Watchdog says VA isn’t keeping close enough tabs on retention bonuses

Justifications for about 30% of recruitment, relocation and retention awards that were provided to Veterans Health Administration employees in fiscal years 2022 and 2023 could not be verified or were insufficient, according to a new Veterans Affairs Department inspector general report that identified gaps in the agency’s oversight of the monetary incentives. As such, approximately $340.9 million in payouts to 38,800 individuals were not adequately substantiated. 

Specifically, the Office of Inspector General estimated that justification forms were missing for 18,000 employees, 10,900 individuals received bonuses for improper reasons and 4,100 people got incentive payments despite missing one or more of the required signatures from appropriate agency officials. 

“VA did not effectively govern the incentive process to ensure responsible VHA officials consistently captured mandatory information necessary to support an incentive award,” investigators wrote. “The required documentation helps provide assurance that incentives are properly used, and effective oversight of incentives also requires sufficient documentation for review.”

The OIG also found that 71% of employees who received relocation incentives, or 2,200 individuals, did not self-certify that they moved. Investigators highlighted one worker who received $30,000 to relocate, but the employee didn’t appear to verify their new address and human resources said the individual didn’t have to move because it was a remote position. 

While VA sought to recoup the money, the employee requested a waiver, and it was determined that the payment was the result of an administrative processing error. As a result, the individual was able to keep about $22,000. 

Additionally, investigators identified 28 employees who were still receiving retention bonuses, in some cases for years, after they were supposed to have ended, leading to $4.6 million in improper payments. For example, one employee received a 12% retention incentive in September 2013 that was supposed to end in February 2014. Instead, payments continued for the next decade, totaling about $150,900. 

The VA reported that it is pursuing debt collection for 27 of the 28 employees. 

Department officials blamed the errors on an overhaul in fiscal years 2019 and 2020 that transferred HR responsibilities from the facility level to the Veterans Integrated Services Networks (i.e. regional level), which led to a shortage of trained staff to oversee incentive payments. The IG, however, noted that the office flagged similar issues with oversight of recruitment, relocation and retention bonuses in a 2017 audit. 

“In response to [that audit], [the department] updated VA policy to establish internal controls and improve oversight of incentives,” according to the report. “However, the OIG team found VHA did not take sufficient steps to sustain or enforce the updated VA policies to ensure incentive packages were completed appropriately before payments were initiated. Further, VISN human resources staff acknowledged they did not always adhere to policy.”

VA concurred with all eight recommendations, which include enforcing quality control checks to ensure that VISNs fulfill requirements for maintaining monetary incentive documentation and identifying retention awards that have been paid for more than one year to determine whether they have been appropriately recertified or should be terminated. 

In 2024, VA acknowledged that it mistakenly awarded $11 million in “critical skill” bonuses to senior executives. 

Under President Donald Trump, VA is seeking to downsize its workforce by around 80,000 employees, which would represent a 15% cut that brings it down to fiscal 2019 levels.