Federal Employees' Compensation Act: Status of Previously Identified Management Challenges

What GAO Found

Labor and IGs from employing departments and agencies have consistently reported similar FECA program management challenges, such as oversight and information technology, and have linked these to increased program costs through improper payments. For example, one IG reported in 2007 that its department could not appropriately manage its long-term rolls and contain improper payments because staff assigned to this task spent no more than 10 percent of their time managing cases. Additionally, citing ongoing program weaknesses—mostly related to oversight—IGs have reported avoidable costs at employing departments and agencies, which one department reported were as high as $41 million in 2011. Above and beyond the actions departments and agencies can take to address these challenges, some IGs have also reported that legislative reform is necessary to better manage the program. In an effort to alleviate the impact of management challenges, IGs collectively made over 200 recommendations since 1994, mainly to improve FECA’s oversight, and most of these recommendations have been implemented.

Why GAO Did This Study

In 2010, the Department of Labor’s (Labor) Federal Employees’ Compensation Act (FECA) program paid approximately $2.8 billion in total cash and medical benefits to federal employees who sustained injuries or illnesses while performing federal duties. Because the FECA program’s benefit structure has not been significantly amended in 38 years, policymakers and others have raised concerns related to its efficiency and efficacy. As a result, there have been a number of legislative proposals to manage program costs by changing the benefit type or amount that employees receive at retirement age and to enact procedures that may enhance program administration. Federal agencies’ Inspectors General (IGs) have identified long-standing programmatic deficiencies at the department and agency level that may make the program vulnerable to fraud and abuse. For this reason, we were asked to review the FECA program’s management challenges and determine the extent to which actions have been taken to address them.

For more information, please contact Andrew Sherrill at (202) 512-7215 or sherilla@gao.gov or Phillip Herr at (202) 512-2834 or herrp@gao.gov.