The political-policy path that leads to the annual federal pay raise has more than its share of detours. But, with any luck, federal employees will know next month where they stand on the 2005 pay raise.

Congress is scheduled to return in mid-November and grapple with its unfinished business, including fiscal 2005 appropriations bills. Only four of the regular 13 spending bills have been sent to the White House. One of the unfinished bills, the transportation and treasury appropriation, includes a provision providing a 3.5 percent raise to civil service employees.

If Congress fails to act on the proposed raise, President Bush probably will be forced to submit an alternative plan to avoid the triggering of salary formulas in federal pay law that were set in 1990 with the goal of closing the gap between federal and private-sector salaries.

Those formulas, if not blocked, would provide about 1.8 million civil service employees with a 13.1 percent pay increase. Under the law, employees would receive 2.5 percent in an across-the-board raise, and 10.6 percent would be distributed based on their geographic location.

Bush has until Nov. 30 to submit his alternative plan and probably will do so if Congress fails to ratify its proposal for a 3.5 percent raise.

Last year, Bush sent Congress an alternative plan when lawmakers deadlocked over budgetary priorities. He cited national conditions, including the war against terrorism, as reasons to sidestep the higher raise that would have been mandated under federal pay law.

The White House has faulted the methodology set up for the federal pay law since the mid-1990s, citing concerns about how "locality pay" raises are calculated and the costs of such raises. As a result, pay law changes made in 1990 have been only partially followed.

Bush began the year proposing that civil service employees receive a 1.5 percent raise in 2005, but Congress -- at the urging of Washington area members -- has decided to provide a 3.5 percent raise, on par with what lawmakers allocated for military personnel.

The Federal Salary Council, an advisory group that oversees the General Schedule locality pay system, recommended in September that GS employees receive a 2.5 percent raise next year and an additional 1 percent raise based on their geographic location.

Auditing Homeland Security

The president has signed legislation designed to tighten auditing and financial management practices at the Department of Homeland Security.

The law, proposed by Rep. Todd R. Platts (R-Pa.), requires an audit of the department's accounting controls that are used to detect fraud and mismanagement of funds. Under the law, the department will use an independent auditor to render an opinion on the department's internal controls, starting in fiscal 2006.

In a statement, the House subcommittee on government efficiency and financial management said the change was particularly important in light of repeated reports of problems in the department.

The subcommittee cited a recent inspector general audit that concluded that the Transportation Security Administration did not follow sound contracting practices for the installation and maintenance of explosive-detection equipment at airports. The inspector general said TSA paid the contractor at least $49 million in excess profit. TSA has disputed the finding that the profit was unreasonable, the inspector general said.

Platts, who chairs the subcommittee, said, "Strong internal controls are essential to sound management. Too often, internal controls are a last thought when programs are created; we need to think of them much earlier."

The law also brings the department under the 1990 Chief Financial Officers Act, requiring the president to appoint a financial officer, who will undergo Senate confirmation. The new officer will report directly to the department's secretary and undersecretary for management, according to the law.

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