00:00Order. I would like to welcome the members, witnesses, and audience to this hearing for
00:04the Subcommittee on Oversight and Investigations. I appreciate my colleagues on the dais and the
00:10witnesses for being here to discuss the chronic issue of improper recruitment, retention,
00:14and relocation incentive payments. These are commonly referred to as the three R's.
00:19These incentives are tools provided to the VA by Congress to attract and retain quality staff
00:24in positions that are consistently vacant or identified as difficult to fill. While many
00:29federal agencies can use these incentive payments, they are particularly helpful for an agency like
00:33the VA, whose mission is to provide complex services and quality health care to veterans
00:37across the entire country. These incentives are designed to be a part of a benefits package
00:42for positions in markets that are difficult to hire in, like specialist physicians, nurses,
00:47and social workers in rural areas. Congress gave federal agencies the ability to pay these incentives
00:52so that government entities, like the Veteran Health Administration, can be competitive in
00:57attracting and keeping quality health care professionals in a labor pool that is facing
01:00staffing challenges across the country. As a nurse practitioner, I understand these challenges
01:05firsthand. Unfortunately, recent reports have shown that these funds have been proven to be paid
01:10out with very little oversight. While this hearing was organized after the release of the June 2025
01:15OIG report on the VA's poor oversight of these incentive payments, the problems we will discuss today
01:20are not new to the VA. In fact, in 2017, the OIG released a similar report detailing oversight issues
01:26with recruitment, relocation, and retention incentive payments based on the OIG's oversight work
01:31stretching back to July 2014. The 2017 OIG report identified the need to improve controls
01:39over the use of these incentives, having found that the VA did not properly authorize 33 percent
01:44of the retention incentives that were awarded to senior executives. The improper payments found in
01:502017 totaled more than $158 million in unsupported spending. As a result, the OIG made recommendations
01:57that the VA develop internal controls to monitor policy compliance and decrease the VA's reliance on
02:02retention incentives. Now, here we are in July 2025, confronted with the same issues that the VA has failed
02:09to improve since the first report. The only difference is that now there is even more taxpayer dollars
02:15involved. For example, between 2020 and 2023, relocation payments grew by 85 percent and retention
02:23payments have grown by 131 percent, while recruitment bonuses have ballooned by a staggering 237 percent.
02:31I believe anyone would agree that these numbers are alarming when there is little data to back up the
02:35massive increases. The 2025 report acknowledged that after the initial report, VA implemented processes
02:41to improve authorization and review controls for the payments. However, VA employees inconsistently
02:46followed them. This made the good government improvements virtually useless. In response to the
02:512017 OIG audit, quality assurance teams were created at both the Office of Human Resources and
02:57Administration Operations, Security and Preparedness, and the VISN level. However, the 2025 OIG report found that
03:03while these teams identified errors, they did not address systemic issues in the request and
03:08authorization of incentives, did not proactively prevent incentive packages from being processed
03:14and paid based on insufficient justifications. Additionally, the OIG found that 28 employees
03:19continued to receive annual retention incentives for many years after the initial award period expired.
03:26In one case, an employee continued to receive annual incentive awards for more than 11 years
03:31after the initial award period. In total, the VA improperly paid these employees a total of about 4.3 million
03:37dollars. Between 2020 and 2023, more than 134,000 employees received incentive payments totaling 1.2 billion
03:46dollars. 341 million of those incentives were found by the OIG to be improperly documented.
03:53The lack of documentation also hinders review efforts by oversight bodies like the OIG,
03:58the GAO, and this committee. I echo what the OIG said in their report that the required documentation
04:04helps provide assurance that incentives are properly used and effective oversight of incentives also
04:09require sufficient documentation for review. In fact, the OIG noted that much of the data used in
04:14the report relied on projections due to the VA's sparse documentation. I found it shocking in the
04:19report that when cases of waste, fraud, and abuse were discovered, the VA's implementation of established
04:24processes did not always guarantee that the issues were appropriately resolved. The 2025 report cited an
04:30example where VHA awarded $30,000 in relocation payments for an employee who never relocated. The
04:36employee was a remote worker teleworking from home. When someone receives a relocation incentive and never
04:42actually relocates, that's wrong and a clear waste of taxpayer dollars. Despite this clear case of
04:48impropriety, the VHA declined to recoup the payments that were made to this employee.
04:52These are taxpayer dollars set aside for veterans and for far too long they have been carelessly
04:57handled. I'm excited to hear the Trump administration's plan to not only satisfy the OIG's recommendations,
05:02but their plan to make real and necessary improvements and corrections in how the VA manages
05:06and oversees their incentive programs. The status quo is not acceptable and we will continue to push the
05:12VA to make improvements that lead to better care outcomes for the veterans that are receiving VA services.
05:17I look forward to working with Secretary Collins and his team to right the ship and create real change at the VA.
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