INSPECTORS GENERAL Staff Resources of VA’s Office of Inspector General 141285 ---- _” - GAO/Ak’MI)-904; e United States GAO General Accounting Office Washington, DC. 20548 Accounting and Financial Management Division B-233770 April 13,199O , The Honorable John Glenn I Chairman, Committee on Governmental Affairs United States Senate The Honorable Alan Cranston Chairman, Committee on Veterans’ Affairs United States Senate The Honorable John Conyers, Jr. Chairman, Committee on Government Operations House of Representatives The Honorable G. V. Montgomery Chairman, Committee on Veterans’ Affairs / / House of Representatives / ! The Department of Veterans Affairs Act, Public Law 100-627, estab- I lished the Veterans Administration as an executive department effective March 15, 1989, and redesignated it the Department of Veterans Affairs , (VA). The act also authorized 40 additional staff members for VA'S Office of Inspector General (OIG) to be phased in over fiscal years 1990 and 1991, The conference report! accompanying the act directed GAO to review the resources available to VA'S Office of Inspector General for , carrying out its statutory responsibilities. As agreed with your offices, I our review evaluated the OIG’s use of its current’staff, its planned use of I, the additional 40 staff members authorized by the act, and its plans to I request further staff increases. We found that the OIG is providing widespread coverage of VA'S opera- tions through its audits and investigations of facilities, programs, and functions. The 40 additional staff members authorized by the act will be used to provide more in-depth coverage of VA'S operations in areas cur- rently subject to OIG audit and investigation. This increase of 40 will bring the authorized VA OIG staffing level to 417, which is almost the / level it requested in budget submissions for fiscal years 1988 and 1989. I/ This is also the staffing level the OIG has cited as needed in its S-year I, , ‘Conference report 100-1036, dated October 3,1988, accompanied H.R. 3471, which was enacted as Public Law 100-627. Page1 GAO/AFMD-W6 VA’s Office of Impector General ,r 1 rh B-233770 resources plan and in hearings before the House Veterans’ Affairs Committee. The Acting Inspector General (IG) stated that he planned to request addi- tional staff beyond the 40 authorized by the act. Based on the results of a workload assessment developed in January 1989, the Acting IG submit- ted a budget request to VA for 80 additional staff members in fiscal year 1991 and plans to request about an additional 80 staff members in each subsequent fiscal year through 1996. The workload assessment con- cluded that the VA OIG needed a staffing level of 809 to provide maxi- mum audit and investigation coverage of VA operations. In our view, however, the workload assessment does not adequately support a staffing level of 809. The OIG did not establish audit or investi- gative priorities for VA’S diverse facilities, programs, and functions in determining its staffing requirements. Guidance for establishing priori- ties is included in Office of Management and Budget (OMB) Circular A-73 and OIG policies. We believe that the OIG could better identify its staffing requirements by establishing priorities for the facilities, programs, and functions identified in the assessment and by considering the impact of its new audit approach. To better identify VA OIG staffing requirements, we recommend that the VA Inspector General establish priorities in the OIG workload assessment and consider the effect of those priorities and its new audit approach on future staffing needs. In commenting on a draft of this report, the Acting IG agreed to include priorities in the OIG workload assessment and to consider the effect of its new audit approach on its staffing requirements. The Acting IG did not agree that the workload assessment does not adequately support a staff- ing level of 809. m B&kground was made a statutory OIG nearly 10 months later by the Inspector Gen- eral Act of 1978. The OIG’S mission is to prevent, detect, and reduce t fraud, waste, and abuse and to promote economy, efficiency, and effec- I tiveness through audits and investigations of VA programs and opera- tions. The VA OIG began its operations with 156 staff members. During the OIG’S first year, it received a substantial staff increase, which brought the OIG’S total staff to 366 by the end of fiscal year 1978. Since that time, the OIG’S staffing levels have remained fairly constant. Page 2 GAO/AFMD-!?JO4 VA’s Office of Inspector General B333770 In fiscal year 1989, the OIG operated with an authorized staff level of 377 and a budget of about $21 million to provide audit and investigative coverage of VA’S budget of about $30 billion and the activities of about 219,000 employees. While there are many other variables that can and do affect the size of an OIG’S operation, we did note that in comparison with other OIGS, the VA OIG ranked in the bottom third in terms of the ratios of OIG employees to agency employees and OIG employees to agency budgeted outlays. (See appendixes I and II for staffing, budget, and coverage information on OIGS for fiscal years 1981 through 1988.) The OIG requested staff increases in prior-year budgets. For fiscal years 1986 through 1989, the OIG requested from VA staff levels of 469,424, 421, and 421, respectively. While VA approved partial increases for the OIG in fiscal years 1986 and 1987, OMB disapproved VA’S proposed increases. VA did not approve any of the increases requested by the OIG for fiscal years I988 and 1989 because of the government’s overall budgetary constraints. The 40 additional staff members authorized by the act will increase the OIG’s authorized staff level to 397 in fiscal year 1990 and to 417 in fiscal year 1991. Our objectives were to evaluate the 01~'s (1) use of its current staff, Objectives, Scope,and (2) planned use of the additional 40 staff members authorized by the Methodology act, and (3) plans to request additional staff increases. We examined the OIG’s operational plan for fiscal year 1988 to identify the types of audits and investigations planned and the OIG coverage of VA operations. We reviewed VA’S budget for fiscal year 1988 to identify its major programs and functions. We also analyzed data from the OIG’S management information system to determine if the OIG achieved its planned audit and investigative coverage and provided coverage of VA’S major programs and functions. We interviewed the Assistant Inspector * General for Investigations, Acting Assistant Inspector General for Auditing, and Deputy Assistant Inspectors General for Auditing and Investigations to identify the nature and priority of work not performed because of lack of staff. We discussed with the Acting Inspector General and the Assistant Inspector General for Policy, Planning, and Resources the intended use of the additional 40 staff members authorized by the act and plans to request further increases in the OIG’S staff level. We also discussed the OIG’s progress in implementing a new audit approach for nationwide coverage of VA’s programs. Page 3 GAO/AF’MD-30-g VA’s OfYice of Inspector General B-233770 - We examined the OIG’s workload assessment and related staffing requirements profile completed in January 1989. We also examined the legislative history related to the growth of the OIG and its responsibilities. We obtained information on actual staff levels of OIGS at selected agen- cies and their budget outlays for fiscal years 1981 through 1988 from the President’s Council on Integrity and Efficiency. For fiscal year 1988, we computed the ratios of the OIGS' staffs to their respective agencies’ budget outlays and numbers of employees. We also obtained information on the VA OIG’S prior years’ budgets submitted to VA and OMB and the actions taken on its budgets for fiscal years 1990 and 1991. We performed our work at VA OIG headquarters in Washington, DC. Our work was performed between February and October 1989 and was con- ducted in accordance with generally accepted government auditing standards. We found that in recent years, the OIG has provided widespread audit OI/GProvides and investigation coverage of VA’S operations with its authorized staff Widespread Coverage levels. In our quality assessment review2 of the VA OIG’S operations, we of !VA’sOperations reported that in fiscal year 1987, the OIG conducted audits and investiga- tions in areas of VA’S operations that accounted for about 97 percent of With Its Resources VA’S $27.6 billion budget. These areas of coverage included income secu- / rity for veterans; veterans education, training, and rehabilitation; veter- ans housing; other veterans benefits and services, such as cemeteries; and hospital and medical care for veterans. For fiscal year 1988, the OIG provided audit and investigative coverage in these areas of VA opera- tions. The OIG’S annual planning process identified vulnerabilities in these areas and developed operational plans to provide coverage of the most vulnerable areas identified. The OIG provides audit and investigation coverage and oversight of VA’S facilities, programs, and functions through its three major offices: the Office of Policy, Planning, and Resources; the Office of Investigations; and the Office of Auditing. In addition to its central office, the OIG has eight regional offices and a field data processing center. At the end of fiscal year 1988, the OIG had 398 staff members which were distributed as follows: 45 in the Office of Policy, Planning, and Resources; 76 in the 21nspe~rs General: Compliance With Professional Standards by the VA Office of Inspector General (GAO/mD -89 _76 , July 3,19s9). Page 4 GAO/AFMD9O4 VA’s OffIce of Inspector General B-333770 Office of Investigations; 274 in the Office of Auditing; and 3 in the IG’S office. The Office of Policy, Planning, and Resources is primarily responsible for developing OIG policy, plans, and budgets and for administering the training and other needs of OIG staff. This office is also responsible for providing oversight of VA’S quality assurance program for the delivery of medical care, VA medical inspector operations, and VA’S contract audit process. In addition, this office operates the VA fraud hotline and per- forms oversight of VA security functions. The Office of Investigations provides coverage of VA primarily through investigations of alleged wrongdoing brought to the OIG’S attention. Its investigations mainly focus on veterans benefits, with the largest caseload involving veterans pension benefits. For the 6-month period ended September 30,1988, the OIG reported that about 70 percent of its investigations were in the area of veterans benefits. During fiscal year 1988, the Office of Investigations also conducted some self-initiated investigations, primarily of VA’S multibillion-dollar home loan guaranty program. The Office of Auditing provides coverage through performance audits of VA facilities, programs, and functions. For the 20-month period ended May 26, 1989, the Office of Auditing spent approximately half of its audit staff days reporting on facilities and half reporting on programs and functions. The Office of Auditing generally reviews 230 of VA’S 701 facilities on a cyclical basis over a 3-year period-approximately 77 facilities annually. The 230 facilities included in the 3-year audit cycle provide medical and benefit services to veterans in program areas which accounted for 96 percent of VA’S $29.6 billion budget for fiscal year 1988. Similarly, the majority of the audit coverage of programs and functions focused on VA’S major medical and benefits program areas. During fiscal year 1988, the Office of Auditing began implementing a new audit approach to provide increased nationwide coverage of VA’S programs and functions. The objective of the new approach is to pro- duce audit results on a nationwide basis rather than focusing on individ- ual VA facilities. In the past, the OIG selected a few facilities for review during its program or function audits, which resulted in the identifica- tion of problems at those specific facilities. Under the new audit approach, the OIG will use the approximately 77 cyclic facility audits and audits of other selected facilities to review nationwide aspects of VA programs and functions. The Acting IG believes that reviewing programs Page 5 GAO/AFMD-30.6 VA’s Office of InspeCtor General E283770 and functions on this basis will be more comprehensive and enable the OIG to identify and report on systemic problems and to make recommen- dations with broader impact. The Acting IG said that the 40 additional staff members authorized by the act for fiscal years 1990 and 1991 will be used to provide more in- depth coverage of VA operations currently under review. The 40 addi- tional staff members will provide the OIG with a staff level that approxi- mates the levels it requested in its 1988 and 1989 budget submissions to VA and will meet the levels identified in its S-year resources plan. This staffing level is also consistent with information presented by the for- mer IG in October 1987 to the House Committee on Veterans’ Affairs that 40 additional staff members were needed to provide more in-depth coverage of VA’s large programs. The OIG will allocate 32 of the additional 40 staff members to the Office of Auditing and 8 to the Office of Investigations. With the additional 40 staff members, the OIG intends to increase its coverage of such VA pro- gram areas as procurement and veterans life insurance, which had not received in-depth coverage in the past. We believe that the OIG’s ratio- nale for assigning the staff to these areas is reasonable, based on its concerns about the vulnerabilities within VA’S procurement and insur- ance programs. The OIG requested appropriations for these additional 40 staff members in its budgets for fiscal years 1990 and 1991. For fiscal year 1990,” the OIG will receive about $21.8 million. According to OIG officials, this amount will support a staff level of 389, while 397 staff were authorized. The VA budget request for fiscal year 1991 includes about $26.9 million for the OIG, which will support a staff level of 437, which is greater than the 417 staff authorized for that year. The OIG plans to request additional staff beyond the 40 authorized by The OIG Plans to the act. Based on the results of a workload assessment that it completed Request Additional in January 1989, the OIG submitted a budget request to VA for 80 addi- Staff tional staff members for fiscal year 1991 and plans to request about 80 additional staff members in each of the subsequent fiscal years through 1996. The assessment concluded that the OIG required a staff level of 3The OIG’s fiscal year 1990 budget was the first funded under a separate appropriation account authorized for all OIGs by the Inspector General Act Amendments of 1988. Previously, the VA OIG’s budget request and operations were part of VA’s general operating expenses account. Page 6 GAO/AFMD-904 VA’s Office of Inspector General 5333770 809 to provide maximum audit and investigation coverage of VA opera- tions. The assessment stated that the 809 staff members would be allo- cated as follows: 679 to the Office of Auditing, 160 to the Office of Investigations, and 80 to the Office of Policy, Planning, and Resources and the IG'S office. Our analysis of the 1989 assessment showed that the OIG did not estab- lish priorities for its audit and investigation universes in determining its staffing requirements for audits and investigations of VA'S diverse facili- ties, programs, and functions. Requirements for establishing priorities are stated in OMB Circular A-73, “Audit of Federal Operations and Pro- grams,” and in the VA OIG'S written guidance for prioritizing investiga- tions, “Investigative Priority Codes.” In addition, the OIG did not consider the impact of its new audit approach in developing the assessment. OMB Circular A-73 requires that an audit organization periodically review its audit universe-facilities, programs, and functions-and determine the coverage, frequency, and priority of audits required to cover the components of the audit universe. Priorities should be based on consideration of such criteria as the vulnerability of each of the areas to fraud, waste, and abuse; size of the budget for each area; coverage of the areas by GAO; and Federal Managers’ Financial Integrity Act reviews of the agency’s internal operations. By applying the criteria in OMB Cir- cular A-73 to the components of the OIG'S audit universe identified in the workload assessment, we believe that the frequency and depth of cover- age of the components would be impacted and, correspondingly, the 01~'s staffing requirements could be affected. While the assessment indicated that a staff level of S7g4 was necessary for audits of VA'S diverse facilities, programs, and functions, it did not consider the factors previously discussed for establishing priorities and determining OIG staffing requirements. For example, the assessment showed that the OIG would audit the 701 VA facilities every 3 years, including VA'S 111 cemeteries which accounted for less than 1 percent of VA'S $29.6 billion budget for fiscal year 1988. Similarly, among VA'S diverse programs and functions, the coverage of burial programs, which also accounted for less than 1 percent of the fiscal year 1988 budget, is not based on consideration of the factors previously discussed. 4The OIG intends to use 24 of the 679 staff members to audit, over a B-year period, 400 private mortgage lenders that are involved in VA’s housing program. Page 7 GAO/AF’MD-30-6 VA’s OfTlce of Inspector General , B-233770 The OIG’s “Investigative Priority Codes” require that investigations be classified as priority 1 to 4, depending on factors such as the dollar amount of potential loss to the government. Priority 1 investigations involve potential losses of over $25,000; priority 2 investigations involve losses between $10,000 and $25,000; priority 3 investigations involve losses between $1,000 and $10,000; and priority 4 investigations involve losses below $1,000. For investigations, the workload assess- ment showed that a staff level of 150 was necessary for total coverage of areas, including low-priority investigations of VA employees and investigative-type hotline cases. In July 1988, the Assistant Inspector General for Investigations analyzed the OIG’S past investigative efforts and concluded that additional investigative staff would enable all of the lower priority 3 and 4 investigative cases to be addressed as well as the higher priority cases which are currently addressed. While the OIG currently establishes priorities for the cases it investi- gates, priorities were not included for the diverse investigation universe identified in the workload assessment. Prioritizing the work would help the OIG determine whether areas warrant expanded or reduced coverage. For example, we found in our quality assessment review of the VA OIG that OIG referrals of lower priority hotline cases to VA program offices were resolved administratively to the 010’S satisfaction. Therefore, we believe that the consideration of such priorities in this area would affect the staffing requirements included in the assessment. In addition, the workload assessment did not consider the impact of the new audit approach on the OIG’S staffing requirements. Specifically, under the new audit approach, the Acting IG stated that the audit cycle of the 230 facilities would be lengthened or shortened to reflect each facility’s vulnerability to fraud, waste, and abuse and to make more staff available for program and function audits. However, the assess- ment showed that all 701 facilities-including the original 230 facili- ties-would be audited on a 3-year cycle. We believe that the new audit approach will impact the frequency of the OIG’S audit cycle and, as a result, will affect its staffing requirements, The Acting IG said that the workload assessment will be periodically updated and that requests for additional staff must be justified on the basis of evaluations of the productivity and benefits from the OIG’s cur- rent staff and any additional staff it receives. The OIG plans to update the assessment every 2 years and has identified a variety of factors which it plans to use in its evaluation of staff productivity and benefits. These factors include the monetary savings identified by audits and Page 8 GAO/AF’MD-90-6 VA’s Office of Inspector General B-223770 investigations, new and changed legislation resulting from OIG work, changes in VA’S management and procedures, numbers of reports, and more efficient audits in terms of reduced staff days. The OIG provides widespread coverage of VA’S operations through its Con lusions audits and investigations of the agency’s facilities, programs, and func- tions. The OIG will provide more in-depth coverage of VA’S operations F with the additional 40 staff members authorized for fiscal years 1990 and 1991. With the additional 40 staff members, the OIG will almost reach the staffing level it requested in recent budget submissions and cited as needed in its S-year plan and in hearings before the House Vet- erans’ Affairs Committee. The OIG plans to request additional staff beyond the 40 authorized by the act. Based on the results of its workload assessment indicating a need for a staff level of 809, the OIG submitted a budget request to VA for 80 additional staff members for fiscal year 1991 and plans to request about 80 additional staff members in each subsequent fiscal year through 1995. In our view, however, the workload assessment does not adequately support a staffing level of 809. In determining its staffing requirements, the OIG did not establish audit or investigation priorities, which could impact the frequency and depth of coverage, or consider the impact of the OIG’s new audit approach. By establishing priorities and including their effect and the effect of the new audit approach when determining its staffing requirements, we believe that the OIG could better identify its staffing requirements. I To better identify VA OIG staffing requirements, we recommend that the Reckmmendation Inspector General establish priorities in the OIG workload assessment and consider the effect of those priorities and its new audit approach on future staffing needs. The Secretary of the Department of Veterans Affairs and the Acting Agdncy Comments and Inspector General provided written comments on a draft of this report. Ouq”Evaluation (See appendixes III and IV.) The Secretary commented that while the / overall staffing level of the OIG is approved in VA’S internal planning and budget process, the allocations of staff are left to the discretion of the J Inspector General. Our evaluation of the Acting IG’S specific comments is / provided in appendix IV. Page 9 GAO/AFMIMM VA’s Office of Inspector General 5223770 The Acting IG agreed to include priorities in the workload assessment and to consider the impact of the OIG’S new audit approach on its staff- ing requirements. However, the Acting IG did not agree with our conclu- sion that the workload assessment does not adequately support a staffing level of 809. The Acting IG stated that including priorities would have no impact on the OIG's overall staffing needs and that the impact of the new audit approach on staffing requirements was, at a minimum, resource neutral and would likely require additional staff resources because audit coverage would be both broader and deeper. We do not believe that the impact of adding priorities and the new audit approach to the workload assessment can be determined at this time. The staffing level of 809 is intended for maximum audit and investiga- tion coverage of the audit and investigation universes identified in the assessment. The OIG’s staffing level is based on a 3-year audit cycle for all VA facilities, programs, and functions identified in the assessment, without consideration of such criteria as the vulnerabilities of the com- ponents of the audit universe to fraud, waste, and abuse cited in OMB Circular A-73 for prioritizing audit universes. It is also based on the premise that the OIG will provide maximum investigative coverage of its investigation universe, without regard to the priority system the OIG has established for its own work. We believe that establishing priorities in accordance with OMR Circular A-73 could change the 3-year audit cycle and depth of coverage of VA facilities, programs, and functions identified in the assessment and, con- sequently, could impact staffing requirements. The new audit approach, which requires more comprehensive coverage of the programs and func- tions at VA facilities, could also change the frequency of the individual cyclic audits of facilities and thus impact the staff requirements for audits of VA facilities, programs, and functions. In addition, applying its criteria for prioritizing investigations could also change the frequency and depth of coverage of the OIG’S investigation universe. By including priorities and the impact of its new audit approach in the OIG workload assessment, we believe the OIG will be better able to identify its staffing requirements. Unless you publicly announce the contents of this report, we will not distribute copies until 16 days after it is issued. At that time, we will send copies to the Secretary of Veterans Affairs, the Acting Inspector General, and other interested parties. Copies will also be made available to others upon request. Page10 GAO/AFMD4O8V!'eOf!lceofInspectmGenerd This report was prepared under the direction of John J. Adair, Director, Audit Oversight and Policy, who may be reached on (202) 275-9369 if you or your staff have any questions. Other major contributors are listed in appendix V. Donald H. Chapin Assistant Comptroller General Page 11 GAO/~M VA’s Office of Inspector General , Cbntents Letter Adpendix I St ’ff and Budget Le els of Offices of In ” pectors General 16 Adpendix III 18 Cobents From the Secretary of VeberansAffairs Apipendix IV 19 Cobents From VA’s Acting Inspector Geherd Appendix V 27 M&or Contributors to This Report Page 12 GAO/AF’MD-SO-6 VA’s Of’fice of Inspector General Tal E?S Table 1.1: Staff Levels of Offices of Inspectors General for 14 Fiscal Years 1981 to 1988 Table 1.2: Budget Outlays of Offices of Inspectors General 16 for Fiscal Years 1981 to 1988 Table II. 1: OIG Coverage of Agency Funds for Fiscal Year 16 1988 Table 11.2:OIG Coverage of Agency Staff for Fiscal Year 17 1988 Abbreviations IG inspector general OIG Office of Inspector General OMB Office of Management and Budget VA Department of Veterans Affairs Page 13 GAO/AFMD&Ui VA’s Oi’fice of Impector General Apphdix I Sl@ffand Budget Levels of Offices of Inspectors General TabId 1.1:Staff Levels of Offices of Inspectors Qeneral for Fiscal Years 1981 to 1988 Agen(cy/Deprrtment 1981 1982 1983 1984 1985 1986 1987 1988 Agric&ire’- 900 872 897 879 891 820 818 818 Kgay --.-.-_ ----+ ..-for-_--- International Development 179 171 160 179 192 175 183 205 Comn)erce ----.+---.--.-.. 171 176 2a7 215 208 206 192 206 P?f”!$--“.-..-..- -._.___+-..--- ..- 385 284 496 269 937 283 900 299 1,081 304 1,080 272 1,334 278 1,380 320 --.... EnergJ-._-_.^ -_._.. - _.._-_-_- 125 153 178 180 178 178 178 178 Envircjnmental~___ Protection Agency 142 174 180 229 256 260 256 280 Gene&l .-.-.- _-..-Services ._-. ..~- Administration 531 483 404 419 400 361 364 452 _.-- -..---- Services Human __-.--- 867 922 1,280 1,317 1,307 1,225 1,204 1,236 a and Urban Develooment 481 499 499 488 498 472 469 493 lnteridr ----+--.---... .------ 189 206 278 317 314 289 278 300 Labor, - -A- .--__-.---- ..--- 439 430 471 528 524 562 519 530 Natio al Aeronautics and Soace Administration 100 100 102 100 97 98 111 131 Railroad Retirement Board NA NA NA NA NA NA 22 45 .--_-~ .. ---___-~ 124 140 133 124 124 120 125 132 67 67 69 82 88 98 149 181 448 445 436 434 462 457 456 451 -..-- -t. --...---.- -.- -~____ 27 27 86 117 120 117 112 114 Veterans _‘-“.-., Affairs c ..--._...._. -- ..__. ~..-_^..-- -----_-- 330 342 345 356 385 385 381 381 U.S. llilformation Aaencv NA NA NA NA NA 36 36 44 Total 1 5,789 5,972 6,938 7,163 7,429 7,211 7,465 7,877 Note: Staff levels are actual full-time equivalent employees. NA denotes that data were not available because the OlGs were either not yet established or not fully operational. aDefense figures reflect the Office of the Assistant to the Secretary for Oversight and Review and the statutory Defense OIG (created in 1983) and do not include the inspectors general of the military depart- ments or Defense audit and investigation organizations. Source: President’s Council on Integrity and Efficiency Page 14 GAO/AFMD-908 VA’s Office of Inspector General Staff and Budget Leveb of OffIws of Inapectora General Table 1.h: Budget Outlays of Offices of Inspectors General for Fiscal Years 1981 to 1988 Dollars ih millions GGGGGartment -2z----L~:--.------ 1981 1982 1983 1984 1985 1988 1987 1988 Agricult _--- re--- ._._ --- $37.7 $40.2 $41 .o $42.3 $45.6 $43.1 $45.6 $47.7 Aaencv t-for International Develooment 11.4 14.2 13.7 14.2 17.5 13.7 18.4 22.8 7.0 6.9 9.5 12.2 13.3 12.8 12.8 13.9 16.1 25.7 35.1 44.9 55.1 63.7 73.5 83.8 9.8 9.4 13.1 14.1 15.2 14.3 15.3 16.9 5.5 6.4 11.2 13.7 23.3 18.3 21 .l 20.0 Environmental Protection Agency 9.7 11.9 11.7 13.7 18.4 15.1 18.0 21.5 s’ -- Services Administration a---~ -- 19.8 17.9 17.8 19.4 21.2 19.6 19.7 24.1 Health nd Human Servicesb 35.7 37.2 56.5 66.4 73.1 68.7 69.0 71.8 Housinb --C...-.-..-..~and Urban Development -...___-__- 16.9 18.9 20.6 21 .l 24.7 23.1 20.2 25.8 Interior .---4.- ; 9.1 13.5 21.9 21.9 16.9 14.8 15.9 17.9 Labor / 22.3 23.7 24.6 36.4 43.7 38.7 40.8 42.4 Nationalc--..-:---.----- --.. Aeronautics and -.Space Administration 3.9 4.4 4.9 4.7 5.0 5.4 6.0 7.9 Railroad Retirement Board NA NA NA NA NA NA 1.1 2.2 Small &siness Administration 5.3 5.6 5.7 5.5 5.8 5.7 6.3 7.4 -&-f --___..l p_-. -.---.--- --.- -.-.--__- 3.5 3.6 3.8 3.8 4.8 5.6 10.3 14.9 Transpbrtatron--..:” -...._ - _._--.----.-- 21.5 23.3 24.4 21.6 23.8 25.6 26.0 28.3 Treasury ---.‘-+ __-.-.---r----.-.--p. 1.0 1.o 3.1 4.3 4.9 4.9 5.0 5.7 Veterans I .- _-...,~.,_-Affairs . .._.._-..-~~~~______. 12.3 14.8 16.4 17.1 19.5 18.2 18.9 19.6 U.S. lnqormation Agency NA NA NA NA NA 2.7 2.3 2.8 ‘f&l i .. $248.5 $278.8 $335.0 $377.3 $431.8 $414.6 $446.2 $4972 Note: NA denotes that data were not available because the OlGs were either not yet established or not fully operational. aDefense figures reflect the Office of the Assistant to the Secretary for Oversight and Review and the statutory Defense OIG (created in 1983) and do not include the inspectors general of the military depart- ments or Defense audit and investigation organizations. bThese data are figures for obligational authority rather than outlays. Source: President’s Council on Integrity and Efficiency. Y Page 15 GAO/AF’MD90-6 VA’s Office of Inspector General Apkndix II OiG Coverage of Agency Funds and Staff Tab16 ll.1: OIG Coverage of Agency Fun& for Flacal Year 1968 Dollars in millions Ratio of OIG staff to // Budgeted Number of OlC3 Agency/Depattment agency outlays staff bu:litY~: Agency for International Development $1,319 205 1 toS6 Commerce 2,279 206 1 to11 Interior 5,147 300 1 to17 Environmental Protection Agency 4,871 280 1 to17 State 3,421 181 1 to19 U.S. Information Agency 843 44 1 to19 Housing and Urban Development 18,938 493 1 to38 Labor 21,870 530 1 to41 Agriculture 44,003 818 1 to64 Education 18,246 320 1 to 57 Transportation 26,404 451 1 to 59 Energy 11,166 178 1 to63 National Aeronautics and Space I Administration 9,092 131 1 to 69 / Veterans Affairs 29,271 a 381 1 to 77 I Railroad Retirement Board 4,147 45 1 to 92 Defense 303,984 1,380b 1 to 220 Health and Human Services 373,560c 1,236 1 to 302 Treasury 202,386 114b 1 to 1,775 TotaId $1,080,927 7,293 1 to $148 8The VA data exclude government liability for $170 billion in home loan guarantees and $201 billion in veterans insurance policies in force. bDefense and Treasury have substantial audit and investigation resources that supplement their OIG staff resources. ‘This figure includes the Social Security program of $214.5 billion, dTotals exclude the General Services Administration and Small Business Administration because they had negative budgeted outlays for fiscal year 1988. Page 16 GAO/AFMD-908 VA% Office of Inqectm General Table 1112:OIQ Coverage of Agency staff for Flrdal Year 1988 Ratio of 010 Number of Number otst$ staff to age$z# Aaency/Department agency Miff Education 4,516 320 1 to14 Agency for International Development 4,582 205 1 to 22 Housing and Urban Development 12,971 493 1 to 26 Small Business Administration 4,105 132 1 to31 Labor 18.178 530 1 to34 Railroad Retirement Board 1,527 45 1 to 34 General Services Administration 18,807 452 1 to42 Environmental Protection Aaencv 14.389 280 1 to 51 Energy 16,258 178 1 to91 Health and Human Services 118,734 1,236 1 to 96 Agriculture 106,552 818 1 to 130 Transportation 61,330 451 1 to 136 State 25,482 181 1 to 141 Commerce 35,000 206 1 to 170 National Aeronautics and Space Administration 22,326 131 1 to 170 U.S. Information Agency 8,796 44 1 to 200 Interior 70,336 300 1 to 234 Veterans Affairs 214,433 381 1 to 563 Defense 1,052,84ea 1,380b 1 to763 Treasury 153,063 114b 1 to 1,343 Total 1.964.233 7.877 1 to 249 aThe number of Defense staff includes civilian personnel only. bDefense and Treasury have substantial audit and investigation resources that supplement their OIG staff resources. Page 17 GAO/APMD-W-6 VA’s Office of Ins-r General 1 .p, App&dix III ‘Y- C&nments From the Secretary of V&er~ Affairs THE SECRETARY OF VETERANS AFFAIRS WASHINGTON Mr. Donald H. Chapin Assistant Comptroller General Accounting and Financial Management Division General Accounting Office Washington, DC 20548 Dear Mr. Chapin: This letter responds to your December 8, 1989, draft report, I stairice 1 0 f InsueotgE m (GAO/AFWD-90-L). After reviewing the Acting Inspector General's comments, dated January 11, 1990, I am providing these remarks separately. I believe it is important to note that, while the overall staffing level for the Office of Inspector General is approved in the Department of Veterans Affairs internal planning and budget process, the allocations of the staff are left to the discretion of the Inspector General. Thank you for the opportunity to comment on your draft report. Page18 GAO/~~VA's~~ofInspectorGeneral I4 App&n&x IV &nments From VA’s Acting Inspector General Note: GpiO comments supplemgnting those in the report te$t appear at the end of this appendix. Otf3tfs;;f Inspector Washington DC 20420 Department of Veterans Affairs . Mr. Donald H. Chapin Assistant Comptroller General Accounting and Financial Management Division General Accounting Office Washington, DC 20548 Dear Mr. Chapin: We appreciate the opportunity to comment on your draft report titled “Staff Resources of VA’s Office of Inspector General.” While we were pleased that the General Accounting Office (GAO) recognizes the VA Office of In.spector General is providing See conjment 1. widespread coverage of VA’s’operations with its current staffing level, we cannot agree with the overal 1 conclusion that the workload assessment does not adequately support a staffing level of 809. The workload assessment was developed in accordance with Off ice of Management and Budget (OMB) Circular A-73 and in our opinion accurately reflects the total staffing needs of the Office of Inspector General to accomplish all of its mission workload. We agree with GAO’s recommendation to include priorities in our next workload assessment. Currently, the 010 does prioritize its See cofjment 1. workload as a part of the annual planning and budget process. These priorities will now be added to the workload assessment document. In our opinion, adding priorities to the workload assessment document will have no impact on our overall staffing needs. We agree with GAO’s recommendation to consider the impact of the new overall audit approach on future staffing needs. While we See comment 1, agree that the new approach will impact on the future cycle at each location, we believe that GAO’s silence on how this will impact on resource requirements may likely lead the report reader to conclude that it wi 11 lessen the need for audit resources. While this revised approach is too new to precisely identify its impact on future resource needs, it is our belief that, as a minimum, it is resource neutral (i.e. requires about the same resources as identified in the workload assessment for ‘cyclical audits) and likely will require more overal 1 resources because of the concentration on more national programs and functions together with more problem-plagued facilities. Audit coverage will be both broader and deeper. In our next workload assessment, we will attempt to measure the impact of this approach on future resource needs. L Page 19 GAO/~99-9 VA% OfWe of Inspector General NW* N CommentaFrom VA’sActing hwpestor General Our specific comments, keyed by page number to the GAO draft report, are enclosed. If you have any questions about our comments, please do not hesitate to call me. Sincerely, Enclosure Page 20 GAO/AFMD-904 VA’sOffice of Inspector General Mm* w Comments From VA’s Acting Insjmctor General 4 VA OFFICE OF INSPECTOR GENERAL COMMENTS ON GAO DRAFT REPORT “STAFF RESOURCES OF VA’S OFFICE OF INSPECTOR GENERAL” GAO’s comments regarding the staffing levels requested in its B-year resources plan are incorrect. The 010, in its 5-year resources plans, submitted in FY 1984, 1985, and 1986, See c01 nent 2. all requested substantial increases (as many as 301 FTE) in OIG resources. The fact that these large increases were not granted because of budgetary constraints on the VA does not mean that the workload does not exist or that the resources were not otherwise justified and needed. In addition, we believe the statements attributed to the IO at the hearings before the House Veterans’ Affairs Committee are taken See car lent 3. out of context. The IG's remarks were tempered by the realities of the budget climate. He was aware that 40 additional FTE was al 1, at that time, that could be funded by the VA: therefore, his remarks reflect a realistic estimate of what resources could be obtained given the extremely tight budget situation in the VA. The OIG does not agree that the workload assessment does not support a staffing level of 809. We believe that it is a reasonable estimate of the staffing needed to perform See car I+rent 1. the OIG's mission priorities should workload. change We disagree (lower) this with GAO’s assumption estimate. Priorities that determine which parts of the workload are covered first and the depth of that coverage. We believe it is standard practice in the OIG community to identify staffing needs based on overall estimates of the workload. In today’s world of limited resources, OIGs cannot realistically expect to be fully staffed at these levels; therefore, each OIG has established a formalized planning process that allocates scarce resources to the highest priority workload. We believe this process is in accordance with OMB Circular A-73. We believe the VA OIG’s resource levels relative to other Inspectors General and the Departments they audit and investigate are a strong indicator of the inadequacy of the VA See coriment 4. OIG's resources. GAO recognizes that the VA OIG ranks in the bottom third in these comparisons; however, the rest of the narrative in GAO’s report is silent on the significance of this fact or its impact on the adequacy of the justification for more resources. We believe this is an important point and should be stressed and highlighted in a separate section of the report and in the summary paragraph of GAO’s report. Page 21 GAO/AFMD-90-g VA’s Office of hqector General APpe- Iv commentll From VA’s Acting Inspector General The GAO information relative to the 010 requests for additional data is incorrect and misleading. A5 stated earlier, the OIG requested large increases in its resource See cbmments 2 and 5 levels; but for the most part, these requests were disproved by Agency management because of limited funding VA-wide. GAO’s description of the functions assigned to the Office of Policy, Planning and Resources excludes an See cbmment 6. important function of this Office--Contract Audits, This function accounted for more than 50 percent of the audit reports issued in FY 1989. GAO’s description of the objective of the OIG’s new audit approach is not entirely correct. Since 1981, the 010 has provided nationwide coverage of VA programs and functions through its centrally directed audits. The new approach, which did See cjomment 7. not begin until FY 1989, is an attempt to “increasingly” produce results on a nationwide basis through a more direct blend of See cpmment 8. facility audits and coverage of VA programs and functions. The new approach will still include a focus on individual VA facilities, and we will still maintain an average cycle among all facilities See +mment 1, of about 3 years. As noted by GAO, about 50 percent of our staff time is devoted to cyclical audits of VA facilities; and we expect this to continue. We believe that the GAO should put its comments regarding the 5-year resources plans in context. As discussed in our prior comments, the recent 5-year resource plans were geared to what resources we reasonably could expect to be See cjomment 2. given--not to our overall needs as supported by the workload assessment that existed at that time. We believe this was a prudent decision in light of the Agency’s budget situation; but in no way should it be construed to mean that this represented our entire budgetary needs. Since the GAO draft report was issued, events have occurred that changed the status of the OIG’s FY 1990 See comment 9. budget. As a result of the sequestration action, the new amount appropriated for the OIG is $21.0 million. This funding is not sufficient to support the 397 personnel authorized by Congress as a part of the Departmental Legislation. The latest estimate of personnel for the OIG for FY 1990 is 389. We believe that GAO has misinterpreted the requirements of OMB Circular A-73, “Audit of Federal Operations and Programs. ” We believe that the determination of audit priorities See ciomment 10. referred to in OM8 Circular A-73 relates to the planning process that prioritizes areas for audit within available resources. Nowhere in OMB Circular A-73 does it state that the priority of a L Page 22 GAO/AFMD-904 VA’s Office of Inspector General Appemix IV Commenta F’rom VA’s Acting Inqeclmr General particular program should be used to determine an audit organization’s staffing needs. Furthermore, the provisions of OMB See corn ent 11. Circular A-73 are limited to audit operations; yet GAO appears to attempt to apply this circular to investigative and other non-audit functions of the OIG. r” In addition, the prioritization system for investigations referred to by GAO is an operational and planning mechanism to deal See corn L ent 12. with the serious shortfall of resources in the OIG’s investigation staff. The GAO implies that we should not consider lower priority cases as workload. The only real difference in the investigative priority system is the dollar magnitude of the offense. We do not believe we should exclude these low-priority cases from our workload assessment simply because of the dollar value ‘of the fraud. We should investigate all fraud cases; but, unfortunately, we only have the resources to investigate a few--so, we must prioritize our efforts. // We believe that this paragraph contains further misinterpretations of OMB Circular See comment 13, A-73. The priorities of areas, to include all the factors listed by GAO in this paragraph, are for planning purposes. In fact, OMB Circular A-73, paragraph S.F., clearly states that, based on the considerations set forth in paragraph 8.~. (Determination of Audit Priorities), each audit organization will prepare an audit plan at least annual 1 y. It is clear to us that the priorities referred to in paragraph 8.c.: (1) relate only to audit and (2) relate to the planning process, not the process of identifying an organization’s total workload requirements. The GAO did not put its reference to the audit of VA cemeteries in proper perspective with the workload assessment. While it is true that the 111 VA cemeteries account See comment 14. for less than 1 percent of VA’s budget, the workload assessment showed 11 staff years, or 51 ightl y more than 1 percent of the workload, attributable to audits of cemeteries. The difference is not statistically significant and too small to be used by GAO as a part of the justification to conclude the entire workload assessment was inadequate. GAO’s second example on burial programs is even less significant. The workload assessment shows one FTE devoted to these programs. This one FTE represents about one-tenth of 1 percent of the resources in the workload assessment. Again, this sample should not be used to conclude that the overal 1 workload assessment is not adequate. The GAO report implies that the OIG’s See cohment 15. workload assessment includes investigative staff to perform all employee cases and other hotline cases that are now referred to Page 22 GAO/AFMD-90-6 VA’s Of%e of Inspector General A&w* Iv Comments From VA’eActing Inspes2t.m General program officials for resolution. In fact, the assessment includes investigative staff to perform about 50 percent of this work. Furthermore, with the current limited staffing, the 010 has no choice but to refer these cases to program officials for resolution. Unfortunately, these program officials are in many cases closely linked with the allegations; and we believe that, if staffing permitted, it would be far better if the OIG investigated these issues rather than the program officials. The new approach to facility audits was not considered in the workload assessment because it was implemented after the workload assessment was developed. While we agree with See domment 1, GAO that the new approach would affect the cycle at a particular facility (i.e. some would now be done on a P-year cycle while others would be done on a 4-year cycle), on average, the cycle will remain close to 3 years overall. In addition, those facilities placed on a P-year cycle would generally be the larger facilities; and those placed on a 4-year cycle would tend to be the smaller facilities. As a result, the new approach could actually increase the overall staffing needs since the 010 would be concentrating more often on the larger facilities, which may require 1,000 staff days or more to complote a comprehensive audit. We cannot agree with GAO’s conclusion that the workload assessment is not a reasonable See domments 1 and 14. estimate of the VA OIG’s overall workload and staffing needed to perform the identified workload. We believe the examples (audits of burial programs and cemeteries) cited by GAO, as part of the basis for this conclusion, are insignificant and cannot be used as a basis to state the whole assessment is inadequate. The 010 believes the prioritization process is a planning See bomment 10 function that is necessary to make the best use of scarce resources. OMB Circular A-73 does not require priorities of individual areas be considered when an organization develops its overall workload assessment. Furthermore, GAO implies that, if we used this priority system, the workload assessment would result in See iomment 1. a lower overall staffing figure. We disagree. The assignment of priorities would tend to be resource neutral --with higher priority workload requiring more resources and lower priority requiring fewer resources. In our opinion, GAO has not shown that even if we assigned priorities to the workload assessment, it would materially affect the outcome of the staffing needs identified in the workload assessment. The VA OIG will consider the impact of its new approach to audits in future workload assessments. At this point in time, we believe this approach, if anything, will require more resources to fully implement. GAO has not made a case that this would not happen: yet, the implications in the report are that this new approach will require less overall resources. Page 24 GAO/~SO-6 VA’s Offlce of Inspector Generd * Appendx TV Commenta From VA’s Acting In8pector General The following are GAO’S comments on the Department of Veterans Affairs Acting Inspector General’s letter dated January 11, 1990. 1. See the “Agency Comments and Our Evaluation” section of the report. GAc/ Comments 2. No change necessary to the report. In our review, we used the OIG's fiscal year 1989 S-year resources plan, which showed a need for 40 additional staff over a S-year period. We believe that the OIG'S most cur- rent resources plan best reflects the OIG'S staffing requirements based on its current workload. 3. No change necessary to the report. We believe that our report accu- rately reflects the former IG’s response to the House Veterans’ Affairs Committee when asked whether the OIG was adequately staffed. The for- mer IG responded that the OIG’s S-year resources plan (for fiscal year 1988) reflected a need for 40 additional personnel over a S-year period and that an increase in staff would allow the OIG to provide more in- depth coverage of VA’S large programs. 4. No change necessary to the report. We do not believe that the resource levels of the other OIGs are a strong indicator that the VA 01~‘s resource level is inadequate. We believe that the important factors in determining OIG staffing levels include the agency’s mission, the nature of its programs and functions, and the vulnerabilities of its programs and functions to fraud, waste, and abuse. 6. No change necessary to the report. The staff levels reported as requested by the OIG for fiscal years 1986 through 1989 are based on data in the OIG’S budget submissions to VA. 6. We revised the report to reflect that the oversight responsibilities of the Office of Policy, Planning, and Resources include contract audits. 7. No change necessary to the report. The OIG began implementing its new audit approach in fiscal year 1988, as noted in its semiannual report for the period ending September 30, 1988. 8. We revised the report to state that the new approach will increase the OIG’snationwide coverage. 9. We revised the report to reflect the OIG’S fiscal year 1990 appropria- tion as reported in the President’s Budget for Fiscal Year 1991. Page 25 GAO/AFMD-904 VA’s Off& of Inspector General AppendixIV Comments From VA’e Acting In8peet.m General 10. No change necessary to the report. We do not believe that OMB Circu- lar A-73 requires that audit priorities be established only during the planning process for the next year’s work. (See comment 13 for further discussion of this issue.) We agree that the requirements of OMB Circular A-73 do not specifically relate to the OIG'S staffing requirements. How- ever, the OIG chose to use its workload assessment, which contains its audit universe, as the basis for determining its staffing requirements. 11. No change necessary to the report. The report states that the OIG should use its own “Investigative Priority Codes” for prioritizing the investigation universe. 12. No change necessary to the report. The report states that the OIG should establish priorities for its audit and investigation universes, which include all components of its universes. 13. No change necessary to the report. OMB Circular A-73 clearly states in section 8(b) that an audit organization is to identify its audit universe, and in section 8(c) that priorities are to be established for the compo- nents of that audit universe. (In the case of the VA OIG, these components would be the facilities, programs, and functions of VA.) Section 8(f) cited by the OIG states that the planning of work for the year is to be accom- plished in accordance with the earlier sections, including 8(b) and 8(c). Consequently, to meet the requirements of section 8(f), an audit organi- zation must accomplish 8(b) and 8(c) which require that the audit uni- verse be identified first and then priorities be established for the components of that universe. 14. No change necessary to the report. The OIG has placed all VA facili- ties, programs, and functions on a 3-year audit cycle. As a result of not using the criteria in OMB Circular A-73, the OIG did not determine the frequency and depth of coverage required for each of the components of its audit universe. Although we chose to use the smallest facilities and programs in our examples, we could have chosen any of the types of facilities and programs in the assessment to demonstrate our point that the frequency and depth of coverage could change and affect staffing, if prioritization were considered. 16. We revised the report to show that the maximum investigation cov- erage to be provided by the 160 staff relates to investigation-related hotline cases rather than to hotline cases to be addressed by audit or other type of review. Page 26 GAO/AFMD-90-6 VA’s Office of Inspector General AJpGJ Ma ior Contributors to This Report _~-- Marsha L. Boals, Assistant Director, (202) 276-8646 Accc unting and Bernard J. Trescavage, Evaluator-in-Charge Fina Kid Management William E. Adams, Evaluator Divil ion, Washington, D.C , , I (811640) GAO/~90.0 VA’r Office of Inspector General ----1
Inspectors General: Staff Resources of VA's Office of Inspector General
Published by the Government Accountability Office on 1990-04-13.
Below is a raw (and likely hideous) rendition of the original report. (PDF)