GAO Audit Finds Agency Failed To Account for $1.3B in Savings
The Department of Veterans Affairs failed to show it achieved $1.3 billion in budget savings that it claimed in fiscal years 2003 and 2004, according to a report by the Government Accountability Office, CQ Today reports (Starks, CQ Today, 2/2).
According to the GAO report, President Bush's budget requests for fiscal years 2003 through 2006 assumed that VA would implement "management efficiency initiatives that would save money without reducing the quality" of health care services.
After the president submits his budget request to Congress, VA provides lawmakers with a detailed budget justification and funding proposals for its programs, the report says. The report says that over the FY 2003-2006 time period, the president's budget proposals assumed that the VA's projected savings reduced funding requests by billions of dollars (GAO, "Veteran Affairs: Limited Support for Reported Health Care Management Efficiency Savings," 2/1).
CQ Today reports that VA twice in summer 2005 reported to Congress shortfalls totaling about $3 billion in its health care accounts over FY 2005 and FY 2006 (CQ Today, 2/2). According to the report, VA did not have proper documentation for the $1.3 billion it reported as management efficiency savings in FY 2003 and FY 2004. In addition, the VA claimed savings of more than $3 million from "efficiencies" that reduced overtime and delayed hiring at VA offices but did not explain how the savings were achieved without a reduction in the quality of service, according to the AP/Houston Chronicle.
"VA officials told us that the management efficiency savings assumed were savings goals ... to fill the gap between the cost associated with VA's projected demand for health care services and the amount the president was willing to request," the GAO report says (Yen, AP/Houston Chronicle, 2/2).
CQ Today reports that GAO did not examine FY 2005 savings because VA has not finished calculating them (CQ Today, 2/2).
The VA in a written letter said that its accounting practices are not "perfect" and should be improved, but the department did not agree with the report's finding that it was motivated simply "to fill the budget gap."
Gordon Mansfield, deputy secretary of the VA, wrote in the letter, "Proper stewardship of taxpayer resources requires that VA strive to become more effective and more efficient in delivering timely, high-quality health care for our veterans." Rep. Lane Evans (D-Ill.), ranking Democrat on the House Veterans' Affairs Committee, who requested the report, said, "It's unconscionable. Veterans needing health care are being penalized because of an accounting deception promulgated by this administration" (AP/Houston Chronicle, 2/2).
Sen. Daniel Akaka (D-Hawaii), ranking Democrat on the Senate Veterans' Affairs Committee, who also requested the report, said, "It is distressing that VA's health care budget over the past three years has been built like a house of cards."
Rep. Steve Buyer (R-Ind.), chair of the House Committee on Veterans' Affairs, said, "[W]e are closely examining what went wrong with the VA budget process and how we can ensure that we get it right. To provide for America's veterans, the VA must be able to accurately forecast its requirements" (CQ Today, 2/2).