OFCCP Audits Should Be 'Interactive and Conversational,' Official Says

By Lydell C. Bridgeford

May 9 — The Labor Department's Office of Federal Contract Compliance Programs couldn't do an effective compliance audit without providing the contractor in question with information about the agency's concerns, and it has no written policy against such transparency, the agency’s policy director said.

“I just don’t think we could do a good compliance audit if we are trying to hide the ball,” Debra A. Carr, director of the OFCCP's Division of Policy and Program Development, said May 4 at a compliance symposium sponsored by the OFCCP Institute.

The institute, an employer organization based in Washington, isn't affiliated with the agency.

Federal contractors selected for a compliance evaluation receive a scheduling letter and itemized listing that instruct them to produce written affirmative action program employment data and supporting documents during the desk audit phase of an audit.

A compliance officer will analyze the data to determine if the company is complying with its legal obligations under Executive Order 11,246, Section 503 of the Rehabilitation Act and the Vietnam Era Veterans' Readjustment Assistance Act.

Further, the compliance officer may issue a supplemental data request ordering the contractor to produce more information on compensation, job applicants, employees, promotions and terminations.

Audits Shouldn't Be in the Dark

During the questions-and-answers segment of Carr's presentation, David Fortney, a management attorney with FortneyScott and co-chair of the institute, told the agency's policy director that some compliance officers are reluctant to disclose the factors underlying their supplemental data requests in a compliance audit.

For example, a compliance officer will notify a contractor that the agency may have detected potential indicators of discrimination, which will result in an “extensive supplemental data request” to the contractor, he said. But typically, the compliance officer won't provide a full explanation on why a supplemental document request is needed, Fortney said.

“We will ask the compliance officer ‘what are your indicators or where are you focusing on’ with the workforce data analysis,” he said. “We pretty regularly get the response by compliance officers that they are not going to tell us why they are seeking additional information or they are not allowed to,” Fortney said. If the agency’s analysis of the contractor’s workforce data reveals potential bias indicators, then show the contractor “what you have or tell us something about your analysis,” he said. “Maybe it’s a factual misunderstanding that is causing the indicators.”

For contractors, hearing the reason behind the request is about transparency, Fortney said. In addition, numerous supplemental data requests from compliance officers will lengthen the duration of the desk audit and, thus, increase the costs associated with the audit.

Carr stressed that the OFCCP has “no written policy that says during the course of a compliance evaluation that compliance officers are prohibited from telling you what they are generally looking for and why they think you have gone afoul.” She said compliance officers “may not be able to turn over the numbers that they have been crunching, but they should be able to tell you, generally, what they are concerned about,” Carr said.

Checks and Balances Needed

Carr also addressed the steps that the agency has taken to ensure compliance officers are correctly enforcing the revised VEVRAA and Section 503 regulations, effective March 24, 2014, that established new nondiscrimination and written affirmative action programs requirements for hiring and recruiting people with disabilities and protected veterans (185 DLR A-10, 9/24/13).

The agency’s national office reviews all notices of violations and conciliation agreements related to VEVRAA and Section 503 regulations, she said. For instance, her team analyzes the notices of violations to ensure that they can be sustained, meaning that the correct regulation was cited and that the facts support the violation.

If questions arise over a notice of violation, then the notice is sent back to the regional field manager for further inquiry, Carr said.

The “low-hanging fruit” is making sure the compliance officers understand the requirements under the new and old regulations, as well as the transition period, she said.

Carr also receives every month a list of the most common compliance issues and concerns involving compliance officers and federal contractors. The agency is using the information to design upcoming training programs for compliance officers and public webinars for federal contractors regarding VEVRAA and Section 503 regulations, she said.

Rethinking Compliance Paradigm

Carr responded to a question on her long-term outlook on OFCCP enforcement of the VEVRAA and Section 503 regulations.

“I would like our compliance officers to truly engage you,” she said. “During a compliance audit, we have to talk to one another. I want to start changing the way we think about compliance; it’s interactive and conversational,” she said.

For Carr, “good compliance” means “putting ourselves in your shoes and understanding the decisions you have made. This also entails that compliance officers are providing the contractor with “good feedback” and that “we are not shooting ourselves in the foot by citing the wrong stuff.”

She said the agency may have to move beyond the idea of simply sending a letter saying “turn over documents.” Upon receipt of that data, “we go off into a corner and look at those documents, then we send you something that says ‘good' or ‘bad' contractor,” Carr said.

To contact the reporter on this story: Lydell C. Bridgeford in Washington at lbridgeford@bna.com

To contact the editor responsible for this story: Heather Bodell at hbodell@bna.com