questions regarding human resources issues, can be directed to Susan Kantrowitz, Director,
Office of Human Resources (202) 564-4606; any questions regarding financial issues can be
directed to Jeanne Conklin, Acting Director, Office of Financial Management at (202) 564-5342.
cc: David Bloom
Nanci Gelb
Susan Kantrowitz
Jeanne Conklin
Stefan Silzer
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Appendix B
Distribution
Office of the Administrator
Deputy Administrator
Chief of Staff
Assistant Administrator for Administration and Resources Management
Chief Financial Officer
Agency Follow-Up Coordinator
General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for External Affairs and Environmental Education
Principal Deputy Assistant Administrator for Administration and Resources Management
Deputy Chief Financial Officer
Director, Office of Financial Management, Office of the Chief Financial Officer
Director, Office of Human Resources, Office of Administration and Resources Management
Director, Office of Policy and Resource Management, Office of Administration and
Resources Management
Deputy Director, Office of Policy and Resource Management, Office of Administration and
Resources Management
Audit Follow-Up Coordinator, Office of Administration and Resources Management
Audit Follow-Up Coordinator, Office of the Chief Financial Officer
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