Transportation Department employees were bilking the government for extra pay by claiming to work in high-cost cities but actually teleworking from cheaper locations, according to a new federal investigation released Wednesday.

Several employees at the department’s Federal Railroad Administration also broke the rules by not showing up at their D.C. offices a couple of times each pay period, the probe found.

Telework employees were also allowed to escape the agency’s drug testing requirements if they were more than three hours from a test site, the probe said.

The findings were released by the Office of Special Counsel, an independent federal agency that investigates whistleblowers’ complaints.

One of the employees in question claimed to be working in the District of Columbia but was usually working from New Jersey. Another was working in upstate New York.

In both of those cases, the probe said, there was no evidence that the employees were intending to claim extra pay.

“To the contrary, the investigation found that the arrangements were entered into to allow the employees to deal with ongoing family matters outside of the Washington, D.C., area, and that the parties believed the arrangements complied with OPM regulations,” the Transportation Department’s acting general counsel told the special counsel.

The department said there was no evidence that supervisors were aware the employees’ arrangement was wrong.

But in another case, an employee did intentionally mislead authorities, repeatedly claiming he was working within the New York City area and its much higher rate of pay, while actually residing in Dunmore, Pennsylvania.

Brian Francis Reilly was ultimately convicted of misdemeanor theft of government money. He was given three years probation and ordered to repay the $123,641.32 in extra pay, along with a $5,000 fine.

A whistleblower had brought the issue to the special counsel, alleging not only that employees were abusing the system but also that supervisors were aware and let it happen.

The whistleblower also claimed FRA officials weren’t conducting drug testing on telework employees.

Investigators said that was true, to an extent, but said it didn’t violate the agency’s policy because there is an exemption for telework employees who are more than three hours away from the testing site.

“On several occasions during this period, these employees were not selected for testing because they were exempt under FRA testing policy because they were located more than three hours away from the testing site,” Special Counsel Hampton Dellinger said in a letter to President Trump reporting the findings.

Telework has come under scrutiny in recent years as the pandemic pushed employees out of office buildings, and many became accustomed to the more flexible arrangement.

Mr. Trump has ordered employees back to the office but some are resisting.

Then there’s the issue of pay.

Federal employees who work in higher cost-of-living areas can get significantly more money. The base pay for an entry-level GS-12 employee this year is $88,621, but that same employee working in the D.C. region would get $101,401. In New York, the employee would get $104,436.

The Commerce Department’s inspector general, in a report last summer, found nearly 1 in 4 telework employees were overpaid based on erroneous locality pay.

At the Architect of the Capitol, a legislative agency, the overpayment rate was 68%.

• Stephen Dinan can be reached at sdinan@washingtontimes.com.