[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
REVIEW OF AWARDING BONUSES TO
SENIOR EXECUTIVES AT THE
DEPARTMENT OF VETERANS AFFAIRS
=======================================================================
HEARING
before the
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
FRIDAY, JUNE 20, 2014
__________
Serial No. 113-75
__________
Printed for the use of the Committee on Veterans' Affairs
Available via the World Wide Web: http://www.fdsys.gov
______
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COMMITTEE ON VETERANS' AFFAIRS
JEFF MILLER, Florida, Chairman
DOUG LAMBORN, Colorado MICHAEL H. MICHAUD, Maine, Ranking
GUS M. BILIRAKIS, Florida, Vice- Minority Member
Chairman CORRINE BROWN, Florida
DAVID P. ROE, Tennessee MARK TAKANO, California
BILL FLORES, Texas JULIA BROWNLEY, California
JEFF DENHAM, California DINA TITUS, Nevada
JON RUNYAN, New Jersey ANN KIRKPATRICK, Arizona
DAN BENISHEK, Michigan RAUL RUIZ, California
TIM HUELSKAMP, Kansas GLORIA NEGRETE McLEOD, California
MIKE COFFMAN, Colorado ANN M. KUSTER, New Hampshire
BRAD R. WENSTRUP, Ohio BETO O'ROURKE, Texas
PAUL COOK, California TIMOTHY J. WALZ, Minnesota
JACKIE WALORSKI, Indiana
DAVID JOLLY, Florida
Jon Towers, Staff Director
Nancy Dolan, Democratic Staff Director
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
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C O N T E N T S
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Page
Friday, June 20, 2014
Review of Awarding Bonuses to Senior Executives at the Department
of Veterans Affairs............................................ 1
OPENING STATEMENTS
Hon. Jeff Miller, Chairman....................................... 1
Prepared Statement........................................... 33
Hon. Michael Michaud, Ranking Minority Member.................... 4
Prepared Statement........................................... 35
Hon. Ann Kirkpatrick
Prepared Statement........................................... 35
Hon. Timothy Walz
Prepared Statement........................................... 35
WITNESS
Hon. Gina Farrisee, Assistant Secretary for Human Resources and
Administration, U.S. Department of Veterans Affairs............ 5
Prepared Statement........................................... 37
MATERIALS SUBMITTED FOR THE RECORD
Statement From: SEA.............................................. 43
Letter and Questions From: Minority Member....................... 48
Questions for the Record......................................... 50
REVIEW OF AWARDING BONUSES TO SENIOR EXECUTIVES AT THE DEPARTMENT OF
VETERANS AFFAIRS
----------
Friday, June 20, 2014
U.S. House of Representatives,
Committee on Veterans' Affairs,
Washington, D.C.
The committee met, pursuant to notice, at 9:30 a.m., in
Room 334, Cannon House Office Building, Hon. Jeff Miller
[chairman of the committee] presiding.
Present: Representatives Miller, Lamborn, Bilirakis, Poe,
Runyan, Benishek, Huelskamp, Coffman, Wenstrup, Cook, Walorski,
Jolly, Michaud, Takano, Brownley, Titus, Ruiz, Kuster and
O'Rourke.
OPENING STATEMENT OF CHAIRMAN JEFF MILLER
The Chairman. The committee will come to order. Thank you
all for being here this morning. We had planned on a business
meeting this morning to subpoena two sets of documents from the
VA that were long-standing requests from the committee, but
yesterday VA delivered information regarding the removal of six
SES employees for the past two fiscal years. This request was
made by multiple members of this committee, including myself,
in multiple hearings going back to February. This morning VA
delivered the second set of documents, which I requested via
letter in October of 2013. The documents cover the performance
reviews for each SES individual for fiscal years 2011 and 2012.
Now, although VA's response to our request was delayed,
their production of the requested materials is sufficient, and
therefore, after consultation with the ranking member, we will
no longer be having a business meeting this morning.
This morning's full committee hearing is entitled Review of
Awarding Bonuses to Senior Executives at the Department of
Veterans Affairs, and we're going to examine the outlandish
bonus culture at the VA and the larger organizational crisis
that seems to have developed from awarding performance awards
to senior executives despite the fact that their performance
fails to deliver on our promise to our veterans.
As the committee's investigation into the Department
continues, and new allegations and cover-ups are exposed, it's
important that we examine how the Department has arrived at the
point where it is today. Sadly, it's come to a point which has
eroded veterans' trust and America's confidence in VA's
execution of its mission. Part of the mistrust centers on a
belief that VA employees are motivated by financial incentives
alone, and I can certainly see why that perception is out
there.
It appears as if VA's performance review system is failing
the veterans that they are supposed to be serving. Instead of
using bonuses as an award for outstanding work on behalf of our
veterans, cash awards are seen as an entitlement and have
become irrelevant to the quality of work product.
I know we all agree that preventable patient deaths, delays
in care, and continual backlogs of disability claims, cost
overruns and construction delays for VA facilities, and
deliberate behavior to falsify data are not behaviors that
should be rewarded, yet despite startling issues that continue
to come to light, as well as numerous past IG and GAO reports
highlighting these same issues, a majority of senior VA
managers received a performance award for fiscal year 2013.
According to VA's own data, over $2.8 million was paid out
in performance awards to senior executives for FY13. These
performance awards went to at least 65 percent of the senior
executive workforce at the Department. In fact, not a single
senior manager at VA out of 470 individuals received less than
a fully successful performance review for the last fiscal year,
not one.
Based on this committee's investigations, outside
independent reports, and what we have learned in the last few
months, I wholeheartedly disagree with VA's assessment of its
senior staff. It should not be the practice of any Federal
Agency to issue taxpayer dollars in addition to paying six-
figure salaries to failing senior managers just because a
current OPM statute for members of the SES allows that to
occur. Bonuses are not an entitlement; they are a reward for
exceptional work. VA's current practice only breeds a sense of
entitlement and a lack of accountability and is why we are here
today.
This issue, unfortunately, is not a new one for the VA. The
committee has focused its oversight on bonuses for years, and
if Members were to go back and review the 2007 Subcommittee on
Oversight and Investigation hearing on awards and bonuses, you
would find that the issue we raise today was questioned 7 years
ago. There seems to be little, if any, improvement.
In a May 2013 hearing, VA construction chief Glenn
Haggstrom admitted that he could not explain why he collected
almost $55,000 in performance bonuses despite overseeing failed
construction plans that cost our government nearly $1.5 billion
in cost overruns. In December of 2012, an investigation by this
committee revealed a legionella outbreak in the Pittsburgh
Healthcare System that led to at least six patient deaths.
Nevertheless, the Director there, Terry Gerigk Wolf, received a
perfect performance review, and the regional director, Michael
Moreland, who oversaw VA's Pittsburgh operation at the time,
collected a $63,000 bonus. To the average American, $63,000 is
considered to be a competitive annual salary, not a bonus.
The medical center director in Dayton, OH, received a
nearly $12,000 bonus despite an open investigation into
veterans' exposure to hepatitis B and C under his watch. The
Director at the Atlanta VA Medical Center, who oversaw multiple
preventable deaths, received $65,000 in performance bonuses
over his four years there. The former director of the VA
regional office in Waco, Texas, received more than $53,000 in
bonuses. While under his tenure the Waco office's average
disability claims processing time multiplied to inexcusable
levels.
Unfortunately, I could go on and on. These are not the only
instances of those charged with managing VA programs and health
care facilities falling far short of the quality that veterans
and their families deserve. So, in short, there are far too
many examples that prove that bonuses do not ensure good
performance.
As we have previously heard from several witnesses in this
committee, including those from VA, the quest for monetary gain
rather than public service has led to data manipulation and
secret lists designed to create a false impression of quality
health care that is timely and responsive to veterans. This is
scandalous, even criminal, I would argue, and it runs far
deeper than just Phoenix.
Today we'll explore the circumstances surrounding the award
and eventual rescission of a performance bonus award provided
to the former Director of the VA Medical Center in Phoenix,
Arizona, Miss Sharon Helman. In February of 2014, Ms. Helman
was given an $8,500 bonus for her performance during fiscal
year 2013. Only after allegations against Ms. Helman came to
light as a result of this committee's work did a conscientious
VA employee examine whether she received a bonus in fiscal year
2013. When we questioned the award, VA determined that she was
given this bonus due to an administrative error. However, past
documentation from VA has stated that all performance reviews
and awards are ultimately reviewed and signed by the Secretary.
Furthermore, Ms. Helman's direct supervisor, former VISN 18
network Director Susan Bowers, stated in May that Sharon Helman
received her bonus for a highly successful rating and for
improving access concerns and wait lists. Perhaps we should
also question Ms. Bowers' qualifications.
These stories do not match up, and I believe it further
brings into question VA's transparency as well as diligence
when issuing thousands of dollars in bonuses.
Although Acting Secretary Gibson has rightly put a freeze
on all bonuses for senior executives at VHA for the time being,
it is still this committee's responsibility to understand the
rationale for awarding five-figure bonuses to individuals who
have clearly fallen short of the Department's mission and their
commitment to those who have served.
A performance bonus award should not be received because
you are able to check off a few boxes on a form. A performance
award should not be an expectation. A bonus is not an
entitlement. Those at the Department of Veterans Affairs are
there to serve the veterans and their families. Anything less
than the highest possible quality should not be rewarded.
Gaming the bonus system is not a business that VA should be in.
Today we'll hear what VA has to say about their performance
review system, why senior managers who have overseen failure
have received thousands of dollars in bonuses, and how these
large performance bonuses could have led to the terrible
situation that the Department is now in.
[The prepared statement of Chairman Jeff Miller appears in
the Appendix]
The Chairman. With that, I now recognize the ranking member
for his opening statement.
OPENING STATEMENT OF MICHAEL MICHAUD, RANKING MINORITY MEMBER
Mr. Michaud. Thank you very much, Mr. Chairman, for having
this hearing. I want to thank the witness for coming this
morning as well.
Michael Leboeuf in his book entitled The Greatest
Management Principle Ever said, and I quote, ``The things that
get measured are the things that get done,'' end of quote. We
have seen this statement borne out recently within the VA in a
very negative way. As witnesses have stated in recent hearings,
VA's focus on unrealistic wait time measured resulted in
employees manipulating the system to seem like they were
meeting the measured standards. Leboeuf went on to say in a
later book, and I quote, ``The things that get measured and
rewarded are the things that get done well,'' end of quote.
Today we're going to look at the second piece, how VA senior
executives are awarded, and how the system does or does not
incentivize things to get done well.
Before we get into that discussion, let me also recognize
that there are a lot of VA employees who do things well. As we
shine the light on those who do not, let me pause for a moment
and shine a brighter light, more positive light on the hard-
working employees at VA who does things well, and we must not
forget that, and to them I say, thank you for your service and
for setting an example, and hopefully all employees within the
VA look at keeping their bottom line on how we serve the
veteran.
With that, Mr. Chairman, I know we have votes this morning,
so I would ask unanimous consent the remainder of my remarks be
entered into the record, and with that I yield back.
The Chairman. Without objection.
[The prepared statement of Hon. Michael Michaud appears in
the Appendix]
The Chairman. Members, we'll hold opening statements. Your
opening statements, should you have one, will be entered into
the record at the appropriate time.
The Chairman. Thank you for being here with us today. We
have one panelist. We're going to hear from the Honorable Gina
Farrisee, Assistant Secretary for Human Resources and
Administration at the Department of Veterans Affairs.
I would ask that you would please stand, raise your right
hand.
[Witness sworn.]
The Chairman. Thank you. You may be seated.
Your complete written statement will also be made a part of
the record. Thank you for being here with us this morning,
Secretary Farrisee, and you are recognized for 5 minutes.
STATEMENT OF HON. GINA FARRISEE, ASSISTANT SECRETARY FOR HUMAN
RESOURCES AND ADMINISTRATION, U.S. DEPARTMENT OF VETERANS
AFFAIRS
STATEMENT OF HON. GINA FARRISEE
Ms. Farrisee. Chairman Miller, Ranking Member Michaud,
distinguished members of the committee, thank you for the
opportunity to appear before the committee to discuss VA's
senior executive performance management system.
I would like to express on behalf of the VA workforce our
commitment to the Department's veterans. To accomplish this
mission, we must recruit and retain the best talent, many of
whom require special skills in health care, information
technology, and benefits delivery.
In particular, VA requires talented senior executives to
manage the complex set of VA facilities and programs. We are
competing in tough public and private labor markets for skilled
personnel. To remain competitive in recruiting and retaining,
we must rely on tools such as incentives and awards that
recognize superior performance. However, we also acknowledge
that we must do a better job in holding our employees and our
leaders accountable.
Our senior leadership must become more engaged in managing
executive performance plans, to include counseling, midyear
assessments, and documentation. We realize that improvement in
SES performance management also serves as a model for the
General Schedule workforce performance appraisal process.
The key is stringent and precise implementation and
oversight of all performance plans, whether for executives or
General Scheduled employees. Equally important is that we have
good performance training programs for executives.
Performance management has many challenges. By its nature
it is very subjective and complex. It is used to identify
superlative and poor performers, and it is the foundation of
development and mentoring. Senior executives must understand
how to craft good critical elements for their subordinates that
are practical for performance management purposes. They must
also fully understand the process and know how to document
assessments so that decisions on poor performers will be
defensible. Leaders must confidently communicate directly with
the subordinate and prevail during the due process steps that
follow such decisions.
The VA is fortifying existing efforts to train executives
on the fundamentals of performance management and how to
confront poor performance. We cannot assume that our executives
are skilled in these areas. Our executives must receive
frequent and better training on the performance process and
guidance on confronting poor performers.
The data shows that VA's implementation of the SES
performance process has become more rigorous over the last few
years. From 2010 to 2013, the VA decreased the percentage of
outstanding ratings from 35 percent down to 21 percent.
We presently have an OPM-certified senior executive
performance appraisal system. To receive OPM certification,
agencies must demonstrate adherence to laws and policies in the
evaluation of senior executives and distribution of awards.
Agencies must also make meaningful distinctions in the
evaluation of senior executive performance plans to receive the
certification. The certification is rigorous, and failure to
receive certification has significant consequences to a Federal
agency.
As outlined in the statute, monetary awards were designed
to be part of SES compensation. That is the premise of pay-for-
performance law. Failure to recognize value and performance
puts VA at the risk of accelerating retirement, resignation
and/or transfer to other agencies or the private sector of some
of the Department's most effective senior talent.
The process VA uses is described in my written testimony,
but I would like to just touch on some of the high points. Most
important is that the VA has uniformity in evaluating
executives, and has a single performance management system for
both Title 5 and Title 38 employees. We use five rating levels
in the VA and have published standards for these five ratings.
Presently VA certified performance appraisal system goes
beyond the minimum standards set by OPM. In 2011, VA added a
reviewing official, which is not required, as part of the
rating process for most senior executives. This reviewing
official is responsible for highlighting any areas of
disagreement with the rating official and providing a second,
more senior review. In addition, the Department formed
performance review committees that conduct an initial review of
appraisals prior to the review of the VA Performance Review
Board. The addition of a review by the VA committees prior to
the VA Board is an added feature that looks at consistency
throughout the VA lines of business. We are also currently
refining our policy on deferred ratings to ensure clear,
concise guidance on the process, step by step.
In closing, it is clear that VA must do a better job of
holding our executives and employees accountable for poor
performance. Good organizations establish clear standards,
train employees to meet those standards, and then hold them
accountable. VA cannot assume that our executives are
adequately skilled in performance management, so we are taking
steps to refine our training courses to address the shortfalls.
In order to better serve our veterans, VA must continue to
attract and retain the best and brightest leaders.
Thank you for this opportunity to appear before you today,
and I look forward to answering your questions.
[The prepared statement of Hon. Gina Farrisee appears in
the Appendix]
The Chairman. Thank you very much for being here with us.
According to your testimony, from FY 2010 through 2013, not a
single member of the SES, a pool of 470 individuals, received a
less than fully satisfactory or successful rating; is that
correct?
Ms. Farrisee. That is correct.
The Chairman. Knowing what we know now about the fraudulent
actions being taken in facilities all across this country that
have harmed our veterans, do you think that the Department's
assessment that 100 percent of senior managers at VA have been
fully successful in the past four years is in line with
reality?
Ms. Farrisee. Mr. Chairman, if we knew what we knew today
at that time, it is unlikely that their performance would have
reflected what it reflected at the time the reports were
written.
The Chairman. Do you go back and change a performance
review based on information that's gathered after the fact?
Ms. Farrisee. Mr. Chairman, you cannot go back and change a
rating once it has been issued to an employee as the final
rating.
The Chairman. Even if there's information that was hidden
from the raters?
Ms. Farrisee. Even if there's information that was hidden.
The Chairman. Is that a law or a rule?
Ms. Farrisee. It is a law.
The Chairman. Is it a law that needs to be changed?
Ms. Farrisee. There are other ways to discipline employees
for misconduct. If you find out----
The Chairman. Wait, wait, wait, wait. You're telling me if
you find out somebody does something that specifically harms
veterans, is potentially criminal, that the Department's
position is you would not go back and change somebody's rating
if you had the ability to do that?
Ms. Farrisee. If we had the authority, we would use all
authorities provided to us.
The Chairman. And so my question to you, is that something
that you would recommend that this committee do is to look into
having the law changed so that you can go back and change
performance reviews?
Ms. Farrisee. Mr. Chairman, if that was for across the
Federal Government, I could agree with that.
The Chairman. Well, we're focused on the VA, okay? And the
VA hasn't been doing very well lately. And I would hope that
the anger and the frustration that I hear in the Acting
Secretary's voice would filter through every employee and
especially in the central office. Things have to change. We
can't keep doing it the way it's being done.
Ms. Farrisee. I concur, Mr. Chairman.
The Chairman. You're aware this committee has spent
considerable time looking at the outbreak of Legionnaires'
disease in Pittsburgh in the water system where it has been
proven that there were at least six preventable deaths?
Ms. Farrisee. Yes, Mr. Chairman.
The Chairman. During this time period Mr. Moreland, who was
then the Director of the VISN, had the responsibility of
overseeing this facility and was given a one-time $63,000
bonus. Are you aware of that?
Ms. Farrisee. I am aware of it.
The Chairman. During questioning at a September 9th field
hearing in Pittsburgh, then-Under Secretary Petzel told this
committee that it was his understanding that Secretary Shinseki
did not have the authority to rescind the bonus, but that he
would look into that. Are you aware of that?
Ms. Farrisee. I am, Mr. Chairman.
The Chairman. Did anyone ask you about VA's authority to
rescind bonuses prior to Miss Helman's case?
Ms. Farrisee. No, Mr. Chairman.
The Chairman. Anyone ask the Office of General Counsel?
Ms. Farrisee. Mr. Chairman, I'm not aware.
The Chairman. Is it safe to say that Dr. Petzel then sought
his own legal counsel on the matter and then never looked at it
at all?
Ms. Farrisee. Mr. Chairman, I would assume that he
discussed this with General Counsel. General Counsel's views
when I have talked to them about rescinding bonuses, that
rescinding awards based on a rating that was already given to
an employee in finality is we have no authority to take the
rating back nor the award which is the result of that rating.
The Chairman. So how did we take Miss Helman's bonus back?
Ms. Farrisee. Miss Helman's bonus was erroneously released.
The VA does have a standard operating procedure of any employee
who has an investigation ongoing that we have been made aware
of by the IG or Equal Opportunity or other venues, we put them
on a deferred list. Miss Helman's name was on the deferred 2013
list. Her rating should not have been released. It was never
definitively said that was her final rating, it was not her
final rating, and because it was not final, we took the
opportunity to rescind that rating. We worked with General
Counsel and also OPM.
It is unprecedented for that to have happened, but based on
the fact that the VA has a standard operating procedure of
maintaining deferred ratings, it was proven that that was not a
final rating that was determined by the Secretary to be
released.
The Chairman. Is it final now?
Ms. Farrisee. It is not, Chairman.
The Chairman. Can you explain why?
Ms. Farrisee. Her--it was rescinded. Her name is still on
the deferred list. Until the investigation is complete, no
decision will be made on that rating.
The Chairman. And she still is employed by the Department
of Veterans Affairs and being paid her full salary?
Ms. Farrisee. She is, Mr. Chairman.
The Chairman. Okay. And so you don't believe that it was
extenuating circumstances or--I forgot what the term was that
you used--that Dr. Moreland, who oversaw the VISN, that there
were six preventable deaths, he got a $63,000 bonus, and nobody
thought that was worth looking into to see if that could be
rescinded?
Ms. Farrisee. Mr. Chairman, I can't answer that. I wasn't
there when that award was given.
The Chairman. Okay, thank you. Mr. Michaud.
Mr. Michaud. Thank you very much, Mr. Chairman.
Once again, thank you for your testimony.
Sometime my colleagues use the words like ``bonus award''
and ``performance pay'' interchangeably, but I understand they
are different. Can you please explain--describe to us the
different categories of additional pay available to VA senior
executives?
Ms. Farrisee. Yes, I can. There are several different kinds
of incentives. There are relocation, recruitment and retention
incentives that can be given in proper situations to employees.
There are standards that we must meet in order to provide any
of those incentives for our health care, doctors, and dentists.
They receive what is called market pay and performance pay,
which are in addition to a base pay. They all have different
complex ways of calculation, but a normal Title 5 employee is
not authorized for those pays. That is only for our physicians
and our dentists.
Mr. Michaud. The Title 38 employees?
Ms. Farrisee. Title 38, yes, sir.
Mr. Michaud. What's--can you discuss the performance award
bonus initiatives and the tiered pay?
Ms. Farrisee. The tiered pay for our awards is based on the
ratings, the highest rating being outstanding, and then exceeds
fully successful, and then fully successful. A determination is
made by the Secretary at which level he will provide awards
based on the ratings.
For the last two years, employees who received exceeds
fully successful and outstanding were the employees who
received awards. Those awards are calculated at different
percentages. Part of the certification system by OPM requires
that there be a differentiation made between levels of
performance and those awards that are provided to those
employees.
Mr. Michaud. Okay. What's the difference between a
performance award and a bonus?
Ms. Farrisee. We don't use the word ``bonus.'' We only use
the word ``performance award.''
Mr. Michaud. So just performance award.
Who's eligible? When you look at this issue, and I actually
just got--the chairman and I received a letter on the 19th from
the Senior Executive Association, and actually what was
interesting in it as I went through, it says, reports for
claiming large bonuses for Senior Executives at the VA often
fail to note that few employees on the list provided are Title
5, which are SESs; that the largest--nearly all the large
bonuses are for Title 38 employees. So what are the criteria
used to determine who is provided each? I mean, is it different
with Title 5 versus Title 38?
Ms. Farrisee. Congressman, as far as the bonuses for Title
5 and Title 38, when we look at our SES performance awards
system, they are the same. They would fall under the same
categories of outstanding, exceeds fully successful, fully
successful, and those percentages.
What is different about Title 38 employees is in addition
to performance awards, they can receive market pay and a
performance pay that is based on a separate contract if they
are a health professional, if they are a physician or a
dentist, with their superior at the medical center. So they
have things in addition to Title 5 which are not--they are not
a part of the performance appraisal SES system that I was
speaking of.
Mr. Michaud. Some of the criteria for OPM certification
includes alignment; that is, linking individual performance
objective to organizational mission. The second is results;
that is, performance expectation are linked to outcomes. And
number three, the overall agency performance that is linked
between individual performance objectives and overall agency
performance.
If VA receives OPM certification, it must have met these
criteria in aggregate. How do you explain the specific failures
to this committee that we have discovered recently over the
past several months?
Ms. Farrisee. Congressman, as people received awards based
on their performance appraisal, those decisions were based on
them meeting critical elements that were written in their
performance plans and proven by metrics, the words written in
their performance appraisals by their superior. That is what
the Performance Review Committee and Performance Review Board
saw, basically the four corners of the paper, what was written,
and that's what they went by.
Mr. Michaud. Okay, thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you very much.
Mr. Roe, you are recognized for 5 minutes.
Mr. Roe. Thank the chairman.
Let me start by asking, I looked from FY 2010 to FY 2013.
You mentioned in your rating system outstanding and exceeds
fully successful. I just did the percentages, and they're
unchanged. You just changed the mix a little bit, and if you
add the outstanding and exceeds fully successful in 2010, it
was 73 percent. If you look at 2013, it's 78 percent. Actually
it went up. So that means there's an expectation, and it varied
between 75 and 73. So you really didn't change anything other
than the very top ratings so that the bonus or performance
award or whatever you want to call it went down just a little
bit. So fully 80 percent of people last year got an award and
were exceptional out of the 470. Do you think that's normal in
business, that every single executive is exceptional?
Ms. Farrisee. Congressman, I can't answer that question
about business.
Mr. Roe. Well, I mean, the awards here seem to say that. I
mean, if you look at your own data. I'm not making this up.
This is your data I'm looking at.
Ms. Farrisee. Congressman, I understand. Based on the
critical elements in the performance plan for those SESs and
the results that were on those plans, that is what was----
Mr. Roe. Well, that means that you put the bar down here
then so that anybody could step over it. If your metrics are
low enough that almost everybody exceeds them, then your
metrics are not very high.
Ms. Farrisee. Congressman, that is something we should look
at. Every performance plan is written for the fully successful
level, and if they exceed that----
Mr. Roe. I got that. What I want to also understand is--
I've asked this question for the last five or six hearings--is
that to get a bonus or a performance award, whatever you want
to call that, do you--is not sending veterans to the outside,
to private care, is that part of the metric? And no one has
answered that question. Is it yes or no?
Ms. Farrisee. Congressman, I don't know, and I'll take that
for the record.
Mr. Roe. Okay, thank you for that.
You mention, or at least it's in the evaluations that you
have, the elements outlined for--is leading change, leading
people, business acumen, building coalitions, and results
driven. Those are the metrics that you go by. What are the
specifics in there? I mean, how are they set up? I mean, all
that sounds good, but what do you actually have to do to get a
$10,000 or in some cases $60,000 bonus?
Ms. Farrisee. Congressman, in each of the performance
plans, there is a template that goes out that says the guidance
for the strategy of VA and what the employees must do to tie
their organization and individual performance to the strategies
of VA. That is how it is determined, and if they exceed, there
are different critical elements, and----
Mr. Roe. And who decides that?
Ms. Farrisee. It starts with the Secretary, who will put
out VA's strategy plan and guidance, and then it is given to
the administrations. They put additional metrics into their
template.
Mr. Roe. Let me ask you this question: If you fraudulent,
if you knowingly cook the books, as apparently what happened in
Arizona--because if you do that with the IRS--let me give you
an example. If you falsely put your claim out with the IRS and
claim deductions you don't have, let me tell you what's going
to happen to you. You're going to get penalized, you're going
to pay the taxes, and you might go to jail.
Do you think that should happen to people who fraudulently
put out information that led to the deaths of people, a lot
worse than not paying your taxes. Do you think that should be
part of what we should be doing here today, to look at people
who absolutely played, gamed the system so that they could make
some extra money, and veterans didn't get care? Because that's
what will happen to you in other government agencies.
Ms. Farrisee. Congressman, I believe when these
investigations are complete that the Acting Secretary will
ensure there will be accountability for those actions.
Mr. Roe. That's not an answer. I mean, my answer is
somebody who--I mean, accountability to what? What does that
mean? The question I asked is right now today in the IRS, you
know this, if you and I put something down wrong, and we're
audited, you know what's going to happen. We're going to pay
back taxes, we're going to pay penalties, and we might go to
jail if it's really bad. So the question I have is, should that
metric, that same standard, apply to people who are in the VA
who have fraudulently done this, if they have?
Ms. Farrisee. If given that authority, I am sure it would
be used, Congressman.
Mr. Roe. Okay, thank you.
Mr. Chairman, I yield back.
The Chairman. Mr. Takano, you're recognized for 5 minutes.
Mr. Takano. Thank you, Mr. Chairman.
Ms. Farrisee, can you tell me how many employees under
Title 5--and Title 5 is what we're talking about, the Title 5
employees who were involved in the bonus system. I know there's
Title 38, but the Title 5 employees are the ones who were in
charge of managing and responsible for the scheduling. How many
employees received bonuses?
Ms. Farrisee. Across the complete VA or only SES?
Mr. Takano. Well, give me the SES number first.
Ms. Farrisee. Who actually received? Of the--about 78
percent of the SES, but that includes Title 5 and Title 38.
Mr. Takano. Okay.
Ms. Farrisee. And there are Title 5 and Title 38 employees
at the medical centers.
Mr. Takano. Okay. But with regard to the accountability for
the gaming of the system, I'm trying to get a handle on how
many of the employees are sort of accountable for that. I mean,
I'm thinking the Title 38 are the providers that--you know, the
medical practitioners that for other reasons are getting pay
beyond their base pay, right?
Ms. Farrisee. Correct, but it is possible there are some
Title 38 employees involved in the scheduling as well.
Mr. Takano. Okay. But just give me an idea of how many
employees were involved.
Ms. Farrisee. Involved overall? I don't have that number,
but I'll take it for the record.
Mr. Takano. Okay.
Ms. Farrisee. The IG has not completed their investigation,
so we really probably do not have the final number right now.
Mr. Takano. Well, how much of the--I mean, we've talked
somewhat about how the incentives maybe should be based on
outcomes rather than these metrics, but I'm trying to get a
handle on why the metrics--we lost control of them. I've heard
testimony that had to do with the technology, that we didn't
have a--that we had a scheduling system that was easy to game.
Is that your assessment, too?
Ms. Farrisee. I don't know enough about the scheduling
system to make that assessment.
Mr. Takano. Okay. Well, because I just wanted--the number
of employees that were involved just made it very difficult for
anyone to, you know, look at how people were scheduled, how
veterans were scheduled, and if there's a lot of employees, I
can imagine that the scheduling component of the Vista system
apparently was vulnerable to this sort of gaming. But you don't
have--this is not in your expertise?
Ms. Farrisee. Unfortunately it is not, Congressman.
Mr. Takano. Well, what other incentives could the VA use to
recruit and retain health care providers beyond bonuses and
performance pay?
Ms. Farrisee. We have recruiting incentives, relocation,
retention incentives once they are on board. We have
authorities from OPM to give those type of incentives for
hiring difficult-to-fill positions, difficult locations
sometimes, and skills.
Mr. Takano. Well, we know that the VA loses health care
providers to the DoD. Why hasn't the VA considered increasing
the base pay of the VA health care employees so that they
receive comparable pay to the DoD?
Ms. Farrisee. I'm not aware that it's not comparable pay to
DoD. I'll have to look at that.
Mr. Takano. Okay. I would appreciate that. Thanks. I just
wanted to know if that's true.
Has the VA considered offering other incentives such as
loan repayments or increased pay for VA providers willing to
work in rural and underserved areas?
Ms. Farrisee. We have not looked at that, Congressman.
Mr. Takano. Well, that's interesting.
So my understanding is the rural areas, the rural areas and
underserved areas, is this typically--well, we don't know
enough about the investigation to know how this gaming of the
system sort of matches up, whether we're seeing the
manipulation of wait times sort of be more prevalent in these
underserved or rural areas.
What additional professional opportunities could the VA
offer its health care providers to recruit and retain those who
are dedicated to serving veterans?
Ms. Farrisee. I think we are doing things like market pay,
which gives them an additional pay to the base pay, the
performance pay, the contracts that they do with their
individual superiors. All of that gives them additional pay for
us to try to meet the external payments. We'll never meet it,
but we do try to make it more attractive.
Mr. Takano. Thank you.
The Chairman. Thank you, Mr. Takano.
Mr. Runyan, you're recognized for 5 minutes.
Mr. Runyan. Thank you, Mr. Chairman.
And it's really two observations, and I want to say there's
probably not a lot of people--on the basis of what all these
discussions we're having, I don't think there's a lot of people
on this committee that really have much faith in a lot of the
metrics that we use VA-wide, because I know we all go to
whether it's our health centers or our regional offices and are
totally confused by any metric they throw at us, and to be able
to award performance awards off of those type of metrics are
mind-numbing to me. And to go back to what Dr. Roe really said,
and I think you testified to it, you're setting out a template,
the Secretary is setting out a template. How low is that bar
really?
Obviously in my past career, we had performance incentives
all the time. We had several tiers of it. We would have two
categories would be ``likely to be earned'' and ``unlikely to
be earned,'' and it would actually count against the salary cap
of that team. It wasn't either all in or all out; there were
tiers to it.
But I just wanted--and I'll end here and I really don't
have a question. I just want to say; to be able to have
something you're going to set a bar that low and not be able to
really truly measure it, incentives are great, and I don't
think anybody here would agree that uniformly across the VA
that they're being applied equally. And you've said it, too:
It's very subjective. The basis of it is getting the facts, and
I think we're so far away from that at this point, I really
don't even have a question for you, because until we fix that,
having the discussion about performance incentives, you can't
even have the discussion because there's no basis of fact to
have it on.
So with that, I yield back, Chairman.
The Chairman. Thank you very much.
Ms. Kuster, you're recognized for 5 minutes.
Ms. Kuster. Thank you very much, Mr. Chairman.
And thank you for your testimony before us today.
I'm feeling like we're experiencing what they would call in
the academic world grade inflation, or what Garrison Keillor
would refer to as all of the children are above average.
Coming from the private sector, it's hard for me to believe
that 80 percent of employees can be either outstanding or this
other category that is above and beyond what the expectation
is, and it makes me feel like the expectation is lowered to a
place that doesn't serve our veterans the way we had wished.
But I want to focus in on where we go from here and how we
can fix this problem, because obviously this is a bipartisan
issue. We are all concerned. Fortunately, this is one of the
few bipartisan committees where we can work together and make a
difference.
My concern lies in how we can fix this situation or help
the VA to fix this situation, because it doesn't appear that
the policies provide for a methodology to make this kind of
change, and by that what I mean is that we have had some
oversight, but at the end of the day, it doesn't seem to
change. And I just want to make reference to the VHA is unable
to assure that although they identify problems, that the
problems will be corrected and to not recur. This is a review
of one medical center a year later found the identical
problems, but it doesn't--you don't end up with a change.
And I want to focus in on is there ever an opportunity in
the system that we have now where 80 percent of the people get
enhanced pay--is there ever an opportunity for reduction or
denial of this enhanced pay? And just moving forward, now that
we know what we do know, what will be the consequences to
people that, frankly, were lying and cheating and stealing both
veterans' health care and taxpayers' hard-earned dollars?
Ms. Farrisee. Yes, Congresswoman, thank you for that
question.
I do believe there is room for change. Part of that change
will come with more training of our Senior Executives and
understanding our critical elements that are put in the
performance plans in establishing very real goals; and the
metrics we have talked about, and ensuring that our metrics are
not too low; that, in fact, you must perform to reach that
``exceeds'' and that `outstanding' rating; that we pay much
more attention.
We have now automated the system of the performance
appraisal system. I personally could not see them until they
came into hard copy previously. This is the first year it's an
automated system; we'll have a chance to look at all the
metrics in advance. We will do a lot more training with our
Senior Executives on what these critical elements mean and how
our Performance Review Committees and Performance Review Boards
need to view these metrics. I am certain also----
Ms. Kuster. What about lack of performance? Can someone
lose their job? Can they get docked pay? Is there any capacity
in this system to take action when performance is less than
stellar, which apparently it is for 80 percent of the people?
Ms. Farrisee. Yes, Congressman, there is absolutely a
process to do that. You can----
Ms. Kuster. What does that entail, how someone would get
fired?
Ms. Farrisee. It entails proposal of removal, if we are
talking about removing somebody from the Federal Government.
That employee would have a right to respond. They get a 30-day
notice period. Then they can respond orally, say if there's any
mitigating circumstances. That paper then goes to the deciding
official, who would take into consideration what the employee
says. And then a decision maker will make within 30-days a
decision on the personnel action to happen. Depending on what
the evidence is for what the employee has done wrong, there is
a range of things you can do to an employee.
Ms. Kuster. Well, can I ask you, would criminal conduct be
evidence of lack of performance?
Ms. Farrisee. It would be misconduct.
Ms. Kuster. And would misconduct be sufficient for someone
to lose their position?
Ms. Farrisee. If the evidence proves that through
investigation, yes, that is possible.
Ms. Kuster. And how about lying to the extent that it
wasn't a crime, but it was certainly harmful to veterans being
able to get access to care?
Ms. Farrisee. There is certainly a range of punishment, and
depending on all of the details of that, it is possible they
could be proposed for removal depending, again, on the evidence
and the details.
Ms. Kuster. Thank you very much. My time has expired.
Thank you, Mr. Chair.
The Chairman. Ms. Kuster, thank you very much.
Mr. Benishek, you're recognized for 5 minutes.
Mr. Benishek. Thank you, Mr. Chairman.
Thank you for being here, Ms. Farrisee.
Dr. Petzel testified in February of this year in the
Subcommittee on Health that six SES employees had been
involuntarily removed in the last two years. However, we've
tried to get the information as to what the details are of
that, and we haven't gotten that. Are you aware of this?
Ms. Farrisee. Congressman, you did receive that yesterday.
I know it just came yesterday, but the committee did receive
that from the VA yesterday.
Mr. Benishek. Okay. So if that's correct that six people
were removed, and not a single person in the SES received less
than a satisfactory rating, how does that removal take place?
Ms. Farrisee. Removals--once they were removed, they did
not receive a rating, so they would not show up in having
received a less-than-satisfactory rating. So when you see
numbers that show no unsatisfactory ratings, it's a little
misleading because those employees then did not get followed up
with a rating because----
Mr. Benishek. So you're telling me that there is actually
unsatisfactory ratings, but they're just not listed?
Ms. Farrisee. Congressman, once somebody departs, they do
not receive that rating.
Mr. Benishek. That's not accurately depicting what's really
going on.
Ms. Farrisee. That is true, Congressman.
Mr. Benishek. I am kind of concerned, too. Let me ask you
this question. This is from my briefing here that an SES
employee works with their supervisor to create a performance
review plan for each fiscal year, and then they rate their own
performance on each critical element at the end of each fiscal
year.
Ms. Farrisee. Yes, Congressman, and then----
Mr. Benishek. That's then reviewed by their direct
supervisor.
Ms. Farrisee. By their direct supervisor, their rating
official, and then a reviewing----
Mr. Benishek. So they rate themselves?
Ms. Farrisee. They put down all their accomplishments.
Mr. Benishek. Right. But they rate themselves, according to
this, right? And then that process is reviewed by their direct
supervisor?
Ms. Farrisee. It is, and then it's----
Mr. Benishek. And that either then is approved or
disapproved by that direct supervisor?
Ms. Farrisee. Correct.
Mr. Benishek. So the direct supervisor doesn't actually
write the performance review themselves. The actual employee
writes the performance review and the supervisor just okays it
or disallows it. Is that what happens?
Ms. Farrisee. The portion on the appraisal, there is a
self-assessment on there that is optional, so the employee can
put a self-assessment in there, but the rating----
Mr. Benishek. Does that usually occur?
Ms. Farrisee. I'm sorry?
Mr. Benishek. Does that usually occur?
Ms. Farrisee. In some of the ratings. Not all of them.
Mr. Benishek. Have you ever been involved in this process
personally?
Ms. Farrisee. I am just being involved in it since I've
arrived at the VA personally. I've just finished doing my own
SES appraisal plan. We are at the point of turning in our plans
right now. You write your own plan.
Mr. Benishek. I guess I don't know this. How long have you
been there?
Ms. Farrisee. Since September in this role.
Mr. Benishek. So you haven't been a direct supervisor to
anyone that's done their own plan yourself?
Ms. Farrisee. I'm just doing that now.
Mr. Benishek. You're doing your own plan, but are you
actually a supervisor, a direct supervisor?
Ms. Farrisee. I am, and my deputy has provided to me his
plan. We are not to the point of writing the final appraisal
yet.
Mr. Benishek. Do you think this is a good idea, that the
employee themselves writes their own plan?
Ms. Farrisee. Well, before----
Mr. Benishek. I mean, it seems to me that would lead to an
80 percent percentage of people getting good results.
Ms. Farrisee. Congressman, I understand, but before that
plan is written, there is discussion with the ratee and the
rater. They don't just go off and write a plan without some
sort of discussion of what's reasonable and what should be
considered exceptional.
Mr. Benishek. That's what you say, but the process seems to
indicate that the guy writes his own plan; if I do this, this,
and this over the next year, I'll be successful. Then he
accomplishes that and even better, and then he gets a superior
rating, you know. I mean, this whole--I mean, the questions
that have been previously brought up here in the committee tend
to think that there's not a real rating going on here, it's
just everybody is getting a good rating. And, you know, I'm
very concerned with the fact that people are writing their own
review plan, and it just gets checked by the supervisor, and
then the numbers that you present to us aren't accurate, and
zero percent, and there's six people removed.
And there's inconsistencies in your testimony and in the
testimony of Dr. Petzel. It's very disturbing to me that here
we are in the middle of trying to reform the VA, and we get
inconsistent answers, and it makes us not want to trust
anything that comes from you people.
Ms. Farrisee. Mr. Congressman, the numbers that we provided
as far as the ratings are when there is actually an appraisal
plan. We did not do those on the individuals who departed.
That's why they don't show up in the numbers.
Mr. Benishek. Well, it's very disappointing to me, you
know, to get these answers from you today.
I think I'm out of time.
The Chairman. Thank you, Mr. Benishek.
Ma'am, you said that the self-evaluation or senior
executive self-assessment is optional. Are you sure it's
optional?
Ms. Farrisee. As part of that plan, there is----
The Chairman. I'm looking at the performance appraisal
form, senior executive performance appraisal form.
Ms. Farrisee. The 3482?
The Chairman. Yes, 3482.
Ms. Farrisee. And there are rating official narrative that
is on----
The Chairman. Right. I guess what I'm looking at, the only
place I see that's optional is if the person is asking for a
higher-level review for their pay, or it's optional to put a
letter of input, but the other two sections, section 3, senior
executive self-assessment, does not appear to be optional.
Form 3482, section 3, senior executive self-assessment.
Describe your accomplishments, outcomes and results. I think
you just told Mr. Benishek that was optional. Is it?
Ms. Farrisee. I'm going to take that back and say I may
have misspoken. Can I get back with you on this, Chairman?
The Chairman. Yes, you can.
Thank you very much.
Ms. Brownley.
Ms. Brownley. Thank you, Mr. Chairman.
Thank you, Ms. Farrisee.
So now I understand you've been in this position for a
short period of time. Were you in human resources with the VA
prior to?
Ms. Farrisee. I was not. I retired from the Army.
Ms. Brownley. Thank you.
So it's been widely reported in newspapers that the
Regional Director in Pittsburgh, I think, received a
performance pay award of $62,000. You're aware of that?
Ms. Farrisee. I am aware of that.
Ms. Brownley. So I'm just trying to do the calculations
here, and I will add, $62,000, the median income in the county
that I represent is $76,000, so I just want to state that for
the record.
But so if you--if this employee received $62,000 in a
bonus, and in your testimony you said that the performance pay
cannot exceed 20 percent of the base salary for an SES
employee, then if you do the math on that, then the base salary
is over $300,000.
Ms. Farrisee. Yes, Congresswoman. That award was because of
a Presidential Rank Award.
Ms. Brownley. And what's special about that?
Ms. Farrisee. Very few of those are given each year and----
Ms. Brownley. So that doesn't follow any of the rules that
we have been talking about?
Ms. Farrisee. It is not an award given by the VA.
Ms. Brownley. I see.
So I know this hearing is about performance pay, but there
is also a retention incentive pay?
Ms. Farrisee. Yes, Congresswoman.
Ms. Brownley. And so the process for awarding retention
incentives, I presume, differs from performance pay incentives.
And so do you have the information on what percentage of SES
employees received retention incentives last year? Is that--can
they receive both retention pay and performance pay?
Ms. Farrisee. They can receive both, Congresswoman. We
currently have 40 SESs out of the 470-some SESs who receive
retention incentives.
Ms. Brownley. And is there a cannot exceed percent for
retention pay?
Ms. Farrisee. There is.
Ms. Brownley. What is that?
Ms. Farrisee. Twenty-five percent of their salary per year,
and it can be given up to four years.
Ms. Brownley. Are there other kinds of awards that we're
not aware of beyond performance and retention?
Ms. Farrisee. Relocation incentives. If you are asking--
reassigning someone, you can offer a relocation incentive, and
a recruitment incentive for people new joining the agency.
Ms. Brownley. And the--is there a cannot exceed percentage?
Ms. Farrisee. On all of them there is a percentage and a
number of years it can be given. That is across the Federal
Government.
Ms. Brownley. In 2010, the VA did its own review. Can you
just describe what specific actions the VA took to reform and
restructure the SES bonus structure from the results of their
own internal review?
Ms. Farrisee. I'll have to take that for the record,
Congresswoman.
Ms. Brownley. Similarly, a GAO report in 2013, and I wanted
to know what specific action has the VA taken to improve the
performance pay policy since that was issued?
Ms. Farrisee. We updated our handbook that was missing some
very key points that the GAO pointed out, and we put out an
updated handbook in March to include everything they asked us
to include.
Ms. Brownley. Can you just describe some of those elements?
Ms. Farrisee. One of the elements was not meeting a 90-day
time frame in which you would counsel and talk about this
performance pay. It has to be put in a plan that has to be done
within 90 days. We did not have a time frame in the handbook.
Things were not being done according to policy.
Ms. Brownley. And finally, can you--have you--as the
Assistant Secretary for Human Resources and Administration, and
given the situation that we are in currently, have you been
able to assess the IG's ability to investigate this just in
terms of personnel in human resources, and do you believe that
they have enough resources to do this?
Ms. Farrisee. Congresswoman, I cannot personally assess it,
but I have heard the IG in testimony say that he has enough
resources to do this.
Ms. Brownley. But you don't do that as a practice to review
their resources?
Ms. Farrisee. Not the IG's, no, ma'am.
Ms. Brownley. Thank you. I yield back.
The Chairman. Thank you very much.
Mr. Wenstrup, you're recognized for 5 minutes.
Mr. Wenstrup. I thank you, Mr. Chairman.
I have some questions concerning the whole evaluation
system. And I guess I'd like to compare it to how the military
does it for officers. And, you know, you can do a support form,
you fill out a support form for your superiors, you talk about
what your goals were for the year, whatever the case may be.
So, as I understand it, that would be part of the process----
Ms. Farrisee. It is.
Mr. Wenstrup [continuing]. Currently.
And, you know, through the process with the military, you
do have meetings periodically with your rater to see if you are
achieving those goals. It also gives the rater the opportunity
to add other goals that you may want to put in there. Does that
take place?
Ms. Farrisee. That is correct.
Mr. Wenstrup. Okay.
Do you think that there's a point in time where the
person's just pretty much writing their own evaluation, sending
it electronically, and maybe the rater is just cutting and
pasting and putting it in there and sending it off approved? Do
you think that happens within the system? I know you haven't
been there very long.
Ms. Farrisee. I haven't, so I cannot comment that it does
or doesn't happen.
Mr. Wenstrup. Okay. Because that would be a concern of
mine, that this is just kind of a network here. You know, why
don't you just fill it out, send it along to me, and we'll be
okay.
I'm also wondering how much the VA's core values come into
play when it comes to evaluation. Can you tell everyone what
those core values are?
Ms. Farrisee. We have core values: ICARE, or integrity,
commitment, advocacy, respect, and excellence. That is a part
of our performance appraisal plan.
Mr. Wenstrup. Is there a part in there where the rater then
can take those values and comment on those values on that
person?
Ms. Farrisee. Yes, there is.
Mr. Wenstrup. Because it seems to me that some of the
people, especially the part on integrity, really fell short and
yet some people got their performance payment. Would that be
correct?
Ms. Farrisee. Congressman, at the time it was written, we
may not have understood there was an integrity problem. If that
were to be written right now, once the investigation is
complete, I would expect to see that.
Mr. Wenstrup. Okay. Well, I was really just trying to
understand your process more, I think.
And I yield back.
Ms. Farrisee. Thank you, Congressman.
The Chairman. Thank you very much.
Mr. Ruiz, you are recognized for 5 minutes.
Mr. Ruiz. Thank you, Mr. Chairman, for holding this
hearing.
Thank you for being here.
We know, based on the latest data released in the VA Access
Audit, that 46,400 veterans who enrolled in the VA health
system in the past 10-years haven't received appointments and
that more than 56,200 veterans have been waiting more than 90
days for their first appointment at a VA medical facility.
Unconscionably, senior executive who oversaw health care
facilities with manipulated data were awarded bonuses, based,
in part, on faulty wait times and, as Mr. Wenstrup said,
clearly demonstrating a lack of integrity.
As an emergency physician, I am appalled by the thought of
VA officials covering up the fact that they are not providing
much-needed medical care to our veterans and still obtaining
bonuses.
So, in an effort to get to the bottom of this reprehensible
behavior and ensure these executives are held responsible, I
would like to know in what year bonuses started being tied to
scheduling metrics.
Ms. Farrisee. I'll have to take that for the record.
Mr. Ruiz. It's important to know, because then you can
clearly see the difference between pre-bonus and post-bonus.
And things don't move very fast in the VA, including behaviors
and performances, so it would be very important to determine
which facilities had those drastic changes.
Also, I spoke to some of my veterans back home. There's a
veteran, Major Bill Young, a very well-respected man, good
human being. And he is in line with the veteran-centered
approach, which I absolutely agree with. And his question is,
are there any bonuses based on patient satisfaction feedback?
Ms. Farrisee. I'll have to take that for the record to see
if that is a metric in any of the appraisals.
Mr. Ruiz. Okay. I think that there's a--we need a very
drastic cultural change so that when that question is asked
again it should be in the top three answers as to what our VA
personnel are measured against. Number one, two, and three, a
patient-centered, patient-feedback bonus. Okay?
And has there been any analysis of the effect of bonuses on
scheduling metrics?
Ms. Farrisee. There has not been analysis to this point.
Mr. Ruiz. Okay.
What was the exact criteria for awarding these bonuses
regarding scheduling metrics?
Ms. Farrisee. The scheduling metric, to my understanding,
was to have the schedule within the 14-day time period.
Mr. Ruiz. Okay.
And, you know, I think my closing comments here--and we are
talking about bonuses. You know, my father worked in the
fields--hard manual labor. He was a mechanic, he was a truck
driver. He did whatever it took to put food on my table and to
pay for our education, something he didn't have. And he taught
me the value of an honest day's work. And he said, son,
whatever you do in life, just work hard, be the best at it.
And honesty and integrity are the values of this country,
and those are the values that America was founded on. And lying
to get a bonus flies in the face of our values as Americans.
And I think that we really need to have some introspection
within the VA system to come back to those root values that
make this country great.
Thank you, and I yield back my time.
The Chairman. Thank you very much, Doctor.
Mr. Cook, you are recognized for 5 minutes.
Mr. Cook. Thank you, Mr. Chair.
There has been some conversation about, once the evaluation
report is written, that you cannot undo that. Can't you have a
supplemental or a special fitness report, per se, based upon
certain circumstances under somebody's watch?
Ms. Farrisee. I'm not aware of doing one in addition to
their annual appraisal.
Mr. Cook. So if something like this happens that shows the
character or unsatisfactory performance, there's nothing that
goes in the jacket of that individual that gets these bonuses
or what have you?
Ms. Farrisee. That would be included in their current-year
appraisal----
Mr. Cook. No, no, I'm talking about, because of what
happened and things that happened on their watch, that they get
a special fitness report based upon unsatisfactory performance.
No? Okay.
I just want to go on to a couple of things here.
We had a number of veterans testify, I don't know, maybe
six weeks. And I asked them--basically, I was using the
comparison of the military being, you know, fully combat-ready
or non-combat-ready. And I used it analogous to the VA. And
everybody was here. And across the board, everybody went down
the line and basically said they're not mission-capable, which
everyone here, I think, has that same agreement.
But it seems as though mission--and we've talked about
mission performance standards and everything, but we don't
apply them. We're not taking care of veterans. That is the
bottom line. And we're talking about all these intangibles, and
we're not doing the job we're supposed to do.
I want to ask you, have you ever heard the term ``truth-
teller''?
Ms. Farrisee. ``Truth-''----
Mr. Cook. ``-Teller.'' ``Truth-teller.''
In the military, at least in the Marine Corps, you know,
you had great--everybody's outstanding, you know, you write
your own evaluation report, you love yourself, blah, blah,
blah, blah. A truth-teller takes everybody that's in the same
rank, whoever is writing the evaluation, and you have to list
them: one, two, three, four, or five. Because everybody is
outstanding.
And everybody here is outstanding. But some people are
better than others. And that evaluator has to do that. And I
don't see that happening. I think you need--if you're going to
give everybody bonuses on being outstanding and you rate
everybody outstanding.
Let me ask you a question. Have you ever heard of the term
``BENESUG''?
Ms. Farrisee. No, Congressman, I haven't.
Mr. Cook. All right. ``BENESUG''--maybe, I don't know, I
guess if you're old or been around a long time. ``BENESUG''
meant ``beneficial suggestion.'' It was in at least the Marine
Corps; I thought it was in the Army. It's a beneficial
suggestion, where you might get a promotion, you might get a
bonus. And a suggestion normally from one of the troops that
knows what's going on. ``Hey, the scheduling system is all
screwed up for the following reasons, and this should be
changed,'' blah, blah, blah, blah, blah.
Instead of giving ratings to everybody outstanding, I think
you ought to look at this, where the people that deal with this
have an incentive to change it, instead of an automatic bonus,
if you will, that, quite frankly, when you do that, I think it
makes it ridiculous, when a lot of people in this room, even
the veterans themselves, think that the Veterans Administration
is not performing the services that they're supposed to.
I got a--let's see. Going into some of the other things, I
had my--you talked about core values and everything else. Now,
in the evaluation system, going back to mission performance
standards, about taking care of the veterans, is that part or
spelled out? Is that the bottom line on the evaluation? You
know, because integrity is open to interpretation, but this is
a ``yes'' or ``no.'' Is this organization, or your
organization, fully capable of taking care of veterans, and
have they done that? Is that part of the evaluation system or
the evaluative process?
Ms. Farrisee. Not stated in those words, but it is part of
the process.
Mr. Cook. It's not stated----
Ms. Farrisee. In the exact words you just said, but our
mission is to take care of veterans.
Mr. Cook. Do you think that's got to be reinforced over and
over again? Because right now, from a cultural standpoint, it
doesn't seem to be happening. You go back down there and you
start with that premise.
It's like we talked a lot about taking care of veterans,
taking care of people on the battlefield, band of brothers,
band of sisters, et cetera, that's what holds the military and
the veterans together.
Ms. Farrisee. Congressman, I believe that the majority of
our employees do advocate for our veterans.
Mr. Cook. Okay.
I yield back. Thank you.
The Chairman. Thank you very much, Colonel.
Mr. O'Rourke for 5 minutes.
Mr. O'Rourke. Thank you, Mr. Chairman.
And I'd like to start by continuing a line of questioning
begun by Mr. Roe and Mr. Takano and others and look at the
local VHA facility level, the hospital or the clinic. And so
many of us are concerned about a provider shortage and what it
will take to attract and retain the best talent possible to
serve the veterans that we represent.
And so I'd like to understand how salaries and incentives
are set for the providers, the doctors, psychiatrists, nurses,
nurse practitioners, and others who actually provide the care
to our veterans.
Ms. Farrisee. It is a complex process of calculations on
market pay so that we can look at what the national pay is and
that is used in calculating what we recommend for pay. It's in
addition to a base pay. So if we are talking about SESs and we
talk about a Title 5, there is no addition to any of their base
pay. Our Title 38, which are our physicians and dentists, will
receive in addition to that base pay this market pay, which we
must do these calculations to.
And then, also, they can receive a performance pay that has
nothing to do with an award of performance, but it is a
contract and objectives that they must meet in order to receive
that performance pay.
Mr. O'Rourke. And so, apart from the formulas and the
calculations, does the local VHA director have discretion to
deviate from those formulas to attract or retain somebody who's
needed in that community?
Ms. Farrisee. They can request recruitment incentives, and
they can request relocation incentives or retention incentives.
If it's someone that they have already on board they want to
keep, they can request those type of incentives.
Mr. O'Rourke. And is there any--I want to make sure I'm
using the right words; we don't use ``bonus''--but any
incentive offered to a VHA director for returning money back to
the VA or coming in annually under budget or not spending a
certain amount or over a certain amount in a certain category?
Ms. Farrisee. There is not--I would not say an incentive.
Mr. O'Rourke. So no part of a VHA director's performance
incentive is based on how they performed financially?
Ms. Farrisee. They would need to stay within budget,
absolutely, but----
Mr. O'Rourke. So there's a penalty for going over but no
reward for coming under.
Ms. Farrisee. Not that I'm aware of.
Mr. O'Rourke. Okay.
One of the things we're trying to figure out in El Paso
is--I've brought this up repeatedly at this committee. We have
a mental health care crisis and one that was confirmed by the
VHA audit release last week that showed we are the worst in the
country for setting an appointment for an existing veteran
patient within the VA for mental health care, fourth worse for
new patients, second worst for specialty care.
And for those of us in El Paso, it's not a surprise. We've
known it for a while. And what we've been told, as providers
and others within the VA in El Paso and the VISN 18 that we're
in start to come to our office, in many cases anonymously, is a
deep concern that the director is not providing those
discretionary incentives to attract and retain people.
So if we have these terrible performance measures in terms
of being able to connect a veteran with an appointment, if we
have a provider shortage--it was 19\1/2\ full-time employees
when I started a year and a half ago; it was 13\1/2\ as of last
month--I'm wondering how we can provide greater incentives or
leverage or discretion to the local director to bonus or incent
providers to get them or keep them in the first place.
Any thoughts on how you might be able to do that, how the
administration might be able to do that, or how we on the
committee who are interested in this might propose if we need
to change legislation to do this?
Ms. Farrisee. I would need to know what incentives they
have already attempted to do, if they have, or if there is
anything we can do to help them look at those incentives.
Mr. O'Rourke. We, again, had an acute issue--have an acute
issue when it comes to providing mental health care at the El
Paso VA. And we were told by an anonymous source within the
VISN that, until we really started to push on the director, he
had not once deviated from the formula recommendation for what
you pay someone to practice medicine at the VA in El Paso. And
it was only through our pressure that there was this one
deviation that ended up in hiring a much-needed psychiatrist to
El Paso.
It's very hard to get direct answers from the local VHA and
even through the administration, as we've seen. I look forward
to following up with you to find out what those formulas are,
how we improve them or change them, what discretion there is,
and how we hold people accountable for their performance, given
the discretion and power that they already have.
Ms. Farrisee. Yes, Congressman.
Mr. O'Rourke. Mr. Chair, I yield back.
The Chairman. Thank you very much.
Ms. Walorski, you're recognized for 5 minutes.
Ms. Walorski. Thank you, Mr. Chairman.
Thank you, ma'am, for being here.
You talked in your opening statement about stringent
controls, clear standards. In your opinion--on these
performance awards. In your opinion, what happened?
Ms. Farrisee. On the awards?
Ms. Walorski. On the performance awards. How do we go from
your opening statement of stringent controls and clear
standards and end up over here with this massive amount of
money and the revelation of Presidential awards and all these
other awards, 20 and 25 percent of income, the 80 percent
amount of people who receive them?
Was there any red flag? I know you've only been there since
September, but when you came in and just over the past several
months, as you look at this structure, were there any red flags
or alarms or inklings or gut feelings or anything that says,
``Wow, this is a lot of money,'' or anything to set off a red
flag in your mind that something is really, really wrong?
Because it seems like it got away from the stringent controls
and clear standards.
Ms. Farrisee. Congresswoman, what I said in my opening
remarks was we needed to have precise and stringent and clear
standards. I feel that is what we need to do from here forward.
I think we do need more stringent and precise written
performance plans so that when you have----
Ms. Walorski. But my question is, were you aware of that
prior to this whole blowup in the VA, that there was something
out of line with the performance bonuses and that that's why
you needed the stringent controls and the clear standards?
Ms. Farrisee. No, it was because--prior to this year, we
did not have an automated system, so you could not see these in
advance. So having the opportunity to see these in advance and
be able to look at these across the board prior to the end of
the year I thought would allow us to have a better look and
more precisely see, if we do have the correct metrics, if the
right things are being done.
Ms. Walorski. So I have a question on the Presidential
award. The Presidential award doesn't come out of VA budget,
correct? It comes out--whose budget does it come out of?
Ms. Farrisee. I'm not sure. I'll come back to you on that.
Ms. Walorski. Okay. And so, is there an allotment of money?
Do we know how many people--how many employees we have that
receive the Presidential award?
Ms. Farrisee. Oh, very--very few. But I will get you that
number.
Ms. Walorski. Okay.
Ms. Farrisee. It's a very minimum amount across the Federal
Government.
Ms. Walorski. Okay. I appreciate it.
Ms. Walorski. Could you also then get me for the State of
Indiana a list of all the SES-level employees and for the past
5 years what their performance bonuses have been, as well?
Ms. Farrisee. I will gather that information, and if it is
releasable, absolutely, we'll release it to you.
Ms. Walorski. Okay. Do you know how long it'll take to get
that, ballpark?
Ms. Farrisee. A couple weeks?
Ms. Walorski. Okay.
And so, as you look at this, as we move forward and we look
at this whole question, you know, I echo Representative Ruiz's
question about when these incentives started, when was this
thing tied to the matrix of the appointment times.
And then, also, I'm just curious, when we look at this--and
I had heard just, I think, in some of the news report that this
has only been in effect for a couple of years. But when we look
at, like, a place like Phoenix, where over the last 3 years
there has been something like $10 million in bonuses, I am
trying to get my arms around why that didn't send signals or
red flags somewhere in this system of the performance bonuses.
It's such an inordinate amount of money even for just one place
where this whole thing started with the investigation. It's
unbelievable, the amount of money that has gone into this
system.
Ms. Farrisee. I've not confirmed that amount that's been
spent in Phoenix, so I have to go back and confirm that.
Ms. Walorski. Okay.
And then, also, when you send the information on the
Presidential bonuses, what I want to know is what budget it
comes from, is there a cap on how much money comes from a
Presidential bonus, how many people have received it, for how
many years do they get it, just the details of that. I'd
appreciate it.
Ms. Farrisee. Yes, Congresswoman.
Ms. Walorski. Thank you.
I yield back my time.
The Chairman. Thank you very much.
Ms. Farrisee, I appreciate your legal answer, if it's
releasable, you will get it to Mrs. Walorski. Let's make a
deal. If you don't, we will subpoena it.
Ms. Farrisee. I understand, Chairman.
The Chairman. Okay. Thank you very much.
Ms. Titus for 5 minutes.
Ms. Titus. Thank you, Mr. Chairman.
I just want to echo some of the comments that have already
been made by my colleagues and the concern about performance
awards going to people who may or may not have earned them.
I think it was the chairman who pointed out earlier that
the Director of VISN 21, which oversees part of Nevada, turns
out had put false information on a resume, where she'd gone to
school or that she had gone to school, but she rose all the way
through the ranks to be the Director of that VISN. And that's
an enormous task, overseeing tens of thousands of veterans that
stretches all the way from Guam to Reno.
I'd wonder if you could tell us how you verify people's
resumes or, when they file applications, how do you look to be
sure that this wouldn't happen again.
And this woman also received these bonuses as she moved up
the ladder. I think she's having to give some of them back now.
But could you address that issue for us?
Ms. Farrisee. Congresswoman, when we receive resumes, we
call references, we do background checks. I have just heard of
this recently this week, so I've not had the opportunity to
look into that matter.
Ms. Titus. Well, when you look into it, would you get that
back to us?
Ms. Farrisee. Yes, Congresswoman.
Ms. Titus. Thank you.
Ms. Titus. And then just kind of along those same lines,
the Regional Office in Reno serves all the veterans of Las
Vegas, which is where most of the veterans are in the State,
but the office is in Reno.
I'm just wondering if, given the fact that that was one of
the fifth--I think it was the fifth worst but one of the worst
in the country for the backlog--backlogs there took over 500
days. The way you reduced the backlog there was brokering out
over half of the cases to other places around the country.
You've hired 25 new people, finally, after we've been harping
about this for a year and a half. Those are now in southern
Nevada, but they're overseen over the telephone by somebody
who's still in Reno. This person's had a number of problems.
Surely, this is not a record of success.
Can you tell me if there's anybody in that Reno office who
has gotten any of these performance bonuses over the last
couple of years?
Ms. Farrisee. I'll have to get back to you on that,
Congresswoman.
Ms. Titus. Okay. And, also, recruitment incentives, I'd
like to find out if they've gotten any of those incentives in
addition to just a bonus.
Ms. Farrisee. Yes, Congresswoman.
Ms. Titus. And would you get back to me on that pretty
soon?
Ms. Farrisee. Yes, I will.
Ms. Titus. Thank you very much.
I yield back.
The Chairman. Thank you, Ms. Titus.
Mr. Coffman for 5 minutes.
Mr. Coffman. Thank you, Mr. Chairman.
Well, I certainly thank you for being here before this
committee here today.
And if I understand it correctly, you kind of oversee the
personnel system within the Department of Veterans Affairs, and
as part of that is this performance pay system or this bonus
system. Am I correct in that?
Ms. Farrisee. You are correct, Congressman.
Mr. Coffman. Good.
Can you tell me how this bonus performance pay system works
for veterans when they're serving on Active Duty? Can you tell
me how that process works for them?
Ms. Farrisee. Some Active Duty soldiers receive bonuses
based on their specialty, but the majority of Active Duty
soldiers don't receive bonuses.
Mr. Coffman. But on performance, can you tell me how the
bonus structure works for performance for Active Duty military?
Ms. Farrisee. There is no performance----
Mr. Coffman. That's correct.
Now, can you tell me about your own military service?
Ms. Farrisee. I spent 34 years in the Army.
Mr. Coffman. I mean, that's amazing, that you would serve
this country in uniform and yet you would be so tolerant to how
this department treats our veterans. I think it's just
absolutely extraordinary that--how can somebody go from the
United States Army to this environment and yet not take the
values from the United States Army into serving our Nation's
veterans? I think it's just absolutely extraordinary.
And so, as you know, bonuses, if we do call them that for
enlistment and reenlistment purposes, are based strictly on
occupational specialties. When people perform in the military,
they're rewarded through promotion, they're rewarded through
various awards, but they are not financially driven, as they
are in this department, which you seem to defend, this
extraordinary system.
It just seems to be the only thing that the Department of
Veterans Affairs is effective at doing is writing bonus checks
to each other, those that are in leadership. I just think that
that is stunning. Certainly not serving our veterans, not
providing a claims process that is at all expedient, not
providing the health care that they have earned, you know,
certainly fudging wait times to get these bonuses, which you
don't seem to want to come down on these people for doing.
You ought to be outraged. You ought to be outraged at the
manner that these veterans are treated. Based on your own
background, you ought to be outraged. But you're not. It's all
status quo to you. It's all, all things are good, maybe they
could be a little bit better, but things are good.
Things aren't good. This is the most mismanaged agency in
the Federal Government. Yet it is entrusted with honoring our
commitment to those men and women who have made extraordinary
sacrifices on behalf of this country. And I've got to tell you,
I think we'll be better served as a Nation when you are working
outside of the Veterans Administration and not inside the
Veterans Administration.
Mr. Chairman, I yield back.
The Chairman. Mr. Jolly, you are recognized for 5 minutes.
Mr. Jolly. Thank you, Mr. Chairman.
As Assistant Secretary for Human Resources, I'm sure much
of the conversation today is not a case of first impression.
The conversation is about metrics and what are appropriate
metrics and how they are reviewed.
I presume there have been many conversations within the
Department already, in the wake of the crisis, about how
performance awards are distributed and based upon which
metrics. Is that an accurate assumption?
Ms. Farrisee. So much so that the Acting Secretary has
already said there will be no awards----
Mr. Jolly. Right.
Ms. Farrisee [continuing]. For VHA.
Mr. Jolly. So, within those discussions or based on your
knowledge, and even if it's not factual, even if it's hearsay,
are you aware of any metric that's been included in any
executive's bonus or performance award system reducing the
incidence of non-VA care at a facility?
Ms. Farrisee. I am not aware, to my knowledge, that they've
rewritten metrics at this point, other than taking out the 14-
day----
Mr. Jolly. No, I don't mean rewritten. I mean from existing
bonus plans and identifiable metrics from 2010 to 2013,
whatever's been reviewed, or generally, are you aware of any
metric that's been used to award a bonus based on reduce in the
incidence of referral to non-VA care?
Ms. Farrisee. I'm not. I'll have to get back to you on
that.
Mr. Jolly. Okay. Is it something that could be looked at to
see if that's----
Ms. Farrisee. It certainly can be looked at, yes,
Congressman.
Mr. Jolly. Okay. To document it for the record, if I were
to send a letter, would it be appropriate to send that to you?
Ms. Farrisee. Yes, Congressman, that's fine.
Mr. Jolly. Okay.
And I think Mr. O'Rourke asked the question about reducing
costs. That's not a metric that you're aware of either?
Ms. Farrisee. It's just that I'm not aware of it.
Mr. Jolly. Sure, sure.
Ms. Farrisee. It doesn't mean it's not there.
Mr. Jolly. I understand.
The last question is this, and maybe you can clarify it a
little bit, but you referred to almost an expansion of the
review process, an additional layer of review that's been built
in. And you've been there since September, and so maybe it's
just a question about your impression. And this really isn't a
VA question, but we often are asked--I ask the question all the
time, I know a number of constituents do--how does government
get so big?
It seems like there is an awful lot of money being spent on
a very dense, bureaucratic process to ultimately come out at
the back end and provide these performance awards. Can we do
better? Is there a better way to streamline this? Can we reduce
employees actually assigned to the bonus process?
I mean, just based on what you said, and maybe you can
clarify it, it seems like there is a lot of bureaucratic
infrastructure behind the process of determining what metrics
need to be met and evaluating those metrics, which at the end
of the day, as we've heard a thousand times, everybody's on the
right side of the curb and everybody's determined to be above
average.
Can we save money?
Ms. Farrisee. Congressman, I concur it is worth looking at
streamlining this process.
Mr. Jolly. Do you know if the Acting Secretary is looking
at streamlining the process?
Ms. Farrisee. At this time, I don't think that's where his
attention is, but we will definitely discuss it.
Mr. Jolly. Okay. Thank you very much.
Mr. Chairman, I yield back.
The Chairman. Thank you very much.
Mr. Huelskamp for 5 minutes.
Mr. Huelskamp. Thank you, Mr. Chairman.
And I appreciate you being here today, Madam Secretary.
Don't you think retaining one's salary is enough incentive
for an SES employee to do their job?
Ms. Farrisee. That would be my personal opinion, but I
cannot tell you how everybody feels. I've just joined the ranks
of the civilian employment.
Mr. Huelskamp. Yeah, and you're here to answer those
questions about that.
Now, the announcement, can you describe again--I'm unclear
on this announcement about these SES bonuses in the future, how
will they be handled. And they're suspended, deferred?
Ms. Farrisee. The Acting Secretary has suspended any awards
for 2014 for our SESs in our Veterans Health Administration.
Mr. Huelskamp. You also state that they're critical to
retention and performance. So does that mean you're going to
lose employees and performance will go down with this
announcement?
Ms. Farrisee. There is always that probability.
Mr. Huelskamp. Do you think that will happen?
Ms. Farrisee. We did that last year with our Veterans
Benefit Administration. I do not think we lost a lot of people
because of that.
Mr. Huelskamp. Okay.
You also made reference earlier to a deferred list on
bonuses. Can you describe that again? I didn't understand that
concept there.
Ms. Farrisee. Yes, Congressman.
At the end of every year, once the appraisals are complete,
we ensure that we do a check with the IG, with EEO, to ensure
that we don't have any of our SESs who are on what we consider
a bad list, they're under investigation, there's anything
possibly derogatory.
The IG provided us a list of 13 names. We then defer the
rating. So they have received an appraisal, performance, and so
they have a rating, but that rating is held until such time as
the investigation is complete. And then that will go to the
Secretary to receive the results of the investigation, to see
the original rating that the employee received, and make a
determination if that rating should be changed based on the
results of the investigation.
Mr. Huelskamp. And I think I speak for most of my
constituents, as well, that until the veterans waiting list is
shorter than the deferred bonus list, probably no reason to
move forward on the bonuses.
May 7th, 2013, a Mr. Glenn Haggstrom was before the
committee. And he was the gentleman in charge of overseeing
construction projects, which I think we determined at the
committee hearing had massive failures, massive cost overruns.
The bonus issue came up with him, I believe, as an SES
executive, and I asked Mr. Haggstrom a lot of questions. And I
asked him exactly why did he get the bonuses. It was some
pretty massive bonuses for three years. And, Madam Secretary,
he said he had no idea. He had no idea.
How is there a connection between performance when, shazam,
the bonus just shows up in a paycheck? Are there personal
visits every time between the immediate supervisor and folks
like Glenn Haggstrom, or is it simply paperwork?
Ms. Farrisee. There should be a personal visit. I cannot
confirm that there is. They should have seen the rating and
understand that the rating that they received is what is tied
to the award amount. Depending on your rating depends on what
percentage of an award you receive. And that rating is based on
their performance.
Mr. Huelskamp. Well, according to Mr. Haggstrom's testimony
on May 7th, 2013, there was no such visit, no such
communication, and no connection, obviously, between
performance and retention and his pretty significant bonuses.
Is that required in the rules and regulations, that there's
an actual meeting?
Ms. Farrisee. I do not believe a meeting is required.
Mr. Huelskamp. No required meeting. So exactly how does
this improve performance if there--and no understanding of
that?
I mean, well, I presume--and you've only been there nine
months. And most of these--I guess there was end-of-the-year
December evaluations for most of these folks, correct? And so
you've been through that with your folks immediately below you,
right?
Ms. Farrisee. No. They were just receiving their final
evaluation when I arrived.
Mr. Huelskamp. Midyear evaluations, you didn't go into
this?
Ms. Farrisee. Oh, midyear. We're going through that right
now. Yes, Congressman.
Mr. Huelskamp. Okay. So the December evaluations, I
understood from--you didn't go through the midyear--the
December evaluations? Or who did those?
Ms. Farrisee. We didn't--we do midyear about now, just in
the last 30 days. It's not in December. It's----
Mr. Huelskamp. Okay. Well, end of the year is December.
What did you do during those evaluation? Did you meet with your
folks that worked for you?
Ms. Farrisee. That's happening now.
Mr. Huelskamp. Okay. Well, midyear is usually--you went
through this in December, though, correct? You came in
September?
Ms. Farrisee. I came in September, but----
Mr. Huelskamp. No end-year, no one else?
Ms. Farrisee. Not in December. In fact, in December, we
were just completing our performance review committees and
performance review boards for the end of 2013 fiscal year.
Mr. Huelskamp. So you do those in June midyear, and then
there's--is it just once a year?
Ms. Farrisee. Just one midyear. But you can counsel and
discuss with your employees----
Mr. Huelskamp. But the end of the year?
Ms. Farrisee. October--September 30th.
Mr. Huelskamp. Oh, okay. So your predecessor went through
that.
Ms. Farrisee. Correct.
Mr. Huelskamp. And then you came in there.
So your predecessor was how long in the position?
Ms. Farrisee. It was an acting, and I think he was there
about a little over a year.
Mr. Huelskamp. Okay.
Thank you, Mr. Chairman. I yield back.
The Chairman. Thank you very much, Mr. Huelskamp.
Thank you, everybody, for being here today.
I have two quick questions, if you would.
Yesterday, after requests being made at three separate
hearings by members of this committee, multiple staff requests,
the VA did finally provide us limited information on the six
members of the SES who were supposedly fired last year.
Subsequent to this information, the staff has requested a
briefing on that. Can I have your commitment that that briefing
can take place within the week?
Ms. Farrisee. Yes, Mr. Chairman. Next week we will have
this briefing.
The Chairman. And as the senior HR official at VA, can you
tell this committee if you think that Susan Bowers should have
given--what we know now--should have given Ms. Helman a ``fully
successful'' or higher review for last year?
Ms. Farrisee. Not if she knew what we know now.
The Chairman. Okay.
Given that the review Ms. Bowers gave of Ms. Helman was not
a true indication of Ms. Helman's performance, would it have
been your recommendation that the review given of Ms. Bowers
should also be reevaluated and any bonus she has received
rescinded?
Ms. Farrisee. Ms. Bowers retired.
The Chairman. Okay. There's no way to go back after they
retire.
Ms. Farrisee. No----
The Chairman. This is another one of the disciplinary
actions that VA takes that allows people to seal their benefits
and not have anything taken back.
Ms. Farrisee. Mr. Chairman, it was her right to retire.
The Chairman. Yeah. Okay.
Any other questions?
Mr. Michaud.
Mr. Michaud. Thank you, Mr. Chairman.
I'd ask unanimous consent that Ms. Kirkpatrick's statement
be entered in the record, as well as the Senior Executives
Association letter that we received on April 19th--or June
19th.
The Chairman. Without objection.
Mr. Michaud. Thank you.
The Chairman. Thank you, everybody, for being here today.
Thank you, Ms. Farrisee, for being with us.
Ms. Farrisee. Thank you, Mr. Chairman.
The Chairman. This hearing is adjourned.
[Whereupon, at 11:10 a.m., the committee was adjourned.]
APPENDIX
Prepared Statement of Jeff Miller, Chairman
Committee will come to order.
Thank you all for being here today.
We had planned to have a business meeting this morning to subpoena
two sets of documents from VA that were long outstanding requests made
by this Committee.
Yesterday, VA delivered information regarding the removal of six
SES employees for the past two fiscal years. This request had been made
by multiple Members of this Committee including myself in multiple
hearings since February. This morning, VA delivered the second set of
documents, which I requested via letter in October of 2013. The
documents covered the performance reviews for each SES individual for
Fiscal Years 2011 and 2012.
Although VA's response to my requests has delayed, their production
of the requested material is sufficient and therefore, after
consultation with Ranking Member Michaud, we will no longer be having a
business meeting this morning.
During this morning's full committee hearing entitled, ``Review of
Awarding Bonuses to Senior Executives at the Department of Veterans
Affairs'' we will examine the outlandish bonus culture at VA and the
larger organizational crisis that seems to have developed from awarding
performance awards to Senior Executives despite the fact that their
performance fails to deliver on our promise to our veterans.
As the Committee's investigation into the Department continues, and
new allegations and cover-ups are exposed, it is important that we
examine how the Department has arrived at the point where it is today.
Sadly, it's come to a point which has eroded veterans' trust and
America's confidence in VA's execution of its mission. Part of the
mistrust centers on a belief that VA employees are motivated by
financial incentives alone, and I can see why.
It appears as if VA's performance review system is failing
veterans. Instead of using bonuses as an award for outstanding work on
behalf of our veterans, cash awards are seen as an entitlement and have
become irrelevant to quality of work product.
I know we all agree that preventable patient deaths, delays in
care, the continual backlog of disability claims, cost over-runs and
construction delays for VA facilities, and deliberate behavior to
falsify data are not behaviors that should be rewarded. Yet, despite
startling issues that continue to come to light, as well as numerous
past IG and GAO reports highlighting these same issues, a majority of
VA `s senior managers received a performance award for FY 2013.
According to VA`s own data, over $2.8 million was paid out in
performance awards to Senior Executives for FY 2013. These performance
awards went to at least 65% of the Senior Executive Workforce at the
Department. In fact not a single senior manager at VA, out of 470
individuals, received a less than fully successful performance review
for the last fiscal year. Based on this Committee's investigations,
outside independent reports, and what we have learned in the last few
months, I wholeheartedly disagree with VA's assessment of its senior
staff.
It should not be the practice of any federal agency to issue
taxpayers dollars in addition to paying six-figure salaries to failing
senior managers just because a current OPM statute for members of the
SES allows it. Bonuses are not an entitlement. They are a reward for
exceptional work. VA's current practice only breeds a sense of
entitlement and a lack of accountability, and this is why we are where
we are today.
This issue, unfortunately, is not a new one for VA. The Committee
has focused its oversight on bonuses for years, and if Members were to
go back and review a 2007 Subcommittee on Oversight and Investigations
hearing on awarding of bonuses, you would find that the issues we raise
today were also questioned seven years ago. There seems to be little to
no improvement.
In a May 2013 hearing VA construction chief, Glenn Haggstrom,
admitted that he could not explain why he collected almost $55,000 in
performance bonuses despite overseeing failed construction plans that
cost our government nearly $1.5 billion in over-runs.
In December 2012, an investigation by this committee revealed a
legionella outbreak in the Pittsburgh Healthcare System that led to at
least six patient deaths, nevertheless, the Director there, Terry
Gerigk Wolf received a perfect performance review and the Regional
Director, Michael Moreland, who oversaw VA's Pittsburgh operation at
the time, collected a $63,000 bonus. To the average American, $63,000
is considered to be a competitive annual salary--not a bonus.
The Medical Center Director in Dayton, OH received a nearly $12,000
bonus despite an open investigation into veterans' exposure to
Hepatitis B and C under his watch. The Director of the Atlanta VA
Medical Center who oversaw multiple preventable deaths received $63,000
in performance bonuses over his four years there.
The former director of the VA Regional Office in Waco, TX, received
more than $53,000 in bonuses. While under his tenure, the Waco office's
average disability claims processing time multiplied to inexcusable
levels. Unfortunately, I could go on and on, as these are not the only
instances of those charged with managing VA programs and health care
facilities falling far short of the quality that veterans and their
families deserve. In short, there are far too many examples that prove
that bonuses do not ensure good performance.
As we have previously heard from several witnesses, including those
from VA, the quest for monetary gain rather than public service has led
to data manipulation and secrets lists designed to create a false
impression of quality health care that is timely and responsive to
veterans. This is scandalous, even criminal, I would argue, and it runs
far deeper than Phoenix.
Today we will explore the circumstances surrounding the award and
eventual rescission of a performance award provided to the former
director of the VA Medical Center Director in Phoenix, AZ, Ms. Sharon
Helman. In February 2014, Ms. Helman was given an $8,500 bonus for her
performance during fiscal year 2013. Only after allegations against Ms.
Helman came to light, as a result of this Committee's work, did a
conscientious VA employee examine whether she received a bonus in
fiscal year 2013. When we questioned the award, VA determined that she
was given this bonus due to an ``administrative error.'' However past
documentation from VA has stated that all performance reviews and
awards are ultimately reviewed and signed by the Secretary.
Furthermore, Ms. Helman's direct supervisor, former VISN 18 Network
Director, Susan Bowers, stated in May that Sharon Helman received her
bonus ``for a highly successful rating, and for improving access
concerns and wait lists.'' Perhaps we should also question Ms. Bower's
qualifications. These stories do not match up, and I believe it further
brings into question VA's transparency, as well as diligence when
issuing thousands of dollars to individuals.
Although Acting Secretary Gibson has rightly put a freeze on all
bonuses for Senior Executives at VHA for the time being, it is still
this Committee's responsibility to understand the rationale for
awarding five figure bonuses to individuals who have clearly fallen
short of the Department's mission and their commitment to those who
have served. A performance award should not be received because you
were able to check off a few boxes on a form. A performance award
should not be an expectation. A bonus is not an entitlement. Those at
the Department of Veterans Affairs are there to serve veterans and
their families. Anything less than the highest possible quality should
not be rewarded. Gaming the bonus system is not the business that VA
should be in.
Today, we will hear what VA has to say about their performance
review system, why senior managers who have overseen failure have
received thousands of dollars in bonuses, and how these large
performance awards could have led to the terrible situation the
Department is now in.
With that, I now recognize Ranking Member Michaud for his opening
statement.
Thank you.
I ask that all members waive their opening remarks as per this
committee's custom.
I now invite our one witness today to the table.
This morning, we will hear from the Honorable Gina Farrisee,
Assistant Secretary for Human Resources and Administration, at the
Department of Veterans Affairs.
I ask the witness to please stand, and raise your right hand.
Do you solemnly swear, under penalty of perjury, that the testimony
you are about to provide is the truth, the whole truth, and nothing but
the truth.
Please be seated.
Your complete written statement will be made part of the hearing
record.
Secretary Farrisee you are recognized for five minutes.
Thank you, Secretary Farrisee.
I will now yield myself five minutes for questions.
Thank you once again.
If there are no further questions, you are now excused.
I now ask unanimous consent that all members have five legislative
days to revise and extend their remarks and include extraneous
material.
Without objection, so ordered.
I would like to once again thank our witness and audience members
for joining us this morning.
This hearing is now adjourned.
Prepared Statement of Michael Michaud, Ranking Member
Michael LeBouef, in his book ``The Greatest Management Principle
Ever'', said ``The things that get measured are the things that get
done.''
We have seen this statement born out recently within VA in a very
negative way. As witnesses have stated in recent hearings, VA's focus
on unrealistic wait time measures resulted in employees manipulating
the system to make it seem like they were meeting the measured
standards.
LeBouef went on to say, in a later book, ``The things that get
measured and rewarded are the things that get done well.''
Today, we are going to look at this second piece--how VA Senior
Executives are rewarded, and how that system does, or does not,
incentivize things to be done well.
Before we get into that discussion, let me recognize that there are
a lot of VA employees who does things well. As we shine the light of
oversight on those who do not, let me pause for a moment and shine a
brighter, more positive light on the hard-working employees in VA who
do things right, and who do things well. To them, I say ``thank you for
your service, and your example.''
I have sat here, hearing after hearing, as we have learned, over
and over again, that VA Senior Executives received significant bonuses
after the people and organizations under their responsibility have
failed to deliver on reasonable expectations of performance, and in
some cases, have harmed the very people they are supposed to be
serving. How does this happen?
In its testimony, VA will lay out a very extensive and diligent
process with all the seemingly right pieces, parts, checks and
balances. So, what repeatedly goes wrong? Where does the system break
down?
I have asked numerous people--in and out of the Federal Senior
Executive System--this question, and the most consistent answer is that
the measures are wrong. That the goals and objectives defined for some
VA Senior Executives are not adequate or appropriate to elicit the
actions and behaviors desired or required. That the senior most leaders
in VA are held accountable for managing the process that benefits VA,
not delivering an outcome beneficial to veterans.
This has got to change. Making the current form electronic and
fillable isn't the answer. Transferring performance management data
from a spreadsheet to a database isn't the answer. Defining goals and
objectives based on what needs to be done for veterans is the answer.
Rewarding Senior Executives only when they consistently do those things
well is the answer.
Ms. Farrisee, I look forward to your testimony. I hope we can set
the example here today and talk less about the process of how VA Senior
Executive performance management is done and more about how the
outcomes for veterans can change if it is done well.
Prepared Statement of Hon. Ann Kirkpatrick
Bonuses should not be automatic. They should be for VA employees
that go above and beyond just doing a job. VA employees that do not
work to serve veterans should not only be denied bonuses, they should
lose their jobs. Since this system of awarding bonuses to employees is
easily subject to manipulation, the VA needs to look at other ways to
recruit and retain talent, and ensure that employees that really go
above and beyond are rewarded for exceptional performance.
For the vast number of VA employees who do come to work every day
to serve veterans, we need to look at other ways to recruit and retain
them. The VA has a shortage of doctors, nurses, and medical staff and
we need to look at other incentives beyond bonuses that could be
offered to ensure that our VA medical facilities remain fully staffed
and able to provide high-quality and timely care service.
Prepared Statement of Hon. Timothy Walz
It is clear that the Department of Veterans Affairs' (VA) current
performance review and performance pay systems are part of the problem.
We owe it to the thousands of professionals at the VA who are doing
things right, and, most importantly, we owe it to the veterans in their
care to get this problem fixed.
I echo the GAO recommendation that the performance pay program must
have a stated overarching purpose. That purpose must be improving
health outcomes for veterans. This is the only thing that matters, and
this is the only reason the VHA should exist.
With the purpose of the program established, VA will need to
standardize the performance pay and award policies across the country.
Again, it must focus on improving health outcomes for veterans, and
this should be true throughout the VA. It does not make sense to have
over 150 individual performance pay policies as is currently the case.
This system is ripe for the type of gaming and abuse that got us into
this mess. It is also impossible for the Secretary to provide oversight
when there is not a consistent policy. In fact, as we look to the
future of VA reform, national standardization of the VA should be a
pillar of any organizational reform we seek to undertake.
Development of this program must be done in a clear and transparent
manner, leveraging expertise and opinions from veterans, doctors,
staff, and specialists. The starting point for all that we do has to be
the veteran; if we are going to improve their health outcomes, we have
to get them directly involved in the process. I encourage the VA to
leverage the Veteran Service Organizations (VSO) to accomplish this.
Performance management and awards have been a part of medicine for a
long time, and there are best practices in both the private and public
sector which we can leverage. In the end, I call on the VA to solicit
input from everyone, and, as they rebuild their performance management
program, the VA must do so in a transparent, open manner. I also expect
the VA to keep this body informed of all developments and to work with
us to ensure whatever program is developed is efficient, effective and
provides the best outcomes for veterans' health.
[GRAPHIC] [TIFF OMITTED]
Questions For The Record
Letter and Questions From: Committee Minority Members
June 24, 2014
The Honorable Sloan Gibson
Acting Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420
Dear Mr. Secretary:
In reference to our Full Committee hearing entitled, ``Review of
Awarding Bonuses to Senior Executives at the [VA]'' that took place on
June 20, 2014, I would appreciate it if you could answer the enclosed
hearing questions by the close of business on July 31, 2014.
Please note that our Members understand some information may
ultimately be provided by the current IG investigation. For questions
which will be answered by the investigation, please include a statement
to that effect and a brief explanation of your reasoning. Members are
happy to receive complete answers to individual questions as they are
available. For responses that may be delayed, please provide an interim
response or propose an appropriate interim briefing or conference call.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for materials for all Full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively and single-spaced. In
addition, please restate the question in its entirety before the
answer.
Due to the delay in receiving mail, please provide your responses
electronically to Saki Ververis at [email protected]. If you
have any questions, please call 202-225-9756.
Sincerely
Michael Michaud,
Ranking Member
Questions From Committee Minority Members to Gina S. Farrisee
Rep. Mark Takano
1. Please provide an organization chart which identifies the SES or
Title 38 SES equivalent positions within the local VISN and medical
center structure. I want a better understanding of the organizational
structure and who would have an incentive to game the system. From
initial input of a health care appointment, to the person who can
change that appointment and who can give direction to change an
appointment, I want a clear picture of how many people are involved
with the appointment making process.
2. What safeguards, if any, are within the scheduling software to
ensure a data trail is available to see when scheduling data is
changed? Is there any way to see whether people are manipulating an
initial appointment to meet wait time expectations?
3. Finally, I would like to see a cost comparison between VA
provided health care and private health care for an average 60-year old
male veteran patient with diabetes and heart disease. The comparison
should include administrative, medical, and prescription costs. Please
also provide a breakdown of the variables used to calculate these
costs.
Rep. Julia Brownley
1. Please provide a detailed breakdown of VISN executive pay broken
down by SES, title 38 SES equivalents, and non-managing title 38s.
Ideally, the breakdown will include the range of pay available in the
form of base pay, relocation and retention pay, market pay, bonuses,
awards, or other pay incentives available for these individuals. Please
also include a list of measures used to determine how eligible
employees qualify for such payments. For measures that vary between
networks, such as performance pay, please provide the measures used in
VISN 22 (greater Los Angeles) and two other random networks for
comparison. Any other bonus payments from outside the VA, such as the
Presidential Rank Award, should also be provided.
Rep. Raul Ruiz
1. What year did performance pay begin being tied to wait times?
Please describe the relevant performance measures tied to wait times. I
am interested on knowing how wait times are factored into performance
measures.
2. Do any performance measures use patient satisfaction feedback?
Are there any plans to include a patient satisfaction measure in
calculating performance pay across all VISNs?
Rep. Beto O'Rourke
1. What recruitment incentives are available at the local level and
how can they be applied to needs in areas like El Paso? El Paso
veterans have desperate mental health care needs and those needs are
going unheeded despite repeated attempts to communicate with the VISN
18 director.
2. Please provide the total budget available for employing
providers for VISN 18 and the total expected costs for FY2014. Please
also provide the budget allotted for El Paso providers, the amount of
that budget currently in use, and a description of how that
determination was made.
3. I am especially interested on performance measures which are
based on adhering to budget expectations. Please provide a detailed
description of any performance measures which use meeting budgetary
expectations as a factor and what those budget expectations are. Please
also provide the VISN operating budgetary policy and a brief
description of what happens when a need to hire more providers is
identified.
Rep. Dina Titus
1. How did the VA miss the false credentials used by the VISN 21
Director Sheila M. Cullen to attain her position? What performance
awards did she receive during her tenure as director, and how long will
she be able to stay in her position. Will she remain an employee with
the VA? If so what is the reasoning?
Rep. Ann Kirkpatrick
1. VA officials were on notice that ``gaming strategies'' were
being used to misreport patient wait times at VA medical facilities
based on the April 26, 2010 ``Inappropriate Scheduling Practices'' memo
that went to all network directors. Which reviewing officials signed
off on SES performance appraisals for those SESs responsible for VA
medical facilities where manipulation of patient wait time data and
unauthorized scheduling practices were found to have taken place?
2. Did any reviewing officials sign off on performance appraisals
recommending bonuses for SES employees whose facilities were under
investigation by the IG?
3. Who were the officials on the Performance Review Committees that
signed off on performance appraisals and recommended bonuses for these
SESs to the Performance Review Board for approval? Who were the
officials on the Performance Review Board that recommended bonuses for
these SESs to the VA Secretary?
4. Will the VA hold network and medical center leaders that
received bonuses accountable in VISNs and medical facilities where the
audit found that appointment wait time data was being manipulated and
appointment scheduling ``gaming strategies'' were being used?
5. Why was performance pay awarded to providers that had action
taken against them related to clinical performance? These were
providers that failed to competently read mammograms and other complex
medical images, providers that were practicing without a license and
providers leaving residents unsupervised during surgery. Why did the VA
believe these providers deserved performance pay for non-performance?
Is this because performance pay was automatically awarded to every
employee?
6. How can the VA hold employees accountable if bonuses and
performance pay are awarded automatically?
7. There is a shortage of doctors, nurses and medical staff in the
VA. What other incentives could the VA use to recruit and retain health
care providers beyond bonuses and performance pay? We know that the VA
loses health care providers to the DoD. Why hasn't the VA considered
increasing the base salary of VA health care employees so that they
receive comparable pay? Has the VA considered offering other incentives
such as student loan repayment, or increased pay for VA providers
willing to work in rural and underserved areas? What additional
professional opportunities could the VA offer its health care providers
to recruit and retain those who are dedicated to serving veterans?
8. Why is the purpose of the Veterans Health Administration's (VHA)
performance pay policy (to improve health outcomes and quality) not
articulated in the VHA's performance pay policy?
9. Since network and medical center leadership were granted the
discretion to set goals that providers must achieve to receive
performance pay, why did the VHA fail to review these goals to ensure
that performance pay was linked to provider performance goals?
10. How will the VA ensure that only employees who perform
exceptional work are rewarded in the future?
[GRAPHIC] [TIFF OMITTED]
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