What to Expect During an OFCCP Audit?

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With compliance evaluations of federal contractors and subcontractors nearing 5,000 per fiscal year in the last several years, it's likely that one of your locations will receive a compliance review notice sooner rather than later. All federal contractors and subcontractors should be well prepared for an audit notice. Being caught off guard if the Office of Federal Contract Compliance Programs (OFCCP) knocks on your door could be a costly mistake for any company.



How does a contractor get notified of a compliance review?



For most, a Corporate Scheduling Announcement Letter (CSAL) is received as the initial notification of a potential compliance review. This courtesy notice informs the Chief Executive Officer or designated contact of single or multiple locations slated to receive a Scheduling Letter in the fiscal period.



It is not unusual for a federal contractor to receive a call from a compliance officer asking questions such as the name of a senior management team member and employee count at the location. This is a good sign that the facility will receive an official Scheduling Letter. Take time now to discuss how to handle this type of call with the receptionist. A proactive approach with your staff may give you a few more days to gather submission materials for the desk audit.



Once the Scheduling Letter is received, the contractor has 30 days from the date of receipt of the letter to submit the information requested to the OFCCP. A written request must be submitted to the compliance officer if more time is needed. If the OFCCP does authorize an extension, typically it is only a few extra days.



What type of information is requested in the Scheduling Letter?



The Scheduling Letter is a formal request for the written portion of the affirmative action plan, which is stated in the cover letter, and 11 items contained in the itemized listing. (Note that the Scheduling Letter is undergoing what is expected to be rather extensive modifications. The new letter is expected to be announced in the near future.) The following information should be submitted:

  1. Narrative for Females and Minorities

  2. Narrative for Covered Veterans and Disabled

  3. Workforce Analysis or Organizational Unit

  4. Job Group Analysis

  5. Incumbency vs. Availability (aka, 2-Factor Analysis)

  6. Placement Goals

  7. Goal Attainment *

  8. Collective Bargaining Agreement, if union facility

  9. EEO-1 reports for past three years

  10. Applicant, hire, promotion and termination counts for plan period *

  11. Compensation information


*If the contractor is six months or more into the current Affirmative Action Program (AAP) at the time of receiving the scheduling letter, additional reports reflecting at least six months into the new plan period are requested.



What additional information has been requested lately by the OFCCP?



For the past year, it has become common practice for contractors to receive a follow-up letter or email requesting additional information as part of the desk audit review, such as:

  1. FMLA policy

  2. List of recruiting / outreach sources with contact information

  3. Past two years VETS-100/VETS-100A reports

  4. List of religious accommodation requests and outcome

  5. List of disability accommodation request and outcome

  6. Additional information that could impact compensation


    1. Time on the job

    2. Original hire date

    3. Performance evaluation information

    4. Department

    5. Shift (if multiple shifts are available)

    6. Part-time/Full-time status

    7. Location

    8. Manager

    9. Education

    10. Certifications


  7. Policy on national origin and religion

  8. List of any employees who returned from maternity leave

  9. Reason for terminations (list of voluntary versus involuntary terminations)

  10. Copy of job application

  11. Copy of self-identification form for race/ethnicity and gender

  12. Copy of job advertisements/job postings

  13. Proof that jobs were posted with the local/state employment center



Common Violations Uncovered in an Audit



Today's most common violations seem to fall under recordkeeping practices. This includes not keeping documents for the required amount of time or not keeping a copy of applications, resumes, self-identification forms, test results, and interview notes. If you are a contractor with 150 or more employees or $150,000 or more in contracts, you are required to keep a copy of your affirmative action plan and all supporting documentation for two years from the date of producing the document or the personnel action involved, whichever is later. If neither threshold is met, the records need to be maintained for one year. If the location is under any type of investigation such as by the Department of Justice, Equal Employment Opportunity Commission or OFCCP, the records cannot be destroyed until the investigation has been closed.



Failure to develop an internal audit and reporting system is also a common violation. By regulation, contractors are required to periodically measure the effectiveness of the affirmative action program. This includes reviewing activity such as applications and hires to ensure decisions are being made in a non-discriminatory manner.



Adverse impact in hiring decisions is another violation contractors should take steps to avoid. According to the Uniform Guidelines on Employee Selection Procedures (UGESP), if adverse impact is discovered, you are required to assess each step of the hiring process. The OFCCP conducts analysis of hiring decisions, promotions, and terminations comparing genders (male/female) and race/ethnicity. If the unfavored class is found to be selected or terminated at a statistically significant rate over the other group (typically defined as two standard deviations or higher), then the OFCCP would further review the decisions made.



Although the UGESP procedures have been around since the '70s, many companies are unaware of the requirements and, therefore, fail to review the hiring process thus resulting in a technical violation. Conducting a step analysis allows the contractor to pinpoint the phase of the hiring process that caused adverse impact to occur.



Finally, failure to post external job openings with the state employment office (also known as the One-Stop Career Center) is also a technical violation under the Vietnam Era Veterans Readjustment Assistance Act. The OFCCP also reviews the contractors' logs of Good Faith Efforts to attract veterans, persons with disabilities, females, and minorities.



Tips for a Successful Audit



Preparation is key to a successful audit. Here are some tips to increase the likelihood of a successful audit.

  1. Ensure that the plan narrative and statistical analysis are prepared in a timely manner each year.

  2. Reconcile previous year and current year plan data and be able to account for all movements in and out of the plan.

  3. Document all Good-Faith Efforts including outreach, donations, and volunteer work.

  4. Hold management meetings and keep a log of attendance and topics covered.

  5. Perform monitoring analysis periodically throughout the year and review the results with key players.

  6. Perform step analysis in any areas which have adverse impact.

  7. Review compensation annually and make appropriate adjustments in pay if any pay disparities cannot be explained.

  8. Review job requirements and tests to ensure they are still valid for the position.

  9. Perform on-site reviews and check that federally required posters are properly displayed.

  10. Check that the facilities can properly accommodate persons with disabilities (e.g. parking, restrooms, doors, water fountains).

  11. Ensure that there are no posters, screen savers, pictures, or graffiti anywhere on the premises which can be offensive.

  12. Perform regular training on sexual harassment, ADAAA and any other appropriate EEO/AA training.

  13. Conduct an assessment of recruiting efforts to determine if each organization being utilized is effective in attracting qualified candidates in the areas which you have Placement Goals.



Now that you have a taste of what to expect during an OFCCP audit, you are able to more effectively dedicate time toward your AAP, which will help ensure that if you are audited today, you will have a positive audit experience. The key is to remember to prepare your plans in a timely manner, monitor the progress in any of your problem areas, report results of analyses, and document and maintain records of Good Faith Efforts, and all other support documentation.