Whistleblower procedures at FDIC for contractors were not aligned with laws, report finds

Procedures and processes at the federal bank deposit insurance agency for ensuring notice to contractor and subcontractor employees about their whistleblower rights were not aligned with laws, regulations, and policies designed for those purposes, according to a report issued Wednesday by the agency’s inspector general.

The report by the Federal Deposit Insurance Corp.’s (FDIC) Office of Inspector General (OIG) noted that the agency’s Division of Administration (DOA) Acquisition Services Branch (ASB) voluntarily adopted some of the whistleblower provisions and requirements for insertion into its contracts. However, the report stated, that wasn’t enough.

“The FDIC DOA Whistleblower Rights Notification Clause, intended to address whistleblower rights and protections, was not included in three of the nine ASB contracts that we reviewed (33 percent),” the report states. “Further, the FDIC’s Legal Division, under its separately delegated contracting authority, did not operate consistently with FDIC DOA and had not adopted any whistleblower rights notification provisions for contractors or included any whistleblower clauses in its contracts.”

The OIG said it also determined that the agency established no requirements, either through procedures or processes, for FDIC officials – “such as Contracting Officers, Oversight Managers, and Oversight Attorneys” – to determine whether contractors have carried out their obligations under the FDIC’s Whistleblower Rights Notification Clause.

That clause, the report stated, requires contractors to: (1) inform their employees in writing of employee whistleblower rights and protections; and (2) insert the substance of the clause in all subcontracts of more than $100,000.

Finally, the report stated, even though the FDIC had updated its confidentiality forms seven years ago (in 2015) to include a reference to whistleblower protections, the agency “did not obtain Confidentiality Agreements from all of its contractors and contract personnel as required and did not use the current Confidentiality Agreement form.” The report also noted that ambiguity exists about to whom contractors and subcontractors should report about issues.

The OIG made 10 recommendations for addressing the shortcomings it said it found in the agency’s contractor and subcontractor whistleblower programs. Those include review of existing contracts, updating and implementation of guidance and procedures, and development of training to ensure that contractors and subcontractors are properly informed of their whistleblower rights and protections.

“We also recommended that the FDIC obtain the outstanding Confidentiality Agreements that are missing and ensure that updated guidance provides clear direction on whom whistleblowers should report to,” the report stated.

The OIG said the agency concurred with nine recommendations and partially concurred with one; it plans to complete corrective actions by May 30, 2022.

FDIC OIG: Whistleblower Rights and Protections for FDIC Contractors