Alittle-known program has become a favorite way for agencies to hire and could be a boon to young people looking for a federal job.

It is called the Federal Career Intern Program and was designed to allow agencies to hire quickly for entry-level jobs. In its first year, fiscal 2001, the program brought 423 people into the government. Three years later, agencies hired 7,017 interns through the program.

These interns joined the government in the lower to middle ranks, at General Schedule 5 through 9, with typical salaries ranging from $30,000 to $40,000.

The program allows federal agencies to hire for two-year internships and to train and develop the interns for careers in government. After completing the internship, the employees are given permanent status as career civil servants.

The program has become so popular that agencies use it more than other special hiring programs, such as Outstanding Scholar and the Veterans Recruitment Appointment, a report by the Merit Systems Protection Board shows.

The board's report suggests that the intern program could supplant regular civil service hiring procedures, which call for jobs to be advertised widely and for applicants to be selected for employment through a fair and open competition.

The intern program was established by presidential order in July 2000 as a way to speed up hiring in a number of occupations. The first warnings of a big retirement wave had been sounded that year, and there was concern that agencies could be at risk of a brain drain if large numbers of employees opted to retire.

About 38 percent of the civil service is 51 or older, with a large cohort in the 55-to-59 range, according to the Office of Personnel Management. Linda M. Springer, the OPM director, said in a recent interview that OPM data suggest that substantial numbers of federal employees will retire between 2008 and 2010.

The two-year internship program will probably help agencies meet the challenge of hiring younger workers. Agencies may hire career interns anytime, and no public notice of job openings is required.

Interns receive the same pay and benefits as regular federal employees at their grade levels, and they are eligible to receive pay increases and promotions, including accelerated promotions.

The study by the MSPB, an independent agency that monitors trends in the civil service, found that agencies rely heavily on college visits and job fairs to attract internship applicants.

For the report, MSPB researchers surveyed more than 1,000 interns and supervisors to collect information on how the intern program is used and perceived. Ligaya J. Fernandez of MSPB's office of policy and evaluation was project manager for the report.

For fiscal 2001-04, the MSPB study found, 61 percent of the interns hired had bachelor's degrees, and an additional 13 percent had master's or higher degrees. Their average age was 30, and 80 percent said they had no prior federal service.

The interns were hired into 194 occupations, including customs inspectors, auditors, electrical engineers, contract specialists and program analysts, the report said.

Ninety percent of the interns said they planned to stay in their current jobs or stay with their agencies in another position -- "an encouraging finding," the report said.

But the report also raised some red flags.

The MSPB expressed concern that agencies could rely too much on the intern program for hiring and create a "closed" process "where only favored groups or individuals can be considered and appointed to federal jobs."

MSPB also raised questions about whether agencies weeded out people who were undeserving of federal employment. Many interns rated as average probably should be let go, the report said, "because someone who is an average performer as an intern may be a marginal or poor performer when placed in a journeyman position."

In a statement accompanying the report, Neil A.G. McPhie, the MSPB chairman, said agencies hiring through the intern program also must remember to adhere to government-wide principles that call for fair treatment, equal opportunity and veterans' preference.

"Agencies can unwittingly violate these principles and rules, which can result in a weakened civil service," McPhie said.