Did SBA follow applicable policies and procedures when appointing--and setting the starting salaries of--individuals hired during the period January 1, 1993, through December 31, 1998, from outside of SBA for the position of District Director, and what procedures did SBA’s Office of Advocacy use in hiring Regional Advocates and Assistant Advocates during calendar year 1998? There were allegations that the individual appointed to the Denver position obtained the appointment through her political connections. Setting the Starting Salaries for the Six Directors

Federal regulations govern the salary-setting process for new appointees. However, in one of the six cases, SBA did not consider the use of a recruitment bonus when it set the District Director’s salary at a level higher than the minimum rate for the pay grade. In that instance, SBA officials--during our review--determined that the salary had been set incorrectly. SBA said that it is revising its procedures to ensure program managers know extensions and terminations of interagency details are to be documented on a Notification of Personnel Action (SF-50) and that the new procedure will ensure that SBA’s personnel/payroll system provides automated “ticklers” to help eliminate the possibility of any funds from reimbursable details not being collected. For example, like political appointees, Regional Advocates can be hired noncompetitively. However, the documentation necessary to support certain pay settings could not always be found. We recommend that the SBA Administrator identify and establish appropriate procedures for better controlling the interagency detailing of its employees. However, we also report a number of cases in which SBA could not provide documentation allowing a determination as to whether SBA followed appropriate procedures when setting advanced salaries at the time the employees were hired. Consequently, SBA had not developed a recruitment bonus plan, as required by regulations. Date of Reimburse- ment 7/26/94 ?? ? 6. 2. 3. 4. 5.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed events related to personnel reassignments, appointments, and activities at the Small Business Administration (SBA).

What GAO Found

GAO noted that: (1) SBA made hundreds of appointments during the 1990s using competitive procedures for career appointments, special noncompetitive hiring authority for the Office of Advocacy, and political appointment procedures for other appointments; (2) for the appointments that GAO reviewed, GAO found that SBA adhered to the different procedural requirements; (3) for example, although 6 of the 42 District Director appointees were hired from outside SBA to the career positions, and 2 of them had political backgrounds, GAO found nothing procedurally amiss in the hiring process; (4) GAO determined, however, that in several cases SBA did not follow applicable federal regulations when setting the starting salary at a rate higher than the minimum rate for the grade; (5) SBA could not provide the documentation required by federal regulations to support the advanced salary settings; (6) SBA has developed draft procedures that, if properly implemented, should help prevent such situations from recurring; (7) GAO also determined that SBA poorly controlled its interagency detailing of employees, with the result that cost reimbursements were not always being collected; and (8) SBA officials advised GAO that they are developing new procedures to better control interagency details and collections of reimbursements.