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2016 Annual report Volume II No. 38 - Institute for Federal Real Estate intends to enhance official travel procedures

The Institute for Federal Real Estate intends to take speedy organisational and personnel management action to enhance the authorisation of official travel and travel expense accounting revealed by our audit. Following our advice, the Federal Finance Ministry instructed the Institute for Federal Real Estate to ensure appropriate staffing of these functions.

We had audited travel expense management in the Institute for Federal Real Estate. The Institute accepted all our findings and promised to eliminate the deficiencies as well as to adjust the necessary internal regulations. We then concluded our audit.

Ten months after conclusion of the audit, we enquired with the Institute about the status of implementation. It turned out that the Institute had not taken any further steps to address the shortcomings we stated.

We informed the Federal Finance Ministry about the delay in implementing our recommendations. The Ministry’s response was to instruct the Institute’s managing board to ensure that the relevant functions are staffed appropriately in order to cope with workload peaks. It assured us that the Institute will take the necessary organisational and personnel management action to avoid such delays in the future.

 

2016 Annual report Volume II No. 24 - Armed Forces intend to cut 17 posts for the maintenance of the PATRIOT Air Defence Guided Missile System

Following our recommendations, the Armed Forces will cut 17 posts for the maintenance of the PATRIOT Air Defence Guided Missile System up to 2018.

The Armed Forces operate the ground-based PATRIOT Air Defence Guided Missile System to intercept aircraft, cruise missiles and intermediate-range missiles in low to very high altitudes.

We pointed out that the Armed Forces overestimated the input needed for the maintenance of the PATRIOT systems. As a consequence, it made excessive assessment of personnel needs. The personnel assigned were not used to full capacity.

We recommended that the Armed Forces reassess the personnel needs for the maintenance of the PATRIOT Air Defence Guided Missile System.

The Federal Ministry of Defence followed our recommendations. It had personnel needs reassessed and now intends to cut 17 posts.

 

2016 Annual report Volume II No. 10 - German Aerospace Centre will in future comply with the ban on more favourable treatment

The Economics Ministry promised that the German Aerospace Centre will in future comply with the ban on more favourable treatment.

The Federal Government provides institutional funding of about €300 million annually to the German Aerospace Centre. These funds are allocated subject to the condition that the Centre does not grant its employees terms of employment more favourable than those enjoyed by comparable Federal Government Staff.

The Centre regularly organised excursions and team-building events for its employees, such as guided city tours, visits to museums and churches, golf trial courses or ship and boat excursions. The participants were not charged any costs. In several cases, the Centre also provided its employees with meals and drinks free of charge.

We objected to this practice since the German Aerospace Centre thus had not met the requirement subject to which the institutional funding was provided. The Centre offered its employees fringe benefits that comparable Federal Government employees do not receive. Other federal employees would have had to pay for such events.

The Ministry eventually promised that the Centre would no longer fund events of a touristic or recreational nature.

 

2016 Annual report Volume I No. 55 - Berlin Helmholtz Centre needs to make efficient use of its human resources during prolonged idle times of a large appliance

The Berlin Helmholtz Centre has not made plans for the efficient deployment of its staff during prolonged idle times of a large appliance. The Federal Ministry of Education and Research that gives grants of more than €100 million annually to the Helmholtz Centre has tolerated this situation. The Ministry and the Centre have to make better arrangements for future cases.

The Berlin Helmholtz Centre for materials and energy operates two large scientific appliances, one of them being a neutron source. A large proportion of its more than 1,100 employees do research or technical support work with the large appliances. In 2016, the Ministry gave grants of more than €100 million to the Centre.

Due to planned and unplanned idle times, the scientists were unable to use the neutron source during a total of 32 months in the period October 2010 to February 2015. According to the Centre, the idle times affected about 30 full-time equivalents (FTEs) of scientific staff and about 60 FTEs of technical staff. The Centre was only partly able to assign other duties to the staff affected.

We found that the Centre had not planned for the efficient deployment of its staff during prolonged idle times of a large appliance. The Centre has now included the risk of underemployed staff during unplanned idle times in its risk catalogue. We acknowledge this. The Ministry should take steps to ensure that all Helmholtz Centres make contingency plans for longer idle times of large appliances.

 

2016 Annual report Volume I No. 31 - The Federal Insurance Office failed to calculate staffing needs in an appropriate manner

The Federal Insurance Office did not identify its staffing needs in an appropriate manner although it was supported by the Federal Office of Administration and an external consultant. In particular, the external consultant had not been sufficiently instructed due to the bodies’ differing views on quality assurance.

The Federal Insurance Office needed to identify its staffing needs in order to respond to a request made by the German Parliament’s Budget Committee. In doing so, it was supported by the Federal Office of Administration and an external consultant. The Federal Office of Administration was responsible for quality assurance according to the manual for organisational reviews. However, the external consultant used a method not covered by the manual.

The Federal Insurance Office did not object to the use of this method. It trusted that the Federal Office of Administration checked whether manual standards were complied with and did not carry out own checks. However, according to the Federal Office of Administration, its quality assurance measures did not encompass a continued monitoring of the review. Moreover, its involvement ended prior to the end of the project.

We criticized that poor communication between the two bodies finally led to the situation that the Federal Insurance Office was not in the position to reliably determine its staffing needs. The Federal Insurance Office needs to calculate staffing needs in an appropriate manner using accepted methods.

 

2016 Annual report Volume I No. 12 - Offsetting of farmers’ pensions – reducing federal pension liabilities

Since 1986, farmers’ pensions have no longer been taken into account in calculating federal civil service pensions. However, other pensions, such as pensions from the compulsory insurance scheme, are to be offset against federal civil service pensions. The Ministry needs to take steps to also take into account farmers pensions.

The farmers’ pension scheme is a public body, 77 per cent of which is financed through tax revenues. Pursuant to the Civil Servants’ Pensions and Allowances Act, other pensions, such as pensions from the compulsory insurance scheme, are to be taken into account when calculating federal civil service pensions in order to avoid a duplication of retirement benefits from public funds. In 1986, the Federal Administrative Court held that this rule did no longer apply to farmers’ pensions.

The farmers’ pension scheme has since been harmonised with the statutory pensions insurance. In our 2001 annual report, we therefore requested the Ministry to also take into account farmers’ pensions in calculating civil service pensions. The Public Accounts Committee of the German Parliament’s Budget Committee concurred with our recommendation. Several federal states already take into account farmers’ pensions in calculating civil service pensions. Nevertheless, the Ministry did not take steps to include such a provision in the Civil Servants’ Pensions and Allowances Act.

We highlighted this weakness. Not taking into account farmers’ pensions in calculating civil service pensions leads to excessive and thus improper pension payments from various public pension bodies. Moreover, the existing procedure gives preferential treatment to retired federal civil servants also receiving farmers pensions’ compared to such civil servants receiving benefits from other statutory pension funds. We expect the Ministry to amend the Civil Servants’ Pensions and Allowances Act accordingly.

 
 

2016 Annual report Volume I No. 34 – Providing more thorough placement advice is inefficient

The Federal Employment Agency deployed additional staff for better supporting certain customer groups without providing evidence of added value of this additional staff deployment. It was unable to cover the respective expenditure by savings in unemployment benefit and additional contribution revenues as planned.

The Federal Employment Agency deploys additional job placement staff for better supporting certain job seekers. The target group includes persons who return to the labour market after a longer period of absence or who did not apply for a job for a long time. The Agency expects better service to help integrate more job seekers into the labour market. As a result, it intends to save unemployment benefits and receive additional contributions for unemployment insurance thus offsetting additional expenditure incurred.

However, the Agency failed to achieve the expected effects. Additional expenditure is not matched by the savings made. The Agency’s calculations reveal methodological flaws and do not provide evidence for the efficiency of the additional staff deployment, e.g. they did not take into account a part of the personnel costs incurred due to the enhanced support service offered.

We calculated a deficit of €33 million for 2014. We hold that deploying additional agency staff is inefficient. We asked the Agency not to assign additional staff to this service task if it is unable to ensure that costs will be matched by an equivalent amount of savings in the long run.

 

2016 Annual report Volume I No. 32 – More senior management members than provided for by law

The Federal Employment Agency deploys four members of senior management in some of its regional directorates even though law provides for only three management members. As a result, the Agency causes unnecessary personnel and material costs of about €600,000 a year.

The Federal Employment Agency has ten regional directorates in Germany. The law provides that senior management is composed of three members. In addition, he Agency deploys “authorised agents” in the four largest regional directorates to support senior management.

By deploying authorised agents, the Agency actually expanded senior management to four members. Tasks, responsibilities and remuneration do not differ from those of the other management members. This does not only violate the law but also causes costs for staff and goods of about €600,000 a year. The Agency intends to abolish the function of the authorised agents. However, it intends to replace them by “senior management staff” with the same remuneration level

 

2015 Annual report No. 60 - Need for a field service at the Federal Office of Family Affairs and Civil Society Functions

The Federal Office of Family Affairs and Civil Society Functions has not substantiated the continued need for an own field service after suspension of compulsory civilian service for conscious objectors. It assigned new tasks to 93 field service staff although there is hardly any sound basis for doing so.

When compulsory civilian service was still in place, regional representatives did field work throughout Germany. They advised and looked after the civilian service conscripts and supervised the entities in which they served. At the same time, they were disciplinary superiors of the civilian service conscripts. After suspension of the civilian service in 2011, the Federal Office continued to employ all 93 field service staff, assigning them new tasks. However, legislation does not provide for any field service in most of the cases.

We therefore questioned the nature and size of the field service. According to our calculations, it causes personnel and material expenditure of about €10 million annually. This prompted us to ask the Ministry to conduct an organisational management study on the field service. It is necessary to ascertain whether the tasks need to be performed at all or to the current extent. Moreover, there is a need to examine whether other entities can perform the tasks better or more cost-effectively. Where tasks remain with the Federal Office, it is necessary to substantiate whether they actually require a field service or can at least partly be performed from the headquarters of the Federal Office.

 

2015 Annual report No. 57 - Federal Institute for Drugs and Medical Devices intends to better assess its staffing needs

Following our recommendations, the Federal Institute for Drugs and Medical Devices has promised to use a simpler method to assess the staffing needs of its approvals divisions. To do so, it plans to edit data from its cost and performance accounting system. It intends to use trend analyses to improve the forecast of processing times, workload and working time needed for processing approvals. By using data from cost and performance accounting, the Institute will at the same time reduce the input required for assessing staffing needs.

So far, the Institute used the data generated by cost and performance accounting only for the short-term management of staffing needs in its approvals divisions.

We recommended that the Institute further refine these data and to calculate the future staffing needs of its approvals divisions on this basis. The Institute needs to calculate its staffing needs to have the respective posts included in the Federal Budget.

The Institute has promised to implement our key recommendations. It will forecast the quantitative trend of applications received by means of trend analyses and extent the methodological approach for determining staffing needs to other areas. This will enable the Institute to make robust forecasts and at the same time reduce the input required for assessing staffing needs.

 

2015 Annual report No. 04 - Outdated administrative regulations governing the legal provisions on staff pay

The Federal Ministry of the Interior has failed to adapt the general administrative regulations governing the application of the Civil Servants’ Remuneration Act and the Civil Servants’ Pensions and Allowances Act to the amendments made in these Acts.

The Civil Servants’ Remuneration Act governs the pay of federal civil servants, judges and soldiers on active duty. The Civil Servants’ Pensions and Allowances Act governs their retirement benefits. The Federal Interior Ministry has issued general administrative regulations on these Acts.

Many of the administrative regulations on the Civil Servants’ Remuneration Act date from 1997. Most of them have not been adapted to the current provisions of the Act and are therefore outdated. The legal provisions on retirement benefits for civil servants have been amended frequently and radically. The 1981 administrative regulation on the Civil Servants’ Pensions and Allowances Act is largely outdated. The outdated administrative regulations result in considerable uncertainties in the application of the law in the federal administration. This leads to errors in calculating active duty pay and retirement benefits. We therefore perceived an urgent need for review.

The Federal Interior Ministry has admitted that the administrative regulations on the Civil Servants’ Remuneration Act and the Civil Servants’ Pensions and Allowances Act are no longer up to date. The Ministry stated its intention to fully revise these regulations. It argued, however, that it had to involve many other government departments which would entail a long lead time.

We noted the lack of a binding deadline for the urgently needed updating of the administrative regulations. We expect the Ministry to adapt the regulations on the Civil Servants’ Remuneration Act and the Civil Servants’ Pensions and Allowances Act without delay in conjunction with the other government departments.

 

2015 Annual report No. 03 - Federal Foreign Office needs to review expatriation allowances

The Federal Foreign Office needs to review the expatriation allowances for federal staff. The bases of calculation were older than ten years.

About 8,000 federal staff receive expatriation allowances. These are designed to cover additional burdens at posts abroad. The expatriation allowances are calculated by the Federal Foreign Office that agrees them with other departments.

We found that the bases of calculation of the expatriation allowances were more than ten years old. We showed that living circumstances in many regions have changed during that time. We noted that the expatriation allowances did no longer accurately compensate the additional burdens since they relied on outdated bases of calculation.

We perceived an urgent need for updating the bases of calculation for expatriation allowances, for reviewing them at regular intervals and adjusting them where appropriate.

While the Federal Foreign Office intends to follow our recommendation in principle, it has not indicated up to when it intends to update the bases of calculation and to review the expatriation allowances.

We call upon the foreign office to update the bases of calculation without the delay and to review the expatriation allowances accordingly.

 

Good Practice Note 02/04: Workplace health management

Principles

(1) Workplace health management aims especially at designing structures, processes and working conditions in departments and agencies so as to promote and protect employee health and wellbeing. This also includes incentives for health-conscious staff behaviour. Health management is not to be limited to traditional health promotion programmes (e.g. health day and “back fitness”).

(2) Health management requires a conceptual basis that defines needs, goals, structures and methods. This is the only way to ensure that health management is pursued seriously and accepted.

(3) Health management requires a coordinated action plan consisting of analysis, planning, implementation and evaluation.

(4) Where preventive programmes are offered (e.g. “back fitness”, yoga), an appropriate contribution by staff should be planned.

Background

Against the background of demographic change, health management has become increasingly important also in the public sector. It was included in a government programme for the first time in 2006.1 One of the project’s goals was to introduce health management as a long-term and evaluable component of staff and organisation development in federal departments and agencies.

According to the definition developed by the Federal Ministry of the Interior, health management serves especially “… to maintain and promote the health and wellbeing … of staff. Health management means to make staff health and wellbeing a strategic component of an organisation’s vision, corporate identity, structures and processes.”2

1   cf. government programme on “Future-oriented administration by innovation” (16th legislative period). The project continued under the government programme on “Networked and transparent administration” (17th legislative period). The Federal Ministry of the Interior had the lead responsibility for the project.

(1) According to our findings, the audited entities’ health management was usually limited to traditional health promotion programmes (e.g. health day). Conversely, the staff considered the organisation and conditions of work as being more important for their health and wellbeing.3

Accordingly, health management should not focus on traditional health promotion programmes. Rather than that, focus should be placed on structures, processes and working conditions in federal departments and agencies.

(2) Many departments and agencies did not have a health management strategy. Therefore, the needs, goals, structures and working methods remained mostly unclear. Even where federal entities had strategies in place, these were often inadequate. For instance, they frequently defined the goals in very general terms only. Health management requires a conceptual basis tailored to an organisation’s specific situation, which describes the needs, goals, structures and working methods of health management.

(3) Many entities lacked a coordinated action plan to health management. Most entities had not even analysed their initial situation or, if so, had done so inadequately. For instance, all entities collected sickness absence information but rarely used them for further analyses. Frequently other analytical tools (e.g. staff survey, health circles, survey among experts) were not used at all. Health promotion programmes were scarcely planned in a structured way. Instead, health management consisted of isolated individual actions. Entities frequently offered ‘trendy’ programmes without proof of need. Scarcely any entity evaluated its health management. In most cases, such evaluation was impossible because the entities had failed to define measurable goals.

Like any other management process, health management needs to follow a coordinated action plan consisting of analysis, planning, implementation and evaluation. Analysis is the basis for all the following steps in the process.

2    cf. 2008 health promotion report, section A.1., published by the Federal Ministry of the Interior. The European Network for Workplace Health Promotion (Luxembourg Declaration, status: January 2007) and the centre for public management in local government (report 1/2005 “Betriebliches Gesundheitsmanagement als Führungsaufgabe”) use similar definitions. The terms “Workplace Health Management” and “Workplace Health Promotion” are used synonymously in most cases.

3   cf. 2009 health promotion report for federal departments and agencies, section 2.3, published by the Federal Ministry of the Interior.

In the planning phase, measurable goals need to be defined. Without clearly defined goals, retrospective programme results evaluation and a continuous improvement of health management are impossible. Moreover, the benefits for entities and staff remain questionable.

 

(4) The audited entities’ health management was largely characterised by preventive programmes e.g. “back fitness”, yoga, mobile massage, non-smoker courses etc. In a number of cases, the employers credited the time spent on attending such courses as working time. In isolated cases, they took up parts or whole of the costs of such programmes.

Preventive programmes have their rightful place in the health management system. Nevertheless, it has to be borne in mind that the responsibility for staying in good health ultimately lies with the employees. Employees thus need to make an appropriate contribution.

Notes

In its 2008 health promotion report, the Federal Ministry of the Interior took up our findings and recommendations resulting from its multi-agency audit of the organisation of workplace health management in federal departments and agencies (status: December 2008, file number VII 1 - 2008 – 0966).

The annual reports (in German) on workplace health management are posted on the Federal Government’s website:

http://www.intranet.bund.de/DE/Personalmanagement/Gesundheitsfoerderung_Arbeitsschutz/berichte/berichte_node.html

 

The interdepartmental working group on health management has published a key issues paper on a conceptual framework for the further development of workplace health management in federal departments and agencies.

 

Good Practice Note 02/01: In-house staff selection

Principles

(1) Requirements profiles are a key tool for staff selection. They should be included in all vacancy advertisements. Relevant court rulings demand that, where several applicants meet the requirements, the selection needs to be based on sound performance appraisals.

(2) The authorities should document staff selection decisions properly, fully and transparently. Notifications to unsuccessful applicants should be adequately justified.

(3) The procedures for filling vacant positions may at any time be terminated for due cause.

Background

The principle that the best candidate should be selected governs public service staff selection and is the basis for employing all staff in the most effective way. Pursuant to Article 33.2 of the German Constitution, every German shall be equally eligible for any public office according to aptitude, qualifications and professional achievements. The principle of choosing the best candidate also needs to be observed when deciding about promotions or assigning staff members to demanding tasks, thereby entitling them to a higher salary. Article 33.2 of the German Constitution sets forth this yardstick to the exclusion of any others. The selection procedure is governed by judicial precedent rather than by statutory provisions. We audited the in-house staff selection procedure.

(1) Analysing the relevant body of judicial precedent and the literature on ensuring that the selection procedure stands up to judicial scrutiny requires a vast input of time and effort, this is true especially for authorities that have to fill vacancies only occasionally.
We found that often the authorities we audited did not comply with the requirements laid down in court rulings. For instance, requirements profiles were not sufficiently established or performance appraisals were not given sufficient weight. Instead, authorities attached great importance to the results of job interviews, which were not consistent and comparable.

(2) The selection memos did not always meet the requirements of proper documentation and the notifications to unsuccessful applicants were as a rule not sufficiently justified.

However, the outcome of legal proceedings brought before the courts by rejected competitors critically depends on whether the authority has conducted the procedure in line with all legal requirements. Moreover, flawed staff selection procedures may give rise to claims for damages on the part of those competitors whose applications were unlawfully rejected.

(3) After thorough assessment of the applicant’s situation, a public employer may arrive at the justified conclusion that a selection does not meet the criteria of aptitude, qualifications, and professional achievements and/or would contravene the principle of choosing the best candidates. In such a case the procedure for filling the vacancy needs to be terminated. The public employer’s decision based on its organisational power to terminate the procedure does not, as a matter of principle, affect the legal position of applicants. There would also be due cause for terminating the procedure for filling the vacancy, if the invitation to submit applications contains substantial errors.

Notes

Based on our audit findings, we developed a Guideline on In-House Staff Selection Procedure that was forwarded by the Federal Ministry of the Interior to all supreme federal authorities by e-mail dated 5 October 2010 (file number: D 2 - 215 111/1). The Guideline (in German) was also posted on the federal government’s intranet under the heading of audit findings and recommendations of the Bundesrechnungshof in matters of personnel expenditure. It may serve as a basis for deciding about the necessary steps of the procedure.

Further guidance is provided by an expert opinion on the procedures for internal and external staff selection in federal departments and agencies which was published by the Federal Performance Commissioner on 11 March 2014 (volume 19 of the series of
publications of the Federal Performance Commissioner; in German, http://www.bundesrechnungshof.de/de/veroeffentlichungen/gutachten-berichte-bwv/gutachten-bwv-schriftenreihe). This expert opinion summarizes the body of judicial precedent on the procedures for filling vacant positions and points out potential difficulties and errors.

 

2014 Annual report No. 50 - Transfer of the functions to be performed under the Conscripts and Dependents Maintenance Act to the Federal Government without compensation from the German states

The execution of the Conscripts and Dependents Maintenance Act by the states and local authorities is particularly error-prone. Therefore, we recommended that the responsibility for executing the Act should be transferred to the Federal Government. The latter should seek compensation from the states for assuming this additional administrative burden.

The Act gives conscripts and their dependents a claim to maintenance benefits, e.g. rent allowance or compensation for lost earnings. The benefits are funded by the Federal Government. The states carry out the provisions of the Act and bear the related administrative expenditure. The Defence Ministry is responsible for ensuring that the Act is executed so as to avoid legal errors and in an expedient way.

We found that the execution of the Conscripts and Dependents Maintenance Act by the states is particularly error-prone. This is attributable mainly to organisational weaknesses. The fewer claims to be processed, the higher was the error rate. Errors became more frequent, if the staff had to discharge other functions in addition to those to be performed under the Act. If few applications for benefits were received, the staff had insufficient experience with the execution of the Act. The deficiencies in execution resulted in excess payments at the expense of the federal budget or in the rejection of justified claims. Moreover, the Ministry exercised its oversight over the states only inadequately.

We recommended that the functions to be performed under the Act should be transferred to the Federal Government. The latter should receive compensation from the states for assuming these additional administrative burdens.

In April 2014, the Defence Ministry completed a draft Bill under which the processing of claims under the Act is to be transferred to the Federal Government. Instead of many different administrative units in the states, a single entity in the Armed Forces Administration would be responsible for processing such maintenance claims. The Act is to come into force on 1 November 2015. No provision has been made for the compensation by the states of the additional administrative expenditure to be incurred by the Federal Government.

We suggest exploring ways in which the Federal Government can obtain compensation from the states for its additional administrative expenditure.

 

2014 Annual report No. 34 - Federal Employment Agency enhances staff planning for job centre consultants

The Federal Employment Agency implemented the German SAI’s recommendations on staff planning for job centre support teams. The Agency has pledged to employ staff only to the extent needed to efficiently carry out its mission.

Job centres provide basic benefits for job-seekers pursuant to Book II of the German Social Code (so-called Hartz IV benefits). These centres are operated by municipalities on their own or jointly by the Federal Employment Agency and a number of municipalities.

The Federal Employment Agency offers internal consultation services to jointly operated job centres. The aim is to assist these centres in enhancing their business processes and in fulfilling the Federal Employment Agency‘s requirements. The internal consultation service team operates from four regional offices.

We found that the Federal Employment Agency failed to assess the support team‘s staffing requirements. Moreover, the Agency did not ensure that staff was assigned according to demand.

The Federal Employment Agency largely implemented our recommendations to enhance staff planning. In future, consultation teams can be set up flexibly and across all offices. The Federal Employment Agency has pledged to assess staff requirements particularly on the basis of the expected demand for such services.

 

2014 Annual report No. 33 - Doubts about the efficiency of the Federal Employment Agency’s University of Applied Labour Studies

The German SAI requested the Federal Employment Agency to increase its University’s efficiency. The German SAI expects the Agency to conduct an adequate efficiency appraisal on the operation of its University at two different locations and, on this basis, to decide whether to maintain the two locations.

The Federal Employment Agency runs a University in Mannheim with a branch in Schwerin. Offering two bachelor programmes in labour market management and in employment-oriented guidance and case management, the University’s mission is to train part of the junior staff of the Agency.

In addition to junior staff training, the University plans to offer a master programme.

The University also performs research tasks. These are mainly carried out by the Institute for Employment Research, the Federal Employment Agency‘s research institute.

The German SAI found that the University’s organisation was inflated and its premises were too large. Operating two sites was a costly exercise. Compared to other universities maintained by the German states, the costs per student were therefore more than twice as high. Studies or justifications underpinning the need to introduce a master programme did not exist. Moreover, the Federal Employment Agency regularly failed to coordinate research between the University and the Institute for Employment Research.

The Federal Employment Agency only partly followed the German SAI’s recommendations. The Agency pledged to analyse and to streamline the University’s organisation. Furthermore, the Agency developed a strategy for introducing post-graduate studies. This strategy was used to show that the introduction of a master programme was necessary and essential to the Agency’s human resource development. In addition to that, the Federal Employment Agency pledged to better coordinate research between the University and the Institute for Employment Research.

The Federal Employment Agency performed a cost-benefit-analysis on the operation of the two sites. This analysis showed that running the University at only one site would reduce costs. However, the Agency intends to maintain both sites as it sees qualitative benefits in this arrangement, arguing that two sites were attractive for students coming from all German regions.

The German SAI is of the opinion that the University is not yet operating efficiently. The Federal Employment Agency is required to prove the need for operating the University at two sites. The German SAI requests the Agency to take the required steps.

 

2014 Annual report No. 22 - Federal Ministry of Finance enhances drivers’ safety at work

The Federal Ministry of Finance has taken up our audit recommendation and improved workplace safety for drivers within its remit. To this end, it defined more precisely the requirements concerning medical examinations assessing the drivers’ fitness to drive. Furthermore, the Ministry instructed the units of the Federal Finance Office North to observe applicable provisions governing working hours and minimum rest periods and to record periods of availability and waiting. The aim is to reduce the risk of personal injuries and damage to property in traffic accidents for which the Federal Government could be held liable.

Provisions governing working hours and workplace safety of drivers in the public sector are laid down in a separate collective agreement. According to this agreement and in contrast to the German Working Hours Act, employer and employee may agree on longer working hours and shorter minimum rest periods if this is required to ensure a proper functioning of the carpool service. However, agreeing on longer working hours is only admissible if these include periods of availability and waiting. Also, the employer has to offer annual medical examinations.

We found that the Federal Finance Office North inadequately complied with workplace safety requirements in several respects. For example, the Office was unable to prove the need for longer working hours in order to ensure the proper functioning of the carpool service. In addition, in case of longer working hours the Office failed to record whether employees had periods of availability and waiting. The employer did not regularly offer medical examinations assessing the drivers’ fitness to drive. Furthermore, the employer failed to take action if the drivers waived such examinations.

The Federal Ministry of Finance followed our recommendations. It requested the Federal Finance Office North to address the shortcomings found. Moreover, the Ministry pledged to inform all bodies within its remit that in case of a traffic accident caused by a driver’s poor health, drivers may be held liable for damage if they had waived medical examinations. This is to reduce the risk of personal injuries and damage to property in a traffic accident for which the Federal Government could be held liable.

 

2014 Annual report No. 15 - Federal Office of Administration often provides services for other authorities without receiving personnel or financial compensation for doing so

The Federal Office of Administration provides services for many federal authorities, e.g. allowance and travel expense accounting. It has not always received personnel or financial compensation for these services by the other authorities. Thus, the authorities for which the services are provided do not use their savings potentials.

Shared services centres centrally perform various horizontal tasks, e.g. payroll, travel expense and allowance accounting, for federal agencies. A large number of cases in the shared services centres allow handling each individual case with less personnel resources and thus more cost-effectively than could the authority for which the service is provided.

If one authority provides services for another, it will incur expenditures. Pursuant to the Federal Budget Code, these expenditures are to be compensated by the transfer of posts or in the form of on-going payments. If the client and the shared services centre belong to the same department, the current administrative regulations do not necessarily require compensation.

The Federal Office of Administration within the remit of the Federal Ministry of the Interior is one of the federal administration’s large shared services centres. Our audit showed that the Office performed horizontal services for clients liable to provide compensation were performed without compensation in more than half of the cases. Thus, the contracting authorities can reassign the staff previously used for performing the services to other functions.

We objected to this and demanded that the Federal Office of Administration only undertake tasks against compensation. Furthermore, the numerous cases without compensation are to be settled retroactively as best as possible. Resulting surplus posts in the benefitting authorities are to be abolished. This also applies if there are free staff resources available to undertake new tasks in the shared services centre.

 

2014 Annual report No. 08 - Remittance of compensation payments to the Federal Civil-Service Pension Fund ensured

Following our recommendation, the Federal Ministries of the Interior and of Finance have made new arrangements for the remittance of compensation payments to the Federal Civil-Service Pension Fund. The purpose of the new arrangements is to ensure that revenues to be applied to the later retirement benefits of civil service servants and judges will be received by the Fund completely and on a timely basis.

Effective 1 January 2011, the Federal Government and the German states have concluded a Treaty about the apportionment of pension liabilities in cases where civil servants change their public employer, i.e. are transferred between the federal and a state or local government civil service. In such cases, the previous public employer pays compensation to the new public employer. Thus, the former public employer contributes to future retirement benefit costs.

Where non-federal public employers pay such compensation, the respective amounts have to be remitted to the Federal Civil-Service Pension Fund. As from the year 2020, the retirement benefits for all federal civil servants newly hired after 1 January 2007 are to be financed from the Fund.

The former non-federal public employers had to pay compensation to the service centres of the federal finance offices. From there, the amounts were to be remitted to the federal ministries which had to pass them on to the Pension Fund. The Federal Office of Administration was charged with checking whether all compensation payments received were eventually paid into the Fund.

In the years 2012 and 2013, we audited the implementation of the above-mentioned Treaty by the federal authorities. We found that the procedure for receiving the compensation payments and passing them on to the Pension Fund was error-prone. Between January 2011 and June 2012, state and local governments remitted €22 million to the Federal Government, of which only €10 million were received by the Pension Fund. The difference of €12 million went into the federal budget as additional revenue and was spent. Moreover, the Federal Office of Administration was not informed whether and in what amounts compensation payments were received.

We recommended that the Federal Ministries of the Interior and of Finance should modify the procedure.

The two Federal Ministries have followed our recommendation. Now, the new public employer will collect the compensation payments from the former public employer and remits them to the Pension Fund twice a year. Moreover, the Federal Office of Administration will be furnished with summaries of their revenues from such compensation payments, enabling it to verify their complete remittance to the Fund.

By means of the new procedure, the Federal Ministries of the Interior and of Finance have made sure that these compensation payments are completely remitted to the Fund on a timely basis.

 

2014 Annual report No. 07 - Expert opinion issued by the Federal Performance Commissioner provides guidance on the internal and external selection of staff

Based on audit findings developed by the Bundesrechnungshof, the Federal Performance Commissioner has published an expert opinion on the selection of staff in the federal administration. This opinion is to provide authorities with guidance on staff selection and to contribute to adequate and legally secure personnel management decisions.

Traditionally, the President of the Bundesrechnungshof simultaneously holds the office of Federal Performance Commissioner. In that capacity, he works towards the cost-effective discharge of federal government functions and a corresponding organisation of the federal administration.

Based on relevant audit results, the Federal Performance Commissioner assessed the procedure of internal and external staff selection. This assessment was based on weaknesses and similar sources of error found by our auditors in a multi-agency examination of the procedures for appointing staff to posts. The root cause of such deficiencies often was inadequate compliance with complex regulations and judicial precedent. The Federal Ministry of the Interior had not issued any guidance on staff selection procedures.

The deficiencies found and the lack of guidance from a central authority prompted the Federal Performance Commissioner to issue the expert opinion on the procedure of internal and external staff selection in the federal administration in his series of publications. This opinion summarises the relevant legal and administrative provisions and the judicial precedent set by the higher courts. By pointing out the decisive steps in the procedure, it helps the authorities with keeping abreast of recent judicial precedent. The Federal Ministry of the Interior has evaluated the opinion as helpful for practical personnel management.

By including the opinion as part of his series of publications, the Commissioner ensures that all interested parties have access to it. The opinion has also been posted on the internet (in German only) under www.bundesrechnungshof.de.

 

2014 Annual report No. 06 - Federal Ministry of the Interior needs to ensure that legal provisions are applied uniformly when civil servants’ salaries are determined for the first time

Newly hired civil servants may receive higher salaries, if they already have professional experience useful for their new jobs. The federal authorities act inconsistently in taking previous professional experience into account. The Federal Ministry of the Interior has to make sure equal treatment in similar cases.

Effective from 1 July 2009, the Civil Service Law (Restructuring) Act introduced a new basic salary system for civil servants. The salary scale is no longer based on age but on times of professional experience. On first appointment, a grade 1 basic salary is awarded; if times of previous professional experience are recognised, the salary grade will be a higher one.

Recognising times of previous professional experience is largely at the discretion of the authorities. We found that federal authorities decided inconsistently, although the previous primary occupation and the requirements in the new job were comparable. We also found inconsistent decision-making practices within departmental remits, where the ministries had delegated the power to decide about recognising previous professional experience as useful to subordinate authorities.

We pointed out the disadvantages of inconsistent practices to the Federal Ministry of the Interior. We recommended that guidance on the exercise of relevant discretionary powers be promulgated. This is to ensure that comparable cases are treated equally in the federal administration. Moreover, we asked the Ministry to evaluate the present regulations and to adjust them where appropriate.

Our audit findings and our recommendation prompted the Federal Ministry of the Interior to issue a circular to all federal authorities pointing out that, as a rule, previous professional experience has to be recognised. However, it did not issue guidance on the exercise of relevant discretionary powers.

In our opinion, the steps taken by the Federal Ministry of the Interior are not yet sufficient. We uphold our recommendation that the Ministry should promulgate guidance about the exercise of such discretionary powers involving typification and schematisation of useful previous professional experience. This is the only way to ensure uniform application of the law. Moreover, the Ministry should evaluate the current regulations and adjust them where appropriate.

 

2014 Annual report – spring report No. 04 - Federal Railway Assets Fund pays an inadmissible and excessive lump sum to compensate for personnel costs

By virtue of a flat rate agreement, Deutsche Bahn AG received a total amount of €278 million in compensation for personnel costs. Contrary to applicable legal provisions, it did not have to supply evidence justifying that the conditions for such compensation were met.

The relevant legislation gives rise to compensation claims, if, owing to rationalisation measures, Deutsche Bahn AG (the national railway company) can no longer employ staff taken over by or assigned to it. For this purpose, Deutsche Bahn AG has to prove its claims in detail. In the past, it had not succeeded in doing so. The Federal Transport Ministry and the Federal Finance Ministry concluded an agreement with Deutsche Bahn AG providing for a lump-sum payment to compensate for any arising claims. As a consequence, considerable amounts of compensation were paid for groups of employees not legally eligible for such compensation.

The Federal Transport Ministry and the Federal Finance Ministry regard the regulations as being of little use. They argued that, owing to the lack of insight into strategic company data, it was impossible to verify the claims on the basis of detailed circumstances.

We found that the prescribed detailed determination of the compensation claims is reasonable and therefore mandatory. Deutsche Bahn AG has to give detailed proof that the prerequisites for compensation have been met. Moreover, we recommend amending of legislation to completely abolish such compensation claims.

 

2014 Annual report – spring report No. 02 - Regulation on teaching staff’s working hours at the department of financial management science of the Federal University of Applied Administrative Sciences reduces the staff time available for teaching

The regulation on teaching staff’s working hours at the department of financial management science of the Federal University of Applied Administrative Sciences is inefficient. Since time spent on numerous other activities is deducted from obligatory teaching hours, the number of teaching hours is significantly lower than the standard number of hours prescribed by an agreement between the Conference of Education Ministers of the German states. We therefore demand that the Federal Finance Ministry introduce more restrictive rules for crediting non-teaching work for purposes of determining the hours worked by staff. This would make more staff resources available for teaching.

The Federal Revenue Administration's Training and Knowledge Centre trains candidates for the higher intermediate customs service at the financial management science department of the Federal University of Applied Administrative Sciences. The Federal Finance Ministry issued a directive determining the working hours of full-time teaching staff. This directive also prescribes obligatory teaching hours, which are defined as the number of hours which the staff must, as a rule, spend on preparing, holding and following up on lectures.

The directive stipulates that obligatory teaching hours are reduced, if the teaching staff do other work. Such other work may include e.g. internal meetings or the supervision of exams. The list of types of work eligible for being credited to the total obligatory teaching hours includes 25 items. This reduced the actual teaching hours to the extent that overtime and the hiring of additional teaching staff was necessary to deliver training at the department of financial management sciences.

We objected to the fact that the Ministry’s directive listed more types of work creditable against the obligatory teaching hours than provided for in an agreement of the Conference of Education Ministers. We recommended revising the list.

In response, the Ministry revised the working hours’ regulation and reduced the number of types of work creditable against the obligatory teaching hours. In our opinion, this is not yet sufficient. Under the revised scheme, the number of actual teaching hours available in the department of financial management sciences is still smaller than provided for in the agreement of the Conference of Education Ministers. We therefore demanded that the Ministry proceed with its efforts to reduce the number of types of work creditable against the obligatory teaching hours.

 

2013 Annual report No. 56 - Armed Forces pay salaries to newly recruited soldiers inaccurately

The Armed Forces inadequately checked the salary payments to their newly recruited military personnel. 2,000 soldiers received inaccurate amounts of pay. The new IT payroll system does not meet the technical requirements for ensuring that salaries are paid in correct amounts. Therefore, the Federal Defence Ministry should complement the IT system by controls and introduce electronic payroll records.

Based on our audit findings, we had recommended that the Federal Defence Ministry verify the salary payments. When doing so, the Ministry found that nearly 2,000 soldiers had received incorrect, usually too low amounts of pay. The new IT payroll accounting system (SASPF) does not permit a centralised verification of the salaries paid to the soldiers. The Armed Forces keep hardcopy payroll records for their soldiers at several locations. Therefore, a manual ex-post check of the payments involves a large administrative burden. Additional checking functions and soft copy pay records could remedy this deficiency. Due to financial considerations, the Armed Forces have not yet introduced electronic pay records.

The Federal Defence Ministry is obliged to ensure the accurate payment of military salaries. It should make arrangements that personnel expenditure can be verified with a reasonable administrative burden. To do so, it should complement SASPF by verification functions and introduce electronic payroll records.

 

2013 Annual report No. 55 - Expenditures on foreign assignment allowance cannot be sufficiently verified

During their assignment abroad, e.g. in Afghanistan, Armed Forces personnel received foreign assignment allowances in addition to the pay they draw when serving in Germany. Owing to inadequate keeping of files, the quality of processing and the amounts paid out cannot be verified. Excess or underpayments thus go permanently unnoticed.

Armed Forces personnel assigned to a humanitarian or support mission abroad are paid foreign assignment allowances under the relevant legislation. Depending on the strain implied in local conditions, tax-free allowances in six brackets ranging between €30 and €110 per diem are granted. We intended to audit the payment of foreign assignment allowances to 20,000 staff in the annual amount of €180 million on the basis of a sample of payroll cases. The Armed Forces did not keep the corresponding files in good order. Only with a considerable input of work were they able to furnish records on payments of such allowances. As a result, we had to limit the scope of our audit which impeded accurately assessing the processing quality of the allowance cases by the Armed Forces. We also audited the calculation of the allowances in Germany. In one Armed Forces entity, 30 per cent of the cases had been processed inaccurately. Soldiers were frequently either overpaid or underpaid.

We expect the Federal Defence Ministry to ensure checks of the allowance payments and the accurate keeping of files as soon as possible. This will be the only way for the Ministry and its subordinate authorities to exercise their power of technical oversight and to ensure accurate payment of the foreign assignment allowances.

 

2013 Annual report No. 31- Supreme Courts have appropriately identified staffing needs for administrative services

After restructuring their organisational set-up, the Federal Labour Court and the Federal Social Court identified staffing needs for their administrative services. By reallocating tasks, they ensured a more balanced distribution of work among their employees in the areas under scrutiny.

We pointed out that the Federal Courts had failed to appropriately identify their staffing needs and qualifications. Moreover, they had destroyed all corresponding records and were, therefore, neither able to base future assessments on these nor to update the needs identified.

We recommended that the Courts apply adequate methods to reassess their support staff requirements. This assessment should be preceded by a comprehensive task review. The Courts announced their intention to implement our recommendations.

In 2012, we carried out a follow-up audit to verify whether the Courts had honoured their promises. We found that they had balanced out their staff's workload where it had previously been excessive or too low and provided sound justifications for staffing needs identified in part of the areas under scrutiny.

Furthermore, we acknowledged that the Courts had developed a model that can be continuously updated. We are going to monitor if the Courts will use equally appropriate methods for identifying their staffing needs in the remaining areas.

 

2013 Annual report No. 05 - Parallel development and operation of human resources management systems is inefficient

The Federal Government has failed to develop an overall plan for human resources management systems (HR systems) in federal departments and agencies and to coordinate the relevant efforts. As a result, departments and agencies have since 1996 developed and operated four large and many small systems that are among each other incompatible and inadequately at a cost in the range of a 9-digit euro amount. This lack of standardisation makes the necessary restructuring in the federal administration more expensive and difficult.

HR systems support human resources planning, recruitment, allocation, development, payroll accounting and management.

These tasks are largely identical in all departments. Nevertheless, these did not agree common standards for their HR systems. Some used the same and some different technologies and products. There was duplication in the development of components. As a consequence of incompatible HR systems, transferring part of human resources management of the Armed Forces to the Interior Ministry and the Finance Ministry has become difficult and more expensive.

The Federal Government needs to develop measurable goals for merging its HR systems and implement them in a consistent and efficient way. Moreover, it has to set up an appropriate interdepartmental steering system for federal IT.

 

2013 Annual report -spring report No. 02 - Agricultural Social Security Fund employs former executive directors without any proper tasks

The Agricultural Social Security Fund continues to employ former executive directors as regional representatives. These do not have any genuine proper tasks of their own. We hold that this continued employment is inadmissible.

On 1 January 2013, legislation came into force merging the formerly separate regional agricultural social security funds into a single national fund. The national funds continue to employ, on unchanged terms of employment, nine former members of regional managing boards at their former work locations as regional representatives. These posts have been newly created. The tasks assigned to them already come under the responsibility of other bodies. The national fund did not consider the possibility of assigning tasks in the headquarters administration to the former regional executive directors.

The Federal Insurance Office, which is the supervisory authority for the Fund, the Federal Agriculture Ministry and the Federal Social Affairs Ministry concur with our assessment that the regional representatives do not have genuine tasks of their own. Therefore, the posts were established for a limited period and will be abolished in or before June 2017. The above supervisory authorities stated that the National Fund had been advised of the legal requirement to temporarily retire, on or before 30 June 2013, incumbents of posts for which there is no longer any need.

We therefore demand that ways should be considered immediately to assign appropriate tasks to the former executive directors. Their employment may be continued only if it is possible to assign them tasks of their own. Failing that, they must be temporarily retired by 30 June 2013 in accordance with applicable legislation.

 

Good Practice Note 09/01: Initial and continued training on corruption prevention

Principles

(1) The authorities should rely for their training on the prevention of corruption on the written training strategies. In the training strategies, they should set binding requirements as to the training of specific target groups (e.g. supervisors and staff in areas of activity especially vulnerable to corruption). Participation in the obligatory training events must be monitored on a continuous basis.

(2) Responsibilities for planning and steering the training activities should be defined unambiguously. The contact officer for corruption prevention is to be actively involved in both designing and implementing initial and continuous training on the prevention of corruption.

Background

The Federal Government’s Directive on Corruption Prevention in the federal administration requires authorities to include the topic of corruption prevention in their initial and continued training programmes. The focus is to be on the training needs of managerial staff, of the contact officers for corruption prevention, the staff in areas of activity especially vulnerable to corruption and the staff of the organisational unit on corruption prevention.

In 2010, the German SAI audited compliance with these requirements across several government departments.

(1) We found that several auditees did not have written strategies for initial and continued training on corruption prevention. They were therefore unable to carry out training measures precisely targeted to specific groups of staff (e.g. staff in areas especially vulnerable to corruption, managerial staff). Some authorities relied on staff’s own initiative, i.e. they waited for applications to attend. There was no control by the employers. In our opinion, a voluntary application procedure can only apply to staff that do not belong to any specific target group.

All staff of a specific target group need to participate in initial and continued training on corruption prevention and attend the respective training events repeatedly at reasonable intervals.

(2) In some authorities, the responsibilities for identifying and covering training needs were not assigned to any specific organisational unit. Different concepts prevailed as to the role of the contact officers for corruption prevention. Some of these contact officers actively participated in training by giving papers and presentations while others merely made suggestions to the entities that conducted relevant training. In our opinion, the contact officers for corruption prevention have the duty to play an active role in initial and continued training. They may do so especially by teaching courses.

Note

Since June 2010, the recommendations on corruption prevention issued by the Federal Ministry of the Interior have included advice for the relevant units within government departments to develop requirements as to the timing, organisation and contents of a systematic training programme in the entities for initial and continued training.

Moreover, the Federal Ministry of the Interior has announced its intention to develop a list of best practices on how to best involve the contact officers in initial and continued training on corruption prevention.

In January 2012, an e-learning programme on corruption prevention in the federal administration was launched by the Federal Ministry of the Interior. According to the Ministry, it can be used by all federal administration staff by accessing the learning platform of the Federal Academy of Public Administration.

 

Good Practice Note 02/03: Reliance on cost and performance data for assessing staffing requirements

Principles

(1) All federal authorities have to establish their staffing needs for performing their tasks, using appropriate methods. To do so, they may also rely on data from the new steering tools such as cost and performance accounting, thereby reducing their input into determining their staffing needs.

(2) These cost and performance data shall always meet the quality requirements of an analytical assessment of staffing needs.

(3) The lists of products and/or tasks shall be sufficiently differentiated to ensure that they reflect the essential steps in a list of activities.

(4) The development of the data and the results of the assessment of staffing needs shall be documented in a transparent and verifiable way, complying with data protection requirements. The applicable provisions must not rule out the use of the data for personnel management purposes.

Background

Federal authorities have to substantiate their staffing needs by applying appropriate methods.1

A special provision laid down in the German Social Code applies to social insurance bodies.2

Those responsible often do not comply at all or fully with this requirement either. They plead the large input of working time required for an analytical assessment of staffing needs.

We therefore have studied as to whether the assessment of staffing needs can be substantiated with a reasonable input by means of new steering tools, especially cost and performance accounting.

(1) In principle, cost and performance data are not designed to furnish reliable information for assessing an authority’s future staffing needs. For instance, a clear relation to quantities of work is usually lacking. On the other hand, cost and performance accounting frequently supplies data on working hours which would have to be collected in a similar way for a traditional assessment of staffing needs. If an authority uses this data also to assess its staffing needs, this may enable it to avoid duplication of data collection and to limit the input into analytical assessment of staffing needs.

(2) The information on working hours needs to be highly valid. For this data to be usable, its quality needs to match that of an analytical assessment of staffing needs. Working time should be recorded daily with a precision of up to 30 minutes for each working unit. All staff have to record their working times themselves and enter them into the system in a way which precludes changes by third parties. General overhead and personal needs allowances should be recorded separately from the times for task performance. As with the methods of analytical assessment of staffing needs, the recorded data need to be validated e.g. by snap reading (multiple moment method) or time studies.

(3) In order to appropriately substantiate staffing needs, it is necessary to record working hours on the basis of a differentiated list of tasks and activities. Authorities that wish to use cost and performance data for their assessment of staffing needs therefore should ensure, already when designing their cost and performance accounting system, that a sufficiently detailed recording level can be implemented below the grossly structured product level.

(4) Any staffing needs assessment is to be documented so as to show all steps in the process and the result in a transparent and verifiable way. The recorded working times are as a rule aggregated after they have been entered into the new steering systems. To ensure appropriate documentation, the data recorded in the steering system shall be retained as raw data for the individual tasks. They may e.g. be stored in anonymised form in a separate file. Moreover, the employer/staff council agreements of many authorities stipulate that the data collected may not be used for human resources management. Thus, these tools may no longer be used for staffing needs assessments. When entering into agreements with staff councils, it is therefore recommendable to stipulate the right to use the data for staffing needs assessments. It goes without saying that regard needs to be taken to data privacy.

1 Items 4.6.1 and 4.6.3 of the General Administrative Regulations on Art. 17 Federal Budget  Code

2 Article 69.6 of book IV of the German Social Code.

 

Good Practice Note 02/02: Setting off statutory pension claims against civil service retirement benefits

(Art. 55 Civil Service Benefits Act)

Principles

(1) The authorities in charge of managing civil service retirement benefits should regularly inquire with the central pension-paying agency what statutory pensions are paid that have to be set off against civil service retirement benefits.

(2) To ensure that refunds of excess payments of civil service retirement benefits can be claimed, the authorities in charge of civil service retirement benefits should periodically repeat these inquiries on or before the end of three years after the previous inquiry.

Background

Pursuant to the conditions laid down in Art. 55 Civil Service Benefits Act, statutory pension claims generally have to be set off against civil service retirement benefits. The statutory pension also has to be taken into account where it derives from paid employment into which the beneficiary has entered after retirement. Where the two types of retirement benefit coincide, the total of civil service retirement benefits and statutory pensions are only paid up to a specified ceiling (Art. 55 (2) Civil Service Benefits Act). The civil service retirement benefit is reduced by the amount that exceeds the ceiling.

Refund claims on account of excess payments of civil service retirement benefits are governed by the provisions of the German Civil Code about the restitution of monies obtained by way of unjustified enrichment. According to Art. 195 Civil Code, the applicable statute of limitation is three years.

In 1998, we found considerable excess payments due to statutory pensions that were not taken into account. We urged the authorities to verify their payment data against the data of all pension insurance bodies which are centrally held by the pension-paying agency.

The purpose of doing so is to identify beneficiaries of civil service pensions who, in contravention of their obligation and in spite of being directly asked, have not notified that they draw a statutory pension. The authorities undertook to verify the statutory pensions against the civil service retirement benefits at regular intervals.

(1) In 2009 and 2010, our Berlin, Frankfurt, Hamburg and Stuttgart field offices audited the “coincidence of civil service retirement benefits with statutory pensions (Art. 55 Civil Service Benefits Act)”. They found that some of the authorities failed to match their benefits data against statutory pension claims. This resulted in excess payments in cases where claims under both retirement benefits systems had been acquired.

(2) Where the authorities verified benefit claims against statutory pension claims, they partly repeated the verification at intervals of up to a decade. In a number of cases, excess payments accumulated whose refund could not be claimed due to the statute of limitation.

 

2012 Annual report No. 71 - Federal Government pays associations €0.9 million annually too much for reimbursing personnel costs

Since 2001, the Ministry has given inadmissibly high grants to the umbrella organisations of entities that deliver child and youth welfare services; in 2012, it awarded grants of €900,000 too much. It reimburses the full amount of personnel costs, although it is authorised to base the amounts of its grants only on 80 per cent of the personnel cost rates. By doing so, the Ministry disregards the objectives of a resolution adopted by the German Parliament’s Budget Committee and infringes its own directives.

In 1999, the German Parliament’s Budget Committee had decided to reduce the volume of federal block grants. This was to limit permanent claims to grant funding and thus also the long-term commitment of federal budget funds. The funds thus released should be flexibly focused on issues of major importance.

In 2001, the Ministry changed its mode of grant funding of the umbrella organisations of entities engaged in the delivery of youth welfare services. The Ministry concluded grant-funding agreements with the umbrella organisations under which it committed itself to giving grants towards those organisations’ personnel costs. In its directives, the Ministry has stipulated that it will pay grants amounting to 80 per cent of the applicable personnel cost rates. The Ministry does not apply this provision. Instead, it promised the grantees to reimburse 100 per cent of the personnel cost rates.

The reimbursements of personnel costs by the Ministry are excessive. They may not exceed the percentages stipulated in the Ministry’s own directives. The Ministry’s grant-funding practice contradicts the intention of the resolution adopted by the Budget Committee. By its current practice, the Ministry has only formally implemented the shift from block grants to project-related grants; it does not exploit the potential for improving efficiency.

The Ministry should terminate the grant-funding agreements and reimburse no more than the percentage of the organisation’s personnel costs which has been determined in the directives.

 

2012 Annual report No. 65 - Savings of €1 million annually as a result of giving up military rescue service schools

We recommended that the Ministry transfer the initial and continued training of rescue service personnel to military hospitals and to disband its own rescue service schools. This will result in savings of €1 million annually.

The Defence Ministry operated five rescue service schools for the initial and continued training of its rescue service personnel. Paramedics, first responders in the medical corps and emergency medical assistants were trained in these schools. This caused personnel costs of about €1.5 million annually. The instructors had little practical experience with emergency situations and had to draw on physicians of military hospitals specialised in rescue service and emergency room (ER) work. The rescue service schools cooperated intensively with the military hospitals. Only there was it possible to impart realistic training and ER experience to the rescue service personnel.

We audited initial and continued training of military rescue service personnel and found that, owing to the cancellation of many training courses, there were excess capacities of instructors and equipment. We held that the expensive operation of separate rescue service schools was unnecessary. We recommended that the Defence Ministry disband the five rescue service schools and transfer initial and continued training to the military hospitals. This will enable the Armed Forces to train rescue service personnel to a higher standard and to save up to €1 million annually in the medium term.

The Defence Ministry has taken up our recommendation and ordered that the rescue service schools be disbanded. The relevant training will now be provided more cost-effectively in training and simulation centres of military hospitals.

 

2012 Annual report No. 62 - Multiple crewing models of the Navy are ineffective and inefficient

The Navy has been introducing new crewing models on the basis of unreasonable assumptions. Thus, it is planning for more crews than it can deploy in the foreseeable future. However, the Navy does not accomplish the objective of reducing the strain on crews.

Due to the new models, crews are no longer firmly linked to a ship or boat. The objective of introducing this multiple crewing model is to reduce the crews’ absence on voyages from the current average target of 180 days to 120 days.

For many types of vessels, the Navy is not able to maintain its previous cycle of training and deployment with an average absence limited to 120 days. For instance, training frigate crews to the required proficiency takes about 100 days. A subsequent deployment in the same year would thus be ruled out.

Furthermore, the currently operative vessels are not intended for alternating crews. So far, the Navy has not proven that it can change crews on these vessels speedily and without detriment to operative capacity under deployment conditions. Failing that, the vessels would in future return to their home bases after 120 days. As a consequence, more vessels would have to be deployed to meet the same deployment commitments and more transit voyages would be required.

The Federal Defence Ministry argued that the limitation of absences to 120 days was necessary to ensure the continued attractiveness of service in the Navy. In practice, individual absences would significantly exceed the 120-days period anyway.

We concur with the Ministry that the limit of 120 days of absence will significantly be exceeded in practice. Thus, the planned multiple crewing models with the target of not more than 120 days of absence do not achieve the intended reduction of strain on deployed crews. Rather than that, the Navy would have too many crews for the available vessels. Avoidable costs would be incurred by maintaining these crews in readiness and by training them.

We recommend that realistic absence targets differentiated by type of vessel should be developed for multiple crewing vessels and the crew levels should be determined on this basis.

 

2012 Annual report No. 25 - Umbrella organisation of agricultural social security bodies has not proven its staffing needs since its establishment

Since its establishment in 2009, the umbrella organisation of agricultural social security bodies has not appropriately determined the number of staff it needs to perform its functions. Nevertheless, it increased the number of posts by more than 30 per cent up to the year 2012. Its annual personnel expenditure of €43 million is not justified in terms of budgetary law. The Federal Insurance Office responsible for supervising the umbrella organisation and the Federal Agriculture Ministry needs to make sure that the organisation fulfils its legal duties.

When the law on agricultural social security was revised, the umbrella organisation of agricultural social security bodies took over IT functions from the regional bodies for agricultural social security. The posts were approved by the Federal Insurance Office. The Office failed to ensure that appropriate proof of staffing needs was provided. Instead, the umbrella organisation continues to invoke out-dated estimates from the year 2008.

We pointed out that, in the face of annual personnel expenditure of €43 million, the umbrella organisation has to date not justified its staffing needs and the need for staff increasing. We therefore demanded that no new posts be approved. Nevertheless, the Federal Insurance Office approved an increase of posts of more than 30 per cent (181 posts) up to 2012. The Federal Agricultural Ministry was involved in the procedure.

As from 2013, the regional bodies and the umbrella organisation will be amalgamated into a single social security body for agriculture, forestry and gardening. This does not affect the central functions that have already been conferred upon the umbrella organisation. We expect the Federal Insurance Office and the Federal Agriculture Ministry to use all their possibilities to exert influence on and provide advice to the federal body. This should ensure that the principles and criteria applicable to federal departments and agencies are complied with when restructuring agricultural social security.

 

2012 Annual report – spring report No. 06 - Inadequate oversight and expensive management of the former Federal Association of Guild Sickness Funds

The executive director of the former Federal Association of Guild Sickness Funds receives a remuneration of €10,000 and a lump-sum allowance to cover ancillary costs of €1,000 for four working days each month. In addition, he lets a contract for professional services to his own law firm. There is no arrangement for oversight by a public authority which could prevent such action.

The former Federal Association of Guild Sickness Funds is to be dispended by year-end. It does no longer perform the inherent tasks of such an association and does not conduct any day-to-day business. Its staff are released from work. Its members are individual guild sickness funds which have commissioned a lawyer to act as the sole executive director. The incumbent neither has to solve complex questions in various branches of the law nor to bear specific responsibilities that could give rise to any personal liability. His third-party liability is covered by insurance. For his support, he may, at the expense of the community of insured persons, draw on the services of a law firm of which he himself is the managing partner. He commissions that law firm mostly to perform routine administrative and winding-up tasks that do not require the knowledge and skills of a lawyer. It would be more efficient to entrust these tasks to staff of the guild sickness funds. Since 2009, no public authority is responsible any longer for exercising oversight over the former Federal Association of Guild Sickness Funds. Neither the Federal Health Ministry nor the State Government of North Rhine-Westphalia feel to be responsible for such oversight.

We consider the terms and conditions of the contract as inappropriate and damaging for the community of insured persons. Three of the Association’s members come under the oversight of the Federal Insurance Office. Therefore, the Federal Health Ministry should instruct the Federal Insurance Office to exert pressure, in the exercise of its oversight functions, to ensure that

• the contract of the executive director is adjusted and

• that the executive director may commission a law firm only with the specific approval of the members in each individual case

• to avoid conflicts of interest, he should no longer commission his own law firm.

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