WASHINGTON — Investigators looking into lavish spending for a pair of Veterans Affairs training conferences in 2011 found evidence that department employees improperly accepted gifts, wasted hundreds of thousands on unneeded expenses and exhibited “serious management weaknesses” in handling taxpayer dollars.
The investigation report released Monday by the VA Inspector General’s office also says that the department’s top human resources official, Assistant Secretary for Human Resources and Administration John Sepulveda, “failed to provide proper guidance and oversight to his senior executives” and lied to investigators about details of the conference.
Sepulveda resigned on Sunday, a VA spokesman confirmed. He had served in that position since May 2009, as the department’s top advisor on administrative and employee management issues.
VA officials released a statement saying “misuse of taxpayer dollars is completely unacceptable” and calling the actions cited in the report “serious lapses in oversight, judgment, and stewardship.”
Two other employees cited by investigators in the report were placed on administrative leave, pending a review of their involvement in the case. VA officials did not release their names.
VA Secretary Eric Shinseki announced he will appoint a panel of senior officials to review the case and recommend appropriate administrative action against other employees involved in the conference planning.
About 1,800 VA employees attended the two professional development conferences, held in July and August 2011. Investigators said the conferences appeared to be legitimate training opportunities, but noted that senior leaders “accepted little responsibility for financial stewardship” in spending more than $6 million for the two events.
Among the more egregious expenses were $50,000 for a conference video parodying the move “Patton,” $98,000 for promotional items such as tote bags and thumb drives, $37,000 for questionable travel expenses for VA employees and $43,000 in extra pay for staff running the events.
Investigators also found more than $480,000 in excessive spending for hotel catering, hotel audiovisual services, and contractor travel.
The report says VA employees planning the conferences accepted free massages, hotel rooms, limousine rides and helicopter tours — all against well-known policies forbidding government employees from receiving gifts.
In a statement, VA Inspector General George Opfer said he hopes the findings will “enhance VA’s stewardship of public funds” for future events.
“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,” he said.
Investigators also said that Sepulveda told them under oath that he had no prior knowledge of some of the expenses, including the costly “Patton” video produced by an outside contractor. Other VA employees contradicted that, saying he not only viewed the video but even suggested changes to it just days before the first conference.
Department of Justice officials have declined to prosecute Sepulveda for perjury, investigators said.
Lawmakers have promised a full investigation into the conferences. House Veteran Affairs Committee Chairman Jeff Miller, R-Fla., in August requested detailed breakdowns of all VA conference budgets for the last three years to see if the wasteful spending at these events was an anomaly or a pattern of misbehavior within the department.
On Monday, Miller said he had his answer.
“Without a doubt, this appears to be a systemic problem at VA,” he said in a statement.
“Senior leaders took no action to stem excessive conferences costs, and in fact, endorsed and approved costs without proper oversight. Despite repeated attempts by Congress to [rein] in conference costs, this report demonstrates that some senior VA leaders have given little attention to how veteran funding is being spent and VA lacks an adequate system of checks and balances to ensure this type of abuse does not occur.”
Senate Veterans Affairs Chairwoman Patty Murray, D-Wash., in a statement said she was “deeply dismayed” by the report findings.
“The blatant waste of taxpayer dollars and government employees improperly accepting gifts cannot, and will not, be tolerated,” she said.