WASHINGTON, DC 20570
I hereby submit this Semiannual Report: April 1, 2002 - September 30, 2002, which summarizes the major activities and accomplishments of the Office of Inspector General (OIG) of the National Labor Relations Board (NLRB or 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, one inspection report, and one response to Congress. In the investigations program, OIG processed 208 contacts, initiated ten cases, and closed thirteen cases. The investigations resulted in one conviction and one termination this period. We reviewed four pieces of legislation and two regulations. Details on these accomplishments can be found in the body of this report.
We devoted a significant portion of our resources to reviews concerning travel and purchase cards. We completed an audit of travel and purchase card use and found multiple internal control weaknesses. Investigations of 57 subjects substantiated travel card abuse in 44 cases. Management is in the process of implementing stronger controls and taking administrative actions.
In October 2001, we reported that the NLRB did not meet even the lowest criteria level for information security. In April 2002, we reported that password complexity was not in conformance with established guidelines and was the greatest exposure on the NLRB Network. Numerous efforts have been made to improve computer security but the NLRB still does not have proper passwords and continues to not meet the lowest criteria level for information security. We encourage management to give high priority to finalizing and issuing policies and procedures and implementing a change in passwords to correct these critical deficiencies.
I appreciate the support of all Agency employees in achieving the accomplishments set forth in this report.
Jane E. Altenhofen
October 31, 2002
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.
Peter J. Hurtgen, who received a recess appointment on August 31, 2001, served as Chairman until August 1, 2002. Mr. Hurtgen assumed new duties as Director of the Federal Mediation and Conciliation Service on August 2, 2002.
Wilma B. Liebman, whose term expires in December 2002, continues to serve as Board Member. Michael J. Bartlett and William B. Cowen, two recess appointments made in January 2002, also continue to serve as Board Members.
NLRB received an appropriation of $226,438,000 for Fiscal Year (FY) 2002, to fund 1,985 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).
The FY 2002 OIG budget is $711,900 for operations, of which $78,700 is 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, a criminal investigator, two auditors, and a staff assistant.Joyce N. Werking, an OIG staff auditor, departed on April 19, 2002, for a position with the National Science Foundation OIG.
Donquilla M. Nelson entered on duty as staff assistant on June 24, 2002.
Lauren J. Misler was a student assistant from June 3 through August 9, 2002.
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, one inspection report, and one response to Congress.
We issued Audit Report OIG-AMR-36-02-02, Audit of Travel and Purchase Cards, on September 13, 2002. This review was conducted to ascertain whether the travel and purchase card programs are operating in conformance with applicable laws, regulations, and Agency's policies and procedures.
We found that travel cards were not fully utilized by Agency employees to pay for travel related expenses. Some employees used their travel cards to obtain cash advances not related to official travel and exceeded the monthly limit. A small percentage of travel card transactions appeared to be for purchases not related to official government travel, and Agency procedures were inadequate to detect such misuse.
Purchase cards were used to buy items that were on the Agency's unauthorized purchase list, items were not purchased from preferred sources, sales tax was improperly paid on purchases, and multiple purchases were intentionally split to avoid single purchase limits. In addition, cardholders did not always maintain supporting documentation or obtain signatures from approving officials for all purchases.
Management agreed with most of the findings and recommendations. The Director of Administration stressed that resources devoted to the review of travel and purchase card activity should not outweigh the benefits. We agree, and think that an analysis will support the use of automated reports to identify possible misuse of cards.
We issued Report OIG-AMR-37-02-03, Evaluation of Board Casehandling Reports, on September 20, 2002. This audit was conducted to evaluate whether the casehandling reports prepared by the Office of the Executive Secretary provide useful information in an efficient manner, and are being used by the Board to manage cases. Because there is a cost associated with gathering information, reports should avoid duplication and be useful.
The Pending Case Load (PCL) system is user friendly and provides the information needed to adequately manage Agency caseload. Nevertheless, the need exists to automate reports that are not available on-line and in real-time in order to achieve maximum efficiency from the system. For off-line reports to become automated and other potential enhancements to PCL developed, increased programming time must be devoted to the PCL system.
Although there appears to be a potential for redundancy in the information and reports disseminated through the PCL system, some Agency officials use each of the reports produced, and we did not identify any needless duplication.
To be of greatest benefit, PCL needs to develop into more of a research tool. Also, an ongoing training program is needed to help system users and providers to become familiar with system changes in order to efficiently utilize the system capabilities and information available.
The Board generally agreed with the findings and recommendations.
We issued Inspection Report OIG-INS-23-02-03, Timeliness of Posting Board Decisions, on August 8, 2002. This inspection ascertained the timeliness that the Board's decisions reach the public via the Web site.
No written time standards exist in law, regulations, or Agency policy on the number of days that the Agency should post a decision on the Web site. Based on the normal process to post decisions 7 to 11 days after the date of the decision, we calculated that Board decisions should be posted, on average, in 9 days. The average time for a Board decision to be posted was 16 days.
The Agency could reduce this average time by eliminating two time periods that are built into the process of posting a Board decision to the Web site. The Agency could also immediately begin posting Board decisions on the Web site as soon as they are made public. This would make a significant improvement in providing parties and the public with quick, low-cost access to Board decisions.
The Government Information Security Reform Act requires inspectors general to conduct annual reviews of information security programs. As reported in the prior semiannual report, we issued Inspection Report OIG-INS-20-02-02, Computer Penetration Test, on March 25, 2002.
The Inspector General and Chief Information Officer (CIO) also responded to questions posed by OMB on information security. The General Counsel submitted the responses, program review, and independent evaluations to OMB on September 16, 2002.
The CIO Council's Federal Information Technology Security Assessment Framework defines five levels of information security, with Level 5 being the highest. NLRB continues to be rated below Level 1 based on the framework assessment guide. Its information security program has achieved portions of each of the first four levels, but does not fully meet any of these four, including Level 1 - the lowest level. NLRB's information security program could quickly achieve a Level 2 rating by finalizing and issuing its policies and procedures.
Agreed upon actions were not completed within one year on one audit report, Review of Information Systems Security, OIG-AMR-30-00-03, September 29, 2000. We reached agreement with management on actions needed to implement the 15 recommendations made in the report on December 27, 2000. Action is reportedly completed on 11 of the 15 recommendations.
Management is working to implement the remaining recommendations and plans to have them implemented by March 30, 2003. Open recommendations include instituting an individual development-training program, installing password management software, finalizing draft security policies, and implementing system recovery and service continuity plans for the network.
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 208 contacts, initiated ten cases, and closed thirteen cases. The investigations resulted in one conviction and one termination.
|Case Workload||Contacts Processed|
|Open (4/01/2002)||21||Received||208||Initiated||10||Initiated Investigation||4||Closed||13||Opened Case -- Referred to Agency||1||Open (9/30/2002)||18||Non-Investigative Disposition||203|
Contract Fraud. As previously reported, OIG received information from an employee in the NLRB Division of Administration that indicated a government contractor might be overcharging the Agency for relocation expenses of an Agency employee.
OIG determined that the billing documents submitted by a subcontractor were fraudulent. A joint investigation with several other Federal inspectors general and the Federal Bureau of Investigation found wide-ranging fraud in both government and other third party payee moves. The case was referred to the Criminal Division of the Department of Justice in August 1999.
Two subjects pled guilty to mail fraud in violation of 18 U.S.C. 1341. Prior to this reporting period, one of subjects had been sentenced. During this reporting period, the remaining subject was sentenced to 5 years probation and to pay restitution in the amount of $20,698.91. This sentence is the same as the other subject. (OIG-I-207)
Prohibited Political Activity. As previously reported, the OIG determined that an employee may have engaged in prohibited political activity in violation of the Hatch Act. OIG subsequently forwarded the case to the Office of Special Counsel (OSC) for investigation.
OSC completed its investigation and charged the employee with violating the Hatch Act. The violations were participating in political activities while in any room or building occupied in the discharge of official duties or while on duty, using official authority or influence for the purpose of interfering with or affecting the results of an election, and knowingly soliciting or discouraging the political activity of certain persons.
During this reporting period, the employee entered an agreement with OSC that required his removal from his position and that documentation of his Hatch Act violations be placed in his Official Personnel File. This agreement was approved by an Administrative Law Judge for the Merit Systems Protection Board. On July 15, 2002, the Agency removed the employee from his employment. (OIG-I-252(R))
Government Travel Card Abuse. OIG initiated a comprehensive review of travel card purchases by NLRB personnel. As a result of that review, we initiated 19 investigative cases involving 57 subjects.
Of those subjects, 44 had substantiated travel card abuse, 3 left the Agency prior to investigative action, 9 used the travel card for an official expense that was unrelated to travel or inadvertently used the travel card for a personal transaction, and 1 case is still under review. The substantiated travel card abuse included purchases at department, home furnishing, and specialty stores; cash advances at automated teller machines; personal travel related expenses; and cash advances on casino gaming floors.
Management is currently in the process of determining appropriate administrative action.
Driving with a Suspended License and Time and Attendance. OIG received an allegation that an employee was not at meetings that she was granted official time to attend. Additional allegations included that the subject drove a Government owned vehicle (GOV) without a valid motor vehicle operator's license; that while driving the GOV, she was involved in a vehicle accident and left the scene of the accident; and that on February 8, 2002, she left work in the middle of the day and did not return without requesting leave authorization.
The investigation substantiated that the subject failed to attend a meeting while being provided official time and was, therefore, absent without leave; that she violated Federal regulations by driving a GOV without a valid driver's license; and that she was absent without leave on other occasions.
Management is currently in the process of determining appropriate administrative action. (OIG-I-283)
Misuse of Appropriations. OIG initiated an investigation after receiving a complaint alleging that the Branch Chief procured "art work" in violation of Federal procurement practices. The investigation disclosed evidence that the subject improperly used restricted funds to procure framed motivational posters. Based on this finding, we recommended that management reclassify this purchase to unrestricted funds. Management concurred and reclassified the purchase. (OIG-I-305)
Abuse of Authority. OIG received a complaint that the Agency abused its authority by issuing a subpoena to the company that was not accused of violating the NLRA. The Agency issued a subpoena to a third party company to obtain information about unclaimed money owed to victims of an unfair labor practice.
The money at issue was not the property of the Agency, and the Agency was not in a position to authorize the payment of a fee to the company. Because the money was part of a remedy that had not yet been paid to the victims of the unfair labor practice, the law enforcement proceedings were continuing and it was not improper for the Agency to avail itself of the subpoena authority that Congress has provided. (OIG-I-308)
Misuse of Position. OIG conducted an investigation pursuant to a Memorandum of Agreement with another agency that does not have an inspector general. The complaint alleged that an employee was involved in a pyramid scheme with individuals that had matters pending before the agency and also with employees of agency. The complaint further alleged that employee's supervisor was aware of the situation.
We determined that the employee misused his position by soliciting individuals who had matters pending before the agency and by soliciting subordinates to engage in multilevel marketing scheme for telecommunications services. We also found that the employee engaged in this misconduct while on official time.
However, we did not find that the employee's supervisor was aware of the misconduct. We recommended that the agency take appropriate administrative action against the employee. (OIG-I-307(O))
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 208 hotline contacts, of which 64 were telephone calls and 144 were in writing. Five 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 pieces of legislation, two regulations, and one policy document.
We reviewed the following legislation and provided input when appropriate.
H.R. 4685, the Accountability of Tax Dollars Act of 2002. This legislation would require executive agencies with a budget authority in excess of $25 million to submit annual audited financial statements. Hearings were held by the Subcommittee on Government Efficiency, Financial Management, and Intergovernmental Relations, Committee on Government Reform.
Following the hearings, we provided a copy of a completed audit of the NLRB's fiscal year 1999 accounting and reporting systems to the subcommittee. In that report, we recommended that management coordinate with the General Counsel and Board to obtain a decision on whether the NLRB will prepare annual financial statements and have periodic audits.
H.R. 4561, the Federal Agency Protection of Privacy Act. This legislation would require that agencies, in promulgating rules, take into consideration the impact of such rules on privacy of individuals.
S. 2629, the Federal Privacy and Data Protection Policy Act of 2002. This legislation provides a framework for ensuring effective data and privacy management by agencies and requires agencies to designate an employee as a privacy manager. This legislation also requires an agencies' Inspector General to contract with an independent third party to conduct a review of the privacy protection and data protection practices of the agency. This review must be completed every 3 years.
H.R. 4, the Energy Policy Act of 2002. This legislation contains many provisions that affect the consumption of energy by agencies. As passed by the House of Representatives, this legislation also requires inspectors general to conduct periodic reviews of his or her agencies' energy consumption.
The Counsel to the Inspector General is an advisory member of the Agency's Rules Revision Committee that develops changes to Agency procedural regulations. During this reporting period, OIG recommended that the Rules Committee review and update, as needed, the Organization and Functions section of the NLRB Rules and Regulations. This section has not been updated in last 23 years.
Section 515 of the Treasury and General Government Appropriations Act for FY 2001 (PL 106-554) requires each agency to publish guidelines for ensuring and maximizing the quality, objectivity, utility, and integrity of the information it disseminated to the public. We submitted guidelines for the OIG information to be included as an appendix to the Agency's guidelines.
Because the OIG is a statutorily independent component of the Agency with responsibility to investigate and report waste, fraud and abuse in the Agency's programs and operations, we believe that applying Agency-wide guidelines to the OIG would undermine the OIG's independence by having another office in the Agency review the methodology and preparation of the OIG's work. The conflict between the Agency-wide guidelines and the Inspector General Act was resolved by the development and issuance of OIG information quality guidelines in accordance with Section 515 of PL 106-554, that provide comparable assurances and procedures to the public.
We provided comments to the General Accounting Office (GAO) on its exposure draft, Government Auditing Standards 2002 Revision. The Standards set forth the generally accepted government auditing standards the inspectors general are required to follow when conducting audits.
We commented that most of the changes would improve the Standards. Some major issues in the audit community, however, were addressed indirectly rather than in a straightforward manor. For instance, additional guidance was needed on inspections, whether government auditors need to be licensed certified public accountants, and peer reviews.
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 non-governmental 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 designated Federal entities (DFEs) 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. She joined the PCIE Audit Committee in May 2001.
The Inspector General was Co-chair of the PCIE/ECIE Annual Conference held in April 2002. The Counsel and Assistant Inspector General for Audits assisted in planning and facilitating the Conference. They received a joint PCIE/ECIE Award for Excellence for their efforts.
The Assistant Inspector General for Audits participated in the PCIE Results Act Group. Both auditors participated in the IDEA Users Group.
The Counsel participated in the Council of Counsels to Inspectors General. He is also a member of a committee reviewing the Quality Standards for Federal Offices of Inspector General.
The Counsel is an advisory member of the Government Paperwork Elimination Act Committee. This committee was formed to ensure that the Agency meets the October 2003 deadline of providing a means for electronic transactions with the public as a substitute for paper.
An electronic "extension of time request" was successfully implemented for the Agency's Office of Appeals. The Committee is now developing electronic forms for initiating a complaint in a Regional Office.
General Accounting Office
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.
The Chairman, House Subcommittee on Government Management, Information, and Technology, requested a study on July 24, 2000. This 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. A draft report was circulated for comment in September 2002.
The Chairman, House Committee on Government Reform, requested a study on March 5, 2001. This study was to explore improvements to the offices of inspectors general that address overall effectiveness and enhancements to their independence. OIG provided input on June 7, 2001.
We provided comments to the ECIE for consideration on a single response to GAO's draft report. Our comments generally addressed the fact that the GAO's conclusions were not supported by data gathered and were insufficient given the importance of effective oversight of Federal agencies' programs and operations.
GAO issued INSPECTORS GENERAL Office Consolidation and Related Issues, GAO-02-575, on August 15, 2002. GAO provided several matters for congressional consideration. This included consolidating DFE OIGs under Presidentially-appointed inspectors general based on related agency missions or where potential benefits to OIG effectiveness can be shown.
NLRB, the Federal Labor Relations Authority, and the Pension Benefit Guaranty Corporation were identified as having related agency missions to the Department of Labor. We believe legal issues would prevent such a consolidation, and OIG effectiveness would be significantly decreased for the three DFE entities.
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:
|(1),(2),(7)||OIG did not identify any significant problems, abuses or deficiencies relating to the administration of programs. 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 that 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)||No audit reports issued during this period had a recommendation on questioned costs. The audit reports did not identify any 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
Be Put To
|Audit of Travel and Purchase Cards, OIG-AMR-36-02-02||0||0||0||0|
|Evaluation of Board Casehandling Reports, OIG-AMR-37-02-03||0||0||0||0|
Table 1 -- REPORTS WITH QUESTIONED 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|
|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|
|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|
|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|
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