1. NUMBER OF REHIRED ANNUITANTS AND COMPENSATION AWARDED
   
   The INS does not maintain accurate and complete data on annuitants who were rehired under OPM granted waiver authority. Additionally, the INS lacked sufficient accounting controls to identify the compensation paid to annuitants it employed from FY 1996 through FY 2002. We determined through the National Finance Center (NFC) that during those fiscal years the INS granted waivers to a total of 294 annuitants, paying them approximately $39.5 million in salary compensation⁶ , including overtime. A total of 85 additional annuitants, who were not granted waivers, received compensation totaling approximately $9.4 million during the fiscal years. However, due to the lack of accurate and complete data, we could not verify the number of annuitants and amounts they were compensated.

We requested INS officials to provide a list of rehired annuitants and the amount of compensation paid to them from FY 1996 through FY 2002. The INS Human Resource and Development (HRD) staff provided a list of 320 annuitants rehired at various times during that period but could not provide the amounts of compensation paid to them by fiscal year. The INS acknowledged that their records did not include this information. As a result, we had to identify an alternate source for the compensation information.

We requested the JMD Finance Staff to obtain specific data from the NFC, which maintains payroll information for the Department. We asked that the data cover FY 1996 through FY 2002, and include the following information about INS reemployed annuitants: identifying information, dates of employment, salary, amount of annuity, entered-on-duty dates, annuitants working with and without a waiver⁷ . The NFC reported a total of 294 rehired annuitants with waiver working for the INS during the seven fiscal years reviewed, as follows:

According to the NFC data, 227 of the 294 annuitants hired with salary offset waiver were in two General Series (GS): 99 annuitants in GS 1712, Training Instructor; and, 128 annuitants in GS 1801, General Inspection, Investigation and Compliance. The remaining 67 annuitants were in 25 other occupational series. The series used by the INS were consistent with the specific job areas covered by the OPM delegations of authority.

Once we identified the number of annuitants hired using a waiver, we compared the total number of annuitants with waiver on board against limits set by the OPM in its delegations of authority. We found that the INS stayed within the maximums for every period, as follows:

Comparison of Annuitants With Waivers vs.
Maximums Per OPM Delegations

FY	Employed at End of Period	Maximum Allowed per OPM
1996 - 1998	152	500
1999 - 2000	140	200
2001 - 2002	121	300

The NFC data also included the amount of compensation provided to annuitants who received waivers and those who did not. According to the NFC, from FY 1996 through FY 2002⁹ the INS paid $39.5 million in salary compensation, including overtime, to the 294 annuitants who received waivers and $9.4 million to the 85 annuitants who did not receive waivers, thus paying a total of 379 annuitants salary compensation totaling approximately $49 million. The following table provides the amount of compensation by fiscal year that the INS paid to annuitants with waivers.

NFC Salary Data for Annuitants with Waivers
FY 1996 through FY 2000
and FY 2002

FY	Total Salary Paid Per NFC
1996	$398,373
1997	3,104,874
1998	5,487,816
1999	10,929,976
2000	11,286,730
2001	Unavailable
2002	8,313,373
Total	$39,521,142

Recommendation

We recommend that the INS Commissioner ensure that the INS:

1. Has procedures in place to identify the names, series, and compensation paid to rehired annuitants who receive waivers and ensure that this information reconciles with data provided to the NFC.

2. ASSESSMENT OF THE WAIVER APPROVAL PROCESS
   
   The Department needs assurance that decisions regarding requests for waivers of annuity offsets for the INS rehired annuitants comply with guidance provided by the OPM. The INS did not consistently include in annuitant files statements from appointees that they would not accept positions without waivers being granted and did not maintain historic records (FY 1996 through FY 2000) to substantiate its rationale for identifying individual rehired annuitant positions. JMD, who assumed responsibility for approving rehiring annuitants on a case-by-case basis in FY 2000, does not currently maintain a standard review sheet or similar analysis that provides the basis for its decisions on these requests. As a result, neither the INS nor JMD can provide assurance that they made these decisions in accordance with the authority provided to them by the OPM.

In the Introduction section and Finding I of this report we discuss the timing of the INS requests for delegated waiver authority and subsequent OPM actions. The following table summarizes the timeline of delegated authority.

Waiver Authority by Period

Period	Delegation
FY 1996 - FY 2000	INS
FY 2001 - FY 2004	JMD

In the initial OPM delegation of waiver authority to the INS (and every letter thereafter), the OPM stated that the INS had to maintain specific information for each rehired annuitant receiving a waiver, including:

• the appointee's name,
• the appointee's position,
• the location of the appointment, and
• a statement from the appointee that he or she would not accept the position without a waiver being granted.

To determine the INS's responsiveness to these requirements, we reviewed 146 files: 69 files that the INS provided to JMD in FY 2002 for requests to extend waivers, and 77 files maintained at the Immigration Officer Academy and the Border Patrol Academy. The 69 files that INS provided to JMD contained the information cited in the initial OPM delegation. However, of the 77 files we examined at the academies, only 24 contained statements from applicants that they would not accept the positions without waivers being granted. In our judgment, the INS needs to ensure that all of the annuitants' files include this information.

The next essential step to the review was to assess the INS's rationale and decisions to rehire annuitants with waivers, and determine if such information was documented by the INS. We asked the INS for records documenting their rationale and decisions to rehire individual annuitants from FY 1996 through FY 2000. The INS could not provide data to substantiate their rationale for rehiring specific annuitants. Therefore, our results are qualified to the extent that we cannot attest to the appropriateness of the INS decisions to rehire annuitants with waiver from FY 1996 through FY 2000.

For FY 2003 and 2004, JMD's Personnel Staff reviews the INS requests for waivers and extensions of annuity offsets, and the Assistant Attorney General for Administration has authority to approve them. A JMD official stated that this process entails screening the rehired annuitant's application for crucial skills that would benefit the INS. Each waiver is reviewed on a case-by-case basis. According to JMD, the factors considered are the nature of the job, the skills needed to perform the job, and the geographic locale. In an effort to add consistency to the waiver process, JMD contacted the OPM on September 29, 2000, to request advice regarding how to review waivers and extensions properly. The OPM provided general advice to JMD but suggested that JMD consider six questions when reviewing waivers and extensions:

• How long can the timeframe of mission critical positions be deferred without causing significant harm to the program?
• Can the office accomplish the mission critical tasks of the position by any other means?
• Is this an authorized and fully funded position for which INS is actively recruiting?
• Have prior recruiting efforts failed to identify a fully qualified candidate?
• Is there an urgent need to do the work while a candidate is waiting for clearances?
• What is the minimum overlap required to train a new, reassigned, or promoted employee?

From the guidance provided by the OPM, JMD developed a list of information that the INS was to submit with each waiver application that addressed the mission of the project and program, personal information about the individual, and information about the position. (See Appendix II for the detailed list of required information.) JMD Personnel Staff representatives stated that they reviewed the requests against these requirements, taking into consideration the needs of the INS and the Department.

To assess JMD's actions, we judgmentally selected for review requests for extensions from the INS in FY 2002. During the period JMD denied 23 of 69 waiver extension requests from the INS as shown in the following table.

Results of JMD's Reviews of FY 2002
Waiver Extension Requests

Position	Number of INS Requests	Decisions by JMD
		Approved	Denied
Immigration Inspector10	10	10	0
Training Instructor11	39	28	11
Field Operations12	20	8	12
Total	69	46	23

We reviewed a judgmental sample of 57 of the 69 requests and compared the actual submissions from the INS against JMD decisions. We found no documentation of how JMD applied the criteria to each request. Such evidence could have been maintained in the form of a checklist, a narrative, or some other type of written record. Without such documentation, JMD cannot provide assurance to the Department that the reviews were conducted in accordance with criteria suggested by the OPM and subsequently developed by JMD. Accordingly, we believe that JMD can improve its review process and mitigate any potential questions regarding the justification of its waiver extension decisions by documenting its analysis and results of each application for extension.

Recommendations

We recommend that the INS Commissioner:

2. Ensure that rehired annuitant files include statements that the appointees would not accept the position without waivers being granted.

We recommend that the Assistant Attorney General for Administration, JMD, or the successor counterpart in the Department of Homeland Security (DHS):

3. Utilize a formal record to document the analysis performed of each request for waiver or extension by the INS.

3. DEVELOPMENT AND IMPLEMENTATION OF LONG-TERM HIRING AND TRAINING STRATEGIES
   
   The INS had not developed an effective methodology to reduce its dependence on rehired annuitants whose annuity offsets are waived. The OPM granted the waiver authority to rehire annuitants in 1996 on a temporary basis in response to a Department request to meet a staffing emergency. In its September 12, 2000, waiver extension letter, the OPM recognized that the INS had made no progress in addressing its continual reliance on rehired annuitants. The OPM asked JMD to request the INS to develop long-term strategies for their officer training and adjudication functions. The INS submitted its strategies to JMD on October 12, 2001, and March 22, 2002. JMD rejected both saying that the information in the plans pertained only to the hiring of annuitants and did not address the INS's long-term strategy to staff officer training and adjudication positions. Therefore, the INS needs to develop and implement a meaningful long-term strategy.

When the OPM first granted the Department request for waiver authority in 1996, it stated that the authority was for use on a temporary basis, for emergencies dealing with threats to life or property, or unusual circumstances. Various INS officials, including the Executive Associate Commissioner for Management, told us that they considered the rehiring of annuitants with waivers to be an efficient and cost effective way of acquiring experienced and qualified employees. For example, in the Immigration Officer and Border Patrol Academies, they said their rehired annuitants made up a pool of qualified instructors with practical experience to share in the classroom. They said that the extent of this experience can only be matched by detailing working officers to the academies, thus creating a drain on the manpower available to the field. According to the INS, this is cost effective in that a rehired annuitant is not paid relocation or other benefits, while a relocated officer is paid to move and a detailed officer is given temporary duty allowance.

Notwithstanding the opinions of the INS officials, the OPM determined that the INS needed to use hiring methods other than relying on granting annuitants waivers. Therefore, in its September 12, 2000, letter extending the delegation authority, the OPM requested that JMD ask the INS to review their workforce needs for FY 2003 through FY 2007 and develop long-term strategies for their officer training and adjudication functions without continued reliance on the delegation of authority. The OPM 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 OPM provided JMD with general guidance regarding the composition of long-range strategies:

Such strategies could include details, internal staffing actions, training agreements, recruiting bonuses, retention allowances, incentive awards, contracting, etc.

The INS submitted its initial strategy to JMD on October 12, 2001. The document listed methods of reducing the INS reliance on rehired annuitants by upgrading recruiting efforts, but the INS qualified the effort by saying that there was an assumed shortage of quality candidates available. JMD rejected the submission, stating that the information addressed hiring of annuitants but not a long-term strategy to staff officer training and adjudication positions.

JMD advised the INS to submit a revised plan within 15 days of October 23, 2001. Until JMD reviewed such plan, the 96 individuals would only receive extensions through November 30, 2001, and 5 new annuitants would not be approved. The INS submitted a revised plan almost 4 ½ months later. JMD also rejected that plan for the same reasons as it did the INS's October 12, 2001, submission.

JMD continued to review requests for waiver extensions and after subsequent communications with the INS, JMD received INS's revised strategy dated March 22, 2002. As of the time of our audit, JMD had not provided a formal response to the plan. However, officials of the JMD Personnel Staff advised us that JMD had verbally rejected the revised plan. JMD officials told us that that they had determined that there were too many similarities between the second submission and the first, rendering it a mirror version with too little additional input. Accordingly, from JMD's perspective the INS still lacks an acceptable long-range recruitment plan. Yet, JMD continued to review and approve requests for new waivers and hiring extensions of existing waivers. JMD needs to decide if it should continue to approve new waivers and extensions of waivers in advance of the INS developing and implementing an acceptable long-term hiring plan in response to the OPM's concerns.

We asked INS officials to describe the issues it faced in developing a viable long-range plan. The INS indicated that after the events of September 11, 2001, it encountered various obstacles in devising a plan, including:

• Public Law 107-206, which permits the Federal Law Enforcement Training Center (FLETC), a major competitor for qualified law enforcement training professionals, to rehire annuitants without offset;
• a general drain on qualified field personnel from competition with newly formed law enforcement agencies, such as the Transportation Security Agency; and
• an impending major reorganization under legislation creating the DHS.

Public Law 107-206 §1202(a), "2002 Supplemental Appropriations Act for Further Recovery From and Response To Terrorist Attacks on the United States," states that the FLETC:

may, for a period ending not later than 5 years after August 2, 2002 appoint and maintain a cadre of up to 250 Federal annuitants: (1) without regard to any provision of title 5, United States Code, which might otherwise require the application of competitive hiring procedures; and (2) who shall not be subject to any reduction in pay (for annuity allocable to the period of actual employment) under the provisions of section 8344 or 8468 of such title 5 or similar provision of any other retirement system for employees.

An INS official stated that the INS is at risk to lose significant qualified training staff to FLETC because the INS does not have comparable salary and annuity protection for the individuals. Therefore, in our opinion the INS is more inclined to continue to offer waivers to annuitants than it is to develop a long-term plan to fill training vacancies with new hires or transfers.

Similar concerns were voiced by officials at the Border Patrol Academy, Immigration Officer Academy, and Field Operations staff, who cited critical staffing constraints imposed by the loss of qualified agents to newly formed law enforcement agencies such as the Transportation Security Administration. Although this does not impact the rehired annuitant population directly, the INS suggested that the reduced staffing aggravates the existing training problem. According to the INS, the imposition of increased hiring to meet demand and the reduction in the number of qualified agents to other law enforcement enhances the need for training new recruits. Additionally, the INS stated that detailed veteran agents traditionally staff many training positions, and those agents cannot be spared from their field positions for training duties. Finally, according to the INS, it cannot provide newly trained officers to the field to alleviate the staffing problem. The INS decided to use rehired annuitants in the training academies to augment the need for detailed veteran agents from the field.

The INS also said that its impending transfer to the newly created DHS has forced it to refocus its organizational priorities. As a result, this further impacted its ability to develop long-term hiring strategies.

Notwithstanding the comments by INS officials, in our opinion the INS still needs to develop an acceptable long-term hiring strategy in accordance with the request in the OPM's September 12, 2000, letter to JMD. Further, JMD needs to decide if it should continue to review and approve new requests for waivers and extensions of waivers in advance of the INS having an acceptable long-term hiring plan.

Recommendations

We recommend that the INS Commissioner:

4. In collaboration with JMD (or the successor component in the DHS), ensure that an acceptable long-range hiring and training strategy is implemented that establishes viable alternatives to the use of reemployed annuitants using offset waivers.

We recommend that the Assistant Attorney General for Administration, JMD, or the successor component in the DHS:

5. Consider not approving INS's requests for waiving annuity offsets against salaries if an agreeable long-term plan is not developed and implemented in a specific timeframe.

6. We were unable to obtain annuity payment data from either the INS or the NFC because that data is under separate control by the OPM. We consolidated the INS and the NFC lists of rehired annuitants and requested annuity data from the OPM. The OPM was unable to provide that to us before the issuance of this report.
7. The INS did employ retired employees who consented to be rehired with a reduction to their salaries based on their annuities.
8. The NFC informed us that the data contained in the report is under the control of the INS input and the NFC does not perform quality checks as to the completeness and accuracy of the information.
9. Excludes FY 2001 compensation, see footnote number 2.
10. Annuitants perform the full range of inspection, examination, processing and law enforcement duties regarding persons seeking to enter the United States from abroad. The positions are located at Dulles Airport.
11. Annuitants perform a variety of training tasks, which consist of but are not limited to the following topics: course planning and development, evaluating and updating curriculum, professional duties, and other duties as assigned. The assignments are located at the FLETC in Glynco, GA, the Border Patrol Academy in Charleston, SC, and advanced training facilities in Artesia, NM.
12. Annuitants perform various duties in the areas of adjudication, detention, deportation, and investigation.