President Trump wants to make the federal bureaucracy a meritocracy. He has proposed slapping a cap on federal employee salaries and shifting more dollars to merit-based performance bonuses.
Many will consider this a great proposal, but there’s a catch. While taxpayers can see most federal salaries, they can’t see performance bonuses.
In fiscal year 2016, the federal government awarded 1 million performance bonuses, racking up a $1.1 billion tab paid for by taxpayers. Every cent, however, was hidden from public disclosure. Anti-transparency language inserted into government union contracts is blocking the right of taxpayers to see how their money is being spent.
Last month, a Treasury Department watchdog uncovered
$1.7 million in bonuses to IRS employees who had been disciplined by the agency during fiscal year 2016-2017. These 2,000 IRS employees received "high-performing" bonuses despite their record of "serious misconduct such as unauthorized access to tax return information, substance abuse, and sexual misconduct."
Transparency is especially crucial for federal agencies that have failed in the past. The Department of Veterans Affairs has an ugly history with performance bonuses. For example, in 2014, the VA doled out up to $100 million in undeserved performance bonuses while sick veterans died waiting to see a doctor.
We quantified $22 million worth of disclosed bonuses the VA awarded to 38,292 employees in fiscal year 2016. We still can’t see performance bonuses at the VA, but the VA’s problems haven’t gone away.
Currently, the federal government pays out five types of bonus: performance, incentive, recruitment, relocation, and retention bonuses. Each of these types of bonuses should be subject to the Freedom of Information Act disclosure laws. Yet, in fiscal year 2016 the Office of Personnel Management disclosed just 330,000 bonuses totaling $351 million.
We audited the disclosed bonus buckets and found large and small departments and independent agencies gaming the system for personal gain. For example, the largest disclosed bonus didn’t go to a rocket scientist or a doctor researching the cure to cancer. Instead, a $141,525 bonus went to the human resources manager at a small land management agency in San Francisco called Presidio Trust. In fact, Presidio Trust gave out six of the top 10 largest federal bonuses over the last three years.
Just imagine the wasteful practices we’d find if performance bonuses, the largest tranche of federal bonuses, were dragged into the light.
Opening the books on federal performance bonuses will require an act of Congress, and we're leading the charge. The Federal Employee Bonus Disclosure Act would open the books on performance bonuses across the federal government, making them subject to inspection and public disclosure on the U.S. Office of Personnel Management website.
Government unions, who insert anti-transparency language into their contracts, argue that performance awards are usually a percentage of an employee's annual salary, varying by performance rating, and disclosure could allow taxpayers to guess the employee's ratings.
But that’s not the taxpayer’s problem, it’s a management problem for the agencies to deal with. The idea that employee ratings might be easier to guess simply does not outweigh the taxpayer’s right to know how their money is being spent.
Furthermore, we already have some insight into federal performance ratings. It turns out federal bureaucrats give themselves stratospheric job performance ratings, which, in turn, fatten the pay and bonus levels. A Government Accountability Office audit published last summer using 2013 data revealed that 99.6 percent of all federal workers received "fully successful" job performance ratings.
Of course, it's impossible that so large a portion of federal workers honestly deserved "fully successful" ratings. Don Devine, director of the White House Office of Personnel Management during the Reagan administration, quipped that’s a higher purity rating than Ivory soap (99.3 percent).
The fact that federal workers have a high view of their own performance helps explain why taxpayers are forced to fund more than a million "performance bonuses" amounting to $1.1 billion dollars. But, for taxpayers, it’s hard to measure what they can’t see. Maybe these bonuses are deserved. Maybe they aren’t. Because it’s their money, taxpayers deserve to know so they can decide how to hold their elected officials accountable.
In our view, accessing this information isn’t a bonus or a privilege. It’s a right.