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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
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
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
•	Compliance with the law.
•	Operating efficiently and
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
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
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.