Remote Workers Received Incorrect Locality Pay Adjustments at the Department of Energy
April 3, 2025
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March 31, 2025
Remote Workers Received Incorrect Locality Pay Adjustments at the Department of Energy
The Office of Inspector General received a Congressional inquiry to review the Department of Energy’s remote work practices. Specifically, the request expressed concern regarding the accuracy of official worksites for remote employees and their locality pay adjustments.
We initiated this inspection to determine the facts and circumstances pertaining to the concerns regarding locality pay implementation at the Department.
We found that the Department did not implement locality pay adjustments accurately five remote workers in our judgmental sample. The five employees identified each worked remotely from one location while receiving a locality pay adjustment for another location. Locality pay adjustments are determined by the cost of living in defined locality areas and should be made based on an employee’s official worksite. Further, during our inspection, the Department identified eight additional employees that were receiving incorrect locality pay adjustments. In total, those identified in our inspection were less than one percent of all remote employees in the Department.
We attributed these issues to insufficient internal controls regarding the determination of remote workers’ official worksites and locality pay adjustments. In particular, prior to our inspection, the Department did not: (1) fully implement data analytics to identify discrepancies between official worksites and locality pay adjustments; (2) specifically assign oversight responsibility for continued monitoring to ensure official worksites remained accurate; (3) require a periodic review of official worksites and recertification of Remote Work Agreements; (4) and require documentation to verify official worksites.
If remote workers receive locality pay adjustments that are higher than appropriate, the Department is not fully achieving the cost savings that can be provided by remote work arrangements.
To address the issues identified in this report, we have made three recommendations that, if fully implemented, should help ensure that the issues identified are corrected.