Office of Inspector General
Semiannual Report to the Congress

October 1, 2003 - March 31, 2004

April 30, 2004

The Honorable Cari M. Dominguez
Chair
Equal Employment Opportunity Commission
Washington, D.C. 20507

Dear Madam Chair:

I am providing the Office of Inspector General's (OIG) Seminannual Report to Congress summarizing our activities for the 6-month period that ended March 31, 2004. The Inspector General Act of 1978, Public Law 95-452, as amended, Section 5(B), requires that you submit this report, and the management report prepared by the Office of Chief Financial Officer and Administrative Services, to the appropriate committees or subcommittees of the Congress within 30 days of receipt.

Much has been accomplished by the EEOC since my last semiannual report to Congress. During this reporting period, a new strategic plan for fiscal years (FY) 2004 through 2009 was developed and the performance measures included are intended to demonstrate the EEOC's impact on creating fair and inclusive workplaces across America. The first financial statement audit was conducted whereby independent auditors rendered a qualified opinion on the FY 2003 financial statements, and EEOC completed its first Performance and Accountability Report.

The OIG issued 5 audit and evaluation reports; completed 6 investigations or special projects, received 174 investigative inquiries of which 61 were charge processing issues, made 3 referrals to the Federal Bureau of Investigation, and have 13 ongoing assignments. In addition, staff gained professional certifications and participated in various professional activities. OIG offered advice to managers on cost accounting solutions to assist in developing methodology to determine EEOC's cost of doing business.

Staff of the OIG will continue to work with you to improve the programs and operations of EEOC. We appreciate your leadership, commitment to excellence and support of our mission.

Sincerely,

Aletha L. Brown
Inspector General

TABLE OF CONTENTS

Executive Summary

Introduction

Office of Inspector General

The Equal Employment Opportunity Commission

IG's Summary of Significant Management Challenges

The Audit and Evaluation Program

Completed Assignments

Ongoing Audit and Evaluation Activities

Other Audit and Evaluation Activities

The Investigative Program

Investigative Inquiries Received

Completed Investigations

Ongoing Investigative Activity

Other OIG Activities

Appendices

OIG Audit and Evaluation Reports

Index of Reporting Requirements

Single Audit Act Reports

EXECUTIVE SUMMARY

This semiannual report is issued by the Equal Employment Opportunity Commission's (EEOC) Office of Inspector General (OIG) pursuant to the Inspector General Act of 1978, as amended. It summarizes OIG's activities and accomplishments for the period October 1, 2003 through March 31, 2004. During the period, the OIG issued 5 audit and evaluation reports; completed 6 investigations or special projects, received 174 investigative inquiries of which 61 were charge processing issues, made 3 referrals to the Federal Bureau of Investigation, and have 13 ongoing assignments. In addition, staff gained professional certifications and participated in external professional activities. Significant activities are summarized below.

A report on the audit of the Agency's Fiscal Year 2003 financial statements was issued. This was the first audit of its kind. Auditors questioned EEOC's estimate of $12.1 million in future workers compensation payment liability and provided a qualified opinion on the financial statements.

OIG evaluated EEOC's progress in meeting the reporting requirements of the Government Performance and Results Act and found the information useful and most requirements met. OIG offered ten recommendations in the final report. These addressed timely accessibility to the public, improving performance measure targets, and clarity of data.

OIG issued a management advisory addressing the Agency's performance in meeting the President's Management Agenda initiatives. The advisory noted improvement in all initiatives except competitive sourcing. E-Government met core requirements and received a passing score.

OIG completed an investigation into alleged sexual harassment of female employees by an EEOC investigator conducting on-site interviews at a private company. Although evidence did not support the sexual harassment claim, OIG found the employee's conduct both inappropriate and unethical.

OIG completed an investigation into allegations that a former employee attempted to influence former subordinates in a matter in which the former employee participated in while employed by the Agency. This matter will be referred to the U.S. Attorney's Office for prosecutorial consideration.

OIG is conducting a telework pilot to test whether headquarters infrastructure costs can be reduced through the use of frequent telework. A final report detailing OIG's experience, lessons learned, and recommendations to Agency managers will be issued during the next reporting period.

Professional certifications were awarded to two staff members. One of the Criminal Investigators met Certified Fraud Examiner requirements. The Management Analyst met Certified Information Security Manager requirements. Staff attended the National Intergovernmental Audit Forum, Administrative Investigations Seminar, and Creative Problem Solving Workshop. Counsel participated in a working group that addressed legal issues involved in the Executive Council on Integrity and Efficiency (ECIE) Investigative Peer Reviews.

INTRODUCTION

OFFICE OF INSPECTOR GENERAL

The Inspector General Act of 1978 was passed to ensure a level of integrity and efficiency that fulfills the American taxpayer's expectation for excellence and accountability in the Federal Government and its programs. Inspectors General are under the general supervision of the agency head and have substantial independence, authority and responsibility to conduct audits and investigations of agency programs. They have direct access to all agency records and materials; issue subpoenas for necessary information, data, reports, and other evidence; administer oaths before taking testimony; hire staff; and request assistance from other Federal, state and local government agencies. They also act as independent fact finders, often undertaking initiatives at the request of the agency head, and provide assessments in such areas as financial management systems and internal controls. Generally, both the Inspector General (IG) and agency management pursue efficient and effective program operation and service delivery.

Congress established an Office of Inspector General at the EEOC through the 1988 amendment of the Inspector General Act (IG Act), which expanded authority to independent agencies and federal entities. OIG's primary responsibility is to assist the EEOC by ensuring integrity, efficiency, and accountability in the agency's programs to enforce laws against discrimination in the workplace. Specifically, OIG supports the Agency by carrying out its mandate to independently and objectively conduct and supervise audits and investigations; prevent and detect fraud, waste, and abuse; and promote economy and efficiency in programs and operations.

The Inspector General (IG) provides supervision, overall direction, coordination, and leadership of the office. The OIG staff includes a deputy inspector general, audit and evaluation staff, criminal investigators, an independent counsel, and an administrative specialist. The Deputy Inspector General serves as alter ego of the Inspector General and has the responsibility for providing overall program guidance, direction and supervision of the Audit, Evaluation and Investigation personnel. The Audit and Evaluation Program provides assurance to the Chair and Congress that EEOC programs are working efficiently and effectively. These staff conduct performance and financial audits, as well as special reviews and evaluations. This audit work focuses on management controls, administrative and program operations, transaction processing, financial and other information systems. In evaluations and system reviews, the OIG assesses program performance, system security and effectiveness of EEOC operations and policies.

The mission of the Investigative Program is to perform investigative activities related to program integrity and employee ethics. Most investigations focus on violations of law or misconduct by Agency employees, as well as, allegations of irregularities or abuses in operations and programs. When needed, OIG's investigators work in concert with other law enforcement entities. More than half of investigative inquiries result from employees and the general public calling OIG's 24-hour telephone (hotline) to report wrongdoing. About half of these calls concern EEOC's discrimination complaint process, and are either resolved by OIG or referred to the appropriate program office.

Counsel to the IG (CIG) supervises the day-to-day operations of the Investigative Program, and provides independent legal advice on issues concerning criminal law and procedures, evidence, and administrative and constitutional law, as they relate to ongoing investigations. Counsel also develops legal interpretations of appropriation law, financial management statutes and regulations, and procurement and funding rules in support of the audits. The CIG reviews each OIG report product for legal sufficiency. Additionally, the CIG conducts reviews and provides comments on existing and proposed legislation, regulations, directives and policy issues that affect EEOC and OIG programs and operations.

The administrative specialist manages the office, maintains control of OIG accounting records, handles human resource matters, responds to inquiries from the public and performs a variety of other support functions.

During the reporting period OIG held an open house for Agency employees in celebration of the 25th Anniversary of the IG Act. Also, a frequent telework pilot program was implemented. One staff member retired, and two received professional certifications.

THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

The EEOC is the federal agency responsible for enforcement of: Title VII of the Civil Rights Act of 1964, as amended; the Equal Pay Act of 1963; the Age Discrimination in Employment Act of 1967 (ADEA); in the Federal sector only, section 501 of the Rehabilitation Act of 1973; Title I of the Americans with Disabilities Act of 1990 (ADA); and the Civil Rights Act of 1991. These statutes prohibit employment discrimination based on race, sex, color, religion, national origin, age, or disability. The EEOC is also responsible for carrying out Executive Order 12067, which promotes coordination and minimizes conflict and duplication among Federal agencies that administer statutes or regulations involving employment discrimination.

During this reporting period, a new strategic plan for fiscal years 2004 through 2009 was developed and the performance measures included are intended to demonstrate the EEOC's impact on creating fair and inclusive workplaces across America. The first financial statement audit was conducted whereby independent auditors rendered a qualified opinion on the fiscal year (FY) 2003 financial statements. Also, EEOC completed the first Performance and Accountability Report for FY 2003.

IG's SUMMARY OF SIGNIFICANT MANAGEMENT CHALLENGES

The organizational structure of EEOC is hierarchical and 80 percent of its budget is devoted to fixed costs (including compensation, benefits and rent). The remaining amount is primarily devoted to mediation, litigation support, state and local programs, outreach and technology. Further, demographic shifts and the changing business environment requires better resource allocation and distribution nationwide. There are few resources devoted to the human capital investments and workload redistribution requirements needed to respond to these workplace changes. This scenario represents EEOC's most critical management challenge, according to the OIG's assessment. To address some of the workload challenges the Commissioners voted in November 2003, to pilot a National Contact Center. The objective of the project is to explore its effectiveness in handling more than one million unsolicited telephone contacts to EEOC offices nationwide annually. Also, internal litigation activities were transferred from the Office of Legal Counsel to the Office of General Counsel to obtain greater efficiency and consistency in legal operations. Finally, the Commissioners voted to reclassify the Albuquerque District Office to an Area office under the Phoenix District Office's jurisdiction. This action adjusted the status of the office to correspond with its performance level and reflect actual program operations.

The following challenges are linked to the President's Management Agenda (PMA) initiatives and are related to EEOC's Strategic Objective 3 - Organizational Excellence, which embodies the final element of the Chair's Five-Point Plan, "EEOC as a Model Workplace."

Strategic Management of Human Capital

EEOC's future workforce planning needs continues to be a serious concern. On October 1, 2003, a revised Strategic Plan for FY 2004 - 2009 was issued and a human capital strategy was implemented. This represents progress for the agency since OMB requires that human capital strategy be aligned with mission, goals, and organizational objectives and integrated into the budget and strategic plan. A new staff development plan was included in the FY 2004 Collective Bargaining Agreement with the union, a workforce planning system was developed to identify and address gaps in mission critical occupations and competencies, and a seven-step succession planning process was developed.

The weaknesses in the strategic management of human capital initiative include the need to: update the skills gap assessment for the agency performed in 2001; evaluate the performance management system for non-SES employees and link their performance appraisal plans to agency mission, goals, and outcomes; and to develop and execute Individual Development Plans for all employees. Further, the link between the Commission's Strategic Plan and the human capital strategies has not been communicated to the workforce. EEOC is in the process of fully implementing the new workforce planning system, and pending a decision by the Commission on the future structure of the agency, the Office of Human Resources will ensure that the organizational structure is delayered and focused toward performing mission activities.

Budget/Performance Integration

The FY 2004 budget request and annual performance plan began the approach toward budget and performance integration. The request focused on better measures to assess the results of Agency programs and accomplishments and funding, and for the first time, was tied to specific goals in the FY 2000 - 2005 Strategic Plan. A revised strategic plan was issued on October 1, 2003 allowing the agency to proceed on planned tasks under the budget and performance integration initiative that will be directly linked to the plan. During FY 2003, the Chief Financial Officer began providing consolidated monthly financial reports by strategic goals, objectives and programs to senior managers. These reports include field and headquarters direct and indirect costs for compensation, benefits, rent and program, and administration. In future years, funding will be allocated at more detailed levels to enhance the budget and performance integration effort. Specifically, plans include redesigning the internal budget formulation process and associated guidance, comparing agency performance with other civil rights enforcement agencies, assessing how long tasks take in order to accurately measure costs, and documenting alignment of cost centers in the financial accounting system to agency programs.

Financial Performance

In accordance with the Tax Accountability Act of 2003, the EEOC's financial statements were audited and an opinion rendered for the first time in the Commission's history. Cotton & Company LLP, issued a qualified audit opinion on the EEOC's financial statements. The Chief Financial Officer must take steps to resolve the issue with how they determine future workers compensation liability and continue to work towards ensuring that the EEOC receives an unqualified opinion on its future financial statements.

Competitive Sourcing

The Agency planned to consistently identify commercial and inherently governmental inventories throughout the Commission and to develop a 5-year competitive sourcing plan pursuant to OMB's guidance. However, planned competitions for information technology desktop support and applications training, human resources processing and federal operations intake have been delayed awaiting directions from the Administration and Congress. Since OIG found little progress made under this PMA initiative during the year, and until direction is received, competitive sourcing remains a critical management challenge.

E-Government

Improvements in EEOC's technological infrastructure will enable it to proceed with major initiatives to provide more extensive electronic government. An agency-wide IT Security Plan of Action and Milestone Remediation Plan was reviewed and verified by OIG during the Federal Information Security Act review. EEOC currently participates in four categories of E-Gov initiatives designed to eliminate the need for redundant or agency unique IT projects. However, lack of consistent funding continues to compromise the progress of both new and ongoing information technology projects which presents a persistent challenge to EEOC management. For example, the organizational restructuring of the agency and the streamlining of work processes requires strong investment in technology.

THE AUDIT AND EVALUATION PROGRAM

All work conducted under the Audit and Evaluation Program supports the OIG Strategic Goal to improve the economy, efficiency, and effectiveness of EEOC programs, operations, and activities.

COMPLETED ASSIGNMENTS

FY 2003 Financial Statement Audit (OIG Report Number 03-04-FIN)

On March 2, 2004, the Office of Inspector General issued the FY 2003 financial statement audit reports. The financial statement audit was completed under contract with the independent auditing firm of Cotton & Company LLP. The reports included an audit opinion on the financial statements, a report on internal controls and a report on Compliance with Laws and Regulations, as described below:

The Independent Auditors' Report provided a qualified opinion on the EEOC FY 2003 Balance Sheet. The auditors questioned EEOC's estimate of $12.1 million for its future workers' compensation payment liability. Additionally, the auditors did not express an opinion on the Statement of Net Cost, Changes in Net Position, Budgetary Resources, and Financing for the year ended September 30, 2003, because beginning balances for FY 2003 were not audited and the scope of their work was not sufficient to enable them to express an opinion.

The Independent Auditors' Report on Internal Control identified two material weaknesses and a reportable condition. The two material weaknesses included (1) failure to use an actuarial model approach to estimating the future workers' compensation benefits and (2) the lack of a quality assurance system to verify the work of individuals preparing financial statements and footnotes. The reportable condition involves EEOC's use of estimates rather than actual cost data in allocating costs to prepare its Statement of Net Cost.

The Independent Auditors' Report on Compliance with Laws and Regulations noted one instance of non-compliance with requirements of the Federal Financial Management Improvement Act (FFMIA) of 1996. Under FFMIA, the auditors were required to report whether EEOC's financial management systems substantially comply with federal financial management system requirements, applicable federal accounting standards, and the United States Government Standard General Ledger at the transaction level. EEOC's reporting of cost information was not in substantial compliance with the provisions of the Statement of Federal Financial Accounting Standards No. 4, Managerial Cost Accounting Standards.

Evaluation of EEOC's Performance and Results Reporting (OIG Report Number 03-14-AMR)

The Government Performance and Results Act (GPRA) of 1993 requires Federal agencies to prepare strategic plans, annual performance plans, and performance reports. OIG conducted a general assessment of the Agency's 2004 Annual Performance Plan and the 2002 Annual Report to determine how well EEOC reports and supports performance information. Techniques of the assessment included comparing EEOC reporting to standards and guidelines established by executive, congressional, and non-governmental experts.

OIG found that these documents generally comply with requirements and contain information useful in determining intended performance, credibility of performance data, and progress towards meeting Agency goals. However, in each of these areas, we found significant gaps between EEOC reporting and standards set forth in reporting guidelines. EEOC needs to improve in these areas:

• presenting Performance Report and Performance Plan information clearly and in a timely manner
• including goals and measures that will provide a fuller picture of intended performance
• providing adequate descriptions of the methods used to ensure accuracy and reliability of performance data

The report contains 10 recommendations, including making the Performance Report and Performance Plan readily accessible in a timely manner to the public; improving performance measure targets, and providing clear descriptions of methods and procedures for ensuring that data is free from bias and has a low error rate.

Management responded to the recommendations submitted with the final report on January 30, 2004 in the following manner:

• developed an Initial Corrective Action Work Plan for one recommendation
• disagreed with two recommendations
• certified that seven recommendations were resolved

All agree that the work plan is adequate and that six of the seven certifications are correct. However, one recommendation certified as resolved is not. A noteworthy improvement is the 2005 Performance Plan (contained in the 2005 Performance Budget) which was posted in a timely manner on EEOC's public website in February, 2004.

Management Advisory - Tracking Staff Time for Budget/Performance Integration

The Office of Inspector General reviewed a joint Office of Field Programs/Office of General Counsel (OFP/OGC) proposal for tracking staff time information to be used in budget/performance integration efforts. Budget/performance integration is a key component of the President's Management Agenda initiatives and is useful in making decisions on how to manage key Agency efforts. OFP/OGC proposed a sampling approach.

The OIG management advisory stated that the proposal failed to meet current and future program/budget integration needs, did not meet cost accounting requirements, and would do little to improve the Agency's financial management. We offered several observations, including:

• entering time by strategic objective does not provide adequate detail
• the sampling plan has fundamental accuracy and completeness flaws, and avoids individual accountability
• experience shows that the cost of entering data for each employee is low, and that the benefits can be considerable
• meeting expectations for the PMA and the Program Assessment Rating Tool requires a more robust data collection system than contained in the proposal
• the OFP/OGC proposal does not meet Federal Accounting Standards Board's guideline that require that procedures for accumulating and reporting costs should be on a continuous, routine and consistent basis for management information purposes
• the OGC/OFP proposal does not address system documentation

Upon issuing the management advisory, OIG met with these offices and with the Office of the Chair, providing additional information and answering questions related to time tracking issues. The offices agreed upon a cost accounting method and a draft proposal was submitted to the Chair after the end of the reporting period. This matter will be addressed in the next semiannual report.

Management Advisory - OMB Scorecard and EEOC Update (OIG Report Number 03-05-MGT)

The OIG provided the Chair updated status on the progress of Agency managers in implementing the initiatives of the President's Management Agenda (PMA). Even though, the EEOC has not been selected for evaluation by the Office of Management and Budget (OMB), Agency managers are fully aware of the PMA requirements and are taking steps to ensure that the Commission gets to "Green" in each of the initiatives of the PMA. In our February 2002 Management Advisory to the Chair on this subject, we awarded red lights in four of the five initiatives (Human Capital, Competitive Sourcing, Financial Performance, and Budget/Performance Integration). A yellow light was awarded in the area of E-Government.

The results of OIG's latest update (November 2003) are summarized in the table below:

Progress Made in Getting to Green

Agency Compliance With The Federal Managers Financial Integrity Act (FMFIA) (OIG Report Number 04-02-AIC)

Agency regulation, EEOC Order 195.001, Internal Control Systems requires this office to annually provide a written advisory to the Chair on whether the management control evaluation process complied with OMB guidelines. To make this determination OIG reviewed: (1) assurance statements submitted by headquarters and district directors attesting that their systems of management accountability and control were effective and that resources under their control were used consistent with the agency's mission and in compliance with the laws and regulations set out in the FMFIA of 1982; (2) all functional area summary tables, and functional area reports submitted by headquarters and field offices; and (3) the Office of Research, Information and Planning's (ORIP) FY 2003 FMFIA Assurance Statement and Assurance Statement Letter, with supporting documents. OIG's independent assessment showed that the Agency's management control evaluation was conducted in accordance with OMB's standards.

Further, based on the results of OIG audits, evaluations, and investigations conducted during the fiscal year, and information obtained through intra-office exchanges, OIG concurred with ORIP's assertion that the Agency had no material weaknesses during this reporting cycle. Also, upon review of the Office of Chief Financial Officer and Administrative Services' information, regarding the disclosure of financial non-conformance noted in Attachment 2 of the Assurance Statement Letter, OIG concluded that the nine non-conformances were corrected during the fiscal year.

ONGOING AUDIT AND EVALUATION ACTIVITIES

FY 2003 Financial Statement Audit Draft Management Letter

On March 16, 2004, the OIG issued the Draft Management Letter prepared by Cotton & Co. LLP in connection with the FY 2003 Financial Statement Audit. This report identified internal control matters relating to Year-End Procedures for Recording Undelivered Orders and Accounts Payable and Information Technology Vulnerabilities. Agency management provided their comments which are now being evaluated and will be included in the Final FY 2003 Financial Statement Audit Management Letter which will be issued in the 3rd quarter FY 2004.

Peer Review of the Federal Communications Commission

OIG conducted a peer review of the Federal Communications Commission's (FCC) OIG during March 2004. A Draft Report and a Letter of Comments were issued on March 25, 2004. The Draft report includes an Unqualified Opinion on the FCC's audit quality control system. OIG is awaiting comments from the FCC OIG for evaluation and inclusion in the final report, to be issued in the 3rd quarter FY 2004.

Evaluation of Headquarters Infrastructure

Infrastructure, of which rent is the largest component, is EEOC's largest non-personnel cost. A previous OIG study (Reducing Infrastructure Costs Through Increased Use of Telework Report Number 01-13-AMR, January, 2003) found that implementation of frequent telework could result in substantial net savings for each of the four field offices studied. The report served as the primary driver for development of an agency goal of reducing real estate costs by 35 percent in five years. In addition, OMB and GSA have cited the report as useful in EEOC's efforts to become more efficient.

OIG is conducting an evaluation of EEOC's Headquarters infrastructure use and space utilization. OIG is examining whether increased use of frequent telework (two times or more per week) may create options for improving effectiveness and efficiency of selected EEOC infrastructure, particularly office space and technology. Techniques of the evaluation included designing and building a cost model, and conducting and analyzing interview and focus group data gathered from over 150 headquarters' employees. Analysis will be completed in April, 2004. A report will be issued to the Chair by June 30, 2004.

Information Technology Assessment of the Agency's Integrated Mission System

Under the Federal Information Security Management Act, OIG is required to conduct an independent assessment of the Agency's compliance with the Act. OIG is currently in the process of conducting an assessment of the Agency's Integrated Mission System (IMS). IMS consolidates and replaces several separate EEOC database systems including the Charge Data System, the Automated Outreach System and the Office of General Counsel's Litigation Tracking System. IMS provides an integrated database application to support intake, mediation, investigation, state and local contract processing, outreach and litigation. This assessment is being conducted using the National Institute of Science and Technology's Self Assessment Guide for Information Technology Systems.

OTHER AUDIT AND EVALUATION ACTIVITIES

Single Audit Act Reports

The Single Audit Act of 1984 requires recipients of federal funds to arrange for audits of their activities. Federal agencies that award these funds must receive annual audit reports to determine whether prompt and appropriate corrective action has been taken in response to audit findings. During the reporting period, OIG reviewed 26 audit reports issued by public accounting firms, concerning Fair Employment Practices Agencies (FEPAs) that have work-sharing agreements with EEOC. There were no audit findings directed to FEPAs which were related to EEOC funds.

Audit Follow-Up

As required by Section 5(a)(3) of the Inspector General Act of 1978, as amended, semiannual reports shall include identification of each significant recommendation previously reported where corrective action has been completed. OIG has no reports with recommendations previously reported to which corrective action has not been completed. Section 5(a)(1) of the Inspector General Act of 1978, as amended, requires that semiannual reports shall include a summary of each audit report issued before the commencement of the reporting period for which no management decision has been made by the end of the reporting period. OIG has no audit or evaluation reports that were issued before commencement of the reporting period for which no management decision has been made by the end of the reporting period.

THE INVESTIGATIVE PROGRAM

The Investigative work performed supports OIG's Strategic goal to focus limited investigative resources on issues that represent the greatest risk, and offer the maximum opportunity, to detect and prevent fraud, waste and abuse in EEOC programs and operations.

During the period, Investigations staff closed 140 matters, of which 118 were hotline contacts. Charge processing issues were referred by Congress, other Inspector Generals, or at the written request of charging parties or respondents. These matters were either resolved by OIG and /or directed to field offices, the Office of Field Programs (OFP) and the Office of Federal Operations (OFO), for appropriate action.

INVESTIGATIVE INQUIRIES RECEIVED

COMPLETED INVESTIGATIONS

Employee Misconduct

OIG received a complaint that an Agency investigator had sexually harassed two female employees of a private company, while conducting on-site interviews into a discrimination charge that had been filed by a male employee of the same company. OIG determined that there was insufficient evidence to establish that the investigator sexually harassed the female employees. However, the OIG determined that the investigator's conduct during the interviews was inappropriate and unprofessional. OIG issued a report which concluded that the employee violated Standards of Ethical Conduct for Employees of the Executive Branch 5 C.F.R. .735.203, and 5 C.F.R. .2635.101(b)(1), (5), (14).

Post Employment Conflict of Interest

OIG completed an investigation into allegations that a former employee attempted to influence former subordinates in a matter in which the former employee substantially and significantly participated in while employed by EEOC. Immediately after leaving the Commission, the former employee became a consultant with a law firm that represented a substantial number of charging parties. In the capacity as a consultant for the law firm, the former employee attempted to influence the Agency's decision whether to litigate the cases involving the charging parties represented by the law firm. This matter will be referred to the U. S. Attorney's Office for prosecutorial consideration.

Mail Fraud

OIG resolved a complaint of possible mail fraud alleging that a subject had rented a post office box, under the name of the EEOC, and was soliciting individuals to purchase posters and other items referencing statutes enforced by the EEOC. OIG determined that the post office box was leased by an Agency contractor designated to publish and distribute materials of this nature. No fraud was found.

Employee Misconduct

OIG received an allegation that an employee used his EEOC badge and credentials to obtain favors from an area business, and to persuade law enforcement officers to violate a parolee's status. The parolee was allegedly involved in a relationship with the employee's estranged wife, to which the employee was opposed. During its investigative inquiry, OIG discovered that the employee had lied extensively on his resume, which he used to obtain Federal employment. The Office of Human Resources and the employee's supervisor were informed of this matter, and the employee was counseled, and later terminated.

Retaliation

OIG resolved a matter involving an employee who alleged that a supervisor retaliated against him for his cooperation in an OIG investigation. The supervisor placed the employee on a Performance Improvement Plan (PIP), after the employee assisted in the OIG investigation. After conducting an investigation, OIG discovered that the employee is no longer under the supervision of the subject, and has been taken off the PIP. No adverse actions have been taken against the employee for his participation in the OIG investigation.

Computer Misuse

OIG received an allegation concerning the misuse of an Agency computer by an employee for the purpose of viewing sexually explicit web sites. OIG subsequently determined that although the web sites visited were inappropriate, the employee's conduct was not criminal. Accordingly, OIG referred the matter to the field office director for appropriate corrective action. This matter was handled by OIG's Management Analyst.

Referrals to FBI

OIG received an allegation involving a business using the Agency's name in an attempt to sell advertisements for a newspaper. OIG received several complaints involving this business, and conducted significant fact-finding to authenticate the complaints and business practices. The business contacted complainants (private companies) by phone, and led them to believe they were speaking with someone from the EEOC. They proceeded to discuss the complainant's equal employment statements and policies. The complainants were then asked to purchase advertisement space in the business' publication.

OIG received a matter involving allegations of selling contraband on Government property. This allegation stemmed from an individual's attempt to sell alleged counterfeit copies of compact discs and digital video discs on EEOC property.

OIG received a matter involving a private business attempting to sell advertisements in a publication under the pretense of being associated with the EEOC. In this matter a business contacted a school system to discuss their equal employment statement, and made suggested changes. The school system, believing it was being contacted by a Federal agency, was subsequently asked to purchase advertising space in the business' magazine.

ONGOING INVESTIGATIVE ACTIVITY

OIG has investigations ongoing in headquarters and seven field offices regarding allegations of employee misconduct, mismanagement by managers, falsification of time and attendance records and falsification of travel vouchers. Other allegations include misuse of government equipment, false statements under oath, conflicts of interest, prohibited personnel practices, impersonation of an EEOC official, unauthorized outside practice of law, bribery and destruction of evidence.

OTHER OIG ACTIVITIES

25th Anniversary of the Inspector General Act

October 12, 2003 marked the 25th anniversary of the enactment of the IG Act. OIG celebrated the anniversary by holding its first Open House for EEOC employees on October 22, 2003. Staff met with employees and provided overviews of audit, evaluation and investigation operations and activities. Highlights of the afternoon included a demonstration of tools for the 21st century teleworker and a presentation of criminal investigator hardware. Approximately 100 EEOC employees attended. Guests included the Inspectors General of the Federal Reserve Board and the National Labor Relations Board.

EEOC's IG, along with other Federal Inspectors General, met with the President of the United States on October 14, 2003 to honor and recognize the silver anniversary of the passage of the IG Act. Mr. Bush applauded the IGs for their dedication to the mission of combating fraud, waste, and abuse to make programs work better for the taxpayers.

President's Council on Integrity and Efficiency/Executive Council on Integrity and Efficiency (PCIE/ECIE) Award for Excellence

The IG community recognized outstanding employees during the PCIE/ECIE Awards ceremony on October 16, 2003. OIG employees Larkin Jennings, Gregory Frazier and Milton Mayo received an Award for Excellence in Evaluations for assessing costs and benefits of frequent telework.

Performance and Accountability Report

EEOC submitted, for the first time, a Performance and Accountability Report in advance of the November 2004 requirement. OIG provided input which included our Federal Managers Financial Integrity Act Report assessment, the Inspector General's Statement on the Agency's Significant Management Challenges, and the FY 2003 Financial Statement Audit Report.

OIG Frequent Telework Pilot

OIG is conducting a frequent telework pilot program to test our assertion that Agency infrastructure costs can be reduced through the use of frequent telework. OIG defines frequent telework as working at an alternate site, away from the central office, for more than five days a pay period. Four staff members, whose jobs were identified as suitable for frequent teleworking, are participating in the pilot. OIG attempted to replicate the central office environment at the employee's alternate worksite. Therefore, each frequent teleworker was provided a laptop computer, multi-functional printing device, high speed internet access, computer firewall, access to resources through the Agency's Virtual Personal Network, personal digital assistants, file cabinet, paper shredder, various supplies, and a long distance phone card.

An interim report addressing initial startup costs, technical support, as well as other technical issues found during the pilot and will be issued during the 3rd quarter. A final report detailing observations, lessons learned and findings related to office performance and productivity will be issued prior to the end of the fiscal year.

Mobile Worker Communication Pilot

OIG is testing equipment to determine which devices are best suited for wireless communications among staff and the public. OIG management and investigative staff are participating by utilizing such devices such as blackberry wireless email solutions and pagers with two-way text and e-mail capabilities. This pilot is being conducted in an effort to improve OIG's mobile workforce capability.

Legislative and Regulatory Matters

During the reporting period OIG reviewed proposed revisions of EEOC Orders or Management Bulletins on Mixed Case Processing, EEOC Management Bulletin (MB) 100-1, Management Accountability and Controls, EEOC Order Nos. 195.001 and Organization, Mission and Functions, EEOC Order No. 110.002 (Change 8) and EEOC Order No. 120.001 (Change 2).

Technology Update

During the reporting period the OIG obtained the capability of conducting computer forensics examinations by using the tool iLook. OIG developed processes and procedures to conduct computer forensic examinations and investigations. ORIP has agreed to include OIG's internet site as part of the agency's public website, www.eeoc.gov. In the next several months OIG will transfer all information from our existing website, www.ignet.gov/internal/eeoc, and discontinue its use.

Professional Development Activities

OIG staff participated in the Association of Government Accountants Second Annual National Leadership Conference, the National Intergovernmental Audit Forum, Office of Management and Budget's Program Assessment Rating Tool (PART) Training, Administrative Investigations Seminar; GSA Building Security Seminar; and Creative Problem Solving Workship. One of the Criminal Investigators completed requirements for the Certified Fraud Examiner designation and the Management Analyst completed the requirements and was deemed qualified as a Certified Information Security Manager by the Information Systems Audit and Control Association.

Other classes attended included basic mediation skills, Introduction to Computer Forensics, Employee Coaching, the Association of Directors of Investigations Training Conference and the Inspector General Annual Retreat.

Professional Associations in which the Investigative staff members are involved include the Federal Law Enforcement Officers Association, the National Organization of Black Law Enforcement Executives, Blacks in Government, and the Association of Certified Fraud Examiners. Audit and Evaluation staff members belong to the Association for Certified Public Accountants, Association of Government Accountants, American Evaluation Association and Information Systems Audit and Control Association.

PCIE/ECIE

Staff attended regular meetings of the Council of Counsels, Inspection and Evaluation Roundtable, Legislation Committee, Information Technology, and Government Performance and Results Act Roundtable, Interagency Ethics Council, Regional IG Council and ECIE Investigations Peer Review Work Group.

The Counsel to the IG continued participation in a Council of Counsels to Inspectors General (CCIG) Working Group which was requested to address certain legal issues that have arisen in connection with the impending ECIE Investigative Peer Reviews.

The Inspector General served as a member of the Senior Executive Service Performance Review Boards held at the Departments of Commerce and Agriculture, and the Agency for International Development.

APPENDICES

APPENDIX I - OIG AUDIT AND EVALUATION REPORTS

APPENDIX II - INDEX OF REPORTING REQUIREMENTS

APPENDIX III - SINGLE AUDIT ACT REPORTS

How to report wrongdoing

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
OFFICE OF INSPECTOR GENERAL
HOTLINE
REPORT FRAUD, WASTE, AND ABUSE
1-800-849-4230
OR WRITE: OFFICE OF INSPECTOR GENERAL
P.O. BOX 18858
WASHINGTON, DC 20036-8858
IDENTITIES OF WRITERS AND CALLERS FULLY PROTECTED

This page was last modified on July 19, 2004.

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