MSPB: Reasonable Reimbursement Concerns Can Be a Whistleblower Disclosure
After a customer agency objected to the estimated $10,200,000 cost of the National Finance Center’s (NFC) administrative services, the then-Director of the National Finance Center (NFC) raised concerns with his supervisory chain that NFC would likely be unable to recover the cost of an Interagency Agreement (IA) with the customer agency at the reduced amount of $5,900,000. After he raised those concerns, the then-Director alleged that his employer revoked his signing authority for IAs over $5,000,000, lowered his performance rating for two annual performance appraisals, issued him a letter of counseling, issued him a letter of reprimand, subjected him to a random drug test, and placed him on administrative leave.
An MSPB administrative judge dismissed the former Director’s whistleblower reprisal appeal. The administrative judge found that the former Director failed to establish that he reasonably believed his disclosure to his supervisory chain about NFC’s alleged inability to recoup expenses on a reduced-cost IA evidenced a violation of law, rule, or regulation, or another kind of disclosure that would grant the Board jurisdiction over his whistleblower appeal.
The employee appealed that ruling. On August 30, 2023, the Merit Systems Protection Board (MSPB) reversed the administrative judge’s decision, and found that a disinterested observer could reasonably conclude that the former Director’s disclosure evidenced a violation of law, rule, or regulation. Although the Board agreed with the AJ that the IA only included an estimate of the cost of the services, it found that the estimate was nevertheless meaningful and based on actual projections of the anticipated cost. The Board found that NFC “knew that $5.9 million was not representative of the actual cost of the services being provided to” the customer agency, and that it appeared that “NFC was capitulating to what [the customer agency] was willing or able to pay for those services.” The Board found that the former Director’s concerns were especially reasonable because the customer agency had “a history of not paying fully for the actual cost of NFC’s services.”
The former Director and other witnesses believed that allowing the customer agency to only pay $5,900,000 would be illegal because other customers using appropriated funds would be forced to subsidize the discount to the customer agency, and that the IA would violate the Antideficiency Act. According to the Board, “on its face, it is not unreasonable to believe charging a customer $5.9 million for services worth $10.2 million, which would cause NFC to experience financial strain and/or lead to overcharging other Federal clients, violates a law, rule, or regulation.”
For these reasons, the Board remanded the matter to the administrative judge to “determine whether the appellant established that his protected disclosures were a contributing factor in the identified personnel actions, and, if so, whether the agency proved by clear and convincing evidence that it would have taken the same actions in the absence of the protected disclosures.”
Read the full case: Turner, Jr. v. USDA.
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