Watchdog blasts VA for errors leading to $11M in improper bonuses

A key Republican lawmaker accused Veterans Affairs leaders of knowingly misusing nearly $11 million in incentive pay awards to benefit senior department officials instead of retaining in-demand staff following the release of a critical report by a federal watchdog on Thursday.

The controversy stems from erroneous bonuses doled out to senior executives last summer and fall as part of the $117 million Critical Skill Incentive Payments program authorized by Congress. Money from that fund has been given to more than 13,000 staffers with high-demand skills in an effort to keep them in VA hospitals and benefits offices.

Last September, VA leaders acknowledged that about $11 million was given to 182 senior VA leaders who should not have qualified for the bonuses. In a statement, a department spokesman said investigators found no legal wrongdoing in the matter and attributed the improper payments to administrative mistakes.

However, a VA inspector general report into the errors released Thursday blamed the errors on “breakdowns in leadership and controls at multiple levels of VA,” including insufficient communication about bonus plans from Veterans Health Administration leaders and poor oversight by the department’s legal team.

House Veterans’ Affairs Committee Chairman Mike Bost, R-Ill., called those findings disturbing.

“During oversight visits across the country, we have consistently heard from VA police officers, medical supply technicians, housekeepers, and other VA staff about the need for VA to better retain quality employees,” he said in a statement.

“Instead of using all of the critical skill incentives to do this, VA inappropriately used the money to line the pockets of VA executives to the detriment of VA’s workforce and the veterans they serve.”

Bost promised a full investigation into the matter by his committee, saying the evidence so far indicates that the errors were “not some type of administrative mistake.”

The inspector general report specifically singled out leaders in the Veterans Health Administration and Veterans Benefits Administration, but not VA Secretary Denis McDonough, who did not learn about the improper payments until last September.

In a statement to the inspector general’s office, McDonough agreed with recommendations to strengthen incentive pay administration within the department and said he hopes those reforms can be implemented by the end of September.

But he also pushed back on assertions of malfeasance by other department leaders, calling the mistakes issues of “timing, miscommunication, and inadvertence.”

VA officials have already announced plans to recoup all of the improper bonus payments. Investigators said they do not have a full accounting of those efforts yet, but noted the pullback of the money “negatively affected employee morale” and led to the early retirement of at least three senior officials.