Management Advisory Memorandum 16-20

As part of its ongoing review of the Small Business Administration’s (SBA) pay setting practices, the Office of Inspector General (OIG) issued Report 16-20, which provides SBA with early notification of issues identified as part of our review.  We identified that Executive Resources set initial pay higher than allowed for 4 out of 10 Senior Executive Service (SES) employees we reviewed.  Additionally, for one political SES hired in March 2015, Executive Resources set the initial pay based on the 2015 SES pay table instead of 2013, which resulted in an overpayment of $969.  Furthermore, because SBA lost its SES certification on August 25, 2015, the pay levels for newly appointed political SESs hired after that date must be based on 2013 rates of basic pay for agencies without a certified SES performance appraisal system.  Nevertheless, Executive Resources set the initial pay for three political SESs above level III of the 2013 executive pay schedule after SBA lost its SES certification, which amounted to overpayments totaling $6,704.  In total, the four SES appointees received overpayments totaling $7,673.  Accordingly, this advisory contains three recommendations to strengthen internal controls over pay setting practices.  SBA management agreed to implement these recommendations, including recovering the overpayments.