[House Report 114-32]
[From the U.S. Government Publishing Office]
114th Congress } { Rept. 114-32
HOUSE OF REPRESENTATIVES
1st Session } { Part 1
======================================================================
AUTHORIZING THE SECRETARY OF VETERANS AFFAIRS TO RECOUP BONUSES AND
AWARDS PAID TO EMPLOYEES OF THE DEPARTMENT OF VETERANS AFFAIRS
_______
March 2, 2015.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Miller of Florida, from the Committee on Veterans' Affairs,
submitted the following
R E P O R T
[To accompany H.R. 280]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs, to whom was referred
the bill (H.R. 280) to authorize the Secretary of Veterans
Affairs to recoup bonuses and awards paid to employees of the
Department of Veterans Affairs, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.
CONTENTS
Page
Amendment........................................................ 2
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Hearings......................................................... 4
Subcommittee Consideration....................................... 4
Committee Consideration.......................................... 4
Committee Votes.................................................. 5
Committee Correspondence......................................... 5
Committee Oversight Findings..................................... 6
Statement of General Performance Goals and Objectives............ 6
New Budget Authority, Entitlement Authority, and Tax Expenditures 6
Earmarks and Tax and Tariff Benefits............................. 6
Committee Cost Estimate.......................................... 6
Congressional Budget Office Estimate............................. 6
Federal Mandates Statement....................................... 8
Advisory Committee Statement..................................... 8
Constitutional Authority Statement............................... 8
Applicability to Legislative Branch.............................. 8
Statement on Duplication of Federal Programs..................... 8
Disclosure of Directed Rulemaking................................ 9
Section-by-Section Analysis of the Legislation................... 9
Changes in Existing Law Made by the Bill as Reported............. 9
Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. AUTHORITY TO RECOUP BONUSES OR AWARDS PAID TO EMPLOYEES OF
DEPARTMENT OF VETERANS AFFAIRS.
(a) In General.--Chapter 7 of title 38, United States Code, is
amended by adding at the end the following new section:
``Sec. 715. Recoupment of bonuses or awards paid to employees of
Department
``(a) Recoupment.--Notwithstanding any other provision of law, the
Secretary may issue an order directing an employee of the Department to
repay the amount, or a portion of the amount, of any award or bonus
paid to the employee under title 5, including under chapters 45 or 53
of such title, or this title if--
``(1) the Secretary determines such repayment appropriate
pursuant to regulations prescribed under subsection (c); and
``(2) before such repayment, the employee is afforded notice
and an opportunity for a hearing conducted by another
department or agency of the Federal Government.
``(b) Review.--A decision regarding a repayment by an employee
pursuant to subsection (a)(2) is final and may not be reviewed by any
department or agency or any court.
``(c) Regulations.--The Secretary shall prescribe regulations to
carry out this section.''.
(b) Clerical Amendment.--The table of sections at the beginning of
such chapter is further amended by adding at the end the following new
item:
``715. Recoupment of bonuses or awards paid to employees of
Department.''.
(c) Effective Date.--Section 715 of title 38, United States Code, as
added by subsection (a), shall apply with respect to an award or bonus
paid by the Secretary of Veterans Affairs to an employee of the
Department of Veterans Affairs before, on, or after the date of the
enactment of this Act.
(d) Construction.--Nothing in this Act or the amendments made by this
Act may be construed to modify the certification issued by the Office
of Personnel Management and the Office of Management and Budget
regarding the performance appraisal system of the Senior Executive
Service of the Department of Veterans Affairs.
Purpose and Summary
H.R. 280, as amended, to authorize the Secretary of
Veterans Affairs to recoup bonuses and awards paid to employees
of the Department of Veterans Affairs, was ordered to be
favorably reported to the full House on February 12, 2015, by
voice vote. H.R. 280 was introduced on January 12, 2015, by
Chairman Jeff Miller of Florida. H.R. 280, as amended, would
give the Secretary of the Department of Veterans Affairs (the
Secretary) the authority to rescind all or part of the amount
of any award or bonus paid to an employee of the Department of
Veterans Affairs (VA) under chapters 45 or 53 of title 5,
United States Code (U.S.C.), or title 38 U.S.C. This new
authority would apply to any award or bonus paid by VA before,
on, or after the date of enactment of this act. H.R. 280, as
amended, would require that notice be given to the employee of
the repayment, and that the employee be afforded the
opportunity to a hearing by a third-party department or agency
of the Federal Government prior to the recoupment. Lastly, H.R.
280, as amended, would require the Secretary to prescribe the
necessary regulations to carry out this new authority.
Background and Need for Legislation
Over the past year, VA has been criticized for a wide range
of issues that have affected the care and earned benefits of
veterans. Over several Congresses, investigations by the
Committee on Veterans' Affairs (the Committee), and the VA's
Office of the Inspector General (VAOIG), have uncovered
evidence of manipulation of VA's medical appointment system.
This manipulation hid the fact that veterans waited months to
receive medical appointments at many VA medical centers, while
VA records improperly reflected wait times of only several
days. This delay in receiving needed health care at the VA may
have had serious consequences to the health and well-being of
veterans, and may have led to preventable deaths.
Investigations also uncovered evidence that some VA employees
and VA senior managers may have allegedly falsified data to
improve their performance metrics to receive bonuses.
Regardless of whether falsified data used to justify the
receipt of bonus money was deliberately manipulated or not,
bonus awards should be provided on the basis of actual,
verified performance, and not on an inaccurate portrayal of
one's work.
According to VA, in fiscal year 2013, the Secretary issued
a total of $2,827,377 in performance awards to 304 Senior
Executive Service (SES) employees and title 38 equivalent
employees. Many of these 304 individuals were the senior
managers ignoring, or worse, fostering, mismanagement and
negligence at VA medical facilities and in Regional Offices.
Following investigations by the Committee, the VAOIG, and
outside media outlets that brought these VA scandals to light
during the 113th Congress, Committee Members questioned the
large sums of bonuses that were issued to many VA employees,
especially many senior VA leaders who oversaw facilities where
``secret'' appointment wait-lists were used. Committee Members
questioned VA at several Committee hearings from April 2014 to
August 2014 on whether the Secretary would have the legal
authority to recoup any performance awards or bonuses issued to
VA employees if the Secretary deemed their performance,
particularly performance based on manipulated or inaccurate
data, merited the recoupment. On June 17, 2014, Committee staff
was told at a briefing by Mr. Samuel Retherford, VA's Principal
Deputy Assistant Secretary for Human Resources and
Administration, that the Secretary had the authority to rescind
any bonus or performance award from an SES employee within 12
months of it being awarded to the employee. Later, at a June
20, 2014, Full Committee oversight hearing entitled, ``A Review
of Awarding Bonuses to Senior Executives at the Department of
Veterans Affairs,'' the Honorable Gina Farrisee, VA's Assistant
Secretary for Human Resources and Administration, informed
Members of the Committee that the Secretary did not have the
authority to rescind any bonus or performance award from any
employee after the award had been issued.
On July 15, 2014, following the conflicting statements made
by VA employees as to whether the Secretary had the authority
to rescind a performance award, Chairman Miller sent then-
Acting Secretary Sloan Gibson a letter explicitly inquiring
whether VA has the authority to rescind a bonus already issued
to an employee. Deputy Secretary Sloan Gibson replied via
letter on August 19, 2014 that ``the Department does not have
the authority to rescind performance awards issued in
accordance with policies and paid to employees for performance
ratings that are final.''
On July 17, 2014, following Deputy Secretary Gibson's
response, Chairman Jeff Miller introduced H.R. 5094 in the
113th Congress to give the Secretary this authority. H.R. 5094,
as amended, was ordered to be favorably reported to the full
House on September 10, 2014, by voice vote but was not
considered by the full House. Chairman Miller reintroduced the
measure as H.R. 280 in the 114th Congress. The Committee
believes that if a VA employee acts unbecoming of VA and its
mission to veterans, as determined by the Secretary, then the
Secretary should have the authority to rescind any bonus or
performance award from any prior, current, or future employee,
which is the intent of H.R. 280, as amended.
Hearings
On February 27, 2015, the full House Committee on Veterans'
Affairs conducted a legislative hearing on various bills
introduced during the first month of the 114th Congress,
including H.R. 280. The Department of Veterans Affairs failed
to take a position on H.R. 280 during this legislative hearing.
The following witnesses testified:
The Honorable Alan Grayson, U.S. House of Representatives,
9th District, Florida; Mr. David R. McLenachen, Acting Deputy
Under Secretary for Disability Assistance, Veterans Benefits
Administration, U.S. Department of Veterans Affairs,
accompanied by Dr. Rajiv Jain, Assistant Deputy Under Secretary
for Health for Patient Services, Veterans Health
Administration, U.S. Department of Veterans Affairs, Ms. Susan
Sullivan, Deputy Assistant Secretary for Policy, Office of
Policy and Planning, U.S. Department of Veterans Affairs, and
Ms. Kim McLeod, Counsel, Office of General Counsel, U.S.
Department of Veterans Affairs; Mr. Joseph A. Violante,
National Legislative Director, Disabled American Veterans; Mr.
Aleks Morosky, Deputy Director, National Legislative Service,
Veterans of Foreign Wars of the United States; and Mr. Blake
Ortner, Deputy Government Relations Director, Paralyzed
Veterans of America.
Statements for the record were submitted by the following:
The House Policy Council, Financial Services Roundtable.
Subcommittee Consideration
There was no subcommittee consideration of H.R. 280.
Committee Consideration
On February 12, 2015, the full Committee met in an open
markup session, and a quorum being present, ordered H.R. 280,
as amended, to be reported favorably to the House of
Representatives, by voice vote. During consideration of the
bill, the following amendment was considered and agreed to by
voice vote:
An amendment in the nature of a substitute by Chairman Jeff
Miller of Florida which added to the original language of H.R.
280 as introduced, provisions which would require the Secretary
to prescribe regulations for carrying out the recoupment of the
award, and would require that any hearing or appeal of the
Secretary's decision to recoup the bonus be held before a
third-party department or agency of the Federal Government.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report the legislation and amendments thereto.
There were no recorded votes taken on amendments or in
connection with ordering H.R. 280, as amended, reported to the
House. A motion by Ranking Member Corrine Brown of Florida to
report H.R. 280, as amended, favorably to the House of
Representatives was agreed to by voice vote.
Committee Correspondence
House of Representatives,
Committee on Veterans' Affairs,
Washington, DC, February 27, 2015.
Hon. Jason Chaffetz, Chairman,
House Committee on Oversight and Government Reform,
Rayburn House Office Building, Washington, DC.
Dear Chairman Chaffetz: In reference to your letter on
February 26, 2015, I write to confirm our mutual understanding
regarding H.R. 280, as amended, ``To authorize the Secretary of
Veterans Affairs to recoup bonuses and awards paid to employees
of the Department of Veterans Affairs.''
I appreciate the House Committee on Oversight and
Government Reform's waiver of consideration of provisions under
its jurisdiction and its subject matter as specified in your
letter. I acknowledge that the waiver was granted only to
expedite floor consideration of H.R. 280, as amended, and does
not in any way waive or diminish the House Committee on
Oversight and Government Reform's jurisdictional interests over
this legislation or similar legislation. I will support a
request from the House Committee on Oversight and Government
Reform for appointment to any House-Senate conference on H.R.
280, as amended.
Again, thank you for your assistance with these matters.
With warm personal regards, I am
Sincerely,
Jeff Miller,
Chairman.
----------
House of Representatives,
Committee on Oversight and Government Reform,
Washington, DC, February 26, 2015.
Hon. Jeff Miller,
Chairman, Committee on Veterans' Affairs,
Washington, DC.
Dear Mr. Chairman: I write concerning H.R. 280, to
authorize the Secretary of Veterans Affairs to recoup bonuses
and awards paid to employees of the Department of Veterans
Affairs. As you know, the Committee on Veterans' Affairs
received an original referral and the Committee on Oversight
and Government Reform a secondary referral when the bill was
introduced on January 12, 2015. I recognize and appreciate your
desire to bring this legislation before the House of
Representatives in an expeditious manner, and accordingly, the
Committee on Oversight and Government Reform will forego action
on the bill.
The Committee takes this action with our mutual
understanding that by foregoing consideration of H.R. 280 at
this time, we do not waive any jurisdiction over the subject
matter contained in this or similar legislation. Further, I
request your support for the appointment of conferees from the
Committee on Oversight and Government Reform during any House-
Senate conference convened on this or related legislation.
Finally, I would ask that a copy of our exchange of letters
on this matter be included in the bill report filed by the
Committee on Veterans' Affairs, as well as in the Congressional
Record during floor consideration, to memorialize our
understanding.
Sincerely,
Jason Chaffetz,
Chairman.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are reflected in the descriptive portions
of this report.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Earmarks and Tax and Tariff Benefits
H.R. 280, as amended, does not contain any Congressional
earmarks, limited tax benefits, or limited tariff benefits as
defined in clause 9 of rule XXI of the Rules of the House of
Representatives.
Committee Cost Estimate
The Committee adopts as its own the cost estimate on H.R.
280, as amended, prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Congressional Budget Office Cost Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
for H.R. 280, as amended, provided by the Congressional Budget
Office pursuant to section 402 of the Congressional Budget Act
of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 2, 2015.
Hon. Jeff Miller,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 280, a bill to
authorize the Secretary of Veterans Affairs to recoup bonuses
and awards paid to employees of the Department of Veterans
Affairs.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Dwayne M.
Wright.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
H.R. 280--A bill to authorize the Secretary of Veterans Affairs to
recoup bonuses and awards paid to employees of the Department
of Veterans Affairs
H.R. 280 would give the Secretary of Veterans Affairs the
authority to recoup all or part of awards and bonuses that were
paid to employees of the agency. Affected employees would have
to be provided with a notice of recoupment and an opportunity
for a hearing conducted by another agency of the federal
government. The new authority would apply to payments made by
the Department of Veterans Affairs (VA) before the date of
enactment of H.R. 280, as well as those made after that date.
Based on discussions with the agency, CBO expects that this
provision would be used infrequently, primarily to recoup
payments made to senior VA employees who were determined to
have committed a serious violation of the agency's standards of
conduct. Of the roughly $400 million that VA pays out each year
for awards and bonuses, about $4 million goes to senior staff.
Most federal statutes of limitation are no more than six
years. On that basis, CBO expects that VA would not attempt to
recoup payments made more than six years prior to the date of
enactment. In addition, the authority would only affect current
employees of VA; employees who resigned or retired would be
exempt from recoupment.
In recovering overpayments made to employees, federal
agencies have several options: they can require lump-sum or
installment payments, or they can use salary offsets--regular
deductions from bi-weekly payroll payments. Based on general
practices at federal agencies, CBO assumes that in most cases
VA would offset future salary payments. Such offsets would
reduce discretionary costs. In those cases where VA would
require a lump-sum or installment repayment, the funds would
generally be deposited in the Treasury and would be considered
a reduction in direct spending. Because CBO believes that this
authority would be used infrequently, and because employees
could avoid recoupment by leaving the agency, we estimate that
implementing H.R. 280 would decrease personnel costs by less
than $500,000 over the 2016-2020 period, assuming appropriation
actions consistent with the bill. In addition, enacting the
bill would reduce direct spending by an insignificant amount;
therefore, pay-as-you-go procedures apply.
Enacting H.R. 280 would not affect revenues.
H.R. 280 would impose a private-sector mandate as defined
in the Unfunded Mandates Reform Act (UMRA) by permitting the
Secretary of Veterans Affairs to recoup awards and bonuses
given to VA employees. The Secretary could direct any employee
to repay all or a portion of the amounts paid. Requiring
employees to repay their awards and bonuses retroactively would
impose a private-sector mandate on those employees. CBO expects
that, in total, the amount of bonuses and awards recouped would
not be substantial. Therefore, CBO estimates that the cost of
the mandate to VA employees would fall well below the annual
threshold for private-sector mandates established in UMRA ($154
million in 2015, adjusted annually for inflation).
H.R. 280 contains no intergovernmental mandates as defined
in UMRA.
The CBO staff contacts for this estimate are Dwayne M.
Wright (for federal costs) and Paige Piper/Bach (for private-
sector effects). The estimate was approved by Theresa Gullo,
Deputy Assistant Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates regarding H.R. 280, as amended, prepared by the
Director of the Congressional Budget Office pursuant to section
423 of the Unfunded Mandates Reform Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act would be created by H.R.
280, as amended.
Statement of Constitutional Authority
Pursuant to Article I, section 8 of the United States
Constitution, the reported bill is authorized by Congress'
power to ``provide for the common Defense and general Welfare
of the United States.''
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Statement on Duplication of Federal Programs
Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015),
the Committee finds that no provision of H.R. 280, as amended,
establishes or reauthorizes a program of the Federal Government
known to be duplicative of another Federal program, a program
that was included in any report from the Government
Accountability Office to Congress pursuant to section 21 of
Public Law 111-139, or a program related to a program
identified in the most recent Catalog of Federal Domestic
Assistance.
Disclosure of Directed Rulemaking
Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015),
the Committee estimates that H.R. 280, as amended, contains one
directed rule making at section 1 which would require the
Secretary to prescribe regulations to carry out this section.
Section-by-Section Analysis of the Legislation
Section 1--Authority to Recoup Bonuses or Awards Paid to Employees of
Department of Veterans Affairs
Section 1(a) of the bill would amend Chapter 7 of title 38
U.S.C, by adding at the end of the chapter, a new section,
Section 715. This section would give the Secretary of the
Department of Veterans Affairs the authority to direct any VA
employee to repay, in part or in full, an award or bonus paid
to the employee under chapters 45 or 53 of title 5 if the
Secretary determines the repayment appropriate and would direct
the Secretary to prescribe regulations to carry out this
section. Section 1(a) would also require that the employee be
given notice of the repayment requirement and be afforded the
opportunity to a hearing before a third party department or
agency of the Federal Government. The decision made by this
third party entity would be final and may not be reviewed any
further by any department, agency, or court.
Section 1(b) adds a clerical amendment at the beginning of
Chapter 7 of title 38 U.S.C. to reflect the new section, to
read as--``715. Recoupment of bonuses or awards paid to
employees of Department.
Section 1(c) applies this provision to any award or bonus
paid by the Secretary of Veterans Affairs to an employee of the
Department of Veterans Affairs before, on, or after the date of
the enactment of this Act.
Section 1(d) ensures that nothing within section 1 of H.R.
280, as amended, may be construed to modify the certification
issued by the Office of Personnel Management and the Office of
Management and Budget regarding the performance appraisal
system of the Senior Executive Service of the Department of
Veterans Affairs.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
TITLE 38, UNITED STATES CODE
* * * * * * *
PART I--GENERAL PROVISIONS
* * * * * * *
CHAPTER 7--EMPLOYEES
Sec.
701. Placement of employees in military installations.
* * * * * * *
715. Recoupment of bonuses or awards paid to employees of Department.
* * * * * * *
Sec. 715. Recoupment of bonuses or awards paid to employees of
Department
(a) Recoupment.--Notwithstanding any other provision of law,
the Secretary may issue an order directing an employee of the
Department to repay the amount, or a portion of the amount, of
any award or bonus paid to the employee under title 5,
including under chapters 45 or 53 of such title, or this title
if--
(1) the Secretary determines such repayment
appropriate pursuant to regulations prescribed under
subsection (c); and
(2) before such repayment, the employee is afforded
notice and an opportunity for a hearing conducted by
another department or agency of the Federal Government.
(b) Review.--A decision regarding a repayment by an employee
pursuant to subsection (a)(2) is final and may not be reviewed
by any department or agency or any court.
(c) Regulations.--The Secretary shall prescribe regulations
to carry out this section.
* * * * * * *