These companies either purchase or facilitate the  purchase of a relocating employee’s home. Under AVO, the relocation management company buys an  employee’s home for its appraised value if it cannot be sold during a  stated period of time. GSA’s Role

GSA’s role in the employee relocation process includes issuing  regulations that apply to all federal agencies, managing a contract that  relocation management companies and agencies can use, and providing  assistance and guidance to agencies. This is a new policy since  2015, according to VA officials. First, actions built directly into operational processes to support the  entity in achieving its objectives and addressing related risks are  transaction control activities. For example, 18 of the 20 agencies  reported the AVO approval process must be complete before  payments are made. Second, assessing and responding to misconduct risks includes  considering how misuse of authority or position can be used for  personal gain. For example, 19 of the 20 agencies reported their AVO  had safeguards to prevent AVO from being used for the personal gain  of employees. An agency could strengthen the approval process for  its permanent change of station program by requiring an independent  review to ensure moves and expenses are appropriate and justified. While the 20 agencies with an operational AVO that completed our  questionnaire reported they had not examined whether AVO improved  recruitment or retention of staff during fiscal years 2012 to 2016, 12 of the  20 agencies anecdotally provided examples of how AVO has been  beneficial. Four other agencies reported AVO assisted them in recruiting  the most qualified employees or assisted them in recruiting and retaining  employees for hard-to-fill positions. In interviews with GSA officials, they noted the following good practices  which they believe agencies should incorporate into their AVO. We examined the extent to which VA’s AVO included the good practices  based on lessons learned from GSA. We found that VA’s AVO included  all of these practices. For example, VA offers pre-decision counseling and  VA employees work with the relocation company before their home is put  on the market. VA Strengthened Its Controls over AVO but Is Not Tracking Data on Whether AVO Improves Recruitment and Retention

		VA Strengthened the Administration of AVO by Implementing New Policies That Include Internal Controls

VA conducted two recent reviews that had recommendations related to  AVO. In addition, VA implemented new AVO policies that include internal  controls since fiscal year 2016 when VA suspended AVO, as shown in  table 2. However, VA is not tracking the data that would help it determine whether  the use of AVO is improving recruitment and retention of employees  specifically in hard-to-fill Senior Executive Service positions or mission  critical skills occupations. However, VA stated it is not  tracking data on whether the use of AVO improves recruitment and  retention of employees because it does not have the resources or  capabilities to do so. Conclusions

Employee relocation, including home sale assistance, can help agencies  position skilled employees optimally and recruit and retain employees. VA’s Inspector General found instances of officials misusing AVO to  relocate for their personal benefit rather than in the interest of the  government. As VA  continues to seek ways to address recruitment and retention challenges,  such 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 the use of AVO has improved recruitment  and retention. Appendix I: Objectives, Scope, and Methodology

The objectives of this engagement were to review the administration of  Appraised Value Offer (AVO) at the Department of Veterans Affairs (VA)  and government-wide. Specifically, this report (1) describes federal  agencies’ and VA’s use of AVO; (2) describes federal agencies’ key AVO  internal controls, evaluations of whether AVO improved recruitment and  retention of employees, and lessons learned; and (3) analyzes the extent  to which VA has implemented additional internal controls for AVO since  2015 and has evaluated whether the use of AVO improved the  recruitment and retention of employees. According to GSA  officials, about 80 percent of federal agencies’ home sale relocation  transactions occur through GSA’s contract with relocation management  companies. GSA stated that the number of agencies that use its contract  for home sales can differ from year to year. We distributed the questionnaire we developed via email to the 28  agencies or components of agencies with completed home sale  transactions through GSA’s contract in fiscal year 2015 or 2016. Please describe any lessons learned your agency has identified.
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.

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.

What GAO Recommends

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