OFFICE OF PERSONNEL MANAGEMENT

Federal Funds

For necessary expenses to carry out functions of the Office of Personnel Management pursuant to Reorganization Plan Numbered 2 of 1978 and the Civil Service Reform Act of 1978, including services as authorized by 5 U.S.C. 3109; medical examinations performed for veterans by private physicians on a fee basis; rental of conference rooms in the District of Columbia and elsewhere; hire of passenger motor vehicles; not to exceed $2,500 for official reception and representation expenses; advances for reimbursements to applicable funds of the Office of Personnel Management and the Federal Bureau of Investigation for expenses incurred under Executive Order No. 10422 of January 9, 1953, as amended; and payment of per diem and/or subsistence allowances to employees where Voting Rights Act activities require an employee to remain overnight at his or her post of duty, [$102,970,000] $95,769,000, of which [$5,908,000] $6,004,000 shall remain available until [September 30, 2011] expended for the Enterprise Human Resources Integration project; [$1,364,000] $1,416,000 shall remain available until [September 30, 2011] expended for the Human Resources Line of Business project; and in addition [$112,738,000] $121,738,000 for administrative expenses, to be transferred from the appropriate trust funds of the Office of Personnel Management without regard to other statutes, including direct procurement of printed materials, for the retirement and insurance programs, of which not more than [$9,300,000] $9,495,000 shall remain available until [September 30, 2011] expended for the cost of implementing the new integrated financial system [and not more than $4,000,000 shall remain available until September 30, 2011 for automating the retirement recordkeeping systems]: Provided, That the provisions of this appropriation shall not affect the authority to use applicable trust funds as provided by sections 8348(a)(1)(B), and 9004(f)(2)(A) of title 5, United States Code: Provided further, That no part of this appropriation shall be available for salaries and expenses of the Legal Examining Unit of the Office of Personnel Management established pursuant to Executive Order No. 9358 of July 1, 1943, or any successor unit of like purpose: Provided further, That the President's Commission on White House Fellows, established by Executive Order No. 11183 of October 3, 1964, may, during fiscal year [2010] 2011, accept donations of money, property, and personal services: Provided further, That such donations, including those from prior years, may be used for the development of publicity materials to provide information about the White House Fellows, except that no such donations shall be accepted for travel or reimbursement of travel expenses, or for the salaries of employees of such Commission[: Provided further, That within the funds provided, the Office of Personnel Management shall carry out the Intergovernmental Personnel Act Mobility Program, with special attention to Federal agencies employing more than 2,000 nurses: Provided further, That funding may be allocated to develop guidelines that provide Federal agencies direction in using their authority under the Intergovernmental Personnel Act Mobility Program, according to the directives outlined in the joint explanatory statement]. (Financial Services and General Government Appropriations Act, 2010.)

Program and Financing (in millions of dollars)

The Office of Personnel Management's (OPM) mission is to help agencies build an effective Federal civilian workforce based on merit system principles. OPM leads Federal agencies in the strategic management of their human resources, proposes and implements human resources management policy, and provides agencies with ongoing advice and technical assistance to implement these policies and initiatives. OPM also supports veterans' preference in Federal hiring and manages the process for personnel security and background checks for suitability and national security clearances. OPM continues to honor the Government's commitment to employees by managing the trust funds that support the retirement and insurance benefits they earn, and delivering excellent benefit services and support to civil servants both during and after their Federal careers. The 2011 Budget will permit OPM to pursue long-term human resources strategies that deliver results and enhance the values of the civil service.

The functions and objectives of the OPM major organizations are:

Employee Services.—Provides policy direction and leadership in designing, developing and promulgating Government-wide human resources systems and programs for recruitment, pay, leave, performance management and recognition, employee development, work/life/wellness programs, and labor and employee relations. Employee Services also provides technical support to agencies on the full range of human resource management policies and practices, to include veterans employment and agency program evaluation.

Merit Systems Audit and Compliance.—Ensures that Federal agency human resources programs are effective and meet merit system principles and related civil service requirements. Merit Systems Audit and Compliance also manages the Combined Federal Campaign and performs voting rights observations for the Justice Department.

Retirement and Benefits.—Provides Federal employees, retirees and their families with benefits programs and services that offer choice, value, and quality to help maintain the Government's position as a competitive employer. Retirement and Benefits operates the Civil Service Retirement System, the Federal Employees Retirement System, the Federal Employees Health Benefit Program, the Federal Employees Group Life Insurance Program, the Federal Employees Dental and Vision Insurance Program, the Federal Long Term Care Program and the Flexible Spending Account Program. The 2011 Budget includes funding to maintain timely processing of retirement claims and provide services to Federal annuitants.

Federal Investigative Services.—Provides investigative products and services for over one hundred Federal agencies to use as the basis for security clearance or suitability decisions as required by Executive Orders and other rules and regulations. Over ninety percent of the Government's background investigations are provided by OPM. This function is completely financed by payment for these services from other Federal agencies through OPM's revolving fund.

Human Resources Solutions.—Assists Federal agencies in achieving their missions by providing solutions that develop leaders, attract and build a high quality public sector workforce, and transform agencies into high performing organizations. This function is completely financed by payment for these services from other Federal agencies through OPM's revolving fund.

Object Classification (in millions of dollars)

Employment Summary

For necessary expenses of the Office of Inspector General in carrying out the provisions of the Inspector General Act of 1978, including services as authorized by 5 U.S.C. 3109, hire of passenger motor vehicles, [$3,148,000] $2,136,000, and in addition, not to exceed [$21,215,000] $20,428,000 for administrative expenses to audit, investigate, and provide other oversight of the Office of Personnel Management's retirement and insurance programs, to be transferred from the appropriate trust funds of the Office of Personnel Management, as determined by the Inspector General: Provided, That the Inspector General is authorized to rent conference rooms in the District of Columbia and elsewhere. (Financial Services and General Government Appropriations Act, 2010.)

Program and Financing (in millions of dollars)

This appropriation provides agency-wide audit, investigation, evaluation, inspection, and administrative sanction and debarment functions to identify program management, contractual, and administrative deficiencies that may create conditions for fraud, waste, abuse, and mismanagement. During 2009, the Office of Inspector General (OIG) activities resulted in positive financial impacts of over $173 million and led to 104 arrests, 119 indictments, 76 criminal convictions, and 836 suspensions or debarments within the Federal Employees Health Benefits Program (FEHBP).

The audits function provides internal agency audit, health and life insurance audit, contract audit, and information systems audit services. Internal agency audits review all facets of agency operations, and include the oversight of the agency financial statement audit. Insurance audits review the operations of health and life insurance carriers, health care providers, pharmacy benefit managers, and insurance subscribers. Contract audits provide professional advice to agency contracting officials on accounting and financial matters regarding the negotiation, award, administration, repricing, and settlement of contracts. Information systems audits review both general controls and application controls for agencies' systems and programs as well as for the information systems of carriers within FEHBP.

The investigative and evaluative function detects and investigates improper and illegal activities involving agency programs, personnel, and operations. A large component of the investigative program involves activities within the health benefits, retirement and life insurance trust fund programs. Health care providers whose conduct may pose a threat to the financial integrity of benefit programs or to the well-being of insurance program enrollees are debarred by administrative sanctions from participation in the health insurance program.

In 2011, OIG will continue to develop its prescription drug audit program, which includes audits of pharmacy benefit managers. OPM estimates that approximately 26 percent of FEHBP expenses, or approximately $11 billion in 2011, will be for prescription drugs. Through these audits, OIG helps the FEHBP recover inappropriate charges, negotiate more favorable contracts, control future cost growth, and improve benefits provided to program enrollees. OIG will also continue its FEHBP data warehouse initiative in 2011. This project streamlines and enhances the various administrative and analytical procedures involved in the oversight of FEHBP. The purpose of the project is to capture data from experience-rated insurance carriers in a data warehouse of health care information. The system's software tools support a variety of analytical procedures, including data mining, using the data in the warehouse. The project has facilitated more efficient and effective oversight of FEHBP by enhancing the ability of auditors and investigators to identify improper payments.

Another challenge facing the OIG is the oversight of the vast OPM revolving fund financed programs, most notably the Federal Investigative Services Division, responsible for the Federal background investigations which have significant national security implications. The revolving fund programs are projected to spend over $1.7 billion in 2011.

The Inspector General has submitted comments setting forth the Inspector General's conclusion that this Budget's request for the Office of Inspector General "would substantially inhibit the Inspector General from performing the duties of the office" under Section 6(f)(3)(E) of the Inspector General Act of 1978, as amended. These comments are included in the congressional justification.

Object Classification (in millions of dollars)

Employment Summary

For payment of Government contributions with respect to retired employees, as authorized by chapter 89 of title 5, United States Code, and the Retired Federal Employees Health Benefits Act (74 Stat. 849), such sums as may be necessary. (Financial Services and General Government Appropriations Act, 2010.)

Program and Financing (in millions of dollars)

This appropriation covers: 1) the Government's share of the cost of health insurance for annuitants as defined in sections 8901 and 8906 of title 5, United States Code; 2) the Government's share of the cost of health insurance for annuitants (who were retired when the Federal employees health benefits law became effective), as defined in the Retired Federal Employees Health Benefits Act of 1960; and 3) the Government's contribution for payment of administrative expenses incurred by OPM in administration of the Act.

The budget authority for this account recognizes the amounts being remitted by the U.S. Postal Service to finance a portion of its post-1971 annuitants' health benefit costs.

For payment of Government contributions with respect to employees retiring after December 31, 1989, as required by chapter 87 of title 5, United States Code, such sums as may be necessary. (Financial Services and General Government Appropriations Act, 2010.)

Program and Financing (in millions of dollars)

This appropriation finances the Government's share of premiums, which is one-third the cost, for Basic life insurance for annuitants retiring after December 31, 1989, and who are less than 65 years old.

For financing the unfunded liability of new and increased annuity benefits becoming effective on or after October 20, 1969, as authorized by 5 U.S.C. 8348, and annuities under special Acts to be credited to the Civil Service Retirement and Disability Fund, such sums as may be necessary: Provided, That annuities authorized by the Act of May 29, 1944, and the Act of August 19, 1950 (33 U.S.C. 771-775), may hereafter be paid out of the Civil Service Retirement and Disability Fund. (Financial Services and General Government Appropriations Act, 2010.)

Program and Financing (in millions of dollars)

Payment of Government share of retirement costs.—This payment amortizes increases in the static unfunded liability created since October 20, 1969, by any statute which authorizes new or liberalized benefits, provides extension of retirement coverage, or authorizes pay increases.

Transfers for interest on static unfunded liability and payment of military service annuities.—This transfer covers interest on the static unfunded liability and annuity disbursements attributable to military service.

Payments for spouse equity.—This payment provides survivor annuities to eligible former spouses of annuitants who died between September 1978 and May 1986 and who did not elect survivor coverage.

Object Classification (in millions of dollars)

Program and Financing (in millions of dollars)

This account contains reserve resources required under the Office of Personnel Management's contract with the administrator of the Flexible Benefits program. This account is funded by payments from Federal agencies based on the participation of their employees in the program and from net forfeitures, as authorized by the National Defense Authorization Act for Fiscal Year 2004 (P.L. 108-136). Account assets are available to indemnify the administrator when benefit payments exceed contributions, and for program enhancements.

Special and Trust Fund Receipts (in millions of dollars)

Program and Financing (in millions of dollars)

The Postal Accountability and Enhancement Act (P.L.109-435) created the Postal Service Retiree Health Benefits Fund to help fully fund the Postal Service's retiree (annuitant) health benefits liabilities.

This account receives from the Postal Service: 1) the pension savings provided to the Postal Service by the Postal Civil Service Retirement System Funding Reform Act of 2003 (P.L.108-18) that were held in escrow during 2006; 2) payments defined within P.L.109-435, and modified by P.L. 111-68, to begin the liquidation of the Postal Service's unfunded liability for post-retirement health benefits; and 3) beginning in 2017, payments for the actuarial cost of Postal Service contributions for the post-retirement health benefits for its current employees. This account also receives any surplus resources of the Civil Service Retirement and Disability Fund that are not needed to finance future retirement benefits under the Civil Service Retirement System to current or former employees of the Postal Service that are attributable to civilian employment with the Postal Service.

As a result of this health benefits financing system, beginning in 2017, the Postal Service will cease to pay annual premium costs for its post-1971 current annuitants directly to the Employees and Retired Employees Health Benefits Fund. Instead, these premium payments will be paid from amounts that the Postal Service remits to this fund. Payments for a proportion of the premium costs of Postal Service annuitants' pre-1971 service would continue to be paid by the General Fund of the Treasury through the Government Payment for Annuitants, Employees Health Benefits account.

Program and Financing (in millions of dollars)

Budget Program.—OPM's Revolving Fund provides financing for investigations, training, and other functions that OPM is authorized or required to perform on a reimbursable basis. OPM programs offer the following:
OPM's Human Resources Solutions organization delivers integrated, expert solutions to support Federal agencies' human resources needs. These cost-effective products and services span the employment life cycle from recruitment and selection through training and development. Examples of products and services include tailored recruitment and branding, nationwide testing services (including screening for the U.S. Armed Forces), employee competency assessments, workforce and succession planning, surveys of organizational culture and climate, strategies for change, and USAStaffing, an automated recruitment and assessment tool.
OPM's Employee Services organization operates USAJOBS. The USAJOBS system serves as the one-stop solution for bringing government recruiters and job seekers together, giving recruiters the ability to create and advertise government jobs, search through job seeker resumes, and manage the hiring process through a Web interface. It provides job seekers the ability to create and advertise their resumes, search for government jobs, and apply for a job directly through the Web interface. Regulations contained in 5 CFR Parts 330, 333, and 335 that implement section 4 of Public Law 104-52 authorize OPM to charge fees to agencies to pay the cost of providing Federal employment information and services through USAJOBS.
OPM's Federal Investigative Services organization provides background investigative services to agencies on a fee basis. Federal Investigative Services conducts more than 90 percent of the Federal Government's background investigations concerning Federal employees, contractors, and military members for various Federal agencies. Investigations are a critical step in the Federal hiring process, and can affect hiring or removal decisions based on the individual's fitness and suitability for employment. Based on information gathered in background investigations, Federal agencies also issue security clearances and place individuals in sensitive positions involving national security or the public trust.
Within these programs, the revolving fund fully or partially supports three E-Government projects: E-Clearance, the Human Resources Line of Business, and Enterprise Human Resources Integration. On a fee-for-service basis, the Enterprise Human Resources Integration project provides Federal agencies with an electronic official personnel folder (eOPF) system, as well as workforce analysis and other analytical tools. These tools streamline and automate the electronic exchange of standardized HR data and provide comprehensive workforce analysis, forecasting, and reporting capabilities across the Executive Branch for the strategic management of human resources.

Financing.—This account gains spending authority from agreements with other Federal agencies who are seeking services as described above.

Operating Results.—In fiscal year 2009, OPM's revolving fund businesses had a net gain on operations of $26 million. These resources will be utilized to continue the automation of the background investigation process, enhance the functionality of the USAJOBS system, and various other program improvements.

Object Classification (in millions of dollars)

Employment Summary

Trust Funds

Special and Trust Fund Receipts (in millions of dollars)

Program and Financing (in millions of dollars)

The Civil Service Retirement and Disability Fund covers two Federal civilian retirement systems: the Civil Service Retirement System (CSRS) and the Federal Employees' Retirement System (FERS). CSRS is basically a defined benefit plan, covering Federal employees hired prior to 1984. CSRS participants do not participate in the Social Security system. FERS is a three-tiered pension program that uses Social Security as a base, provides an additional basic benefit, and includes a thrift savings plan. FERS covers employees hired after 1983 and formerly CSRS-covered employees who elected to join FERS.

The Budget proposes that the United States Patent and Trademark Office (PTO) continue to fund the full cost for retirement benefits for PTO's employees covered under the Civil Service Retirement System.

Status of Funds (in millions of dollars)

Object Classification (in millions of dollars)

Program and Financing (in millions of dollars)

This fund finances payments to private insurance companies for Federal employees' group life insurance and expenses of the Office of Personnel Management in administering the program.

The Administration proposes that PTO will fund the accruing costs associated with post-retirement life insurance benefits for PTO's employees.

Budget program.—The status of the basic (regular and optional) life insurance program on September 30 is as follows:

Financing.—Non-Postal Service employees and all retirees under 65 pay two-thirds of the premium costs for Basic coverage; agencies pay the remaining third. Optional and certain post-retirement Basic coverages are paid entirely by enrollees. The status of the reserves at the end of the year is as follows:

Program and Financing (in millions of dollars)

This display combines FEHB fund and the Retired Employees Health Benefits (REHB) fund.

The FEHB fund provides for the cost of health benefits for: 1) active employees; 2) employees who retired after June 1960, or their survivors; 3) those annuitants transferred from the REHB program as authorized by Public Law 93-246; and 4) the related expenses of OPM in administering the program.

The REHB fund, created by the Retired Federal Employees Health Benefits Act of 1960, provides for: 1) the cost of health benefits for retired employees and survivors who enroll in a Government-sponsored uniform health benefits plan; 2) the contribution to retired employees and survivors who retain or purchase private health insurance; and 3) expenses of OPM in administering the program.

Budget program.—The balance of the FEHB fund is available for payments without fiscal year limitation. Numbers of participants at the end of each fiscal year are as follows:

In determining a biweekly subscription rate to cover program costs, one percent is added for administrative expenses and three percent is added for a contingency reserve held by OPM for each carrier. OPM is authorized to transfer unused administrative reserve funds to the contingency reserve.

The REHB fund is available without fiscal year limitation. The amounts contributed by the Government are paid into the fund from annual appropriations. The number of participants at the end of each fiscal year are as follows:

Financing.—The funds are financed by: 1) withholdings from active employees and annuitants; 2) agency contributions for active employees; 3) Government contributions for annuitants appropriated to OPM; and 4) contributions made by the United States Postal Service in accordance with the provisions of Public Law 101-508.
Funds made available to carriers but not used to pay claims in the current period are carried forward as special reserves for use in subsequent periods. OPM maintains a contingency reserve, funded by employee and Government contributions, that may be used to defray future cost increases or provide increased benefits. OPM makes payments to carriers from this reserve whenever carrier-held reserves fall below levels prescribed by OPM regulations or when carriers can demonstrate good cause such as unexpected claims experience or variations from expected community rates.
The Budget proposes that the Patent and Trademark Office continue to fund the accruing costs associated with post-retirement health benefits for its employees.

Status of Funds (in millions of dollars)

(in millions of dollars)

This account represents general miscellaneous receipts of the Office of Personnel Management and receipts that must be returned to the General Fund of the Treasury.