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Board Report: 2015-MO-B-006 March 31, 2015

The Board Can Enhance Its Diversity and Inclusion Efforts

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Appendix B: Scope and Methodology

The overall objective for this audit was to assess the Board’s human resources–related functions and other efforts to provide for equal employment opportunities, including equal opportunity for minorities and women to obtain senior management positions, and for racial, ethnic, and gender diversity in the workforce. The scope of our audit included the Board’s human resources–related operations affecting diversity and inclusion from January 2011 through December 2013. We also considered any changes that occurred during 2014.

We gained an understanding of the Board’s human resources–related functions within our scope, which include recruiting and hiring, performance management, promotions and succession planning, complaints, and employee satisfaction surveys, by reviewing relevant Board policies and procedures and interviewing Board divisions responsible for performing these functions. Specifically, we met with officials from the OD&I and HR, as well as representatives from the economics-related divisions and the Legal Division, to discuss topics such as key personnel, roles and responsibilities, systems and applications, and policies and procedures. 

We identified Board policies and procedures related to recruiting and hiring, employee complaints, and performance management, as well as guidance and best practices related to diversity and inclusion. We reviewed relevant Board policies and procedures to identify internal controls that may prevent or detect bias or discrimination. The Board has a limited number of policies related to its human resources–related functions. As a result, we selected two internal controls related to preventing or detecting discrimination or bias in the performance management process to conduct compliance testing with policies and procedures. 

We collected and analyzed data from HR to identify trend statistics related to the Board’s workforce, recruiting and hiring, performance management, promotions, and separations. In addition, we analyzed data related to informal and formal EEO complaints and non-EEO complaints. We assessed the reliability of all the data we obtained to ensure that they were sufficiently reliable for the purposes of our analysis. As part of our data reliability evaluation, we observed the Board extract the data it provided us from the Board’s centralized database of record for all of the human resources–related activities except for EEO complaints. We also obtained screenshots of the queries it used to extract the data. In the case of EEO complaints, we did not verify this information, as the Board informed us of the potential for privacy issues associated with the OIG’s extracting or observing the extraction of these data; however, officials provided us with the summary data, and we attempted to use publicly available sources to verify the cases the Board provided us. After we determined that the data were reliable for the purposes of our audit, we analyzed the data based on sex, race/ethnicity, and age, where possible. 

We examined workforce demographics agency-wide and by pay grade category. We also compared the workforce demographics data to the data from the ACS published by the U.S. Census Bureau, which serves as the primary external benchmark for comparing the sex and race/ethnicity composition of an organization’s workforce. We examined the demographics of the applicants processed during each phase of the Board’s hiring process. 

For performance management, we coordinated with the four other federal financial regulatory agency OIGs that had received a similar congressional request to use the services of an external consulting firm. The external consulting firm analyzed, on an agency-wide basis, the Board’s FY 2011, FY 2012, and FY 2013 performance ratings by gender, race/ethnicity, and age. The external consulting firm’s analysis is provided in its entirety in appendix E of this report. In addition, we conducted an internal analysis of the performance ratings by division. 

We analyzed data for career-ladder promotions, exit survey results, EEO complaints, non-EEO complaints, and Board separations. We assessed the Board’s efforts (1) to respond to complaints or other potential indications of bias and (2) to increase diversity in management.

We evaluated the OD&I’s role and involvement in monitoring (1) the impact of the Board’s human resources–related policies on minorities and women and (2) the agency’s efforts to increase diversity in senior management positions and within the agency. We reviewed documents and conducted interviews with OD&I officials to assess its efforts to respond to EEO complaints. We also reviewed documents, conducted interviews, and applied best practices to evaluate the OD&I’s efforts as they relate to diversity and inclusion and the provision of training to management and staff. In addition, we reviewed Board documents and conducted interviews with OD&I officials to evaluate compliance with applicable sections of the Dodd-Frank Act.

Finally, we interviewed Board division officials to gain an understanding of the Board’s challenges in achieving diversity throughout the agency and within senior management. Through these interviews, we sought to gain management’s perspective on 

  • diversity challenges and strategies to enhance diversity and succession planning efforts for critical management positions
  • division interactions with the OD&I
  • the OD&I’s role and involvement in monitoring the effect of the Board’s human resources–related policies on minorities and women

We conducted our audit fieldwork from May 2014 to November 2014. We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objective. We believe that the evidence obtained provides a reasonable basis for our finding and conclusions based on our audit objective.