Another Scandal at the VA

Exterior view of the Veterans Affairs Medical Center on May 8, 2014 in Phoenix, Arizona.
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Exterior view of the Veterans Affairs Medical Center on May 8, 2014 in Phoenix, Arizona.

The Veterans Administration is facing yet another embarrassment.

The VA's own Inspector General's report says two senior executives used a complicated loophole to significantly boost their pay. The report basically shows how former Under Secretary Diana Rubens created a new regional director job within the VA, volunteered to fill the position, and then took the $274,000 the government was offering in relocation expenses. The report says Kimberly Graves pulled a similar switcheroo, bagging $174,000 in relocation expenses when she created a similar director's position in another city. Both reassignments resulted in decreased responsibilities, but both executives retained their salaries, the report concluded.

The bigger issue, though, seems to be the system itself in which such executives are able to operate and take advantage of these loopholes without any prior oversight. And there may be more examples to come as the Inspector General determined that 21 out of 23 VA reassignments investigated included salary increases. In total, the VA spent over $1.8 million on the reassignments.

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In response to the report, Chairman of the House Committee on Veterans Affairs, Rep. Jeff Miller (R-FL), said that the findings did not surprise him and they were further proof of the VA's corrosive culture.

"This report is simply the latest in a long line of investigations showing VA officials helping themselves instead of helping America's veterans," Miller said.

If you're expecting strong denials from the VA, don't. In a statement sent to CNBC today, the department says it, "has concurred with, (the Office of the Inspector General's), recommendations." The VA added that it will, "take appropriate accountability actions."

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Also today, the VA moved to end a potentially embarrassing situation in its outpatient clinic in eastern Colorado. Fliers sent to many veterans setting up appointments at the clinic stated that bringing iPhones and backpacks into the clinic would result in their appointments being canceled. The flier put the phones and packs on a par with guns and knives. A VA spokesman tells CNBC that appointments will not be canceled and fliers were, "ill advised," and, "all program managers have been informed that the distribution of these, or similar, flyers should be immediately discontinued."