EPA Circumvents Bonus Caps by Awarding Vacation Days

The Environmental Protection Agency is eclipsing thresholds meant to provide additional oversight of performance awards by supplementing cash bonuses with time off, according to a new audit. 

EPA awarded more than 355,000 hours off to employees in 2015 through 2017, the equivalent of 170 full-time positions and nearly $20 million. The agency’s administrator, or a senior official he designates, is required to approve of any award of more than $5,000 in a year. The EPA inspector general found, however, the agency was regularly giving cash awards up to that limit and adding time off on top of it. EPA officials made no effort to calculate the value of the time off and therefore did not send those combined awards up the chain for further approval. 

Following a 2015 IG report, EPA installed new controls to prohibit supervisors from splitting up awards to exceed the $5,000 threshold. Those efforts have proven successful, the IG said, though the agency cannot assess the full value of its awards because it is not placing a monetary equivalent on time off. 

“The number of time-off hours awarded each year results in lost productivity because top performers may not be at work, which can adversely impact the agency’s mission,” the IG said. 

A supervisor could propose a $5,001 bonus for an employee, the IG said as an example, and it would go to a senior official for approval. The same supervisor could propose a $5,000 and 40 hours off, meanwhile, and it would receive no further review. In a sample of 50 awards provided to 23 employees, the IG found the combined values exceeded $5,000 for 13 workers. 

EPA guidance requires supervisors to award time off commensurate with an employee’s accomplishments, but the IG found managers interpreted the value of the awards differently. Additionally, use of the perk varied by location and rank. Headquarters employees received much more time off than those at the agency’s regions, while awardees ranked GS-14 and above received nearly 50% more vacation than those ranked GS-13 and below. Overall, employees receiving time off awards received an average of one day per year. 

The IG told EPA to set a standard for determining the monetary value of time off awards, and to combine that with monetary bonuses for judging whether further review is appropriate. EPA officials told the IG they were under no regulatory requirement to do so and therefore would not comply with the recommendations. The agency said it would put more controls in place to monitor time off awards, but the IG chastised it for failing to spell out any details for its reforms.