First Look

VA committee leaders demand ‘guardrails’ for bonuses as agency claws back payouts to career executives

Top lawmakers on the Senate and House VA committees are demanding stronger guardrails on bonuses, after the Department of Veterans Affairs said it recently made...

Top lawmakers on the Senate and House VA committees are demanding stronger guardrails on bonuses, after the Department of Veterans Affairs said it recently made more awards to career executives than intended.

VA said last Friday it’s taking back nearly $10 million in bonuses it paid to career senior leaders earlier this month, over concerns the awards went to more executives than were eligible.

VA officials said in a statement that the department, after a recent review, found it was “imprecise” in how it implemented its new critical skill incentive (CSI) authority under the toxic-exposure PACT Act.

In a letter to VA Secretary Denis McDonough, Senate VA Committee Chairman Jon Tester (D-Mont.) and Ranking Member Jerry Moran (R-Kan.) joined House VA Committee Chairman Mike Bost (R-Ill.) and Ranking Member Mark Takano (D-Calif.) to express disappointment in the department’s “misuse” of PACT Act authorities.

“Contrary to congressional intent, incentives were used to boost pay of senior executives at VA rather than bolster staffing for critical shortage positions requiring highly skilled individuals,” lawmakers wrote.

Lawmakers are asking the VA to provide the justification it used to initially approve CSI payments to career senior executives at VA headquarters. They’re also asking the VA how it will strengthen its oversight around PACT Act bonuses and other payment incentives.

“VA leadership managing the program clearly did not follow the intended procedures and guardrails that facilities in the field were required to follow,” lawmakers wrote. “We expect a much higher level of due diligence, oversight, and planning at this executive level.”

The VA said 170 career senior executives received about $9.7 million in critical skill incentive payments in early September.

But congressional staffers told Federal News Network that about 200 career executives working in field positions outside the National Capital Region also received the critical skill incentives. In those cases, staffers said the VA has not attempted to take back those bonuses.

“Those applications, based off of VA’s review, did meet the requirements, so those payments will not be recouped,” a staffer said. “We’re still trying to figure out where all of that fits into congressional intent.”

Critical pay incentives under the PACT Act are capped at 25% of an employee’s base pay. VA salaries cannot exceed $400,000, the president’s current salary.

VA, according to congressional staffers, said in a briefing last Friday that the maximum 25% CSI payment went to all 170 of the VA central office career executives who received bonuses.

“I think it’s really eye-opening and something that we’ll not soon forget, as far as congressional authorities,” a staffer said.

However, staffers said VA careers executives in the field did not necessarily receive the maximum CSI bonus.

“We’re glad that the majority of the payments, as far as we know, were made properly. That’s good news. VA is having a lot of success — and new success — with hiring this year. But this is just an unfortunate mark on that success,” a staffer said.

The department said more than 97% of employees who received skill incentive pay under the PACT Act are not senior-level career executives at headquarters.

VA has processed 13,165 critical skills incentives worth $117 million. A majority of the incentives went to HR specialists and assistants, housekeeping aides, security personnel, and police officers.

All VA employees who received CSI payments had to sign retention commitments, as required under the PACT Act.

Congressional staffers said the critical skills incentive authority in the PACT Act was meant to get the VA closer to the market rate for some of its most high-demand positions.

“The intent was to make sure that VA had what it needed in order to implement PACT [Act] and maintain, if not increase their own capacity, while all of these veterans will be newly eligible for care and benefits,” a staffer said.

Staffers said the Senate VA Committee is planning to hold an accountability hearing next week, where lawmakers expect to question VA officials about the critical skills incentives.

“Obviously, there was a lot of frustration and disappointment — and anger, quite frankly — that the authority was used, on the one hand, for senior executives at the central-office level, when I think the vision was definitely more for the field,” a staffer said. “And then two, to find out that the central office staff who received it, the senior executive staff, didn’t necessarily meet the criteria and requirements that VA was holding the field to, and that’s obviously just unacceptable.”

Lawmakers said they included the bonus authority in the PACT Act to hire human resources specialists, IT professionals, police officers and housekeepers “who have faced hired shortages for years and are essential to the day-to-day operation of VA facilities.”

Senate and House VA committee leaders said they’re encouraged the VA inspector general’s office is looking into the issue.

“Regardless, Congress will pursue additional oversight and more aggressive safeguards on existing and future authorities to ensure this does not happen again,” lawmakers said.

Congressional staffers said lawmakers, following the VA’s briefing last Friday, are adding new language to bills introduced earlier this year that would give the VA additional pay flexibility.

Revisions are in the works for the VA CAREERS Act, introduced in January by Tester and Sen. John Boozman (R-Ark.). The bill would set higher base pay caps for VA physicians, podiatrists, optometrists and dentists.

“Part of the first conversation our office had when we got the announcement Friday was, ‘We’re going to go back into CAREERS and take a look at that text, and see if we feel comfortable with the guardrails that are in there, or if we need to put some more meat on that — specifically with this in mind,'” a staffer said.

The VA CAREERS Act would also set up a pay system for VA medical center directors, meant to be more competitive with private-sector compensation.

“We’re really looking at all of the language in that bill. But those two in particular are ones where we’re going to be looking at, where’s this all going.”  We have put a lot of reporting and guardrail language in there already, but we are going to be giving that another look for sure,” a staffer said.

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