Semiannual Report to Congress
April 1, 2001 through September 30, 2001


INSPECTOR GENERAL

NATIONAL LABOR RELATIONS BOARD

WASHINGTON, DC 20570

I hereby submit this Semiannual Report: April 1 - September 30, 2001, which summarizes the major activities and accomplishments of the Office of Inspector General (OIG) of the National Labor Relations Board (Agency). The submission of this report is in accordance with the Inspector General Act of 1978, as amended (IG Act). Section 5 of the IG Act requires that the Chairman transmit this report to the appropriate committees or subcommittees of the Congress within 30 days of its receipt.

OIG issued two audit reports and three inspection reports. In the investigations program, OIG processed 165 contacts, initiated 4 cases, and closed 10 cases. The investigations resulted in one conviction and two personnel actions this period. We reviewed four bills, one regulation, and four policy documents. Details on these accomplishments can be found in the body of this report.

The tragic events of September 11, 2001, were devastating to all Americans. We mourned with those who had suffered a loss and desired to participate in the efforts to pursue those responsible for this evil. The inspector general community responded to requests for investigative personnel to assist in interviewing, analysis, and evidence recovery concerning the terrorist attack. We are also reviewing our priorities and anticipated projects given the change in national focus and are preparing for new initiatives or requests that might come from Congress or the Administration.

The OIG also suffered when Joseph Young died of cancer on September 21, 2001. After working at the National Aeronautics and Space Administration for 6 years, Joe joined the Agency as an auditor in the Division of Administration, Management and Audit Branch and later in the Security and Audit Branch. In November 1989, he became part of the newly established OIG. Joe was a valued employee of this office and will be missed.

I appreciate the support of all Agency employees in achieving the accomplishments set forth in this report.

Jane E. Altenhofen
October 31, 2001


AGENCY PROFILE

The National Labor Relations Board (NLRB or Agency) is an independent Federal agency established in 1935 to administer the National Labor Relations Act (NLRA). The NLRA is the principal labor relations law of the United States, and its provisions generally apply to private sector enterprises engaged in, or to activities affecting, interstate commerce. NLRB jurisdiction includes the U.S. Postal Service (other government entities, railroads, and airlines are not within NLRB's jurisdiction.)

The NLRB seeks to serve the public interest by reducing interruptions in commerce caused by industrial strife. It does this by providing orderly processes for protecting and implementing the respective rights of employees, employers, and unions in their relations with one another. The NLRB has two principal functions: (1) to determine and implement, through secret ballot elections, the free democratic choice by employees as to whether they wish to be represented by a union in dealing with their employers and, if so, by which union; and (2) to prevent and remedy unlawful acts, called unfair fair labor practices, by either employers, unions, or both.

NLRB authority is divided by law and delegation. The five-member Board primarily acts as a quasi-judicial body in deciding cases on formal records. The General Counsel investigates and prosecutes unfair labor practices before administrative law judges, whose decisions may be appealed to the Board; and, on behalf of the Board, conducts secret ballot elections to determine whether employees wish to be represented by a union.

The Board consists of the Chairman and four members who are appointed by the President with the advice and consent of the Senate. Board Members serve staggered terms of five years each. The General Counsel is also appointed by the President with the advice and consent of the Senate and serves a four-year term.

On May 16, 2001, President Bush appointed Peter J. Hurtgen to serve as Chairman, replacing John C. Truesdale, who continued to serve as Board Member until October 1, 2001. Mr. Hurtgen had served as a Board Member since November 1997, in a term that expired on August 27, 2001. On August 31, 2001, the President announced the recess appointment of Mr. Hurtgen as NLRB Chairman.

No changes occurred in three seats during this period. Dennis P. Walsh received a recess appointment on December 29, 2000, to serve as a Board Member and is currently filling this position. Wilma B. Liebman, whose term expires in December 2002, continues to serve as Board Member. A fifth Board Member seat, which has been vacant since August 2000, remains unfilled.

Former General Counsel Leonard R. Page left office on April 20, 2001, after the Senate declined to act on former President Clinton's nomination. Mr. Page received a recess appointment in November 1999 and was named Acting General Counsel in December 2000, serving almost 17 months in office.

The Senate unanimously confirmed President Bush's nomination of Arthur F. Rosenfeld, to serve a four-year term as General Counsel on May 26, 2001.

NLRB received an appropriation of $216,438,000 for Fiscal Year (FY) 2001, to fund 2,002 full-time equivalents. NLRB Headquarters is at 1099 14th Street, NW, Washington, DC.

In addition to the Headquarters building, employees are located in 51 field offices throughout the country. Three satellite offices for the Administrative Law Judges are located in Atlanta, San Francisco, and New York. As of October 2, 2000, field offices included 32 Regional Offices, 16 Resident Offices, and 3 Subregional Offices.

Additional information about NLRB can be found on the Web site www.NLRB.gov.


OFFICE OF INSPECTOR GENERAL

The NLRB established the Office of Inspector General (OIG) pursuant to the 1988 amendments to the Inspector General Act of 1978 (IG Act).

Resources

The FY 2001 OIG budget was $804,500 for operations, of which $67,000 was for contract services. In addition to the Inspector General, the OIG consists of a Counsel/Assistant Inspector General for Investigations, Assistant Inspector General for Audits, Special Agent, two Auditors, and a Staff Assistant.

Jennifer S. Kovachich, Special Counsel to the General Counsel, completed a detail to the OIG on April 30, 2001.

Francis A. Searle, Special Agent, received a disability retirement effective June 11, 2001.

Michael Gibson, a law student at American University School of Law, began serving in the capacity of a Student Assistant in the OIG, on May 20, 2001.

In August 2001, the OIG hosted a student volunteer for one week. This Government-wide program was designed to give participating agencies the opportunity to promote public service careers and to better prepare students for eventual entry into the workplace. The student assigned to OIG provided assistance in conducting an inspection of combination door locks discussed on page 7 of this report.


AUDIT PROGRAM

The Inspector General is to provide policy direction for and is to conduct, supervise, and coordinate audits relating to program operations of the Agency. OIG issued two audit reports and three inspection reports.

Reports Issued

Ongoing Reviews

As of September 30, 2001, the ongoing reviews were of the Alternative Workplace Program, Debt Collection, and Contract for Computer Services.


INVESTIGATIONS PROGRAM

The Inspector General is to provide policy direction for and is to conduct, supervise, and coordinate investigations relating to the programs and operations of the Agency. OIG processed 165 contacts, initiated 4 cases, and closed 10 cases. The investigations resulted in one conviction and two personnel actions.

Case Workload   Contacts Processed
Open (4/01/2001) 12   Received 165
Initiated 4   Initiated Investigation 4
Closed 10   Opened Case -- Referred to Agency 0
Open (9/30/2001) 6   Non-Investigative Disposition 161

Hotline

Employees and members of the public with information on fraud, waste and abuse are encouraged to contact OIG. A log of calls to a nationwide toll free number or the office numbers and a log of mail and facsimile messages are maintained. All information received, regardless of the method used, is referred to as HOTLINE contacts.

The information received over the hotline is the basis for the initial review for potential investigations. The information is analyzed to determine if further inquiry is warranted. Most HOTLINE contacts are calls from members of the public seeking help on an employment related problem or issues outside OIG and/or Agency jurisdiction. As appropriate, OIG refers these callers to: the NLRB office; local, state, or Federal agency; or private resource to provide assistance.

During this reporting period, OIG received 165 hotline contacts, of which 62 were telephone calls and 103 were in writing. Four contacts resulted in OIG investigative cases.


LEGISLATION, REGULATIONS, AND POLICY

The Inspector General is to review existing and proposed legislation and regulations relating to programs and operations of the Agency and is to make recommendations concerning the impact of such legislation or regulations. Similarly, we review Agency and OIG policy. We reviewed four bills, one regulation, and four policy documents.

Legislation

We reviewed the following legislation.

H.R. 4, the SAFE Act of 2001. In addition to promoting energy conservation by the Federal Government, this Act would require that inspectors general conduct periodic reviews of their agency's compliance with part 3 of Title V of the National Energy Conservation Policy Act, 42 U.S.C. 8251, et seq.

H.R. 44, a bill to amend the Inspector General Act of 1978. This legislation would prohibit the payment of cash bonuses or awards to an inspector general, require external reviews, amend reporting requirements, change several inspectors general from Level IV to Level III of the Executive Schedule, and require the Comptroller General to study and report on consolidation of inspector general offices.

H.R. 169, the Notification and Federal Employee Anti-discrimination and Retaliation Act of 2001, commonly referred to as the No FEAR Act. This Act provides that agencies notify employees of the rights and protections available to them under the anti-discrimination and whistleblower statutes in writing. Agencies must also post this information on their Internet Web sites. This Act also requires that agencies submit an annual report to Congress and the Attorney General detailing status or disposition of discrimination and whistleblower reprisal cases.

H.R. 2547, the Erroneous Payments Recovery Act of 2001. This Act would require certain executive agencies to carry out a cost-effective program for identifying any errors made in paying contractors and for recovering any amounts erroneously paid to contractors.

Regulations

The Counsel to the Inspector General is a member of the Agency's Rules Revision Committee that develops changes to Agency procedural regulations. During this reporting period, we continued our efforts to revise the Agency's regulations pertaining to changes mandated by the Freedom of Information Act (FOIA) and to clarify how FOIA requests to the Inspector General for OIG documents are processed. The proposed Regulations were published in the Federal Register on July 25, 2001. The Agency did not receive any comments. The final rule was published in the Federal Register on October 3, 2001.

Policy

We completed our work with the Agency's records officer to provide a draft OIG Records Disposition Authority to the National Archives Records Agency (NARA). The draft disposition authority was approved by NARA on June 6, 2001.

We reviewed the draft Guide for Conducting Qualitative Assessment Reviews of the Investigative Operations of Offices of Inspector General. This Guide was developed to ensure that an investigative program is in compliance with the standards adopted in the "Quality Standards for Investigations" as well as ensure that adequate internal safeguards and management procedures exist for those offices with law enforcement powers. After reviewing the Guide, we decided to participate in a 9-month pilot qualitative assessment review program for the investigative programs within the OIG community.

Standards

We provided comments on the revisions to the organizational independence criteria in the Government Auditing Standards. We commented that the Standards appropriately recognized that inspectors general appointed by the heads of designated Federal entities have organizational independence.

OMB Policy Document

We reviewed and commented on an initial OMB policy document regarding "Erroneous Payments" in Federal benefit programs. We noted our concern that some agency managers may use paragraph 3 of the Basic Principals -- Erroneous Payments Should be Kept to the Lowest Practical Level -- to justify erroneous payments that could have been avoided, and suggested that paragraph be redrafted in order to avoid this eventuality.


LIAISON ACTIVITIES

The Inspector General is to recommend policies for, and is to conduct, supervise, or coordinate relationships between the Agency and other Federal agencies, State and local governmental agencies, and nongovernmental entities. The Inspector General is to give particular regard to the activities of the Comptroller General of the United States, as head of GAO. Similarly, we encourage OIG staff members to participate in Agency programs and activities. OIG staff members are active in the inspector general community and agency activities.

Inspector General Community

The Inspector General is a member of the Executive Council on Integrity and Efficiency (ECIE), which consists primarily of the inspectors general at the Federal entities designated in the 1988 amendments to the IG Act. She participated in activities sponsored by the President's Council on Integrity and Efficiency (PCIE), which consists primarily of the Presidentially-appointed inspectors general. These included:

The Counsel participated in the Council of Counsels to Inspectors General.

The Assistant Inspector General for Audits participated in the PCIE Results Act Group.

Agency Activities

OIG continues to be involved in the Agency's implementation of the Results Act. OIG submitted substantial comments on the Agency's FY 2000 Performance Report and FY 2002 Performance Plan. The Inspector General and Counsel also attended a strategic planning conference in June 2001 with other senior management officials. The retreat provided an opportunity to review and refine the Agency's goals and measurement system.

The Counsel is a member of the Government Paperwork Elimination Act (GPEA) Committee. This committee was formed to ensure that the Agency meets the GPEA's October 2003 deadline of providing a means for electronic transactions with the public as a substitute for paper. To date, the committee identified the transactions that may be accomplished electronically, established a timeline for meeting the October 2003 deadline, and began the process to develop electronic transaction forms.

General Accounting Office (GAO)

The IG Act states that each inspector general shall give particular regard to the activities of the Comptroller General of the United States with a view toward avoiding duplication and ensuring effective coordination and cooperation.

GAO has four ongoing efforts involving NLRB. One study is to determine the extent to which Federal agencies have contracted with companies that have violated Federal labor, environmental, or tax laws, including the nature and extent of such violations. The Chairman, House Subcommittee on Government Manage-ment, Information, and Technology, made this request on July 24, 2000. A report is expected in spring 2002.

The second study is to explore improvements to the offices of inspectors general that address overall effectiveness and enhancements to their independence. The Chairman, House Committee on Government Reform, made this request on March 5, 2001. The OIG provided input on June 7, 2001.

The third effort is a survey of Federal agencies' enterprise architecture efforts to gauge progress towards meeting Clinger-Cohen Act and OMB requirements and to identify successes. The Agency responded to the survey in July 2001. A report is expected in December 2001.

In August 2001, the Agency was notified that GAO had initiated a review of selected agencies, including NLRB, related to whether financial statement audit requirements should be expanded to include certain agencies that are not required to have annual financial statement audits under the Chief Financial Officers Act or other laws. The review will evaluate whether agencies are preparing financial statements and having them subjected to audit, the degree of effort necessary for these agencies to prepare annual audited financial statements, and the benefits derived from such audits.


INFORMATION REQUIRED BY THE ACT

Certain information and statistics based on the activities accomplished during this period are required by section 5(a) of the IG Act to be included in the semiannual reports. These are set forth below:

Section 5(a)

(1),(2),(7) OIG identified significant problems, abuses or deficiencies relating to the administration of information systems security (see page 4). For the purpose of this section, we used the definition of significant as set forth in the Federal Managers' Financial Integrity Act.
(3) Corrective action has been completed on all significant recommendations which were described in the previous semiannual reports.
(4) No matters were referred to prosecutorial authorities. There were no prosecutions. There was one conviction.
(5) No reports were made to the Chairman that information or assistance requested by the Inspector General was unreasonably refused or not provided.
(6) A listing by subject matter is located on page 20.
(8),(9) Two audit reports were issued during this period; the reports had no recommendations on questioned costs or funds that could be put to better use. See Tables 1 and 2.
(10) There are no audit reports issued before the commencement of the reporting period for which no management decision has been made by the end of the reporting period.
(11) No significant revised management decisions were made during the reporting period.
(12) There were no significant management decisions with which I am in disagreement.


AUDIT REPORTS BY SUBJECT MATTER

Report Title and Number Questioned
Costs
Unsupported
Costs
Ineligible
Costs
Funds To
Be Put To
Better Use
ADMINISTRATION
Audit of Case Activity Tracking System Security, OIG-AMR-33-01-02 0 0 0 0
Audit of Property Controls Over ADP Items, OIG-AMR-32-01-03 0 0 0 0


Table 1 -- REPORTS WITH QUESTIONED COSTS

  Dollar Value
  Number of
Reports
Questioned
Costs
Unsupported
Costs
A. For which no management decision has been made by the commencement of the period 0 0 0
B. Which were issued during the reporting period 0 0 0
     Subtotals (A+B) 0 0 0
C. For which a management decision was made during the reporting period 0 0 0
(i) Dollar value of disallowed costs 0 0 0
(ii) Dollar value of costs not disallowed 0 0 0
D. For which no management decision has been made by the end of the reporting period 0 0 0
     Reports for which no management decision was made within six months of issuance 0 0 0


Table 2 -- REPORTS WITH RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE

  Number of
Reports
Questioned
Costs
A. For which no management decision has been made by the commencement of the period 0 0
B. Which were issued during the reporting period 0 0
     Subtotals (A+B) 0 0
C. For which a management decision was made during the reporting period 0 0
(i) Dollar value of disallowed costs 0 0
(ii) Dollar value of costs not disallowed 0 0
D. For which no management decision has been made by the end of the reporting period 0 0
     Reports for which no management decision was made within six months of issuance 0 0


Fraud Waste Abuse -
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Office of Inspector General
NLRB
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Washington, DC 20570