[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
SENIOR EXECUTIVE SERVICE BONUSES:
ENSURING THE U.S. DEPARTMENT OF
VETERANS AFFAIRS PROCESS WORKS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON OVERSIGHT AND
INVESTIGATIONS
of the
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
JUNE 12, 2007
__________
Serial No. 110-26
__________
Printed for the use of the Committee on Veterans' Affairs
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COMMITTEE ON VETERANS' AFFAIRS
BOB FILNER, California, Chairman
CORRINE BROWN, Florida STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South RICHARD H. BAKER, Louisiana
Dakota HENRY E. BROWN, Jr., South
HARRY E. MITCHELL, Arizona Carolina
JOHN J. HALL, New York JEFF MILLER, Florida
PHIL HARE, Illinois JOHN BOOZMAN, Arkansas
MICHAEL F. DOYLE, Pennsylvania GINNY BROWN-WAITE, Florida
SHELLEY BERKLEY, Nevada MICHAEL R. TURNER, Ohio
JOHN T. SALAZAR, Colorado BRIAN P. BILBRAY, California
CIRO D. RODRIGUEZ, Texas DOUG LAMBORN, Colorado
JOE DONNELLY, Indiana GUS M. BILIRAKIS, Florida
JERRY McNERNEY, California VERN BUCHANAN, Florida
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota
Malcom A. Shorter, Staff Director
______
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
HARRY E. MITCHELL, Arizona, Chairman
ZACHARY T. SPACE, Ohio GINNY BROWN-WAITE, Florida,
TIMOTHY J. WALZ, Minnesota Ranking
CIRO D. RODRIGUEZ, Texas CLIFF STEARNS, Florida
BRIAN P. BILBRAY, California
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Veterans' Affairs are also
published in electronic form. The printed hearing record remains the
official version. Because electronic submissions are used to prepare
both printed and electronic versions of the hearing record, the process
of converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
June 12, 2007
Page
Senior Executive Service Bonuses: Ensuring the U.S. Department of
Veterans Affairs Process Works................................. 1
OPENING STATEMENTS
Chairman Harry E. Mitchell....................................... 1
Prepared statement of Chairman Mitchell...................... 35
Hon. Ginny Brown-Waite, Ranking Republican Member................ 3
Prepared statement of Congresswoman Brown-Waite.............. 36
WITNESSES
U.S. Government Accountability Office, J. Christopher Mihm,
Managing Director, Strategic Issues............................ 4
Prepared statement of Mr. Mihm............................... 36
U.S. Department of Veterans Affairs, Hon. Gordon H. Mansfield,
Deputy Secretary............................................... 11
Prepared statement of Mr. Mansfield.......................... 44
______
Senior Executives Association, Carol A. Bonosaro, President...... 27
Prepared statement of Ms. Bonosaro........................... 48
SUBMISSION FOR THE RECORD
Stearns, Hon. Cliff, a Representative in Congress from the State
of Florida, statement.......................................... 49
MATERIAL SUBMITTED FOR THE RECORD
Post-Hearing Questions and Responses for the Record:
Hon. Harry E. Mitchell, Chairman, and Hon. Ginny Brown-Waite,
Ranking Republican Member, Subcommittee on Oversight and
Investigations, Committee on Veterans' Affairs, to Hon.
Gordon H. Mansfield, Deputy Secretary, U.S. Department of
Veterans Affairs, letter, dated October 29, 2007. [The
response from VA included a letter, fact sheet and notebook
of material. Only the letter and fact sheet are included in
the record of the hearing. The notebook will be retained in
the Subcommittee files.]................................... 51
SENIOR EXECUTIVE SERVICE BONUSES:
ENSURING THE U.S. DEPARTMENT OF
VETERANS AFFAIRS PROCESS WORKS
----------
TUESDAY, JUNE 12, 2007
U.S. House of Representatives,
Committee on Veterans' Affairs,
Subcommittee on Oversight and Investigations,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:12 p.m., in
Room 334, Cannon House Office Building, Hon. Harry E. Mitchell
[Chairman of the Subcommittee] presiding.
Present: Representatives Mitchell, Space, Walz, and Brown-
Waite.
Also present: Representative Hall.
OPENING STATEMENT OF CHAIRMAN MITCHELL
Mr. Mitchell. Good afternoon. This hearing is about the
process of awarding Senior Executive Service (SES) bonuses at
the U.S. Department of Veterans Affairs (VA). This hearing will
come to order.
I want to thank everyone for coming today. I am also
pleased that so many folks could attend this oversight hearing
on the process of awarding Senior Executive Services (SES)
bonuses at the U.S. Department of Veterans Affairs (VA).
Before we begin this hearing, I ask unanimous consent that
Mr. Filner, Mr. Hall, Mr. Hare, and Ms. Berkley be invited to
sit at the dais for the full Committee hearing today. Hearing
no objection, so ordered.
The Members will feel free to join us at the dais.
I know that the VA is full of hardworking, dedicated, and
talented people. Nevertheless, there are reasons to be
concerned that the VA bonus process is not doing what it
should, matching pay to individual and organizational
performance.
Consider the following: The VA pays the highest average
bonuses among all cabinet agencies. In 2006, 87 percent of
Senior Executive Service employees who were considered for
bonuses received one.
Central office bonuses averaged $4,000 more than field
bonuses. Particularly in the central office, there appears to
be a case of exaggerated Lake Woebegone syndrome. Not only is
everyone above average, almost everyone is outstanding.
The VA does indeed do an outstanding job in many areas, but
not all, and we hope that this oversight hearing will assist
the VA in making sure that its bonuses are more closely matched
to its performance.
Performance is not just individual. It is also
organizational. The bonus system must allocate responsibility
where it lies. When the backlog of claims has been increasing
for the past few years, one would not expect the senior-most
officials of the Veterans Benefit Administration (VBA) to
receive the maximum bonus.
When the VA is forced to return to Congress for additional
money, which happened twice in 2006, because the budget
submitted to Congress was inadequate and the VA failed to keep
Congress informed, one would not expect the senior-most
officials of the VA responsible for the budget to receive the
maximum bonus.
This is not a question of blame. It is a question of
responsibility. We can be certain that if the senior leaders of
VBA know in advance that their bonuses will depend, at least in
part, on the reduction in the backlog of claims, those leaders
would bring all of their creative energy to bear on this
problem.
The Subcommittee is also concerned about the performance
measures for central office employees. VA appears to be doing a
commendable job at identifying objective, quantifiable criteria
for evaluating its field personnel. The same is not true for
the central office.
It appears that central office personnel are evaluated on
the basis of justifications written by the employees
themselves, with no objective criteria factoring into the
process.
For example, the extent of the backlog of claims by VBA
would seem to be one of the most important metrics of
performance, but this Subcommittee has seen nothing in the
materials provided by the VA that this metric was even
considered by the Secretary in deciding the bonuses for senior
leaders of VBA.
Indeed, it appears that bonuses to the central office were
awarded primarily on the basis of seniority and proximity to
the Secretary.
We are also concerned about what appears to be a breakdown
in the review process. VA is subject to oversight by the VA
Inspector General (IG) and by the Office of Medical
Investigations (OMI).
The Committee has found several examples of bonuses being
awarded to employees responsible for VA operations that have
been the subject of highly critical IG or OMI reports in the
same year the bonus was awarded. VA must ensure that the
Secretary and the Personnel Review Boards are aware of, and
consider, such reports when making bonus decisions.
Finally, I would note that Secretary Nicholson is
responsible by law for the ultimate determination of who gets
bonuses and at what amounts. The Committee invited Secretary
Nicholson to attend today's hearing, but the VA has chosen to
send his Deputy, Mr. Mansfield, even though Mr. Mansfield
appears to have no role in the bonus process. The Committee
would be pleased to hear from Mr. Mansfield that this is
incorrect.
In addition, it appears that Secretary Nicholson has served
as a rubber stamp for the recommendations made by his
subordinates in sharp contrast to his predecessor. The
Committee assumes that Mr. Mansfield will be able to address
this issue as well.
In closing, I want to reiterate this Committee has no
desire to denigrate the good work of the senior managers of the
VA. This hearing is not intended to pressure the VA into
eliminating bonuses or to target individual VA employees.
The VA, this Committee, and all Americans want what is best
for our veterans. The SES bonus system can be an effective tool
in improving the performance of the VA and Congressional
oversight of that process will assist the VA in better matching
performance to reward.
I look forward to today's testimony.
[The prepared statement of Chairman Mitchell appears on p. 3
5.]
Before I recognize the Ranking Republican Member for her
remarks, I would like to swear in our witnesses. And are the
other panel members here? I would like all to stand, raise your
right hand.
[Witnesses sworn.]
Thank you.
I now recognize Ms. Brown-Waite for opening remarks.
OPENING STATEMENT OF HON. GINNY BROWN-WAITE
Ms. Brown-Waite. Thank you, Mr. Chairman, and I thank you
very much for yielding.
I would also like to thank the witnesses who are coming
before us at this hearing. Your testimony is important to the
oversight of this Committee in guaranteeing the process of
assessing bonus reviews, whether it is fair, accurate, and
appropriate.
During our Subcommittee hearing on April 19th, discussing
the care situation at the W.G. ``Bill'' Hefner VA Medical
Center in Salisbury, North Carolina, I asked for a list of the
people who were involved in the administration of care at the
hospital and the bonuses they received over the period of time
where there obviously was questionable quality of care rendered
to veterans at that facility.
The Federal Government should not be in the practice of
providing bonuses to individuals who permit failure in the
system under their watch. I believe that government should be
run as a business enterprise where bonuses are used for an
appropriate reward. But they should be limited to only the very
best and most deserving employees, especially during a time of
war.
Several Members on both sides of the aisle have expressed
frustration over the bonus situation, particularly after many
news articles describing who received certain bonuses and
speculation as to whether these bonuses were justly and
appropriately applied throughout the SES bonus process.
The news media linked bonuses to the 2005 budget shortfall
issue, one that is very fresh on the minds of those who were
here at the time. The media and several Members have also
linked the bonuses to the claims backlog that is prevalent at
the VA.
I am concerned that we should not be too quick to judge the
evaluation process, but rather give all the witnesses here a
fair process to express their views.
It is my hope, though, that through the process of this
hearing, we will learn how the VA determines the bonus awards
given out and whether the bonuses to members of SES at the VA
were given in an appropriate amount related to their actual
performance, not their performance on paper.
I also look forward to hearing from the U.S. Government
Accountability Office (GAO) to better understand how the Office
of Personnel Management (OPM) certifies VA's bonus process and
perhaps a better insight on VA's bonus justification process. I
am sure many of the bonuses reflect the hard work and
professionalism of VA's senior management and that is what this
hearing is all about, to determine whether or not that process
actually works.
Again, I thank the Chairman for yielding and I yield back
the balance of my time.
Mr. Chairman, as you know, I think they have called for a
vote very soon.
[The prepared statement of Congresswoman Brown-Waite
appears on p. 36.]
Mr. Mitchell. Yes. Unfortunately, we are going to have to
recess until we come back from a vote and it will be about an
hour. The Committee is recessed until the sound of the gavel.
[Recess.]
Mr. Mitchell. The Subcommittee will come to order. We will
now proceed to panel one. Mr. Christopher Mihm is the Managing
Director of Strategic Issues for the U.S. Government
Accountability Office. We look forward to hearing his unbiased
view of the VA's process for awarding SES bonuses.
Mr. Mihm, you are recognized for 5 minutes.
STATEMENT OF J. CHRISTOPHER MIHM, MANAGING DIRECTOR, STRATEGIC
ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Mihm. Thank you, Mr. Chairman.
Mr. Chairman, Members of the Subcommittee, it is indeed a
great honor to be here today to discuss VA's process for
awarding performance bonuses to members of the Senior Executive
Service.
I must stress from the outset that while we have reviewed
the structure of the Federal Government's SES pay and bonus
system and its implementation at selected agencies, VA has not
been one of the agencies, where in the past, we have been asked
to do detailed work.
We would be happy obviously moving forward to do work on
behalf of the Committee if you think it would be of value.
However, my comments today are based on just a couple of weeks
of work we have done at VA and, therefore, must necessarily
speak to the design of the system at VA rather than its
implementation which is, of course, the key issue that you were
talking about in your opening statement, Mr. Chairman.
Mr. Mitchell, as you and Ms. Brown-Waite were mentioning in
your opening statements, high-performing organizations
understand that they need senior leaders who are accountable
for results, drive continuous improvement in agency operations,
and make sure that organizational goals and related
transformation efforts are being achieved.
In that regard, we have identified a set of key practices
of effective performance management for the SES which center on
ensuring what we have called a ``line of sight'' or linkage
between individual performance and organizational success.
My written statement covers a number of topics. But in the
interest of time, I will hit on just three major points.
First, in terms of process. Broadly consistent with what we
have seen at other agencies, VA requires that each SES member
have an executive performance plan or contract in place for the
appraisal year that reflects measures that balance
organizational results with customer satisfaction, employee
perspectives, and other appropriate measures.
At the end of the appraisal year, VA's Performance Review
Boards (PRBs) review and make recommendations on SES members'
ratings, awards, and pay adjustments based on those performance
plans. Board members are appointed on the basis of positions
held and consideration is given to those positions where the
holder would have knowledge of the broadest group of
executives.
VA has four PRBs and they vary quite a bit in size,
composition, and number of SES members considered for bonuses.
Each PRB has within the scope of VA's policies developed its
own procedures and criteria for making recommendations.
Second, in terms of the bonuses awarded. In 2005, according
to OPM's most recent governmentwide data, VA awarded a higher
average bonus amount to its career SES than any other cabinet-
level department. On the other hand, OPM data also show that
six other cabinet-level departments awarded bonuses to a higher
percentage of their career SES members.
More recently for fiscal year 2006, VA awarded an average
of $16,600 in bonuses to 87 percent of its career SES. At
headquarters, 82 percent of the SES received a bonus, and 90
percent received a bonus in the field.
Those in headquarters were awarded, as you mentioned in
your opening statement, an average of about $4,000 more in
bonuses than those in the field. And as I noted, 2006 data that
would allow us to compare VA with the other agencies is not yet
available.
My third point, and this was something that Ms. Brown-Waite
raised on OPM and the Office of Management and Budget's (OMB's)
role: OPM and OMB evaluate agencies' SES and senior-level
employee performance appraisal systems against nine
certification criteria jointly developed by those two agencies.
OPM also issues guidance to help agencies improve their
systems and reviews submissions to ensure that they meet the
criteria.
OMB for its part primarily considers overall measures of
agencies' program performance and the extent to which mission
goals are being met.
Let me conclude by noting that today's hearing is both
timely and important as interest grows in better linking
Federal employee pay to the market, individual roles and
responsibilities, and performance.
We at GAO strongly believe that SES need to lead by example
in this area and be role models for how to properly, fairly,
and effectively implement such changes.
Let me end there and I would obviously be pleased to take
any questions that you or other Members of the Subcommittee may
have.
[The prepared statement of Mr. Mihm appears on p. 36.]
Mr. Mitchell. Thank you. I just have one question.
You testified that high-performing organizations understand
that they need senior leaders who are held accountable, who
drive continuous improvements, and stimulate support efforts to
integrate human capital approaches.
What are key steps that agencies, including the VA, can
take in that regard?
Mr. Mihm. There are several things, Mr. Chairman. I think
most important is that organizations need to have a good set of
performance plans and strategic plans in place. That is, they
need to make sure that there is agreement between them,
stakeholders, and the Congress on what is going to be achieved
in terms of the programmatic outcomes and how progress will be
measured.
The second thing, once they have that in place, they need
to make sure that they create again what we have called the
``line of sight,'' that is that they drill down those program
goals into individual SES contracts so that we have clear
accountability and assurance that if this Senior Executive
achieves this level of performance, it will deliver meaningful
results for clients and program customers and for the American
people.
We find very often in agencies, even some of the agencies
that will have nice, sound, well-thought-out strategic plans,
that there is not that linkage down to individual activities.
There is no ``line of sight'' in place. So that line of sight
is the second very important point.
Third is that there needs to be meaningful distinctions in
performance. We need to make sure that we are identifying
performance based on program goals and rewarding our top
performers with bonuses and permanent pay increases, that we
are giving others that are the majority in the middle
categories opportunities to improve, and to the extent that
there are people that just are not being successful, that we
have the good information that we need to deal with
unsuccessful performance.
Those are really three of the most key things that we think
need to take place.
Mr. Mitchell. Thank you.
And I yield my time. Ms. Brown-Waite.
Ms. Brown-Waite. I thank the Chairman.
Mr. Mihm, I apologize for not being here. I was over on the
floor and then I had to go up to my office. And I will be
leaving for an amendment on the floor when they actually get to
the amendment process.
Your testimony indicates that the VA uses four Performance
Review Boards. These Boards review the Veterans Health
Administration (VHA), VBA, VA Headquarters, and the VA IG. I
understand that the functions are different for each of these
distinct Boards and the accompanying criteria for the business
lines, but should not the review process reflect one VA
departmental human resource system?
Mr. Mihm. That is an excellent point, ma'am. And at a
minimum, to the extent that there are differences, and there
are differences in the case of the VA, to the extent that there
are differences in an agency among the various PRBs that are in
place, they should be known and considered differences. That
is, there should be a business case for those differences and
not merely, ``Well, we do it this way and someone else does it
another way.''
In the case of VA, as you mentioned, they have the four
PRBs. The one that covers VHA and the separate one that covers
VBA do have to vet their procedures through the Veterans
Affairs PRB which covers central staff offices as well as
cemeteries.
We have not had the opportunity yet to get a good
understanding that would really allow me to speak directly to
your question about why are these differences and are they
considered. What are the reasons? There may be excellent
reasons. We do not know. But at a minimum, one would want to
again make sure that those reasons are thoughtful and
considered and not just idiosyncratic.
Ms. Brown-Waite. Do you know if other agencies' SES
categories have more than one Board?
Mr. Mihm. Many agencies will have one or more or several
PRBs, yes, ma'am. In that case, VA is consistent with other
agencies.
Ms. Brown-Waite. Okay. But is there one system or a
different disparate system?
Mr. Mihm. I am sorry. I did not understand your question at
first. I am not sure on that. Let me give you a more thoughtful
answer if I could for the record rather than have to correct
something.
Ms. Brown-Waite. Okay. Do you know what actually
precipitated VA's decision to change its policies on SES
performance plans?
Mr. Mihm. If I could ask for a clarification as to if there
is a particular change that you have in mind because I guess
the reason I ask that is that overall, VA's changes came about
consistent with what other agencies did with congressional
authorization in 2003 and 2004 that allowed agencies with
certified, from OPM and OMB, performance management systems to
raise their pay caps and provide additional bonuses.
Ms. Brown-Waite. Okay. So it was OPM directed?
Mr. Mihm. It was OPM and OMB.
Ms. Brown-Waite. For all agencies?
Mr. Mihm. Yes, ma'am. What happens is that agencies have to
independently apply to OPM and OMB. They have to provide OPM
and OMB with a variety of information based on the nine
criteria that OPM and OMB have jointly developed, and they get
either full certification for their performance management
system or provisional certification.
Each year since 2004, VA has had provisional certification.
They have additional paperwork that is due to OMB for the
current year by the end of June, and they tell us they expect
to submit that paperwork to them.
Most executive agencies have received provisional
certification, that is they are allowed to raise their pay cap,
but they are still not consistent with all the OPM/OMB
criteria.
Ms. Brown-Waite. Are they as consistent or less consistent
as other agencies?
Mr. Mihm. Well, one of the things that tripped VA in the
past has been a sticking point with a number of agencies. It
gets back to one of the things I was discussing with the
Chairman and that is the targets that are in SES performance
contracts. OPM was asking VA to make sure that they were
results oriented, that there was a sizeable percentage of those
targets that had quantitative measures on those.
It is exactly, ma'am, the point that you were making in
your opening statement: If we have hard data that something is
not happening, that health outcomes are not happening, for
example, we need to know both from an improvement opportunity
how can we get better, but also who is responsible for that.
The way you do that is making sure that you have SES
contracts that have those requirements, quantitative
requirements in there.
Ms. Brown-Waite. I thank the gentleman, and I yield back.
Mr. Mitchell. Thank you.
Mr. Space.
Mr. Space. Pass for questions, Mr. Chairman. Thank you.
Mr. Mitchell. Mr. Walz.
Mr. Walz. Thank you, Mr. Chairman and Ranking Member.
Thank you, Mr. Mihm, for taking your time to be here. I
just had a couple of questions.
First of all, to put this into context, the last three
positions I have held over the last few years is high school
teacher, Command Sergeant Major in the Army National Guard, and
Member of Congress, not necessarily in order of importance.
None had performance bonuses.
My question to you is, is there any quantitative data that
shows we are losing people in the SES because we are not
providing them with bonus pay because this program was set up
for performance bonus not as a means of offsetting the
difference between public and private sector?
If it is being used to do that, do we not need to go back
and reevaluate the pay system in general then and alleviate
this misperception that if the agency is underperforming, we
are still going to give bonuses because we are under threat of
losing these people?
Mr. Mihm. You are raising an excellent point, sir, in that
we have issued some work to some of your colleagues on the
House Government Reform and Oversight Committee that asked us
to look at both executive pay, judicial pay, and SES pay.
And one of the things that we came up with or developed as
part of that is some principles for Federal pay. You want it to
be market sensitive. You want it to be flexible. You want it to
be sustainable over time and that it is affordable.
There is a natural but unfortunate tendency to conflate the
performance award process with the pay process. If we are not
paying market pay, and in some cases, I am certain we are not,
in many cases, we are probably fine and in some cases, we may
be over market, but if we are not paying to market, then
Congress and all of us need to address that.
The performance appraisal and the bonus system were not
intended to really be the vehicle to address those types of
issues. Those should be on a separate track.
Mr. Walz. All right. Very good. And I just had one more and
I am not sure on this one, Mr. Mihm, if you can help me with
this.
I know the nine criteria that we are measuring here on the
performance. The one that I guess strikes and steps out at me
is the accountability one. That is the one that I would say we
are very concerned with.
And, again, is there any correlation that we can prove
between individual performance and individual performance
bonuses and agency performance because our ultimate goal here
is across the spectrum agency performance to delivering better
care to our veterans?
So I could see 39 out of 42 highly performing individuals
and if the agency is not performing to that level, is it fair
to say that that should be almost an overriding criteria of
these nine in your opinion?
Mr. Mihm. It should certainly be, sir, a very compelling
one. I am not trying to parse words there. But certainly over
time, it is a reasonable expectation on behalf of the American
people, on behalf of the Congress and the American people that
Senior Executives, that those of us that have been entrusted
with Senior Executive positions in government, that are doing
right, well paid by the standards of most Americans, are able
to demonstrate that we are giving meaningful results to our
fellow citizens.
And if we are, then there should be a bonus system that
appropriately recognizes and rewards that. But if not, we need
to be able to address those problems as well. We are only in
the first couple years of meaningful pay for performance for
Senior Executives.
It is over time, and I am not talking decades. We are
talking relatively soon, we should be able to start seeing
pretty strong lines of sight and linkages between
organizational success and the individual awards that accompany
those.
Mr. Walz. Thanks, Mr. Mihm.
I yield back my time, Mr. Chairman.
Mr. Mitchell. Thank you.
Mr. Hall.
Mr. Hall. Thank you, Chairman Mitchell and Ranking Member
Brown-Waite, for including us from other Subcommittees in this
hearing.
Mr. Mihm, thank you for your testimony. I want to follow up
Mr. Walz's questions by asking, there is a media report stating
that the average VA bonus in 2002 was $8,120 and the current
average is $16,606. Has there been any change in Federal law
that you know of that would explain this rapid increase?
Mr. Mihm. The big changes were beginning with 2004. There
were two separate pieces of statute. But in 2004 was when it
kicked in that agencies with certified performance management
systems were authorized to raise both their pay limits and
their total compensation limits. And so that would allow for
authorizing an increase.
Mr. Hall. So other departments would have been doing the
same kind of thing?
Mr. Mihm. You will see that there were increases in many
cases across agencies.
Mr. Hall. Can you explain in greater detail why the VA
received only provisional certification from OPM rather than
full certification? It appears that OPM had some concerns about
the VA bonus review system but granted it provisional
certification for 3 years.
Mr. Mihm. Yes, sir. The provisional certification from OPM,
and this was fairly consistent with what other agencies were
getting, similar types of feedback, turned on large measure the
degree to which the performance contracts for SESers at VA had
results oriented, quantitative targets in them that
appropriately balanced organizational results, outcomes, an
employee perspective or busi-
ness perspective, and customer satisfaction, customer response
categories.
The VA, we have looked at their 2006 or a sample of their
2006 contracts and begun to look at their 2007 contracts. We
have seen that they have been making changes in response to OPM
and OMB, and OPM has indicated that they have been making
changes.
As I mentioned to an earlier question, they are up for
recertification. They have to submit information to OPM by the
end of June of this year and so all of us will have a better
feel as to whether or not they have made sufficient progress.
Mr. Hall. So we might expect that they will provide
information on or evidence of the outstanding performance that
merits these bonuses?
Mr. Mihm. I am sorry, sir?
Mr. Hall. We might expect or you might expect to see by the
end of this month, this June----
Mr. Mihm. What we will see, what we should see, all of us,
is by the end of this month, VA's package to OPM in which there
will be an attempt to show against the nine criteria, including
organizational results, how they have improved their
performance management system.
Mr. Hall. That will be something to look forward to.
Mr. Mihm. Yes, sir.
Mr. Hall. And have you seen any information that would
suggest that the VA has provided bonus awards to hospital
directors for holding down costs by not replacing senior staff?
Mr. Mihm. We have not seen that, but we have not looked. I
want to be clear on that. We would be happy to undertake that
work if that is something that the Committee would be
interested in.
Mr. Hall. Just a thought. And how does the 87 percent of
SES officials at VA who received bonuses compare with the
percentage of bonuses paid at other departments?
Mr. Mihm. It is among the highest in government. There are
six other agencies that had higher percentages of that. VA
gives the highest dollar amount in average bonuses. There are
six other agencies that gave bonuses to a higher percentage of
their SES.
We would all like to work there, the Lake Woebegone factor,
Mr. Chairman. There are some agencies where 95 percent of the
SESers received bonuses. Great work if you can get it.
Mr. Hall. Thank you very much, sir. No further questions.
I yield back. Thank you, Mr. Chairman.
Mr. Mitchell. Thank you.
Are there any other questions of Mr. Mihm?
[No response.]
Thank you very much.
Mr. Mihm. A pleasure.
Mr. Mitchell. Thank you.
I welcome panel two to the witness table. We are pleased to
have Deputy Secretary Gordon Mansfield as the principal
presenter for this panel.
This Committee has a long and professional working
relationship with Mr. Mansfield in all of his roles at VA, from
his time serving as Assistant Secretary for Congressional
Legislative Affairs to his present position as Deputy
Secretary.
Mr. Mansfield is a highly decorated military combat veteran
having served two tours of duty in Vietnam. His military awards
include the Distinguished Service Cross, the Bronze Star, two
Purple Hearts, and the Combat Infantryman's Badge.
Mr. Secretary, would you please introduce your team when
you get them all settled there. And you are recognized for 5
minutes after you introduce your team.
STATEMENT OF HON. GORDON H. MANSFIELD, DEPUTY SECRETARY, U.S.
DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY SHARON K.
BARNES, DEPUTY CHIEF OF STAFF; GERALDINE V. BREAKFIELD,
ASSOCIATE DEPUTY UNDER SECRETARY FOR MANAGEMENT, VETERANS
BENEFITS ADMINISTRATION; THOMAS HOGAN, SPECIAL ASSISTANT TO THE
ASSISTANT SECRETARY FOR HUMAN RESOURCES AND ADMINISTRATION,
OFFICE OF HUMAN RESOURCES AND ADMINISTRATION; GERALD M. CROSS,
M.D., FAAFP, ACTING PRINCIPAL DEPUTY UNDER SECRETARY FOR
HEALTH, VETERANS HEALTH ADMINISTRATION; AND WILLIAM F. FEELEY,
MSW, FACHE, DEPUTY UNDER SECRETARY FOR HEALTH FOR OPERATIONS
AND MANAGEMENT, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT
OF VETERANS AFFAIRS
Mr. Mansfield. Thank you, Mr. Chairman.
I am accompanied today by Sharon Barnes, the Deputy Chief
of Staff; Dr. Cross, the Acting Principal Deputy Under
Secretary for Health; William Feeley, the Deputy Under
Secretary for Health; and Geraldine Breakfield, who is our
Associate Deputy Under Secretary for Management in VBA; and Mr.
Thomas Hogan.
I request that my full testimony be accepted for the
record.
Mr. Chairman, Members of the Subcommittee, I am pleased to
come before you to provide an overview of the performance
management system governing VA's career Senior Executive
Service Performance Bonus Program.
Federal law and Office of Personnel Management policies
guide the executive branch in matters relating to compensation
of Federal employees. Those policies acknowledge that
performance awards are integral to the government's ability to
attract, retain, and reward experienced, high-quality career
executives.
The statute also establishes the procedure for appointing
PRBs, stipulating the majority of members are to be career
appointees. And last, the statute assigns to the Secretary of
Veterans Affairs final approval of awards recommended by each
PRB for the Department.
The Office of Personnel Management regulations further
amplify the statutory framework. OPM regulations set procedures
for establishing PRBs and state the criteria for determining
performance standards and related metrics. And OPM annually
reviews and certifies the results of PRB activities to ensure
compliance with its rules and regulations.
In keeping with the statute and adhering to OPM
regulations, VA's four PRBs direct a rigorous and transparent
performance management process. They establish performance
standards that are objective, measurable, and to the maximum
extent possible, quantifiable.
Our executives report on their specific levels of
achievement measured against these standards and their
supervisors subsequently recommend performance ratings, pay
adjustments, and bonuses. These bonus recommendations are
reviewed by the governing PRB to ensure equitable and
consistent interpretation and application throughout the
Department. The Board then forwards its recommendations to the
Secretary for his final review and approval as per the statute.
VA has 321 career SES positions. This represents a ratio of
Senior Executives to the general employee population of
approximately 750 to 1. This ratio represents one of the
broadest spans of control in the Federal Government.
Our SES corps provides oversight to a staff of nearly
240,000 employees and a budget of more than $80 billion. In
point, we operate the Nation's largest integrated healthcare
system with 153 hospitals, 882 outpatient clinics, 46
domiciliaries, and 207 Vet Centers. Fully 198,000 employees
staff those broad-based programs and services of VHA.
Our $40 billion benefits system, supported by over 13,000
employees, disburses disability payments each month to 2.7
million recipients and pensions to more than 324,000
beneficiaries.
We operate the country's largest burial and cemetery
system. This year, more than 103,000 veterans will be laid to
rest in one of our 125 national cemeteries whose operations are
supported by a staff of 1,527 individuals. Since 2005, we have
established five new national cemeteries and will open six more
by early 2009.
VA's central office is the nexus for an array of programs
and services that reach from Maine to Manila. Central office
sets VA-wide policy and procedures, prepares the Department's
budget, oversees financial operations, and manages our
information technology infrastructure.
Working for the second largest agency in the Federal
Government, each VA Senior Executive has responsibility for
far-reaching and complex programs, significant financial
resources and major capital assets, and a large number of
reporting staff.
Over the past 3 years, the average VA SES bonus amount is
in the range of $16,000. This compares to a governmentwide
average of approximately $14,000. A number of agencies report a
mean SES bonus figure that falls well within the $2,000 window
between VA and governmentwide averages.
For example, fiscal year 2005 data show that the average
SES bonus was 15,900 plus dollars at the Department of
Agriculture, 15,800 plus dollars at NASA, and $15,173 at the
Treasury Department.
In response to recent congressional inquiries about SES
bonuses, Secretary Nicholson requested an OPM review of VA's
SES performance-based pay system. I am including the OPM report
as an attachment and will briefly provide a summary of its
findings and request that it be included in the record, if I
may.
OPM found that, number one, the design and implementation
of VA's SES performance management system meets all statutory
and regulatory requirements.
Number two, executives who are members of PRBs do not make
recommendations regarding their own pay adjustments and awards
or the pay adjustments and awards of other executives in their
chain of command.
Number three, VA is making distinction in performance as
evidenced in its ratings, pay, and awards decisions.
Number four, VA executives are rated and rewarded primarily
based on organizational results balanced against customer and
employee perspectives and additional executive competencies.
I would especially recommend to the staff and the Members
of the Committee that you look at attachment three to the
report. It gives much broader detail to some of the questions
that have been raised.
Secretary Nicholson has agreed to implement the
recommendations made as a result of the OPM analysis.
Mr. Chairman and Members of the Committee, I am extremely
proud of the Senior Executives with whom I work. They are a
highly competent and committed group of leaders who excel in
managing an organization that, if in the private sector, would
rank as a Fortune 50 company.
Most of our SES have dedicated their entire careers to the
welfare of America's veterans. Many are retirement eligible and
were they to retire, they could quickly be hired at
considerably higher salaries.
While the bonus dollar amounts under discussion are
sizeable, and we recognize that, they are paid to seasoned and
successful executives in recognition of solid and significant
contributions to public service. And they pale in comparison
with compensation and bonuses common to executives with similar
credentials working in the private sector.
Good government is a reflection of the people who make it
that way and their competency, their dedication, their
leadership are essential to the Department of Veterans Affairs
as they are to the government at large.
VA remains committed to the statutory imperative of
executive bonuses to both reward and to encourage continued
excellence in performance.
Mr. Chairman, before I conclude my remarks, I would make
the point that I understand some of the issues raised and I
look forward to the discussion. But I would recognize as my
full statement submitted for the record points out that we are
serving this year 5.8 million veterans in our healthcare
system, a record, more than ever before 5.8 million veterans
are being seen at what is touted in many publications as the
best healthcare system in the United States, the best
healthcare system in the United States.
As indicated in my testimony, there are millions of people,
millions of veterans and their survivors and dependents who are
receiving compensation and pension checks each and every month.
There are hundreds of thousands of individuals, active duty and
veterans who are getting new houses, a place to live through
the VA Housing Program. There is an insurance program that
would make us the sixth largest insurance company standing on
itself. And, again, I would just make the point that these are
good, honest, dedicated, hard-working leaders who have been
able to be identified and that takes a special process itself
as Senior Executive Service members, members of the Senior
Executive Service----
Mr. Mitchell. Thank you.
Mr. Mansfield [continuing]. Have a special place in our
workforce. And, Mr. Chairman, that concludes my prepared
remarks and I will attempt to answer any questions you may
have.
[The prepared statement of Mr. Mansfield appears on p. 44.]
Mr. Mitchell. Thank you. Your testimony was a good overview
of what your Department does.
And all the things you said toward the end of the people
that are serving and so on, I just assume you do that because
that is your job, that is your responsibility. And that is the
charge that Congress has given the Veterans Department.
I have a series of questions which will take very simple
answers. In the documents that the VA has provided this
Subcommittee, it does not appear you had any role in reviewing
the bonuses; is that correct?
Mr. Mansfield. No, that is not correct. As the Deputy
Secretary and as the Chief Operating Officer, I accept
responsibility for what operates in the Department. The process
is set up so that an Assistant Secretary who is an expert and
has experts to work with him in this area gets the information,
does the process work before that final document goes to the
Secretary----
Mr. Mitchell. So you reviewed all of the recommendations
for the bonuses; is that correct?
Mr. Mansfield. I review the initial submission that goes to
the Secretary for his decision and I review what goes to the
Chief of Staff for his discussion with the Secretary of what
the final answers are.
Mr. Mitchell. Did you serve on any of the PRBs, the Review
Boards?
Mr. Mansfield. No, sir, I did not.
Mr. Mitchell. Then did you read the recommendation memo
that you sent?
Mr. Mansfield. Sir, I am having a little trouble hearing.
Mr. Mitchell. Did you read the bonus recommendation memo
that evidently you sent to the Secretary? Did you advise the
Secretary on all the bonuses? Did you advise the Secretary on
these bonuses?
Mr. Mansfield. In the fact that I forwarded the final
document, yes, sir.
Mr. Mitchell. And did you recommend any changes?
Mr. Mansfield. The question is again, sir, to the operation
of the statute and the regulations and the VA setup where the
Secretary makes the final decision.
Mr. Mitchell. Correct. And he makes the final decisions on
all SES bonuses. And, you know, the Subcommittee did invite the
Secretary to come to this hearing. Do you know why he is not
here?
Mr. Mansfield. Not available to make it, sir.
Mr. Mitchell. Pardon?
Mr. Mansfield. Not able according to his schedule to make
it, sir.
Mr. Mitchell. We mailed out the invitation May 24th.
Mr. Mansfield. I do not have a specific, you know----
Mr. Mitchell. All right.
Mr. Mansfield. I will go back and ask him and come back and
give you an answer.
Mr. Mitchell. Very good. So the Secretary was provided a
memo with all the recommended bonuses? He has it all?
Mr. Mansfield. Again, sir, I----
Mr. Mitchell. The Secretary has provided a memo of all the
recommended bonuses; is that correct?
Mr. Mansfield. Yes.
Mr. Mitchell. Does the Secretary of Veterans Affairs have a
memo of all the recommended bonuses?
Mr. Mansfield. All the recommended bonuses went to the
Secretary and were finalized by him.
Mr. Mitchell. Okay. And that memo includes the ratings
outstanding, excellent, fully satisfactory, but, otherwise, no
information about the PRB recommendation in any particular
bonus is listed; is that correct? Is there any information
listed besides outstanding, excellent, fully satisfactory? Is
there any justification for these?
Mr. Mansfield. In the final decision memo that goes to him,
as you indicated, that is the clear memo. The information from
any of the PRBs is available if requested or if needed.
Mr. Mitchell. But what he receives is only outstanding,
excellent, or fully satisfactory; is that correct?
Mr. Mansfield. Yes, to the best of my knowledge.
Mr. Mitchell. That is all? So there is no particular
followup that he has with his recommendation?
Mr. Mansfield. Well, he has his knowledge of the Department
and what has happened in different parts of it and who is doing
what type of a job and any recommendations that may be
presented to him.
Mr. Mitchell. Okay. Did you actually read the write-ups for
the individual justification for each bonus?
Mr. Mansfield. No, sir, I did not read all of them.
Mr. Mitchell. Did the Secretary read them?
Mr. Mansfield. That I do not know, sir.
Mr. Mitchell. Let me ask this then. How is the Secretary
supposed to meet his legal obligation to decide on bonuses if
he knows nothing about the justifications for the bonuses?
Mr. Mansfield. Well, again, sir, these bonuses are
performance driven and depend on a combination of what the
Department has done in total and how that is measured. And that
is handled through a monthly performance review which measures
across the Department on what we are doing in specific areas
and where we are having problems and any corrections that need
to be made over the course of the year.
It deals with the strategic plan which the Secretary signs
off on and it is his direction for the total direction of the
organization. It depends in some cases on employee satisfaction
and there are reports from OPM that come in that----
Mr. Mitchell. I understand that. But those justifications
are not listed.
Mr. Mansfield. It depends on patient or customer reviews--
--
Mr. Mitchell. Right.
Mr. Mansfield [continuing]. That come in.
Mr. Mitchell. But all those justifications are not listed
with the recommendation, are they? There are just three
categories.
Mr. Mansfield. Not all in one package, but they are----
Mr. Mitchell. Okay.
Mr. Mansfield [continuing]. A part of the leadership of the
Department's knowledge about what is going on in the
Department.
Mr. Mitchell. Are you aware that in the 2 years that
Secretary Nicholson has been approving bonuses he has changed
only one out of hundreds of recommendations? He has changed
one. By contrast, in 2003, Secretary Principi changed over 30
of the recommendations.
Mr. Mansfield. Well, part of it as mentioned by the
previous testifier, we are in a different system now since
2004. I do not have an exact knowledge about how many that
Secretary Nicholson has changed, but I believe it is more than
one.
Mr. Mitchell. Go back and check.
I will yield my time to Ms. Brown-Waite.
Ms. Brown-Waite. Thank you.
I do not think you actually answered the question of did
you make any recommendations to the Secretary? Did you make any
recommendations to the Secretary when the list came down for
the bonuses? I listened very carefully and I did not hear a yes
or a no answer.
Mr. Mansfield. The list went forward with some verbal
recommendations from me as to some people on that list.
Ms. Brown-Waite. And is this the normal practice? Did you
do this with the previous Secretary?
Mr. Mansfield. Yes.
Ms. Brown-Waite. So you made a few. Define a few for me.
Mr. Mansfield. One of the issues of concern is, for
example, conformance with IG issues or other reports on
performance throughout the Department. And in some cases, there
may be IG issues that are under investigation, under review
that are not, for example, what we call public knowledge that I
would be briefed on.
Ms. Brown-Waite. Well, with respect to the bonuses given to
senior staff at the Asheville Medical Center during the 2004 to
2005 timeframe, given that the Office of Medical Inspector was
notified and began an investigation on November 30th, 2004, why
were allegations of possible patient care issues not made known
prior to the final Senior Executive bonus approval decision in
December and again in December of 2005 after the final OMI
report was issued? Is there some reason why, for example, this
was not part and parcel of that process? We are talking about
quality of care which certainly should be part of the criteria.
Mr. Mansfield. I agree with you a hundred percent. I am
sorry. I would agree with you a hundred percent that quality of
care is one of the issues we are concerned about, one of the
biggest things we are concerned about. I am sorry. I do not
have all the facts and figures for Asheville in front of me,
but I would be prepared to go look at that and come back and
report to the Committee or to you, however you should like that
handled.
Ms. Brown-Waite. I believe that there were already letters
written by individuals as well as Members of Congress about the
quality of care at that facility. And, yet, the Director got a
very sizeable bonus.
Mr. Mansfield. I do not have all the facts in front of me,
Madam Congresswoman. I would, as I said, go back and look at
that and answer the question for the record or if you wish for
me to come and speak to you, I would do that.
Ms. Brown-Waite. No. I would like you to submit subsequent
testimony on that very situation in North Carolina.
[The following was subsequently received from Mr.
Mansfield:]
In August and December, 2004, the Office of the Medical
Inspector (OMI) conducted site visits in the Asheville VA
Medical Center (VAMC) Nursing Home Care Unit (NHCU) also known
as the Extended Care Rehabilitation Center (ECRC). The purpose
of the visits was to review the quality of care in the ECRC.
That reports made several recommendations for improvements
which were implemented (some of which were implemented within
hours of the OMI notification of the issue). In addition, a
third OMI report was conducted in July 2005 which revealed
clinical leadership issues. These were addressed immediately
and the clinical managers who were involved eventually left the
VA.
The nursing home was closed for admissions from December 17,
2004-January 28, 2005. One of the recommendations from the OMI
was to detail an Associate Chief Nursing Service (ACNS) and
Geriatrician to the facility to work with the facility as they
addressed other recommendations. On January 23, 2005, VHA
detailed the ACNS for Geriatrics from Durham VAMC and a
Geriatrician from the Detroit VAMC to the facility to provide
temporary clinical leadership. On January 28, 2005, this team
provided an exit report to Asheville VAMC Leadership and
conducted weekly calls to monitor the implementation of their
recommendations for improvement. One of the recommendations
included approval for limited admissions (no more than one per
week per month) beginning with admissions to the ECRC rehab
program starting on January 28, 2005. On March 10, 2005,
additional admissions were approved for ECRC skilled nursing,
restorative and maintenance programs. On May 31, 2005,
admissions were opened to the ECRC respite program and
admissions were increased to four residents per floor per week.
On August 3, 2005, admissions were opened to the ECRC hospice
program. Nursing Leadership monitors ECRC staffing levels on a
daily basis.
While the OMI review and results were taken into
consideration when rating the Director's FY-2005 performance,
other factors were also considered. For example, among other
accomplishments under his leadership that year, the Medical
Center successfully received full Joint Commission on the
Accreditation of Healthcare Organizations (JCAHO) accreditation
in all programs, achieved Level 1 scores (highest level) in
clinical performance levels, reduced waiting lists, scored
among the highest Medical Centers in patient satisfaction and
held pharmacy costs to just a 1.27% increase while providing
over 50,000 more prescribed drugs than in previous years. The
Director also led the Medical Center through flood disasters
that resulted from hurricanes, where the hospital was without
water and power for extended periods of time.
This timeframe encompassed the FY-2005 rating period and the
Director in charge of Asheville VAMC during this period
received a performance rating of Excellent.
This rating decision included consideration of the OMI
reviews. His prior performance ratings had been Outstanding in
FY-04 and Excellent in the two preceding years.
The VHA did not diminish the importance of the OMI findings
when considering the rating and performance bonus for the
Medical Center Director, however it did consider all of the
other positive accomplishments that occurred during that same
time period. The bonus he was granted was comparable to other
Medical Center Directors in Veterans Integrated Service Network
(VISN) 6 who also received a final rating of Excellent.
That Director is no longer with the Asheville VAMC having
retired on March 3, 2006.
Ms. Brown-Waite. The other thing I want to know is, do you
think that the IG should review the list of bonuses prior to
the approval of the Secretary to set up some sort of an early
warning system that there is an ongoing investigative issue?
Mr. Mansfield. That does happen.
Ms. Brown-Waite. So that does happen now. Could you tell me
what the process is.
Mr. Mansfield. The Assistant Secretary for Human Resources
Administration who in effect is the Secretary or the person in
charge of the process, the paperwork, contacts the IG, shares
that information with him, and gets a report back or I get a
report back on any issues that may be of concern.
Ms. Brown-Waite. So is this actually taken into
consideration?
Mr. Mansfield. Yes, ma'am.
Ms. Brown-Waite. So have bonuses actually been reduced as a
result of an ongoing investigation or the conclusion of an
investigation which was not very favorable?
Mr. Mansfield. Yes.
Ms. Brown-Waite. Could you also tell us how many SES
employees in your agency have been reduced in rank and/or
salary and/or fired? And if it involved a transfer, which I
know that the VA is known for transferring people, was it under
adverse conditions?
Mr. Mansfield. Obviously I do not have that information----
Ms. Brown-Waite. I know you do not, sir.
Mr. Mansfield [continuing]. Right in front of me, but I can
tell you that some of each of those categories have taken place
and that I will get the information for you.
Ms. Brown-Waite. Okay. I would appreciate it.
Mr. Mansfield. Let me just make a point, though, that it is
awful hard to terminate anybody in the Federal Government.
Mr. Mitchell. Even SES?
Ms. Brown-Waite. Even SES, the Chairman asked.
Mr. Mansfield. Including SES, yes. They still have appeal
rights to the Board.
Ms. Brown-Waite. I know they have appeal rights, sir, but
we are talking about competency here. And I think that this is
a question which deserves an answer and I would appreciate your
getting back to us on it.
Additionally, Mr. Chairman, just one other quick question.
OPM recently wrote back to Secretary Nicholson with some
findings and recommendations. The Secretary had asked OPM to
conduct a comprehensive review of the systems and policies that
VA has in place to operate its performance management system
for Senior Executives.
It is relatively new. Their response was dated June 1st. As
soon as possible, I think that the Committee deserves to have
shared with it the responses of the Secretary to these
recommendations.
Mr. Mansfield. Yes ma'am.
Ms. Brown-Waite. I yield back.
Mr. Mitchell. Thank you.
Mr. Space.
Mr. Space. Thank you, Mr. Chairman.
Notwithstanding what may be a policy problem that I view
with giving taxpayer moneys away in the form of bonuses, I have
some questions about the independent nature of these
Performance Review Boards.
Is it not true that, I think, three of the four PRBs are
comprised entirely of departmental employees, VA employees?
Mr. Mansfield. Yes.
Mr. Space. Do you see that as creating the appearance of
improprietary or a conflict in asking VA departmental employees
to make assessments regarding their own peers without any
independent oversight?
Mr. Mansfield. I understand that there has been discussion
staff to staff and I understand the issue you are raising here.
But I would make the point that, for example, since many of us
come out of the military, the military seems to do it that way
when you are doing officer reviews, for example, and that is a
point.
We are dealing with the most senior, most qualified, most
professional part of the government. We are dealing with some
cases with the healthcare arena and a benefits arena. So I can
see reasons why it has come up that way. But I also understand
the question being raised and I would be, as I have explained,
more than happy to bring that one back and talk to the
Secretary about it and see if there are reasons on why we
should change it and, if so, how.
I think also we have to recognize that we are in OPM's area
here and I am not sure how many other agencies do it that way
either.
Mr. Space. And it just seems to me that a system that is
comprised wholly of departmental employees, many of whom know
each other, I am quite certain that those members of these PRBs
are colleagues of one another, that that creates a system that
is bound to encourage some peer pressure among departmental
employees to essentially take care of each other.
And, again, apart from what I see to be an inherent problem
in creating a system that uses taxpayer moneys to provide
bonuses in a subjective fashion regardless of the number of
criteria, it is difficult to argue that it is not a subjective
process.
I would think that bringing some independence to the system
of review would be appropriate. Is it fair to say that that is
an accurate statement, that some level of independence would be
required to assure the taxpayers that their monies are being
well spent?
Mr. Mansfield. As I indicated, I understand the issue that
you are raising and I would be more than happy to bring that
one back, sit down and look at it, talk to OPM. And I
understand what you are saying that bringing to bear some
outside influence may make the system work better.
Ms. Brown-Waite. Mr. Chairman, I have to leave for an
amendment on the floor. I would ask the gentleman if he would
suspend and I would also ask if the Members would give
unanimous consent. Obviously we are kind of missing some
Members here who also are on the floor or in markups. And if
the Committee would allow Mr. Wu to continue to ask questions
in my absence.
Mr. Mitchell. If there is no objection, so ordered.
Mr. Space. No objection.
Ms. Brown-Waite. I would appreciate that. Thank you. Thank
you for suspending.
Mr. Space. You are welcome.
And I yield back my time, Mr. Chairman. Thank you.
Mr. Mitchell. Thank you.
Mr. Walz.
Mr. Walz. Thank you, Mr. Chairman.
And thank you, Secretary Mansfield. First and foremost,
your commitment and dedication to this Nation and our veterans
will never be questioned. The service you have given to this
Nation and the service you have given to our veterans is not at
issue here. I think that needs to be made very clear.
I appreciate you and your staff coming up here. And I hope
you understand and see us as allies in this to try and deliver
the best possible service to our veterans.
And one of the things that I am very happy to see you
talked about in there was good government, Secretary, and we
believe that one of the key roles and one of the things, quite
honestly, many of us here feel have been missing is oversight.
And that is one of the key responsibilities of a Member of
Congress.
So please understand we are here to ask these questions to
be allies with you, teammates with you, do whatever we can do
to try to get to the heart of this. And I hope you will
understand that the concern of this, not just as Members of
Congress and oversight, but from our veterans' groups, quite
honestly, it has been made very loud and clear to us.
So I appreciate where you are coming from on this, but I
hope you can understand at least public perception-wise why
this is such a pressing issue and why we brought you up here to
talk about these. So, please.
And a couple of things. I would have to be quite honest.
Many of us believe and we have seen this with declining budgets
in terms of what the real need was. You are exactly right. You
are servicing more veterans and with more critical issues
spread across a broader spectrum of issues than at almost any
time before.
And your organization in the VA is doing so brilliantly. I
will say that we understand that. But there are glaring
examples of where we can do better and that is what we are
trying to get at.
And in my case, I guess, I do not want to speak for anyone
else up here, especially in some of the senior positions, there
is a belief that they need to tow the Administration's budget.
They need to tow on where things are coming into the VA and
saying that is enough money, you can do it.
When I hear you say one of the issues is 750 to 1 in the
span of control, I agree with you. That is ridiculously high.
But the fix on this, I do not believe is trying to give a bonus
to keep somebody around to get there. The fix would be can we
provide more staff for oversight. Is there a better way or is
there an organizational fix other than that.
The next thing I would say is this is very difficult for me
to try to sell back home when I go to my VA facilities and talk
to my RNs who have a shortage of nurses and want to know. Now,
you may say it is a different budget, it is a different issue
at hand, we have the supervision of that.
The public does not care about that when they are asking
why is there a shortage of nurses, why am I waiting 177 days as
an average to have my claim adjudicated, and I see that the
entire top of the organization received bonuses. That is one of
the issues.
We keep coming back to this issue of pay parity, but
bonuses have nothing to do with pay parity. The bonuses are
performance. If we have an issue with pay parity, ask us to fix
that, ask Congress to fix it. Then we do not get ourselves
caught in these jams where the perception of the organization
is handing out favored bonuses when the organization is not
performing all the way across the board.
And I just kind of want to turn it over to you on that
because I want to make it very clear, Mr. Mansfield. The work
you do for veterans, I applaud you. You are doing. As a
veteran, I know that. We are trying to make it even better. And
I think and my perception of this was these bonuses are making
it harder for us to do our job and that is why we want to get
to the heart of this.
So I am not asking you a specific question on this. I am
not putting you on the spot on this. I just want to make it
very clear what I am hearing from my constituents, what I as a
veteran see in this, and what I see our responsibility is in
working with you.
Mr. Mansfield. Well, thank you, sir, number one, for the
personal comments. I appreciate that.
I would also make the point as I made many previous times
at this witness table that I understand and respect and am
honored to be able to participate in what is a constitutional
process. The executive branch represented here and you folks
represented there and I do understand how the process is
supposed to work and appreciate that. And I do understand and
agree that when it works right, veterans are the ones that
benefit from it and that is what we both want. And I understand
that is what you want and that is what I want.
Mr. Walz. Thank you.
I yield back, Mr. Chairman.
Mr. Mitchell. Thank you.
Mr. Hall.
Mr. Hall. Thank you, Mr. Chairman.
I would echo Mr. Walz's statement. Thank you for your
service and certainly, you know, as a man in uniform and also
in the Department of Veterans Affairs, no one questions your
commitment to veterans and to this country.
And so we are all of us trying to represent our
constituents and also to do what we can to try to make the
system work better.
I am happy to see in your written statement that bonuses
are based on one and only one criteria, demonstrated
performance and that is as it should be.
When Secretary Nicholson was in this room, he testified
that the 177-day waiting time for a disability claim to be
processed was unacceptable in his words. He suggested that 125
days might be acceptable, nearly 2 months shorter than the
current average.
So, with so many of the top positions here in the
Department being graded as excellent, but a key area like that
being unacceptable, my question is, which is it? I mean, is
there a systemic problem or is there a person who maybe was
graded excellent who should have been graded unacceptable? How
can a performance standard like that be unacceptable when it
seems that across the board, there are bonuses being given?
Mr. Mansfield. First of all, sir, I think we have to
recognize that what we are judging is a person across the total
package, individuals with different responsibilities, and some
of it could be actually doing cases, some of it could be
training, some of it could be budget work, some of it could be
public affairs, some of it could be sitting at this table.
So there are all kinds of different elements that go into
this. And when you get to the Senior Executive Service, you
have I believe, the best of the best, those that by their
experience and their capabilities and their ability to go out
and get extra training and move into this, you are dealing with
good people.
I have to tell you I am a little concerned that we are
getting into an area where we are almost naming some people.
They have been named in the press, I think unfairly and
unmercifully, and that is a concern.
The other issue, though, when you are talking about the 177
days, I would suggest to you that part of that is the result of
laws that this Congress has passed because you believe that
certain aspects of the process for the veterans benefit require
additional time, additional waiting, up to 60 days waiting time
for evidence to be submitted.
And in addition to that, there are some court cases that
have also extended this time. So it is not as simple as just
one issue and we recognize that.
The other point I would make is that while we are talking
about the so-called backlog in the traditional area of
compensation and pension, that backlog right now is about
159,000 cases because we agreed and Congress agreed in
oversight hearings a few years ago under a previous Secretary
that 250,000 cases in the inventory is what we should have. Now
we are up around 399,000 or more.
So we have done an awful lot to keep things moving. This
year should be a record, over 800,000 cases decided, more than
for quite a while.
And I would make the point also that in addition to just
the number of cases, 800,000, the number of issues per case has
increased exponentially. And our Benefits Delivery at Discharge
Program, over the course of 4 years of implementing that and
putting it in practice, we have seen the average number of
issues per case grow from three or four to seven or eight. That
in effect doubles the number of cases you have to deal with.
You may require twice as many medical exams to be able to have
the information at hand to make a decision.
I am not trying to excuse the fact that we are not where we
should be, the Secretary said we are not where we should be,
177 days is too long. We have made some adjustments, for
example, to bring Gulf War on Terrorism veterans, those coming
back, those veterans, men and women, coming back from the
combat zone, to put them at the head of the line and be able to
adjust for their adjustment back into civilian society.
We are not where we should be, but we are working awful
hard to get there. And I would still say we have some damn good
people who are doing the job and I believe that they are damn
good people. And I do not believe that we need to take it from
exceptional down to throw them out the door.
Mr. Hall. I do not think anybody is suggesting that, sir.
Mr. Mitchell. That is not the alternative. That is
extremes.
Mr. Hall. Mr. Chairman, may I ask a second question,
please?
In a full Committee hearing on May 9th, Secretary Nicholson
stated that no political appointee at the Department has
received a bonus. However, CRS research found a staff member,
Paul Hutter, who received a bonus as having a PAS designation.
Furthermore, there are White House releases from June and
September 2006 announcing the President's designation of Mr.
Hutter to two positions.
Do you know if Mr. Hutter was in a PAS position at the time
that he received his bonus and can the Department clarify his
status?
Mr. Mansfield. Sir, I am under oath and I would have to go
back and check the record for that one.
Mr. Hall. Okay. Thank you.
I yield back. Thank you, Mr. Chairman.
Mr. Mansfield. And report back obviously.
Mr. Mitchell. Thank you.
I want to go back to what Mr. Hall was asking and part of
my opening statement. And I am going to read this again.
When the backlog of claims has been increasing for the past
few years and the trend is up every year, one would not expect
the senior most official of the Veterans Benefit Administration
to receive the maximum bonus when the trend is going away from
what we would like, yet this person received the maximum bonus.
When the VA is forced to return to Congress for additional
money, which happened twice in 2006 because the budget
submitted to Congress was inadequate and the VA failed to keep
Congress informed, yet this person who is in charge of that
received the maximum bonus.
Is that what you would call good pay for performance? And I
am not saying these people do not do a good job. I would say
there are probably many people throughout the VA who get no
bonuses that are doing terrific jobs.
Mr. Mansfield. Mr. Chairman, I----
Mr. Mitchell. We are talking about exceptional. Yes.
Mr. Mansfield. Mr. Chairman, I understand the point you are
making. I agree with you. And I would also make the point that
we do need to go back and look at that. I am making the point
that you made. We have some good people working for us and let
us make sure we do not take the wrong information and arrive at
the wrong decision on that.
Mr. Mitchell. No. We are just talking about bonuses. We are
not talking about the performance of the people in your
Department.
Let me ask a couple other questions. This Subcommittee has
cross-referenced reports from the Office of Medical
Investigations and the VA Inspector General to the bonus
recommendations. Does the VA do this? Do you cross-reference
what the Office of Medical Investigations and VA Inspector, do
you cross-reference these in making your recommendations?
Mr. Mansfield. Sir, as I indicated, there is a final review
by the IG when we get through the total process. My
understanding is that at the local level, at a hospital or VISN
level, that OMI information is taken into consideration. But,
again, being under oath, I would go back and check the record
and submit that one.
Mr. Mitchell. The Subcommittee has found four or five
instances where bonuses were awarded to employees with direct
authority over VA facilities that were subject to highly
negative OMI and IG reports. Are you aware of this?
Mr. Mansfield. I am aware of some staff decision and some
briefings I have had in preparation for coming up here, sir.
And, again, considering the circumstances, I probably want to
go back and submit an answer for the record.
Mr. Mitchell. I believe that what I have been briefed on
says that it may be a question of timing. The incident
happened. The person responsible went somewhere else. Somebody
else came into the same facility. But I would request to submit
for the record the answer on that one.
Let me ask your opinion. Do you believe that the VA, when
it makes its bonuses and recommendations at the end of the
year, do you believe that they should have the OMI and IG
reports in front of them when they are making these
recommendations?
Mr. Mansfield. Yes, sir. That could be a process change
that we would guarantee that those were--I do not think at the
end, though. I think what we want is to have them involved in
the early discussion and decisionmaking stage to make sure that
the people that are making the first set of decisions are aware
of that where we can have that.
Mr. Mitchell. Okay. Thank you.
Mr. Wu.
Mr. Wu. Chairman Mitchell, I appreciate your indulgence in
Ms. Brown-Waite's request for staff to ask questions.
And, Mr. Hall, thank you for your indulgence also.
I understand what Ms. Brown-Waite has been asking and what
Chairman Mitchell has been asking and in consultation with
Ranking Member Buyer about this entire bonus process.
And I just would like to reiterate what I have heard other
Members say and the Chairman and the Ranking Member that this
hearing for us is not to denigrate the hardworking employees at
VA, and there are many, and the mission that they accomplish.
But it is here for our purposes on this side to look at what is
dysfunctional about the process.
And without trying to indict by anecdote, there are a
variety of bonuses here that in the personal opinion of the
staff and myself in review and in consultation with your staff
bringing to question how those bonuses are awarded by some
measurable performance metric. There are others in there that
they probably walk on water and deserve more.
But there is a process that we think probably needs to be
repaired and I would bring to mind what Ms. Brown-Waite said.
In referencing the letter to Secretary Nicholson by Ms.
Springer from OPM dated 1 June about the review that Secretary
Nicholson asked right after the negative articles came out to
take a look at the system to see how copasetic it was.
And they came up with findings that said that you were
involved and the Department was doing the process that was
certified, but they came up with four distinct recommendations
that talk and link performance, individual performance to
institutional performance.
And I guess what Ms. Brown-Waite would like to know, not
guess, but she said we would like to have a report back of
those four recommendations and when the Department intends on
implementing by specific hard milestone dates and take
seriously what OPM's recommendations to cure or to address some
of those issues.
So I would just reiterate that Ms. Brown-Waite would
certainly like to see that and I think that at the same time,
Mr. Buyer would like to see that also.
Mr. Mansfield. Let me make sure that you and the Committee
Members understand. I did not mean that the Committee Members
were denigrating anybody. I meant that the publication
indicated some people individually was denigrating them and I
think unfairly. And that is a problem with me since I know who
these people are and I know how hard they work and I know how
dedicated they are and how much they care and they do a good
job. So I hope that message did not come across.
I believe that we are here to do better. I believe that we
are here to make the constitutional process work with the goal
of service and benefits to veterans being improved. And that is
what my goal is being here.
So I understand what you are saying. My testimony indicated
that Secretary Nicholson in his review of the information has
said that we will adopt them. I will give you an exact date,
you know, some date certain as to when we can do that.
I would imagine that when you look at what we are talking
about here, the four on page 46, that the next go around for
this, we should be able to get these in place for the next
process.
Mr. Wu. Right. That was the bottom line. These new
processes and recommendations would be in place before the next
bonus reviews.
Mr. Mansfield. Well, again, this is the Secretary's system.
He said that he will implement them. I will double check that
we will get them done. I do not see any reason why we cannot
get these implemented in the next----
Mr. Wu. I would like to revisit one of Ms. Brown-Waite's
questions on the IG review or OMI review that Chairman Mitchell
has also addressed.
It is my distinct memory when we were briefed by VA staff
prior to this hearing when that question came up whether the IG
gets to review all bonus recommendations prior to the
Secretary's approval so as not to embarrass the Secretary on
approving a Presidential award of $44,000, that there is some
criminal investigation going on on that individual. It would
behoove the Department to have the IG and other review
mechanisms in place prior to the Secretary putting ink to the
paper.
Mr. Mansfield. As I indicated in my answer, that does
happen now and has been happening.
Mr. Wu. Ms. Brown-Waite wanted to know when that happened
because when we were briefed, the staff said they were not sure
if it was happening and they would go back and check.
Mr. Mansfield. Well, I know it is happening because I have
been involved in it. So you want a date certain on when
something went over?
Mr. Wu. She asked when there was a review by the IG prior
to--does the IG get to see the recommended list prior to the
Secretary signing the final----
Mr. Mansfield. All right.
Mr. Wu [continuing]. And when did that happen. And I would
like to address a second question. I know I----
Mr. Mansfield. I would like to make sure that I finish the
answer to the first one----
Mr. Wu. Yes, sir.
Mr. Mansfield [continuing]. Which is to make sure that--you
mentioned a dysfunctional system. I hope you do not understand
that you think that we come up here and say we got an OPM
report and we are perfect. We understand that we have a massive
organization spread all over the place out there and that there
are potential issues involved in it.
But I would make the point that we are attempting as much
as we can to make sure that this system works the way it is
intended to work, the way the statute that this Congress set it
up with implies that it should work, the way the OPM rules
work.
So, again, I do not think it is a dysfunctional system. We
may have some questions about what some of the final results
are here, but I would hope we would agree as OPM says that
basically the system is working.
There are some issues here, Mr. Chairman, that you brought
up and other Members have brought up that we have agreed to
look at, some of them in these recommendations to put in place
to again make it better if we can do that.
Mr. Mitchell. Thank you. Just one comment before we end.
Again, about the denigration of individuals. You know,
these individuals that are listed here with the bonuses, they
did not give themselves the bonuses. The system did and that is
what we are trying to correct because we think that in some
cases that people should be held responsible for, as you said,
accountability and that you had some performance measures and
that when we find some things that seem to be going backward
instead of the way we would like and that is wait time and so
on and budget processes, it is not these members' faults who
got the bonuses. I think it is those people above them who were
operating the system and that is what we are trying to correct.
Mr. Mansfield. Well, sir, there are two points. One is
there are performance measures that are in place throughout the
Department. As indicated by the previous testimony and as
indicated in some of the OPM reports and in the certification
letter, we need to do a better job of bringing those metrics
down into the individual SES performance review to ensure that
in addition to the Department requirements, which is a part of
the certification, that we have--I agree with you--we need to
do a better job with the metrics for the individuals.
Mr. Mitchell. That is right. And I think also those at the
very top of the central office ought to have some metrics to
measure them by as well which today they do not.
Thank you very much for your testimony and this ends the
testimony for panel two. Thank you.
Mr. Mansfield. Thank you, Mr. Chairman.
[The U.S. Department of Veterans Affairs provided a large
notebook of documents to respond to the many requests for
information during the hearing.]
Mr. Mitchell.
We will now proceed to panel three. Carol Bonosaro is the
President of the Senior Executives Association (SEA). The
Senior Executives Association acts as the voice and advocate
for the career Executive Corps. We look forward to hearing her
view on VA's process for awarding SES bonuses.
I hope I pronounced your name correctly.
Ms. Bonosaro. Absolutely.
Mr. Mitchell. Thank you. You will have 5 minutes. Thank
you.
STATEMENT OF CAROL A. BONOSARO, PRESIDENT, SENIOR EXECUTIVES
ASSOCIATION
Ms. Bonosaro. Members of the Subcommittee, the Senior
Executives Association, the professional association
representing the interests of the career Senior Executive
Service, appreciates the opportunity to testify, and I ask that
my written----
Mr. Mitchell. Excuse me. I do not think your microphone is
on.
Ms. Bonosaro. Well, it has the green light on.
Mr. Mitchell. Oh. Maybe bring it closer.
Ms. Bonosaro. We appreciate the opportunity to testify, and
I ask that my written testimony be entered into the record.
As previous witnesses have testified, SES performance
awards are made with substantial
oversight by Performance Review Boards. In every agency, PRB
members must and do exempt themselves from decisions about
their own performance appraisals and awards.
Some in Congress have called for PRB members to be
ineligible for performance awards. That would be a serious
mistake in our view. Agencies select their highest performing
career executives as PRB members as impartial jurors of their
peers. Excluding them from receiving awards will result in only
those executives not recommended for awards being eligible to
serve and the quality of service may well be lessened.
Further, who would wish to accept appointment to a PRB when
it would make them ineligible to receive an award?
We believe that the publicity surrounding bonuses has been
unfair and misdirected. All Americans desire to give our
veterans the best care and service possible and none more than
the VA career executives who dedicated their careers to doing
just that and who are well worth their salaries and awards.
Representative Hall has said he would be introducing
legislation to place a hold on this year's performance awards.
Restricting awards because of disagreement with policy
decisions will unfairly punish career executives and achieve
nothing in relation to those decisions.
As the Subcommittee is aware, career executives work at the
direction of political appointees. Concerns with Administration
decisions to request less money than is believed needed for
healthcare and claims processing should be directed at the
Administration's policymakers, not at the career executives who
are required to implement their decisions.
The SES was created in 1979 to encourage and reward the
highest performers in government. It provides both greater
risks and greater rewards than the General Schedule. All pay
raises and all awards are discretionary and are made on the
basis of performance. Senior Executives do not receive locality
pay. They do not receive within grade increases. They do not
receive an annual cost-of-living increase.
If a Senior Executive is not rated as fully successful or
better, his or her salary can be decreased as much as 10
percent. Those rated fully successful often do not even receive
an increase in salary that covers increases in the cost of
living.
Senior Executives have no appeal rights if they are removed
from the SES or Federal service for poor performance. All of
this is unlike the General Schedule.
With regard to IG investigations, I would point out to you
that bonuses and even Presidential Rank Awards have been denied
to SESers due to ongoing investigations. However, those SESers
who have been exonerated following those denials have been
unable to be made whole later. So I would urge the Committee to
tread carefully in that regard.
High-performing career executives can and often do receive
substantial pay raises or performance awards. Up to 10 percent
of a Department's or Agency's SES pay pool can be set aside for
annual performance awards of from 5 to 20 percent of a career
executive's salary. As one would expect, top performers
consistently receive awards which are central to keeping them
in the VA and throughout government.
If Congress decides to limit performance awards, the best
career executives will have another incentive to leave for the
private sector or retirement rather than continue to work in a
system that provides only a mere fraction of the compensation
they are worth and can earn in the private sector, often 100
percent more. Many career SES earn as much as $70,000 a year
less than some of the VA medical staff that they supervise.
These performance awards are not lavish frills and limiting
them would be particularly unwise since 90 percent of those in
the Senior Executive Service are eligible to retire over the
next decade.
Further, SEA consistently receives reports that many
talented and accomplished GS-14's and 15's who would be prime
candidates to the SES are dissuaded from aspiring to the
Service since they would take on additional responsibilities,
enjoy fewer rights, and their pay adjustments would be far less
reliable.
As a former career executive myself and as President of SEA
for 20 years, I can assure you that these career executives are
driven by a love for public service over financial gain. They
are dedicated to their work and putting in 70-hour weeks is not
rare. They make the best decisions possible with the resources
they are provided.
Thank you.
[The prepared statement of Ms. Bonosaro appears on p. 48.]
Mr. Mitchell. Thank you.
Let me ask a couple questions. Would you agree that the
bonuses in question are for the purpose of rewarding
exceptional performance and not used to reduce disparity
between government and private sector compensation?
Ms. Bonosaro. Yes. That is the purpose they are intended
for, but I will point out to you, sir, that until really 2005,
because it took about a year for the new pay system to be
implemented, 70 percent of the members of the Senior Executive
Service were all drawing the same salary.
In that case and because so little wiggle room, if you
will, has been created, in fact, by the new higher limit, which
is $12,500 more between a certified and uncertified agency,
that it was not uncommon since so many of them are indeed high
performing to look to that bonus pool as a way of dealing with
pay compression and now, of course, the lack of locality pay as
well.
Mr. Mitchell. Let me ask you this----
Ms. Bonosaro. I am not suggesting that is what they do, but
that is----
Mr. Mitchell. Well, it sounds like it. Let me ask you this.
Would it be a violation of statute and regulations to use
bonuses for purposes of reducing such disparity?
Ms. Bonosaro. Would it be illegal?
Mr. Mitchell. Yes.
Ms. Bonosaro. I do not know. I think I would ask my general
counsel that because----
Mr. Mitchell. Well, it is. It is not to be used for pay
disparity or for reducing these disparities. Bonuses were for
exceptional service. And I have some feel for this because I
was a high school teacher and I understand when they talk about
people who teach and those who get out because of pay and so
on. And I knew what I was going to be paid when I went in and I
stuck it out as a career, 28 years.
And I think on the one hand you are saying that these
people could be making so much more money other places and they
should and we are going to lose them and so on, and then you
end up by saying but these people are not here for that. They
are here for the love of their work and for what they are
doing. You seem to be saying you want the cake and you want to
eat it too.
And I come from a background of government service and I
understand the dedication of government service, but I think
also when somebody comes in and tries to put business practices
into government and they come up with pay for performance, the
idea of pay for performance is exactly that. It is pay for
performance.
Everybody is expected to do an excellent job all the time.
That is what they are paid for. They are expected to come to
work every
day. They are expected to put in a full day's work. That is expe
cted.
But there are some people who go over and beyond and I
think you would find that it is probably illegal to use bonuses
for reducing this disparity. And I think that is what we are
trying to drive at. If there needs to be a pay increase, that
is what Congress should be doing.
Ms. Bonosaro. With regard to pay, it is quite true that I
have talked about the pay they can earn in the private sector
and that becomes a factor as they do consider how long to stay
in government.
I think it is clear they are not in government because of
the pay, but pay decisions, bonus decisions can be a
demotivator. It can be very demoralizing when you know that you
have been putting in--I talked to a group of executives last
week at Army who said, look, we are putting in 70-, 80-hour
weeks. This is a time of war. We love what we do, we care about
what we do, but when certain decisions are made that are in a
sense not respectful of them, it is demoralizing.
So I just wanted to put that in that context. But also with
regard to bonuses, I am not suggesting to you that they are not
made on the basis of performance. But when you have a great
number of high performers as you do in the Senior Executive
Service--because if you did not have that, you would have to
question how they were selected to begin with and the selection
is very difficult--you expect them to be performing well.
Mr. Mitchell. It sounds like Lake Woebegone where everyone
is above average and it sounds like to me that everybody who
happens to be in SES is above average and there is no bell
curve going back to my teaching experience.
Ms. Bonosaro. Well, I would argue that actually I do not
think there is. I mean, when you look at a basketball team, you
do not expect a bell curve of height. When I look at the Senior
Executive Service, I do not see a bell curve of competence and
capability. They had to work too hard to get there. The
requirements for entry are very high.
Mr. Mitchell. Thank you.
Mr. Wu.
Mr. Wu. Thank you, Chairman Mitchell.
Ms. Bonosaro, I think that we had SES Association testify
one time before this Committee about 8 years ago. I appreciate
your 27 years there.
Where were you an SES just out of curiosity?
Ms. Bonosaro. Well, I started my career at the then Bureau
of the Budget, but I ended it at the U.S. Commission on Civil
Rights.
Mr. Wu. Just out of curiosity, I do not think that anyone
here in our Members and speaking for our side of our Members
are saying that SESs are not the cream of the crop, and there
are many there.
But at the same time and reflecting on what Chairman
Mitchell said, there is a bell curve. There are good SESers and
there are marginal SESers. I mean, it is just going to be that
way. That is the universe there.
I know that you defend and you represent that constituency.
Just out of curiosity, do you know how many VA SESers that the
SES Association is representing for adverse personnel actions?
Ms. Bonosaro. We do not represent any individual.
Mr. Wu. But you provide counsel for those that are
appealing their SES or whatever personnel actions are at the
VA?
Ms. Bonosaro. No, sir. There may be some confusion. Our
General Counsel is under contract to us and he provides
services to us. He has a law firm and who that law firm
represents is a matter of his service as an attorney. That has
nothing to do with the Senior Executives Association.
The most that we do is if a member calls, for example, and
says I have had a notice of an action, what do you recommend I
do, we have someone on staff who gives them advice, but it is
not as an attorney. It is not representation.
Mr. Wu. But would you clear up a perception for me at
least. You said in your testimony that there are no appeal
rights?
Ms. Bonosaro. Correct, not for removal, nothing effective.
I believe you can request a hearing at the MSPB. There is no
transcript made. So it is a totally ineffective right.
Mr. Wu. There are probably several SESers in my memory that
were attempted to be removed by the VA for nonperformance and
are still within the VA payroll after years.
Ms. Bonosaro. We have had this conversation over the years
with political appointees and have always said that our view is
if there is a nonperforming Senior Executive and you have made
clear what the performance standards are, given them an
opportunity to meet them, and they do not do it, then get rid
of them.
And there is no reason you cannot. As I say, they have no
effective appeal rights. About the only thing they can do is
argue a prohibited personnel practice. That is extremely
difficult to prove.
So if they are not removed, it is for a failure of will on
the part of the appointee who is supervising them, frankly.
Mr. Wu. I am not sure if your association keeps any of
these statistics, but if you do, just enlighten us a little
bit. How many Senior Executives have had a salary decrease as a
result of poor performance? How many have been terminated? Are
statistics kept concerning poor performance punishments for any
of these Senior Executives governmentwide?
Ms. Bonosaro. Well, unfortunately, you are going to have to
ask Office of Personnel Management for that. I have not seen
the data. I have seen data on average salary adjustments at
different levels and so on, but I have not seen the data you
have asked for.
I will say one thing, however. Very often instead of taking
action, direct action on a removal, what happens, and you may
well be aware of this, is the Senior Executive is encouraged to
retire. They are proposed to be geographically reassigned. They
are sent signals that their life will not be terribly
comfortable and most often that is what happens.
So you do not see high numbers of removals, but I would
suggest to you that there have been quite a few removals that
are hidden.
Mr. Wu. Thank you.
Mr. Mitchell. Thank you.
Mr. Hall.
Mr. Hall. Thank you, Mr. Chairman.
Ms. Bonosaro, thank you for your testimony, and I
appreciate your comments that SES members are working 70-hour
weeks and are committed to the jobs that they do and are not in
this for the money as it were.
Chairman Mitchell, you talked about being a teacher. I was
a school board trustee and President where we got paid no money
and for 4 years, I put in a lot more hours than my wife would
have liked me to.
And indeed many of us here in Congress are not here for the
money either. So I would like to think that that is sort of a
common theme that perhaps a lot of us could do better in the
private sector.
But our job in Congress is to try to, if there is a problem
that we can assist with legislation or providing more funding
that we know that and that we do that.
You have not been to some of the hearings that we have been
at where we have heard people talk about the areas where the
Department of Veterans Affairs is not at its best. There are
many areas certainly where it does a very good job.
There is a portability that is the envy of the rest of the
healthcare system in terms of being able to bring your card to
any hospital and have your record called up so that it does not
matter if you are on vacation or traveling to visit somewhere
else in the country and you have a health problem that you can
start by being taken care of by somebody who knows exactly what
your history is. And that is not true for many of the rest of
us in the public healthcare or HMO world.
But there are some disconnects. Now, those are the things
that we are trying to figure out. For instance, if a Deputy
Under Secretary of Health takes his position in February of
2006 and in September 2006 gets a $33,000 bonus which is the
largest bonus awarded that year to any official in the
Department--you know, I did not get to ask this question before
because the first answer took 5 minutes to my first question,
but I will submit it in writing--but one has to wonder, you
know, what this individual did in 6 months to merit the largest
bonus given out in the Department.
When the Deputy Under Secretary for Benefits requested an
amount that apparently was less than what was needed to deal
with the claims process, which the Secretary admits or himself
describes as unacceptable, then he has described his apparently
being exceptional in performance in terms of the recommendation
for his bonus.
We would give more money if we are asked for it. You know
what I mean? If members, if officers or Secretary Deputies,
Under Secretaries of the VA come to us and say, help, we need
more funding, we need more people, we are not going to hold
back on that.
But we have had literally, I think, eight or so different
proposals kicked around in the Committee and in the
Subcommittees to try to bring the backlog down and to try to
shorten the time of the appeals process and so on.
And the answers that we have gotten back in the roundtable
that the Chairman of the full Committee, Bob Filner,
Congressman Filner, had a couple weeks ago, it seems that what
I am hearing, if I heard right, was sort of like, well, we are
close to it and we just need to work on this a little more and
let the system work a little more.
And so it is frustrating because we go home and we hear the
complaints. I understand there are many more success stories
possibly than there are complaints, but nonetheless, at a time
when the system is taxed and overloaded and stressed, we need
to either be told what solutions we can provide or else we are
left to look and wonder if there is more oversight needed. And
that is why we are here.
So that was not exactly a question, but you can respond in
any way you choose.
Ms. Bonosaro. Thank you.
Well, along the way, you talked about budget and I just
want to point out that budget requests are not made directly to
Congress by career executives, as you know. I mean, they are
vetted, approved by not only the Secretary of the Department
but OMB.
And so whether or not a career executive happens to agree
with particular budgetary requests, policy, or anything else,
ultimately that conversation is had inside the Department. As
you know, when they get here, they are going to defend what
they are supposed to defend. They work at the direction of
political appointees. So, you know, I trust you appreciate that
and understand that.
The other point I guess I would like to make is that I
think it is very difficult to look at individual bonus awards
without literally being in the Department, if you will, and
having a greater sense of the day-to-day workings, the week-to-
week workings, and the contributions these people have made.
I mean, I guess we would feel a lot more comfortable if you
were addressing directly the points that you have been talking
about, the claims processing as opposed to going in frankly via
the bonus route because I suspect that you could probably
conduct the same sort of consideration of other departments'
programs and results, other Committees could in the same way by
going via the bonus system. And I guess we think you ought to
go in the other direction, frankly.
Mr. Hall. Thank you, Mr. Chairman.
Mr. Mitchell. Thank you.
One last question. You just said, and I understand that,
that these people work under political appointees and so they
follow the directions of the political appointees.
Would you then follow that their bonuses would be based on
political considerations?
Ms. Bonosaro. No. What I am saying is they have given their
best advice. They have done their best work. But when a policy
decision is made, it is theirs to carry out and to defend it. I
do not think that means that their bonuses are made based on
political considerations.
Mr. Mitchell. Well, I only say that because the budget
requests that were made by the VA to the Congress were
understated and the VA knew they were understated, but they did
it because they were hired or their bosses were political
appointees. And these very people got the very highest bonus
they could get and I assume they were doing their job.
Now, they were doing their job either following the orders
of the political appointees which seems to be the case, so----
Ms. Bonosaro. Yes. I would conclude that certainly because
their other alternative might have been to come here and
suggest something entirely different to you, at which point
they would no longer have a job.
Mr. Mitchell. Thank you. Thank you.
I want to thank everybody who was here and ask unanimous
consent that all Members have five legislative days to submit
or revise any of their extended remarks. If there is no
objection, so ordered.
And this concludes our hearing. Thank you.
[Whereupon, at 4:40 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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Prepared Statement of Hon. Harry E. Mitchell
Chairman, Subcommittee on Oversight and Investigations
This hearing will come to order.
Thank you all for coming today. I am pleased that so many folks
could attend this oversight hearing on ``The Process of Awarding SES
Bonuses at the Department of Veterans Affairs.''
I know that the VA is full of hardworking, dedicated, and talented
people. Nevertheless, there are reasons to be concerned that the VA
bonus process is not doing what it should--matching pay to individual
and organizational performance. Consider the following: The VA pays the
highest average bonuses among all cabinet agencies. In 2006, 87 percent
of Senior Executive Service employees who were considered for bonuses
received one. Central office bonuses averaged $4,000 more than field
bonuses. Particularly in the central office, there appears to be a case
of exaggerated Lake Woebegone syndrome--not only is everyone above
average, almost everyone is outstanding. The VA does indeed do an
outstanding job in many areas, but not in all, and we hope that this
oversight hearing will assist the VA in making sure that its bonuses
more closely match its performance.
Performance is not just individual, it is also organizational. The
bonus system must allocate responsibility where it lies. When the
backlog of claims has been increasing for the past few years, one would
not expect the senior-most officials of the Veterans Benefit
Administration to receive the maximum bonus. When the VA is forced to
return to Congress for additional money--which happened twice in 2006--
because the budget submitted to Congress was inadequate and the VA
failed to keep Congress informed, one would not expect the senior-most
officials of VA responsible for the budget to receive the maximum
bonus. This is not a question of blame; it is a question of
responsibility. We can be certain that if the senior leaders of VBA
know in advance that their bonuses will depend, at least in part, on
reduction of the backlog of claims, those leaders will bring all of
their creative energy to bear on the problem.
The Subcommittee is also concerned about performance measures for
central office employees. VA appears to be doing a commendable job in
identifying objective, quantifiable criteria for evaluating its field
personnel. The same is not true for the central office. It appears that
central office personnel are evaluated on the basis of justifications
written by the employees themselves, with no objective criteria
factoring into the process. For example, the extent of the backlog of
claims at VBA would seem to be one of the most important metrics of
performance, but this Subcommittee has seen nothing in the materials
provided by the VA that this metric was even considered by the
Secretary in deciding the bonuses for senior leaders of VBA. Indeed, it
appears that bonuses in the central office are awarded primarily on the
basis of seniority and proximity to the Secretary.
We are also concerned about what appears to be a breakdown in the
review process. VA is subject to oversight by the VA Inspector General
and by the Office of Medical Investigations. The Committee has found
several examples of bonuses being awarded to employees responsible for
VA operations that have been the subject of highly critical IG or OMI
reports in the same year the bonus was awarded. VA must ensure that the
Secretary and the Personnel Review Boards are aware of, and consider,
such reports when making bonus decisions.
Finally, I would note that Secretary Nicholson is responsible by
law for the ultimate determination of who gets bonuses and in what
amounts. The Committee invited Secretary Nicholson to attend today's
hearing, but the VA has chosen to send his deputy, Mr. Mansfield, even
though Mr. Mansfield appears to have had no role in the bonus process.
The Committee would be pleased to hear from Mr. Mansfield that this is
incorrect. In addition, it appears that Secretary Nicholson has served
as a rubber stamp for the recommendations made by his subordinates, in
sharp contrast to his predecessor. The Committee assumes that Mr.
Mansfield will be able to address this issue as well.
In closing, I want to reiterate that this Committee has no desire
to denigrate the good work of the senior managers of VA. This hearing
is not intended to pressure the VA into eliminating bonuses or to
target individual VA employees. The VA, this Committee, and all
Americans want what is best for our veterans. The SES bonus system can
be an effective tool to improve the performance of the VA, and
Congressional oversight of that process will assist the VA in better
matching performance to reward.
I look forward to today's testimony.
Prepared Statement of Hon. Ginny Brown-Waite, Ranking
Republican Member, Subcommittee on Oversight and Investigations
Mr. Chairman, thank you for yielding. I would also like to thank
the witnesses before us for coming to this hearing. Your testimony is
important to the oversight of this Committee in guaranteeing the
process of assessing bonus reviews is fair, accurate, and appropriate.
During our Subcommittee hearing on April 19th, discussing the care
situation at the W.G. (Bill) Hefner VA Medical Center in Salisbury,
North Carolina, I asked for a list of the people who were involved in
the administration of care at the hospital, and the bonuses they
received over the period of time, where there was obviously
questionable quality of care rendered to veterans at that facility. The
Federal Government should not be in the practice of providing bonuses
to individuals who permit a failure in the system under their watch. I
believe that government should be run like a business enterprise, where
bonuses are used as an appropriate reward, but are limited to only the
very best and most deserving employees, especially during a time of
war.
Several Members on both sides of the aisle have expressed
frustration over the bonus situation, particularly after the many news
articles describing who received certain bonuses, and speculation as to
whether these bonuses were justly and appropriately applied through the
SES bonus process. The news media has linked bonuses to the 2005 budget
shortfall issue, one that is very fresh on the minds of those of us
here who served on the Committee during the 109th Congress. The media
and several Members have also linked the bonuses to the claims backlog
that is prevalent at the VA. I am concerned that we not be too quick to
judge the evaluation process, but give all the witnesses here a fair
process to express their views.
It is my hope that, through the process of this hearing, we will
learn more about how the VA determines the bonus awards given out, and
whether the bonuses to members of the Senior Executive Service at the
VA were given in an appropriate amount related to their actual
performance. I also look forward to hearing from GAO to better
understand how OPM certifies VA's bonus process and perhaps a better
insight on VA's bonus justification process. I am sure many of the
bonuses reflect the hard work and professionalism of VA's senior
management.
Again, thank you for yielding, Mr. Chairman, and I yield back my
time.
Prepared Statement of J. Christopher Mihm, Managing Director
Strategic Issues, U.S. Government Accountability Office
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to provide the Subcommittee with
information on the Department of Veterans Affairs' (VA) process for
providing Senior Executive Service (SES) performance awards
(bonuses).\1\ VA's mission is to serve America's veterans and their
families. Through its three primary components, in fiscal year 2006, VA
operated one of the largest healthcare systems that provided services
to about 5 million patients, paid cash disability benefits to more than
3.5 million veterans and their survivors, and operated 125 national
cemeteries in the United States.\2\
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\1\ For purposes of this testimony, we refer to SES performance
awards as bonuses. Since only members of the SES with career
appointments are eligible for bonuses, all references to bonuses apply
only to SES members with career appointments.
\2\ VA's three primary components are the Veterans Health
Administration, the Veterans Benefits Administration, and the National
Cemetery Administration.
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In our body of work on Senior Executive performance management, we
have discussed how high-performing organizations understand that they
need senior leaders who are accountable for results, drive continuous
improvement, and stimulate and support efforts to integrate human
capital approaches with organizational goals and related transformation
issues. We have also identified key practices of effective performance
management for the SES, which include the linkage or ``line of sight''
between individual performance and organizational success, the
importance of linking pay to individual and organizational performance,
and the need to make meaningful distinctions in performance.\3\ In
2006, we identified certain principles for executive pay plans that
should be considered to attract and retain the quality and quantity of
executive leadership necessary to address 21st century challenges,
including that they be sensitive to hiring and retention trends;
reflect responsibilities, knowledge, skills, and contributions; and be
competitive.\4\
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\3\ GAO, Results-Oriented Cultures: Creating a Clear Linkage
between Individual Performance and Organizational Success, GAO-03-488
(Washington, D.C.: Mar. 14, 2003).
\4\ GAO, Human Capital: Trends in Executive and Judicial Pay, GAO-
06-708 (Washington, D.C.: June 21, 2006).
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My comments today will focus on (1) VA's policies, procedures, and
guidelines for evaluating and awarding SES member bonuses, including
the composition and responsibility of VA's Performance Review Boards
(PRB), which recommend SES bonuses; (2) the number and amount of
bonuses awarded for fiscal years 2004 through 2006 by VA headquarters
and field locations and compared to the amount of bonuses given to SES
members at other major cabinet-level departments; and (3) the Office of
Personnel Management's (OPM) and the Office of Management and Budget's
(OMB) roles in certifying VA's and other agencies' SES performance
appraisal system. We analyzed VA's policies and procedures related to
the awarding of SES member bonuses for 2005 through 2007 that were
included in VA's 2005 and 2006 submissions and 2007 draft submission to
OPM concerning VA's SES and senior-level employee performance appraisal
system. We also interviewed knowledgeable officials in VA's Office of
Human Resources and Administration. We analyzed data provided to us by
VA on the amount and number of SES member bonuses for fiscal years 2004
through 2006 and comparable data from other cabinet-level departments
as reported by OPM for fiscal years 2004 and 2005. The numbers we are
presenting today are limited to SES member bonuses and do not include
other types of SES member compensation. Information on OPM's and OMB's
roles is based on our review of VA's senior performance appraisal
system certification submissions and related correspondence and our
prior work reviewing OPM's capacity to lead and implement reform.\5\ We
conducted our work in May and June 2007 in accordance with generally
accepted government auditing standards.
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\5\ GAO, Office of Personnel Management: Key Lessons Learned to
Date for Strengthening Capacity to Lead and Implement Human Capital
Reforms, GAO-07-90 (Washington, D.C.: Jan. 19, 2007).
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In summary, VA requires that each SES member have an executive
performance plan or contract in place for the appraisal year that
reflects measures that balance organization results with customer
satisfaction, employee perspectives, and other appropriate measures. VA
uses four PRBs that review and make recommendations on SES members'
ratings, awards, and pay adjustments based on these performance plans.
Members are appointed to the boards on the basis of the positions held,
and consideration is given to those positions where the holder would
have knowledge about the broadest group of executives. VA's PRBs vary
in size, composition, and the number of SES members considered for
bonuses, and each PRB, within the scope of VA's policies, develops its
own procedures and criteria for making recommendations. According to VA
policy, bonuses are generally awarded only to those rated outstanding
or excellent and who have demonstrated significant individual and
organizational achievements during the appraisal period. In fiscal year
2006, VA awarded an average of $16,606 in bonuses to 87 percent of its
career SES members.\6\ At headquarters, 82 percent of career SES
members received bonuses and 90 percent received bonuses in the field.
Additionally, those in headquarters were awarded an average of about
$4,000 more in bonuses than the career SES members in its field
locations. OPM and OMB evaluate agencies' SES and senior-level employee
performance appraisal systems against nine certification criteria
jointly developed by the two agencies. OPM also issues guidance to help
agencies improve their systems and reviews submissions to ensure that
they meet the criteria. In providing concurrence, OMB primarily
considers measures of overall agency performance, such as agency
President's Management Agenda results. Our review of VA's requirements
for SES performance plans as represented in both its 2006 submission
and 2007 draft submission to OPM shows that VA made changes to the
requirements for its performance plans to reflect greater emphasis on
measurable results.
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\6\ According to VA policy, Presidential Rank Award winners are not
eligible for VA's Senior Executive bonuses in the same year they
receive the award. Agencies can nominate Senior Executives for these
awards, which recognize career Senior Executives who have demonstrated
exceptional performance over an extended period of time. The OPM
Director reviews agency nominations and recommends candidates to the
President. These awards are either 20 or 35 percent of the recipient's
base pay.
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We provided VA officials the opportunity to review the information
contained in my statement. VA officials agreed that the facts presented
accurately reflect VA's SES bonus process and results.
Background
In recent years, Congress has passed legislation designed to
strengthen the linkage between SES performance and pay. Congress
established a new performance-based pay system for the SES and
permitted agencies with SES appraisal systems, which have been
certified as making meaningful distinctions based on relative
performance, to apply a higher maximum SES pay rate and a higher annual
cap on total SES compensation.\7\ We have testified that such SES and
senior-level employee performance-based pay systems serve as an
important step for agencies in creating alignment or ``line of sight''
between executives' performance and organizational results.\8\ By 2004,
an agency could apply a higher cap on SES pay and total compensation if
OPM certifies and OMB concurs that the agency's performance management
system, as designed and applied, aligns individual performance
expectations with the mission and goals of the organization and makes
meaningful distinctions in performance. Since 2004, VA has received
approval to increase the cap on SES pay and total compensation, which
includes bonuses.
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\7\ See section 1322 of the Chief Human Capital Officers Act of
2002, Title XIII of the Homeland Security Act of 2002, Pub. L. No. 107-
296 (Nov. 25, 2002) and section 1125(a)(2) of the National Defense
Authorization Act for Fiscal Year 2004, Pub. L. No. 108-136 (Nov. 24,
2003).
\8\ GAO, Human Capital: Aligning Senior Executives' Performance
with Organizational Results Is an Important Step Toward Governmentwide
Transformation, GAO-06-1125T (Washington, D.C.: Sept. 26, 2006).
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By law, only career SES appointees are eligible for SES bonuses.\9\
As stated previously, agencies with certified senior performance
appraisal systems are permitted higher caps on SES base pay and total
compensation. With a certified system, for 2006, an agency was
authorized to increase SES base pay to $165,200 (Level II of the
Executive Schedule) and total compensation to $212,100 (the total
annual compensation payable to the Vice President). Those agencies
without certified systems for 2006 were limited to a cap of $152,000
for base pay (Level III of the Executive Schedule) and $183,500 (Level
I of the Executive Schedule) for total compensation.\10\ SES
performance bonuses are included in SES aggregate total compensation.
Agencies are permitted to award bonuses from 5 to 20 percent of an
executive's rate of basic pay from a pool that cannot exceed the
greater of 10 percent of the aggregate rate of basic pay for the
agency's career SES appointees for the year preceding, or 20 percent of
the average annual rates of basic pay to career SES members for the
year preceding.
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\9\ 5 U.S.C. Sec. 5384.
\10\ In 2007, Senior Executives at agencies with certified systems
can receive up to $168,000 in base pay and $215,700 in total
compensation, at agencies with noncertified systems, up to $154,600 in
base pay and $186,600 in total compensation.
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VA's SES Performance Appraisal Process
VA requires that each SES member have an executive performance plan
or contract in place for the appraisal year. According to VA's policy,
the plan must reflect measures that balance organizational results with
customer satisfaction, employee perspectives, and other appropriate
measures. The plan is to be based on the duties and responsibilities
established for the position and also reflect responsibility for
accomplishment of agency goals and objectives, specifying the
individual and organizational performance or results to be achieved for
each element. Toward the end of the appraisal period, each executive is
to prepare a self-assessment relative to the job requirements in the
approved performance plan, and his or her supervisor then rates the
executive on each element and provides a summary rating. Specifically,
according to VA's policy on the rating process, the rater is to assess
the accomplishment of each established performance requirement,
consider the impact of the individual requirement on overall
performance of the element, and assign one achievement level for each
element. The VA rating is a written record of the appraisal of each
critical and other performance element and the assignment of a summary
rating level by the rater. The summary of each SES member rating passes
to the appropriate reviewing official (if applicable) and PRBs for
consideration.
VA uses four PRBs to review and prepare recommendations on SES
member ratings, awards, and pay adjustments: Veterans Affairs, Veterans
Health Administration, Veterans Benefits Administration, and Office of
Inspector General. The Veterans Affairs PRB has a dual role in VA in
that it functions as a PRB for SES members who work for VA's central
offices, such as the Office of the Assistant Secretary for Management
and the Office of the Assistant Secretary for Policy and Planning, and
those employed by the National Cemetery Administration. It also reviews
the policies, procedures, and recommendations from the Veterans Health
Administration and Veterans Benefits Administration PRBs.
The Secretary appoints members of three of the four PRBs on an
annual basis; members of the Office of Inspector General PRB are
appointed by the VA Inspector General. VA's PRBs must have three or
more members appointed by the agency head or Inspector General for the
Office of Inspector General PRB and can include all types of Federal
executives from within and outside the agency. As required by OPM, when
appraising career appointees or recommending performance awards for
career appointees, more than one-half of the PRB membership must be
career SES appointees. Federal law prohibits PRB members from taking
part in any PRB deliberations involving their own appraisals.
Appointments to PRBs must also be published in the Federal
Register.\11\ According to a VA official in the Office of Human
Resources and Administration, appointments are made on the basis of the
position held, and consideration is given to those positions where the
holder would have knowledge about the broadest group of executives.
Typically, the same VA positions are represented on the PRB each year,
and there is no limit on the number of times a person can be appointed
to a PRB.
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\11\ 5 U.S.C. Sec. 4314. VA's PRB members were published in the
Federal Register on November 2, 2006. 71 Fed. Reg. 64,609 (Nov. 2,
2006).
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VA's PRBs vary in size, composition, and number of SES members
considered for bonuses. For example, in 2006, VA's Veterans Health
Administration PRB was composed of 18 members and made recommendations
on 139 SES members while its Veterans Benefits Administration PRB was
composed of 7 members and made recommendations on 50 SES members. In
2006, 6 PRB members sat on multiple PRBs, and 1 member, the Deputy
Chief of Staff, sat on three PRBs--the Veterans Affairs, Veterans
Health Administration, and Veterans Benefits Administration PRBs. With
the exception of the Office of Inspector General PRB, members of PRBs
are all departmental employees, a practice that is generally consistent
across cabinet-level departments. The Office of Inspector General PRB
is composed of 3 external members--officials from other Federal
agencies' offices of inspector generals--which is generally consistent
with PRBs for other Federal offices of inspector general.
Under VA's policy, each PRB develops its own operating procedures
for reviewing ratings and preparing recommendations. The Veterans
Health Administration and Veterans Benefits Administration PRBs are to
submit their procedures to the chairperson of the Veterans Affairs PRB
for approval and are to include a summary of procedures used to ensure
that PRB members do not participate in recommending performance ratings
for themselves or their supervisors.
VA policy requires any SES member who wishes to be considered for a
bonus to submit a two-page justification based on his or her
performance plan addressing how individual accomplishments contribute
toward organizational and departmental goals, as well as appropriate
equal employment opportunity and President's Management Agenda
accomplishments. While Federal law and OPM regulations permit career
SES members rated fully successful or higher to be awarded bonuses,
VA's policy calls for bonuses to generally be awarded to only those
rated outstanding or excellent and who have demonstrated significant
individual and organizational achievements during the appraisal period.
Beyond these policies, each PRB determines how it will make its
recommendations. For example, a VA official from its Office of Human
Resources and Administration told us that the Veterans Affairs PRB
bases it's bonus recommendations on an array of the numerical scores
assigned based on the executive core qualifications. The information
that each PRB receives from its component units also varies. For
example, the Veterans Benefits Administration PRB members receive
ratings and recommended pay adjustments and bonus amounts from Veterans
Benefits Administration units. VA policy requires formal minutes of all
PRB meetings that are to be maintained for 5 years. The official from
the Office of Human Resources and Administration told us that the
minutes are limited to decisions made, such as the recommended bonus
amount for each SES member considered, and generally do not capture the
deliberative process leading to such decisions. Data provided by VA on
one VA component--the Veterans Integrated Services Network--showed that
of the bonuses proposed for fiscal year 2006, the Veterans Health
Administration PRB decreased 45 and increased 9 of the bonuses
initially proposed to that PRB and left the amounts of 64 unchanged.
At the conclusion of their deliberations, the Veterans Health
Administration and Veterans Benefits Administration PRBs send their
recommendations to the Under Secretary for Health and Under Secretary
for Benefits, respectively, who, at their sole discretion, may modify
the recommendations for SES members under their authority. No
documentation of the rationale for modifications is required. The
recommendations, as modified, are then forwarded to the chairperson of
the Veterans Affairs PRB, who reviews the decisions for apparent
anomalies, such as awarding bonuses that exceed maximum amounts. The
chairperson of the Veterans Affairs PRB then forwards the
recommendations from the Veterans Health Administration, Veterans
Benefits Administration, and Veterans Affairs PRBs to the Secretary for
approval.
The Secretary makes final determinations for SES member performance
bonuses, with the exception of SES members in VA's Office of Inspector
General. Recommendations from the Office of Inspector General PRB are
sent directly to the VA Inspector General for final decision without
review by the Veterans Affairs PRB or approval by the Secretary.\12\
The Secretary has sole discretion in accepting or rejecting the
recommendations of the PRBs. According to an official in the Office of
Human Resources and Administration, the Secretary modified 1
recommendation in 2006, but a prior Secretary modified over 30 in 1
year.
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\12\ In accordance with section 6(d) of the Inspector General Act
of 1978, the VA Inspector General is responsible for making final bonus
decisions for SES members within the Office of the Inspector General.
See Pub. L. No. 95-452, codified at section 6(d) of Appendix 3 of Title
5 of the United States Code.
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Recommendations for bonuses for members of the Veterans Affairs,
Veterans Health Administration, and Veterans Benefits Administration
PRBs are made after the PRBs conclude their work.\13\ The highest-level
executives of each board rank the members of their respective PRBs and
make recommendations, which are submitted to the Secretary. The
Secretary determines any bonuses for the highest-level executives of
the Boards.
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\13\ The three members of the Office of Inspector General PRB are
not eligible for bonuses from VA because they are external to VA.
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VA SES Bonuses
In 2006, VA's bonus pool was $3,751,630, or 9 percent of the
aggregate basic pay of its SES members in 2005. VA awarded an average
of $16,606 in bonuses in fiscal year 2006 to 87 percent of its career
SES members.\14\ At headquarters, approximately 82 percent of career
SES members received bonuses and 90 percent received bonuses in the
field. Additionally, those in headquarters were awarded an average of
about $4,000 more in bonuses than the career SES members in field
locations. Table 1 shows the average bonus amount, percentage receiving
bonuses, and total rated at VA among career SES members and by
headquarters and field locations for 2004 through 2006.\15\
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\14\ According to VA policy, Presidential Rank Award winners are
not eligible for VA's Senior Executive bonuses in the same year.
Agencies can nominate Senior Executives for these awards, which
recognize career Senior Executives who have demonstrated exceptional
performance over an extended period of time. The OPM Director reviews
agency nominations and recommends candidates to the President. These
awards are either 20 or 35 percent of the recipient's base pay.
\15\ For 2004 and 2005, our analysis of the average award amount
and percentage receiving SES bonuses at VA based on data provided by VA
differs from that reported by OPM.
Table 1. Average Bonus Amount, Percentage Receiving Bonuses, and Total Rated at VA among Career SES Members and by Headquarters and Field Locations,
2004-2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
2004 2005 2006
-----------------------------------------------------------------------------------------
Average Percentage Number Average Percentage Number Average Percentage Number
amount receiving rated amount receiving rated amount receiving rated
--------------------------------------------------------------------------------------------------------------------------------------------------------
All $16,371 85.4 240 $16,713 79.7 261 $16,606 87.2 243
--------------------------------------------------------------------------------------------------------------------------------------------------------
Headquarters 19,195 82.1 78 18,629 80.2 86 19,439 81.9 83
--------------------------------------------------------------------------------------------------------------------------------------------------------
Field 15,089 87.0 162 15,761 79.4 175 15,268 90.0 160
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: GAO analysis of VA data.
Note: We excluded career SES members who received Presidential Rank Awards from our calculations of average bonus amount, percent receiving bonuses and
total rated because under VA's policy, those individuals were not considered for bonuses.
In 2005, according to OPM's Report on Senior Executive Pay for
Performance for Fiscal Year 2005, the most recent report available, VA
awarded higher average bonuses to its career SES than any other
cabinet-level department. OPM data show that six other cabinet-level
departments awarded bonuses to a higher percentage of their career SES
members.\16\ When asked about possible reasons for VA's high average
bonus award, a VA official in the Office of Human Resources and
Administration cited the outstanding performance of VA's three
organizations and the amount allocated to SES member bonuses.
---------------------------------------------------------------------------
\16\ In fiscal years 2004 and 2005, the Department of Defense did
not receive certification of its SES performance appraisal system for
SES members.
---------------------------------------------------------------------------
OPM's and OMB's Roles in the VA Certification Process
Both OPM and OMB play a role in the review of agency's senior
performance appraisal systems and have jointly developed certification
criteria.\17\ OPM issues guidance each year to help agencies improve
the development of their SES performance appraisal systems and also
reviews agency certification submissions to ensure they meet specified
criteria. To make its own determination, OMB examines agency's
performance appraisal systems against the certification criteria,
primarily considering measures of overall agency performance, such as
an agency's results of a Program Assessment Rating Tool review or
President's Management Agenda results.
---------------------------------------------------------------------------
\17\ GAO-07-90.
---------------------------------------------------------------------------
Specifically, to qualify for the use of SES pay flexibilities, OPM
and OMB evaluate agencies' senior performance appraisal systems against
nine certification criteria. These certification criteria are broad
principles that position agencies to use their pay systems
strategically to support the development of a stronger performance
culture and the attainment of the agencies' missions, goals, and
objectives. These are alignment, consultation, results, balance,
assessments and guidelines, oversight, accountability, performance, and
pay differentiation. See Appendix I for a description of the
certification criteria. There are two levels of performance appraisal
system certification available to agencies: full and provisional. To
receive full certification, the design of the systems must meet the
nine certification criteria, and agencies must, in the judgment of OPM
and with concurrence from OMB, provide documentation of prior
performance ratings to demonstrate compliance with the criteria. Full
certification lasts for 2 calendar years. Provisionally certified
agencies are also granted the authority to apply higher caps on SES pay
and total compensation just as those with fully certified systems are,
even though agencies with provisional certification do not meet all
nine of the certification criteria. Provisional certification lasts for
1 calendar year. According to OPM, the regulations were designed to
cover initial implementation of the certification process. Now that all
agencies have been under the system, all nine criteria must be met for
an agency to be certified, even provisionally. According to OPM, for an
agency to receive full certification in 2007, it must show that it has
2 years of making performance differentiation in ratings, pay, and
award; and that the agency performance plans fully met all the criteria
without requiring extensive revision.
After OMB concurrence, the Director of OPM certifies the agency's
performance appraisal system and formally notifies the agency with a
letter specifying provisional, full certification, or no
certification.\18\ Of the 42 performance appraisal systems that were
certified in 2006, only the Department of Labor's system received full
certification. According to OPM's Web site, as of June 5, 2007, four
agencies had received full certification of their senior performance
appraisal systems--the Department of Commerce for 2007 through 2008,
the Department of Labor for 2006 through 2007, the Federal
Communications Commission for 2007 through 2008, and the Federal Energy
Regulatory Commission for 2007 through 2008.\19\
---------------------------------------------------------------------------
\18\ Since congressional authorization for the new performance-
based pay system went into effect, not all Federal agencies have
submitted their senior performance appraisal systems for review and not
all agencies have received either full or provisional certification.
\19\ All years are calendar years.
---------------------------------------------------------------------------
If provisional or no certification is recommended, the letter from
OPM provides the agency with specific areas of concern identified
through the review process. These comments may direct an agency to
focus more on making meaningful distinctions in performance or
improving the type of performance measures used to evaluate SES
members. For example, in OPM's 2007 certification guidance, the OPM
Director asked agencies to place more emphasis on achieving measurable
results, noting that many plans often fall short of identifying the
measures used to determine whether results are achieved. In addition,
OPM asked agencies to highlight in their 2007 certification requests
any description or evidence of improvements made as a result of
comments from OPM or OMB in response to the agency's 2006 certification
submission.
VA received provisional certification for each of the years 2004
through 2006. In 2006, in the letter from OPM to VA discussing its
decision to grant the VA provisional certification rather than full
certification, OPM stated that while the VA ``system met certification
criteria, clear alignment and measurable results must be evident in all
plans across the entire agency.'' In addition, OPM said that it
expected to see ``well over 50 percent of an executive's performance
plan focused on business results'' and that VA ``needs to ensure its
2007 executive performance plans weight business results
appropriately.'' VA officials told us that the 2007 submission is in
draft and they expect to submit it to OPM by the June 30, 2007,
deadline.
Our preliminary review of VA's requirements for performance plans
contained in its 2006 submission and 2007 draft submission show that VA
made changes to the policy requirements for its performance plans to
reflect a greater emphasis on measurable results. Specifically, the
elements of the job requirement in the 2007 policies provides that each
critical element and performance element will be weighted, which was
not previously required in 2006. These performance requirements,
according to the policy, will be described in terms of specific
result(s) with metrics that the SES member must accomplish for the
agency to achieve its annual performance goals and represent at least
60 percent of the overall weight of the performance plan. The policy
further states that the expected results should be specific,
measurable, and aggressive yet achievable, results-oriented, and time-
based.
Responding to concerns expressed by Members of Congress and media
reports about SES member bonuses, VA's Secretary recently requested
that OPM review its performance management program for Senior
Executives to ensure that its processes are consistent with governing
statutes and OPM regulations and guidance. VA officials indicated that
while OPM's review encompasses some of the same areas as those required
for 2007 certification, VA requested a separate report from OPM.
We have stated that it is important for OPM to continue to
carefully monitor the implementation of agencies' systems and the
certification process with the goal of helping all agencies to receive
full certification of their system. Requiring agencies with provisional
certification to reapply annually rather than every 2 years helps to
ensure continued progress in fully meeting congressional intent in
authorizing the new performance-based pay system. VA has achieved
provisional certification of its SES performance management system for
2004 through 2006.
Mr. Chairman and Members of the Subcommittee, this concludes my
prepared statement. I would be pleased to respond to any questions that
you have.
Contacts and Acknowledgments
For further information regarding this statement, please contact J.
Christopher Mihm at (202) 512-6806 or [email protected]. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this testimony. Individuals making key
contributions to this statement included George Stalcup, Director;
Belva Martin, Assistant Director; Carole J. Cimitile; Karin Fangman;
Tamara F. Stenzel; and Greg Wilmoth.
Appendix I: Senior Executive Service Performance Appraisal System
Certification Criteria
Summary of Certification Criteria for Senior Executive Appraisal Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Alignment Individual performance expectations must be linked to or
derived from the agency's mission, strategic goals, program/
policy objectives, and/or annual performance plan.
----------------------------------------------------------------------------------------------------------------
Consultation Individual performance expectations are developed with senior
employee involvement and must be communicated at the
beginning of the appraisal cycle.
----------------------------------------------------------------------------------------------------------------
Results Individual expectations describe performance that is
measurable, demonstrable, or observable, focusing on
organizational outputs and outcomes, policy/program
objectives, milestones, and so forth.
----------------------------------------------------------------------------------------------------------------
Balance Individual performance expectations must include measures of
results, employee and customer/stakeholder satisfaction, and
competencies or behaviors that contribute to outstanding
performance.
----------------------------------------------------------------------------------------------------------------
Summary of Certification Criteria for Senior Executive Appraisal Systems_Continued
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Assessments The agency head or a designee provides assessments of the
and guidelines performance of the agency overall, as well as each of its
major program and functional areas, such as reports of
agency's goals and other program performance measures and
indicators, and evaluation guidelines based, in part, upon
those assessments to senior employees, and appropriate senior
employee rating and reviewing officials. The guidance
provided may not take the form of quantitative limitations on
the number of ratings at any given rating level.
----------------------------------------------------------------------------------------------------------------
Oversight The agency head or designee must certify that (1) the
appraisal process makes meaningful distinctions based on
relative performance; (2) results take into account, as
appropriate, the agency's performance; and (3) pay
adjustments and awards recognize individual/organizational
performance.
----------------------------------------------------------------------------------------------------------------
Accountability Senior employee ratings (as well as subordinate employees'
performance expectations and ratings for those with
supervisor responsibilities) appropriately reflect employees'
performance expectations, relevant program performance
measures, and other relevant factors.
----------------------------------------------------------------------------------------------------------------
Performance dif- Among other provisions, the agency must provide for at least
ferentiation one rating level above Fully Successful (must include an
Outstanding level of performance), and in the application of
those ratings, make meaningful distinctions among executives
based on their relative performance.
----------------------------------------------------------------------------------------------------------------
Pay differentia- The agency should be able to demonstrate that the largest pay
tion adjustments, highest pay levels (base and performance
awards), or both are provided to its highest performers, and
that, overall, the distribution of pay rates in the SES rate
range and pay adjustments reflects meaningful distinctions
among executives based on their relative performance.
----------------------------------------------------------------------------------------------------------------
Source: GAO analysis of OPM and OMB regulations.
__________
GAO HIGHLIGHTS
HUMAN CAPITAL
Bonuses to Senior Executives at the Department of Veterans Affairs
Highlights of GAO-07-985T, testimony before Subcommittee on Oversight
and Investigations, Committee on Veterans' Affairs, House of
Representatives.
Why GAO Did This Study
Key practices of effective performance management for the Senior
Executive Service (SES) include the linkage or ``line of sight''
between individual performance and organizational success, the
importance of linking pay to individual and organizational performance,
and the need to make meaningful distinctions in performance. GAO
identified certain principles for executive pay plans that should be
considered to attract and retain the quality and quantity of executive
leadership necessary to address 21st century challenges, including that
they be sensitive to hiring and retention trends; reflect knowledge,
skills, and contributions; and be competitive. This testimony focuses
on the Department of Veterans Affairs (VA) process for awarding bonuses
to SES members, the amount and percentage of bonuses awarded for fiscal
years 2004 through 2006 based on data reported by VA, and the Office of
Personnel Management's (OPM) and the Office of Management and Budget's
(OMB) roles in certifying Federal agencies SES performance appraisal
systems.
GAO analyzed VA's policies and procedures for awarding bonuses and
data provided by VA on the amount and percentages of bonuses and
interviewed knowledgeable VA officials. Information on OPM's and OMB's
certification process was based on our 2007 report on OPM's capacity to
lead and implement reform.
www.gao.gov/cgi-bin/getrpt?GAO-07-985T.
To view the full product, including the scope and methodology,
click on the link above. For more information, contact J. Christopher
Mihm at (202) 512-6806 or [email protected].
What GAO Found
VA requires that each Senior Executive have an executive
performance plan or contract in place for the appraisal year that
reflects measures that balance organization results with customer
satisfaction, employee perspectives, and other appropriate measures. VA
uses four Performance Review Boards (PRB) to review and make
recommendations on SES ratings, awards, and pay adjustments based on
these performance plans. VA's Secretary appoints members of three of
the four Boards on the basis of the position held within the agency,
and consideration is given to those positions where the holder would
have knowledge about the broadest group of executives. Members of the
fourth Board are appointed by VA's Inspector General. VA's PRBs vary in
size, composition, and number of SES members considered for bonuses,
and each PRB, within the scope of VA's policies, develops its own
procedures and criteria for making bonus recommendations. According to
VA policy, bonuses are generally awarded only to those rated
outstanding or excellent and who have demonstrated significant
individual and organizational achievements during the appraisal period.
As for bonuses awarded, the table below shows VA SES member bonus
amounts for fiscal years 2004 through 2006.
--------------------------------------------------------------------------------------------------------------------------------------------------------
2004 2005 2006
-----------------------------------------------------------------------------------------
Average Percentage Number Average Percentage Number Average Percentage Number
amount receiving rated amount receiving rated amount receiving rated
--------------------------------------------------------------------------------------------------------------------------------------------------------
All $16,371 85.4 240 $16,713 79.7 261 $16,606 87.2 243
--------------------------------------------------------------------------------------------------------------------------------------------------------
Headquarters 19,195 82.1 78 18,629 80.2 86 19,439 81.9 83
--------------------------------------------------------------------------------------------------------------------------------------------------------
Field 15,089 87.0 162 15,761 79.4 175 15,268 90.0 160
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: GAO analysis of VA data.
According to data reported by OPM, in fiscal year 2005, VA awarded
higher bonus amounts to its career SES than any other cabinet-level
department; however, according to OPM's data, six other cabinet-level
departments awarded bonuses to a higher percentage of their career SES.
OPM and OMB evaluate agencies' SES performance appraisal systems
against nine certification criteria jointly developed by the two
agencies and determine that agencies merit full, provisional, or no
certification. VA has been granted provisional certification in each of
the years 2004 through 2006. Our review of VA's requirements for SES
performance plans as represented in both its 2006 submission and 2007
draft submission to OPM show that VA made changes to the requirements
for its performance plans to reflect greater emphasis on measurable
results.
Prepared Statement of Hon. Gordon H. Mansfield
Deputy Secretary, U.S. Department of Veterans Affairs
Mr. Chairman and Members of the Committee:
Recently, questions have surfaced about the integrity of the
performance award process for Senior Executives serving within the
Department of Veterans Affairs (VA).
I am pleased to come before you to address this issue and to
provide an overview of the performance management system governing VA's
career Senior Executive Service (SES) corps. But most important, I am
happy to dispel any and all misrepresentations surrounding the issues
of SES performance ratings, pay increases, and performance bonuses
within my Department.
I would like to note that, by statute, Senior Executive noncareer
appointees are not eligible for performance bonuses.
Federal law and Office of Personnel Management (OPM) policies guide
the executive branch in matters relating to compensation of Federal
employees. Those policies acknowledge that performance awards are
integral to the government's ability to attract, retain, and reward
experienced, high-quality career executives.
United States Code specifically states that ``to encourage
excellence in performance by career appointees, performance awards
shall be paid.'' (Title 5, sec. 5384, `Performance awards in the Senior
Executive Service').
It further specifies the way payment is to be made (``in a lump sum
and in addition to basic pay''); The way a bonus pool is to be
established (``an amount not to exceed 10 percent of the aggregate
amount of basic pay paid''); And the parameters governing an award's
payment amount (``a performance award . . . may not be less than 5
percent nor more than 20 percent of the rate of basic pay'').
The statute also establishes the procedure for appointing
Performance Review Boards (PRBs), stipulating that the majority of
members are to be career appointees. And, last, the statute assigns to
the Secretary of Veterans Affairs final approval of awards recommended
by each PRB for the Department.
Office of Personnel Management regulations further amplify this
statutory framework. OPM regulations set procedures for establishing
PRBs and state the criteria for determining performance standards and
related metrics. And OPM annually reviews and certifies the results of
PRB activities to ensure compliance with its rules and regulations.
In keeping with the statute, and adhering to OPM regulations, VA's
four PRBs direct a rigorous and transparent performance management
process. They establish performance standards that are objective,
measurable and, to the maximum extent possible, quantifiable.
Our executives report on their specific levels of achievement
measured against these standards, and their supervisors subsequently
recommend performance ratings, pay adjustments, and bonuses.
Senior Executive Service personnel, by definition, hold leadership
positions of great responsibility and trust. And VA approves bonuses
for these men and women based on one and only one criteria--
demonstrated performance. Greater amounts are awarded to career
executives who receive higher performance ratings for successfully
carrying out complex responsibilities in positions with broad spans of
control.
These bonus recommendations are reviewed by the governing PRB to
ensure equitable and consistent interpretation and application
throughout the Department. The Board then forwards its recommendations,
through me, to the Secretary for his final review and approval.
VA has 321 career SES positions. This represents a ratio of Senior
Executives to the general employee population of approximately 750:1.
This ratio represents one of the broadest spans of control in the
Federal Government. Our SES corps provides oversight to a staff of
nearly 240,000 employees and a budget of more than $87 billion.
VA provides direct services, such as healthcare, pensions,
compensation, home and education loans, and burials to millions of
veterans annually.
In point, we operate the Nation's largest integrated healthcare
system, with 153 hospitals, 882 outpatient clinics, 46 domiciliary
residences, and 207 Vet Centers. Fully 198,000 employees staff the
broad-based programs and services of our Veterans Health
Administration.
VA manages a $34.5 billion healthcare system with 7.6 million
enrollees. We treat 5.8 million patients, and have over 57 million
outpatient visits annually. That's more than 1 million patients each
and every week.
VA has been widely acknowledged in the healthcare industry and by
the media as the best healthcare system in America today. Business Week
. . . the Washington Monthly . . . U.S. News and World Report . . . the
New York Times . . . and NBC Nightly News, among many others, have all
applauded our state-of-the-art medical care.
Our $40 billion benefits system, supported by over 13,000
employees, disburses disability payments each month to 2.7 million
recipients, and pensions to more than 324,000 beneficiaries on our
rolls. Payments made on time, every time.
This year, we will pay out more than $2.7 billion in educational
benefits to over one-half million active duty servicemembers, veterans,
and their beneficiaries.
Last year, VA helped over 142,000 veterans purchase homes worth $25
billion through our home loan guaranty program.
VA administers $1.3 trillion in insurance coverage for 4.3 million
veterans and servicemembers, plus 3 million spouses and children.
For calendar year 2006, our insurance programs paid claims totaling
$2.1 billion to 110,000 veterans, servicemembers, and their families.
This includes the newly-enacted Traumatic Servicemembers' Group Life
Insurance program, which provides payments to seriously injured
servicemembers and their families at a time when they are most in need
of our support.
If operating in the private sector, VA's insurance component,
alone, would rank as the sixth largest life insurance company in the
country.
We operate the country's largest burial and cemetery system. This
year, more than 103,000 veterans will be laid to rest in one of 125
national cemeteries whose operations are supported by a staff of 1,527.
Since 2005, we have established five new national cemeteries, and will
open six more by late 2008 and early 2009.
In the midst of our historic expansion, VA remains committed to
ensuring that each of our cemeteries is maintained as a pristine,
respectful National Shrine to those who served. This fiscal year, we
will expend $16.6 million to support our commitment.
Our cemetery operations have elicited customer satisfaction ratings
that are second to none. Surveys have consistently confirmed that VA
provides an unmatched level of excellence in honoring our Nation's
departed heroes.
VA's central office is the nexus for an array of programs and
services that reach from Maine to Manila. Central office sets VA-wide
policy and procedures, prepares the Department's budget, oversees
financial operations, and manages our information technology
infrastructure.
Working for the second largest agency in the Federal Government,
each VA Senior Executive has responsibility for far-reaching and
complex programs, significant financial resources and major capital
assets, and large numbers of reporting staff.
Within VA, the bonus pool is 9 percent of aggregate SES salaries,
or about $3.8 million. That is in the context of an overall 2006 VA
salary budget of approximately $18.4 billion. This amount translates to
.02% of 2006 salaries. Or expressed another way, for every $1 million
in salaries, VA awarded just over $200 in bonuses.
Over the past 3 years, the average SES bonus amount is in the range
of $16,000. This compares to a governmentwide average of approximately
$14,000. I would like to take this opportunity to note that a number of
agencies report a mean SES bonus figure that falls well within the
$2,000 window between the VA and governmentwide averages.
For example, FY 2005 data show that the average SES bonus was
$15,945 at the Department of Agriculture; $15,857 at NASA; and $15,173
at the Treasury Department.
In response to recent congressional inquiries about SES bonuses,
Secretary Nicholson requested an OPM review of VA's SES performance-
based pay system. I am including the OPM report as an attachment and
will briefly provide a summary of its findings.
Number one. The design and implementation of VA's SES performance
management system meets all statutory and regulatory requirements.
Number two. Executives who are members of PRBs do not make
recommendations regarding their own pay adjustments and awards, or the
pay adjustments and awards of other executives in their chain of
command.
Number three. VA is making distinctions in performance as evidenced
in its ratings, pay, and awards decisions.
Number four. VA executives are rated and rewarded primarily based
on organizational results balanced against customer and employee
perspectives and additional executive competencies.
Secretary Nicholson has agreed to fully implement the
recommendations made as a result of the OPM analysis.
Mr. Chairman, I am extremely proud of the Senior Executives with
whom I work. They are a highly competent and committed group of leaders
who excel in managing an organization that, if in the private sector,
would rank as a Fortune 50 company.
The scope of our services is enormous, and the implications for
senior personnel management are equally great.
Most of our SES have dedicated their entire careers to the welfare
of America's veterans. Many are retirement eligible--and were they to
retire--they would quickly be hired at considerably higher salaries by
one of the many organizations with whom VA does business.
While the bonus dollar amounts under discussion are sizeable, they
are paid to seasoned and successful executives in recognition of solid
and significant contributions to public service. And they pale in
comparison with compensation and bonuses common to executives, with
similar credentials, working in the private sector.
Good government is a reflection of the people who make it that way,
and their competency, dedication, and leadership are essential to the
Department of Veterans Affairs, as they are to government-at-large.
VA remains committed to the statutory imperative of executive
bonuses to both reward and to encourage continued ``excellence in
performance.''
Mr. Chairman, this concludes my prepared remarks. I would be happy
to answer any questions you may have.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Prepared Statement of Carol A. Bonosaro
President, Senior Executives Association
Distinguished Members of the Subcommittee:
The Senior Executives Association, the professional association
representing the interests of members of the career Senior Executive
Service and those holding equivalent positions, appreciates the
opportunity to testify about performance awards for Senior Executives
at the Department of Veterans Affairs.
This investigation into and resulting publicity surrounding bonuses
paid to Senior Executives at the Department of Veterans Affairs has
been, in our view, unfair and misdirected. All Americans share the
desire to give our Nation's veterans the best care and service
possible, and no group more than VA career executives, who have
dedicated their lives and careers to doing just that. These career
executives are well worth their salaries and performance awards.
Newsweek, U.S. News and World Report, the Wall Street Journal and other
publications have repeatedly cited the Department of Veterans Affairs
as administering the ``finest healthcare in the world.'' Such
commendations are significant considering it is a system that many
agree has been underfunded and under additional stress since 2002. We
believe such commendations have resulted from the tremendous work of
the dedicated executives who receive these performance awards and their
teams.
Considering measures to restrict bonuses because of disagreement
with policy decisions will unfairly punish career civil servants and
achieve nothing in relation to those policy decisions. As the
Subcommittee is aware, career executives work at the direction of
political appointees. Consequently, concerns with Bush Administration
decisions to request less money than is believed needed for VA
healthcare and claims processing should be directed at the
Administration's policymakers, not at the career Senior Executives who
implement their decisions.
At the Department of Veterans Affairs and throughout government,
career executives are working to provide the best services they can
within the resources they are given by the Administration and Congress.
If Congress limits or discontinues SES performance awards, the best
career executives will have another incentive to leave for the private
sector or retirement, rather than continue to carry out these programs
in a system that only provides a mere fraction of the compensation
these professionals are worth and can earn in the private sector. The
media has portrayed these performance awards as extravagant. However,
career executives who run VA health facilities generally make less than
50% of what their private sector counterparts earn in comparable
positions. Many career SES earn as much as $70,000 a year less than
some of the VA medical staff employed in the facilities under their
direction. It is important to see performance awards in this
environment and realize they are not lavish frills. They are a part of
the compensation system for Senior Executives throughout government and
are necessary to attract and retain the best leaders.
The Senior Executive Service was created in 1979 to encourage and
reward the highest performers in government. It provides both greater
risks and greater rewards than the General Schedule. If a Senior
Executive is not rated as fully successful or better, his or her salary
can be decreased as much as 10 percent. If rated below fully successful
twice in 3 years, the executive can be removed from the Senior
Executive Service with what is essentially no right of appeal. Those
rated ``fully successful'' often do not even receive an increase in
salary that covers increases in the cost of living as happens
automatically each year for General Schedule employees, who also
receive locality pay adjustments and are eligible for within-grade
increases. Suffice it to say, mediocre or poor performing employees do
not last long in the Senior Executive Service, and even being
considered to be ``fully successful'' can bring no upward salary
adjustment.
In contrast, high-performing Senior Executives can and often do
receive substantial pay raises or performance awards. By law, up to 10
percent of a Department's or Agency's SES pay pool can be set aside for
annual performance awards. These performance awards range from 5
percent to as much as 20 percent of a career Senior Executive's salary.
As one would expect, top performers consistently receive performance
awards. They are central to keeping those top performers in the
Department of Veterans Affairs and in government.
These performance awards are not given out without substantial
oversight. By statute, a Performance Review Board (PRB) consisting of a
majority of career Senior Executives evaluate performance appraisal
recommendations from supervisors for accuracy and equitability
throughout the agency and provide a final recommendation to the agency
head. PRB members must and do exempt themselves from decisions about
their own performance appraisals. This is the case at the Department of
Veterans Affairs, as well as in every agency in government with
oversight from the Office of Personnel Management.
Some in Congress have called for PRB members to be ineligible for
performance awards. This would be a serious mistake. Agencies select
their highest performing career executives to be members of Performance
Review Boards as impartial jurors of their peers. These high-performing
executives also have good judgment and are most knowledgeable about the
agency. Obviously many PRB members will be recommended for awards.
Excluding them from receiving awards will result in only those career
Senior Executives not recommended for awards being eligible to serve,
and the quality of advice may very well be lessened. Further, who would
wish to accept appointment to a PRB with the understanding that such
membership would make them ineligible to receive performance awards?
Recusal by the PRB member when his or her performance is being
discussed remedies this.
A recent survey by the Senior Executives Association (SEA) showed
that many of the government's career Senior Executives were discouraged
by their relatively new pay system. Performance awards, on the other
hand, have existed since the inception of the SES and are one part of
the SES pay system that works as intended according to a quarter
century of comments from SEA's members.
Even with performance awards, Senior Executives in government are
paid well below what they are worth. Taking away performance awards
will push the best and brightest out of the civil service and into jobs
in the private sector or retirement. With 90 percent of those in the
Senior Executive Service eligible to retire over the next decade and
with no effective governmentwide succession plan designed to develop
personnel trained to replace them, taking away performance awards would
be moving in the wrong direction. Further, SEA consistently receives
reports that many talented and accomplished GS-14's and 15's who would
be prime candidates for the SES are dissuaded from aspiring to the SES
given that they would take on additional responsibilities, enjoy fewer
rights, and their pay adjustments would be far less reliable.
As a former career Senior Executive myself, and as President of SEA
for over 20 years, I can assure you that these career Senior Executives
are driven by a love for public service over financial gain. They are
dedicated to their work, and putting in 70-hour weeks is not rare. They
must make the best decisions possible with the resources they are
provided. Those who do the best jobs and make the greatest
contributions deserve the rewards available under the current SES pay
and awards system, and perhaps more.
SEA understands that the Committee has some concerns about the
budgetary policies and other policy decisions that have been made with
regard to the Department of Veterans Affairs. SEA asks that the
Committee seek answers to those questions through the Administration.
We are concerned that the career Senior Executives are becoming an easy
scapegoat for these matters over which they have no control.
I thank you again for the opportunity to testify before this
Subcommittee. SEA looks forward to working with this Committee and with
the Department of Veterans Affairs to correct this unfortunate
misperception. We hope to continue to be an effective voice of the
Federal Government career executive leadership on this and other
matters regarding the civil service.
Prepared Statement of Hon. Cliff Stearns, a Representative in Congress
from the State of Florida
Mr. Chairman,
Thank you for holding this hearing today to discuss recent issues
that have been developing within the VA. Today we will specifically be
examining the process in which bonuses are awarded to VA officials and
how the VA ensures that bonuses are awarded in an impartial process,
and to award bonuses taking the Department's overall success into
account.
In 2006, the Department of Veterans Affairs awarded over $3.8
million in bonuses to its employees. Coincidentally, this is right
after Congress had to jump in and obtain emergency funding to cover a
$1.5 billion budget shortfall.
AP reports have shown that ``21 out of 32 officials who were
members of the VA Performance Review Boards received more than half a
million dollars in payments themselves.'' Additionally, the largest
increase in spending for VA health in the past 77 years was introduced
by Congress only recently. I want to ensure and reiterate that the
priority for VA funds is to serve our country's veterans. Only after
their needs have been met, and all departmental obligations fulfilled,
should the VA bureaucrats receive rewards.
However, I feel we must also be fair about this process. I do not
believe we are questioning whether or not the VA should award bonuses,
but rather the manner in which it does so. Actually, in a May 15th
Washington Post article, Secretary Nicholson made an interesting
argument that, ``bonuses help keep experienced officials and make their
compensation more competitive with the private sector. Over the long
run, keeping the most talented employees helps improve efficiency and
maintains quality services.'' This is an accurate point, however, these
bonuses must not be at the expense of veterans' services, or at the
cost of taxpayers with million dollar budget bailouts.
The VA's method for granting bonuses should be examined to
determine whether there is any opportunity for improvement of the VA's
SES bonus system. Our goal here always is to ensure that the VA funds
are being properly distributed to the servicemen and veterans who
deserve it. I look forward to hearing more from our witnesses today.
POST-HEARING QUESTIONS AND RESPONSES FOR THE RECORD
Committee on Veterans' Affairs
Subcommittee on Oversight and Investigations
Washington, DC
October 29, 2007
Honorable Gordon H. Mansfield
Acting Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420
Dear Secretary Mansfield:
On Tuesday, June 12, 2007, the Subcommittee on Oversight and
Investigations of the House Committee on Veterans' Affairs held a
hearing on the process by which the VA awards bonuses to members of the
Senior Executive Service (SES). You testified at that hearing,
accompanied by several of your colleagues. In your testimony, you
committed to this Subcommittee that VA would implement the four
recommendations of the Office of Personnel Management contained in
OPM's June 1, 2007, letter to then-Secretary Nicholson. Those four
recommendations were:
1. Ensure all executive performance plans focus at least 60
percent on achiev-
ing measurable results. This will make certain the performance ratings
are primarily based on individual and organizational performance and
results achieved.
2. Revise the VA PRB awards determination process to ensure awards
are granted based primarily on individual and organizational
performance and results achieved. Discussions within the VA PRB should
center on measurable results achieved and the awards scoring form used
by the VA PRB (which leads the discussion and scoring) should more
clearly focus on results.
3. New PRB members should receive training on the policies and
guidance of the SES PRB process and their role on the PRB. All PRB
members should receive refresher training annually.
4. Management guidance issued to PRB members regarding how to
consider organizational performance when determining ratings and awards
should be made clear to all PRB members. A report summarizing
organizational performance should be provided to PRB members with
instructions on how to use the information in its deliberations.
Please confirm for the record that VA is, in fact, implementing
these recommendations for executive performance evaluations being done
for the current performance year (i.e., for bonuses to be awarded in
December of this year) and describe in detail how VA is implementing
the recommendations.
In addition, please state whether the VA executive performance
evaluation process for the current performance year includes the
following elements and, if so, how the element is being implemented
and, if not, why not:
1. Consideration during the PRB process and review by the
Secretary of the existence and results of investigations by the VA
Inspector General and/or the Office of Medical Investigations;
2. Appointment of PRB members who are not VA employees;
3. Assessment of VA SES bonuses with bonuses awarded at other
Federal agencies.
Finally, please tell the Subcommittee about any changes to the VA
executive performance evaluation process for the current performance
year that have not been described in your responses to the previous
requests in this letter.
We request you provide responses to the Subcommittee no later than
close of business, Wednesday, November 28, 2007. For purposes of
printing in the record, please also provide an electronic version of
the response in Microsoft Word format to Ms. Caitlin Ostomel.
If you have any questions concerning these questions, please
contact Subcommittee on Oversight and Investigations Staff Director,
Geoffrey Bestor, Esq., at (202) 225-3569 or the Subcommittee Republican
Staff Director, Arthur Wu, at (202) 225-3527.
Sincerely,
HARRY E. MITCHELL
GINNY BROWN-WAITE
Chairman
Ranking Republican Member
__________
U.S. Department of Veterans Affairs
Washington, DC
November 28, 2007
The Honorable Harry E. Mitchell, Chairman
The Honorable Ginny Brown-Waite, Ranking Republican Member
Subcommittee on Oversight and Investigations
Committee on Veterans' Affairs
Washington, DC 20515
Dear Mr. Chairman:
This is in response to your October 29, 2007, request for
confirmation that the Department of Veterans Affairs (VA) implemented
four recommendations contained in the Office of Personnel Management's
(OPM) June 1, 2007, letter to then-VA Secretary R. James Nicholson. You
asked that VA provide a detailed description of how it implemented
these recommendations. Your letter also requested that we indicate
whether, and to what extent, VA had incorporated the following elements
into the executive performance evaluation process for the current
performance year:
1. Consideration during the Performance Review Board (PRB) process
and review by the Secretary of the existence and results of
investigations by the VA Inspector General and/or the Office of Medical
Investigator;
2. Appointment of PRB members who are not VA employees;
3. Assessment of VA Senior Executive Service (SES) bonuses with
bonuses awarded at other Federal agencies.
My responses are contained in the enclosed fact sheet which
includes the information and training provided to PRB members to assist
them in ensuring their recommendations on performance ratings, pay
increases and SES bonuses are based on both organizational performance
and individual contributions by each covered executive.
I believe that incorporating the recommendations covered in the OPM
Report and the elements discussed in the hearing have strengthened our
executive performance appraisal process. We have committed to
conducting post PRB assessment process reviews to identify ways we can
further improve our process, particularly in the areas of strengthening
performance standards, making meaningful distinctions among individual
performance, and assessing organizational performance.
I hope that this fact sheet is responsive to your concerns. I am
available to provide additional or clarifying information, or discuss
further, at your convenience. I am providing a similar response to the
Honorable Ginny Brown-Waite, Ranking Republican Member, Subcommittee on
Oversight and Investigations, Committee on Veterans' Affairs.
Sincerely yours,
Gordon H. Mansfield
Acting Secretary
Enclosure
__________
FACT SHEET
The Department of Veterans Affairs (VA) Response to the
Office of Personnel Management's (OPM) Report and the
Subcommittee On Oversight and Investigations' Inquiry on
VA's SES Performance Evaluation Process
ISSUE:
To provide the Honorable Harry E. Mitchell, Chairman, Subcommittee
on Oversight and Investigations, Committee on Veterans' Affairs,
confirmation that VA has implemented OPM's four recommendations and the
three specific elements contained in the Chairman's letter regarding
VA's executive performance evaluation process for the current
performance year and address how the elements were implemented.
DISCUSSION:
This fact sheet provides confirmation that VA has implemented OPM's
four recommendations and complied with the Subcommittee's three
additional elements regarding VA's current executive performance
evaluation process.
OFFICE OF PERSONNEL MANAGEMENT'S RECOMMENDATIONS
RECOMMENDATION #1
Ensure all executive performance plans focus at least 60 percent on
achieving measurable results.
VA RESPONSE:
OPM modified the Fiscal Year (FY) 2007 Senior Executive Service
(SES) performance appraisal system certification criteria to establish
results-oriented performance cultures in agencies. For SES programs
being certified in FY 2007, OPM required that well over 50 percent of
an executive's performance rating focus on achieving results. As a
result of OPM's modification, I required all SES members in the
Department have a performance plan with performance elements that
contained weights in terms of percentages. At least 60 percent of the
weight of each plan must be based on business results within a critical
element. In addition, all SES performance plans must reflect
Information Security as a critical element or sub-element to a critical
element for the rating period that began October 1, 2006. The VA Human
Resources (HR) staff met with OPM staff to obtain guidance on the new
requirement and then worked closely with VA Administrations and Staff
Offices to provide them assistance necessary to bring the SES
performance plans into alignment with OPM's requirements by July 1,
2007.
RECOMMENDATION #2
Revise the VA Performance Review Board (PRB) awards determination
process to ensure awards are granted based primarily on individual and
organizational performance and results achieved. Discussions within the
VA PRB should center on measurable results achieved and the awards
scoring form used by the VA PRB (which leads the discussion and
scoring) should more clearly focus on results.
VA RESPONSE:
The Office of the Assistant Secretary for Human Resources and
Administration (A/S HR&A) reviewed the current VA PRB awards
determination process and developed modifications to the process to
increase the emphasis placed on individual and organizational
performance and results achieved. The modifications were briefed to the
Chief of Staff and the Acting Secretary (Exhibit R.2.a) who approved
the changes together with the FY 2007 SES performance guidelines for
the 2007 bonus pool percentage, bonus amounts and pay adjustment
percentages. The rating officials of staff office executives who fall
under the purview of the VA PRB were briefed (Exhibit R.2.b) on the
modifications made to the VA PRB awards determination process,
including the FY 2007 performance guidelines approved by the Acting
Secretary. In summary, the awards scoring form criticized in the OPM
Report has been eliminated. Staff office organization heads have been
given more autonomy to ensure meaningful distinctions are made related
to the executives assigned under their immediate purview. This year,
the staff office organization heads have been allotted bonus pools
which represent a percentage of the aggregate career salary of their
executives, from which they can recommend bonuses using up to 75
percent of their allotted bonus pools within the guidelines (Exhibit
R.2.c) approved by the Acting Secretary. The VA PRB focused their
discussions on individual and organizational performance as it relates
to the Department's performance as a whole.
RECOMMENDATION #3
New PRB members should receive training on the policies and
guidance of the SES PRB process and their role on the PRB. All PRB
members should receive refresher training annually.
VA RESPONSE:
All VA PRB members have been provided training on the policies and
guidance of the SES PRB process and their roles on the PRB. This year,
the Office of the A1S HR&A developed a training guide for the VA PRB
members. The training was included as part of the first meeting of the
VA PRB on November 14, 2007. The training guide presented to the PRB
members is provided as Exhibit R.3.
RECOMMENDATION #4
Management guidance issued to PRB members regarding how to consider
organizational performance when determining ratings and awards should
be made clear to all PRB members. A report summarizing organizational
performance should be provided to PRB members with instructions on how
to use the information in its deliberations.
VA RESPONSE:
The guidance provided to the PRBs regarding how to consider
organizational performance included a briefing by the Assistant
Secretary for Management which includes a report of each organizational
performance during the rating period along with instructions by the
Chairperson of each PRB on how to use the information during the PRB
deliberations. Exhibit R.4 consists of the briefing materials presented
at the VHA, VBA and Department PRB meetings.
ELEMENT #1
Consideration during the PRB process and review by the Secretary of
the existence and results of investigations by the VA Inspector General
and/or the Office of Medical Investigations.
VA RESPONSE:
The VA PRB process has historically included submitting the names
of all SES members recommended for a bonus to the Office of the
Inspector General (OIG) along with an inquiry as to whether there were
any ongoing or completed investigations on any of the SES members
recommended for a bonus. The results of this inquiry have been reported
to the appropriate Under Secretary or Assistant Secretary for action,
and then to the approving official (the Secretary or his designee)
along with the OIG reports. Also, the Deputy IG serves as a member of
the VA PRB and is asked to identify any SES member recommended for a
performance award who is the subject of an ongoing or completed
investigation to ensure that the investigation has been factored into
performance recommendations for any such SES member. This year, each
organization head was required to confirm that the results and findings
of external reviews, including those from the OIG, Government
Accountability Office, Combined Assessment Program, and the Office of
the Medical Inspector, etc., have been considered and were factored
into each rating, pay adjustment, and bonus recommendation as
appropriate. Exhibit E.1.a is the sample memorandum. Exhibit E.1.b is a
sample template which VHA uses on a quarterly basis for each network.
VHA reviews each item on the template to determine if revisions are
needed.
As you know, when the Offices of the Inspector General or Medical
Inspector conduct an audit, investigation, or review of a Medical
Center or Regional Office, they routinely provide that organization's
supervisory level (Network Director in VHA; Area Director in VBA) with
a copy of the findings and recommendations. The field facility provides
a copy of their responses to the findings together with planned action
to implement the recommended corrective actions to their Network or
Area Director at the same time they respond to the OIG or Medical
Inspector (MI). The Network and Area Director then track their
implementation steps until they are satisfied that corrective measures
are in place, and the deficiencies have been remedied.
If the Medical Center or Regional Office does not concur with
either the findings or recommendations, they can provide responses to
the DIG or MI specifying their reasons why they do not agree. These may
be disagreements over factual issues or over the most effective means
of remedying the problem. These responses are also provided to the
Network or Area Director to ensure that the supervisory office has a
full understanding of the issue involved.
As a consequence, the Network or Area Director, as the rating
official, has a comprehensive, contemporaneous knowledge of an OIG or
MI review at the same time as the affected executive, and is able to
assess the nature and severity of the issues, as well as the
effectiveness of any corrective action. They are able to fully consider
the impact of these findings on an executive's performance evaluation,
and are expected to do so by VHA and VBA senior management. Each rating
official was required to stipulate that he or she had fully considered
the results of any IG, MI, GAO, or other significant review and or
investigation in recommending a performance rating for executives under
their supervision.
ELEMENT #2
Appointment of PRB members who are not VA employees.
VA RESPONSE:
This year, each of the three VA PRBs (Central Office, Veterans
Health Administration, and Veterans Benefits Administration) included a
non-VA executive. The Federal Register Notice, published on October 30,
2007, contains the full membership of the VA PRBs (Exhibit E.2.a). The
non-VA PRB members are listed at the end of each PRB. A brief
biographical sketch for each is included as Exhibit E.2.b. VA selected
each of the external members on the basis of their familiarity with the
Department's core functions, i.e., claims adjudication, healthcare
delivery systems, and staff office support to a large organization.
Each of the external members will be asked to provide their
observations on the Department's SES performance review process, and to
make specific recommendations on improvements that could be made.
ELEMENT #3
Assessment of VA SES bonuses with bonuses awarded at other Federal
agencies.
VA RESPONSE:
Attached as Exhibit E.3 is the Office of Personnel Management
Report on Senior Executive Service Pay for Performance for FY 2006. The
report includes the rating, pay and awards data for the third year of
pay for performance for Federal executives in the Senior Executive
Service. The report illustrates that VA ranked eleventh in the
percentage of Senior Executives who received bonuses and third in the
average bonus amount given in FY 2006.
Department of Veterans Affairs
Office of Human Resources and Administration
November 2007
[A notebook containing all of the Exhibits was received by the
Subcommittee staff, will not be printed, and will be retained in the
Subcommittee files.]