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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
17-P-0407
September 26, 2017
Why We Did This Audit
The U.S. Environmental
Protection Agency (EPA) Office
of Inspector General (OIG)
conducted this audit to follow
up on corrective actions made
in response to two prior OIG
audits on retention incentives
paid by the agency and OIG.
Retention incentives are used
to retain employees who are
highly or uniquely qualified, or
meet a special need.
The objectives of this follow-up
audit were to determine
whether: (1) the agency
completed the corrective
actions proposed in the prior
audits, (2) actions taken were
effective in resolving the cause
of the findings, and (3) the
agency and OIG complied with
regulations and policies for
retention incentives since the
prior audits.
This report addresses the
following:
• Operating efficiently and
effectively.
Send all inquiries to our public
affairs office at (202) 566-2391
or visit www.epa.gov/oia.
Listing of OIG reports.
Follow-Up Audit: EPA Needs to Strengthen
Internal Controls Over Retention Incentives
What We Found
The agency completed its proposed corrective
actions to address prior OIG audit
recommendations. However, the agency has
not monitored retention incentives as required
by existing EPA policy and 5 CFR §
575.312(a), nor issued a new incentive policy.
In response to the prior OIG audit, the agency
stated it had drafted a new policy that
delineates the EPA's implementation
requirements and processes. These actions
are needed to further strengthen internal controls and effectively resolve the
cause of the prior audit findings.
The agency did not perform monitoring reviews due to a misunderstanding
of oversight responsibilities. The EPA's new policy, drafted in 2014, has not
been issued and is currently under review by agency officials. We also
identified two requirements that should be included in the agency's new
policy—quarterly reviews and performance ratings. Without an up-to-date
policy, the agency has no assurance that retention incentives are authorized
and activities are monitored consistent with its policy and federal
requirements, or that payments are valid.
The agency complied with its existing policy and 5 CFR Part 575,
Subpart C, for one of two employees receiving retention incentive payments
since the prior audits. However, the agency indicated the payments for the
second employee may have been the result of payroll miscoding, and we
questioned the payments of $1,605 to that employee.
The OIG has not given any retention incentives since the prior audit, and
therefore we performed no additional work related to the OIG.
Recommendations and Planned Agency Corrective Actions
We recommend that the Assistant Administrator for Administration and
Resources Management: (1) implement quarterly monitoring of retention
incentives; (2) issue new policy on retention incentives, including
requirements for quarterly monitoring and performance ratings; and
(3) determine the validity of the irregular payments to an employee totaling
$1,605 and, if invalid, discontinue payments and recover all funds paid.
The agency agreed to take sufficient corrective action for all
recommendations.
Additional actions are
needed to strengthen
internal controls over
monitoring and to
effectively resolve the
cause of the prior audit
findings. We question
$1,605 of irregular
payments.

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