Audit of VA’s Recruitment, Relocation, and Retention Incentives

OIG assessed how VA used recruitment, relocation, and retention (3R) incentives to develop and maintain its workforce in FY 2014. OIG conducted this audit following a complaint alleging VA awarded its Senior Executive Service (SES) employees recruitment and relocation incentives without adequate justification, and retention incentives without determining the employee’s intent to leave VA. OIG substantiated part of the allegation, finding VA's Office of Corporate Senior Executive Management (CSEMO) did not ensure SES recruitment and relocation incentives were properly authorized before making award recommendations to VA. OIG did not substantiate that VA awarded SES employees retention incentives without determining the employee’s intent to leave. VHA didn’t properly authorize 33 percent of the recruitment and 64 percent of the relocation incentives awarded to non SES employees. Most retention incentives awarded to SES employees and non-SES VHA employees, and half of retention incentives awarded to non-SES VACO employees, lacked adequate workforce and succession plans. VA needs to improve efforts to recoup payments when employees don’t meet the recruitment or relocation service agreement terms. VA’s inadequate controls over its 3R incentives represent an estimated $158.7 million in unsupported spending and about $3.9 million in repayment liabilities projected for FYs 2015 through 2019. OIG recommended the Assistant Secretary for Human Resources and Administration review and update procedures for Administrations to ensure recruitment and relocation incentives are justified and properly authorized, and develop internal controls for Administrations to monitor facilities’ compliance with developing succession plans to reduce VA’s reliance on retention incentives. OIG recommended the capabilities of the HR Smart system be reassessed to reduce VA’s incentive repayment liability risks.