For example,  government-wide waiver authority was contained in the National Defense  Authorization Act (NDAA) for Fiscal Year 2010 and allows agencies to  waive offset requirements on a temporary basis. Use of Reemployed Annuitants Increased Between 2004 and 2013 with Most Concentrated in the Department of Defense

Our analysis of OPM’s data indicate that agencies’ use of reemployed  annuitants has increased, with the number of on-board uniformed and  civil service annuitants rising from over 95,000 in September 2004 to  around 171,000 in September 2013 (from about 5 percent to 8 percent of  the federal workforce). This is inclusive of reemployed annuitants with  and without dual compensation waivers, as well as retired uniformed  service members whose retirement or retainer pay is not subject to  reduction. More than half of these reemployed civilian annuitants,  specifically DOD’s civil service reemployed annuitants, would not be  covered under OPM’s waiver authority. DOD accounted for 83 percent of  the increase in annuitants from 2004 to 2013— of this increase,  approximately 3 percent were civil service annuitants and about 98  percent were uniformed service annuitants. OPM Does Not Conduct Trend Analysis of Dual Compensation Waiver Requests and Has Not Developed Policies and Procedures to Manage Waiver Documentation

OPM officials said that they do not conduct trend analysis of dual  compensation waiver requests because each waiver is so unique that  there is no trend or pattern to analyze. While there is no specific statutory requirement for OPM to conduct trend  analysis, without such analysis, OPM may be missing opportunities to  analyze this information that can help guide the human capital  management tools and guidance it develops and provides to agencies  government-wide. Ensuring OPM is identifying challenges and assisting  agencies as issues emerge is especially important given the increasing  number of retirement-eligible employees across the federal government. OPM officials said that they do not have a systematic and  reliable process for maintaining dual compensation waiver  documentation. Given OPM’s document management challenges, as  previously discussed, OPM was unable to provide us with a  representative sample of waiver approval letters to determine whether  OPM consistently established time limits on the delegation of waiver  authority provided to agencies and, if not, whether there were instances  where monitoring or oversight was necessary. Given the increasing use of  reemployed annuitants and the impending wave of retirements, OPM is  missing an opportunity to leverage the information gained through the  review and approval of dual compensation waivers to inform and improve  upon the assistance it provides federal agencies in their management of  human capital. 2. In  written comments, which are reprinted in appendix II, OPM did not concur  with one recommendation and partially concurred with one. We continue to believe that OPM should take action to fully  address this recommendation and comply with federal internal control  standards. To evaluate the extent to which OPM analyzes trends in the reasons for  waiver requests and provides related guidance, we reviewed OPM’s  policies and procedures for evaluating waiver requests, analyzed  documentation from OPM, and interviewed officials. To evaluate the extent to which OPM ensures compliance with conditions  under which the waivers were granted, we reviewed relevant statutes,  regulations, OPM’s policies and procedures for reviewing waiver  requests, and interviewed OPM officials.
Why GAO Did This Study

The federal workforce has a large number of retirement-eligible employees that could potentially result in a loss of skills hindering federal agencies' ability to meet their missions. Agencies can mitigate this challenge by hiring uniformed and civil service retirees. Generally, when an agency reemploys a retired civil service employee, their salary rate is subject to offset by the amount of the annuity received. Upon request, OPM has authority to waive offsets, allowing dual compensation (annuity and full salary). Dual compensation is also permitted under other authorities not administered by OPM, such as the authority provided to Defense.
GAO was asked to provide information on the use of rehired annuitants and OPM's dual compensation waiver authority. This report: (1) describes the trends in rehired annuitants for fiscal years 2004 to 2013; (2) identifies the extent to which OPM analyzes trends in the reasons for waiver requests, and provides guidance to agencies, and (3) evaluates the extent to which OPM ensures agencies' compliance with the conditions under which the waivers were granted. GAO analyzed OPM data, reviewed OPM documentation, and interviewed OPM officials.

What GAO Found

Agencies' use of reemployed annuitants has increased, with the number of on-board retired uniformed and civil service annuitants increasing from over 95,000 in fiscal year 2004 to around 171,000 in fiscal year 2013 (from about 5 percent to 8 percent of the federal workforce). This is inclusive of reemployed annuitants with and without dual compensation waivers. The Department of Defense (DOD) accounted for about 80 percent of rehired annuitants in 2013; ninety-eight percent of which were retired uniformed service members whose retirement pay is not subject to reduction. More than half of the total reemployed civilian annuitants in 2013, including DOD's civil service reemployed annuitants, would not be covered under the Office of Personnel Management's (OPM) dual compensation waiver authority.
OPM officials said that they do not conduct trend analysis of dual compensation waiver requests and they provide related guidance only as needed. While OPM is not required to conduct trend analysis, given the increasing number of retirement-eligible federal employees, without such analysis OPM may be missing opportunities to analyze information that can inform decisions about the human capital management tools it develops and provides for agencies government-wide. OPM's ability to conduct trend analysis is limited by its lack of a systematic and reliable process for maintaining dual compensation waiver documentation. The lack of policies and procedures is inconsistent with federal internal control standards and made OPM unable to timely retrieve the documentation for GAO's review.
OPM is not required by statute to monitor agencies' implementation of individual dual compensation waivers to determine whether relevant requirements are followed. OPM regulations provide for limited oversight in delegated situations, where waiver authority is delegated to agencies without a time limit.

What GAO Recommends

GAO recommends that OPM analyze trends in agencies' use of dual compensation waivers and establish policies and procedures for maintaining waiver documentation. OPM did not concur with the first and partially concurred with the second recommendation. GAO maintains that OPM should implement these actions as discussed in the report.