Logosm.gif (1927 bytes)
navlinks.gif (4688 bytes)
Hruler04.gif (5511 bytes)

Back to Inspector General’s main page

Inspector General
Management Implication Report on the Use of Inter-Agency Personnel Agreements (MIR-2000-7) with Private Sector Entities
IG 13-67
August 10, 2000




Dorothy Brizill
Bonnie Cain
Jim Dougherty
Gary Imhoff
Phil Mendelson
Mark David Richards
Sandra Seegars


DCWatch Archives
Council Period 12
Council Period 13
Council Period 14

Election 1998
Election 2000
Election 2002

Election 2004
Election 2006

Government and People
Anacostia Waterfront Corporation
Boards and Com
Campaign Finance
Chief Financial Officer
Chief Management Officer
City Council
Control Board
Corporation Counsel
DC Agenda
Elections and Ethics
Fire Department
FOI Officers
Inspector General
Housing and Community Dev.
Human Services
Mayor's Office
Mental Health
Motor Vehicles
Neighborhood Action
National Capital Revitalization Corp.
Planning and Econ. Dev.
Planning, Office of
Police Department
Property Management
Public Advocate
Public Libraries
Public Schools
Public Service Commission
Public Works
Regional Mobility Panel
Sports and Entertainment Com.
Taxi Commission
Telephone Directory
University of DC
Water and Sewer Administration
Youth Rehabilitation Services
Zoning Commission

Issues in DC Politics

Budget issues
DC Flag
DC General, PBC
Gun issues
Health issues
Housing initiatives
Mayor’s mansion
Public Benefit Corporation
Regional Mobility
Reservation 13
Tax Rev Comm
Term limits repeal
Voting rights, statehood
Williams’s Fundraising Scandals


Appleseed Center
Cardozo Shaw Neigh.Assoc.
Committee of 100
Fed of Citizens Assocs
League of Women Voters
Parents United
Shaw Coalition



What Is DCWatch?

themail archives

Office of the Inspector General

Charles C. Maddox, Esq.
Inspector General

August 10, 2000

The Honorable Anthony A. Williams
District of Columbia
One Judiciary Square
441 4th Street, N.W., Suite 1100
Washington, D.C. 20001

RE: Management Implication Report on the Use of Inter-Agency Personnel Agreements (MIR-2000-7) with Private Sector Entities

Dear Mayor Williams:

This Management Implication Report (MIR) is a follow up to MIR Number 2000-4, issued by this Office on April 28, 2000, which identified a District agency that improperly contracted for the services of a private sector employee through the use of an Inter-Agency Personnel Agreement (IPA). The IPA was improper because it included a profit for the private sector entity lending its employee to the District.

The purpose of this MIR is to inform you that (1) additional "for profit" IPAs have been entered into, notwithstanding the admonishment in our April 28 MM that this practice is unlawful, and (2) that the inappropriate use of IPAs has enabled agencies to bypass laws and policies regulating the District's contracting process, salary ceilings, residency requirements, residency preferences, hiring procedures, and management accountability.

Background. District agencies were authorized by the Budget Support Act of 1995 to enter agreements to pay for the salary and fringe benefits of a private sector employee on a temporary basis in order to resolve problems affecting the District. Our April 28, 2000, MIR alerted the heads of all District agencies to the fact that "for profit" IPA arrangements - those that obligate the District to pay more than the employee's salary. or fringe benefits - violate District laws and regulations. It was noted that this Office, in concert with the Office of the Corporation Counsel, concluded that neither D.C. Code §1-628 nor Chapter 27 of the District of Columbia Personnel Manual (DCPM) may be interpreted to permit the payment of a profit, or other fees, to a private sector ear under the terms of an IPA. In fact, if a profit is to be paid to a private entity for employment or consultant services, the agreement to provide those services constitutes a contractual action subject to the requirements set forth in the Procures Practices Act (PPA).

The focus of this Office's investigation has been twofold. The first priority is that of ascertaining whether District agencies have entered into unlawful IPAs and, if so, the magnitude of that problem. The second area of concern is that of determining the extent to which the IPA is being used inappropriately, i.e., as a covert hiring system that circumvents the District's procurement regulations, its personnel objectives, and, ultimately, performance and accountability.

Unlawful IPAs.

Our investigation, subsequent to the April 28, 2000, MIR, has determined that the use of the IPA in the District is more systemic than previously known. Because of our concern that all IPAs in force have not yet been accounted for, we are not able at this time to quantify the full extent of their use. We believe that records provided to us to date about IPAs are incomplete or unclear for a number of reasons. First, IPA personnel can be funded from non-personnel budget sources. Second, IPA personnel generally do not count against an agency's complement of Full-Time Employees. Third, IPA personnel arrangements are not always coordinated with the District's Office of Personnel.

So far, we have identified five private sector agencies that have been and/or are curtly involved in twenty-seven separate IPAs with two District agencies. Of these twenty-seven IPAs, twenty-five are known to have included unlawful profits in the hourly wage or annual salary of the employee that are not in fact ever paid to the employee. During recent interviews, company officials acknowledged that the District paid a profit in at least twenty-two IPAs.

Also, a review of information developed so far during this investigation reflects that two of the IPAs noted above were initiated subsequent to the issuance of our April 28 Milt. This fact is of great concern in that such actions suggest that the heads of at least two District agencies either failed to read the MM or decided to ignore the findings therein.

Inappropriate Use of IPAs

While the use of the IPA in an unlawful manner is a serious issue, the inappropriate use of an IPA to circumvent District laws, regulations, and management oversight may have even-more dire consequences in terms of subverting efforts to achieve long term accountability and productivity in government operations and programs.

Supervision of employees. An agreement to build a profit into an EPA transforms it from an assignment of personnel to a contrail for securing consultant services (necessitating compliance with the PPA). Section 1901.3 of 27 DCMR limits the parameters of a consulting contract by prohibiting: 1) detailed control or supervision by District personnel of the contractor or its employees with respect to the day to-day operations of the contractor or the methods of accomplishment of services; 2) a regularly established tour of duty for the contractor, and 3) supervision of District employees by the contractor:

Employees working for the District under an IPA are often placid in supervisory positions. In fact, the IPA is commonly used as a mechanism to circumvent the prohibitions of section 1901.3. The eligibility of an employee retained by a for profit IPA to supervise others or to be supervised is legally questionable; the practice of entrusting an IPA employee, or any other contractor, with managerial/supervisory responsibility is administratively questionable.

Avoidance of Residency Requirements and Salary Ceilings. Recently this Office conducted an inquiry involving a nonresident federal retiree who was hired as a District Government employee in a position that required him to relocate his residence into the District within six months. A few months after being hired, this employee negotiated an IPA at a significantly higher salary with a local corporation, resigned from his position with the District, and returned to the same job without relocating (he has since resigned).

We have encountered a significant number of IPA personnel whose salaries grossly exceed the District Schedule salary range for their job descriptions. Several command salaries in excess of $200,000 for performing work similar to peers at significantly lower salary ceilings.

Recruitment and Hiring Policy. The IPA, because it was intended to be limited to temporary difficult-to-fill positions, bypasses District recruitment and selection procedures and prevents career employees - as well as the public at large - from competing. In fact, section 1900.8 of 27 DCMR prohibits contrails for expect or consulting services from being awarded in such a manner as to give preferential treatment to former District employees. In addition, contractors are usually exempt from due diligence checks concerning nepotism, prior criminal convictions,- and credential verification that apply-to District employees For these reasons, sufficient review and . oversight is required to ensure that the IPA is strictly limited to its intended use. Early indications are that IPAs have been used for positions that are not difficult to fill.

This MIR is intended to update you and agency heads prior to the conclusion of our inquiry so that appropriate remedial action can be taken immediately. At this time, I am recommending the following:

  • The Office of Personnel should develop a procedure to identify and evaluate all on-board IPAs and IPA applicants to ensure that all contracts are accounted for, reviewed for legal sufficiency, and that justification exists for not competing the position at career employee salary levels.
  • The Office of the Corporation Counsel should review all IPAs entered into between the District and a private entity to ensure compliance with relevant laws and regulations.

Upon completion, the final results of our investigation will be provided to you with additional recommendations for corrective action. If you have any questions about this report, please call me or Austin Andersen, Deputy Inspector General, at (202) 727-9553.


Charles . Maddox, Esq.
Inspector General

cc: See Attached Distribution List

The Honorable Alice M. Rivlin, Chairman, DCFRA (1 copy)
Mr. Francis Smith, Executive Director, DCFRA (1 copy)
Mr. Russell Smith, Chief of Staff, DCFRA (5 copies)
The Honorable Anthony A- Williams, Mayor, District of Columbia (1 copy)
Dr. Abdusalam Omer, Chief of Staff (1 copy)
Mr. Norman Dong, City Administrator/Deputy Mayor for Operations (1 copy)
Ms. Peggy Armstrong, Mayor's Press Secretary (1 copy)
Ms. Lydia Sermons, Director, Office of Communications (1 copy)
The Honorable Linda W. Cropp, Chairman, Council of the District of Columbia (1 copy)
Ms. Phyllis Jones, Secretary to the Council (13 copies)
The Honorable Kathleen Patterson, Chairperson, Committee on Government Operations, Council of the District of Columbia (1 copy)
Dr. Natwar M. Gandhi, Chief Financial Officer (4 copies)
Ms. Deborah K. Nichols, D.C. Auditor (1 copy)
Mr. Elliott Branch, Director, Office of Contracting and Procurement (1 copy)
Mr. Jeffrey C. Steinhofl; Assistant Comptroller General, GAO (1 copy)
Ms. Gloria Jarmon, Director, Civil Audits, HERS, GAO (1 copy)
The Honorable Eleanor Holmes Norton, D. C. Delegate, House of Representatives (1 copy)
Mr. Jon Bouker, Office of the Honorable Eleanor Holmes Norton (1 copy) ,
The Honorable Ernest J. Istook, Jr., Chairman, House Committee on Appropriations, Subcommittee on D.C. (1 copy)
The Honorable James Moran, House of Representatives Committee on Appropriations
Mr. John Albaugh, Office of the Honorable Ernest J. Istook, Jr. (1 copy)
Mr. Migo Miconi, Clerk, House Subcommittee on D.C. Appropriations (1 copy)
The Honorable Tom Davis, Chairman, House Committee on Government Reform and Oversight, Subcommittee on D.C. (1 copy)
Mr. Howard Denis, Staff Director, House Committee on Government Reform and Oversight, Subcommittee on D.C. (1 copy)
Mr. Robert Dix, Clerk, House Committee on Government Reform and Oversight, Subcommittee on D.C. (1 copy)
The Honorable George V. Voinovich, Chairman, Senate Subcommittee on Government Oversight (1 copy)
Mr. Peter M. Rowan, Legislative Clerk, Senate Subcommittee on Government Oversight (1 copy)
The Honorable Kay Bailey Hutchison, Chairman, Senate Appropriations, D.C. Subcommittee (1 copy)
Ms. Mary Beth Nethercutt, Clerk, Senate Committee on Appropriations, D.C. Subcommittee (1 copy)
Mr. Tim Aiken, Office of The Honorable James Moran (1 copy)

Back to top of page

Send mail with questions or comments to webmaster@dcwatch.com
Web site copyright ©DCWatch (ISSN 1546-4296)