Executive Summary

Veterans' employment is a key priority of the President and this Administration. The Office of Personnel Management (OPM) is committed to ensuring that veterans receive the preference they are due under law. Veterans' preference is a legal right that reflects a national value, and providing our veterans with the hiring preference they have earned is a small way of acknowledging their many sacrifices to our country and our society. As Director Kay Coles James noted:

It is a priority of President George W. Bush, and it is my personal mission, to see that each and every veteran who wants to serve his or her country as public servants be given the chance to do so. Veterans have served our country with distinction; they have put their civilian lives on hold to defend our democratic principles and protect our friends around the world; and, they have sacrificed in ways we cannot begin to understand.

OPM considers any violation of veterans' preference to be a serious matter and will direct any agency to take appropriate action to correct veterans' preference violations. As a matter of public policy, OPM is also committed to supporting veterans' employment in the Federal Government.

To ensure veterans are receiving their proper preference, Director James tasked the Division for Human Capital Leadership and Merit System Accountability to conduct a broad and comprehensive audit of veterans' employment in the Federal Government. The purpose of the audit was two fold: to determine whether Federal agencies are taking affirmative measures to employ veterans; and to determine if agencies are providing veterans their employment preferences under the Veterans' Preference Act. The following are highlights from the audit:

We audited numerous unused competitive certificates to determine if veterans received proper consideration. Our assessment found that veterans do receive appropriate consideration in the competitive examining process. However, the audit, as well as information received from other sources, revealed four specific cases in three agencies where veterans' preference had not been properly applied in competitive examining. Under OPM's direction, these agencies have been required to take corrective action by granting priority consideration to the affected veterans. Each case was processed by a delegated examining unit (DEU). OPM has taken strong measures to avoid future merit system and veterans' preference violations in these agencies. OPM is considering whether to withdraw delegated examining authority from one agency. In another case, OPM is expanding its review of that agency's DEU to determine if it is appropriate to withdraw examining authority. In the third and fourth cases, the agency has already withdrawn delegated examining from the installation, which is the course of action OPM would have required.

• Agencies have more discretion in determining how to consider veterans' preference for excepted service positions, such as attorney and student trainee positions, but preference eligibility status should still be considered. The veteran community is a source of well qualified applicants and agencies should aggressively recruit in that community. OPM will continue to work with the agencies to clarify that veterans' preference eligibility status should be considered as a positive factor in the selection process. During the audit, OPM ordered specific corrective action in one case where records existed to show that no preference consideration was given to a 30 percent disabled veteran for a student appointment. That agency was directed to give the veteran priority employment consideration.

In many cases, agencies do not have adequate internal accountability systems to detect the kind of veterans' preference violations we found during the audit. Under delegated examining agreements with OPM, agencies are required to maintain an oversight system which provides for the review of these activities by non-delegated examining unit staff.

Hiring of disabled veterans is very uneven across Federal agencies. The vast majority of disabled veterans work in either the Department of Defense or the Department of Veterans Affairs (VA). While agencies have Disabled Veterans Affirmative Action Program (DVAAP) plans, few agencies fully implement them in a way that produces significant results. Most managers were unaware of specific initiatives by their agency to hire disabled veterans.

The manner in which agencies hire veterans has changed significantly over the years. Special non-competitive hiring authorities designed to support veterans' employment are now used to a far greater extent than traditional competitive examining. Over 41 percent of the veterans hired into the Federal Government are brought in through non-competitive means versus 25 percent from competitive examining. Regardless of the hiring source, our audit revealed that most Federal agencies failed to conduct veterans' outreach beyond simply posting positions on OPM's job website and did not undertake additional recruitment measures designed to attract veterans as a public policy initiative.

Agency human capital staff need to reinforce the fact that veterans' preference is the law. They should also do more to convince managers of the value of the military training, experience, and discipline that veterans bring to the job.

Some hiring officials felt that the way veteran applicants described their work experience impeded their job consideration. Many veterans use acronyms and other descriptive terms that are well understood within the military community, but are unfamiliar to other employers. Conversely, some agencies can do a better job of describing their job requirements clearly so all applicants, including veterans, can adequately reflect how their knowledge, skills, and abilities (KSAs) match those required for the position.

Even agencies with a low representation of veterans in their workforce failed to take a strategic approach to hiring veterans. They lacked specific goals and objectives to promote veterans' hiring and did not track their progress in meeting veterans' employment public policy initiatives. Although we did not identify any agency policies or practices specifically designed to inhibit veterans'

employment, few agencies had placed any special emphasis on veterans' hiring.

The fact that the Federal Government employs veterans at a rate more than two times their representation in the civilian labor force is a commendable achievement. However, the audit findings clearly indicate that agencies can do more to support the employment of veterans through better outreach, education, systems development, and accountability. There are many actions OPM, Federal agencies, Veteran Service Organizations (VSOs), and even veterans themselves can take to further strengthen our shared commitment to veterans' employment in the Federal Government. OPM pledges its continued commitment to work with agencies, VSOs, and other stakeholders to address veterans' issues. The recommendations contained in this report are designed to meet this commitment.

Introduction and Background

In a letter to agencies issued November 15, 2002, OPM Director Kay Coles James expressed the view that although the Federal Government's employment of veterans surpasses the private sector (23 percent compared to 10 percent), more can be done to promote this public policy. Veterans' employment has been high on OPM's leadership agenda for some time. OPM has taken important steps to ensure that veterans receive the preference they are due by statute, and that veterans' employment is emphasized as important public policy. In December 2001, Director James established a Veterans' Issues Task Force to assess veterans' issues and implement measures for Governmentwide improvement. Further demonstrating her leadership commitment, Director James has designated her Deputy Director, Dan Blair, to serve as OPM's direct liaison with VSOS. Deputy Director Blair meets regularly with the VSOS to address issues of mutual concern, working in a cooperative spirit to achieve veterans' employment goals. OPM also tracks inquiries and complaints involving veterans' employment to help keep abreast of current issues and identify any problems that require investigation or oversight. In connection with the oversight role, Director James recently tasked OPM staff to conduct a special audit of veterans' employment. The audit was designed to determine whether Federal agencies are taking affirmative measures to employ additional veterans and providing veterans their employment preferences under the Veterans' Preference Act.

Methodology

Given the enhanced personnel flexibilities agencies now have for making appointments, Director James asked that this audit focus on title 5 agencies and on special veteran hiring authorities.

Focus

The objectives of the study were to determine:

if any specific agency policies or practices serve to advance or restrict the employment of veterans;

the extent of agencies' outreach to veterans' sources to promote employment interest;

if competitive certificates topped by veterans are unused more frequently than those headed by non-veterans;

how and the extent to which agencies use special non-competitive hiring authorities in support of veterans' employment; and

if consideration is given to veterans as appropriate in exempt, excepted service, or other non-title 5 personnel system positions.

Sample

Our audit focused on external hiring over the past two years. We visited a total of 45 installations nationwide, representing 18 President's Management Council agencies (listed in Appendix A). Several agencies were selected that hire veterans below the Civilian Labor Force (CLF) level, which is currently 10 percent according to the Bureau of Labor Statistics.' We were also seeking to identify best practices and included several agencies with veterans' representation significantly above the CLF level. Finally, our sample included agencies where problems or complaints concerning veterans' issues had surfaced.

Procedures

We reviewed competitive examining (see Appendix B) in the agencies covered by the study, regardless of whether it was conducted by a Delegated Examining Unit (DEU) or OPM. We paid close attention to reasons given for not using certificates headed by veterans. We also visited agencies' Human Resources (HR) offices and reviewed the use of special non-competitive hiring authorities and overall accessions of veterans. In all, we reviewed 1,983 appointment actions. We interviewed agency DEU and HR staff, along with supervisors and managers, and gathered information on the basis for actions taken on competitive certificates, as well as the use of other veterans' hiring authorities. In addition, we worked through OPM's Human Capital Officers and assessed the level of attention agencies are devoting to veterans' employment as a strategic human capital management issue.

Findings and Recommendations

Excepted service and non-title 5 personnel systems

Numerous title 5 statutory provisions and accompanying regulations provide detailed information on appointment procedures, including the application of veterans' preference, to positions in the competitive and excepted services. The appointment procedures from 5 CFR Part 302, Employment in the Excepted Service, do not apply to certain positions, including attorney and student trainee positions. The appointment procedures for these positions allow agencies greater latitude in determining how veterans' preference will be applied. However, the regulation requires that "each agency shall follow the principle of veterans' preference as far as administratively feasible and, on the request of a qualified and available preference eligible, shall furnish him or her with the reasons for his or her non-selection."

A number of agencies do not have any policy pertaining to the application of veterans' preference in filling these positions, and in many instances, there was no evidence that veterans' preference was being considered in the hiring process at all. Except for one case, files were not available to completely reconstruct the actions taken.

'In comparing veterans' employment data between the Federal and private sectors, we focused on CLF rather than relevant CLF (RCLF) to ensure we are viewing veterans' employment as a whole without limiting the focus to certain occupations. We recognize that using RCLF figures would render a more precise measure of how well agencies are doing with veterans' employment.