REPORT DIGEST

 

EXEMPTIONS GRANTED BY THE CIVIL SERVICE COMMISSION

 

MANAGEMENT AUDIT

 

Release Date: June 24, 2010

 

State of Illinois, Office of the Auditor General

WILLIAM G. HOLLAND, AUDITOR GENERAL

 

To obtain a copy of the Report contact:

Office of the Auditor General, Iles Park Plaza, 740 E. Ash Street, Springfield, IL 62703

(217)    782-6046 or TTY (888) 261-2887

 

This Report Digest and Full Report are also available on the worldwide web at www.auditor.illinois.gov

­­­­­­­­­­­____________________________

 

 

SYNOPSIS

 

House Resolution Number 140 directed the Auditor General to determine whether the Civil Service Commission’s granting of exemptions from the merit and fitness requirements (Jurisdiction B) of the Personnel Code was consistent with applicable State law and rules.  The Personnel Code allows exemptions if the position involves principal administrative responsibility for the determination of policy or the way policies are carried out.

The Personnel Code allows the Commission to use its judgment in awarding exemptions.  However, the administrative rules in place during the audit period required that the position meet certain reporting requirements before qualifying for an exemption.  Our audit found that:

 

• For all 50 positions in our sample, the granting of the exemption was consistent with State law.

• For 20 of the 50 positions (40%) in our sample, however, the granting of exemptions was not consistent with the more restrictive administrative rule requirements.

• The Commission proposed new administrative rules which were initially published in the Illinois Register on April 10, 2009, and were adopted effective March 3, 2010.  The new rules substantially change the requirements to qualify for an exemption, listing factors the Commission should consider when determining if a position qualifies for an exemption.

• A majority (341 or 61 percent) of the 559 exempt positions approved during the audit period were approved during the first two years (2003-2004) of the audit period.  These included certain types of positions such as 25 human resource positions and 20 Chief Financial Officer positions.

• During the six-year audit period, the number of exempt positions increased from 396 on December 31, 2002, to 840 exempt positions on December 31, 2008, an increase of 112 percent.

• As of December 31, 2008, 205 of the 840 (24%) exempt positions were vacant and as of March 1, 2010, 95 of the 205 (46%) vacant positions remained vacant.

• In recent years, the Commission has identified positions that were vacant for extended periods of time and has actively sought to rescind the exempt status of those positions.

• Once a position is approved for exempt status, neither the Commission nor Central Management Services monitors the exempt position to ensure that the duties performed match the job description and the positions are being used as presented at the time of approval.

 

REPORT CONCLUSIONS

 

The Personnel Code (Section 4d(3)) establishes the authority for the Civil Service Commission (Commission) to grant exemptions for positions that, in the judgment of the Commission, involve principal administrative responsibility for the determination of policy or the way in which policies are carried out.  This section of the Personnel Code allows the Commission to exempt positions from the merit and fitness requirements (Jurisdiction B) of the Personnel Code.  House Resolution Number 140 directed the Auditor General to conduct an audit of exemptions granted during the period from January 1, 2003, to December 31, 2008, to determine if the granting of exemptions was consistent with State law and rules.

 

A total of 559 positions were approved for exempt status during the six-year audit period.  A majority of the positions, 341 or 61 percent, were approved during the first two years (2003-2004) of the audit period. 

At various times, positions were approved as the result of new Executive Orders, such as the Shared Services Initiative, or new programs within agencies, such as the Opportunity Returns program at the Department of Commerce and Economic Opportunity (DCEO).  During the course of the audit period, 23 positions were approved for exemption as a result of the Shared Services Initiative.  When the first positions were approved, it was represented to the Commission that the creation of the Shared Services Centers would ultimately reduce the overall number of exempt positions.  However, as of April 2010, there had not been a net reduction in positions as a result of the Shared Services Initiative.

 

We also noted patterns of similar types of positions approved across agencies.  For example, there were 25 human resource positions and 20 Chief Financial Officer positions approved, the majority of which were approved over a 12-month period beginning in March 2003.

 

For all 50 positions in our sample, the granting of the exemption was consistent with the Personnel Code which allows the Commission to use its judgment in awarding exemptions.  However, 40 percent (20 of 50) did not meet the more restrictive requirements of the administrative rules which specified that before a position shall qualify for exemption, the position shall be directly responsible to one of seven reporting options.

Commission staff stated that the Commission has never considered itself bound by the administrative rules and considers the rules to be guidelines for its staff and agencies.  If, in the Commission’s collective judgment, a position meets the criteria set forth in the statute, staff believes the Commission is obligated to approve it regardless of any self-imposed non-statutory criteria.

 

The Commission proposed new administrative rules which were initially published in the Illinois Register on April 10, 2009, and were adopted effective March 3, 2010.  The new rules substantially change the requirements to qualify for an exemption.  The new rules eliminated the specific reporting requirements and now, similar to the Personnel Code, allow the Commission to exercise its judgment when determining whether a position qualifies for exemption.

 

Over the years, the Commission has established various precedents for approving exempt positions even though the positions may not meet the requirements for exempt status.  The established precedents are informal and are not documented in Commission policy.  Commission officials noted that the Commission may look at past precedent but that every position up for approval is unique and is considered on its own merits. 

 

When agencies submit a position description that describes the essential functions of the position, the position description can be written so that it meets the broad requirements of the statute.  However, once a position is approved for exempt status, neither the Commission nor Central Management Services (CMS) monitors the exempt position to ensure that the duties being performed match the job description.  While not specifically required by statute or the administrative rules, monitoring positions would help ensure that the duties performed match the job descriptions and the positions are being used as presented at the time of approval.

During the audit period, the number of exempt positions increased from 396 on December 31, 2002, to 840 exempt positions on December 31, 2008, an increase of 112 percent.  The Department of Central Management Services saw the biggest increase during that time period going from 7 exempt positions to 110 exempt positions, an increase of 1,471 percent.

 

As of December 31, 2008, 205 of the 840 (24%) exempt positions were vacant and as of March 1, 2010, 95 of the 205 (46%) vacant positions remained vacant.  For positions where information was available, the number of days vacant ranged from 136 days (International Trade Liaison at DCEO) to 3,614 days (Assistant Superintendent Operations at Pere Marquette at Juvenile Justice) with an average of 932 days vacant, or over two and a half years.  While most agencies stated in our survey that these vacant positions were needed, responses indicated that 15 of the vacant positions were no longer needed.

 

Also in response to our survey, agencies stated that 28 of 840 positions failed to meet the statutory or administrative rule requirements for exempt status.  Fifteen of these positions have since been abolished, are in the process of being abolished, or had their exempt status rescinded by the Commission.  However, the remaining 13 positions continue as 4d(3) exempt positions even though they do not meet the requirements for exempt status as self-reported by the agencies.

 

The Commission has identified positions that were vacant for extended periods of time and has actively sought to rescind the exempt status of those positions.  During calendar years 2007 to 2009, the Commission rescinded the exempt status of 52 positions, many of which were initiated by the Commission.  This compares to only 12 positions that were rescinded during the four-year period from 2003 to 2006.  The Commission should examine positions identified through our agency survey to determine if those positions should have their exempt status rescinded.

 

BACKGROUND

 

On May 30, 2009, the Illinois House of Representatives adopted House Resolution Number 140 which directed the Auditor General to conduct an audit of exemptions granted by the Civil Service Commission pursuant to its authority under item (3) of subsection (d) of Section 4 of the Personnel Code.  This gives the Commission the authority to approve requests for exemption from Jurisdiction B of the Personnel Code.  The audit is to determine if the granting of such exemptions was consistent with applicable State law and rules.  The time period specified in the Resolution is the period from January 1, 2003, to December 31, 2008. (page 3)

 

 STATUTES AND RULES

 

The Personnel Code gives the authority for the Civil Service Commission to grant exemptions from Jurisdiction B of the Personnel Code.  Jurisdiction B deals with merit and fitness requirements such as examination requirements, veteran preferences, and hiring procedures.  This authority is granted under item (3) of subsection (d) of Section 4 of the Personnel Code and the exemptions granted are referred to as 4d(3) exemptions.  This is the section that is the subject of the audit.  The Personnel Code states:

The Civil Service Commission, upon written recommendation of the Director of Central Management Services, shall exempt from jurisdiction B other positions which, in the judgment of the Commission, involve either principal administrative responsibility for the determination of policy or principal administrative responsibility for the way in which policies are carried out, except positions in agencies which receive federal funds if such exemption is inconsistent with federal requirements, and except positions in agencies supported in whole by federal funds. [20 ILCS 415/4d(3)]

The administrative rules further define the requirements that a position must meet to be declared exempt.  These rules were in effect during the audit period.  Section 1.142(a) contains seven reporting requirements.  The position must be directly responsible to one of these seven reporting options to qualify for an exemption.

 

Section 1.142(a)  Jurisdiction B Exemptions

a)   Before a position shall qualify for exemption from Jurisdiction B under Section 4d(3) of the Personnel Code, the position shall be directly responsible to:

1)   The Governor, or

2)   A departmental director or assistant director appointed by the Governor, or

3)   A board or commission appointed by the Governor, or

4)   The head of an agency created by Executive Order, or the director or assistant director of an agency carrying out statutory powers, whose offices are created by the Governor subject to legislative veto under Article V, Section 11, of the Constitution of 1970, which agency head, director, or assistant director may themselves be subject to exemption under Section 4d(3), or

5)   In an agency having a statutory assistant director, a deputy director exercising full line authority under the director for all operating entities of the agency, provided the statutory role of assistant director is vacant or is assigned clearly distinct and separate duties from the deputy director and as a colleague to him, or

6)   A line position organizationally located between the director and/or assistant director and a subordinate statutorily exempt position(s), provided the position proposed for exemption has line authority over the statutorily exempt position(s), or

7)   The elected head of an independent agency in the executive, legislative, or judicial branch of government. (80 Ill. Adm. Code 1.142)

 

New Administrative Rules

The Commission recently proposed new rules to change the requirements that must be met to qualify for an exemption.  The proposed rules were initially published in the Illinois Register on April 10, 2009.  The new rules were adopted effective March 3, 2010.  The new rules substantially change the requirements to qualify for an exemption.  The new rules take away the specific reporting requirements and instead list factors that the Commission should consider in exercising its judgment when determining if a position qualifies for an exemption. (pages 4-6)

Section 1.142  Jurisdiction B Exemptions (New rules effective March 3, 2010)

a)   The Civil Service Commission shall exercise its judgment when determining whether a position qualifies for exemption from Jurisdiction B under Section 4d(3) of the Personnel Code.  The Commission will consider any or all of the following factors inherent in the position and any other factors deemed relevant to the request for exemption:

1)   The amount and scope of principal policy making authority;

2)   The amount and scope of principal policy administering authority;

3)   The amount of independent authority to represent the agency, board or commission to individuals, legislators, organizations or other agencies relative to programmatic responsibilities;

4)   The capability to bind the agency, board or commission to a course of action;

5)   The nature of the program for which the position has principal policy responsibility;

6)   The placement of the position on the organizational chart of the agency, board or commission;

7)   The mission, size and geographical scope of the organizational entity or program within the agency, board or commission to which the position is allocated or detailed. (80 Ill. Adm. Code 1.142)

 

EXEMPTIONS GRANTED DURING AUDIT PERIOD

A total of 559 positions were approved for exempt status during the six-year audit period.  Digest Exhibit 1 shows the number of positions approved each year.  A majority of the positions, 341 or 61 percent, were approved during the first two years of the audit period.

The Commission does not maintain an overall tracking document that explains the reason behind each exemption request or classifies approvals into groups.  At various times, positions were approved as the result of new Executive Orders, such as the Shared Services Initiative, or new programs within agencies, such as the Opportunity Returns program at DCEO. 

During the course of the audit period, 23 positions were approved for exemption as a result of the Shared Services Initiative.  The first exempt positions for Shared Services were approved in July 2006.  At that time, it was anticipated that when the Shared Services Centers became operational, there would be a significant amount of overlapping responsibilities with an unknown number of current 4d(3) exempt positions.  In April 2010, we asked Commission officials if there had been a net reduction as a result of the Shared Services Initiative.  Officials said that there has not been a reduction but that it could still occur in the future.

To help explain the number of positions approved, we classified positions into broader categories.  For example, 18 positions were approved during the audit period as a result of the creation of the Office of Communication and Information which was created as part of the media relations consolidation under Executive Order 2004-2.  Another 20 positions were approved in Property Management as a result of Executive Order 2003-10 which consolidated the facilities management function into CMS.

In reviewing the positions approved we also noted patterns of similar types of positions approved across agencies.  Digest Exhibit 2 shows some of the different types of positions approved across agencies.  For example, there were 25 human resource positions approved at 22 different agencies; 18 of these positions were approved during a 12-month period beginning in March 2003.  These positions were primarily the managers of the human resources bureaus within these agencies.  There were 20 Chief Financial Officer positions approved at 19 different agencies, 10 of which were during the same 12-month period. (pages 12-17)

RESULTS OF TESTING

We judgmentally selected a sample of 50 positions that had been approved for exempt status during the audit period.  We examined each position to determine whether the granting of the exemption was consistent with statute and rule requirements. 

Meeting Statutory Requirements

For all 50 positions in our sample, the granting of the exemption was consistent with statutory requirements.  The Personnel Code is written to allow the Commission to use its judgment in determining whether a position meets the requirements. 

Meeting Administrative Rule Requirements

For 20 of the 50 positions (40%) in our sample, the granting of exemptions was not consistent with the administrative rule requirements.  While the Personnel Code allows the Commission to use its judgment in awarding exemptions, the administrative rules specified that before a position shall qualify for exemption, the position shall be directly responsible to one of seven reporting options.  In all 20 instances, the positions did not meet the reporting requirements outlined in the administrative rules.  Digest Exhibit 3 lists the positions from our sample that did not meet the administrative rule requirements.

In the opinion of Commission staff, beginning with the first exemptions approved in 1958, the Commission has approved positions that do not meet the reporting requirements in the administrative rules.  Commission staff stated that the Commission has never considered itself bound by the administrative rules and considers the rules to be guidelines for its staff and agencies.  If, in the Commission’s collective judgment, a position meets the criteria set forth in the statute, staff believes the Commission is obligated to approve it regardless of any self-imposed non-statutory criteria. (pages 17-25)

PRECEDENTS ESTABLISHED BY THE COMMISSION

Over the years, the Commission has established various precedents for approving exempt positions even though the positions do not meet the requirements for exempt status.  The established precedents are informal and are not documented in Commission policy.  Commission officials noted that the Commission may look at past precedent but that every position up for approval is unique and is considered on its own merits. 

Although not documented in a policy, the Commission appears to be aware of its past actions and tries to remain consistent with those past actions.  For example, we noted several examples where the meeting minutes stated that consistent with past decisions of the Commission, staff recommended approval.  While consistent with past actions, the approvals were not always consistent with the requirements in the administrative rules.  We noted, however, at least one example where the Commission was not consistent in approving a type of position for exemption. 

As discussed previously, the rules governing 4d(3) exemptions were changed effective March 3, 2010.  The more subjective nature of the new rules makes the reliance on past precedent more important.  Documenting the Commission’s past precedent would assist agencies submitting exemption requests and would help ensure consistency in granting exemptions. (pages 25-27)

MONITORING APPROVED POSITIONS

Once a position is approved for exempt status, neither the Commission nor CMS monitors the exempt position to ensure that the duties being performed match the job description.  As specified in statute, the Commission approves positions for exemption based on whether the positions involve either principal administrative responsibility for the determination of policy or principal administrative responsibility for the way in which policies are carried out.  Job descriptions could be tailored to meet this broad definition. 

While not specifically required by statute or the administrative rules, monitoring positions would help ensure that the duties performed match the job descriptions and the positions are being used as presented at the time of approval.  Monitoring could include periodically sampling positions identified by the Commission.  These positions could include, for example, ones where the Commission had questions during the approval process about the duties being performed. (pages 28-29)

AGENCY SURVEY

As part of our audit testing, we compiled a list of 4d(3) exempt positions as of December 31, 2008.  The list was compiled using information from both the Commission and CMS.  Based on this list, we sent a survey to all agencies that had at least one 4d(3) exempt position.  The survey asked the agencies to verify that the listed positions were 4d(3) exempt positions at their agencies.  All agencies responded to the survey.

Digest Exhibit 4 shows the number of exempt positions at each agency as of December 31, 2008.  The exhibit also shows the number of exempt positions as of December 31, 2002, as reported in the Commission’s January 2003 meeting minutes and the percent increase or decrease over the six-year period.

As of December 31, 2008, there were 840 exempt positions at 38 agencies – the 37 agencies shown in Digest Exhibit 4 plus the Department of Juvenile Justice.  This compares to a total of 396 exempt positions as of December 31, 2002, an increase of 112 percent over the six-year period.  CMS had the largest increase going from 7 exempt positions to a total of 110 positions, an increase of 1,471 percent.  Twelve agencies experienced a slight decrease, or no change, in the number of exempt positions over the six-year period.

Vacant Positions

The results of our agency survey showed that, as of December 31, 2008, 205 of the 840 (24%) exempt positions were vacant.  If the position was vacant, agencies were asked if the position was still vacant at the time of the survey.  As of March 1, 2010, 95 of the 205 (46%) vacant positions remained vacant. 

Agencies were also asked if the position was still vacant, how long it had been vacant.  Of the 95 vacant positions, agencies provided a time period for 66 of the vacant positions.  The number of days vacant for these 66 positions ranged from 136 days (International Trade Liaison at DCEO) to 3,614 days (Assistant Superintendent Operations at Pere Marquette at Juvenile Justice) with an average of 932 days vacant or over two and a half years.  While most agencies stated in our survey that these vacant positions were needed, responses indicated that 15 of the vacant positions were no longer needed.

Meeting Personnel Code and Administrative Rule Requirements

The final question of the agency survey asked whether the exempt position continued to meet the requirements for exempt status as outlined in the Personnel Code and the administrative rules.  Agencies responded that 28 of the 840 positions failed to meet the statutory (Personnel Code) requirements, the administrative rule requirements, or both.  Fifteen of these positions have since been abolished, are in the process of being abolished, or had their exempt status rescinded by the Commission.  However, the remaining 13 positions continue as 4d(3) exempt positions even though they do not meet the requirements for exempt status as self-reported by the agencies.

The survey asked agencies to explain why the positions did not meet the statutory and administrative rule requirements.  For the active positions, one agency noted that the position was recently placed in the AFSCME (American Federation of State, County and Municipal Employees) bargaining unit.  Another agency stated that the position does not direct programs defined by statute, nor does it make decisions in exercising principal responsibility for the determination or execution of policy.  The Commission should examine these positions to determine whether their exempt status should be rescinded. (pages 37-41)

RESCINDING EXISTING EXEMPT POSITIONS

In addition to approving positions for exempt status, the Commission also acts to rescind exempt status from positions.  Agencies can ask that positions have their exempt status rescinded or the Commission can initiate the action.  Rescinding a position does not mean the position is eliminated, only that the position is subject to the merit and fitness provisions of the Personnel Code and rules.

The Commission rescinded 64 positions from 2003 to 2009, 34 of which were during the six-year audit period.  As Digest Exhibit 5 shows, the Commission has actively pursued the rescission of positions in recent years.  During calendar years 2007 to 2009, the Commission rescinded the exempt status of 52 positions, many of which were initiated by the Commission.  This compares to only 12 positions that were rescinded during the four-year period from 2003 to 2006. (pages 34-35)

AUDIT RECOMMENDATIONS

The audit report contains six recommendations.  The Commission agreed with the recommendations.  Appendix E of the audit report contains the Commission’s complete response.

 

WILLIAM G. HOLLAND

Auditor General

 

WGH\DJB

June 2010