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Inspection Report: INS-L-13-06

Wednesday, August 21, 2013

Allegations of Irregular Hiring Practices and Preferential Treatment in the Loan Programs Office

The Department of Energy’s (Department) Loan Programs Office (LPO) grants and monitors loans to private sector entities to develop new clean energy technologies.  LPO was authorized by the Energy Policy Act of 2005 with the goal of creating jobs, reducing dependency on foreign oil, improving the Department’s environmental legacy, and enhancing American competitiveness in the global economy of the 21st century.  As with most Departmental programs, LPO relies on both Federal and contractor employees to carry out its mission.  With the support of the Department’s human resources officials, LPO recruits and hires Federal employees.  Federal regulations prohibit employees from granting any preference or advantage to applicants for Federal employment, unless specifically prescribed by law.  Regarding contractor support, with limited exception, Federal employees are prohibited from becoming involved in contractor employee personnel matters.

The Office of Inspector General received a complaint alleging that a senior LPO official: (1) hired a “friend” for a Federal program position; and (2) directed a contractor to hire six individuals.  We initiated this inspection to examine the facts and circumstances surrounding these allegations.

Our inspection identified actions taken by a senior LPO official that could have caused others to perceive a misuse of position. Specifically, we substantiated the allegation that the senior LPO official hired a "friend" for a Federal position. Regarding the second allegation related to directed contractor hiring, we found that the senior LPO official had, in fact, not only referred six individuals, but actually referred a total of 10 individuals with whom the official was affiliated, to a support service contractor for hiring consideration. However, we did not substantiate the allegation that the official actually directed the hiring of the referred individuals. Nonetheless, the actions by the senior LPO official could have created the appearance that the official was inappropriately involved in the contractor's hiring process.

Topic: Human Resources