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Retention Allowances: Usage and Compliance Vary Among Federal Agencies

GGD-96-32 Published: Dec 11, 1995. Publicly Released: Jan 03, 1996.
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Highlights

Pursuant to a congressional request, GAO reviewed federal agencies' use of retention allowances as salary supplements to retain essential employees, focusing on: (1) the total and average value of the allowances from 1991 to 1994; (2) the extent to which Senior Executive Service employees received retention allowances; (3) whether there were any compliance issues involved in retention allowance awards; (4) the agencies' adherence to Office of Personnel Management (OPM) retention regulations; and (5) the extent to which OPM oversees the use of retention allowances.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense The Chairman, Eximbank, the Secretary of Defense, and the Chairman, SEC, should include the required criteria for determining the value of retention allowances in their retention allowance plans.
Closed – Implemented
The Office of the Assistant Secretary of Defense on March 8, 1996, notified components that it had agreed that a planned revision of DOD regulations would indicate that appointing officials shall apply criteria for determining retention allowance amounts that are consistent with Office of Personnel Management criteria.
Export-Import Bank of the United States The Chairman, Eximbank, the Secretary of Defense, and the Chairman, SEC, should include the required criteria for determining the value of retention allowances in their retention allowance plans.
Closed – Implemented
Eximbank's revised Retention Allowance Plan, dated September 19, 1996, provides criteria for establishing the value of a retention allowance.
United States Securities and Exchange Commission The Chairman, Eximbank, the Secretary of Defense, and the Chairman, SEC, should include the required criteria for determining the value of retention allowances in their retention allowance plans.
Closed – Implemented
The Director of Personnel at the Securities and Exchange Commission provided GAO with an internal procedures document that highlights the GAO-recommended revision to its retention allowance plan and explains the criteria to be used in determining the amount of an allowance. The Director said that his agency is operating under the revised criteria and plans to make formal revisions to its Operations Manual reflecting the changes. On August 15, 1996, the Special Assistant to the Associate Executive Director of SEC said that it expects to incorporate the revisions in its Operations Manual within 1 month.
Office of Personnel Management The Director, OPM, should take action to ensure that retention allowance regulations are revised to explicitly address whether, and if so when, an agency should review or recertify the amount of an allowance as a result of basic pay rate increases or other relevant changes in the conditions justifying the allowance.
Closed – Implemented
OPM issued an Interagency Advisory Group memorandum that explained GAO's concerns regarding the lack of specific guidance on whether and when an agency should review or recertify the amount of a retention allowance as a result of a basic pay rate increase or other relevant change in an employee's pay and requested agency comments. Agencies' comments expressed concerns that requiring additional formal reviews of retention allowances would be burdensome and demand valuable staff time to complete. OPM has decided that the existing regulations are adequate and preserve agency flexibility.

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Topics

Civilian employeesCompensationEmployee incentivesFederal agenciesFederal personnel legislationStaff utilizationPersonnel managementPersonnel recruitingSalary increasesAllowances