B-132800, NOV. 1, 1957

B-132800: Nov 1, 1957

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VETERANS ADMINISTRATION: IN OUR AUDIT OF THE VETERANS ADMINISTRATION ACCOUNTS A QUESTION WAS RAISED CONCERNING THE EMPLOYMENT. FEARNEY HAS BEEN EMPLOYED ON AN AVERAGE OF 235 DAYS PER YEAR SINCE HIS RETIREMENT WHICH MAKES IT APPEAR THAT HIS EMPLOYMENT IS PRACTICALLY ON A FULL TIME BASIS. IF THE EMPLOYMENT IS ON A FULL TIME BASIS IT APPEARS THAT IT WOULD COME WITHIN THE PROVISIONS OF SECTION 2 (B) OF THE CIVIL SERVICE RETIREMENT ACT. 5 U.S.C. 2263 (B) WHICH PROVIDES THAT WHEN AN ANNUITANT UNDER THAT ACT IS SERVING IN AN APPOINTIVE OR ELECTIVE POSITION THERE SHALL BE DEDUCTED FROM HIS SALARY A SUM EQUAL TO THE ANNUITY ALLOCABLE TO THE PERIOD OF ACTUAL EMPLOYMENT. A SIMILAR SALARY REDUCTION WAS FORMERLY CONTAINED IN 5 U.S.C. 715 (B).

B-132800, NOV. 1, 1957

TO HONORABLE H. V. HIGLEY, ADMINISTRATOR, VETERANS ADMINISTRATION:

IN OUR AUDIT OF THE VETERANS ADMINISTRATION ACCOUNTS A QUESTION WAS RAISED CONCERNING THE EMPLOYMENT, AFTER MANDATORY RETIREMENT, OF DOCTOR FRANK A. FEARNEY ON A FEE BASIS IN THE VETERANS ADMINISTRATION HOSPITAL IN LAKE CITY, FLORIDA.

THE AUDIT INDICATES THAT DR. FEARNEY HAS BEEN EMPLOYED ON AN AVERAGE OF 235 DAYS PER YEAR SINCE HIS RETIREMENT WHICH MAKES IT APPEAR THAT HIS EMPLOYMENT IS PRACTICALLY ON A FULL TIME BASIS. IF THE EMPLOYMENT IS ON A FULL TIME BASIS IT APPEARS THAT IT WOULD COME WITHIN THE PROVISIONS OF SECTION 2 (B) OF THE CIVIL SERVICE RETIREMENT ACT, AS AMENDED, 5 U.S.C. 2263 (B) WHICH PROVIDES THAT WHEN AN ANNUITANT UNDER THAT ACT IS SERVING IN AN APPOINTIVE OR ELECTIVE POSITION THERE SHALL BE DEDUCTED FROM HIS SALARY A SUM EQUAL TO THE ANNUITY ALLOCABLE TO THE PERIOD OF ACTUAL EMPLOYMENT. A SIMILAR SALARY REDUCTION WAS FORMERLY CONTAINED IN 5 U.S.C. 715 (B).

ON OCTOBER 23, 1957, YOU FURNISHED US INFORMATION CONCERNING THE EMPLOYMENT OF CONSULTANT AND ATTENDING STAFF TO RENDER SERVICE ON A LUMP SUM FEE BASIS AS FOLLOWS:

"UNDER THE AUTHORITY CONTAINED IN SECTION 14 (A), PUBLIC LAW 293, 79TH CONGRESS, AS AMENDED, THIS AGENCY DESIGNATES CONSULTANTS AND ATTENDINGS TO RENDER SERVICE ON A LUMP SUM FEE BASIS. DOCTOR FRANK A. FEARNEY WAS SO DESIGNATED. THESE PERSONS ARE ISSUED LETTERS OF DESIGNATION AS THEIR EMPLOYMENT DOCUMENT WHICH SET FORTH THE TERMS OF THEIR UTILIZATION. COPIES OF LETTERS OF DESIGNATION PERTAINING TO DOCTOR FEARNEY ARE ENCLOSED. FEES BASIS CONSULTANTS AND ATTENDINGS PERFORM SERVICES ON AN ON -CALL BASIS, OR ONCE OR TWICE WEEKLY ON A RECURRING BASIS, DEPENDING ON THE NEED FOR THEIR SERVICES. INFREQUENTLY, THEIR SERVICES MAY BE REQUIRED FOUR OR FIVE TIMES IN A WEEK, USUALLY IN INSTANCES WHERE THERE IS NO QUALIFIED SPECIALIST AVAILABLE ON THE STAFF OF A VETERANS ADMINISTRATION INSTALLATION FOR CONSULTATION PURPOSES. IN VIEW OF THE SCARCITY OF PSYCHIATRISTS THROUGHOUT THE FEDERAL SERVICE IN GENERAL, THE NEED FOR CONSULTANTS IN THIS AREA IS ESSENTIAL TO THE MISSION OF THE MEDICAL PROGRAM OF THE VETERANS ADMINISTRATION. THEY ARE PAID A SPECIFIED LUMP SUM FEE FOR EVERY VISIT OR PERIOD OF SERVICE RENDERED IRRESPECTIVE OF THE TIME INVOLVED. IN GENERAL, THE TOTAL AMOUNT OF FEES WHICH MAY BE RECEIVED ANNUALLY IS CONTROLLED ADMINISTRATIVELY BY A $7,000 LIMITATION PLACED ON THEIR EARNINGS.'

ALSO, YOU SAY THAT WHILE DOCTOR FEARNEY WAS DESIGNATED AS AN ATTENDING WITH NO THOUGHT IN MIND OF ACCEPTING A FULL-TIME POSITION, THE SERVICE HE RENDERED APPEARED TO BE CONSIDERABLY IN EXCESS OF WHAT WAS EXPECTED UNDER THE TERMS OF THE CONTRACTUAL AGREEMENT. IN ORDER TO REMEDY THIS SITUATION AND PRECLUDE OTHER QUESTIONABLE CASES FROM ARISING, YOU SAY THE CHIEF MEDICAL DIRECTOR IS INITIATING A DIRECTIVE TO FIELD STATIONS TO INSURE CONFORMANCE WITH THE CONDITIONS AND RESTRICTIONS REGARDING THE USE OF CONSULTANT AND ATTENDING STAFF. WE REQUEST THAT OUR OFFICE BE FURNISHED A COPY OF THE DIRECTIVE IN ORDER THAT OUR FILE IN THIS MATTER WILL BE COMPLETE.

IN VIEW OF THE INFORMATION FURNISHED BY YOU CONCERNING THE PROPER EMPLOYMENT OF CONSULTANT AND ATTENDING STAFF ON A LUMP SUM FEE BASIS AND THE DIRECTIVE WHICH YOU SAY IS BEING ISSUED TO THE FIELD STATIONS TO PRECLUDE OTHER QUESTIONABLE CASES OF THIS NATURE FROM ARISING IN THE FUTURE, WE WILL NOT QUESTION FURTHER THE PAST EMPLOYMENT OF DOCTOR FEARNEY. OUR AUDIT DIVISION IS BEING ..END :