E-mail a link to this directive

AWARDS FOR THE DISCLOSURE OF FRAUD, WASTE OR MISMANAGEMENT

DAO 202-453: AWARDS FOR THE DISCLOSURE OF FRAUD, WASTE OR MISMANAGEMENT
Number: DAO 202-453
Effective Date: 1982-09-17

SECTION 1. PURPOSE.

The purpose of this Order is to set forth the policies and procedures for making cash awards to employees whose disclosures of fraud, waste and mismanagement to the Inspector General have resulted in cost savings to the Department, and to provide a mechanism for making recommendations to the Director of Personnel Management (OPM) concerning Presidential awards to employees for similar disclosures.

SECTION 2. GENERAL PROVISIONS.

Pursuant to the provisions of this Order, cash awards may be granted to employees of the Department in order to encourage disclosures of fraud, waste or mismanagement. Such disclosures will continue to be handled in accordance with the standard operating procedures of the Office of Inspector General.

SECTION 3. LEGAL AUTHORITY.

Under section 1703 of the Omnibus Budget Reconciliation Act of 1981, which amends Chapter 45 of Title 5 United States Code (5 U.S.C. 4511 et seq.), the Inspector General may grant monetary awards for employee disclosures of fraud, waste, and mismanagement which result in cost savings to the agency. The amount of an award may not exceed the lesser of $10,000 or an amount equal to 1 percent of the Department's total cost savings attributable to the employee's disclosure. No award may be made under this authority after September 30, 1984.

SECTION 4. DEFINITIONS.

.01 "Employee" means an officer of an individual who is (i) appointed in the civil service by a Federal officer or employee, (ii) engaged in the performance of a Federal function under authority of law or an Executive act; and (iii) subject to the supervision of a Federal officer or employee while engaged in the performance of the duties of his/her position (5 U.S.C. 2105). As used in this Order, the term includes members of the NOAA commissioned corps.

.02 "Disclosure" occurs when an employee voluntarily (i) exposes fraud, waste or mismanagement to the Inspector General or his/her representatives, or (ii) provides evidence concerning such matters, to those parties. As used in Order, the term includes a disclosure to a supervisor or an "agency liaison" as specified in DAO 207-10 on reporting matters to the Office of Inspector General. An employee does not have to reference the cash awards program in order to make an eligible disclosure.

.03 "Cost Savings" means (i) present tangible net benefits to the Department, for which the monetary value can reasonably be established, and (ii) projected tangible net benefits to the Department during the two (2) fiscal years following a disclosure, for which the monetary value can reasonably be estimated. Cost savings may result from: reduction or avoidance of director recognizable costs or losses; or collection or recoupment of funds expended for Government grants or cooperative agreements, or contracts for property or services, or of money disbursed as program expenditures for program entitlements, loans and loan guarantees.

SECTION 5. RELATIONSHIP TO EXISTING INCENTIVE AWARDS PROGRAM.

The Omnibus Budget Reconciliation Act of 1981 authorizes cash awards for employees only where their disclosures of fraud, waste or mismanagement to the Inspector General have resulted in cost savings to the Department. In contrast, the existing incentive awards program, established under the Government Employees' Incentive Awards Act (5 U.S.C. Chapter 45, subchapter I), and described in DAO 202-451, provides that all employees, except those covered by merit pay, may receive a cash award (i) for a suggestion, invention, superior accomplishment, or other personal effort that contributes to the efficiency, economy, or other improvement of Government operations, or achieves a significant reduction in paperwork, or (ii) for performing a special act or service in the public interest in connection with or related to official employment. Parallel authority for merit pay employees is provided in 5 U.S.C. Chapter 54.

SECTION 6. ELIGIBILITY.

.01 General. Except as provided in paragraph 6.02 of this Order, awards authorized hereunder may be granted to any employee of the Department, to any former employee, or to the legal heirs or assigns of a deceased employee. Recognition under this program shall be granted to employees without regard to race, color, religion, national origin, sex, lawful partisan political affiliation, marital status, physical or mental handicap, age or membership or nonmembership in a labor organization.

.02 Employees of the Office of Inspector General. An employee of the Office of Inspector General is not eligible for an award under this Order. Such employees remain eligible for recognition under other incentive awards authorities.

SECTION 7. CONFIDENTIALITY FOR EMPLOYEES WHO MAKE DISCLOSURES.

.01 Confidentiality and Protection against Reprisals. Section 7 of the Inspector General Act of 1978 (5 U.S.C. App. I, 1 et seq.) prohibits the Inspector General from revealing the identity of an employee who brings information to the Inspector General concerning fraud, waste or mismanagement, unless the Inspector General determines that such is unavoidable during the course of the investigation. The same section prohibits reprisals against employees for complaints to the Inspector General, unless the complaint was made with the knowledge that it was false or with willful disregard for its truth or falsity. Therefore, as a general rule, the identity of an employee who discloses fraud! waste or mismanagement to the Inspector General shall be kept confidential and the employee shall be protected from reprisals.

.02 Anonymity of Awards. The identity of any employee who receives a cash award under this program shall remain confidential at the employee's request.

SECTION 8. CRITERIA FOR GRANTING MONETARY AWARDS.

.01 Quality of the Disclosure. In determining whether to approve an award, the Inspector General may consider the timeliness, accuracy, specificity, scope, and usefulness of the employee's disclosure. The Inspector General may also consider: (i) the circumstances under which the employee acquired the information disclosed; (ii) the employee's culpability, if any, for the matters disclosed; and (iii) the potential risk to the employee, if any, for having made the disclosure.

.02 Results of Disclosure. In order for an employee to receive an award, the Department must realize some savings directly attributable to the employee's disclosure.

.03 Time of Disclosure. In order for an individual to receive an award, his or her disclosure must have been made while the individual was an employee of the Department.

SECTION 9. COMPUTATION OF THE AWARD.

.01 Initial Awards. The amount of an award may not exceed the lesser of (i) $10,000 or (ii) an amount equal to 1 percent of the Department's cost savings which the Inspector General determines to be the total savings attributable to the employee's disclosure. The Inspector General may take into account projected cost savings attributable to the employee's disclosure. In reaching a determination as to cost savings, the OIG shall consult the affected Departmental operating units.

.02 Supplemental Awards. A supplemental award may be granted if additional savings are identified from an employee disclosure that are greater than initially determined.

.03 Interagency Awards. The Inspector General shall review employee disclosures or proposals for potential application elsewhere in the Government. These shall be referred in accordance with office of Personnel regulations (5 C.F.R. 451.206) and guidance (FPM chapter 451, subchapter 10). If, as a result of wider application, greater benefits to the Government result, an additional award may be granted to the employee under subchapter I of 5 U.S.C. Chapter 45.

.04 Prorating Awards. If the Inspector General or his/her representatives should receive information about the same matter from more than one employee, he/she-may divide any award for the disclosure among the employees based on tne criteria in section 8. of this Order.

SECTION 10. PROJECTING COST SAVINGS.

.01 General Approach. Projected savings may be included as cost savings at such tlme as the realization of those projected savings appears reasonably certain, including but not limited to the time at which: (i) action is instituted to discontinue planned expenditures; (ii) recommendations that will result in foreseeable savings are accepted by the official responsible for implementation; or (iii) line items in operating unit budget plans submitted to the office of Management and Budget are reduced as a result.

.02 Salaries and Expenses. Cost savings that will result in the need for fewer personnel, supplies or other resources are realized at such time as (i) the planned budget is altered, (ii) the resources are reprogrammed or (iii) plans to acquire additional resources are accordingly reduced or abandoned.

SECTION 11. AUTHORITY FOR RECOMMENDING AND APPROVING AWARDS.

.01 Recommendations. Recommendations for cash awards may be made in writing to the Inspector General by Secretarial Officers, heads of operating units, the Assistant Inspectors General, and other officials as designated by the Inspector General.

.02 Approval. Fina1 approval of an award is sole1y within the discretion of the Inspector General, who shall be guided by the criteria established in section 8. of this Order. As a prerequisite to approving an award, the Inspector General may require that the employee under consideration for an award submit a sworn affidavit detailing how he/she obtained the information that formed the basis for the disclosure.

SECTION 12. FUNDING OF AWARDS.

Awards will be paid from the funds or appropriations available to the activity within the Department that realizes the cost savings. To assure the necessary funds, the Office of the Secretary (O/S) will establish a separate project in the O/S advances and reimbursements account. An operating unit will be billed from this account when an award is made to an employee for a disclosure resulting in a cost savings to the operating unit. The amount of the billing may not exceed the lesser of (i) $10,000 or (ii) one percent of the operating unit's cost savings attributable to the employee's disclosure.

SECTION 13. TIMING OF AWARDS.

Awards should be granted as soon as an assessment can be made of the cost savings to the Department.

SECTION 14. ACCEPTANCE OF AN AWARD.

A cash award under this authority is in addition to the basic pay of the recipient. Acceptance of a cash award constitutes an agreement that the use by the Government of an idea, method, or device for which the award is made does not form the basis of a further claim of any nature against the Government by the employee, his/her heirs, or assigns.

SECTION 15. DOCUMENTATION SUBSTANTIATING AWARDS.

The Inspector General shall submit to the Comptroller General documentation substantiating any award made under this authority. Within 30 days of the actual date of each award approval, a copy of an award justification shall be forwarded to the Director, Federal Personnel and Compensation Division, Room 4001, GAO Building, 441 -G Street, N.W., Washington, D.C. 20548. The justification shall include: (i) the amount of the award; (ii) action taken by the agency as a result of the disclosure; and (iii) the actual and estimated cost savings to the Government. The OIG shall retain full documentation of awards granted for employee disclosures for at least 5 years or until GAO reviews each award.

SECTION 16. PUBLICIZING DEPARTMENTAL AWARDS; REPORTS TO OPM.

.01 Publicizing Departmental Awards. Although the names of award recipients will not be released without their consent, the Inspector General will disseminate the following information within the Department and, as appropriate, to the public: (i) the number and amounts of awards; (ii) the savings to the Government; and (iii) where advisable, a synopsis of actions taken because of the disclosures.

.02 Reports to OPM. On an annual basis, the Inspector General shall advise the Departmental Office of Personnel of the .number and amounts of awards by employees' grade levels and pay schedules. The Office of Personnel will include this information in the Department's annual report to OPM on the Incentive Awards Program.

SECTION 17. PRESIDENTIAL AWARDS.

.01 Legal Authority. Section 1703 of the Omnibus Budget Reconciliation Act of 1981 also provides the President authority to grant up to 50 awards each year of $20,000 to employees whose disclosures of fraud, waste or mismanagement have resulted in substantial cost savings to the Government. The Director of OPM has responsibility for administering this program and for recommending potential award recipients to the President.

.02 Departmental Recommendations to OPM. The Inspector General, other Secretarial Officers, and the heads of operating units may recommend potential Presidential award recipients to the Secretary. Each recommendation shall be submitted to the Office of Inspector General for an evaluation of the cost savings resulting from the employee's disclosure. The OIG shall forward the recommendation and evaluation to the Office of Personnel for presentation to the Secretary. The Secretary shall forward to the Director of OPM those recommendations that he/she deems appropriate for Presidential recognition.

.03 Criteria for Making Recommendations. In making recommendations to the Secretary. Departmental officials shall be guided by the criteria set forth in sections 8.01 and 8.02 of this Order. However, an employee should not be recommended for a Presidential award unless the cost savings to the Government substantially exceed those that would qualify for a $10,000 award (i.e., cost savings that substantially exceed $1,000,000).

Signed by: Secretary of Commerce

Office of Primary Interest: Office of Inspector General

Index Changes:

Add.

Awards for the Disclosure of Fraud, Waste or Mismanagement 202-453 Fraud, Waste or Mismanagement. Awards for the Disclosure of 202-453 Mismanagement, Awards for the Disclosure of Fraud, Waste or 202-453

Questions and Comments

Send Questions or Comments on the Commerce Directives Management program to Directives@doc.gov.

Office of Privacy and Open Government
Office of the Chief Financial Officer and Assistant Secretary for Administration
U.S. Department of Commerce

 

Page last updated:February 1, 2010