Human Capital:

Continued Opportunities Exist for FDA and OPM to Improve Oversight of Recruitment, Relocation, and Retention Incentives

GAO-10-226: Published: Jan 22, 2010. Publicly Released: Feb 22, 2010.

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The Food and Drug Administration (FDA) within the Department of Health and Human Services (HHS) has faced challenges in obtaining the workforce needed to support its responsibilities and similar to other agencies, has paid selected employees recruitment, relocation, and retention (3R) incentives. This report examines (1) the extent to which FDA is linking its use of 3R incentives to its strategic human capital approaches to address its current and emerging challenges; (2) the extent to which FDA's 3R incentives were awarded consistent with regulations and the internal controls FDA has in place to ensure proper disbursement of 3R incentives; and (3) the steps the Office of Personnel Management (OPM) has taken to help ensure that agencies have effective oversight of their 3R incentive programs and how HHS is providing oversight. GAO analyzed a stratified sample of FDA's 3R incentives files, 3R data provided by HHS, HHS's 3R policy and FDA's guidance, and interviewed HHS, FDA, and OPM senior officials.

Retention incentives encompass the majority of 3R incentives awarded to FDA employees in recent years. FDA's employees in mission-critical occupations received the greatest number of 3R incentives from 2007 to 2009. However, without an updated strategic workforce plan or established agencywide indicators for tracking its use of 3R incentives, FDA cannot assess the impact that these incentives have on its overall human capital strategy. While FDA collects data on workforce indicators at the agency and center levels, it has not analyzed how 3R incentives are helping the agency achieve its recruitment and retention goals. On the basis of GAO's review of a stratified sample of FDA's 3R incentive files awarded from January 2007 through October 2008, GAO found that FDA maintained documentation which provided sufficient explanation to justify each award. However, several of the incentive files we reviewed lacked adherence to certain other requirements, such as prescribed contents of a service agreement, which in most instances may have resulted from a lack of documentation. To help ensure the proper awarding of 3R incentives, FDA has various internal controls in place, such as a centralized review and approval process for incentive requests. Over the past 3 years, FDA has made some changes to its internal controls, such as updating its guidance including the standard forms for 3R incentive requests. If effectively implemented, FDA's revisions to its internal controls may help ensure that in the future 3R incentives are properly awarded and documentation exists to support the incentives. While both OPM and HHS provide oversight of 3R incentives through various mechanisms, including guidance and periodic evaluations and accountability reviews, there are opportunities for improvement. As a next step, OPM could provide guidance to all agencies on the importance of considering succession planning in the decision process for awarding retention incentives. While HHS's 3R incentive policy generally addressed the requirements for 3R incentive plans as outlined in OPM's regulations, there were several instances where the policy omitted or did not clearly address certain important requirements, such as the conditions for terminating or reducing an incentive.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: As OPM implements the results of its governmentwide 3R incentive review, the Director of OPM should require agencies to incorporate succession planning efforts into the decision process for awarding retention incentives and document this requirement for succession planning in their 3R incentive plans.

    Agency Affected: Office of Personnel Management

    Status: Closed - Implemented

    Comments: In August 2013, OPM issued final regulations for recruitment, relocation, and retention incentives to improve oversight of recruitment and retention incentive determinations, among other things. As part of the revisions, OPM added succession planning to the list of factors an agency must consider before approving a retention incentive, if applicable, for an employee who would be likely to leave the federal service in the absence of the incentive. OPM stated that specifically listing this factor in the regulations will strengthen the relationship between succession planning and retention incentives.

    Recommendation: As FDA implements the results of its 2009 review of 3R incentives, the Commissioner of FDA should continue to strengthen FDA's internal controls for requesting, approving, and processing 3R incentives by ensuring 3R incentive files are properly completed and reviewed to address policy and regulatory requirements before the employees receive the incentive payments.

    Agency Affected: Department of Health and Human Services: Food and Drug Administration

    Status: Closed - Implemented

    Comments: According to FDA officials, FDA staff from the office that oversees the administration of 3R incentives coordinates with FDA program staff to ensure that incentive actions are properly documented and that actions submitted to the Office of Human Resources are properly processed. Since the time of our review, the Office of Human Resources has implemented a "hard stop" mechanism to ensure that payments of incentives automatically terminate upon the not to exceed date of the retention incentive in order to help reduce overpayments and processing errors. In its April 2011 update to its retention incentive form, FDA added in its instructions that the effective and expiration dates of the retention incentive will be filled out by the administrating office after the FDA Commissioner has approved the request, which was not clearly stated in the version of the incentive form during the time of our review.

    Recommendation: As FDA implements the results of its 2009 review of 3R incentives, the Commissioner of FDA should continue to strengthen FDA's internal controls for requesting, approving, and processing 3R incentives by updating the guidance for awarding 3R incentives to include the payment method used for retention incentives and all the conditions for terminating a retention incentive when no service agreement is required.

    Agency Affected: Department of Health and Human Services: Food and Drug Administration

    Status: Closed - Implemented

    Comments: In April 2011, FDA updated the guidance section on its retention incentive form on how to award retention incentives to employees. Specifically, FDA now states that retention incentives are paid to recipients on a bi-weekly basis; therefore, a service agreement is not required. Also, FDA now includes the conditions for termination of a retention incentive including, among others, demotion or separation for cause, insufficient funds, performance rating less than "fully successful", and that the agency may unilaterally terminate a retention incentive based solely on the management needs of the agency.

    Recommendation: To better align the use of 3R incentives with the agency's human capital goals, the Commissioner of FDA should update FDA's strategic workforce plan to document the agency's recruitment and retention goals and strategies and as part of that update, identify indicators to better track the progress of 3R incentives over time in addressing the agency's recruitment and retention goals.

    Agency Affected: Department of Health and Human Services: Food and Drug Administration

    Status: Closed - Implemented

    Comments: As part of its Strategic Human Capital Plan for 2010-2012 (issued in September 2010), FDA identified goals and objectives related to its recruitment and retention activities and the use of 3R incentives to help achieve these goals. For example, FDA included a goal to retain qualified employees to accomplish the FDA's mission with a supporting objective to use 3Rs to support new hiring, to fill key vacancies and to facilitate the retention of employees possessing mission critical skills in centers and offices. Performance measures to achieve this goal and objective include: review and revise the need and the use of 3Rs, and establish agencywide indicators for tracking the progress of 3R incentives. According to an FDA official, while formal indicators have not been developed, FDA monitors the progress of 3R incentives by, among other things, conducting annual reviews of these incentives to see how they have impacted the agency's recruitment and retention of employees and marketability analyses to compare salaries of FDA employees with comparable organizations outside the federal government.

    Recommendation: To ensure the department and operating division (OPDIVs) are aware of HHS's policy in all areas of 3R incentives and use these incentives consistent with law and OPM regulations, the Secretary of HHS should revise HHS's 3R incentive policy to ensure that the guidance provided clearly addresses certain important requirements outlined in the regulations.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: In September 2013, in response to our recommendation, HHS revised its recruitment, relocation, and retention (3R) incentive policy to address needed changes. Specifically, HHS's 3R incentive policy now includes the mandatory termination condition for retention incentives when no service agreement is required due to the employee being demoted or separated for cause or the employee receiving a rating of less than "fully successful", as well as the requirement for annually reviewing retention incentives administered without a service agreement. We had identified these requirements as missing from HHS's 3R incentive policy at the time of our report.

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