Failed leadership blamed for VA conference spending scandal

Monday - 10/1/2012, 5:25pm EDT

Federal News Radio's Ruben Gomez interviews Rep. Jeff Miller (R-Fla.)

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Ruben Gomez, reporter, Federal News Radio

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Two Veterans Affairs Department training conferences held last summer in Orlando, Fla., contained as much as $762,000 in wasteful spending and were plagued by poor planning and oversight, according to an inspector general report released Monday.

In the report, the IG said although the conferences were held for legitimate purposes, agency leadership "failed to provide proper oversight in the planning and execution" of the two conferences. Specifically, Assistant Secretary for Human Resources and Administration John Sepulveda "abdicated his responsibilities" by failing to provide guidance to agency senior executives and taking a "hands-off approach."

The report also said Sepulveda knowingly made false statements to investigators surrounding what he knew about a video parodying the 1970 film Patton that was played at the conference and cost almost $50,000 to produce, according to the IG report.

Sepulveda initially "denied having any involvement" with the video and said he only became aware of it when it was played on the first day of the conference, according to the report.

However, several people testified that Sepulveda had viewed the video prior to the conference and signed off on it. The report stated the Justice Department declined to accept the matter for investigation.

Sepulveda resigned Sunday, a day before the release of the report, saying he didn't want to be a distraction to the Obama administration or to the department.

Along with Sepulveda, the report also faulted Alice Muellerweiss, dean of the VA Learning University, and Tonya Deanes, deputy assistant secretary for human resources management, for failing to provide proper oversight in conference planning.

The IG also said VA Chief of Staff John Gingrich failed to "make sufficient inquiries" regarding the cost of the conferences despite authorizing them.

Total cost of conferences exceeded VA estimates

The report's release caps a months-long review by the IG's office.

The final report puts the total price tag for the two human-resources conferences at about $6.1 million — well above the $5 million agency officials initially estimated.

However, the IG's report stated it could not "gain reasonable assurance that this figure represents a complete accounting for these conferences."

The report found the conferences were held "to fulfill valid training needs," which the agency had long maintained. "However, VA's processes and the oversight were too weak, ineffective, and in some instances, nonexistent," the report stated.

In total, the IG report pointed to $762,000 in spending deemed "unauthorized, unnecessary, and/or wasteful."

That includes:

  • More than $280,698 in excess costs stemming from VA's contract with the Orlando Marriott where the conferences were held.

  • $49,516 for the production of the Patton parody video

  • $97,906 for "unnecessary promotional items"

  • $37,489 in "questionable travel-related expenses" for 169 VA employees who arrived early or stayed late to the conference

  • $43,018 in awards paid to members of the VA staff who planned the conferences. The IG said the spending was questionable "in light of the mismanagement and lack of professional care exercised in controlling and tracking conference-related costs."

The report also found 11 employees, who were responsible for managing the conferences, improperly accepted gifts from VA contractors, including meals, lodging and spa treatments.

Shinseki pledges 'immediate action'

VA Secretary Eric Shinseki "has taken immediate action" to "strengthen oversight, improve accountability, safeguard taxpayer dollars and help ensure such incidents do not occur again," VA said in a separate release.

Along with accepting Sepulveda's resignation, the agency will appoint senior officials to conduct a review of career employees accused of wrongdoing. So far, two of those employees have been placed on administrative leave, according to the VA statement.

"Beyond the individual ethical lapses, which cast all federal employees in a bad light, the management failures resulted in unnecessary costs and unauthorized commitments that diminished these legitimate training events," VA IG George Opfer said in a separate statement. "I trust this report will enhance VA's stewardship of public funds for future events."

The spotlight on agency conference spending has shone brighter since the revelation earlier this year that the General Services Administration spent more than $823,000 on a 2010 Las Vegas conference.

Chairman of the House Oversight and Government Reform Committee, Rep. Darrell Issa (R-Calif.), said his committee is investigating more than 150 conferences hosted since 2005 where spending exceeded the GSA price tag.

Following the release of a preliminary IG earlier this summer, Rep. Jeff Miller (R-Fla.), the chairman of the Veterans Affairs Committee, pledged to hold hearings on VA's conference spending.

Miller told Federal News Radio Sepulveda's resignation represents a step in the right direction. But he's not putting full confidence in VA management.

"I believe as we dig deeper, we're going to find that others turned a blind eye and didn't think that this was such a big deal, when in fact it really is," he said.

(Federal News Radio reporter Ruben Gomez contributed to this report)

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