VA cited for excessive conference spending and ‘weak’ leadership

This story has been updated with additional details. 

The Veterans Affairs Department spent more than $6 million on two conferences in the summer of 2011, much of which was deemed wasteful and excessive, according to an internal investigation.

The report, issued by VA’s inspector general’s office, called the human resources conferences in Orlando, Fla., “valid training” exercises, but said the department lacked the leadership to “provide proper oversight.”

“Overall, VA’s processes and the oversight were too weak, ineffective and, in some instances, nonexistent to ensure that conference costs identified were accurate, appropriate, necessary and reasonably priced,” the auditors wrote in the report. “Accountability and controls were inadequate to ensure effective management and reporting of the dollars spent.”

The report specifically cited Assistant Secretary for Human Resources and Administration John Sepulveda for “abdicat[ing] his responsibilities.” VA confirmed a Federal News Radio report that Sepulveda resigned from his position Sunday. The IG’s office said Sepulveda made false statements while under oath during the investigation.

In a statement, VA said the issues discussed in the report represent the “misconduct” of a few individuals.

“Misuse of taxpayer dollars is completely unacceptable,” the department said. “The actions cited in the report represent serious lapses in oversight, judgment and stewardship.”

It added the department agrees with the IG’s findings and recommendations.

“[VA]Secretary [Eric] Shinseki has taken immediate action to address the issues outlined in the IG report to strengthen oversight, improve accountability, safeguard taxpayer dollars and help ensure such incidents do not occur again,” the department said.

Among the extraneous spending cited in the report was nearly $50,000 on a parody video. The auditors also pointed to hundreds of thousands of dollars in “unsupported” travel expenses, “excessive” expenditures at the two conferences at a Marriot hotel in Orlando and wasteful promotional purchases.

Additionally, VA rented karaoke equipment and purchased “artisan cheese displays” for senior executives, which the auditors said “did not add any training value to the conference.”  

VA employees directly disobeyed agency legal advisors, who told the conferences’ organizers that promotional all-purpose bags, “padfolios” and USB hubs were not allowable expenditures, but the employees went ahead with the purchases anyway.

The IG’s office said the total “questionable, unnecessary and wasteful” purchases added up to $762,000.

The report found total costs well exceeded the authorization for spending on the conferences, while failing to reach the target for number of employees. Organizers had hoped the two conferences would train 3,000 workers, though only around 1,800 ended up attending.

The IG’s office said due to VA’s failure to accurately and comprehensively track the spending at the conferences, there is no way to identify all the costs and the $6.1 million price tag estimate could actually understate the total expenses.

Nearly a dozen employees face retribution for accepting “improper gifts in violation of federal law,” including several “high-grade, supervisor-level employees.” The gifts included free meals, transportation, gift baskets, spa treatments and tickets for a Rockettes performance.

The report specifically named several VA executives in addition to Sepulveda for leadership failures -- including Alice Muellerweiss, dean of the VA Learning University, and Tonya Deanes, deputy assistant secretary for the Human Resources Management Office -- and redacted the names of several others.

The auditors recommended VA consult with its General Counsel’s Office to determine the appropriate action to take against Muellerweiss, Deanes and others.

VA announced two employees have been “place on administrative leave pending review,” but could not elaborate on which two employees, citing privacy considerations.