Federal agencies have embraced telework to increase efficiency and improve employee satisfaction, but recent audits reveal critical gaps in how they manage payroll, duty stations, and compliance with telework policies.
Investigations from the Department of Commerce’s Office of Inspector General (OIG) and reports cited by Senator Joni Ernst (R-IA) demonstrate that many agencies failed to update duty stations promptly, leading to overpayments and inconsistent payroll practices. These issues highlight a broader need for more effective oversight, better tracking tools, and clearer recovery protocols to ensure telework remains both sustainable and accountable.
The OIG’s June 2024 report uncovered $42,985 in overpayments involving seven employees at the Department of Commerce, where delays in updating duty stations ranged from two to eleven months. One employee’s duty station remained unchanged even after switching to remote work, resulting in overpayments based on the higher-cost region originally assigned.
Supervisors had not flagged these discrepancies early enough, contributing to months of incorrect payments. In two cases, the agency abandoned efforts to recover the overpayments—one employee had left the agency, while unclear accountability over delays complicated the other case.
These findings illustrate how administrative bottlenecks and weak internal controls not only create financial waste but also undermine trust in federal telework programs.
Broader investigations identified similar issues across other federal agencies. Senator Joni Ernst’s investigation highlighted that 80% of employees reviewed continued receiving higher locality pay even after relocating to lower-cost areas.
Telework has proven indispensable for federal agencies. According to a recent report by the Office of Management and Budget (OMB), telework offers significant advantages, such as improving employee recruitment and retention, reducing the need for expensive office space, and helping workers balance personal and professional demands. Federal human capital officers have credited telework with enabling agencies to close skills gaps by expanding the talent pool to include workers from various geographic locations. These benefits highlight the importance of maintaining telework as a long-term strategy for workforce management across the federal government.
However, the OIG audit, combined with findings from Sen. Ernst, demonstrates that agencies must strengthen oversight to prevent payroll errors.
Locality pay, which adjusts federal salaries to reflect regional costs, depends on accurate records of an employee’s official work location. However, audits found that many teleworkers received pay tied to their previous duty stations due to lapses in updating personnel records.
With 58 locality pay areas covering the majority of federal employees, these errors carry serious financial consequences. The unchecked growth of such problems indicates deeper issues with the oversight of telework policies.
Compounding these problems, many agencies failed to monitor compliance with telework attendance agreements. Federal policy requires telework employees to report in person at least two days per pay period unless supervisors grant temporary exceptions.
However, audits found that agencies lacked reliable attendance data, relying on incomplete badge tracking systems or inconsistent timekeeping practices. At the Department of Commerce, several employees assigned to high-cost duty stations worked from remote locations without documentation proving they met their in-office obligations. Supervisors could not produce badge data for two employees stationed in Seattle and Silver Spring, indicating that they may not have physically reported to the office. Inconsistent documentation not only impairs payroll accuracy but also allows employees to exploit loopholes in telework agreements.
Based on my experience consulting for federal agencies on telework best practices, addressing these issues requires federal agencies to adopt comprehensive reforms focused on automation, compliance, and accountability. Automating duty station updates would eliminate many of the delays currently plaguing payroll systems. With automated systems, personnel records would reflect changes in real-time, ensuring employees receive the correct locality pay from the moment they switch work locations.
Regular audits of duty station records would help detect discrepancies early, preventing long-term overpayments. For example, the Department of Commerce has started issuing new guidance to human resources managers, requiring them to audit duty station changes processed since employees returned to the office in 2022. The department aims to recover any excess payments that resulted from delays in processing these changes.
Accountability plays a central role in maintaining the integrity of telework programs. Supervisors must take a proactive approach to managing employee agreements by conducting regular reviews and ensuring that duty station changes occur without delay.
Monthly performance reviews can help identify non-compliance early, enabling agencies to address issues before they result in payroll discrepancies. Agencies should also expand training programs to equip managers with the skills needed to monitor remote employees effectively. The Department of Commerce, for instance, plans to increase training for supervisors on how to manage telework policies, emphasizing the importance of documenting exceptions and monitoring compliance.
Agencies must also communicate more effectively with employees to ensure they understand their responsibilities under telework policies. Regular updates and training on telework agreements will reduce the likelihood of misunderstandings and reinforce compliance. Supervisors should engage with employees proactively, reviewing agreements regularly to reflect operational needs and workplace changes.
Agencies like the Department of Commerce have already started issuing monthly reminders to employees about timekeeping accuracy and the proper use of telework and remote work codes. These efforts aim to enhance transparency and accountability while fostering better communication across departments.
While telework offers substantial benefits—such as improved employee satisfaction and enhanced recruitment—agencies must implement stronger oversight mechanisms to maintain public trust. Balancing flexibility with oversight ensures that remote work not only supports employee well-being but also protects public funds. Strengthening internal controls, adopting real-time tracking tools, and promoting accountability will help agencies sustain telework as an effective strategy for the long term, ensuring it benefits both employees and taxpayers alike. With these measures in place, telework can continue to support government operations while maintaining fiscal responsibility and public trust.
