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Overclassified Waste

Tuesday July 15th, 2014   •   Posted by Craig Eyermann at 6:41am PDT   •  

20935045_S The problems plaguing the Department of Veterans Affairs are deep and systemic. New evidence has come to light indicating that the cancer of corruption and incompetence permeating the VA is even deeper than we knew. The Huffington Post reports:

The scandal-plagued Department of Veterans Affairs is systematically overpaying clerks, administrators and other support staff, according to internal audits, draining tens of millions of dollars that could be used instead to ease the VA’s acute shortage of doctors and nurses.

The jobs of some 13,000 VA support staff have been flagged by auditors as potentially misclassified, in many cases resulting in inflated salaries that have gone uncorrected for as long as 14 years.

And because the bonuses earned by the VA’s “overclassified” employees are often set as a percentage of their base annual salary as per their union contracts, these thousands of excessively paid VA employees doubly benefit from their administrators’ and managers’ deliberate failure to correct these errors. They triply benefit when you realize that their excessive wages and salaries also inflate their already overly generous pension benefits.

We say “deliberate failure” because the Department of Veterans Affairs managers and senior leadership acted to derail and obstruct the efforts to impose fiscal discipline upon them:

Rather than moving quickly to correct these costly errors, VA officials two years ago halted a broad internal review mandated by federal law. As a result, the overpayments continue.

Moreover, in the two years since thousands of misclassified jobs were identified, hundreds of additional positions have been filled at improperly high salaries. Internal VA documents obtained by The Huffington Post show that between September 2013 and May 2014, for instance, overpayments in annual salaries for the latter jobs alone came to $24.4 million, not counting benefits.

The federal government’s contracts with the American Federation of Government Employees (AFGE) prevents the pay of these employees who have been misclassified into higher pay brackets from having their salaries reduced to the levels that would apply if they were correctly classified.

We should note that placing employees into higher paying classifications than their actual skills and experience warrant is one way in which the government department’s administrators could get around the pay freeze that was passed into law in 2010. While pay raises for federal government workers were restricted, placing employees into open positions with higher paying job classifications was not. This “pay grade creep” became the bureaucrats’ preferred method to get around the pay freeze.

As for what might explain why the VA’s senior leadership would terminate efforts to bring fiscal discipline to the VA’s employment practices, we should note that in 2008, 96% of the AFGE’s political donations in that election year, totaling hundreds of thousands of dollars, went to Democratic Party candidates, including Barack Obama, who was elected president. In 2011, the AFGE cranked up its donations to “vulnerable” members of President Obama’s political party in the U.S. Congress, which coincides with when the VA’s senior administrators terminated the effort to correct the problem.

Looking the other way where the interests of the very deep-pocketed AFGE then would be an easy way that the political appointees running the VA could return the union’s ongoing political favors.

There is an obvious solution for this situation. Given what we’re still learning about the scandal, we’re afraid that it will not be achievable while the current management remains in place.

Until they’re replaced, we can expect that the waste will both continue and grow.

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July 2014