The investigation was prompted by allegations of impropieties in time and attendance practices at the U.S. Penitentiary in Atlanta, Ga. Review of these practices showed that all three physicians on the penitentiary's medical staff who were earning maximum pay were improperly taking compensatory time off during working hours while being reported on regular duty. In addition, two fraudulent applications by a physician assistant for sick leave were found. In view of these findings, the inquiry was expanded to include the Federal Correctional Institution in Lexington, Ky., and U.S. Public Health Service hospitals in Baltimore and New Orleans. At these institutions instances were also found in which physicians who were earning maximum or near maximum pay were improperly taking compensatory time off. Results indicate that these practices may still be prevalent at similar institutions. Although the motive for these practices (to provide adequate compensation to Federal physicians while ensuring adequate medical coverage) is understandable, the practice is improper. Recurrence of the practice should be presented. It is recommended that the Assistant Secretary for Health in the Department of Health, Education, and Welfare take the necessary action to stop the improper use of such compensatory time. The Assistant Secretary should also direct that employees involved in maintaining time and attendance records be given explicit instruction for records preparation and approval. Other steps should include taking appropriate action regarding past causes and reviewing physicians' work schedules to see if they can be revised to meet their agencies' needs.