Employee Relocation: VA Strengthened Appraised Value Offer's Controls, but Can Improve Efforts to Track Effects on Retention and Recruitment

GAO-17-700 Published: Sep 19, 2017. Publicly Released: Sep 19, 2017.
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Fast Facts

Home sale assistance allows federal agencies to facilitate the sale of employees' homes if their relocation is in the government's interest. Veterans Affairs suspended a type of home sale assistance in 2015 after two employees abused it for personal gain.

In 2017, VA reinstated this assistance with strengthened safeguards. For example, VA's policies now state that a relocating employee's participation cannot be approved by the employee's subordinates. Officials stated that the assistance helps with workforce recruitment and retention, but VA doesn't track data to support these assertions.

We recommended that VA track such data.

VA's Home Sale Count and Expenditures Varied between Fiscal Years 2012 to 2016

Bar chart showing home sale numbers and expenditures for VA for fiscal years 2012 to 2016.

Bar chart showing home sale numbers and expenditures for VA for fiscal years 2012 to 2016.

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What GAO Found

About 80 percent of federal agencies' home sale transactions to support employee relocations are through the contract that the General Services Administration (GSA) manages with relocation management companies. To support relocations, agencies can use an Appraised Value Offer (AVO). Under an AVO, the relocation management company buys a relocating employee's home for its appraised value if it cannot be sold during a stated period of time. From fiscal years 2012 to 2016, use of AVO varied for federal agencies, including the Department of Veterans Affairs (VA). For example, in fiscal year 2012, the federal agencies that used GSA's contract spent over $66 million on 936 homes and in fiscal year 2016 they spent over $42 million on 601 homes.

In response to GAO's questionnaire (which was not sent to VA), most of the 20 agencies that were using AVO identified the following two types of critical internal controls as part of their AVO policies. First are transaction control activities, which are actions built directly into operational processes to support the entity in achieving its objectives and addressing related risks. For example, 18 agencies reported that the AVO approval process must be complete before payments are made. Second is assessing and responding to misconduct risks by considering how misuse of authority or position can be used for personal gain. For example, 19 agencies reported that their AVO had safeguards to prevent it from being used for the personal gain of employees. An agency could require an independent review of its permanent change of station program.

While none of the 20 agencies reported they had evaluated whether AVO improved recruitment and retention of employees, 12 of the 20 agencies provided examples of how AVO had been beneficial. For example, four agencies noted the use of AVO had helped them recruit the most qualified employees or assisted with hard-to-fill positions. GSA officials also identified six good practices based on lessons learned from their role, which includes managing the relocation contract that they believe agencies should incorporate into their AVO. When GAO compared these good practices to VA's AVO process, it found that all of these good practices had been adopted by VA. For example, VA offers pre-decision counseling and VA employees work with the relocation company before their home is put on the market.

Since fiscal year 2016, VA has strengthened the administration of AVO by implementing new policies that include internal controls, but does not track data on whether AVO improves recruitment and retention. For example, VA revised its policies to require approval prior to initiating recruitment efforts and that a relocating employee's participation cannot be approved by the employee's subordinates. VA officials stated AVO is beneficial for hard-to-fill Senior Executive Service positions and for mission critical skills occupations, however, VA does not track data to determine whether AVO improves the recruitment and retention of employees. VA officials stated the agency does not have the resources or capabilities to track such data. These data could be useful in identifying trends and options for targeting certain occupations or skill sets that may improve the agency's use of home sales to support relocation. Without tracking these data, VA will be unable to determine whether AVO has improved recruitment and retention.

Why GAO Did This Study

Employee relocation is a critical tool to help agencies position skilled employees optimally and for workforce recruitment, retention, and development. Agencies can facilitate the sale of a relocating employee's home when the relocation of a specific employee to a different location is in the interest of the government. After a 2015 VA Inspector General report found that two VA employees abused AVO to relocate for their personal benefit, VA suspended AVO in October 2015 and reinstated it in fiscal year 2017. GAO was asked to review the administration of AVO at VA and government-wide.

This report (1) describes federal agencies' and VA's use of AVO; (2) describes federal agencies' key AVO internal controls, evaluations, and lessons learned; and (3) analyzes the extent to which VA has implemented additional internal controls since 2015 for AVO and has evaluated whether AVO improved recruitment and retention. GAO analyzed agency documents and interviewed VA and GSA officials. GAO also distributed a questionnaire to 28 agencies or their components that had completed home sale transactions through GSA's contract in fiscal years 2015 or 2016. Twenty of these agencies responded that they had an operational AVO and provided information on the types of controls they use and any lessons learned.

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GAO recommends that VA track data to determine whether AVO improves recruitment and retention. VA concurred with the recommendation.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Veterans Affairs The Secretary of Veterans Affairs should track data that can help VA determine whether AVO improves recruitment and retention.
Closed – Implemented
The Department of Veterans Affairs (VA) concurred with the recommendation. In April 2020, VA stated that it is tracking the usage and effectiveness of appraised value offer (AVO) for hard-to-fill Senior Executive Service (SES) and non-SES positions. VA stated that based on a recent review of data, use of AVO has aided recruitment and retention for five of these positions. VA provided GAO with data on the usage of AVO for these five positions that had become vacant between August 2016 and April 2018. The data included when each position was vacated, the date that each position was filled using AVO, and whether each position is still occupied. This data can help VA determine if AVO improves recruitment and retention. For example, VA could compile equivalent data on all hard-to-fill SES and non-SES positions that were filled through AVO and those that were not in the same time period. VA could then assess whether the positions were filled faster if AVO was used. VA could also use the same data to assess whether the positions were occupied for longer if AVO was used during the same time period.

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