Following are key sections of a recent IG report examining the impact of a round of buyouts and early retirements at the EPA, incentives that are on the radar screen as many federal agencies—again including the EPA—face the potential of downsizing and reorganization under Trump administration initiatives.
On December 12, 2013, the Deputy Administrator announced that EPA offices were planning to use early-outs (under VERA) and buyouts (under VSIP) to realign their workforces to meet changing mission requirements and move toward new models of work. According to the announcement, over the prior year, due to resource constraints, the EPA had been operating under a series of temporary hiring policies to carefully manage its workforce and payroll by not filling all positions vacated when people left the agency. The December 2013 announcement noted this approach was difficult to manage because of the unpredictable nature of attrition. Further, it challenged the EPA’s ability to acquire new talent, build diversity in its staff, develop new skills, and provide all of the necessary tools to do the job of protecting human health and the environment.
VERA and VSIP are options for increasing voluntary attrition in agencies that are downsizing or restructuring. With U.S. Office of Personnel Management (OPM) approval, federal agencies can grant early-outs to temporarily lower the age and service requirements to increase the number of employees eligible for retirement from the federal government. Similarly, with OPM approval, agencies can grant buyouts—lump-sum payments of up to $25,000 to each employee—as an incentive to voluntarily leave the federal government. Section 1313 of the Chief Human Capital Officers Act of 2002 authorized VERA and VSIP options as regulated by OPM and codified in Title 5 U.S.C. (For VERA, see 5 U.S.C. §§ 8336(d)(2) and 8414(b)(1)(B); for VSIP, see 5 U.S.C. §§ 3521 and 3525.)
According to CFR 576.102(a)(1), a plan submitted to OPM by the head of an agency, or his or her specific designee, must include identification of the specific positions and functions to be reduced or eliminated—identified by organizational unit, geographic location, occupational series, grade level, and any other factors related to the position. The OPM human resources specialist we interviewed stated that only restructured positions under the approved plan can be refilled. Further, once an agency’s VERA-VSIP plan gets approved, the agency is required to administer the VERA-VSIP plan as approved. Only OPM can approve amendments that revise the dates and targeted positions listed in the original approved plan after consultation with the Office of Management and Budget.
Besides eliminating positions, OPM interprets the VERA-VSIP to allow positions to be restructured. This includes filling the vacated position with a position:
Having a different job series and/or grade.
Using the same job series and grade but with substantively different duties and responsibilities.
Having a different full-performance level.
That is no longer supervisory.
Once OPM approves an agency’s VERA-VSIP plan, each agency should administer its plan as approved. This includes completing the restructuring or elimination of positions vacated through the buyouts. An organization’s progress in completing its approved restructuring activities is relevant for assessing whether the VERA-VSIP authority was properly used, and for assessing the overall cost effectiveness of VERA-VSIP to meet agency workforce goals. While, agencies are required to provide OPM with interim and final VERA and VSIP reports, OPM does not monitor organizations after the conclusion of the buyout authority to verify restructuring progress.
In 2014, 19 of the EPA’s 23 program and regional offices participated in VERA-VSIP activities. A total of 456 employees separated from the EPA through these activities. The EPA paid early-out/buyout incentives of about $11.3 million and annual leave payments of $4.9 million, for a total of approximately $16.2 million. These costs represent the direct costs associated with the VERA-VSIP early-outs/buyouts. Other indirect costs not captured include the costs to develop and administer each of the 19 program and regional office plans.
VERA-VSIP authority helped the EPA organizations in our sample achieve goals related to reducing size and grades. At the time we concluded our review, other organizational goals—such as de-layering (increasing supervisor-to-staff ratio) and adding staff with new skill sets—had not been achieved, and not all of the VERA-VSIP positions targeted for restructuring had been filled. To obtain buyout authority from OPM, EPA program offices and regions identified and proposed a variety of restructuring activities in their VERA-VSIP applications (plans). Once OPM approved VERA-VSIP plans, organizations were required to administer their VERA-VSIP plan as approved. The agency monitored its buyout and subsequent hiring activities to ensure positions vacated under VERA-VSIP were properly filled. However, the agency was limited in determining whether it achieved its VERA-VSIP goals for reducing the supervisor-to-employee ratio and changing organizational structure, because some organizations did not specify measurements for their goals or an identifiable end point for restructuring. As a result, the agency could not assess the overall impact, effectiveness and value of VERA-VSIP as a workforce management tool.
Agency Restructuring Goals Were Generally Consistent
The EPA program offices and regions requested VERA-VSIP authority consistent with OPM guidance, justifying early-outs and buyouts for restructuring goals. Table 2 lists the goals in applications that EPA organizations submitted to OPM. These goals included de-layering, reorganization, transfer of function, or other workforce restructuring or reshaping. The organizations in our review requested VERA-VSIP for a variety of reasons, and those reasons were generally consistent. Staff from OARM described three cross-cutting issues that EPA senior leadership suggested to program and regional offices:
Reduce the number of staff performing administrative functions.
Replace higher-graded technical staff with lower-graded technical staff (reduce grade).
Increase the staff-to-supervisor ratio (de-layering).
The most common goal in the EPA program and regional office requests was the acquisition of new skills, and the second most frequent goal was to target nonessential positions. According to some of the EPA requests, the agency had positions that were considered no longer essential to operations. Fifteen organizations planned new hires after VERA-VSIP buy-outs. Also, 13 of the 15 organizations identified that new or different skills were needed in their workforce. Three organizations indicated that some positions would have a lower full-performance level for the newly hired staff. Further, the goals described by the 15 organizations were consistent with the purposes of an early-out or buyout.
The EPA organizations we reviewed described in general terms the workforce analysis they performed in support of their VERA-VSIP requests. For example:
The Office of Research and Development performed a modified gap analysis to identify its scientific workforce supply, demand and gaps, and how VERA-VSIP could be used to address the gaps.
Region 1 reviewed its workforce demographics to determine the number of positions, occupations and grade levels that would be considered for workforce reshaping.
Region 10 relied on a comprehensive workload assessment that it conducted in FY 2013 using specially designed assessment guidelines to determine what workload or priority adjustments were warranted.
Staff and managers we interviewed in the Office of Human Resources (OHR), within OARM, reported assisting regions and program offices through a variety of activities. OHR reported preparing business cases for VERA-VSIP. OHR also created two teams to help regions and program offices implement VERA-VSIP. OHR developed and shared with all of the EPA organizations participating in VERA-VSIP its workforce planning data, rosters of staff eligible for retirement, examples of VERA-VSIP requests, templates, VERA and VSIP Guides, checklists, and other items. OHR reviewed program office and regional VERA-VSIP applications, and advised changes, before EPA organizations sent the applications to OPM.
Buyouts Helped Vacate Positions
The EPA organizations we reviewed made progress executing restructuring plans and achieving some of the goals identified in their OPM-approved VERA-VSIP plans. The VERA-VSIP early-out/buyout initiative was successful in helping vacate 456 positions across the agency.
The voluntary nature of the VERA-VSIP incentive means that the agency cannot control which employees—or how many employees—will accept an offer to separate from the agency. However, the agency retains control of hiring into restructured positions, and should complete restructuring those positions as part of administering its plans as approved by OPM. While VERA-VSIP early-outs/ buyouts helped the regions and program offices reviewed achieve goals for reducing the size and changing the shape of the workforce, some goals used to justify the early-out/buyout authority from OPM—such as hire workers with new skills, restructure work or redirect resources—were not complete at the time we concluded our review.
VERA-VSIP Helped Achieve Some Goals Associated With Reducing Number of Positions
At the time we concluded our review, each organization achieved at least one of the VERA-VSIP goals associated with de-layering, removing surplus positions, reducing grade or reducing size.
Examples for each of the goals follow, based on information provided by program offices and regions.
De-layer: Regions 1, 4 and 7 sought to reduce the number of supervisory positions consistent with a smaller workforce. Region 1 made slight progress; its pre-VERA-VSIP ratio was 1:7.4 and post-VERA-VSIP ratio was 1:7.8. Region 1 reported to us that it believed its continued restructuring will move it to above a ratio between 1:8. Region 4 made some progress as well, moving from 1:6.6 to 1:7.4, with a goal of 1:9. While Region 7 did not identify a target ratio in its VERA-VSIP plan, its supervisor-to-staff ratio increased from 1:6.9 in 2013 to 1:8.4 as of September 2015.
Surplus: Three of five organizations sought to reduce the number of positions in targeted areas and made progress. For example, OW eliminated eight positions and Region 4 eliminated 10 positions from targeted job series. OECA eliminated six positions and restructured seven others to lower full performance grade levels.
Reduce Grade: Regions 1 and 7 reduced the number of highly-graded employees at the GS-13 through GS-15 level, and transferred duties to other employees or to lower-graded staff. The Region 1 VERA-VSIP plan stated its goal was to reduce the number of high-graded technical experts and senior policy advisors, and bring greater balance across the region’s grade structure in both technical and legal series. As of September 2015, Region 1 capped new-hire positions for entry-level environmental engineers, environmental scientists and environmental protection specialists at the GS-12 level, and has only hired for GS-7 through GS-12 positions. Region 7’s stated goals were to consolidate some higher-graded duties or restructure grade levels. According to a September 2015 Region 7 report, 73 percent of its VERA-VSIP departures were at GS-13 or above. The region spread staff work from those that left so some could be performed by lower-graded staff. Region 7 reduced the grade of one GS-14, three GS-13 and one GS-12 positions. Four total OECA Attorney and Criminal Investigator positions were also restructured to lower full performance level or by changing the supervisory status of the position.
Reduce Size: Four of the five organizations sought to reduce the size of the organization, and all four lowered the full-time equivalent (FTE) to the level or below listed in their OPM-approved VERA-VSIP plan:
* OECA reduced its FTEs to 726; its goal was to reduce to 767 FTEs.
* OW reduced its FTEs to 558; its goal was to reduce to 563 FTEs.
* Region 1 reduced its FTEs to 556; its goal was to reduce to approximately 590 FTEs.
* Region 7 reduced its FTEs to 488; its goal was to reduce to 488 FTEs.
Some Progress Made on VERA-VSIP Restructuring Goals
One justification for the EPA’s VERA-VSIP authority was to provide an incentive for staff in targeted positions to vacate those positions, which would then be restructured to accommodate new skillsets. This would enable the agency to accomplish its human health and environmental protection goals with a different workforce.
While hiring has occurred since VERA-VSIP, not all the organizations we reviewed had filled all the positions that were targeted for restructuring at the time we concluded our review. Regions 1 and 7 are the only organizations to have filled all positions targeted for restructuring.
EPA regional and program office managers stated that restructuring activities had not been completed for various reasons. For example:
Region 4 cited the theft of security-related information (OPM breach) leading to the slowing and stopping of background checks as impeding its ability to hire new staff.
OECA stated its overall number of staff was reduced due to congressional budget cuts, and it did not want to hire and then have to lay off staff.
OW managers had not filled more positions because of uncertainty about budgets being large enough to support new staff.
Under its VERA-VSIP authority, the EPA paid incentives of about $11.3 million for federal workers to leave their positions, plus accumulated annual leave payments of $4.9 million, for a total of $16.2 million. VERA-VSIP helped the program offices and regions in our sample achieve goals related to reducing size, grades and surplus positions. Other goals—such as de-layering and adding staff with new skill sets—had not been fully achieved at the time we concluded our review. All EPA organizations we reviewed complied with OPM’s reporting requirements, and continued monitoring after the completion of the buyouts. In response to an earlier OIG report, the agency implemented “hiring templates” to ensure it filled new EPA positions in a manner consistent with its VERA-VSIP goals and authority. The agency can take further action to monitor its progress in achieving its VERA-VSIP restructuring goals while also providing a foundation for assessing the cost effectiveness of VERA-VSIP as a broad workforce restructuring tool.