If you received notification that your company was being audited, would you be ready? If your organization is like most, the honest answer to this question is, at best, “maybe.” Because noncompliance can carry costly ramifications and violations, a “maybe” isn’t good enough. Join us as we provide you with proactive ways to be prepared in an audit situation. During this webinar, PeopleFluent compliance experts will help you: Assess your affirmative action program for audit preparedness. Understand the key issues that will raise a red flag for Office of Federal Contract Compliance Programs auditors. Determine your particular risk for an audit. Review recent focus areas of OFCCP auditors.

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How to Evaluate Your Affirmative
Action Program’s Audit Readiness

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Speakers: Julia Méndez, SHRM-CP, CDP, PHR, CAAP, CELS
Principal Business Consultant
PeopleFluent
Rosemary Cox, SPHR
Principal Business Consultant
PeopleFluent
How to Evaluate Your Affirmative
Action Program’s Audit Readiness

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Julia Méndez, SHRM-CP, CDP, PHR, CAAP, CELS
Principal Business Consultant
PeopleFluent
How to Evaluate Your Affirmative
Action Program’s Audit Readiness
Rosemary Cox, SPHR
Principal Business Consultant
PeopleFluent

9. © PeopleFluent 2015
How to Evaluate Your Affirmative
Action Program for Audit Readiness
Julia Mendez, PHR, SHRM-CP, CAAP, CDP, CELS
Principal Business Consultant
Rosemary Cox, SPHR, SHRM-SCP
Principal Business Consultant

10. 10© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
• Audit selection
• Preparing for an audit
• Scheduling Letter
• Best practices
Agenda

11. 11© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
Have any of your locations been selected for an
audit in the last 24 months?
 Yes
 No
 I don’t know
Polling Question #1

12. 12© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
OFCCP AUDIT SELECTION

13. 13© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
• Federal Contractor Selection
System
• Contracts First Initiative
• Pre-Award audits
• Complaint activity
• Conciliation Agreement
How are Establishments Selected?

14. 14© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
• Receive a Corporate Scheduling
Announcement Letter (CSAL)
• OFCCP contacts contractor by phone
• Receive audit notice by certified mail
How is a Contractor Contacted for a Review?
How often can an establishment be reviewed?

15. 15© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
What if the audit notice has been
floating around or we need more time
to prepare for the submission?

16. 16© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
How do you prepare your clients for
an audit?

17. 17© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
• Schedule meeting with appropriate personnel
• Review AAP and reconcile data
• Are correct people in the AAP?
• Are includes/excludes appropriate?
• Are manager/supervisors notated?
• Is compensation data complete?
• Do you have adverse impact in any area?
• Can you produce documentation?
• Are disposition codes correct?
• Have you performed a step analysis?
Preparing for an Audit

18. 18© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
• Are transactions correct (hires, promotions,
transfers, terminations)?
• Do the prior year totals – plus and minus the
transactions – accurately reflect the current
year totals?
• Review and make appropriate edits to
narratives
• Ensure good-faith efforts are documented
• Prepare package for OFCCP submission
Preparing for an Audit

19. 19© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
Does someone within your company review the
integrity of data before analysis/AAPs are run?
 Yes. We audit the data prior to running plans
 No. Our vendor “scrubs” the data we send
them
 No. We run the reports with the data “as is”
 I don’t know
Polling Question #2

20. 20© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
So what exactly is in the
Scheduling Letter?

21. 21© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
1. Organizational Profile (aka Work Force Analysis).
2. Formation of job groups (Job Group Analysis).
3. For each job group, statement of % of minority and
female incumbents (JGA).
4. For each job group, determination of minority and
female availability (Availability Analysis).
5. For each job group, comparison of incumbency to
availability (Incumbency vs. Availability).
6. Placement Goals for each group where incumbency
is less than availability.
Itemized Listing

22. 22© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
7. Results of evaluation of effectiveness of outreach
and recruitment efforts to identify and recruit
qualified IWD.
8. Documentation of all actions taken to comply with
audit and reporting system requirements.
9. Documentation of computations or comparisons
described in 41 CFR 60-741.44(k) for preceding AAP
year and if 6 months or more into current AAP year,
information for at least the first 6 months of the
current AAP year.
Itemized Listing Section 503

23. 23© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
10. Utilization analysis evaluating representation of
IWDs in each job group (or entire workforce, if
appropriate). If 6 months or more in current AAP
year on date receive the scheduling letter, submit
information that reflects current year progress.
Itemized Listing Section 503

24. 24© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
11. Results of evaluation of effectiveness of outreach
and recruitment efforts.
12. Documentation of all actions taken to comply with
audit and reporting system requirements.
13. Documentation of computations or comparisons
described in 41 CFR 60-300.44(k) for immediately
preceding AAP year and, if 6 months or more into
current AAP year, information for at least the first 6
months of current AAP year.
Itemized Listing Section 4212
(VEVRAA)

25. 25© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
14. Documentation of hiring benchmark, methodology
used to establish it if using 5 factors. If 6 months or
more into current AAP year, submit information
that reflects current year results.
Itemized Listing Section 4212
(VEVRAA)

26. 26© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
15. Copies of EEO-1 for last three years.
16. Copy of CBA. Include other documents such as
policy statements, employee notices or handbooks,
etc. that implement, explain, or elaborate on
provisions of CBA.
17. Information on AA goals for immediately preceding
AAP year and progress on goals for the current AAP
year. If 6 months or more into current AAP year,
submit info that reflects progress on goals
established in current AAP year and describe
implementation of action-oriented programs
designed to achieve these goals.
Itemized Listing Supporting Data

27. 27© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
18. Data on employment activity for immediately
preceding AAP year and, if 6 months or more into
current AAP year, information for at least the first
six months of the current AAP year. Information
can be presented by job group or job title.
a. Applicants and hires: Total number of applicants and
total number of hires, minority break out information,
female/male information. Unknown race and/or sex
should be included in data submitted.
b. Promotion: Total number of promotions by gender and
race/ethnicity. Include definition of “promotion” as used
by your company and basis on which they are compiled.
Itemized Listing

28. 28© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
18. (continued)
c. Terminations: For each job group or job title, provide
total number of employee terminations by gender and
race/ethnicity. When presenting terminations by job
title, include the department and job group from which
the person(s) terminated.
19. Employee level compensation data for all
employees (including full-time, part-time, contract,
per diem or day labor, temporary) as of date of the
workforce analysis in AAP. Provide gender and
race/ethnicity information and hire date for each
employee as well as job title.
Itemized Listing

29. 29© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
19. (continued)
a. For all employees, compensation includes base salary
and or wage rate, and hours worked in a typical
workweek. Other compensation or adjustments to salary
such as bonuses, incentives, commissions, merit
increases, locality pay or overtime should be identified
separately for each employee.
b. Contractor may provide any additional data on factors used to
determine employee compensation (education, past experience,
duty location, performance ratings, department or function, salary
level/band/range/grade)
c. Documentation and policies related to compensation practices
should be included in the submission
Itemized Listing

30. 30© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
20. Copies of reasonable accommodation policies and
documentation of any accommodation requests received
and their resolution, if any.
21. Most recent assessment of personnel processes including
the date assessment was performed, any actions taken or
changes made as a result of the assessment, and the date of
next scheduled assessment.
22. Most recent assessment of physical and mental
qualifications including date of assessment, actions taken or
changes made as a result of assessment, and date of next
scheduled assessment.
Itemized Listing

31. 31© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
Notes under Item #22 state
“If any of the requested information is
computerized, you must submit it in an
electronic format that is complete, readable,
and useable.”
Itemized Listing

32. 32© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
What types of requests are you seeing
today that are taking contractors by
surprise?

33. 33© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
So after all of this, what
may be the outcome of
the audit?

34. 34© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
• Compliance Evaluation Closure Letter
• No violations
• Minor violations
• Conciliation Agreement
• Major violations
Outcome of Compliance Review

35. 35© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
• FY 2014 = 3,802 compliance
evaluations and 501
conciliation agreements
• September 2014 – April 8,
2015 = 1,333 compliance
evaluations with 220
conciliation agreements
(16.50%)
OFCCP Activity

36. 36© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
• May 2015: Manufacturer in Alabama
will pay $115,000 in back wages,
interest to 159 applicants; systemic
hiring discrimination against 83 women
and 19 African Americans
• April 2015: Media and technology
company in Seattle, Washington:
$190,000 settlement for back wages
and interest to 96 former and current
female employees and 100 minority job
applicants
Selection Discrimination

37. 37© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
• February 2015: Massachusetts medical center
will pay $190K in back wages, interest and salary
adjustments
• January 2015: Research university and hospital
in Maryland; $360K in back wages and damages
for two African American women
Pay Discrimination

38. 38© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
Polling Question #3
If you were selected for an audit today, how
prepared would your organization be?
 Well prepared
 Somewhat prepared
 Not prepared
 Don’t know

39. 39© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
What are some best practices that we
can put into place now to prepare for
an audit?

40. 40© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
Best Practices
• Review job groups, labor areas, and other plan
data prior to writing an AAP
• Reconcile data and ensure accuracy for AAP
prior to audit
• Review compensation annually (make changes
if needed)
• Document and review effectiveness of GFE
• Hold managers, recruiters, HR staff
accountable for progress and GFE

41. 41© 2015 PeopleFluent How to Evaluate Your AAP’s Audit Readiness
Best Practices
• Review processes and procedures to ensure
being carried out
• Review website and facilities for accessibility
• Take employees seriously
• Take tours of facilities
• Investigate adverse impact
• Review record retention requirements
• Train HR, recruiters, managers, employees

42. TM
© 2014 PeopleFluent | Confidential Talent Insights. Business Outcomes.TM
Thank
You
Find PeopleFluent on…
Twitter: twitter.com/peoplefluent
LinkedIn: linkedin.com/company/peoplefluent
Facebook: facebook.com/peoplefluent
Blog: peoplefluent.com/resources/peoplefluent-blog
Julia Méndez, Principal Business Consultant
julia.mendez@PeopleFluent.com
Rosemary Cox, Principal Business Consultant
rosemary.cox@PeopleFluent.com
DISCLAIMER: The information provided in this presentation is for educational and informational purposes only.
It does not constitute legal advice or legal opinions. PeopleFluent makes no claims, promises or guarantees
about the accuracy, completeness or adequacy of the information contained herein. Nothing that is provided in
this presentation should be used as a substitute for the advice of legal counsel.
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