Improper Retention Incentive Payments, $179,000, Providence-VA, VAOIG Report 10-01937-68, 1/20/2011

We concluded that retention incentive payments were not adequately justified and supported in accordance with VA policy. As a result, in 17 (85 percent) of 20 cases reviewed, we questioned the appropriateness of the retention incentive payments. These 17 employees were receiving incentive payments totaling $6,833 each pay period, or about $179,000 annually. The absence of adequate and appropriate documentation for these payments indicates lapses in the management of retention incentives. Approving officials did not exercise due professional care when they approved these payments. Further, some retention incentives were misused to supplement employees’ pay in order to compensate for perceived inconsistencies in official position classification decisions.

Full Report at: Report Summary

Veterans Health Administration eview of Retention Incentive Payments at VA Medical Center Povidence, Rhode Island

Report Number 10-01937-68, 1/20/2011 | Full Report (PDF) at linked site above

The purpose of the review was to determine whether VA Medical Center (VAMC) Providence paid its employees retention incentive payments in accordance with VA policy. OIG conducted this review in response to a Hotline allegation. We concluded that retention incentive payments were not adequately justified and supported in accordance with VA policy. As a result, in 17 (85 percent) of 20 cases reviewed, we questioned the appropriateness of the retention incentive payments. These 17 employees were receiving incentive payments totaling $6,833 each pay period, or about $179,000 annually. The absence of adequate and appropriate documentation for these payments indicates lapses in the management of retention incentives. Approving officials did not exercise due professional care when they approved these payments. Further, some retention incentives were misused to supplement employees’ pay in order to compensate for perceived inconsistencies in official position classification decisions. We recommended the Under Secretary for Health ensure Veterans Health Administration (VHA) or VA personnel independent of Veterans Integrated Service Network 1 (VISN 1) conduct a 100 percent review of current retention incentives paid to VAMC Providence employees to assess the appropriateness of retention incentive payments and take corrective action as needed. We also recommended the VISN 1 Director implement controls to strengthen reviews of retention incentive requests and annual reviews of retention incentives by the VAMC Providence Chief, Human Resources Management (HRM), and approving officials. Further, he should implement controls to conduct annual reviews of retention incentives in accordance with policy and to maintain documentation supporting retention incentives for at least 3 years as required by VA policy. We also recommended the Under Secretary conduct an independent review to determine whether to pay a retention incentive to the VAMC Providence Director and other directors within the VISN.

The Under Secretary for Health agreed with our findings and recommendations and plans to complete all corrective actions by June 2011.