FDA Uses 3R Incentives to Recruit and Retain Mission- Critical Staff, but Lacks Agencywide Indicators for Tracking the Progress of 3R Incentives in Addressing Its Recruitment and Retention Goals

Employees in mission-critical occupations as identified by FDA make up  the majority of FDA’s workforce and have also received the greatest  number of 3R incentives from 2007 to 2009. While FDA collects data on workforce  indicators at the agency and center levels, it has not analyzed how 3R  incentives are helping the agency achieve its recruitment and retention  goals. However, several of the incentive files we reviewed lacked adherence to  certain other requirements, such as approval prior to the incentive  payment, proof of employee relocation, and prescribed contents of a  service agreement, which in most instances may have resulted from a lack  of documentation. Over the past 3 years, FDA has made some changes to its  internal controls, such as continuing to revise its centralized review and  approval process for 3R incentive requests and updating its guidance  including the standard forms for 3R incentive requests. If effectively  implemented, the revisions to its internal controls may help ensure that in  the future 3R incentives are properly awarded and documentation exists  to support the incentives. As a next step, OPM could provide guidance to all agencies on the  importance of considering succession planning in the decision process for  awarding retention incentives. While HHS’s 3R incentive policy generally  addressed the requirements for 3R incentive plans as outlined in OPM’s  regulations, there were several instances where the policy omitted or did  not clearly address certain important requirements. As FDA implements the results of its 2009 review of 3R incentives, we  recommend that the Commissioner of FDA continue to strengthen FDA’s  internal controls for requesting, approving, and processing 3R incentives  by taking the following two actions:    update the guidance for awarding 3R incentives to include the payment  method used for retention incentives and all the conditions for terminating  a retention incentive when no service agreement is required, and    ensure 3R incentive files are properly completed and reviewed to address  policy and regulatory requirements before the employees receive the  incentive payments. GAO staff who made major contributions to  this report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

This report examines (1) the extent to which the Food and Drug  Administration (FDA) is linking its use of recruitment, relocation, and  retention (3R) incentives to its strategic human capital approaches to  address its current and emerging challenges; (2) the extent to which FDA’s  3R incentives were awarded consistent with the law, regulations, and  guidance and the internal controls FDA has in place to ensure proper  disbursement of 3R incentives and encourage efficient use; and (3) the  steps the Office of Personnel Management (OPM) has taken to help ensure  that agencies, including the Department of Health and Human Services  (HHS), have effective strategic oversight of their 3R incentive programs,  and how HHS is providing oversight of its 3R incentive program. We reviewed the files of a random, stratified  sample of 3R incentives awarded from January 2007 through October 2008  to determine whether they met requirements in law, OPM regulations, HHS  policy, and FDA guidance.
Why GAO Did This Study

The Food and Drug Administration (FDA) within the Department of Health and Human Services (HHS) has faced challenges in obtaining the workforce needed to support its responsibilities and similar to other agencies, has paid selected employees recruitment, relocation, and retention (3R) incentives. This report examines (1) the extent to which FDA is linking its use of 3R incentives to its strategic human capital approaches to address its current and emerging challenges; (2) the extent to which FDA's 3R incentives were awarded consistent with regulations and the internal controls FDA has in place to ensure proper disbursement of 3R incentives; and (3) the steps the Office of Personnel Management (OPM) has taken to help ensure that agencies have effective oversight of their 3R incentive programs and how HHS is providing oversight. GAO analyzed a stratified sample of FDA's 3R incentives files, 3R data provided by HHS, HHS's 3R policy and FDA's guidance, and interviewed HHS, FDA, and OPM senior officials.

What GAO Found

Retention incentives encompass the majority of 3R incentives awarded to FDA employees in recent years. FDA's employees in mission-critical occupations received the greatest number of 3R incentives from 2007 to 2009. However, without an updated strategic workforce plan or established agencywide indicators for tracking its use of 3R incentives, FDA cannot assess the impact that these incentives have on its overall human capital strategy. While FDA collects data on workforce indicators at the agency and center levels, it has not analyzed how 3R incentives are helping the agency achieve its recruitment and retention goals. On the basis of GAO's review of a stratified sample of FDA's 3R incentive files awarded from January 2007 through October 2008, GAO found that FDA maintained documentation which provided sufficient explanation to justify each award. However, several of the incentive files we reviewed lacked adherence to certain other requirements, such as prescribed contents of a service agreement, which in most instances may have resulted from a lack of documentation. To help ensure the proper awarding of 3R incentives, FDA has various internal controls in place, such as a centralized review and approval process for incentive requests. Over the past 3 years, FDA has made some changes to its internal controls, such as updating its guidance including the standard forms for 3R incentive requests. If effectively implemented, FDA's revisions to its internal controls may help ensure that in the future 3R incentives are properly awarded and documentation exists to support the incentives. While both OPM and HHS provide oversight of 3R incentives through various mechanisms, including guidance and periodic evaluations and accountability reviews, there are opportunities for improvement. As a next step, OPM could provide guidance to all agencies on the importance of considering succession planning in the decision process for awarding retention incentives. While HHS's 3R incentive policy generally addressed the requirements for 3R incentive plans as outlined in OPM's regulations, there were several instances where the policy omitted or did not clearly address certain important requirements, such as the conditions for terminating or reducing an incentive.