Veterans Affairs leaders plan to cut hundreds of payroll workers in coming months as part of efforts to downsize the department’s workforce and increase efficiency in agency operations.
The moves, outlined in an internal memo signed by VA Secretary Doug Collins earlier this month, would shutter payroll offices at nearly 50 VA medical centers spread throughout the country, which employ around 600 staffers.
Their workload would instead be handled by the department’s Financial Services Center, centralizing finances for all department workers. Officials estimate the move will save the Veterans Health Administration about $13 million annually.
“Centralizing these payroll services will reduce administrative overhead, duplication errors, back pay settlements, fraud, and increase efficiencies,” Acting Chief Financial Officer Edward Murray wrote in the memo.
But it will also eliminate jobs for about 300 federal workers and force the relocation of 300 other positions. In a statement, VA Press Secretary Peter Kasperowicz said the department has yet to finalize details about which employees will be given opportunities to move or accept other department jobs.
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“Despite the fact that VA has a proven payroll system that processes paychecks for more than 200,000 VA employees, some 50 VA medical centers still maintain their own payroll support staff,” Kasperowicz said. “By consolidating payroll and payroll support for all employees under VA’s Financial Services Center, VA will save money, time and resources.
“This is exactly the kind of commonsense reform that should have been done years ago but is only happening now under President Trump and Secretary Collins.”
Collins has already set a public goal of trimming at least 15% — about 72,000 staffers — from the VA workforce in coming years as part of an effort to reduce waste and inefficiencies within the department.
In his memo, Murray also outlined plans to consolidate Veterans Family Member Program payouts into the new centralized payroll operations, producing another $31 million in savings annually.
Officials said they are confident that after restructuring, the new office will be able to handle the increased workload without any disruptions to employee paychecks or family member benefits.
In late March, problems with VA’s payroll software caused delays in overtime and specialty pays for about 10,000 workers. Lawmakers said the issues raised concerns about department systems and staffing levels, but VA leaders dismissed the problems as a one-time glitch.
Democratic lawmakers have been fiercely opposed to plans for large-scale employee cuts at the department, saying the moves are likely to hurt medical care and benefits delivery for veterans. Collins has pushed back on those accusations and promised a careful review of potential impacts before the workforce reductions.
Kasperowicz said an implementation plan for the payroll staffing overhaul is still being developed.
Leo covers Congress, Veterans Affairs and the White House for Military Times. He has covered Washington, D.C. since 2004, focusing on military personnel and veterans policies. His work has earned numerous honors, including a 2009 Polk award, a 2010 National Headliner Award, the IAVA Leadership in Journalism award and the VFW News Media award.
