In the face of persistent budget shortfalls, the Equal Opportunity Employment Commission should reexamine employees' salaries and office rent expenses to save money, an agency official said Monday.
Salaries and rent eat up approximately 80 percent of the EEOC's budget, Jeffrey Smith, the agency's chief financial officer, told commissioners at a public meeting held to discuss an upcoming agency reorganization. These expenses mean less money is available for programs that consistently lack adequate funding, Smith said.
For instance, in fiscal 2002, the EEOC had an operating budget shortfall partly because some workers received a pay increase greater than that recommended in budget guidance, Smith said. Employees in technological positions also received a higher salary than planned at the request of the Office of Personnel Management, he said. As a result, the EEOC had to freeze travel spending and cut IT spending that year.
Training and information technology are areas repeatedly left underfunded at the EEOC, according to Angelica Ibarguen, the EEOC's chief human capital officer and Sallie Hsieh, the agency's chief information officer.
Nearly 400 employees have left the EEOC in the past two years, 148 employees, or 37 percent, because of retirement, Ibarguen said. Roughly 95 percent of agency managers will be eligible to retire within 10 years. "We are hemorrhaging people with talent and experience and will continue to do so as our people choose to retire or leave the agency," Ibarguen warned commissioners.
When employees leave the EEOC, gaps in job skills emerge, Ibarguen explained. These gaps have been especially hard to fill because of a hiring freeze and a lack of funds to train current workers. In 2003, the EEOC allotted about $400,000 for training, significantly less than the 2 percent to 3 percent of its budget suggested by management experts, she said.
Agency managers also tend to set aside training money at the back end of the budget process, Ibarguen added.
"While we have talented people in the EEOC who are committed to and passionate about the mission, we are not developing them or creating the kind of environment that will make them do what they do best," she cautioned. "Under these conditions, we will experience an exodus of the best and brightest and create low morale and discontent."
Limited funding also makes it difficult for the EEOC to maintain and upgrade its computer systems, said Hsieh, the agency's technology chief. The EEOC has made progress on integrating computer networks housing case data and is phasing out an antiquated accounting system, she noted. But the agency "could have reaped the benefits of technology much sooner if the agency had sufficient funding to invest in IT in a consistent manner over the years," she said.
Under its current budget, the EEOC is continually "robbing Peter to pay Paul," and undertakes upgrades in a "piecemeal" fashion, Hsieh said. As a consequence, the agency has had trouble replacing outdated computers in field offices and adding bandwidth in a "timely fashion," she said.
"The only real option is to begin to reduce the percentage of growth of compensation, benefit and rent costs to make additional resources available for program spending, employee development, employee relocations and information technology," Smith, the chief financial officer, told commissioners.
To make more funding available, the EEOC should complete a comprehensive review of current spending on workforce and infrastructure, Smith said. "There is a critical need to reevaluate how we serve citizens and to determine the optimal workforce mix of skills, occupation codes, career ladder and development tracks, supervisor to employee ratios and compensation and benefit plans," he explained.
The EEOC also stands to save up to $8 million in rent by evaluating current leases and making sure office space is used efficiently, Smith said. An assessment of the agency's headquarters office space and location should be included in the process of rethinking real estate holdings, he added.
EEOC managers should not rely on Congress to approve adequate funding, Smith added. President Bush requested a $335 million budget for the EEOC in fiscal 2004, including $5 million to begin an agency restructuring, but lawmakers have yet to approve the request. "As we await final congressional action on the request, we are again faced with the possibility of funding a pay increase greater than the budget request as well as directed spending not included in our budget submission," Smith said.
In order to increase the likelihood of getting full funding, EEOC managers should present strong business cases to justify budget requests, Smith said. These should include a clear description of program objectives and a list of measures that could be used to track whether a program is meeting its stated goals.
The EEOC should also create a budget with long-term spending needs in mind, Smith said. Financial planners should consider spending needs three to five years into the future, rather than handling one year at a time, he suggested.