Ernst Demands USAID Answer for Payroll Fraud

WASHINGTON – U.S. Senator Joni Ernst (R-Iowa) is following up on her previous request for a comprehensive review of telework and locality pay policies by demanding action from the Inspector General (IG) of the U.S. Agency for International Development (USAID) to prevent waste, fraud, and abuse. 

This follows a USAID employee falsely using an office supply retailer’s mailing address in Virginia to defraud the taxpayer by claiming higher Washington, D.C. locality pay while living full-time in Florida – with the full knowledge and assistance of her supervisor. Meanwhile, multiple reports across different agencies have found as many as 80 percent of sampled federal employees are receiving the wrong locality pay.

Ernst wrote, “In your January 11, 2024, response, you stated your office takes timecard abuses and locality pay issues ‘very seriously.’ Yet, you declined to initiate a comprehensive review of USAID’s remote work practices due to the agency’s ‘evolving posture remote work, telework, and hybrid work over the past three years,’ despite USAID’s requirement that employees report to their official worksites at least six days per two-week pay period has been in effect since the end of Fiscal Year 2023. You should need no reminder that there is certainly ongoing locality pay fraud at USAID.”                                                                                                 

“Across the federal government, those Inspectors General whose offices evaluate this issue are uncovering rampant locality pay fraud, fueled by telework arranged without sufficient guardrails or oversight,” continued Ernst. “Of note, when the Office of the Inspector General of the Architect of the Capitol analyzed its locality pay practices, it found a full 80 percent of sampled employees received incorrect locality pay. Proactive steps must be taken to verify the accuracy of locality pay determinations, payroll, and personnel management.”

To ensure these steps are taken, Ernst requested answers to:

• The cost to taxpayers of locality pay abuse at USAID;
• What the IG is doing to hold employees abusing the system accountable; and
• If the USAID IG would conduct a thorough review and evaluate how much taxpayer-funded office space is being wasted. 

View the full letter here.

Background:

On August 28, 2023, Ernst sent a letter to USAID IG Paul Martin requesting a review of USAID’s telework, physical space utilization, and locality pay policies.

Ernst has been exposing locality pay abuse throughout the federal government. In June 2024, an audit she requested revealed one in four Department of Commerce employees had moved to areas with lower rates of pay but still received the higher pay rates associated with higher cost of living areas.

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