A large-scale reorganization is taking place at a federal volunteer service agency, resulting in approximately 75% of its full-time staff being placed on administrative leave.

According to internal sources, 535 out of 700 full-time employees have been temporarily removed from their positions as part of broader efforts to streamline the agency’s operations and reduce the size of the federal workforce.

In anticipation of the staffing changes, youth volunteers from a program focused on community service for individuals aged 18 to 26 were withdrawn from field assignments. Contracts totaling roughly $250 million were also terminated.

Despite these developments, the agency is expected to resume operations in a restructured form, sources said.

Originally founded in the early 1990s as a national volunteer initiative, the agency has received nearly $1 billion in public funding annually. However, it has struggled with oversight and accountability, failing eight out of the last ten annual audits.

A recent report from the agency’s Inspector General highlighted ongoing management challenges, including weaknesses in fraud detection and unresolved audit recommendations. In the latest review, 78 recommendations remain open, despite reported efforts to address some of them.

The future structure and mission of the agency remain under evaluation, with officials signaling that operational changes are aimed at improving efficiency and fiscal responsibility.