WASHINGTON — VA’s program of giving out bonuses as retention incentives has been conducted without appropriate guidance or oversight, and many were handed out without regard for employee reviews, according to an audit conducted by the VA Inspector General’s Office.
This has some legislators calling for a suspension of the VA bonus system until the department can more effectively run the program.
In FY 2010, VA paid approximately $11 million in bonuses to 16,487 employees spread out over 162 facilities. The bonuses are meant to help facilities retain employees that do quality work. Intended to counter employment trends and labor market forces, such as limited availability of candidates, and unsuccessful efforts to recruit candidates for certain positions, they also can be used to help even out disparities between salaries in the private sector and those in VA.
According to VA policy, officials at each facility must justify, in writing, the reason for a retention incentive and the amount. IG investigators, however, found a lack of justification in the majority of bonuses they examined.
Investigators looked at a sampling of bonuses handed out by VA in FY 2010 and found reason to question 80% of the VHA incentives they reviewed and 79% of the incentives handed out by VA Central Office. The awards ranged from amounts as low as $260 to as high as $43,733.
One example of faulty justification was a nurse at a VA facility in Minneapolis. The employee’s annual salary was $95,237 in 2010. The employee was given $7,589, with the written justification stating the employee was likely to leave federal service and had unusually high or unique qualifications, according to the IG. The report found no evidence supporting or describing those qualifications.
In many cases, the supporting documentation backing up the retentions was missing entirely.
Similar deficiencies were seen in VA Central Office (VACO). One senior official with a salary of $156,797 received a retention incentive of $26,000, in addition to a $13,000 senior executive leadership award, although it was the employee’s first year and a probationary period was still in effect.
Due to lack of justification and missing supporting documentation, investigators questioned the appropriateness of retention incentives paid out to 30 of 38 VACO employees totaling about $514,000.
Part of the problem, according to the IG report, is inadequate guidance, oversight and training.
There are no set policies about how to use incentives to retain employees in high-turnover positions as part of work force succession planning. Guidance in other areas is thin or unclear, the report states.
Also, human-resource officials responsible for reviewing incentive requests did not always ensure the completeness of documentation. Senior officials in medical facilities frequently signed off on incentive packages they received from human resources without ensuring the requests were adequately justified.
Some of these gaps are due to poor personnel training. According to the report, human-resource employees need detailed training on the process and procedures surrounding the incentive program.
Immediate Fixes Needed
The Inspector General’s Office is recommending that VA take immediate steps to shore up its incentive program, including revising national guidance and instituting control mechanisms.
The report also recommends that, over the next six months, VA conduct a review of all of the questionable awards IG identified as part of their investigation. In addition, VA should take the next year to review 100% of incentives being paid out in order to assess their appropriateness and stop unnecessary payments.
In the meantime, Rep. Jeff Miller (R-FL), chair of the House VA Committee is asking VA Secretary Eric Shinseki to suspend VA’s executive bonus program until all concerns have been resolved. Miller made the request for the first time in September.
“The response I received [in September] was that everything was fine,” Miller said. “In light of the VA OIG report, I am making that request a second time and encourage VA to stop payment of bonuses until it can be verified that these bonuses are prudent and merit-based.”
VHA has not made plans to suspend incentives but does expect to review all facility-based retention incentives the IG identified as problematic by September 30, 2012, as well as 100% of all bonuses given to senior executives.
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