importance of level of pay. By letter to the Director, the Chairman of the Commission advised that it was Commission policy to evaluate experience on the basis of quality and level of responsibility, regardless of the level of pay or even if no pay was received, and that he was instructing Commission examiners to discontinue using current salaries as a factor in making qualification determinations. Similar letters were sent to all of the major departments and agencies.

In August 1977 the Civil Service Commission took another step to make it easier for agencies to get the appointees selected for high-level positions, regardless of qualifications. By Federal Personnel Manual Letter dated August 3 (to all agencies), a procedure was established whereby agency heads were asked to certify personally to the Commission the qualifications of all persons proposed for Noncareer Executive Assignment appointments. In other words, instead of the Commission making the evaluation, the agency would do the job. To fulfill its legal responsibility, the Commission would perform a pro forma review of the proposed appointment, in which "great weight" would be given to agency head recommendations.

B. Qualifications Review

In other cases

In reviewing how ACTION has evaluated qualifications, the Investigative Staff reviewed 36 appointments to Schedule C and other excepted positions. Most of the cases posed no qualification problems. A number of the appointees were either career or former career employees, and the promotion was part of a normal career progression. involving mainly appointees without Federal experience, the salary at which the employee was hired was not out of line with past earnings. In some dozen other cases, however, it was more difficult to equate past earnings with the level of appointment, and, in over half of these cases, the appointees realized salary increases of $15,000 or more per year over earnings last reported for full-time employment.

The maximum salary increase as a result of employment with ACTION (among the cases reviewed) went to a high-level management official in the field organization. This applicant had mainly an academic background but was working as a legislative analyst for a State Legislature before coming to realized a salary increase of over $20,000. As a result of the appointment, the employee was to a grade GS-15 position. The appointment

work for ACTION.

Another more recent windfall was realized by an employee, serving as an expert who was subsequently appointed to a newly created FS-2 job at headquarters.

This employee had a

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total of 6 years' work experience when hired by ACTION and had never earned more than the equivalent of a grade GS-12 salary. As an expert with ACTION the employee got an immediate salary increase of over $6,000, but with his permanent appointment as an FS-2 his prior earnings were almost doubled. In view of the employee's limited prior work experience, the Investigative Staff asked for an evaluation of his qualifications for the high-level job but was informed that the personnel office has no role in reviewing the qualifications of senior management personnel hired under FS authority and was not consulted in regard to this appointment.

It

Six other cases were reviewed involving salary increases of $15,000 to $17,000 for the appointees over earnings reported for their last full-time positions in the private sector. should be noted, however, that three of these persons also reported having been self-employed as "consultants" either immediately before or at some time prior to coming to work for ACTION. Without exception, these employees reported earning more (or commanding a higher salary rate) as consultants than as full-time salaried workers. Further, these employees were appointed at salary levels which equated much more closely with rates earned for consulting activity rather than with past salaries.

One of the difficulties involved in giving so much weight to self-employed consultant experience is that such employment cannot be readily verified. The case of a GS-15 Staff Assistant is illustrative. In the application, this employee showed maximum past salary of $20,400 a year but also reported working as a "free-lance consultant" since 1960 at a daily rate of $150. Subsequent investigation disclosed that contrary to the impression given by the application, the employee's work as a consultant had been highly irregular. The employee was asked by the agency to provide further details on the employment to clarify the record, but, to date, 2 years since being appointed, the employee had not done so. The Investigative Staff doubts whether the personnel office actually cares whether the experience is ever verified.

A further indication of the unimportance of past earnings in evaluating quality of experience is suggested by the finding that three of the appointees to regional director positions did not even bother to report salary information for prior employment in their applications.

The Domestic Volunteer Service Act of 1973 and the Peace Corps Act of 1961 both provide ACTION with authority to employ experts and consultants. The Peace Corps Act also provides ACTION with a special authority to contract with U.S. citizens and aliens for professional services in host countries and with aliens for professional services within the United States. This authority is used mainly to hire instructors to provide language and other training for Peace Corps personnel abroad.

A. Poor Information on

Experts and Consultants

The absence of reliable and readily available information made it difficult for the Investigative Staff to establish how extensively ACTION has used consultant and expert advisory services over past years and to analyze trend data.

The general inadequacies of statistical data on experts and consultants and the indifference with which such information is assembled are reflected in three reports prepared by ACTION over the past year. One was the so-called Whitten Report on man-years and personnel costs, prepared annually for the Congress in compliance with the Supplemental Appropriations Act of 1952. The report is a responsibility of ACTION'S Accounting Division. The report submitted by ACTION for FY 1977 shows a total of three expert/consultant man-years with a total cost of $84,500. The data reported actually reflects experts and consultants on the payroll at the end of the fiscal year and the total of their annual salary rates. report, as presently assembled, is misleading and of no value in shedding light on the agency's use of experts and consultants.

The

Another report on ACTION's experts and consultants was prepared in response to an OMB request of May 12, 1977, directed to all departments and agencies. The memorandum

dollars involved.

expressed the President's concern about the excessively large volume of consultant and expert services used by the Federal Government and asked for, among other information, data on the number of consulting arrangements in effect and the total ACTION responded that as of June 28 there were 115 experts and consultants onboard and that during FY 1976 a total of 589 persons were employed at a cost of $1.786 million. (Other data, believed to be more reliable, shows total costs of $2.754 million for FY 1976.)

To develop corresponding data for the prior and current years and make comparisons, the Investigative Staff inquired about the source for these cost figures. As best the personnel clerk who had assembled the report could remember, she had

made "several phone calls," mainly to the budget office. one in the budget office recollected having provided the information.

No

This year, ACTION was required to submit a similar report to OMB. It shows zero consultant arrangements in effect as of June 1, 1978. An ACTION official explained, and an OMB official confirmed, that the report this year was to cover only consultants and not experts, of which ACTION had many. In the personnel jargon, a consultant is usually considered an "adviser" as compared with the expert who is considered a "doer," but otherwise both positions are treated identically for appointment and pay purposes. They should also be treated the same for reporting purposes, if the objective of the report is improved management of such resources and better control over burgeoning personnel costs.

The third report on the use of experts and consultants is required by the Federal Personnel Manual. It requires that agencies perform a quarterly review of each consultant and expert working more than 10 days during the quarter to determine whether duties being performed are proper, documentation is current, and time limits are being observed. The Investigative Staff found that the quarterly review reports are prepared with little more care and are no more reliable than the other reports on experts and consultants. Even the agency personnel officer, under whose direction the reports are prepared, indicated it would serve no purpose to review earlier quarterly reports as she had no confidence in their accuracy.

B. Number of Experts on the Increase

The best measure of the use of experts is man-days actually worked. This is because of the nature of an intermittent appointment. Such an appointment implies that the employee will not work a regular tour of duty. Thus, the number of appointments, in itself, is not too meaningful as an indicator of how extensively an agency is using expert or consultant services. Cost figures also have limitations in analyzing trend data unless adjusted for salary increases.

In FY 1978, the ACTION agency hired at least 113 experts, at an average salary rate of $106 a day. For the same year, payroll records show total costs for intermittently employed experts were $868,707. This would indicate a total of 8,158 staff-days or 31.4 man-years worked. Except for total costs, no corresponding data are available for prior years.

The $868,000 obligated in FY 1978 for intermittently employed experts compares with $538,000 obligated in FY 1977 and $939,000 in FY 1976 (15 months). These costs were distributed as follows:

Comparison of total costs for FY 1976 (excluding costs of $286,000 for the T-quarter) with costs for FY 1978 indicates an increase in the use of experts by ACTION. With adjustment for salary increases, costs increased by about 18 percent ($733,000 in FY 1976 to $868,000 in FY 1978). At the FY 1978 average expert salary rate, the difference of $135,000 would represent some 1,268 more staff-days (4.9 man-years) worked.

The lower costs for FY 1977 probably reflect a decreased use of experts during the period while the former national administration was phasing out and the present administration was getting into gear.

During FY 1978, ACTION also obligated $776,000 for personal service contracts with U.S. citizens and $619,000 for personal service contracts with non-U.S. citizens. The corresponding figures for FY 1976 (15 months) were $990,000 and $825,000 and for FY 1977 were $627,000 and $534,000.

Thus, overall costs of expert and consultant services for the past 3 fiscal years were as follows: