GAO: DOD Is Terminating the National Security Personnel System, but Needs a Strategic Plan to Guide Its Design of a New System

April 28, 2011 3:45 PM , Updated February 21, 2020 1:54 PM
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During fiscal year 2010, DOD achieved its initial goal of transitioning approximately 75 percent of NSPS employees to their successor pay and personnel system–that is, the General Schedule system–despite having to overcome some challenges. DOD plans to transition the remaining NSPS employees by the January 1, 2012, mandated deadline.

Specifically, according to DOD’s October 2010 report, the department transitioned, as planned, approximately 172,000 of the 226,000 NSPS employees to the General Schedule system. Regarding challenges, component officials told us that they completed the reclassifications of employees back to the General Schedule system even though in some cases it was difficult to meet deadlines–occasionally requiring the use of contractors or overtime.

For the remaining NSPS employees–approximately 53,000–the department plans to complete those transitions in five groups. More specifically, employees in 30 health care provider occupations will return to the General Schedule system from July to December 2011, and employees in other miscellaneous categories (e.g., deployed civilians and those affected by base realignment and closure activities) will transition to the appropriate pay and personnel system no later than December 2011.

The remaining three groups of NSPS employees will transition to the following alternative pay and personnel systems during the time frames noted: Science and Technology Reinvention Laboratories from February to April 2011, Acquisition Demonstration Project from March to June 2011, and Physicians and Dentists Pay Plan in June 2011.

The Transition Office issued guidance to the components for tracking the costs of the NSPS termination; however, the office did not sufficiently document and support termination costs, and we found inconsistencies in some reported costs. The guidance instructed the components to, among other things, (1) report only the costs that were directly attributable to NSPS termination and (2) include five categories of costs in the cost tracking reports–one category being Within-Grade Increase Buy-Ins, Performance Awards, and Quality Step Increases.

Regarding insufficient documentation, we found, for example, that the Transition Office reported $238.6 million (as projected by the Transition Office and Comptroller’s Office) to Congress as the estimated fiscal year 2011 department-wide costs for increased compensation resulting from the termination. However, despite our repeated requests during the course of our review, DOD did not provide documentation to support this estimate or the methodology used to develop this estimate. Transition Office officials told us that the department had experienced turnover in both the Comptroller’s Office and the Transition Office since those estimates had been developed. Internal control standards state that all transactions and other significant events need to be clearly documented and that documentation should be readily available for examination.

To promote an efficient use of resources and to better plan for the design of a new performance management system, we recommend that the Secretary of Defense direct the Deputy Assistant Secretary of Defense for Civilian Personnel Policy to take the following two actions: (1) in conjunction with the DOD Comptroller, help ensure that information identifying and supporting the costs of the NSPS termination and new performance management system is documented, reliable, traceable to a source document, and readily available for examination, and (2) develop a plan with documented near-term design and implementation goals and a timeline for meeting these goals to build momentum and show progress for the development of an enterprise-wide performance management system and to facilitate an assessment of what is being achieved as a result of the resources being spent.

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