VA Conference Spending Investigation Report Released; Top Official Resigns

DANICA TORMOHLEN, EDITOR-AT-LARGE
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Washington, DC – Following a five-month investigation, the Office of Inspector General (OIG) found that the Department of Veterans Affairs (VA) spent $6.1 million on two human resources conferences, of which $762,000 was deemed unauthorized, unnecessary or wasteful, according to a report released on September 30. In addition, VA employees violated ethical policies by accepting gifts in violation of laws and regulations.

“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 report stated. “Accountability and controls were inadequate to ensure effective management and reporting of the dollars spent.”

In response to the news, David DuBois, president of International Association for Exhibitions and Events (IAEE), told Trade Show Executive,  “When dealing with tax dollars at any level — city, state or federal – government employees must follow the strict rules for ethical guidelines and regulations.” DuBois, who spent six years at the Fort Worth Convention & Visitors Bureau before joining IAEE in September, said taxpayer-funded employees must be very careful on how they spend those dollars.

In April, OIG opened an administrative investigation after receiving allegations of wasteful expenditures related to two human resources conferences held in July and August 2011 in Orlando, FL. The report verified that the conferences, which attracted 1,800 employees, were held for legitimate training purposes, but organizers spent more than was budgeted for fewer employees than estimated. The department was authorized to spend $5 million for two conferences for 3,000 employees.

“This OIG report clearly demonstrates the importance of training and certification for government meeting planners and for the education of government administrators,” Rob Bergeron, acting executive director for the Society of Government Meeting Professionals, told Trade Show Executive. “We support any reasonable efforts by the federal government to implement appropriate cost-saving and transparency measures.”

The report noted, “Assistant Secretary for Human Resources & Administration John Sepúlveda abdicated his responsibilities when he failed to provide proper guidance and oversight to his senior executives in the operations of his organization.” Sepúlveda announced his resignation one day before the OIG report was released.

The issues surrounding the wasteful spending were primarily related to unbudgeted expenses, poor accounting practices and improper checks and balances. Among the questionable items:

· $280,698 in excess of the VA’s contract with the Orlando World Center Marriott, including excessive expenditures for audiovisual services, catering, food & beverage, and other miscellaneous expenses.

· $200,224 in unsupported expenses, including almost $154,000 in contractor travel paid by the VA.

· $49,516 for unauthorized costs associated with the production of a General George S. Patton parody video; the conference planner lacked the authority to commit government funds for this purpose.

· $97,906 in wasteful costs associated with the purchase of unnecessary promotional items.

The report also questioned pre-selection conference site visits to Dallas, TX; Nashville, TN; and Orlando, FL. OIG found $10,666 in unnecessary travel expenses for seven VA employees to conduct pre-planning site visits to the three locations. The visits occurred prior to the VA authorization for the conferences and prior to the VA’s issuance of a request for proposal (RFP). “Sound business practice entails that site visits be conducted after RFP issuance,” according to the report.

Total prohibited gifts accepted by VA employees included $5,981 in meals, free rooms, transportation (limos and town cars), entertainment (helicopter rides and show tickets), spa treatments, amenities (food & gift baskets) and gift cards. “The employees cannot claim they were sampling hotel products and services for purchase, as spa treatments, meals and helicopter rides were never intended to be purchased for the conference,” according the report.

The report made several recommendations to ensure that appropriate actions and guidelines are in place going forward. “The 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,” said the department in a statement.

A copy of the full report, Administrative Investigation of Veteran Affairs 2011 HR Conferences in Orlando, FL, can be found at: http://www.va.gov/oig/pubs/VAOIG-12-02525-291R.pdf

Reach Catherine Gromek at (202) 461-4527 or Catherine.Gromek@va.gov; Rob Bergeron at (703) 566-3631 or rob.bergeron@sgmp.org; David DuBois at (972) 458-8002 or ddubois@iaee.com