VA official says bonuses needed to retain top executives

Lawmakers on Tuesday challenged the Veterans Affairs Department's award of $3.8 million in bonuses to senior executives in fiscal 2006 even as the department's case backlog grew, but a senior official defended the awards as crucial to retaining public servants who would be more richly rewarded in the private sector.

Members of a House VA oversight committee questioned the award of performance bonuses to 87 percent of Senior Executive Service members eligible to receive them in fiscal 2006. The average amount was $16,606, the highest of any agency and about $2,000 above the governmentwide average.

"While the bonus dollar amounts under discussion are sizable, they are paid to seasoned and successful executives in recognition of solid and significant contributions to public service," VA Deputy Secretary Gordon Mansfield told lawmakers. "And they pale in comparison with compensation and bonuses common to executives with similar credentials working in the private sector."

In a lengthy question and answer session, lawmakers directed few questions to a Government Accountability Office finding that officials at VA headquarters received, on average, $4,000 more than their field office counterparts. But they questioned VA's reliance on performance review boards consisting of career officials to decide on individual bonus awards, saying the system was subject to abuse by board members who might "take care of" their peers with the expectation of benefiting themselves.

Mansfield said the review board members do not make decisions on their own bonuses or those within their chain of command.

In a recently completed Office of Personnel Management review of VA's performance management system for senior executives, which Mansfield submitted to the committee for the record, investigators found that the system generally functions according to OPM standards.

OPM recommended VA officials ensure that performance plans "focus at least 60 percent on achieving measurable results," and urged a revision to the review board process to ensure that that bonus awards are more geared toward measurable results.

At Tuesday's hearing, lawmakers also questioned instances in which bonuses were awarded despite highly publicized failures, including two occasions in 2005 when the agency required emergency supplemental funding following mistakes accounting for expenditures related to fighting in Iraq and Afghanistan.

Flanked by five high-ranking subordinates, Mansfield repeatedly said he would answer questions about individual cases in a later written response because he did not have enough information at hand.

Carol Bonosaro, president of the Senior Executives Association, which represents senior career officials, said it was unfair to attack civil servants for failures stemming from political decisions to underfund the agency.

"Concerns with Bush administration decisions to request less money than is believed to be needed for VA health care and claims processing should be directed at the administration's policy-makers, not at the career senior executives who implement their decisions," Bonosaro argued.

Pointing out that VA officials often make less than half the pay of their private sector counterparts, she stressed that bonuses are not "lavish frills" but an important part of the compensation system.

Rep. Timothy Walz, D-Minn., a former serviceman, said the panel's questioning was not intended to denigrate the contributions of agency personnel. But "bonuses have nothing to do with pay parity," he said. "If this is about pay parity, ask Congress, ask us to fix this."

Bonosaro acknowledged that bonuses are not intended to address pay disparities, but said that with tight budgets, agencies have increasingly relied on them beyond rewarding top performers. She also defended the high rate of awards, saying it was appropriate that the vast majority of officials who reach the top management ranks would be above-average performers.

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