On Monday March 25, 2019, the Office of Federal Contract Compliance Programs (OFCCP) released the audit list for fiscal year 2019. It should be noted that if a contractor was on the previous list released in September 2018 and was not audited yet, the release of the new list does not negate any audits not initiated in the previous list. In other words, the contractor in the September may still be audited.
The breakdown of the audits to be scheduled are of 1,208 unique contractors and include:
- 2,345 Establishment Compliance Reviews
- 500 Section 503 Focused Reviews
It should be noted that the Compliance Checks are being revived and a new type of audit, the 503 Focused Audit, are included. Altogether, OFCCP is expecting to complete 3,500 audits this fiscal year.
Establishments for Compliance Checks were selected at a regional level. The number of establishments with the lowest employee counts within each region that met the regional share for Compliance Checks were designated for Compliance Check reviews.
For this time around, again, direct federal contractors are the focus of the audits. As for those facilities of a federal contractor that did not have a direct federal contract, “OFCCP extracted all establishments with 100 or more employees from the EEO-1 database and added them to the Establishment File. These extracted establishments did not have direct contracts but fell within OFCCP’s jurisdiction because their parent entity had a covered direct contract(s).” Also, there was no time limitation as in the past to direct contractors who can be audited. Any contractors who had not been audited in the past two years were considered.
However, OFCCP did remove some contractors from the eligible pool. First, OFCCP cross-referenced the Establishment File with the agency’s administrative database (OFIS) to remove establishments that: (1) were under review or monitoring period, (2) had completed a review or monitoring period within the last two years, or (3) were pending scheduling for review from a prior scheduling list, as of the release date of this scheduling list. In addition, direct federal contractors with less than 70 employees and establishments that had active separate facility exemption waiver were removed from the eligible audit pool.
Further, cancelled contracts, contracts associated with debarred companies, contracts valued at less than $50,000, and contracts awarded to federal, state, local, municipal, tribal, city, and foreign governments, school districts, or construction companies were removed. Contracts that did not have any contract modification in the last 15 months were assumed closed or cancelled and were also removed.
Finally, healthcare contractors and universities were removed from the eligible audit pool. Per the methodology, “[h]ealthcare establishments that fell under OFCCP’s TRICARE Directive (DIR 2014-01) were removed from both Establishment and Parent files. Also, OFCCP has decided to not include any University Reviews on this scheduling list.” This may be in part that OFCCP is retooling the university audit as the complexity of a university structure and funding of employees and faculty.
OFCCP selected contractors for the various type of audits based on the following methodology: “CMCE reviews were selected based on the highest employee count (above 299 employees) when such headquarter establishments were available in a district office’s jurisdiction. For Section 503 Focused Reviews, OFCCP selected corporate headquarters of multi-establishment companies that had the largest number of establishments, when such headquarters were available in a district office’s jurisdiction. The three FAAP functional units with the highest employee counts were included for the district office’s FAAP reviews; provided that such FAAP functional units were available within a district office’s jurisdiction.”
As for the actual reviews, as previously described in EPTW, the Section 503 Focused Reviews are all being conducted at the headquarters of the federal contractor. One or more external databases such as FPDS‐NG, EEO‐1, D&B, LexisNexis, or the OFCCP administrative database may have been used to identify establishments as corporate headquarters.
The Compliance Check is also being revived as an audit tool. The Compliance Check is based on questions answered in the Federal Contractor Database (SAM) in which a question is asked whether the contractor is in compliance with Executive Order 11246. Per the OFCCP regulations at §60-1.20 (3), a Compliance Check is a determination of whether the contractor has maintained records consistent with §60-1.12. At the contractor's option, the documents may be provided either on-site or off-site. §60-1.12 discusses the retention of the contractor’s affirmative action plan and supporting documentation. What OFCCP will be asking to see is not clear. It used to be Prior Year Goal Analysis (Narrative and Statistical section), Disability Accommodations, and Listings with State Service.
It has been reported that audit letters will be sent starting the week of April 15th.
Source: OFCCP, Jackson Lewis 3/26/19