#• jx \
kW!
U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Compliance with the law
Operating efficiently and effectively
EPA Needs to Substantially
Improve Oversight of Its Military
Leave Processes to Prevent
Improper Payments
Report No. 21-P-0042
December 28, 2020
Monitor
/
\
Communicate
\
Control
Environment
V

1

Assess Risk |
~

-------
Report Contributors:
John Trefry
Leah Nikaidoh
Stephen Seifert
Abbreviations
EPA	U.S. Environmental Protection Agency
IBC	U.S. Department of Interior's Interior Business Center
OCFO	Office of the Chief Financial Officer
OIG	Office of Inspector General
OMS	Office of Mission Support
OPM	U.S. Office of Personnel Management
U.S.C.	United States Code
Cover Image: The EPA must establish key internal control elements to effectively implement
military leave laws, guidance, and related policies and procedures.
(EPA OIG image)
Are you aware of fraud, waste, or abuse in an
EPA program?
EPA Inspector General Hotline
1200 Pennsylvania Avenue, NW(2431T)
Washington, D.C. 20460
(888) 546-8740
(202) 566-2599 (fax)
OIG Hotline@epa.gov
Learn more about our OIG Hotline.
EPA Office of Inspector General
1200 Pennsylvania Avenue, NW (2410T)
Washington, D.C. 20460
(202) 566-2391
www.epa.gov/oiq
Subscribe to our Email Updates
Follow us on Twitter @EPAoig
Send us your Project Suggestions

-------
^EDSX
* JL \
SXi
U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
21-P-0042
December 28, 2020
Why We Did This Audit
We conducted this audit to
determine whether the
U.S. Environmental Protection
Agency is following federal laws
and regulations and has
established controls related to
military leave. A federal civilian
employee who is a member of a
military reserve force—that is, a
reservist— is entitled to military
leave for certain types of duty in
the National Guard or Armed
Forces.
If an EPA reservist takes unpaid
military leave and the reservist's
military pay is less than what the
reservist would have earned in
civilian pay, the EPA must pay
the reservist the difference—
that is, the reservist differential.
EPA reservists who take paid
military leave must, in certain
circumstances, reimburse the
EPA for the military pay
received, minus travel,
transportation, and per diem—
known as a military offset.
This audit addresses the
following:
•	Compliance with the law.
•	Operating efficiently and
effectively.
This audit addresses a top EPA
management challenge:
•	Complying with key internal
control requirements (policies
and procedures).
Address inquiries to our public
affairs office at (202) 566-2391 or
OIG WEBCOMMENTS@epa.gov.
List of OIG reports.
EPA Needs to Substantially Improve
Oversight of Its Military Leave Processes to
Prevent Improper Payments
What We Found
The EPA has not fully complied with
federal laws related to military leave,
reservist differential, and military offset.
This occurred because Agency
management did not establish effective
internal controls to implement these
laws. The EPA instead relied on
reservists, their supervisors, and the
Agency's federal payroll provider to comply
The EPA paid 124 reservists
about $1.4 million in military
leave pay from January 2017
through June 2019. We identified
potential improper payments of
$129,000 related to 104 of the
1,628 payroll transactions that
we audited.
with federal requirements.
The U.S. Government Accountability Office's Standards for Internal Control
in the Federal Government, known as the "Green Book," and the Office of
Management and Budget's Circular No. A-123 state that management is
responsible for complying with applicable federal laws and regulations, as
well as for designing, implementing, and monitoring internal controls to
achieve its objectives. When effective and systematic internal controls are in
place, compliance with laws and regulations becomes more likely.
EPA management's lack of internal controls to effectively implement federal
laws resulted in potential overpayments or underpayments to EPA reservists
Based on the transactions we reviewed, the Agency had a 75 percent error
rate for 36 of 48 reservists tested for compliance with military leave
requirements. These errors resulted in about $129,000 in potential improper
payments.
Recommendations and Planned Agency Corrective Actions
We recommend that the assistant administrator for Mission Support and the
chief financial officer develop and implement policies and procedures on
military leave and pay requirements; provide resources to EPA staff related
to military leave, such as guidance and training; implement internal controls
to monitor Agency compliance with applicable military leave laws, guidance,
and polices; and address military offset because of the EPA and reservist
differential due to reservists. We also recommend that the chief financial
officer report all improper payments related to military leave in the annual
Agency Financial Report. The Agency agreed with the recommendations
and provided acceptable planned corrective actions and estimated
completion dates. We consider the recommendations resolved with
corrective actions pending.

-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
December 28, 2020
MEMORANDUM
SUBJECT: EPA Needs to Substantially Improve Oversight of Its Military Leave Processes to Prevent
Improper Payments
Report No. 21-P-0042
This is our report on the subject audit conducted by the Office of Inspector General of the
U.S. Environmental Protection Agency. The project number for this audit is OA&E-FY19-0286. This
report contains findings that describe the problems the OIG has identified and corrective actions that the
OIG recommends. Final determinations on matters in this report will be made by EPA managers in
accordance with established audit resolution procedures.
The Office of Mission Support and the Office of the Chief Financial Officer are responsible for the
subjects covered in this report.
In accordance with EPA Manual 2750, the Agency provided acceptable planned corrective actions and
estimated milestone dates in response to OIG recommendations. All recommendations are resolved, and
no final response to this report is required. However, if you submit a response, it will be posted on the
OIG's 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
to be released to the public; if your response contains such data, you should identify the data for redaction
or removal along with corresponding justification.
FROM: Sean W. O'Donnell
TO:
Donna Vizian, Principal Deputy Assistant Administrator
Office of Mission Support
David Bloom, Deputy Chief Financial Officer
We will post this report to our website at www.epa.gov/oig.

-------
EPA Needs to Substantially Improve Oversight
of Its Military Leave Processes
to Prevent Improper Payments
21-P-0042
	Table of Contents
Chapters
1	Introduction		1
Purpose		1
Background		1
Responsible Offices		5
Scope and Methodology		5
Prior Report		6
2	EPA's Military Leave Program Is Not Compliant with Federal Laws		7
Significant Errors Associated with Military Leave Transactions		7
EPA Lacks Effective Internal Controls Over Use of Military Leave		11
Conclusion		15
Recommendations		15
Agency Response and OIG Assessment		16
Status of Recommendations and Potential Monetary Benefits		18
Appendices
A Internal Control Assessment	 19
B Agency Response to Draft Report	 20
C Distribution	 25

-------
Chapter 1
Introduction
Purpose
The Office of Inspector General of
the U.S. Environmental Protection Agency
conducted this audit to determine whether
the EPA is following federal laws and
regulations and has established controls,
related to its employees on military leave.
Background
As set forth in 5 U.S.C. § 6323, a federal employee who is also a member of a
military reserve force—referred to as a reservist—is entitled to paid military leave
for certain types of active or inactive duty in the National Guard or Armed Forces.
The amount of time and pay for military leave that a reservist receives is dictated
by federal law. From January 2017 through June 2019, the EPA paid
approximately $1.4 million in military leave to 124 Agency employees who were
reservists.
Depending on the specific legal provisions under which an EPA reservist on
military leave received military orders—as further explained in Table 1—the
reservist's EPA pay can either remain the same or be reduced by the amount of
pay the reservist receives from the National Guard or Armed Forces. If the
reservist takes leave under 5 U.S.C. § 6323(a), the reservist's EPA pay remains
the same, and the reservist may retain both the military pay and the Agency pay.
In contrast, military leave taken under 5 U.S.C. § 6323(b) and (c) is subject to the
provisions of 5 U.S.C. § 5519. Under this law, an EPA reservist who receives
both military pay and Agency pay for the same day(s) of service must reimburse
the EPA for the military pay received, minus travel, transportation, and per diem
allowances. This reimbursement is known as a military offset.
An EPA reservist who takes unpaid military leave under 5 U.S.C. § 5538 for
active duty tours is entitled to receive a reservist differential from the Agency, so
that the reservist does not incur a reduction in pay when called to active duty. The
law protects the reservist's pay by requiring the EPA to make up any difference
between what the reservist was projected to earn from the Agency and what the
reservist earned from the military while on active duty.
The U.S. Office of Personnel Management is responsible for prescribing
regulations necessary to carry out the reservist differential authority. The OPM's
Policy Guidance: Regarding Reservist Differential under 5 U.S.C. 5538,
Top Management Challenge
This audit addresses the following top
management challenge for the Agency, as
identified in OIG Report No. 20-N-0231.
EPA's FYs 2020-2021 Top Management
Challenges, issued July 21, 2020:
• Complying with key internal control
requirements (policies and procedures).
21-P-0042
1

-------
originally issued on December 8, 2009, addresses the reservist differential
provisions, including eligibility criteria, definitions, and processes for calculating
the amount of pay differential. In conjunction with the policy, the OPM issued
procedural guidance, Reservist Differential Agency Implementation Guidance, on
March 15, 2009, that provides guidance for agencies to establish processes and
procedures for implementing the reservist differential authority, including
procedures for:
•	Identifying and notifying affected reservists.
•	Reviewing reservists' military orders.
•	Projecting civilian basic pay during the qualifying period of active duty
service.
•	Calculating and paying the reservist differential.
The OPM's policy guidance has been intermittently amended and reissued since
it was originally issued in 2009. As of July 2020, the most recent update was
issued on June 23, 2015.
EPA Military Leave and Pay Guidance
The EPA's Leave Manual, dated September 1995, and Leave Handbook, undated,
detail the Agency's policy and guidance for leave. The Leave Manual provides
the Agency's policy for the administration of leave benefits in accordance with
legal and regulatory requirements. The Leave Handbook is the Agency's
guidance based on applicable federal law, federal regulation, and the Leave
Manual', and it provides general information about leave for EPA employees and
supervisors. While both documents include basic information related to military
leave based on 5 U.S.C. § 6323, a previous OIG audit found that both are
significantly outdated. See the "Prior Reports" section below for more details.
Neither the Leave Handbook nor the Leave Manual contain specific policies and
procedures addressing how the Agency should comply with the military offset
requirements of 5 U.S.C. §5519.
In accordance with 5 U.S.C. § 5538, agencies, in consultation with the OPM,
shall adopt procedures to protect reservists' rights related to the reservist
differential under this statute. The EPA did not issue any policies or procedures
specific to reservist differential, nor did it update its Leave Manual or Leave
Handbook to provide guidance to its reservists and supervisors.
The Agency's Pay Administration Manual, dated October 1991, details the
Agency's policy and procedures on pay administration for Agency employees.
The Manual includes specific requirements for many pay categories, such as
severance, overtime, and holiday pay. The Manual does not include any specifics
related to the determination of reservist differential and includes only minimal
references to military leave.
21-P-0042
2

-------
EPA Military Leave Process
There are five categories of military leave identified under federal law. Both the
EPA and the Agency's payroll provider, the U.S. Department of Interior's Interior
Business Center, or IBC,1 have specific codes related to these categories for time-
and-attendance and payroll processing, respectively. Table 1 outlines the EPA's
codes associated with the different military leave types.
Table 1: Federal military leave and associated time-and-attendance codes
Military leave
provision
EPA time-and-
attendance code
Description
5 U.S.C.
§ 6323(a)
MILLV
Provides up to 15 paid days for active duty, active duty
training, and inactive duty training. Leave payments are
not subject to military offset requirements.
5 U.S.C.
§ 6323(b)
MIL22
Provides up to 22 paid days for emergency duty as
ordered by the president, the secretary of defense, or a
state governor. Leave payments are subject to military
offset requirements.
5 U.S.C.
§ 6323(c)
MILDC
Provides unlimited paid military leave to members of the
National Guard of the District of Columbia for certain
types of duty ordered or authorized under Title 49 of the
District of Columbia Code. Leave payments are subject
to military offset requirements.
5 U.S.C.
§ 6323(d)
Ml LOS
Provides reservist technicians with up to 44 paid
workdays for duties outside the United States under
certain conditions. Leave payments are not subject to
military offset requirements.
5 U.S.C.
§ 5538(a)
LVWOP
A temporary nonpaid status and absence from duty that,
in most cases, is granted at the employee's request.
Leave payments are subject to reservist differential
requirements.
Source: OIG analysis of federal laws and Agency payroll system data. (EPA OIG table)
If EPA reservists are called to inactive or active duty during times when they
would normally be working at the Agency, they must request military leave. For
military leave under 5 U.S.C. § 6323, reservists must submit their initial military
orders to the EPA supervisor. Upon approval, reservists record the military leave
in PeoplePlus, the EPA's time-and-attendance system, using the applicable codes
outlined above in Table 1.
If a reservist plans to be on unpaid military leave, the reservist's supervisor will
authorize, and the servicing personnel office will process, a request for military
leave without pay. The resulting personnel records are placed in the reservist's
electronic personnel file. In accordance with the IBC's Client Interface Guide, the
servicing personnel office should review the reservist's initial military orders,
determine whether the employee is eligible for reservist differential under
5 U.S.C. § 5538, and advise the reservist accordingly. The reservist should
provide monthly military leave-and-earnings statements to the servicing personnel
1 The IBC is a federal shared services provider, meaning that it provides systems and services for both the
Department of the Interior and other federal agencies, including the EPA.
21-P-0042
3

-------
office, which will provide them to the IBC. The IBC will then conduct what is
referred to in this report as a payroll audit calculation. In the context of 5 U.S. C.
§ 5538, this payroll audit calculation will determine whether the reservist should
receive the reservist differential. If so, the IBC will allocate the military pay and
related allowances, such as taxes, to the reservist's civilian biweekly pay period.
When reservists return from military leave, they submit their final military orders
to their supervisors and update their timesheets, as needed. Their supervisors
reconcile the final orders against the timesheets. If a supervisor determines that a
military offset may be required under 5 U.S.C. § 6323(b) or (c) and 5 U.S.C.
§ 5519, the supervisor directs the reservist to submit the military orders and
military leave-and-earnings statements to the IBC. In accordance with the IBC's
Client Interface Guide, reservists must send their paperwork to the IBC Payroll
Operations Division. The IBC then performs a payroll audit calculation to
determine the offset amount between the civilian and military pay and sends the
resulting paperwork to the IBC Debt Management Branch. If a military offset is
due, a Bill of Collection is issued to the reservist. The reservist can instead choose
to send a check to the IBC for the military offset amount in lieu of submitting
documentation to the IBC for review.
Internal Control in the Federal Government
The U.S. Government Accountability Office's Standards for Internal Control in
the Federal Government, which is commonly referred to as the "Green Book,"
outlines five internal control components that federal agencies must follow
(Table 2).2
Table 2: Five components of internal control for federal government
Control
environment
This is the foundation for an internal control system. Management should
establish a control environment that affirms a commitment to integrity and
ethical values. The control environment provides the discipline and structure
to help an agency achieve its objectives.
Risk assessment
Managers assess risks facing the agency as it seeks to execute its
programs and achieve its objectives. This assessment is the foundation for
developing appropriate risk responses.
Control activities
After assessing the risk, the control activities are the actions management
establishes through policies and procedures to achieve objectives and
respond to risks.
Information and
communication
Management should use, and internally and externally communicate, quality
information to achieve the agency's objectives.
Monitoring
Management should establish and implement activities to monitor agency
performance, evaluate results, and promptly resolve identified deficiencies.
Source: The Green Book. (EPA OIG table)
In June 2016, the Office of Management and Budget issued Memorandum M-16-17,
OMB Circular A-123, Management's Responsibility for Enterprise Risk
Management and Internal Control. The Circular requires agencies to implement
2 GAO-14-704G, dated September 2014.
21-P-0042
4

-------
an enterprise risk-management process to ensure that federal managers are
effectively managing risks. It states that the standards outlined in the Green Book
"provide the internal control framework and criteria Federal managers must use in
designing, implementing, and operating an effective system of internal control."
The Circular establishes an assessment process based on the Green Book, and it
defines management's responsibilities for the evaluation of the effectiveness of
internal controls.
Responsible Offices
The Office of Mission Support leads the Agency's core mission support functions
to improve efficiency, coordination, and the customer experience for internal
customers, stakeholders, and the public. The Office of Human Resources, within
the OMS, is responsible for the management of human resources functions,
including agencywide policy development.
The Office of the Chief Financial Officer is responsible for formulating and
providing time-and-attendance reporting. The OCFO is also responsible for the
PeoplePlus system and its associated operational policies, including:
•	Enforcing internal control policies and standards.
•	Monitoring records to confirm that appropriate individuals are entering,
attesting, submitting, verifying, and approving the time worked.
•	Providing system administration.
•	Coordinating training.
The Department of the Interior's IBC was selected by the EPA in 2013 to provide
the Agency's human resources and payroll services, including the processing of
military leave payments.
Scope and Methodology
We conducted this performance audit from August 2019 to August 2020 in
accordance with generally accepted government auditing standards. 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.
As detailed in Appendix A, we assessed the internal control components and
underlying principles—as outlined in the U.S. Government Accountability
Office's Green Book—that were significant to the audit objectives.3
3 An entity designs, implements, and operates internal controls to achieve its objectives related to operations,
reporting, and compliance. The Government Accountability Office sets internal control standards for federal entities
in the Green Book.
21-P-0042
5

-------
To determine whether the EPA followed federal laws and regulations and
established controls related to its employees on military leave, we:
•	Reviewed federal laws and regulations, external guidance, and internal
policies and procedures related to military leave, military leave pay, and
the reservist differential authority.
•	Interviewed key managers to obtain an understanding of their roles and
responsibilities related to military leave and reservist differential.
•	Identified the universe of military reservists who charged military leave
pay codes from January 1, 2017, through June 30, 2019, per data
downloaded from the IBC's payroll information system.
•	Surveyed reservists and their supervisors to obtain an understanding of
federal military leave requirements, as well as the EPA's policies,
procedures, and formal training related to military leave.
•	Selected a risk-based judgmental sample of military leave transactions,
and tested compliance with federal and Agency requirements.
Prior Report
EPA OIG Report No. 20-P-0063, Outdated EPA Leave Manual and Control
Weaknesses Caused Irregularities in the Office of Air and Radiation's
Timekeeping Practices, issued December 19, 2019, found that the EPA's Leave
Manual and Leave Handbook were outdated. The Agency agreed with the OIG's
recommendation to update the EPA's leave policy to reflect current laws and
regulations but did not provide an acceptable estimated completion date. Once the
Leave Manual has been updated, there will be no need for the Leave Handbook.
21-P-0042
6

-------
Chapter 2
EPA's Military Leave Program
Is Not Compliant with Federal Laws
The EPA has not fully complied with federal laws related to military leave,
including 5 U.S.C. § 6323(a)-(c) pertaining to military leave without loss of pay,
5 U.S.C. § 5538(a) pertaining to reservist differential, and 5 U.S.C. § 5519
pertaining to military offset. This occurred because Agency management did not
establish effective internal controls to implement these laws. The EPA instead
relied on reservists, their supervisors, and the IBC to comply with federal
requirements associated with military leave. EPA management's lack of internal
controls to effectively implement federal laws resulted in potential overpayments
or underpayments to EPA reservists. Of the military leave transactions we
reviewed, for 75 percent of the reservists tested, or 36 of 48 reservists, there was
at least one compliance error with military leave requirements. These errors
resulted in about $129,000 in potential improper payments.
Significant Errors Associated with Military Leave Transactions
Our audit testing found significant errors associated with military leave
transactions across all military leave categories. Table 3 shows that EPA
reservists recorded a total of 1,628 military leave transactions during our audit
period, from January 2017 through June 2019. We tested 105 of these
transactions, which were made by 48 reservists. Of the military leave transactions
we tested, 36 of the 48 reservists, or 75 percent, made at least one transactional
error related to military leave requirements.
Table 3: Military transactions (January 1, 2017-June 30, 2019)
PeoplePlus
leave code
Number of
reservists who
used leave
code
Number of
transactions
made
Dollar value
charged
Transactions
tested
Error rate
detected
MILLV
121
1,454
$1,287,252
20
85%
MIL22
18
99
117,837
10
90
MILDC
2
11
11,935
11
27
Ml LOS
2
7
7,285
7
100
LVWOP
27
57
N/A
57
*TBD
Total
1,628
$1,424,309
105
**
Source: Military transaction information from the IBC data system. (EPA OIG table)
* To be determined. An error rate related to LVWOP cannot be determined until extended
deployment documentation is reviewed by the OMS for reservist differential eligibility.
** We did not calculate an overall transactional error rate because the methodology for selecting
transactions to test in each category varied.
21-P-0042
7

-------
We also identified about $129,000 in potential improper payments related to
104 transactions under military leave codes MILLV (five transactions) and
MIL22 (99 transactions).4 As shown in Table 3, there were a total of
1,628 transactions across all military leave codes in this time frame. The actual
potential improper payment amount related to the use of military leave codes
from January 2017 through June 2019 could, therefore, be substantially higher
than the approximately $129,000 we identified within these 104 transactions.
The potential improper payments and instances of noncompliance with respect to
5 U.S.C. §§ 6323 and 5519, as well as potential amounts owed to reservists with
respect to 5 U.S.C. § 5538, are discussed in the subsections below.
5 U.S.C. § 6323(a): 15 Days for Active Duty and Active/Inactive
Duty Training
Under 5 U.S.C. § 6323(a)(1), reservists are entitled to leave for active duty, active
duty training, or inactive duty training. The EPA codes this leave as MILLV in
PeoplePlus. The use of this leave does not require a payment offset or reservist
differential; the reservist is allowed to keep both the civilian and military pay.
From January 2017 through June 2019, 121 reservists used this pay code,
recording 1,454 separate payroll transactions. We analyzed 20 transactions and
found that 85 percent of these transactions contained at least one of the following
errors:
•	Incorrect military pay code was charged.
•	Military leave dates charged did not match dates on military orders.
•	Final military orders were not submitted.
Also, within these 20 transactions, we found approximately $11,000 of improper
payments related to five transactions. We consider these payments to be improper
because the Agency could not substantiate the validity of the reservists' military
leave. Specifically, the dates of the military leave charged to the Agency did not
match the dates shown on the reservists' military orders.
5 U.S.C. § 6323(b): 22 Days for Emergency Duty
Under 5 U.S.C. § 6323(b), reservists are entitled to up to 22 days of paid military
leave for emergency duty as ordered by the president, the secretary of defense, or
a state governor. The EPA codes this leave as MIL22 in PeoplePlus. The use of
this military leave is subject to military offset requirements, and reservists are
entitled to receive the higher of their military or civilian pay, but not both. So that
the IBC can calculate any military offset due from the reservist, the reservist must
provide the necessary documentation, including leave-and-earnings statements, to
4 Although we tested only ten MIL22 transactions, the error rate was significant enough to question the entire
population of 99 MIL22 transactions. See the "5 U.S.C. § 6323(b): 22 Days for Emergency Duty" subsection for
details.
21-P-0042

-------
the IBC and request that the IBC perform a payroll audit calculation. The IBC
will then generate an invoice for overpayment of civilian pay, as applicable, and
send it to the reservist.
From January 2017 through June 2019, 18 reservists used this pay code, recording
99 separate payroll transactions under 22 sets of military orders. We judgmentally
selected ten payroll transactions to test and found that the IBC did not perform a
payroll audit calculation for nine of the ten transactions to determine the military
offset due. This represents a 90 percent sampling error rate.
We did not expand our judgmental selection testing because of the high rate of
internal control failure—in other words, the lack of payroll audit calculations—
within just those ten transactions. We therefore identified the approximately
$118,000 charged to MIL22 during our audit period as possible improper
payments. We consider these payments potentially improper because we have no
assurance that the EPA identified and recovered military offset payments due
under federal law, and it is likely that at least some portion of the approximately
$118,000 paid in military leave under Section 6323(b) is subject to military offset.
5 U.S.C. § 6323(c): Unlimited Leave for Washington, D.C., Reservists
Under 5 U.S.C. § 6323(c), reservists who are members of the Washington, D.C.,
National Guard are entitled to unlimited military leave for each day of a parade or
encampment under Title 49 of the District of Columbia Code. The EPA codes this
leave as MILDC in PeoplePlus. The use of this military leave is subject to
military offset requirements in accordance with 5 U.S.C. § 5519, and the reservist
must provide the IBC with the necessary documentation and request that the IBC
perform a payroll audit calculation to determine the dollar amount due from the
reservist.
From January 2017 through June 2019, two reservists used this pay code. We
analyzed all 11 transactions for these two reservists under this pay code. One
reservist incorrectly used MILDC instead of MIL 15 for three transactions, for
a 27 percent error rate. These miscodings were identified, and the reservist
subsequently corrected the relevant timecards and charged the appropriate
pay code.
The remaining eight transactions were made by the second reservist, who
correctly charged leave to MILDC. This reservist should be commended for
taking responsibility to repay the offset due to the Agency. It took the reservist
many hours over the course of six months of communicating with OMS and
OCFO personnel to finally have the payroll audit calculation performed by the
IBC to determine the correct military offset amount.
21-P-0042
9

-------
5 U.S.C. § 6323(d): 44 Days for Duties Outside the United States for
Reservist Technicians
Under 5 U.S.C. § 6323(d), reservists who are military technical specialists, or
reservist technicians, are entitled to up to 44 paid workdays for duties outside the
United States under certain conditions. The EPA codes this leave as MILOS in
PeoplePlus.
From January 2017 through June 2019, two reservists used this pay code. We
analyzed all seven transactions for these two reservists under this pay code and
found that all seven were inaccurately coded, for a 100 percent error rate.
5 U.S.C. § 5538(a): Reservist Differential
Under 5 U.S.C. § 5538(a) and OPM policy, reservists who are on military leave
without pay for extended deployments may be eligible for reservist differential for
active duty contingency operations under specific authority. The EPA codes this
leave as LVWOP in PeoplePlus.
From January 2017 through June 2019, 27 reservists used the LVWOP pay code.
We analyzed all 57 transactions made by these 27 reservists and found that
81 percent of the extended deployment transactions were not audited by the IBC.
We do not know whether all of these unaudited extended deployment transactions
are errors, because only certain active-duty contingency operations under specific
authority are eligible for reservist differential. For example, pursuant to 5 U.S.C.
§ 5538(b), the employee must be entitled to reemployment rights to be eligible for
reservist differential. It is possible that reservists were underpaid by the EPA
because the reservist differential was not calculated by the IBC.
The Agency must first examine the associated military documentation—that is,
military orders and military leave-and-earnings statements—to determine whether
the reservist would be entitled to reservist differential pay. A payroll audit
calculation would not be required, however, if the reservist did not meet the
conditions to be eligible for reservist differential under 5 U.S.C. § 5538. For
example, if the reservist's military pay was equal to or higher than what the
Agency pay would have been, the Agency would not owe the reservist any
differential. For those transactions that meet the criteria for reservist differential,
the Agency needs to provide the necessary documentation, including leave-and
earnings-statements, to request that the IBC perform payroll audit calculations.
21-P-0042
10

-------
EPA Lacks Effective Internal Controls Over Use of Military Leave
The noncompliances discussed in the examples above occurred because the
Agency has not established effective internal controls over the use of military
leave. Specifically, the Agency has not:
•	Updated policies and procedures to reflect current military leave, reservist
differential, and military offset requirements or designed and implemented
a process that monitors compliance and proper implementation of the leave
statutes.
•	Provided resources and training to supervisors, timekeepers, and reservists
for military leave activity in PeoplePlus or implemented a process to verify
that time charges are correct.
•	Implemented a process to ensure that appropriate reservist's differential and
military offset payroll audit calculations are being requested, when required,
and that appropriate military documentation is properly submitted.
The Green Book and Office of Management and Budget Circular No. A-123 state
that management is responsible for complying with applicable federal laws and
regulations, as well as for designing, implementing, and monitoring internal
controls to achieve its objectives. When effective and systematic internal controls
are in place, compliance with laws and regulations becomes more likely.
EPA Needs to Update Policies and Procedures and Establish
Processes to Monitor Compliance
As part of the EPA's process to comply with and properly implement federal
requirements related to military leave, the Agency's leave policies and procedures
should provide reservists and supervisors with clear and current guidance
regarding the different types of military leave. Further, the policies should address
military leave eligibility requirements, including documentation requirements,
contingency operation authority, and post-leave responsibilities once the reservist
returns to civilian duty.
The OMS and the OCFO have not established current policies and procedures
consistent with all applicable federal requirements for military leave or
implemented a process to monitor compliance. As described in Chapter 1, the
Agency's 1995 Leave Manual is outdated, and it does not fully incorporate
5 U.S.C. § 6323 requirements. The Agency's 1991 Pay Administration Manual
similarly has not been updated to fully reflect 5 U.S.C. §§ 6323 and 5519
requirements.
Also, in accordance with 5 U.S.C. § 5538, effective March 15, 2009, agency
heads are required, in consultation with the OPM, to prescribe procedures to carry
21-P-0042
11

-------
out the statute's requirements for reservist differential. The OPM's
implementation guidance directs each agency to establish processes and
procedures for implementing the reservist differential pay authority. The EPA has
not updated any of its policies and procedures or adopted specific processes to
address reservist differential.
Because the Agency's policies and procedures are significantly outdated, it is
possible that the EPA has not been paying the reservist differential it owes to
reservists as far back as 2009, when 5 U.S.C. § 5538 was first enacted. Similarly,
with respect to 5 U.S.C. §§ 6323 and 5519, reservists may have failed to pay the
military offset due to the Agency since before the timeframe of this audit. These
circumstances could result in additional improper payments not specifically
identified in our audit.
EPA Needs to Provide Resources for Military Leave
The Agency lacks resources, such as current policies and procedures and training,
for supervisors and reservists for military leave activity in PeoplePlus to ensure
that time charges are correct. We surveyed all active reservists and their
supervisors regarding their understanding of the EPA's military leave policies and
procedures. This perspective is important because the Agency relies heavily on its
reservists and their supervisors to properly record military leave activity in
PeoplePlus.
Of the 233 individuals surveyed, we received responses from 105 individuals, a
45 percent response rate. As shown in Figure 1, more than 50 percent of the
respondents indicated that there was a lack of guidance and resources for
reservists and their supervisors. Some reservists and supervisors did indicate that
they received assistance, such as policies, from the EPA regarding military leave.
21-P-0042
12

-------
Figure 1: EPA military leave survey results
Did the Agency or supervisor provide training on how to apply for military leave?
Supervisor Response
ii
mm
Did the Agency provide the policies, processes, or procedures on the
implementation of the reservist differential pay authority?
Reservist Response

Supervisor Response
I







i
r




!


1
Reservist Response
Source: EPA reservist and supervisor survey results. (EPA OIG images)
Although the Agency relies almost exclusively on the reservist and supervisor as
its primary internal control mechanism for compliance with federal requirements,
the Agency has not provided the resources necessary for these internal controls to
be effective.
Reservist Perspective
"Create formal in processing checklists outline discussion required w/in 30-60 days of
employment or assigned to new position. Add to leadership training requirements, create &
implement focused training on subject area, create resource information to be displayed in
common areas & add to EPA @Work."
—EPA reservist response to 016 survey
21-P-0042
13

-------
EPA Needs to Implement A Process for Requesting Payroll Audit
Calculations
The EPA does not have a process in place for reservists or their supervisors to
request military offset and reservist differential payroll audit calculations. As the
Agency's payroll provider, the IBC performs payroll audit calculations to
determine the dollar amount due either from the EPA's reservists (military offset)
or to the EPA's reservists (reservist differential). However, the Agency or the
reservists must request the calculation and provide the appropriate documentation,
specifically military orders and military leave-and-earnings statements.
The IBC cannot automatically perform these audits because:
•	Only the EPA supervisor would know when reservists return to civilian
duty to trigger such an audit.
•	The EPA supervisor would need to review the reservist's military orders
to determine whether the reservist's military leave would require a
military offset calculation under 5 U.S.C. § 5519.
•	The EPA servicing personnel office needs to review documentation to
determine whether reservists meet the reservist differential eligibility
requirements under 5 U.S.C. § 5538.
•	The IBC would not have the reservists' military leave-and-earnings
statements and final military orders needed to perform the payroll audit
calculations.
We found that the Agency lacks a process to identify whether:
•	Reservists have requested that the IBC perform payroll audit calculations
to determine military offsets, when required.
•	Servicing personnel offices have requested that the IBC perform payroll
audit calculations to determine reservist differential.
For those calculations requested, we found that neither the Agency nor its
reservists have, as of May 2020, consistently submitted the necessary military
documentation for the IBC to perform payroll audit calculations since the IBC
began providing payroll services to the EPA in 2014. The lack of policies and
procedures, coupled with the lack of monitoring by Agency officials, has resulted
in potential underpayments and overpayments of military pay to its reservists.
Furthermore, in accordance with the Payment Integrity Information Act of 2019,
the OCFO must report improper payments each year in the EPA's Annual
Financial Report to Congress. Military leave payments that the EPA determines to
21-P-0042
14

-------
be improper must be reported for the Agency to comply with this statutorily
mandated reporting requirement.
Conclusion
The Agency's lack of effective internal controls over military leave caused a
significant number of errors related to military leave transactions in the EPA's
PeoplePlus system. It also resulted in potential improper payments made to
military reservists. The EPA's OMS and OCFO have intersecting responsibilities
for establishing and updating internal controls to properly implement time-and-
attendance requirements, such as those related to military leave, that comply with
federal requirements. Substantial improvements to the Agency's system of
internal controls over military pay are needed to prevent the errors we identified
during our audit and provide reasonable assurance that the EPA complies with
and properly implements military leave requirements.
Recommendations
We recommend that the assistant administrator for Mission Support and the chief
financial officer:
1.	Adopt and implement policies and procedures on military leave and pay
requirements that comply with 5 U.S.C. §§ 5538, 6323, and 5519.
2.	Provide resources for supervisors, timekeepers, and reservists on their
roles and responsibilities related to military leave under the law and
Agency policies.
3.	Establish and implement internal controls that will allow the Agency to
monitor compliance with applicable laws, federal guidance, and Agency
policies, including periodic internal audits of all military leave, to verify
that (a) charges by reservists are correct and supported and (b) appropriate
reservist differential and military offset payroll audit calculations are
being requested and performed.
4.	Require reservists to correct and supervisors to approve military leave time
charging errors in PeoplePlus that have been identified during the audit or as
part of the Agency's actions related to Recommendations 5 and 6.
5.	Recover the approximately $11,000 in military pay related to unsupported
5 U.S.C. § 6323(a) military leave charges, unless the Agency can obtain
documentation to substantiate the validity of the reservists' military leave.
6.	Submit documentation for the reservists' military leave related to the
approximately $118,000 charged under 5 U.S.C. § 6323(b) to the EPA's
21-P-0042
15

-------
payroll provider so that it may perform payroll audit calculations and
recover any military offsets that may be due.
7.	Identify the population of reservists who took unpaid military leave
pursuant to 5 U.S.C. § 5538 and determine whether those reservists are
entitled to receive a reservist differential. Based on the results of this
determination, take appropriate steps to request that the EPA's payroll
provider perform payroll audit calculations to identify and pay the
amounts that may be due to reservists.
8.	For the time periods outside of the scope of our audit (pre-January 2017
and post-June 2019), identify the population of reservists who charged
military leave under 5 U.S.C. § 6323(b) or 6323(c) and determine whether
military offset was paid by the reservists. If not, review reservists' military
documentation to determine whether payroll audit calculations are required.
If required, request that the EPA's payroll provider perform payroll audit
calculations to identify and recover military offsets that may be due from
the reservists under 5 U.S.C. §§ 6323 and 5519.
We recommend that the chief financial officer:
9.	Report all amounts of improper payments resulting from paid military
leave for inclusion in the annual Agency Financial Report, as required by
the Payment Integrity Information Act of 2019.
Agency Response and OIG Assessment
The Agency concurred with all recommendations and provided an acceptable
multiphase corrective action plan. The estimated dates for completion of the
corrective actions range from June 30, 2021, to June 30, 2022. We consider all
recommendations resolved with corrective actions pending. The Agency's
complete response is in Appendix B.
To address the recommendations, the Agency identified corrective actions to be
performed by the OMS and the OCFO, as follows:
1.	The OMS will update policies and finalize procedures related to military
leave and pay to comply with statutory requirements. The OCFO will update
PeoplePlus or make other system changes in support of internal controls.
2.	The OCFO will provide PeoplePlus training related to military leave and
pay policies to supervisors, timekeepers, and military reservists.
3.	As part of its internal control processes, the OMS will conduct periodic
audits to ensure Agency compliance with updated military leave policy.
21-P-0042
16

-------
For any errors identified, the OCFO will work with the IBC to correct any
timekeeping errors identified.
4.	The OCFO will obtain and review documentation related to the time
charging errors identified in this report and take appropriate actions to
correct the errors.
5.	For any unsupported leave charges under the 15-day military leave
authority, the OMS will coordinate with the IBC to initiate a process to
recover the military pay. The OCFO will recover any military pay related
to unsupported leave charges for reservists who are no longer EPA
employees.
6.	The OMS will work with the EPA's programs and regions to collect
documentation related to unsupported military leave charges under the
22-day emergency military leave authority. Unsupported military offsets
will be recovered by the OMS and the OCFO, as applicable.
7.	The OCFO will provide the OMS with the population of reservists charging
military leave outside of the time frame of our audit testing. The OMS will
review this information and determine which items need to be submitted to
the IBC to determine whether military offsets were paid accurately.
8.	For any military leave charges for which reservists were required to, but
did not, reimburse the EPA for military offsets, the OMS will coordinate
with the IBC to initiate the process to recover any military offsets. The
OCFO will recover any military offsets for reservists who are no longer
EPA employees.
9.	The OCFO will report any paid military leave amounts identified as an
improper payment within the annual Agency Financial Report for the
applicable fiscal year. The OCFO will also perform an internal control
review on military leave pay during the fiscal year 2021 Office of
Management and Budget Circular A-123 Internal Review period and
report any identified improper payment amounts in the fiscal year 2021
Annual Financial Report.
21-P-0042
17

-------
Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
Rec.
No.
Page
No.
Subject
Status1
Action Official
Planned
Completion
Date
Potential
Monetary
Benefits
(in $000s)
15 Adopt and implement policies and procedures on military leave
and pay requirements that comply with 5 U.S.C. §§ 5538, 6323,
and 5519.
15 Provide resources for supervisors, timekeepers, and reservists
on their roles and responsibilities related to military leave under
the law and Agency policies.
15 Establish and implement internal controls that will allow the
Agency to monitor compliance with applicable laws, federal
guidance, and Agency policies, including periodic internal audits
of all military leave, to verify that (a) charges by reservists are
correct and supported and (b) appropriate reservist differential
and military offset payroll audit calculations are being requested
and performed.
15 Require reservists to correct and supervisors to approve military
leave time charging errors in PeoplePlus that have been
identified during the audit or as part of the Agency's actions
related to Recommendations 5 and 6.
15 Recover the approximately $11,000 in military pay related to
unsupported 5 U.S.C. § 6323(a) military leave charges, unless
the Agency can obtain documentation to substantiate the validity
of the reservists' military leave.
15	Submit documentation for the reservists' military leave related to
the approximately $118,000 charged under 5 U.S.C. § 6323(b) to
the EPA's payroll provider to perform payroll audit calculations
and recover any military offsets that may be due.
16	Identify the population of reservists who took unpaid military
leave pursuant to 5 U.S.C. § 5538, and determine whether those
reservists are entitled to receive a reservist differential. Based on
the results of this determination, take appropriate steps to
request that the EPA's payroll provider perform payroll audit
calculations to identify and pay the amounts that may be due to
reservists.
16 For the time periods outside of the scope of our audit (pre-
January 2017 and post-June 2019), identify the population of
reservists who charged military leave under 5 U.S.C. § 6323(b)
or 6323(c) and determine whether military offset was paid by the
reservists. If not, review reservists' military documentation to
determine whether payroll audit calculations are required. If
required, request that the EPA's payroll provider perform payroll
audit calculations to identify and recover military offsets that may
be due from the reservists under 5 U.S.C. §§ 6323 and 5519.
16 Report all amounts of improper payments resulting from paid
military leave for inclusion in the annual Agency Financial
Report, as required by the Payment Integrity Information Act of
2019.
Assistant Administrator for
Mission Support and
Chief Financial Officer
Assistant Administrator for
Mission Support and
Chief Financial Officer
Assistant Administrator for
Mission Support and
Chief Financial Officer
Assistant Administrator for
Mission Support and
Chief Financial Officer
Assistant Administrator for
Mission Support and
Chief Financial Officer
Assistant Administrator for
Mission Support and
Chief Financial Officer
Assistant Administrator for
Mission Support and
Chief Financial Officer
Assistant Administrator for
Mission Support and
Chief Financial Officer
Chief Financial Officer
4/30/22
4/30/22
6/30/22
9/30/21
8/31/21
8/31/21
2/28/22
$11
$118
2/28/22
12/1/21
C = Corrective action completed.
R = Recommendation resolved with corrective action pending.
U = Recommendation unresolved with resolution efforts in progress.
21-P-0042
18

-------
Appendix A
Internal Control Assessment
This table identifies which internal control components and underlying principles are significant
to the audit objectives.
Which internal control components
are significant to the audit objective(s)?
Which internal control principles
are significant to the audit objective(s)?
X
Control Environment
The foundation for an internal control
system. It provides the discipline and
structure to help an entity achieve its
objectives.
X
1. The oversight body and management should demonstrate
a commitment to integrity and ethical values.
X
2. The oversight body should oversee the entity's internal
control system.
X
3. Management should establish an organizational structure,
assign responsibilities, and delegate authority to achieve
the entity's objectives.
X
4. Management should demonstrate a commitment to recruit,
develop, and retain competent individuals.
X
5. Management should evaluate performance and hold
individuals accountable for their internal control
responsibilities.
X
Risk Assessment
Management assesses the risks facing
the entity as it seeks to achieve its
objectives. This assessment provides the
basis for developing appropriate risk
responses.
X
6. Management should define objectives clearly to enable the
identification of risks and define risk tolerances.
X
7. Management should identify, analyze, and respond to risks
related to achieving the defined objectives.
X
8. Management should consider the potential for fraud when
identifying, analyzing, and responding to risks.
X
9. Management should identify, analyze, and respond to
significant changes that could impact the internal control
system.
X
Control Activities
The actions management establishes
through policies and procedures to
achieve objectives and respond to risks in
the internal control system, which includes
the entity's information system.
X
10. Management should design control activities to achieve
objectives and respond to risks.
X
11. Management should design the entity's information system
and related control activities to achieve objectives and
respond to risks.
X
12. Management should implement control activities through
policies.
X
Information and Communication
The quality information management and
personnel communicate and use to
support the internal control system.
X
13. Management should use quality information to achieve the
entity's objectives.
X
14. Management should internally communicate the necessary
quality information to achieve the entity's objectives.
X
15. Management should externally communicate the
necessary quality information to achieve the entity's
objectives.
X
Monitoring
Activities management establishes and
operates to assess the quality of
performance overtime and promptly
resolve the findings of audits and other
reviews.
X
16. Management should establish and operate monitoring
activities to monitor the internal control system and
evaluate the results.
X
17. Management should remediate identified internal control
deficiencies on a timely basis.
Source: Based on internal control components and principles outlined in GAO-14-704G, Standards for Internal
Control in the Federal Government (also known as the "Green Book"), issued September 10, 2014.
21-P-0042
19

-------
Appendix B
^t0SX


Agency Response to Draft Report
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
*	WASHINGTON, D.C. 20460
October 16, 2020
MEMORANDUM
SUBJECT:
FROM:
Response to Office of Inspector General Draft Report No. OA&E-FY19-0286 "EPA
Needs to Oversee Its Military Pay Processes to Prevent Improper Paymentsdated
September 2, 2020
DAVID
David A. Bloom, Deputy Chief Financial Officer R, /-^ly
Office of the Chief Financial Officer
Digitally signed by DAVID
BLOOM
Date: 2020.10.16
14:25:15-04'00'
Vizian,
Donna J. Vizian, Pnncipal Deputy Assistant Administrator Qonna
Office of Mission Support
Digitally signed by Vizian,
Donna
Date: 2020.10.16
13:43:44 -04'00'
TO:	John Trefry, Director
Forensic Audits Directorate
Office of Audit
Thank you for the opportunity to respond to the issues and recommendations in the subject draft
audit report. The following is a summary of the U.S. Environmental Protection Agency's overall
position, along with its position on each of the report recommendations. The draft report assigned
eight joint recommendations to both the Office of the Chief Financial Officer and the Office of
Mission Support and one recommendation solely to the OCFO
AGENCY'S OVERALL POSITION
The agency concurs with the Office of Inspector General's recommendations and has provided
high-level intended corrective actions and estimated completion dates. The corrective actions
have been reviewed by both the OCFO and OMS.
21-P-0042
20

-------
AGENCY'S RESPONSE TO DRAFT AUDIT RECOMMENDATIONS
Agreements
No.
Recommendation
Assigned
to:
High-Level Intended
Corrective Action(s)
Estimated
Completion Date
1
Adopt and implement policies
and procedures on military
leave and pay requirements
that comply with 5 U.S.C. ,§§
5538, 6323, and 5519.
OMS&
OCFO
The OMS will update policy and
finalize procedures to comply with
statutory requirements.
June 30, 2021



The OCFO will determine what
system changes may be necessary
to update PeoplePlus or make other
changes in support of internal
controls, where feasible, to comply
with any policies and procedures
related to military leave and pay
policy.
October 31, 2021
If changes are feasible and
necessary, the OCFO will
develop a schedule for
implementation.
April 30, 2022
2
Provide resources for
supervisors, timekeepers, and
reservists on their roles and
responsibilities related to
military leave under the law
and Agency policies.
OMS&
OCFO
The OMS will update policy and
finalize procedures to comply with
statutory requirements.
June 30, 2021
The OCFO will provide
PeoplePlus training to support
roles and responsibilities related to
military leave and pay policy.
April 30, 2022
3
Establish and implement internal
controls that will allow the
Agency to monitor compliance
with applicable laws, federal
guidance, and Agency policies,
including periodic internal audits
of all military leave, to verify
that (a) charges by reservists are
correct and supported and (b)
appropriate reservist differential
and military offset payroll audit
calculations are being requested
and performed.
OMS&
OCFO
The OMS will conduct periodic
human capital audits to ensure
compliance with the updated
military leave policy.
June 30, 2022
The OCFO will work with the
Interior Business Center, the EPA's
payroll provider, to ensure the
necessary timecard corrections
identified by the OMS periodic
audit were made by the employee
and approved by the supervisor in
accordance with agency policy.
The OCFO will provide a report to
the OMS confirming timecard
corrections identified by the OMS
periodic audit were made by the
employee and approved by the
supervisor for the OMS to
distribute to the appropriate offices.
June 30, 2022
21-P-0042
21

-------
4
Require reservists to correct and
supervisors to approve military
leave time charging errors in
PeoplePlus that have been
identified during the audit or as
part of the Agency's actions
related to Recommendations 5
and 6.
OMS&
OCFO
The OCFO will work with the
agency's payroll provider to confirm
the necessary time charging errors
identified in the audit were corrected
by the employee and approved by
the supervisor; and the OCFO will
then provide a report to the OMS
confirming the necessary time
charging errors identified in the
audit were corrected by the
employee and approved by the
supervisor for the OMS to
distribute to the appropriate
offices.
September 30,
2021
5
Recover the approximately
$11,000 in military pay related
to unsupported 5 U.S.C.
§ 6323(a) military leave
charges, unless the Agency can
obtain documentation to
substantiate the validity of the
reservists' military leave.
OMS&
OCFO
For any unsupported leave charges,
the OMS will coordinate with the
IBC, the agency's payroll provider,
to initiate the process to recover the
military pay, and where applicable,
the OCFO will recover any
unsupported leave charges for out-
of-service debt.
August 31, 2021
6
Submit documentation for the
reservists' military leave
related to the approximately
$118,000 charged under 5 U.S.C.
§ 6323(b) to the EPA's payroll
provider to perform payroll audit
calculations and recover any
military offsets that may be due.
OMS&
OCFO
The OMS will work with the
EPA's programs and regions to
collect documentation related to
the identified military leave
charges. For any unsupported
leave charges, the OMS will
coordinate with the IBC to initiate
the process to recover any military
offsets.
August 31, 2021
The OCFO will recover any
unsupported leave charges for
out-of-service debt.
August 31, 2021
7
Identify the population of
reservists who took unpaid
military leave pursuant to 5
U.S.C. § 5538 and determine
whether those reservists are
entitled to receive a reservist
differential. Based on the results
of this determination, take
appropriate steps to request that
the EPA's payroll provider
perform payroll audit
calculations to identify and pay
the amounts that may be due to
reservists.
OMS&
OCFO
The OCFO will provide the OMS
with the population of reservists
charging military leave. The OMS
will conduct a review of this
population to determine which
items need to be provided to the
IBC for audit calculation of
whether military offsets were paid
accurately.
December 31,
2021
For amounts due to reservists
who are no longer EPA
employees, the OCFO will
coordinate with the IBC on the
amounts due.
February 28, 2022
21-P-0042
22

-------
8
For the time periods outside of
the scope of our audit (pre-
January 2017 and post-June
2019), identify the population of
reservists who charged military
leave under 5 U.S.C. § 6323(b)
or 6323(c), and determine
whether military offset was paid
by the reservists. If not, review
reservists' military
documentation to determine
whether payroll audit
calculations are required. If
required, request that the EPA's
payroll provider perform payroll
audit calculations to identify
and recover military offsets that
may be due from the reservists
under 5 U.S.C. §§ 6323 and
5519.
OMS &
OCFO
The OCFO will provide the OMS
with the population of reservists
charging military leave. The OMS
will conduct a review of this
population to determine which
items need to be provided to the
IBC for audit calculation of
whether military offsets were paid
accurately.
December 31,
2021
For any unsupported leave
charges, The OMS will coordinate
with the IBC to initiate the process
to recover any military offsets.
The OCFO will recover any
unsupported leave charges for out-
of-service debt.
February 28, 2022
9
Report all amounts of improper
payments resulting from paid
military leave for inclusion in
the annual Agency Financial
Report, as required by the
Payment Integrity Information
Act of 2019.
OCFO
The OCFO will report any paid
military leave amounts identified as
an improper payment(s) within the
annual Agency Financial Report for
the applicable fiscal year; and the
OCFO also will perform an internal
control review on military leave
pay during the FY 2021 A-123
Internal Review period and report
any identified
improper payment amounts in
the FY 2021 AFR.
December 1, 2021
CONTACT INFORMATION
If you have any questions regarding this response, please contact the OCFO Audit Follow-up
Coordinator, Andrew LeBlanc, at leblanc.andrew@epa.gov or (202) 564-1761 or the OMS Audit
Follow-up Coordinator, Mitchell Hauser, at hauser.mitchell@epa.gov or (202) 564-7636.
cc: Carol Terris
C. Paige Hanson
Lek Kadeli
Charlie Dankert
Katherine Trimble
James Hatfield
Charles Sheehan
Edward Shields
Jeanne Conklin
21-P-0042
23

-------
Michael CI ant on
Meshell Jones-Peeler
Eva Ripollone
Richard Gray
Mara Kamen
John Trefry
Dan Coogan
Jan Jablonski
Debbi Hart
Monisha Harris
Loretta Hunt
Marilyn Armstrong
Lynnann Hitchens
OCFO-OC-MANAGERS
Mary Robertson
Leah Nikaidoh
Stephen Seifert
Mitchell Hauser
Andrew LeBlanc
Jose Kercado
21-P-0042
24

-------
Appendix C
Distribution
The Administrator
Assistant Deputy Administrator
Associate Deputy Administrator
Chief of Staff
Deputy Chief of Staff/Operations
Chief Financial Officer
General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for Public Affairs
Deputy Chief Financial Officer
Assistant Administrator for Mission Support
Principal Deputy Assistant Administrator for Mission Support
Associate Deputy Assistant Administrator for Mission Support
Associate Chief Financial Officer
Associate Chief Financial Officer for Policy
Controller
Deputy Controller
Director, Office of Continuous Improvement, Office of the Chief Financial Officer
Director, Policy, Training, and Accountability Division, Office of the Controller
Director, Office of Resources and Business Operations, Office of Mission Support
Branch Chief, Management, Integrity and Accountability Branch; Policy, Training, and
Accountability Division, Office of the Controller
Audit Follow-Up Coordinator, Office of the Administrator
Audit Follow-Up Coordinator, Office of the Chief Financial Officer
Audit Follow-Up Coordinator, Office of Mission Support
21-P-0042
25

-------