that, indeed, the computation of the compensation rate had been in error. Instead of being awarded at the rate of $469.20 a week the rate should have been $466.28. We were assured that all monies overpaid as a result of the error would be collected.

This official said he saw nothing improper about the em~ ployee getting almost $10,000 a year more for not working (all tax free) than the $15,000 he had earned at gainful employment for the year before the injury. According to this official, it was all within the intent of the law (5 USC 8114 (d)(4)) which gives much discretion to OWCP in establishing average annual earnings for employees working irregular tours of duty. This employee's employment contract (there was no copy in the file) permitted him to work up to 39 hours a week, and if he had chosen to work full-time under the contract his earnings could have been $33,126 instead of the $15,640 that he actually earned. Accordingly, his average annual earnings were set at $33,126.

The Investigative Staff finds it difficult to believe that it is the intent of the FECA to reward an employee for not working, as in the case of this former OWCP official. As indicated by OWCP, the FECA allows much discretion in establishing average annual earnings for less than full-time employees. OWCP should use some of this discretion and amend its instructions to prevent the recurrence of similar abuses of the system. The OWCP spokesman showed no interest in the suggestion.

E

Costs of administering the compensation program have increased from $6.4 million in FY 1972 to an estimated $23.5 million in 1978. As reflected in the following table such costs have represented a fairly consistent percentage of total benefit costs:

Over about the same period staffing has increased from 472 full-time permanent positions to an estimated 643 full-time permanents plus an additional 151 temporary and part-time positions. In spite of this substantial infusion of additional personnel, all indications are that staffing levels for the FECA program are still inadequate. The establishment of appropriate staffing levels for OWCP is a problem with which DOL appears to have much difficulty coping. Past performance indicates that they have neither the data base necessary to forecast workloads accurately nor a credible system for converting workloads into man-years.

In its 1977 budget request for supplemental funds, the DOL asked for $3.2 million for the FECA program to support 123 fulltime permanent positions and 83 temporary positions. The key workload indicator for OWCP (as explained in the 1977 supplemental budget) is the number of new claims filed annually for compensation benefits. The additional staffing requested in the 1977 supplemental was based on the anticipated receipt of 43,000 new claims in FY 1977 (the request was submitted to Congress in February 1977) and 48,000 new claims in 1978.

The actual number of new claims received in 1977 totalled 30,301 or 30 percent fewer than the number estimated well after the beginning of the fiscal year. Instead of the anticipated 7 percent increase in workload over 1976 levels when 40,324 new claims had been received, a decrease in workload of 25 percent was actually realized. The estimate for 1978 has also

now been revised downward by about 30 percent to 34,000 new claims.

Inaccurate workload projections were not the only evidence of bad planning in the 1977 supplemental budget request. In addition to money for salary and expenses, the request asked for supplemental funds in the amount of $19.1 million to meet the expected level of funding needed to pay benefits for the remainder of the fiscal year. The justification for the money was that the number of cases on the periodic roll at the end of 1976 was more than had been projected, and additional medical payments were expected in 1977, an assumption that materialized, but not to the extent estimated.

The additional $19.1 million increased budget authority under this Special Benefits appropriation to $591.0 million. Actual obligations for 1977 were $552.0 million, and the supplemental money was obviously unnecessary.

B. The Inexplainable Backlog

In January 1977, the then Assistant Secretary of ESA sent a memo to all Regional Administrators advising of his concern about the increasing compensation backlogs. To put the problem in perspective he indicated that the unprocessed work inventory in FECA offices had more than doubled in the prior 6 months. The backlog of pending work at the time was some 74,000 cases. To improve the situation, a series of actions and reports were required with the stated objective of reducing the backlog to 30,000 pending cases by the end of the fiscal year.

In testimony given to the Committee on Appropriations in February 1977, the Acting Assistant Secretary for ESA stated the backlog was then up to 85,003 but effort was still underway to reduce it to a level of 30,000 pending cases by the end of the fiscal year. Estimates were even more optimistic for the period after the new employees then being requested were on board and fully trained.

The actual backlog at the end of the fiscal year was 103,016 pending cases (at the end of CY 1977, it was up to 111,325 cases). ESA officials were unable to reconcile satisfactorily the buildup in backlog with the 25 percent decrease in new claims. received and with the goals and objectives set by the Assistant Secretary. One official attributed the problem mainly to the bad publicity the program has been getting. As a result, he feels, field personnel have become more quality conscious, and this has slowed down production. Another official got more to the point, we believe, in expressing his view that backlog is. an invalid measure for evaluating workload because workload statistics now generated by the OWCP reporting system are virtually meaningless.

We

The Investigative Staff agrees with this observation. also found that workload statistics, like most other management information data maintained by OWCP, have serious limitations. The information is, at best, questionably complete, accurate or reliable with the result that most evaluations based on the data have little value or credibility. We found few field officials who had much confidence in the workload reporting system or who made any use of it for planning purposes. The more candid of these officials readily acknowledged that no one actually knows what constitutes an acceptable backlog, what kinds of cases are in the backlog, or the age of cases in the backlog, or even how long it should take to adjudicate a claim or pay a bill. Until this condition is corrected, evaluation of the OWCP workload will continue to be, in our opinion, no more than a hit or miss effort.

OWCP does not have the staff capability to establish its own manpower requirements and is not responsible for the function. The Office of Program Development and Analysis (OPDA) is responsible for manpower planning for all ESA programs, including those under OWCP.

The planning for staffing requirements in the district offices is done on the basis of available dollars, and positions are allocated in accordance with a distribution formula which takes into account several workload factors, namely, injuries reported, claims received, and cases on the periodic roll. Each of the factors is weighted to reflect the relative time required to accomplish the workload (for example, it takes half again as much time to process a claim as it does to review an injury report) and, then, program positions are distributed among the district offices in the same ratio as the overall weighted workloads. In addition, each office gets a fixed number of overhead positions, including the medical officer and vocational rehabilitation specialists.

Workload estimates are derived from trend analysis and an econometric model which, it was stated, is a highly sophisticated and usually reliable management tool. The fact that it broke down in FY 1977 and overprojected new claims receipts of more than 13,000 cases was attributed to the model's proneness to being "thrown off by short-range fluctuations," a problem of "data comparability" dating from enactment of the 1974 amendments, and to the data base which does not adequately account for quality. With all of these acknowledged shortcomings plus the highly inaccurate projections for FY 1977, we would question both the reliability of the model for projecting workloads and the accuracy of staffing levels based on such estimates.

In the opinion of the Investigative Staff, the overall

process of manpower planning for the FECA program can best be
characterized as haphazard. It is generally recognized (and
we would not dispute) that OWCP staffing is inadequate. Some
officials would even contend that more personnel is the only
realistic answer to coping with the many pressing problems
of OWCP and getting benefit costs ultimately under control.

Yet, the Investigative Staff could find little evidence that ESA was fully on top of the manpower resources situation at the district office level or had any coherent plan for determining and satisfying district office manpower needs. Experience with the use of temporary personnel illustrates the lack of foresight in manpower planning.

In 1974, a decision was made to emphasize temporary hires. The decision was based on two assumptions: (1) the automation project initiated that year would mitigate the need for additional claims examiners, and (2) the backlog had to be brought down before service could be improved and permanent staffing levels established. While the effort to hold down permanent staff in a period of instability and while inventory levels were worked off was commendable, the strategy appears to have been carried much too far. The budget presentations for FY 1977 and 1978 continued to assume that workload problems could be corrected with temporary help, and it was not until submission of the supplemental budget for FY 1977, long after the need had become evident, that additional full-time permanent staff was requested.

D. Work Measurement Needed

After automation, the Investigative Staff believes that work measurement is one of the more urgent OWCP management needs. Only such a system will provide the data to assure that resources are effectively balanced with respect to workload, and the statistics necessary for a systematic evaluation of operations and for the justification of budget requests for manpower. This kind of information is now completely lacking.

The Investigative Staff was advised that work measurement was also of concern to ESA management and that a study had been undertaken in 1976 to develop work measurement standards for district office FECA operations. The study had only been carried through its initial phase, however, and was then dropped. It has now been inactive for over a year and is likely to remain so until the currently in progress automation project is completed and the system installed. At the earliest this is expected to be some time in 1979, but the impression was given by many OWCP officials that the estimate is optimistic.

The Investigative Staff has difficulty understanding why the work measurement study has been put aside. The DOL