H.R. 5094, a bill to amend title 38, United States Code, to authorize the Secretary of Veterans Affairs to recoup certain bonuses or awards paid to employees of the Department of Veterans Affairs, and for other purposes
Cost Estimate
As ordered reported by the House Committee on Veterans’ Affairs on September 10, 2014
As ordered reported by the House Committee on Veterans’ Affairs on September 10, 2014
H.R. 5094 would modify several authorities and programs administered by the Department of Veterans Affairs (VA). CBO estimates that implementing H.R. 5094 would cost less than $500,000 over the 2015-2019 period, subject to the availability of appropriated funds. In addition, enacting H.R. 5094 would affect direct spending. However, CBO estimates that the net effects on direct spending would be insignificant for each year and over the 2015-2024 period. Enacting H.R. 5094 would not affect revenues.
Section 1 would give the Secretary of Veterans Affairs the authority to recoup all or part of awards and bonuses that were paid to employees of the agency after providing a notice of recoupment and an opportunity for a hearing conducted by VA. That authority would apply to such payments made by VA before the date of enactment of H.R. 5094 as well as those made after that date. CBO expects that this provision would be used infrequently, primarily to recoup payments made to senior VA employees who were determined to have committed a serious violation of the agency’s standards of conduct. Of the roughly $400 million that VA pays out each year for awards and bonuses, about $4 million goes to senior staff.
Most federal statutes of limitation are no more than six years. On that basis, CBO expects that VA would not attempt to recoup payments made more than six years prior to the date of enactment. In addition, the authority would only affect current employees of VA; employees who resigned or retired would be exempt from recoupment.
In recovering overpayments made to employees, federal agencies have several options: they can require lump-sum or installment payments, or they can use salary offsets—regular deductions from bi-weekly payroll payments. Based on general practices at federal agencies, CBO assumes that in most cases VA would offset future salary payments. Such offsets would reduce discretionary costs. In those cases where VA requires a lump-sum or installment repayment, the funds would generally be deposited in the Treasury and would be considered a reduction in direct spending. Because CBO believes that this authority would be used infrequently, and because employees could avoid recoupment by leaving the agency, CBO estimates that the amount of bonuses and awards that would be recouped would be insignificant.