Generous Government Bonuses Get New Scrutiny
Policy + Politics

Generous Government Bonuses Get New Scrutiny

REUTERS/Government Handout

This has been a tough several years for federal workers, who weathered a lengthy pay freeze, suffered from repeated furloughs and saw their agencies pummeled   by irate members of Congress over a range of misdeeds -- including the Internal Revenue Service’s misguided targeting of conservative non-profit groups.

But things may be getting even worse for them.

The House last week lashed out at the federal employee bonus system in a way that may foreshadow more aggressive scrutiny of the government’s long-standing bonus system for recruiting, retaining and relocating prized employees. The House unanimously passed a bill that included a five-year ban on bonuses for senior Veterans Affairs executives in retaliation for what lawmakers say were serious management and medical errors at VA facilities across the country that are treating a flood of returning injured troops. The Senate reportedly is considering less severe restrictions on performance pay.

Related: IRS Employees Getting $70 M in Bonuses

Top members of the congressional committees with VA oversight are growing increasingly frustrated with the agency because of a rash of incidents ranging from a patient’s death after an altercation with a nursing assistant in Louisiana to a deadly outbreak of Legionnaire’s disease in Pennsylvania to huge backlogs in processing veterans’ claims, according to The Wall Street Journal.

House Veterans Affairs Committee members have been sparring with VA Secretary Eric Shinseki over these issues and complaining about a lack of timely response to their questions. Now some of these frustrated lawmakers have decided to hit VA officials where it hurts most – in their wallets. “VA needs to more directly and explicitly measure each leader’s contributions,” Rep. Mike Michaud of Maine, the top Democrat on the House VA committee, told the Journal. “If they do not, they will never be able to truly hold themselves accountable to veterans, or the American taxpayer.”

Related: VA Bureaucrats Nab Bonuses As Veterans’ Benefits Lag 

Another recent scandal at the Environmental Protection Agency has heightened congressional and public attention on the government’s bonus system. A former veteran EPA official pled guilty to scamming the agency out of $900,000 – including about $500,000 in bonuses – that he did not deserve. The former official, John C. Beale, collected his salary and bonuses for over a decade while only rarely showing up for work by convincing his superiors that he was working surreptitiously for the CIA or that he had contracted malaria.

Scott Monroe, director of human resources in the EPA’s Office of Air and Radiation, who approved Beale’s time cards, informed a superior in a Jan. 12, 2011 note, “John Beale has been receiving a retention bonus of 25 percent every year since 1991,” even while EPA policy requires that the agency recertify the bonus annually and reestablish the bonus every three years, The Washington Post reported last week. Monroe wrote, “EPA has no records to show that these re-certifications occurred except for one in 2000.” 

Related: How John Beale Swindled the EPA Out of $1 Million 

Understandably, retention bonuses and other incentives are crucial tools in the federal government’s efforts to compete with the private sector for talented workers. But many on Capitol Hill have begun to question the standards being used to award these contracts and whether departments and agencies are being rigorous enough in granting generous bonuses. 

Under Office of Personnel Management rules, agencies may pay a retention incentive of 10 percent to 25 percent of an employee’s base salary in order to keep him from transferring to another agency or leaving government – provided the employees have an evaluation of at least “Fully Successful.”

A retention incentive may be paid to an eligible individual in a General Schedule (GS), senior-level (SL), scientific or professional (ST), Senior Executive Service (SES), the Federal Bureau of Investigation and Drug Enforcement Administration senior executive service and other agencies.

Recent data on the incentive program is hard to come by. Federal agencies paid out more than $349 million in recruitment, relocation and retention bonuses in 2009, the most recent information provided by the U.S. Office of Personnel management. That was a 22 percent increase from the previous year.

Overall, 45 agencies made more than 43,000 of these payments, or an average of $8,079, according to OPM. The government’s two largest departments, Defense and Veterans Affairs, made the most incentive payments. The Pentagon provided 21,910 payments, while the VA handed out 8,885 in 2009.

The State Department, which employs diplomats and other highly skilled personnel often working in dangerous locations, paid out the highest average incentive payments, totaling $12,586.

Last fall, Sen. Claire McCaskill (D-MO) questioned whether many of the federal government's Senior Executive Service members deserved the bonus payments they were receiving. McCaskill, who chairs a Senate subcommittee on financial and contracting oversight, wrote to the head of the Government Accountability Office, asking the watchdog agency to investigate whether bonuses paid to SES employees involved in contract management are effective tools in reducing costs or improving contract performance.

"There is ample evidence to suggest that performance bonuses have been issued by government departments and agencies to SES employees as a routine matter of course with little regard to actual performance," McCaskill wrote.

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