Labor Dept watchdog offers buyouts, early retirement to cut staffing by 20%

The Labor Department's watchdog is not only losing staff, but racing against the clock to complete its ongoing work on pandemic-era fraud before time runs out.

The Labor Department’s watchdog office is offering buyouts and early retirements to its employees to cut its workforce by about 20% by the end of the fiscal year.

The department’s inspector general office already made workforce cuts through attrition last year.

But with COVID-19 emergency funds running out and cuts to its annual budget, the DOL OIG is offering Voluntary Early Retirement Authority (VERA) and Voluntary Separation Incentive Payments (VSIP) to some of its employees.

A DOL OIG spokesperson, who confirmed the buyouts and early retirements, told Federal News Network that the office doesn’t have a specific target for how many employees will accept the VERA / VSIP offers — but it does plan to lose about 20% of its current staffing by the end of fiscal 2024.

Employees eligible for either the VERA or VSIP include criminal investigators, auditors, analysts and administrative staff.

The DOL OIG spokesperson said employees who take the VSIP will receive the lower of two options — an authorized severance package, or $25,000.

Most agencies under law can offer incentive payments worth up to $25,000 for Title 5 employees.

Federal employees are generally eligible to accept a VERA offer if they have 20 years of service at age 50. or 25 years of service at any age.  Eligible employees are allowed to voluntarily retire and earn an immediate annuity.

The Labor Department’s watchdog is not only losing staff, but racing against the clock to complete its ongoing work on pandemic-era fraud cases.

The statute of limitations for many pandemic-related unemployment insurance fraud cases will begin to expire in early 2025.

DOL OIG is warning Congress that, unless it extends the five-year statute of limitations, it will not have the “investigative capacity” to review the 166,000 open unemployment insurance fraud complaints and investigate each case of suspected fraud before time runs out.

“We are concerned that, unless Congress acts to extend the statute of limitations for fraud associated with pandemic-related UI programs, many groups and individuals that have defrauded the UI program may escape justice,” DOL OIG wrote in its latest semiannual report to Congress.

Labor Department Inspector General Larry Turner wrote in the report that his office already saw a 20% reduction in its workforce in fiscal 2023 to deal with budget cuts.

Turner told Congress his office canceled 10 planned audits in FY 2023, “and may need to discontinue other planned work in the coming months.”

Those canceled audits included a closer look at DOL job training and worker safety programs, as well as the unemployment insurance program.

“These cancellations will result in fewer recommendations for improvement of department programs and operations,” Turner wrote.

DOL OIG received about $13.5 million for its FY 2023  budget — about $11 million short of its request to Congress.

Meanwhile, Turner said that most of DOL OIG’s supplemental pandemic funding will be completely spent by the first half of FY 2024.

“We will continue to efficiently and effectively use our available resources; however, at current funding levels, resource limitations have resulted and will continue to result in a reduction of oversight in both the Offices of Audit and Investigations,” DOL OIG wrote.

Congress passed a stopgap spending bill last week to avoid a government still working on a comprehensive spending bill for the rest of the fiscal year. But DOL OIG expects its workforce cuts will continue unless it receives a major funding increase.

To date, DOL OIG’s pandemic-related oversight work has led to over 1,500 indictments or initial charges, 957 convictions, more than 19,000 months of incarceration.

Its pandemic work has also led to over $1 billion in investigative monetary outcomes and helped put $85 billion in funds to better use.

DOL OIG estimates that, over the past 10 years, each dollar spent on its budget has led to an average return on investment of nearly $85.

“Essentially, the degree to which we can continue our level of oversight work depends on the availability of resources,” DOL OIG wrote in the semiannual report to Congress.

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