John Plahovinsak
The Department of Veterans Affairs (VA) Office of Inspector General (OIG), in a Report on May 9, 2024, recommended a Full Investigation of the VA’s disbursement of over $10.8 million dollars in critical skills incentive (CSI) bonuses to senior executives.
The recommended investigation would focus on any actual or apparent conflicts of interest. The CSI bonuses were erroneously paid last year to 170 senior executives at the VA Central Office (VACO) in Washington.
Specifically, the Veterans Health Administration (VHA) distributed $9.1 million in CSI bonuses and the Veterans Benefits Administration (VBA) provided $1.7 million to its’ VACO Senior Executives.
The VHA average CSI bonus was $61,666, while the average CSI bonus was $49,880, according to the 78-page OIG Report. Each of the seven (7) senior executives at the VHA and VBA received bonuses of $100,000.
The CSI bonuses were provided from a Retention Bonus Program, authorized by the Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics (PACT) Act.
The $10.8 million dollars was meant to retain employees in critically understaffed positions. These understaffed positions were in information technology; human resources, law enforcement, housekeeping, and clerical administrative staff.
The timing of the CSI bonuses is a crucial element, according to the OIG Report. Seventy-five (75%) percent of the bonuses were paid to VOCO senior executives from August 2023 to early September of 2023.
The Under Secretary of the VHA, Dr. Shereef Elnahal, and the Under Secretary of the VBA, Joshua Jacobs, authorized the bonuses despite the department’s human resources officers, and others, indicating that the bonuses were ill-advised.
On September 13, 2023, the VA Secretary Denis McDonough was alerted by Chief Financial Officer Jon Rychalski that the Office of Management “had detected unusual payment activity relating to senior executives.”
On September 22, 2023, the VA notified Congress, and sixteen (16) veteran service organizations, of the details of the CSIs including the awarding of bonuses to VACO senior executives.
On the same day, the VA announced the cancelation of CSI payments, and VA Secretary McDonough requested the VA OIG “to conduct a review of the facts and circumstances surrounding the issuance of the CSIs.”
The OIG Report found that Under Secretary Dr. Elnahal failed repeatedly to tell Secretary McDonough about the bonuses for VHA senior executives, while at the same time keeping him apprised of payments to VHA field employees.
Under Secretary Jacobs, on the other hand, provided Secretary McDonough several memos describing plans to pay the bonuses to senior executives at the headquarters, as well as his VBA field offices.
In late October of 2023, the VA issued Letters of Indebtedness to all senior executives, who received CSIs. The senior executives had to decide whether to complete repayment by December 31, 2023, or repay the debt pursuant to payment. The executives could seek a wavier or challenge the debt and seek an appeal.
The OIG Report contained two (2) significant findings and eight (8) recommendations. First, “the awards of the CSIs to all VHA and VBA central office executives was inconsistent with both the PACT Act and VA policy.”
Second, “the breakdowns in leadership and controls and missed opportunities at multiple levels of VA contributed to this result. The VA, in response to the OIG Report, reluctantly concurred that the findings and recommendations were valid.”
The VA promised that their Office of Accountability and Whistleblower Protection envisions working with the Office of General Counsel Ethics Specialty Team to determine whether disciplinary or non-disciplinary action will be taken against those involved.
My Opinion: The Office of Inspector General did a comprehensive report concerning this awkward VA situation. The fact that VA Secretary McDonough was not aware of the CSIs being distributed until 75% of the senior executives already received their bonuses was disturbing.
The VA Secretary has three (3) Under Secretaries that report directly to him. The OIG Report indicated that the Under Secretaries were working on calculating the CSIs as early in March of 2023.
In fact, the VHA Under Secretary was providing McDonough with CSIs updates in VA Field locations but no updates were provided for CSIs to the senior executives in his Central Office.
The VA did not dispute the OIG’s facts, findings, and recommendations. Now comes the unpleasant task of a new investigation that would focus on any actual or apparent conflicts of interest. This will determine whether disciplinary or non-disciplinary action will be taken against those involved.
The recoupment of the CSI bonuses is still ongoing and several VA senior officials have already retired or left VA employment. Therefore, it would be extremely hard to recoup some of the bonuses.
But, two (2) individuals rise above in this particular situation. Secretary McDonough took full responsibility for the CSI bonus situation and took immediate steps to address it by cancelling the remaining senior executives’ bonuses and authorizing the new investigation.
Second, Under Secretary for Memorial Affairs Matt Quinn stands out as the “voice of reason on this situation.” He did not award any CSIs to his senior executives at Memorial Affairs because his officials “did not believe they had a justifiable reason to do so.”
BioSketch: John Plahovinsak is a retired 32-year Army veteran who served from 1967 to 1999. He is the Disabled American Veterans (DAV) Chapter #63 Adjutant (Clermont County). His last tour was as an Inspector General from 1996 to 1999. He can be reached at: plahovinsak@msn.com.