Review of Alleged Improper Pay at VHA's Hudson Valley Health Care System

We evaluated the merits of an allegation that wage rates paid to Federal Wage Service (FWS) employees working at the Castle Point campus within the Hudson Valley Health Care System (HVHCS) were inappropriate. We substantiated the allegation that wage rates paid to FWS employees in the Engineering and Environmental Management Services at the Castle Point campus were incorrect. We found all 256 FWS employees in the Engineering and Environmental Management Services were assigned Montrose as their official duty station, regardless of whether they regularly performed their duties at Montrose or Castle Point. We determined that 104 of the 256 HVHCS FWS employees in the Engineering and Environmental Management Services performed their regular duties at the Castle Point campus during calendar year (CY) 2014. These 104 employees incorrectly received the higher Montrose wage rate instead of the correct wage rate for Castle Point. We found management officials in the Engineering and Environmental Management Services did not follow VA policy on determining employees’ official duty stations. In addition, we found Human Resources oversight on ensuring the accuracy of official duty stations for employees was insufficient. We estimated HVHCS’s use of inappropriate wage rates for the Castle Point FWS employees in the Engineering and Environmental Management Services resulted in overpayments of about $592,550 in CY 2014. If HVHCS does not correct the official duty station for the 104 employees, this could result in additional overpayments of about $3 million over the next 5 years. We recommended the Interim Director of the Veterans Integrated Service Network 3 ensure HVHCS management takes immediate steps to correct inappropriate wage rates paid to FWS employees and improve controls over the designation of official duty stations. We also recommended the Interim Director take steps to determine whether administrative actions are appropriate to hold HVHCS officials accountable.