audit 101: preparing for and managing a full -blown ofccp ... · desk audit letter. 1. an...

Audit 101: Preparing for and Managing a Full-Blown OFCCP Compliance EvaluationAugust 7, 2019

Phil Akroyd and Be Lam

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Be LamConsultant I

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AGENDA

Types and Process

Desk Audit Letter

Checklist and Recommendations

Questions and Answers

Types and Process


Types and Process

• Compliance (Establishment) Review – “full audit”

• Focused Review – concentrates on specific issues (503 & VEVRAA)

• Compliance Check – can you comply?

• Corporate Management Compliance Evaluation (CMCE) – full audit with a focus on upper management and potential “glass ceiling” issues

• Functional (FAAP) reviews

• Pre-award compliance evaluation – compliance check prior to awarding the contract


New Types of Audits Introduced for 2019

Types and Process

• Desk AuditFederal Contractor submits AAP and supporting docs to the OFCCP

Compliance Officer (C.O.)OFCCP reviews documents at their locationLots of crossover with regions – C.O. may not be in your region

• Onsite AuditCompliance Review can escalate to an onsite auditInspection of company’s personnel and employment practices,

documentsCan involve personnel interviews


Compliance Review

Types and Process

• OFCCP published the new CSAL list of 3,500 establishments for FY2019 on March 25, 2019: https://www.dol.gov/ofccp/scheduling/FY2019-CSAL.xlsx500 Section 503 Focus Reviews Headquarter only

500 Compliance Checks About 1/3 of scheduling list include industries with the highest rates

of discrimination finds based on the past five years of Financial Conciliation Agreements (CA) 1,167 establishments selected from Agriculture, Manufacturing,

and Wholesales Trade industries


The Process for 2019

https://www.dol.gov/ofccp/scheduling/FY2019-CSAL.xlsx

Types and Process



Establishments scheduled for audit

Types and Process

• CSAL provides 45-day courtesy notification prior to when OFCCP begins sending its OMB-approved scheduling letterReality is that many letters still haven’t gone out

• Contractors will have the standard 30 days to submit their Affirmative Action Programs (AAPs)

• OFCCP will also grant a one-time 30-day extension for supporting dataRequest made prior to initial 30-day due date Submits the basic EO 11246, Section 503, and VEVRAA

• No more than 15 establishments per parent company (up from 10)

• Still a two year “immunity” if undergone audit (down from 5 years)



Types and Process

• The list of establishments is not all-inclusive

• An establishment of a contractor not on the CSAL may be selected for evaluation because of a complaint, contract award notice or as a result of conciliation agreement or consent decree progress report



Types and Process


No

FCSS(ID’s Contractors for Audit)

Advanced Scheduling Announcement Letter

(ID’s Contractor’s AAPs for Auditin a 12-month period)

Scheduling Letter

Contractor Submits AAP

OFCCP Reviews AAP

Problem Areas/TriggersAdditional Data/OFCCP On-Site

OFCCP Provides Audit Result(s)

Yes

Part of a focused review orquality check review

Results:1. No Apparent/No Technical Violation2. Notice of Violation (Conciliation Agreement)3. Show Cause/Recommendation for

Enforcement

Desk Audit Letter


Desk Audit Letter

• [Typically] addressed to the highest ranking official at the audit location

• Mail room/reception should on alert to look for DOL headed letter sent registered mail


Compliance Evaluation - Itemized Listing: Executive Order 11246

Desk Audit Letter

• Receiver should alert HR/Legal/Compliance/Site Head of the letter

• Scheduling Letter and Itemized Listing.docx

• Sometimes letters go missing or don’t make it to the intended recipient

• Contact C.O. if it was lost to negotiate new timeline



Desk Audit Letter

• Is the location/business/entity still accurate – argue to move to admin closure?



Desk Audit Letter1. An Organizational Profile prepared according to 41 CFR 60-2.11

• Two ways to address this item:

1) Organizational Profile/Display – graphical display of the contractor’s organizational structure

2) Workforce Analysis – a listing of job titles by organizational unit



Organizational Profile (requirements):• Must show each organizational unit within the organization • Must show the relationship of each department to one another• For each unit, it must indicate:

Name of the unit

Job title, gender, race/ethnicity of the supervisor

Total male/female incumbents

Total male/female incumbents within the following race groups: Blacks, Hispanics, Asians/Pacific Islanders, American Indian/Alaskan Natives



Organizational Profile (requirements):



Organizational Profile (requirements):• Job titles must be listed from lowest to highest paid in each department

or organizational unit• Wage rate or salary range must be provided for each job title • For each job title, it must indicate:

Total male/female incumbents

Total male/female incumbents within the following race groups: Blacks, Hispanics, Asians/Pacific Islanders, American Indian/Alaskan Natives

• Must show lines of progression



Organizational Profile (requirements):


Desk Audit Letter2. The formation of job groups (covering all jobs) consistent with criteria

given in 41 CFR 60-2.12

3. For each job group, a statement of the percentage of minority and female incumbents as described in 41 CFR 60-2.13


2 and 3 = The Job Group Analysis/Report (requirements):• Jobs with similar content, wage rates, and opportunities must be

combined to form job groups• Must include a list of job titles in each job group• Must annotate job titles that are located at another establishment or AAP• Smaller employers (fewer than 150 ee’s) may use EEO job classifications as

their job groups• State the percentage of minorities/females in each job group

Desk Audit Letter2. The formation of job groups (covering all jobs) consistent with criteria

given in 41 CFR 60-2.12

3. For each job group, a statement of the percentage of minority and female incumbents as described in 41 CFR 60-2.13


Desk Audit Letter4. For each job group, a determination of minority and female availability

that considers the factors given in 41 CFR 60-2.14(c)(1) and (2)


4 = Availability Analysis (requirements): • Contractors must consider at least two factors: External factors - The percentage of minorities and women as having

the requisite skills as the contractor’s incumbents from the contractor’s reasonable recruitment area

o Data compiled from an outside source (e.g., census data, data from colleges or other training institutions)

Internal factors - The percentage of minorities and women among those promotable, transferable, and trainable within the contractor’s organization

Desk Audit Letter4. For each job group, a determination of minority and female availability

that considers the factors given in 41 CFR 60-2.14(c)(1) and (2)


4 = Availability Analysis (requirements): • Determine the factor weights - percentages assigned to the external and

internal factors according to the proportion of historical placements (hires, promotions, transfers, etc.) into the job group

• Determine the final availability - the availability data from, external and/or internal factors are multiplied by the assigned factor weights and then summed up to create the final availability for the job group

• An estimate of the number of qualified minorities or women available for employment in a given job group.

Desk Audit Letter5. For each job group, the comparison of incumbency to availability as

explained in 41 CFR 60-2.15.

6. Placement goals for each job group in which the percentage of minorities or women employed is less than would be reasonably expected given their availability as described in 41 CFR 60-2.16.


5 and 6 = Comparison of Incumbency to Availability Report & Placement Goals Report

• A comparison of minorities and women percentages within each job group to the corresponding availability percentages for those job groups

• Goals are established for each job group where the incumbency rate for women or minorities is less than reasonably expected, given their availability in that job group

• Goals serve as objectives or targets reasonably attainable by means of applying every good faith effort

Desk Audit Letter7. Results of the evaluation of the effectiveness of outreach and

recruitment efforts that were intended to identify and recruit qualified individuals with disabilities (IWDs) as described in 41 CFR 60-741.44(f).

8. Documentation of all actions taken to comply with the audit and reporting system requirements described in 41 CFR 60-741.44(h).


7 and 8 = Written response in Narrative. How are you assessing your recruitment efforts towards IWD?

• Track recruitment sources from ALL applicants

Desk Audit Letter7. Results of the evaluation of the effectiveness of outreach and

recruitment efforts that were intended to identify and recruit qualified individuals with disabilities (IWDs) as described in 41 CFR 60-741.44(f).



Activity Date Brief Description Evaluation

Annual Meeting with State Vocational Rehabilitation Service Agency (SVRA)

March 1, 2018 Met with SVRA to inform of Company’s outreach and recruitment efforts for IWD’s

SVRA will begin posting all of Company’s job openings starting in 2019 to expand Company’s applicant pool

Veterans Job Fair held at Hilton Hotel

April 25, 2018 Participated at local job fair aimed at counseling veterans on employment applications and inclusion of veterans in the workforce

Received 25 applications on the spot which resulted to hiring 2 qualified veterans.

Annual meeting with Company’s Hiring Managers and Recruiters

July 20, 2018 Meeting also included a training on Company’s AAP obligations.

Discussed, brainstormed and received great ideas on other Outreach and Recruitment activities and programs that the Company can initiate/participate in. Will implement these ideas sometime in the 3rd quarter of 2019.

Desk Audit Letter9. Documentation of the computations or comparisons described in 41 CFR 60-

741.44(k)for the immediately preceding AAP year and, if you are six months or more into your current AAP year when you receive this listing, provide the information for at least the first six months of the current AAP year

10. The utilization analysis evaluating the representation of IWDs in each job group, or, if appropriate, evaluating the representation of IWDs in the workforce as a whole, as provided in 41 CFR 60-741.45. If you are six months or more into your current AAP year on the date you receive this listing, please also submit information that reflects current year progress


9 and 10 = Technical Reports for IWD• Track recruitment sources from ALL applicants

Desk Audit Letter


9 and 10 = Technical Reports for IWD

Desk Audit Letter11. Results of the evaluation of the effectiveness of outreach and recruitment

efforts that were intended to identify and recruit qualified protected veterans as described in 41 CFR 60-300.44(f).



11 and 12 = Written response in Narrative. How are you assessing your recruitment efforts towards VETS?

• Track recruitment sources from ALL applicants

Desk Audit Letter13. Documentation of the computations or comparisons described in 41 CFR 60-

300.44(k) for the immediately preceding AAP year and, if you are six months or more into your current AAP year when you receive this listing, provide the information for at least the first six months of the current AAP year.

14. Documentation of the hiring benchmark adopted; the methodology used to establish it if using the five factors described in 60-300.45(b)(2). If you are six months or more into your current AAP year on the date you receive this listing, please also submit information that reflects current year results.


13 and 14 = Written response in Narrative. How are you assessing your recruitment efforts towards VETS?

Desk Audit Letter


13 and 14 = Technical Reports for Protected Veterans

Desk Audit Letter15. Copies of your Employer Information Report EEO-1 (Standard Form 100 Rev.) for

the last three years. 41 CFR 60-1.7


16 = Collective Bargaining Agreements (if applicable)

15 = Copies of your EEO-1 Reports (3 years)• In addition, be prepared to have last three years of Vets-4212 reports to

submit post-submission

16. Copies of your collective bargaining agreement(s), if applicable. Include any other documents you prepared, such as policy statements, employee notices or handbooks, etc. that implement, explain, or elaborate on the provisions of the collective bargaining agreement.

Desk Audit Letter17. Information on your affirmative action goals for the immediately preceding AAP year and, where

applicable (see below), progress on your goals for the current AAP year.

For the immediately preceding AAP year, this report must include information that reflects:

a) job group representation at the start of the AAP year, (i.e., total incumbents, total minority

incumbents, and total female incumbents);

b) the percentage placement rates (% goals) established for minorities and women at the start of the

AAP year; and

c) the actual number of placements (hires plus promotions) made during the AAP year into each job

group with goals (i.e., total placements, total minority placements, and total female placements.

For goals not attained, describe the specific good faith efforts made to achieve them

If you are six months or more into your current AAP year on the date you receive this listing, please also

submit information that reflects progress on goals established in your current AAP year, and describe

your implementation of action-oriented programs designed to achieve these goals.


Desk Audit Letter18. Data on your employment activity (applicants, hires, promotions, and terminations) for the immediately

preceding AAP year and, if you are six months or more into your current AAP year when you receive this

listing, provide the information in (a) through (c) below for at least the first six months of the current AAP

year. You should present this data by job group (as defined in your AAP) or by job title.

a) Applicants and Hires: For each job group or job title, this analysis must consist of the total number of

applicants and the total number of hires, as well as the number of African American/Black, Asian/Pacific

Islander, Hispanic, American Indian/Alaskan Native, White, and the number of female and male applicants

and hires. For each job group or job title applicants for whom race and/or sex is not known, should be

included in the data

However, if some of your job groups or job titles (most commonly, entry-level) are filled from the same

applicant pool, you may consolidate your applicant data (but not hiring data) for those job groups or titles. For

example, where applicants expressly apply for or would qualify for a broad spectrum of jobs (such as

“Production,” “Office,” etc.) that includes several job groups, you may consolidate applicant data


Desk Audit Letter18. (Cont.)

b) Promotions: For each job group or job title, provide the total number of promotions by gender and race/ethnicity. Also, include a definition of “promotion” as used by your company and the basis on which they were compiled (e.g., promotions to the job group, from and/or within the job group, etc.). If it varies for different segments of your workforce, please define the term as used for each segment. If you present promotions by job title, include the department and job group from which and to which the person(s) was promoted. The term “race/ethnicity” as used throughout the Itemized Listing includes these racial and ethnic groups: African American/Black, Asian/Pacific Islander, Hispanic, American Indian/Alaskan Native, and White.


Desk Audit Letter18. (Cont.)

c) Terminations: For each job group or job title, provide the total number of employee terminations by gender and race/ethnicity. When presenting terminations by job title, include the department and job group from which the person(s) terminated.


Desk Audit Letter19. Employee level compensation data for all employees (including but not limited to full-time, part-

time, contract, per diem or day labor, temporary) as of the date of the workforce analysis in your

AAP. Provide gender and race/ethnicity information and hire date for each employee as well as job

title, EEO-1 Category and job group in a single file. Provide all requested data electronically, if

maintained in an electronic format. See Note 1, below.

a) For all employees, compensation includes base salary and or wage rate, and hours worked in a typical

workweek. Other compensation or adjustments to salary such as bonuses, incentives, commissions, merit

increases, locality pay or overtime should be identified separately for each employee.

b) You may provide any additional data on factors used to determine employee compensation, such as

education, past experience, duty location, performance ratings, department or function, and salary

level/band/range/grade.

c) Documentation and policies related to compensation practices of the contractor should also be included in

the submission, particularly those that explain the factors and reasoning used to determine compensation.


Desk Audit Letter20. Copies of reasonable accommodation policies, and documentation of any

accommodation requests received and their resolution, if any.


21. Your most recent assessment of your personnel processes, as required by 41 CFR 60-300.44(b) and 60-741.44(b), including the date the assessment was performed, any actions taken or changes made as a result of the assessment, and the date of the next scheduled assessment.

22. Your most recent assessment of physical and mental qualifications, as required by 41 CFR § 60-300.44(c)and § 60-741.44(c), including the date the assessment was performed, any actions taken or changes made as a result of the assessment, and the date of the next scheduled assessment

Desk Audit Letter

• NOTE 1: If any of the requested information is computerized, you must submit it in an electronic format that is complete, readable, and useable. Please use caution when submitting large electronic files. Check with the OFCCP Compliance Officer and your system administrator to ensure adherence to administrative and system guidelines

• NOTE 2: According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 1250-0003. We estimate that the average time required to complete this information collection is 27.9 hours per response, including the time for evaluating instructions, searching existing data sources, gathering and maintaining the data needed, and completing and evaluating the collection of information.


NOTES:

Revised Scheduling Letter

• In April of 2019, the OFCCP submitted for public comment revised scheduling letters for:11246 compliance evaluations (full audits)Compliance checksSection 503 (disability) focused reviewsScheduling letter for VEVRAA (vets) focused reviews


Revised scheduling letter for 11246 compliance evaluations

Revised Scheduling Letter

• Proposed changes included:Information on the contractor’s three most recently awarded

subcontracts that have a total contract value of $150,000 or moreRevised Goals Progress report to include placement goals instead of

percentage placement rates.Submission of promotion “pools”


Revised scheduling letter for 11246 compliance evaluations

Checklist and RecommendationsBasic AAP Contents (Under 6 months into AAP Year):

√ Narrative for Women and Minorities

√ Narrative for Individual with Disabilities and Protected Veterans

√ Workforce Analysis

√ Job Group Analysis

√ Availability Analysis

√ Comparison of Incumbency to Availability

√ Placement Goals

√ Utilization Analysis (IWD)

√ Hiring Benchmark (Vets)

√ Goals Progress Report

√ Summary of Personnel Transactions

√ Compensation Factors (Separate Electronic File)


Checklist and Recommendations6 Months into AAP Year:

√Basic Contents (see previous slide)

√Six Month Updated Summary of Personnel Transactions

√Six Month Updated Utilization Analysis (IWD), Hiring Benchmark (Vets), and Goals Progress Report


Top 10 Audit Request

10. Proof of job listings with the State Employment Service Delivery System (ESDS)

9. Proof of proper notifications

• EO Clause

• Notice to vendors/subcontractors

8. Proof of online accessibility

• Accommodation policy/process (incl. designated person and contact information)

• Link to “EEO is Law” poster

7. Copies of self ID forms, job announcements, applications

• Proper format/categories

• BQs, tests, background checks

6. Documentation of review of personnel processesBiddle Consulting Group Institute for Workforce Development


50

5. Documentation of review of physical and mental qualifications

4. Documentation of accommodations

• Policies (including leave)

• Logs (including requests, results, supporting documentation)

3. Documentation of Outreach and Recruitment Efforts

• Primarily (but not necessarily) for veterans and individuals with a disability

• Results of the “Evaluation of Effectiveness”

• Description of activities, name, contact information

• What worked well. What didn’t. What changes are being made.

• “Failure to meet a goal/benchmark is not a violation. Failure to try is.”

• Recommendation: Try to get specific information from applicants . . . Perhaps have recruiters ask as well.



2. Personnel Activity Data

• Including data for all minority groups

• OFCCP is primarily running comparisons to the group with the highest rate (ala Uniform Guidelines)

• Provide unknowns (OFCCP looking for potential flaws in the process . . . i.e., a low response rate)

• If impact . . . be prepared to provide detailed applicant data (with dispositions), previous year’s job group headcounts, termination logs, promotion reasons, etc.

1. Compensation Data



• Review data before submission. Ensure that data is correct and appropriate for the at-issue time frame

• Perform adverse impact analyses on all transactions. Pay closer attention to the hire analysis

• Review compensation data - conduct pro-active analysis and investigate any pressure points

• Document and emphasize all EEO “good things”

• Prepare a neat and professional AAP The personnel in charge of implementation can answer simple questions regarding the plan(s)

The reports are complete and accurate

• Consider performing a pre-audit “mock” audit.

• Are you registering job openings with state agencies?



• Reread the regulations

• Review and familiarize with the content of the AAP

• Know your auditor

• Know your auditor’s time frame for decisions

• Document all conversations with reviewers



• The OFCCP is expecting contractors create “active” relationships with outreach/recruitment sources

• Ensure all postings make it to state and local agencies including advocacy groups (enlist 3rd-party if necessary)

• Include specific agencies aimed towards women, minorities, veterans, and individuals with disabilities

• Document postings and ensure they were “actionable”• Best practice: Track referral source to evaluate effectiveness of

outreach/recruitment



Upcoming Webinars & Events

• August 14 – Investigating Series: Compensation Discrepancies

• August 28 – Investigating Series: Selection Rate Discrepancies

• September 17 – 18 – Sacramento Area Human Resource Association (SAHRA)

• September 18 – VETS 4212

• September 21 – 24 – ASHHRA 55th Annual Conference and Exposition

• October 23 – Diversity Series: Benefits

• November 13 – Diversity Series: Portal Dashboard


Visit www.bcginstitute.org to register!

https://www.bcginstitute.org/events/EventDetails.aspx?id=1238151&group=




https://www.bcginstitute.org/events/EventDetails.aspx?id=1230136



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