Oversight: “Counting the Money: Preventing Fraud and Abuse in VA’s Bonus Payment Practices for VA Employees

VA Budget and ModernizationHouse Veterans' Affairs Subcommittee on Oversight and Investigations · 2025-07-22 · 119th Congress
The House Veterans' Affairs Subcommittee on Oversight and Investigations held this hearing to examine a June 2025 VA Inspector General report finding poor oversight of the VA's "three R" (recruitment, relocation, and retention) incentive payments, and to compare those findings with a similar 2017 OIG report. Begins at 0:27:26
Transcript
Highlights

Title

VA oversight of recruitment, relocation, and retention bonus payments

Purpose

The House Veterans' Affairs Subcommittee on Oversight and Investigations held this hearing to examine a June 2025 VA Inspector General report finding poor oversight of the VA's "three R" (recruitment, relocation, and retention) incentive payments, and to compare those findings with a similar 2017 OIG report. Witnesses from VA's Office of Human Resources and Administration, Veterans Health Administration, the VA Office of Inspector General, and the American Federation of Government Employees testified on documentation failures, improper payments, and the broader impact of workforce reductions on veteran care. Begins at0:27:26

Who spoke

Chairwoman Kiggins (R-VA)0:27:26: Opened by describing the three R incentives as tools to attract and retain hard-to-fill health care staff0:27:54, cited the 2017 OIG finding that 33% of senior-executive retention incentives were improperly authorized and totaled over $158 million in unsupported spending0:29:08, and noted 28 employees improperly received incentives for years past expiration, including one for 11 years, totaling $4.3 million0:30:52; later pressed witnesses on the VA's reactive rather than proactive review process1:01:14 and the approval chain of command1:05:19.

Ranking Member Ramirez (D-IL)0:32:35: Said the VA will lose nearly 30,000 employees by fiscal year-end and called this "despicable"0:32:59; presented workforce dashboard data showing a 45% drop in job applicants and 56% drop in new hires this year versus last0:36:01, a net loss of 4,144 mission-critical employees compared to 111 under the Biden administration in the same period0:36:25, and 7,500 veteran-facing employees lost without backfill0:37:26; cited retention incentive use falling from nearly 20,000 to 7,000 and special contribution awards from 30,000 to 7,000 year-over-year0:40:180:40:48; later questioned Ms. Therit on attrition numbers1:09:56 and entered VA workforce dashboard issues 1–26 into the record1:35:32.

Ms. Tracey Therit, VA Chief Human Capital Officer0:43:33: Testified that VA updated 3R policy in 2017 and continues refining documentation, certification, and oversight procedures0:44:32; described the approval process using SF-1016 (recruitment/relocation) and SF-1017 (retention) forms1:02:42 and the breach-of-agreement/debt-collection chain up to the Assistant Secretary for HR1:05:47; said the chain of review dates to a 2020 policy revision1:06:43.

Mr. David Perry, VHA Chief Officer, Workforce Management and Consulting1:01:48: Said VHA is shifting quality-assurance review to the "front end" (compensation office) rather than after-the-fact1:01:48, acknowledged facilities previously used about 150 different local processes, now standardized to 181:02:11, and said standardization/compliance work would be complete by the end of the fiscal year1:02:241:24:40.

Mr. Shawn Steele, VA OIG, Director of Human Capital and Operations Division0:48:40: Summarized the June 2025 report finding VA could not verify or found insufficient justification for 30% of incentive payments to VHA employees, amounting to $341 million0:52:10; said 28 employees were improperly paid retention incentives for an average of eight additional years, totaling about $4.6 million0:52:25; also cited a May 2024 finding of $10.8 million in critical-skill incentives paid to senior executives without required support, over 90% since recouped0:49:59; attributed re-certification failures to a mix of HR Smart system limitations and human error1:25:44.

Dr. Sheila Elliot, President, AFGE Local 23280:54:23: Said AFGE found no VA repository showing who received bonuses at Hampton and that outreach to 800 bargaining-unit members found only nine reporting bonuses (four recruitment, four retention, one relocation) from 2021–20250:55:43; said the new North Battlefield Outpatient Clinic opened only 27% staffed0:56:06; described losing a psychologist to another facility for lack of a relocation bonus, worsening a 43% vacancy rate to 44%1:16:411:17:33; said VA's collective bargaining rollback has hurt recruitment and retention1:22:53.

Rep. Conway1:12:42: Criticized the impact of announced staffing cuts on morale and recruitment1:12:42, raised concerns about remote-work restrictions harming psychologist/psychiatrist retention and patient privacy1:15:30, and asked Dr. Elliot about the effect of the executive order on collective bargaining rights1:29:16.

Rep. Kennedy1:18:26: Cited February 2025 cuts of 1,000 then 2,400 VA employees, a leaked memo describing plans to cut 80,000, and a revised target of nearly 30,000 by fiscal year-end1:18:561:19:141:19:42; asked Ms. Therit why collective bargaining rights were preserved for Milwaukee VA workers but stripped from Buffalo counterparts, receiving no answer due to pending litigation1:20:581:21:15; later cited 1,720 lost registered nurses, 604 physicians, and 1,081 claims examiners as contradicting Secretary Collins's mission-critical staffing pledge1:30:43.

Key moments

OIG's 2017 report found 33% of senior-executive retention incentives improperly authorized, totaling more than $158 million in unsupported spending0:29:08.

The 2025 OIG report found VA could not verify or found insufficient justification for 30% of incentive payments to VHA employees — about $341 million — and identified 28 employees improperly paid for an average of eight additional years, totaling $4.6 million0:52:100:52:25.

Recruitment bonuses grew 237% and relocation payments 85% between 2020 and 2023, per Chairwoman Kiggins0:29:38.

Ramirez's data: retention incentive use fell from nearly 20,000 (2024) to 7,000 (2025); recruitment incentive use fell from 6,000 to about 1,000; special contribution awards fell from nearly 30,000 to about 7,0000:40:180:40:48.

VHA declined to recoup $30,000 in relocation payments made to a remote-working employee who never relocated0:31:190:32:06.

Dr. Elliot testified Hampton VA is 43% vacant in recruitment and expects to reach 44% after losing a psychologist to a facility offering a relocation bonus Hampton did not1:16:411:17:33.

Rep. Kennedy asked Ms. Therit why Milwaukee VA workers kept collective bargaining rights while Buffalo counterparts lost them; she said she could not answer due to ongoing litigation over the executive order1:20:581:21:15.

OIG's May 2024 report found $10.8 million in critical-skill incentives paid to senior executives without required justification, with over 90% subsequently recouped0:49:59.

Mr. Steele attributed re-certification failures to both HR Smart system limitations (lacking automation to halt noncompliant processes) and inadequate human oversight1:25:44.

Chairwoman Kiggins noted the House passed S.423, the PRO Act, adding guardrails on Senior Executive Service incentive payments1:33:57.

Metadata

CommitteeHouse Veterans' Affairs Subcommittee on Oversight and Investigations
Chamber / CongressHouse · 119th Congress
Date2025-07-22
TypeHearing
Witnesses
Ms. Tracey Therit — Chief Human Capital Officer, Office of Human Resources and Administration, Operations, Security, and Preparedness; Veterans Health Administration
Mr. David Perry — Chief Officer, Workforce Management and Consulting; Veterans Health Administration; U.S. Department of Veterans Affairs
Mr. Shawn Steele — Director of the Human Capital and Operations Division, Office of Audits and Evaluations; Office of Inspector General; U.S. Department of Veterans Affairs
Dr. Sheila Elliot — President, Local 2328; American Federation of Government Employees
Videoyoutube
Transcript212 caption blocks · 11,381 words · 1:39:10 runtime
EventCongress.gov 118513