Review of Allegations of Mismanagement of Fee-basis Appointments VA Medical Center Portland, Oregon

A review conducted in response to allegations referred to the Secretary from the Office of Special Counsel substantiated that fee-basis appointments were being inappropriately approved and managed by the Portland, Oregon VA Medical Center. Title38, United States Code, Section 7405 (a)(2) allows VA to use fee-basis appointments to hire employees into certain positions without regard to certain laws and regulations. VA policy implementing the statute requires that employees appointed on a fee-basis are to be compensation by task or service, not a time-basis. Because payment was based on task or service, VA could hire retired annuitants without off-setting pay by their retirement. The review substantiated that the Portland, Oregon VA Medical Center was employing retired nurse annuitants as fee-basis employees on a time-basis. We also found that when the fee-basis employee was a retired annuitant, there was no reduction of pay by the amount of the annuity as required by law. In addition, we identified fee basis agreements that exceeded the maximum dollar threshold established by policy without the required approvals and instances where actual payment exceeded the maximum payment allowable under the agreement. The Acting VISN Director concurred with our recommendations and agreed to take corrective action.

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