Watchdog: Follow the Money

Veterans Affairs officials claim agency cannot revoke bonuses, contradicting earlier statements to congressional committee

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Bonuses paid to top executives at the Department of Veterans Affairs who committed misconduct cannot be rescinded, an agency official testified Friday, in direct contradiction to what he told a different panel less than a month ago.

Samuel Retherford, principal deputy assistant secretary for human resources at the veterans' agency, was asked directly whether bonuses paid to senior executives who created phony medical appointment lists could be rescinded.

“Currently we do not have the authority to go back and rescind an award,” Retherford told a House Oversight and Government Reform subcommittee Friday.

Last month Retherford told the House Veterans' Affairs Committee staff that bonuses could be rescinded for one year after being paid.

The muddled answers come as the VA is mired in ongoing investigations into falsification of records at health facilities nationwide meant to conceal long backlogs in care. Patients in Phoenix and other facilities were put on fake waiting lists to make it appear they were being seen within the deadlines set by agency policy.

Meeting those timeframes was a key component in determining whether top managers in the Senior Executive Service received performance bonuses.

In May, VA officials claimed they had rescinded a $9,345 performance bonus paid in 2013 to Sharon Helman, who was the director of the Phoenix VA hospital where the scandal over phony waiting lists first erupted. Agency officials claimed at the time that Helman's bonus was rescinded because it was improperly paid due to an administrative error.

While VA officials say Helman’s bonus was rescinded, they have not confirmed the money has been recovered.

Former VA Secretary Eric Shinseki announced on May 30 that steps had been initiated to fire Helman. Shinseki resigned later that day.

Helman’s current status is unclear. Acting VA Secretary Sloan Gibson said last month he was confident she was on paid administrative leave, but agency officials have not said for certain whether she is still being paid.

VA officials issued a statement late Friday confirming bonuses cannot be rescinded. Since Helman's bonus was issued in error, it can be revoked, according to the statement, which provides no information about her current employment status.

VA paid out about $2.7 million in merit bonuses to SES executives in 2013. Bonuses for 2014 have been suspended.

Retherford’s testimony Friday came as the oversight subcommittee investigated whether federal laws make it too difficult to fire agency officials who commit misconduct, and whether the performance appraisal and bonus structure rewards failure.

Every top manager at VA received a positive performance evaluation for the past four years, Gina Farrisee, assistant VA secretary for human resources, told the House veterans' committee last month. During that hearing she also indicated about 78 percent got bonuses, but the agency later clarified that the actual figure was about 65 percent.

The average bonus paid to a SES executive at VA was $12,010 in 2012, the most current year for which figures are available.

Government wide, about $50.6 million in merit bonuses were paid to SES executives in the 2013 fiscal year, according to documents released by the oversight committee. Agency-by-agency breakdowns were not available from the oversight committee or the U.S. Office of Personnel Management.

About 69 percent of all SES officials working for the federal government got a performance bonus which, on average, amounted to about $10,739 in 2012.

The Washington Examiner has sought clarification of the authority to rescind bonuses at VA since the revocation of Helman’s payout was announced.

Robert Petzel, former under secretary for health at VA, told the House veterans' committee in September 2013 that performance bonuses could not be rescinded once they were awarded.

When the announcement about revoking Helman’s bonus was issued, it stated the money was improperly paid because of an administrative error. However, Helman’s boss told a Phoenix television station it was awarded because of Helman’s outstanding performance.

Retherford told the veterans’ committee staff in a June 17 meeting that VA could rescind bonuses within a year of payment. The bonuses were paid in February.

Rep. Jeff Miller, R-Fla., chairman of the veterans' committee, apparently believed that assessment when he issued a media statement about VA bonuses July 7.

“The VA secretary has the authority to rescind these bonuses anytime within a year of when they were paid, and I am calling on the him to take this action where he deems appropriate,” Miller said in a statement to the Examiner, which published the list of all SES bonuses paid last year.

Retherford was adamant during the hearing Friday when asked whether those responsible for falsifying patient waiting lists could have their bonuses revoked. Rep. Stephen Lynch, D-Mass., asked the initial question and later asked it again.

“Are you saying that even if we find them having done that (misconduct) and concealed that from their evaluators, we can’t take back the bonus?” Lynch asked.

“We don’t have the authority, Congressman Lynch, to do that right now,” Retherford replied.

As to every SES manager at VA getting a positive performance review last year, despite an ever-widening series of scandals, Retherford said that statistic reflects a paperwork problem in that personnel evaluations were not retroactively corrected when the managers responsible for wrongdoing left the agency.

Carol Bonosaro, president of the Senior Executive Association, which represents SES employees throughout the federal government, said managers at VA and other agencies already have the authority to fire, demote or discipline managers involved in misconduct. They also have the option of referring criminal activity for prosecution, she said.

If executives who should be fired are not fired, that’s the fault of political leaders and appointees, Bonosaro said.

“That’s a matter of spine,” she said. “It’s called take the action when it’s appropriate.”

This article was originally published at 2:53 p.m. and has been updated to include new information from the Department of Veterans Affairs.

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