July 6, 2000
To: Frederick Calatrello
Regional Director, Region 8
From: Jane E. Altenhofen
Subject: Inspection Report No. OIG-INS-07-00-04: Accounting and Reporting Systems in the Cleveland Regional Office
This inspection was conducted in conjunction with our audit of the National Labor Relations Board's Fiscal Year 1999 accounting and reporting systems. We selected four Regional Offices, including Region 8, the Cleveland Regional Office (Cleveland), on a judgmental basis. Our objective was to review functions that could effect the Agency's ability to prepare audited financial statements including financial management, backpay, time and attendance (T&A), and capitalized and sensitive property.
Generally, record keeping for administrative matters was meticulous. We did not identify anything adversely impacting the Agency's ability to prepare audited financial statements based upon Cleveland's financial management. We determined that procedures provided reasonable assurance that the management of backpay meets Agency objectives. We found that records accurately reflected capitalized and sensitive property. We also found that documentation supporting T&A such as written approval of work schedules, flex-time, granting of compensatory time, and authorizing the use of annual and sick leave were maintained. Bi-weekly T&A reports were initialed by the employee, timekeeper, and supervisor.
We did, however, identify two reportable issues. Clerical employees were scheduled to work a 7 1/2 rather than 8 hour day, and advance sick leave was not granted in accordance with Agency policy.
We interviewed responsible personnel to identify procedures relating to financial management, the collection and distribution of backpay, controls over capitalized and sensitive property, and the administration of T&A practices. We reviewed applicable documentary evidence and performed a physical inventory of capitalized and sensitive property, including all computer equipment.
Capitalized and Sensitive Property
General Accounting Office Standards for Internal Control in the Federal Government, updated in November 1999, call for accurate and timely recording of transactions and events. Capitalized property consisted of one photocopy machine. Sensitive property included computer equipment, non-capitalized photocopy equipment, a television, two video cassette recorders, and one mail meter. We found that records accurately reflected capitalized and sensitive property.
Maintaining Time and Attendance Records
General Accounting Office Policy and Procedures Manual for Guidance of Federal Agencies, Title 6 - Pay, Leave, and Allowances (Title 6), dated March 22, 1996, states that documents supporting T&A should be completed and maintained. Examples of such documents include those for establishing (1) work schedules, (2) flexiplace arrangements, (3) leave, (4) overtime, (5) compensatory time, and (6) credit hours.
All professional employees in Cleveland worked the standard office hours. A work schedule was maintained for clerical employees. The clerical employee work schedule documented an 8 1/2 hour workday with an hour lunch break, effectively a 7 1/2 hour work day. 5 U.S.C. § 6101 established a 40-hour work week for Federal employees. The Office of Personnel Management reaffirmed this in guidance which states that Agencies are not allowed to routinely permit employees to work less than an 80 hours in a pay period, and hour long meal breaks, half of which is in a pay status are not authorized.
In response to our draft report, the Regional Director informed Cleveland's clerical support staff of the 40-hour work week requirement and altered work schedules accordingly.
No Cleveland employees participated in the work-at-home program.
Cleveland consistently used the Standard Form 71 to document sick and annual leave usage.
Advance Sick Leave
Agency policy requires that an employee submit medical certification when requesting advance sick leave. The Regional Director can approve up to 4 days. For 5 or more days, the Regional Director must submit a memorandum to the Division head justifying the advance. The Division head is to respond either approving or disapproving the request.
We identified 4 employees with advance sick leave balances and reviewed 48 related transactions to determine whether documentary evidence was maintained and approval was granted in accordance with Agency policy. None of the employees was advanced 5 or more days of sick leave. Only 8 of 48 transactions were supported by a medical certificate.
In response to our draft report, the Regional Director informed Cleveland's staff of Agency policies regarding advance sick leave.
Advance Annual Leave
Annual leave may not be advanced in excess of what the employee could accrue by the end of the pay year. We reviewed all advance annual leave balances and determined that leave was not advanced in excess of the amount allowed.
Compensatory time and overtime were properly approved and recorded into the Agency's payroll system. Credit hours were not used.
Review and Approval of T&A Reports
Title 6 states that review and approval of T&A reports should be made by the official, normally the immediate supervisor, most knowledgeable of the time worked and absence of the employee. Since at least March 1992, when Administrative Policy Circular (APC) 92-4 was issued, Agency policy requires employees, timekeepers, and supervisors to initial hard copy T&A reports. This policy was reaffirmed in APC 98-01, which was issued in response to an OIG finding that employees, timekeepers, and supervisors frequently did not initial T&A reports as required.
T&A reports were initialed by the employee, timekeeper, and supervisor.
This review was done in accordance with the Quality Standards for Inspections issued by the President's Council on Integrity and Efficiency.
cc: Richard A. Siegel