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Reemployment of Annuitants by the Immigration and Naturalization Service
Report No. 03-16
Office of the Inspector General
The Office of the Inspector General conducted an audit of the rehiring of federal annuitants by the Immigration and Naturalization Service (INS). Beginning in Fiscal Year (FY) 1996, INS was granted emergency authority to rehire federal retirees. We performed this audit in response to a request by the Chairmen of the House Judiciary Committee and the Subcommittee on Immigration, Border Security, and Claims, who expressed concern over the length of time the INS had used this authority and the INS's apparent failure to develop new hiring practices to obviate the need to rehire annuitants. Our audit identified areas of internal control that require strengthening. Most importantly, we found that the INS had not developed long-range hiring alternatives to reduce or eliminate the use of rehired annuitants.
The INS began hiring annuitants in an effort to meet a 1995 Congressional mandate calling for hiring 5,000 new Border Patrol Agents. The INS sought delegated authority from the Office of Personnel Management (OPM) to hire annuitants possessing the requisite skills while waiving compulsory pay reductions against annuities. The INS obtained this authority on February 22, 1996, and it expired on September 30, 1998.
The OPM stipulated that the INS not exceed 500 reemployed annuitants during the term of this authority and that appointments made under this authority had to be in the areas of:
In its delegation letter, OPM outlined specific hiring and retention criteria that the INS must adhere to and advised the INS that prospective new hires were to be evaluated on a case-by-case basis to ensure their eligibility. The OPM stipulated that this authority was to be utilized merely as a stopgap measure, and the INS would have to develop alternative hiring methods to ensure future compliance with the Congressional mandate.
By letter dated August 11, 1998, the OPM granted the INS its first extension of the waiver authority through September 30, 2000, again vesting the delegated authority with the INS Assistant Commissioner, Human Resources and Development. However, the extended delegation of authority reduced the ceiling on reemployed annuitants from 500 to 200 during the new term of the authority. On September 12, 2000, the OPM granted a second extension of the delegated authority through September 30, 2002, with a ceiling of 300 annuitants. However, the OPM noted that the INS's hiring practices had apparently become a recurring problem. Therefore, the OPM approval provided that the Attorney General could redelegate the authority only to the Department of Justice (Department) Assistant Attorney General for Administration or other senior official in the Justice Management Division (JMD). Accordingly, the OPM removed the authority to approve waivers from the INS and vested it with JMD.
On April 1, 2002, the OPM extended the waiver authority for the third time to September 30, 2004. The OPM extension provided that the Department could redelegate limited approval to an INS Headquarters official. However, in an e-mail dated August 13, 2002, an official of OPM revised its grant of waiver authority to permit redelegation only to JMD.
In response to the Congressional request, we undertook three tasks:
We found that the INS did not have a system that accurately tracked the number of federal annuitants it rehired and lacked sufficient accounting controls to confirm the compensation paid to annuitants it employed from FY 1996 through FY 2002. We therefore contacted the National Finance Center (NFC)1 for this information and found that from FY 1996 through FY 2002 the INS employed a total of 379 annuitants and paid them approximately $49 million in salary (including overtime) compensation.2 Of these 379 annuitants, 294 received waivers enabling them to collect their annuities and full salaries. These 294 annuitants received salary compensation totaling $39.5 million. We recommend that the INS maintain an accurate source of data for rehired annuitants, and implement accounting procedures to identify the compensation paid to rehired annuitants and reconcile the data with the NFC.
The INS also did not maintain records to document its rationale for hiring each annuitant from FY 1996 through FY 2000. Therefore, our review is qualified to that extent that we cannot render an opinion on the appropriateness of the INS's decisions to rehire annuitants during that period. Accordingly, we focused on 69 INS requests reviewed and approved by JMD during FY 2002. We found that while JMD denied a number of requests by the INS, it does not currently maintain a standard review sheet or similar analysis that provides the basis or rationale for its decisions on the waiver extension requests. In our judgment, JMD also can improve its review process and mitigate or eliminate potential questions regarding its waiver extension decisions by documenting its analyses.3
We also concluded that the INS had not developed an effective plan to reduce its dependence on rehired annuitants. When the OPM first granted the INS waiver authority in 1996, it stated that the authority was temporary and to be used for emergencies dealing with threats to life or property, or unusual circumstances. It also stated that the authority was to be used to hire 5,000 new employees, most of whom, according to the OPM, were to be Border Patrol Agents, Immigration Inspectors, and Immigration Investigators. At the time of the second request by the INS for an extension of the waiver authority, the OPM recognized the need to formalize a requirement for the INS to develop alternate hiring methods. In its September 12, 2000, waiver extension letter, the OPM asked JMD to request the INS to develop long-term strategies for their officer training and adjudication functions, and asked JMD to review the INS plans before JMD approved waivers for annuitants during FY 2002. We acknowledge that the OPM language does not require JMD to approve the long-term strategy from the INS, but it is evident to us that the OPM did recognize the need for the INS to develop a methodology that would negate the need for waiver authority.
The INS submitted its strategy to JMD on October 12, 2001, but JMD rejected it on October 23, 2001, stating that the information addressed hiring of annuitants but lacked a long-term strategy for officer training and adjudication positions. The INS resubmitted its strategy to JMD on March 22, 2002, but JMD again rejected it. According to JMD officials, they believed the resubmission had too many similarities to the previously rejected strategy. Notwithstanding the INS's repeated failure to devise a long-term recruitment strategy, which OPM asked JMD to review before approving waivers in FY 2002, JMD continued to review and approve waivers requested by the INS.
As a result of our audit, we made five recommendations to the INS and JMD (or the appropriate component in the Department of Homeland Security). The recommendations include the need to develop improved accounting procedures; a single source database of rehired annuitants; documentation of effective long-range hiring and training strategies; and possible revocation of the INS's ability to rehire annuitants.
The details of our field work are contained in the Findings and Recommendations section of the report.4 Our audit scope and methodology are detailed in Appendix I.