oversight

Veterans Paralympics Program: Improved Reporting Needed to Ensure Grant Accountability

Published by the Government Accountability Office on 2012-07-26.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             United States Government Accountability Office

GAO          Report to Congressional Committees




July 2012
             VETERANS
             PARALYMPICS
             PROGRAM
             Improved Reporting
             Needed to Ensure
             Grant Accountability




GAO-12-703
                                              July 2012

                                              VETERANS PARALYMPICS PROGRAM
                                              Improved Reporting Needed to Ensure Grant
                                              Accountability
Highlights of GAO-12-703, a report to
congressional committees




Why GAO Did This Study                        What GAO Found
The Veterans Benefits Improvement             The Department of Veterans Affairs (VA) and the U.S. Olympic Committee
Act of 2008 established VA’s                  (USOC) primarily awarded program funds through subgrants to 65 national and
Paralympics Program to promote the            community organizations that support adaptive sports opportunities. However,
lifelong health of disabled veterans and      their respective program expenditure reporting was not consistent with federal
members of the Armed Forces through           internal control standards, making it difficult to know fully how program funds
physical activity and sports.                 were spent. VA’s reporting of first-year program funding was problematic
Additionally, the act authorized VA to        because it did not closely track costs until midway through the fiscal year. During
provide a grant to USOC’s Paralympics         the second fiscal year—2011—VA granted $7.5 million to USOC, which, in turn,
Division, and allowed USOC to enter
                                              awarded $4.4 million to subgrantees and spent the remainder primarily on
into subgrant agreements to provide
                                              operations and personnel. Subgrantees reported using funds for activities such
adaptive sports activities to veterans
and service members. The act also
                                              as training and camps. GAO found, however, that USOC did not have sufficient
mandated GAO to report on the VA              reporting requirements in place for subgrantees to provide information on how
Paralympics program.                          VA funds were used separate from other sources of funding.

GAO is required to (1) review how VA          VA relied upon self-reported, unverified information to oversee the grant program
and its grantee and subgrantees used          but is planning to make improvements. In fiscal year 2011, VA did not conduct
program funds to provide adaptive             any on-site or remote monitoring to verify how funds were used. Thus, VA lacked
sports opportunities to veterans and          information on how well USOC and subgrantees managed grant funds,
service members; (2) assess how VA            potentially exposing itself to paying for services not delivered. In 12 of 21
is overseeing its grantee’s and               subgrant files selected, USOC was not holding subgrantees accountable for
subgrantees’ use of funds; and (3)            meeting the terms of their agreements. For example, one subgrantee agreed to
describe how veterans and service             conduct 10 activities, but the file indicated only 4 were conducted. VA reported
members have benefited from VA                that it has plans to improve to oversight, including conducting on-site monitoring
Paralympics activities. To do this, GAO       of grantees’ and subgrantees’ use of funds and having USOC verify financial
reviewed relevant federal laws,               reports for at-risk subgrantees, such as those with large subgrants.
regulations, guidance, agency reports,
and a non-probability sample of 21 of         While program benefits were reported by subgrantees and participants, up until
76 subgrant files, consisting of data on      this point VA has not systematically measured how adaptive sports activities
about 56 percent of funds subgranted.         benefit the health and well-being of veterans and service members. Subgrantees
GAO also conducted site visits to two         primarily report anecdotal information on program benefits, such as individual
states and interviewed veterans as well       success stories. VA collects information on the number of activities and
as agency and grantee officials.              participants from USOC. In 2011, over 10,000 participants were served through
                                              nearly 2,000 activities. However, these metrics are flawed due to double counting
What GAO Recommends                           and other measurement issues. VA officials also recognize that the metrics do
GAO recommends that VA take                   not comprehensively measure program benefits. Thus, VA and USOC have hired
additional actions to improve grantee         a contractor to conduct a study on the effects of adaptive sports on rehabilitation
and subgrantee reporting of                   and reintegration of veterans and service members into the community.
expenditures, activities, and
participants, as well as USOC’s
                                              Figures: VA-Funded Archery and Wheelchair Racing Competitions
monitoring of subgrantees. In
commenting upon a draft of this report,
VA agreed with these
recommendations and reported that it
was taking steps to implement them.


View GAO-12-703. For more information,
contact Daniel Bertoni at (202) 512-7215 or
bertonid@gao.gov.

                                                                                        United States Government Accountability Office
Contents


Letter                                                                                            1
                       Background                                                                 3
                       VA Grants and USOC Subgrants Were Awarded Primarily to
                         Provide Adaptive Sports Opportunities, but Reporting on
                         Expenditures Was Problematic                                             7
                       VA Relied on Self-Reported, Unverified Information to Oversee the
                         Grant Program, but Is Taking Steps to Improve Oversight                16
                       Program Benefits Have Been Reported but VA Does Not
                         Systematically Measure Them                                            20
                       Conclusions                                                              24
                       Recommendations                                                          25
                       Agency Comments and Our Evaluation                                       25

Appendix I             Objectives, Scope and Methodology                                        27



Appendix II            United States Olympic Committee’s Cost Definitions for
                       Subgrantees’ Use of Funds                                                29



Appendix III           Comments from the Department of Veterans Affairs                         30



Appendix IV            GAO Contact and Staff Acknowledgments                                    33



Related GAO Products                                                                            34



Table
                       Table 1: Fiscal Year 2011 VA Paralympics Program Funding                   9


Figures
                       Figure 1: VA Paralympics Program’s Organization Chart, Including
                                Program Fund Recipients                                           5




                       Page i                                GAO-12-703 Veterans Paralympics Program
Figure 2: Number of Subgrantees Providing Activities by Sport,
         Fiscal Year 2011                                                                 13
Figure 3: Fiscal Years 2011 and 2012 Projected Budget Estimates
         for Subgrantees                                                                  15
Figure 4: Examples of Anecdotal Reports on VA Paralympics
         Program Benefits                                                                 20




Abbreviations

IG                Inspector General
GAO               U.S. Government Accountability Office
OMB               Office of Management and Budget
USOC              United States Olympic Committee
VA                Department of Veterans Affairs



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Page ii                                         GAO-12-703 Veterans Paralympics Program
United States Government Accountability Office
Washington, DC 20548




                                   July 26, 2012

                                   The Honorable Patty Murray
                                   Chairman
                                   Committee on Veterans’ Affairs
                                   United States Senate

                                   The Honorable Richard Burr
                                   Ranking Member
                                   Committee on Veterans’ Affairs
                                   United States Senate

                                   The Honorable Jeff Miller
                                   Chairman
                                   Committee on Veterans’ Affairs
                                   House of Representatives

                                   The Honorable Bob Filner
                                   Ranking Member
                                   Committee on Veterans’ Affairs
                                   House of Representatives

                                   In 2010, an estimated 3.4 million veterans had a disability due to service-
                                   related injuries and illnesses. 1 Due to advances in battlefield medicine, a
                                   larger proportion of military personnel are surviving their wounds than in
                                   previous generations, though often with serious medical conditions
                                   including amputations, traumatic brain injuries, and post traumatic stress
                                   disorder. To promote the lifelong health of veterans and servicemembers
                                   with disabilities through regular participation in physical activity and
                                   sports, as well other related purposes, the Veterans Benefits
                                   Improvement Act of 2008 2 established the Office of National Veterans
                                   Sports Programs and Special Events within the Department of Veterans
                                   Affairs (VA). The act also authorized VA to provide monthly assistance
                                   allowances to veterans with disabilities participating in Paralympics
                                   competitions or training operated by the United States Olympic
                                   Committee (USOC). Additionally, the act authorized grants solely to


                                   1
                                    2010 American Community Survey data.
                                   2
                                    Pub. L. No. 110-389, §§ 701-704, 122 Stat. 4145, 4180-85.




                                   Page 1                                        GAO-12-703 Veterans Paralympics Program
USOC 3 to plan, develop, manage, and implement an integrated adaptive
sports program 4 for veterans and servicemembers with disabilities,
including joint outreach with VA. The act also allows USOC to enter into
partnership agreements with other organizations, essentially subgranting
funds to conduct adaptive sports activities. VA conducts grant oversight to
help ensure that USOC is effectively and efficiently providing adaptive
sports opportunities, reliably managing its financial reporting, and is in
compliance with applicable laws and regulations. Moreover, the act
mandated GAO to submit a report of the VA Paralympics program by
September 30, 2012. 5

In response to our this mandate, our objectives are to (1) review how VA
and its grantee and subgrantees used program funds to provide adaptive
sports opportunities to veterans and servicemembers; (2) assess how VA
is overseeing grantee’s and subgrantees’ use of funds; and (3) describe
how veterans and servicemembers have benefited from VA Paralympics
activities.

To address these issues, we analyzed both planned and final program
budget expenditure data; reviewed program reports, guidance, and
relevant federal laws and regulations; and interviewed VA and USOC
officials and other program stakeholders about VA’s Paralympics program
activities funded with fiscal years 2010, 2011, and 2012 appropriations.
Because USOC is delayed by one fiscal year in its use of program funds,
we reported their annual budget information separately from VA’s annual
budget information. We assessed VA’s and USOC’s budget data and
found them sufficiently reliable for our reporting purposes. As part of this
analysis, we reviewed subgrantee plans for spending grant funds as
reported to USOC. We do not provide information on subgrantees’ final,
reported expenditures because we found that some subgrantees reported


3
 The act actually refers to the United States Paralympics, Inc, but in 2009, when VA was
preparing its first grant agreement, it was informed that USOC had dissolved United
States Paralympics, Inc. as a separate entity and that it had been superseded by the
Paralympic Division of USOC. To ensure grants were used as provided under the law, VA
reported that it awarded them directly to USOC.
4
 According to VA, both of the terms “Paralympic” and “adaptive sports” can be used when
referring to recreational sports for those with a physical or visual disability. However,
“Paralympic” can also refer to elite-level competition. For simplicity, VA uses the term
“adaptive sports” when referring to the programs it promotes.
5
§ 704, 122 Stat. 4185.




Page 2                                         GAO-12-703 Veterans Paralympics Program
             spending more than what they were granted, making it unclear to us
             which portion of their program costs were funded by VA. In addition, we
             reviewed a non-probability sample of 21 out of the 76 subgrant files
             maintained by USOC during a site visit to the organization’s headquarters
             in Colorado Springs, Colorado. These subgrant files included information
             on grant activities that occurred during fiscal year 2011 and were a mix of
             some that were selected based on their larger size as well as others that
             were randomly selected. In total, the sample files contained information
             on 56 percent of funds USOC provided in subgrants using fiscal year
             2010 dollars. We also interviewed subgrantees, regional stakeholders,
             and veteran program participants at a site visit to a VA adaptive sports
             program event in Chicago, Illinois in August 2011. (See appendix I for
             more details.)

             We conducted this performance audit from June 2011 through July 2012
             in accordance with generally accepted government auditing standards.
             Those standards require that we plan and perform the audit to obtain
             sufficient, appropriate evidence to provide a reasonable basis for our
             findings and conclusions based on our audit objectives. We believe that
             the evidence we obtained provides a reasonable basis for our findings
             and conclusions based on our audit objectives.


             VA’s Office of National Veterans Sports Programs and Special Events’
Background   mission is to motivate, encourage, and sustain participation and
             competition in adaptive sports among veterans and members of the
             Armed Forces with disabilities. This is to be accomplished through
             collaboration with VA clinical personnel as well as national and
             community-based adaptive sports programs. This office is responsible for
             the VA Paralympics program’s administration, including the grant award
             process, grant oversight, distribution of any monthly assistance
             allowances to eligible athletes, and program outreach. For fiscal years
             2010 through 2012, the federal law authorizes appropriations of $2 million
             for monthly assistance allowances for competitive athletes in training and
             $8 million for grants to USOC. 6 The grant program will need to be
             reauthorized to continue in fiscal year 2014. VA officials stated that, in the
             first years of the Paralympics program—fiscal years 2010 and 2011—$10



             6
              Sec 702(a), § 521A(g), 122 Stat. 4182-83 (codified at 38 U.S.C. § 521A(g), and 703(a) §
             322(d)(4), 122 Stat. 4184 (codified at 38 U.S.C. § 322(d)(4)).




             Page 3                                         GAO-12-703 Veterans Paralympics Program
million in federal funds were made available for each year. 7 Prior to
receiving this initial funding, the office had a troubled beginning. In
February 2010, VA’s Inspector General (IG) found that the office’s initial
director had abused agency resources and obstructed the IG
investigation. 8 Since then, VA officials reported that they hired a new
office director, restructured the office housing the program, and
addressed these issues of malfeasance.

The USOC is a non-profit organization that serves as the National
Olympic and Paralympic Committees and, as such, is responsible for
training, entering, and funding U.S. teams for the Olympic and Paralympic
Games. Furthermore, the organization has a well-established history of
providing adaptive sports opportunities to people with disabilities. To
reach veterans and servicemembers throughout the United States, USOC
subgrants VA funding to national and community organizations that
provide adaptive sports opportunities. (See figure 1 for the VA
Paralympics program’s organizational chart, including external
organizations and individuals who receive program funds.)

The categories of subgrantees are:

•   National Partners: national organizations that offer camps, clinics and
    on-going programs for veterans and servicemembers with disabilities
    through local chapters. Individual annual subgrant amounts range
    from $100,000 to $500,000.

•   Athlete Development subgrant recipients: organizations that conduct a
    national network of camps and clinics to provide opportunities for
    veterans and servicemembers with disabilities to receive sport-


7
  Although no appropriations were provided under the specific authorizations in the act,
the program was funded from VA’s Office of Pubic and Intergovernmental Affairs’ general
operating expenses account. Consolidated Appropriations Act, 2010, Pub. L. No. 111-117,
123 Stat. 3034, 3300 (2009), Department of Defense and Full-Year Continuing
Appropriations Act, 2011, Pub. L. No. 112-10, 125 Stat. 38, 174 – 76, and Consolidated
Appropriations Act, 2012, Pub. L. No. 112-74, 125 Stat. 786, 1151.
8
 At the time of the investigation, the duties associated with the Paralympics program were
being handled by the director of the Office of National Programs and Special Events,
which is now a part of the Office of National Veterans Sports Programs and Special
Events. For more information about the investigation, see VA Office of Inspector General,
Abuse of Authority, Misuse of Position and Resources, Acceptance of Gratuities, &
Interference with an OIG Investigation, National Programs & Special Events (Washington,
D.C.: February 5, 2010).




Page 4                                          GAO-12-703 Veterans Paralympics Program
                                           specific instruction and assessment. These opportunities help
                                           participants meet U.S. Paralympics standards of performance for
                                           emerging athletes. Individual annual subgrant amounts range from
                                           $15,000 to $300,000.

                                       •   Model Community Partners: community organizations that provide
                                           leadership in various geographic regions for promoting adaptive
                                           sports and to help increase regional capacity for Paralympic sports.
                                           These organizations are allowed to further subgrant funds to other
                                           local organizations to provide direct services. Individual annual
                                           subgrant amounts range from $2,500 to $175,000.

                                       •   Olympic Opportunity Fund recipients: community organizations that
                                           aim to bring adaptive sports opportunities to their local communities.
                                           Individual annual subgrant amounts range from $5,000 to $45,000.


Figure 1: VA Paralympics Program’s Organization Chart, Including Program Fund Recipients




                                       Page 5                                     GAO-12-703 Veterans Paralympics Program
As a condition of receiving these funds, USOC must permit VA to conduct
the oversight VA determines is appropriate. 9 Furthermore, the federal law
requires USOC to submit to the Secretary of VA an annual report
detailing its use of grant funds. 10 The reports are to include the number of
veterans who participated in the adaptive sports program and the
administrative expenses. USOC provided this first annual report to VA in
November 2011. In turn, VA is required to report annually to Congress on
the use of program funds for each year the Secretary makes grants to
USOC. 11 Additionally, VA and USOC officials agreed that USOC would
submit quarterly progress reports throughout the year. During fiscal year
2011, USOC provided quarterly reports that included descriptions of
activities conducted by subgrantees, the number of veterans and
servicemembers served in the activities, and anecdotal information on
how participants benefited from activities.

Regular reporting of relevant, reliable, and timely information and regular
monitoring are necessary for an entity to run and control its operations
according to GAO’s Standards for Internal Controls in the Federal
Government and OMB’s internal control framework for the federal
government. 12 This internal controls guidance states that program
managers need both operational and financial data to determine whether
they are meeting their strategic and annual performance plans and
effectively and efficiently using resources. Monitoring of internal controls
should occur within the normal course of business as well as through
separate evaluations. Furthermore, members of the Domestic Working




9
 Sec. 702(a), § 521A(b) (codified at 38 U.S.C. § 521A(b)).
10
    Sec. 702(a), § 521A(j)(1) (codified at 38 U.S.C. § 521A(j)(1)).
11
    Sec. 702(a), § 521A(k) (codified at 38 U.S.C. § 521A(k)).
12
  Internal controls are defined as an integral component of an organization’s management
that provides reasonable assurance that the following objectives are being achieved:
effectiveness and efficiency of operations, reliability of financial reporting, and compliance
with applicable laws and regulations. Internal control, which is synonymous with
management control, helps government program managers achieve desired results
through effective stewardship of public resources. For more information about GAO and
OMB’s internal control frameworks, see Standards for Internal Control in the Federal
Government. GAO/AIMD-00-21.3.1 (Washington, D.C., November 1999) and OMB
Circular A-123 Revised.




Page 6                                             GAO-12-703 Veterans Paralympics Program
                        Group’s Grant Accountability Project 13 —a task force of federal, state, and
                        local audit organizations—found that subgrantees, many of which are
                        small organizations, often lack training and experience in grant
                        management. Therefore, the group suggested that government agencies
                        provide guidance to subgrantees on how to conduct financial reporting
                        that complies with federal and state requirements and auditing and
                        accounting standards. The group also suggested that government
                        agencies conduct ongoing monitoring of subrecipients as well as field or
                        desk audits of potentially high-risk subgrantees.



VA Grants and USOC
Subgrants Were
Awarded Primarily to
Provide Adaptive
Sports Opportunities,
but Reporting on
Expenditures Was
Problematic




                        13
                          This project was conducted by the Domestic Working Group, which consists of 19
                        federal, state and local audit organizations and is chaired by the Comptroller General of
                        the United States. The purpose of the group is to identify current and emerging
                        challenges of mutual interest and explore opportunities for greater collaboration within the
                        community of intergovernmental auditors. The group issued a guide for better managing of
                        governmental grants in October 2005.




                        Page 7                                          GAO-12-703 Veterans Paralympics Program
VA Awarded the Majority    In the first 2 years of the Paralympics program, VA granted most of its
of Program Funds to        available funds for the program to USOC, but inconsistent with federal
USOC, but VA’s             internal controls standards for reporting relevant and reliable information,
                           we found weaknesses in VA’s administrative and personnel expenditure
Administrative and         reporting. In fiscal year 2010, VA allotted $10 million for the Paralympics
Personnel Expenditure      program. 14 VA granted $7.5 million to USOC and obligated about
Reporting Had Weaknesses   $400,000 to contract with a consulting firm to design an outreach strategy
                           for informing eligible participants about the program. It is not clear,
                           however, how much money VA spent, in total, on administrative and
                           personnel costs associated with this program in fiscal year 2010, primarily
                           because VA did not closely track these costs until midway through fiscal
                           year 2011. VA officials told us that the Office of National Veterans Sports
                           Programs and Special Events did not have a full-time program director
                           and was not fully operational until about midway through fiscal year 2011,
                           and as a result, VA did not establish accounting codes for the
                           Paralympics program until that time. VA officials also said that some
                           administrative and personnel costs were charged to other VA programs
                           as general expenses, and therefore cannot be traced back to the
                           Paralympics program. In addition, VA officials said they were unable to
                           obligate the full amount of fiscal year 2010 funds available to athletes’
                           monthly assistance allowances before the end of the fiscal year, due to
                           the delays in establishing the program.

                           In fiscal year 2011, VA once again allotted $10 million for the Paralympics
                           program. VA obligated a total of about $8.9 million, of which $7.5 million
                           was granted to USOC. The remainder was spent on athletes’ monthly
                           assistance allowances as well as agency administrative and personnel
                           costs. (See table 1.)




                           14
                              A VA official explained that the Office of National Veterans Sports Programs and Special
                           Events is housed within the Office of Public and Intergovernmental Affairs and included in
                           its overall budget report. VA Paralympics officials stated that, as a result, they assume
                           they will receive $10 million from this total budget each fiscal year. They do not, however,
                           always obligate or spend that much.




                           Page 8                                           GAO-12-703 Veterans Paralympics Program
Table 1: Fiscal Year 2011 VA Paralympics Program Funding

                                                                                      Remaining
                                                                                     Unobligated
                                                   Obligated       Expended             Amount
 VA Personnel Costs                                  $11,753          $11,753                 $0
 VA Administrative Costs                            $322,817        $224,285              $98,532
 Athletes’ Monthly Assistance
 Allowances                                        $1,079,000       $675,906             $403,094
 USOC Grant                                        $7,500,000      $7,500,000                 $0
 Total                                             $8,913,570      $8,411,944            $501,626
Source: VA Budget Data as of September 30, 2011.


Note: Not all personnel costs for fiscal year 2011 are included in the number above because
accounting codes for the program were not established until midway through the year.


VA planned to spend about $1.1 million in 2011 on monthly assistance
allowances to assist competitive athletes with their training, but ultimately
spent about $675,900. According to VA officials, fewer athletes than
expected were able to apply for the allowance, so the Paralympics
program returned some portion of the remaining funds to VA’s Office of
Public and Intergovernmental Affairs general expense account. 15 USOC
officials explained that the monthly information an athlete must submit to
obtain an allowance, such as a detailed training log, can be burdensome.
USOC is working with VA to develop a new online reporting tool to help
ease the burden of this monthly reporting requirement in an effort to
encourage greater participation. 16



15
  Program data show that the number of athletes who received payment from October
2010 to September 2011 steadily grew from 40 to over 70. On average, these athletes
received monthly payments of approximately $700. VA officials noted that the total of
$675,906 for fiscal year 2011 included retroactive payments made to athletes in fiscal
years 2010 and 2011. And while these retroactive payments are included in the total
amount spent, they are not included in the calculation of average monthly payment ($700).
In July 2012, following an expansion of allowable Paralympic sports, VA reported that
participation increased to 91 athletes.
16
  An athlete’s initial application for monthly assistance allowances is partially managed by
USOC. Indeed, USOC works with the athlete to submit to VA the necessary paperwork—
which includes information on their dependents and signatures from their coaches. The
paperwork also demonstrates that the athletes have qualified for Paralympics training
camps and competition. USOC also sets the military standards for each Paralympic sport
activity. These military standards must be met for veteran athletes to be eligible to receive
a monthly stipend.




Page 9                                                   GAO-12-703 Veterans Paralympics Program
                          VA also planned to spend about $334,500 on fiscal year 2011
                          administrative and personnel costs associated with the Paralympics
                          program, the majority of which was for contracted services. Specifically,
                          within its administrative costs, VA contracted with a consulting firm to
                          provide grants management services, including assistance with
                          developing grant agreements, providing technical assistance, and
                          developing performance measures for grantees. The contractor did not
                          use all of the funding it obligated for this contract, and returned to VA
                          approximately $98,500. According to VA, $11,753 in fiscal year 2011
                          funds was spent on personnel for the Paralympics program. However, the
                          salaries for the Director of the Paralympics program and other personnel
                          who contributed to establishing the program are not fully reflected in
                          these personnel costs; those salaries were funded through other VA
                          programs because separate accounting codes for the Paralympics
                          program were not established until midway through fiscal year 2011.
                          Indeed, the Director of the Paralympics program was paid out of funds
                          from the Office of National and Special Events. As a result, only those
                          expenses that were incurred after the codes were established were
                          reported on VA’s budget for the Paralympics program. In fiscal year 2012,
                          VA’s total personnel and administrative costs are projected to increase to
                          about $2.2 million as the fiscal year 2012 budget will now reflect activities
                          and personnel from the Office of National and Special Events, which has
                          been consolidated into the Office of National Veterans Sports Programs
                          and Special Events. 17 Specifically, in addition to the Paralympics
                          activities, the Office of National Veterans Sports Programs and Special
                          Events now funds five additional staff who travel to and administer six
                          separate national events, as well develop related outreach literature for
                          these events.

USOC Used About Half of   USOC was awarded a 1-year grant of $7.5 million by VA in fiscal year
Its Grant to Provide      2010, to be used during fiscal year 2011. USOC was also awarded a 1-
Adaptive Sports           year grant of $7.5 million in fiscal year 2011 to be used during fiscal year
                          2012. In fiscal year 2011, USOC subgranted approximately $4.4 million to
Opportunities             organizations to provide adaptive sports opportunities and used the
                          remaining $3.1 million for its operations and personnel and administrative




                          17
                            As described earlier, the Office of National Veterans Sports Programs and Special
                          Events is housed within the Office of Public and Intergovernmental Affairs. The old Office
                          of National and Special Events had also been housed within this office.




                          Page 10                                         GAO-12-703 Veterans Paralympics Program
costs. 18 Some of USOC’s subgrantees did not use all of the funding they
received for their adaptive sports programs, so they collectively returned
about $50,000 to USOC. VA officials reported that USOC returned these
remaining funds to VA.

In fiscal year 2011, about half of the $1.5 million USOC spent on
operations went towards outreach and awareness efforts as well as
program support for the Paralympics sport programs, while the remaining
half was used to provide training and technical assistance. For example,
USOC works with VA medical centers and local organizations to help
them develop relationships and expand opportunities for veterans and
servicemembers with disabilities to engage in adaptive sports. USOC’s
program budget shows that operation costs are projected to decrease to
$1.1 million in fiscal year 2012. Fiscal year 2011 was the first year that
USOC implemented a VA grant program. USOC officials told us the
decrease in 2012 operations costs reflects the fact in fiscal year 2011,
there were significant upfront, one-time costs to build the foundation of
the program, such as designing outreach materials and regional training.
USOC officials also said “lessons learned” from their experiences during
that first year will allow them to plan more effectively going forward.

USOC reports personnel costs separately from administrative costs. In
fiscal year 2011, USOC spent about $1.3 million on personnel costs.
Specifically, this funding went toward salaries, Social Security taxes,
Medicare withholdings, and benefits for 17 program staff and additional
temporary staff. The salaries of program staff ranged from about $20,000
to $175,000 and covered positions including the administrative assistants,
coaches, grant managers, and program director, among others. Further,
in addition to having staff who are dedicated to administering the
program, USOC has staff dedicated to the outreach and technical
assistance efforts described above; they are responsible for designing
and implementing USOC’s outreach materials and facilitating
conferences, regional meetings/trainings, and other training and
education activities for veterans.

In fiscal year 2012, USOC projects spending about $1.9 million to pay for
the salaries of 12 program staff. As a percent of its budget, USOC’s



18
  Specifically, USOC’s operations costs for fiscal year 2011 were $1.5 million; personnel
costs were $1.3 million, and administrative costs were $253,000.




Page 11                                         GAO-12-703 Veterans Paralympics Program
                           personnel costs are projected to increase from 18 percent in fiscal year
                           2011 to 26 percent in fiscal year 2012. USOC officials said that the
                           increase is due to its fiscal year 2011 grant with VA spanning a 17 month
                           period of performance. This differs from the first grant USOC received
                           which was for a 12 month period of performance.

                           In contrast, USOC’s allocated administrative costs 19 are projected to
                           decrease from $253,000 in fiscal year 2011 to $0 in fiscal year 2012. 20
                           Specifically, in fiscal year 2011 these funds went toward indirect costs
                           such as rental expenses, supplies, event expenses, and utilities. A USOC
                           official told us that they chose not to allocate any administrative costs in
                           fiscal year 2012 because they want to allocate the most possible funding
                           to programming that directly serves veterans. USOC reported that it plans
                           to pay for administrative costs associated with the VA program through
                           other funding sources.


Subgrantees Provided a     Subgrantees reported using funds to provide opportunities in a range of
Range of Activities, but   activities—through camps, practice/trainings, and competitions—across
Determining Whether They   29 adaptive sports. Cycling/handcycling and skiing were the most
                           common activities. (See figure 2.)
Spent Funds As Planned
Was Problematic




                           19
                             According to VA General Counsel guidance, the law governing the Paralympics program
                           does not include personnel costs within its definition of administrative costs. For
                           subgrantee use of funds, USOC defines administrative costs to include only costs
                           associated with subawardees and the implementation and tracking of subaward programs.
                           20
                             The federal law allows USOC to use up to 5 percent and subgrantees to use up to 10
                           percent of grant or subgrant funding, respectively, for administrative expenses (Sec.
                           702(a), § 521A(d)(4) and (5), 122 Stat. 4182 (codified at 38 U.S.C. § 521a(d)(4) and (5)).
                           At the same time, there are no limits on the proportion of funding that can be used for
                           operations or personnel costs. In fiscal year 2011, USOC’s administrative costs
                           represented 3 percent of its total grant amount.




                           Page 12                                         GAO-12-703 Veterans Paralympics Program
Figure 2: Number of Subgrantees Providing Activities by Sport, Fiscal Year 2011




a
    The “Skiing” category includes cross country and alpine skiing.
b
 The “Other” category includes bowling, climbing, curling, fencing, judo, powerlifting, road racing,
sitting volleyball, snowboarding, surfing, wheelchair racing, wheelchair rugby, and wheelchair tennis.
c
 The “Boat Sports” category includes kayaking, rowing, and sailing.
d
 Goal ball is an indoor game invented for participants with visual impairments in which opposing
teams try to roll a ball with bells across the other team’s goal line.
e
 Sled hockey is similar to ice hockey in terms of general rules and concepts. It differs in that it allows
participants with mobility limitations to sit on an adaptive sled, which is affixed with two skate blades
and a runner in the front to form a tripod. The hockey stick has a pick on the end which participants
use to propel the sled across the ice.

The majority of USOC’s subgrantees received relatively small grants in
fiscal year 2011; of the 76 grants USOC awarded to 65 organizations, 54
were Olympic Opportunity Fund subgrants, awarded through a
competitive process, ranging from $5,000 to about $45,000. 21 As
previously described, Olympic Opportunity Fund subgrants provide
adaptive sports to veterans’ local communities. For example, one


21
 Some subgrantees received more than one type of grant depending on the nature of the
adaptive sports programming they planned to offer.




Page 13                                                  GAO-12-703 Veterans Paralympics Program
subgrantee reported using Olympic Opportunity funds to provide cycling
and sled hockey activities, such as weekly hand cycling clinics and
training sessions on adaptive equipment. Another subgrantee reported
using Olympic Opportunity funds to hold a weekly power-lifting group, an
indoor kayaking clinic, and a judo clinic.

The remaining 22 subgrants generally were larger, ranging from $15,000
to $500,000, and were provided to Athlete Development organizations
and National and Model Community Partners. These organizations
provided a wider range of activity types through national networks, local
chapters, or community organizations in various geographic regions. For
example, one Athlete Development subgrantee reported holding an
outreach clinic at a nearby VA hospital where they educated staff and
potential participants about adaptive sports options and hosted a ski
camp which included a sit-ski clinic, a race, and strength and conditioning
training for a cross-country skiing marathon. In addition, a National
Partner subgrantee reported using its funds to train and educate staff and
program leaders on adaptive and Paralympic sports, and to conduct
outreach and recruitment campaigns. This organization also awarded and
administered subgrants to some of its local chapters to hold archery,
cycling, fencing, wheelchair basketball, and swimming activities, among
others.

All subgrantees’ grant agreements required them to report how VA funds
were used to cover program expenses. As part of their agreements,
subgrantees provided a projected budget detailing plans to spend
program funds in six categories: personnel, operations, equipment,
supplies, travel, and administrative costs (see appendix II for USOC’s
cost definitions for subgrantees’ use of funds). Although subgrantees
could not spend more than 10 percent of the total amount granted on
administrative costs, no other category had spending limits. Of the
approximately $4.4 million USOC awarded for fiscal year 2011,
subgrantees projected using over half, or about $2.6 million, on
operations and personnel costs. Subgrantees projected that these costs
would remain about the same for fiscal year 2012. (See figure 3.)




Page 14                                 GAO-12-703 Veterans Paralympics Program
Figure 3: Fiscal Years 2011 and 2012 Projected Budget Estimates for Subgrantees




Note: USOC expenditure data reported equipment and supplies as one combined budget item.

Inconsistent with federal internal control standards, we found that during
the first program year, USOC did not have reporting requirements or
electronic reporting systems in place for subgrantees to provide
information on how VA funds were used separate from other sources. As
a result, there was a lack of reliable information on actual expenditures.
Our review of a sample of subgrantees’ files raised concerns with how
subgrantees reported their actual expenditures. In 7 of the 21
subgrantees’ files we reviewed, it was difficult to determine how the
subgrantees spent their grant funding, and 4 out of these 7 files reported
spending more than they were actually granted by VA to provide adaptive
sports activities. For example, in one case, a subgrantee received a grant
for $35,000 but reported expenditures to USOC in excess of $89,000. In
reviewing these files, we found that USOC had not determined what
portion of the subgrantees’ program costs were funded with VA dollars.
While USOC provided a template to each subgrantee to report quarterly
expenditures, the template did not explicitly request that a subgrantee
only provide information on how VA funds were spent. When asked if they
reconciled a subgrantee’s reported expenditures with planned
expenditures, USOC officials told us they generally did not have enough
time between the receipt of a subgrantee’s quarterly budget and the
deadline to submit a quarterly report to VA to ensure that the budget
information was accurate. This lack of follow-up is inconsistent with OMB
internal controls guidance, which provides that management should




Page 15                                           GAO-12-703 Veterans Paralympics Program
                           regularly reconcile and compare data within the normal course of
                           business.

                           USOC officials said they were aware of reporting problems and, at the
                           beginning of fiscal year 2012, were developing and implementing an
                           electronic system that will allow subgrantees to report quarterly
                           expenditures online, among other things. USOC officials told us such a
                           system should help them process the reports more quickly. However,
                           they acknowledged the system will not include controls to ensure
                           subgrantees report only those costs specific to the VA grant. VA officials
                           told us that they are aware that this electronic system has limitations and
                           they have directed USOC to make the necessary improvements. In
                           addition, VA reported that it provided guidance on how USOC could
                           improve data processes, and USOC has agreed to send its grant
                           management staff to training, both in effort to enhance USOC’s data
                           reporting capabilities.



VA Relied on Self-
Reported, Unverified
Information to
Oversee the Grant
Program, but Is
Taking Steps to
Improve Oversight
VA Lacked Information on   VA lacked information on how USOC and subgrantees used funds due to
How USOC and               its reliance on self-reported, unverified quarterly reports from USOC.
Subgrantees Used Funds     Inconsistent with federal internal controls standards, VA officials stated
                           that they did not independently review or verify how grant funds were
                           used due to a lack of staff to oversee the program in fiscal year 2011. In
                           fact, VA did not hire staff dedicated to managing the Paralympics program
                           until it had already granted funds to USOC. Specifically, in September
                           2010, VA and USOC established a memorandum of agreement for the
                           grant, but a Paralympics program director was not hired until February
                           2011. The director, with the assistance of interns, reported spending the




                           Page 16                                 GAO-12-703 Veterans Paralympics Program
rest of the fiscal year finalizing the office’s outreach campaign,
administering the monthly assistance allowance program, and processing
USOC’s fiscal year 2011 grant application. 22 According to VA officials,
another VA Paralympics staff person was hired in September 2011.
Furthermore, with the establishment of the Paralympics program, agency
officials stated that grant management became a new administrative
responsibility for the VA Office of Public and Intergovernmental Affairs as
well as USOC and the subgrantees, and all of these program
stakeholders needed time to learn about appropriate oversight
mechanisms.

USOC officials told us their quarterly reports were primarily based on the
quarterly reports they obtained from subgrantees, and therefore, the
available information VA had for oversight may not have been accurate.
USOC officials managing the grant program did not conduct any separate
reviews to verify the information provided to them by subgrantees, and as
mentioned earlier, did not make efforts to reconcile expenditure data in
these quarterly reports as they were submitted. To gain additional
information about how subgrantees were managing funds in the first
program year, USOC’s Audit Division selected 2 of the 65 subgrantees,
based on risk-related criteria, for review in the fall and winter of 2012, and
the grant managing officials plan to use the information from those audits
to develop future plans for oversight.

Our review of a sample of USOC’s files on subgrantees showed that
USOC officials were not holding subgrantees accountable for meeting the
terms of their subgrant agreements—a grant management problem about
which VA was not in the position to know about given its lack of oversight.
We found that many subgrantee files lacked information on the status of
their grant expenditures and the activities the subgrantees agreed to
conduct. USOC reported using a process in which quarterly reports are
checked against subgrantees’ agreements to ensure completeness of
agreed-upon activities. However, in 12 of the 21 subgrant files we
reviewed, we did not find evidence that the subgrantees conducted all
agreed-upon activities. For example, one National Partner had agreed to
develop 27 programs related to handcycling, bowling, and trapshooting,
but the reports we found mentioned that only 18 programs had been



22
  As previously described, USOC spent program funds a full fiscal year later; therefore, its
application for fiscal year 2011 funds was submitted to VA during fiscal year 2011.




Page 17                                          GAO-12-703 Veterans Paralympics Program
                          completed. Another National Partner agreed to conduct 10 activities
                          related to outreach, introducing adaptive sports at VA clinics, and
                          identifying athletes for higher level of competition, but the case file
                          indicated only 4 of these activities had been completed. Furthermore, in
                          11 of the 12 files, we did not find any documentation explaining why the
                          planned activities did not occur, nor did we find written permission from
                          USOC to change the scope of agreed-upon activities.

                          In 5 of the 21 files we reviewed, we found that subgrantees transferred
                          more than 20 percent of funds from one budget category to another
                          without the written permission of USOC, as required by their grant
                          agreements. For 2 of these files, we identified significant issues with the
                          subgrantees’ financial management and reporting. Specifically, 1 file
                          belonged to a subgrantee that received a $400,000 grant that was one of
                          the organizations subjected to an audit by USOC’s Audit Division. The
                          division officials found that, in addition to making unallowed transfers, the
                          subgrantee had instances of non-compliance with OMB Circular A-122’s
                          Cost Principles for Non-Profit Organizations (including unexplained
                          personnel and administrative charges by five employees), did not
                          consistently document and communicate requirements and responsibility
                          related to the VA funds it subgranted to its member chapters, and did not
                          clearly and formally document its methodology for determining and
                          allocating administrative costs to the VA grant. 23 Another subgrantee who
                          made unallowed budget transfers also reported purchasing a van without
                          the written permission of USOC, which is required by the grant agreement
                          prior to making equipment purchases exceeding $5,000. This same
                          subgrantee also received another $35,000 VA-funded grant for which it
                          did not submit required expenditure reports.


VA Plans to Improve Its   VA officials recognized that their grant oversight has been limited and
Grant Monitoring          report that improvements are under development. In December 2011, VA
                          established a monitoring plan that identifies the specific information
                          USOC should report and requires USOC to establish a similar plan to
                          oversee subgrantees. Specifically, VA’s plan requires USOC to submit
                          quarterly reports and an annual report that include summary data on the
                          activities provided, number of veterans served, levels of expended and


                          23
                            In its response to the Audit Division, the subgrantee agreed to avoid these problems
                          with future grant funds. This subgrantee received another $400,000 grant from fiscal year
                          2011 program funds.




                          Page 18                                        GAO-12-703 Veterans Paralympics Program
unexpended funds, and available assets, among other information. VA’s
plan does not, however, require on-site or remote evaluations of USOC
and the subgrantees, nor a review of USOC’s monitoring outcomes for
subgrantees. When asked why such monitoring was not included in the
plan, VA officials stated that they recognize that a lack of separate
evaluations is a gap in their oversight and are working to address this
limitation. For example, in fiscal year 2012, VA officials reported
conducting on-site visits of USOC to discuss various aspects of grant
management. VA plans to conduct additional on-site reviews of USOC
and selected subgrantees later in the year. 24 Furthermore, officials are
expecting that information from USOC’s subgrantee reviews will
eventually be incorporated into subgrantee application packages, which
they will review before finalizing future grant agreements. Also, after
reviewing the first quarter reporting for fiscal year 2011 funds in January
2012, VA officials reported asking USOC officials to provide more
information about whether subgrantees were providing deliverables within
the agreed-upon timeframes.

With input from VA, USOC finalized a monitoring plan of subgrantees in
early 2012 that, in addition to reviewing subgrantee reports, will require
USOC officials to audit financial data for subgrantees selected on risk-
based criteria. USOC’s plan includes a checklist for reviewing and
verifying information in these quarterly reports; the checklist mentions
comparing the reports to the agreed-upon activities and conducting
remote and on-site reviews. USOC aims to conduct enough site visits to
review the use of half of all fiscal year 2011 funds. Furthermore, USOC
plans to use risk-based criteria to select subgrantees for remote audits of
financial data; these criteria will include the size of the subgrant award,
additional granting of VA funds to other entities by the subgrantee, and
the absence of a current audit report. The remote audits will include
reviewing the subgrantees’ ledgers and comparing them to what was
submitted in the quarterly reports and reviewing documentation that
supports selected transactions to ensure that they are compliant with
OMB guidance. However, given that we found that USOC was not holding
subgrantees accountable—despite having an oversight process in



24
  In May 2012, VA officials reported that they are still developing their process for
conducting on-site reviews of subgrantees. The officials also mentioned that an internal
control expert from VA’s Office of Business Oversight has been assigned to advise them
on all aspects of the grant process and they expect program changes will happen during
the next grant cycle.




Page 19                                        GAO-12-703 Veterans Paralympics Program
                                              place—VA will need to ensure its monitoring efforts include overseeing
                                              the implementation of USOC’s plans.

Program Benefits
Have Been Reported
but VA Does Not
Systematically
Measure Them
Some Participants Have                        We found that many subgrantees and participants reported benefits from
Reported Improvements to                      VA’s Paralympics program. Subgrantees primarily reported anecdotal
Their Health and Well-                        information on program benefits in their quarterly reports to USOC, and
                                              USOC then provided some of these examples in their quarterly reports to
Being                                         VA. This anecdotal information included participant success stories,
                                              testimonials, and related news articles, and was consistently positive with
                                              regards to the program’s value in the first year. (See figure 4 for
                                              examples.)

Figure 4: Examples of Anecdotal Reports on VA Paralympics Program Benefits


“Kevin is a 21 year old Veteran with a SCI (paraplegia) injury incurred 6/2011. Kelly worked with Kevin on a 1:1 basis for 2 months to
train on the hand cycle, eventually leading to him training on his own at home. Kevin signed up for the Marine Corps Marathon prior
to his injury. After his injury in 6/2011, Kevin was determined to still compete in this marathon, but due to his injury, he was not able to
run, so he wanted to handcycle. Kevin finished the Marine Corp Marathon this past October 2011 at a time of 2:18! It shows that with
the right resources, guidance, and determination, nothing can keep someone from attaining their dreams (even if you have to adapt!).
Kevin utilized one of the cycles that was purchased through this grant.”
– Subgrantee quarterly report

“One athlete stated ‘I still find it hard to believe. Me, a C7 quadriplegic, on the water rowing. It feels so good to exercise, and be
treated like an athlete. Rowing is a beautiful sport. And now it's my thing.’”
– Subgrantee quarterly report

“An alumni (army sergeant) told us that because of the confidence he gained the first year, he was able to remain sober for the past
year (he had been abusing drugs and alcohol and had been arrested several times) and had started college.”
– Subgrantee quarterly report

“Benjamin is a Wounded Warrior from Arizona who . . . was no longer affiliated with a military facility, no longer active, suffering from
depression and excessive weight gain and coping with a recent spinal cord injury. He came to our Winter Wounded Warriors Camp,
Operation High Altitude accompanied by his mom and with a great deal of trepidation. He fell in love with the sport of Nordic skiing
and was eager to come back to participate in our upcoming biathlon camp.”
 – Subgrantee quarterly report




                                              Page 20                                            GAO-12-703 Veterans Paralympics Program
“I have been in a wheelchair for almost 3 years. I have known about the sports that are available and the resources but I only recently
took advantage of them. The biggest benefit I have received from going to these events is being around people that ‘get you.’ I'm not
saying that other people can't try to understand what it’s like to be in a chair but they will never really know unless they experience it
themselves. . . . I've talked to dozens of vets about these events and they all said that these programs have become an integral part of
their lives, as well as mine.”
 – Veteran Participant

“Thank you for the great opportunity, I was starting to feel kind of isolated and this event helped me in so many different ways. It was
really good to meet a lot of the other vets and active duty wounded warriors. Thank you thank you thank you, it meant a lot.”
– Veteran Participant

“[Skiing] allows you to focus on your abilities rather than your disabilities. You’re normal again. You can compete, get your competitive
edge.” – Veteran Participant, Bi-lateral Leg Amputee
                                             Sources: USOC fiscal year 2011 quarterly and annual program reports and subgrantee fiscal year 2011 grant files submitted to USOC



                                             During our site visit to an adaptive sports event in Chicago, veterans we
                                             spoke with also told us how adaptive sports programs have improved
                                             their mental and physical health. All six veterans in one group interview
                                             agreed that the greatest benefit was to their mental health; they believe
                                             that adaptive sports are a tool that helps them deal with depression. They
                                             also said that participating in group activities with other veterans with
                                             disabilities made them feel less isolated in their challenges. Other
                                             veterans said that they had experienced social benefits, including a boost
                                             to their self-esteem; one veteran described how he developed long-term
                                             friendships during the competitions, and another described how these
                                             events show veterans that they can be physically active despite their
                                             disabilities. Veterans also told us that competitions motivated them to stay
                                             active on an on-going basis and improved their overall physical health.
                                             For example, some veterans said regular participation in athletic activities
                                             made them physically stronger in their remaining limbs and had improved
                                             their balance and dexterity. One veteran in particular told us that he had
                                             lost 68 pounds in 4 months due to his regular participation in Paralympic
                                             program activities.




                                             Page 21                                                              GAO-12-703 Veterans Paralympics Program
Counts of Activities and   While VA requires USOC and its subgrantees to count the number of
Participants Are           adaptive sports activities conducted and the number of participants
Inconsistent, but VA Is    served, these measurements are not always accurate. 25 In its fiscal year
                           2011 annual report to VA, USOC stated that over 10,000 veterans and
Taking Steps to Improve
                           servicemembers participated in nearly 2,000 activities. However, VA
Measurement of Program     officials acknowledged that the participation and activity data are flawed.
Benefits                   Indeed, in USOC’s quarterly reports to VA, USOC stated there is some
                           double counting of unique veterans/servicemembers and activities due to
                           partnerships and collaboration among the Paralympic community. For
                           example, a veteran might attend activities sponsored by different
                           subgrantees, and each subgrantee might then include that same veteran
                           in their separate count. The extent of this double counting is unknown due
                           to a lack of a systematic review of the activity and participant counts.
                           Although VA is required by law to report annually to Congress on the
                           number of veterans who participated in adaptive sports activities and the
                           administrative expenses, it has yet to do so. 26

                           Additionally, in our review of a sample of 21 subgrantee reports, we found
                           some inconsistencies with how subgrantees count program participants
                           and activities, further diminishing the reliability of these data. It was
                           difficult to determine, in fact, how 16 out of the 21 were counting their
                           participants or activities as many organizations had different
                           interpretations of what qualified as a participant or activity. For example, 8
                           out of the 21 subgrantee reports counted activities that did not have
                           veteran or military participants—some of them even counted purchases of
                           equipment as activities. Also, 6 out of the 21 subgrantees administered
                           more than one type of a VA Paralympics grant and submitted reports
                           where it was difficult to determine which grant corresponded with which
                           counts of activities and participants.

                           While subgrantees and program participants reported program benefits,
                           VA has not yet systematically measured how adaptive sports activities
                           specifically benefitted the health and well-being of veterans and
                           servicemembers. A couple of USOC’s subgrantees conducted surveys


                           25
                             The authorizing legislation requires USOC to report on the use of grant funds, including
                           the number of veterans who participated in the adaptive sports program. VA is, in turn,
                           required to report to Congress annually on the use of funds. 38 U.S.C. § 521A(j)(1) and
                           (k), respectively.
                           26
                             In commenting on a draft to this report, VA indicted that it anticipates providing a report
                           to Congress on the Paralympics program for fiscal years 2010-2011 in August 2012.




                           Page 22                                           GAO-12-703 Veterans Paralympics Program
asking for feedback on specific events or activities, but VA has not
conducted a program-wide survey or study to collect information about
the various events and their benefits. Absent this measurement, VA
largely relies on the anecdotal information supplied by subgrantees and
program participants. Moreover, VA officials recognize that participant
and activity counts do not comprehensively measure how participation in
adaptive sports can improve a person with disabilities’ quality of life,
including improved physical health, enhanced confidence and self-
esteem, reduction in depression and improved relationships with family
members and other members of the community.

VA wants to improve its measurement of Paralympics activity benefits. VA
and USOC have, in turn, taken the initiative to hire a contractor to conduct
a study on the effects of adaptive sports on rehabilitation and
reintegration of veterans and servicemembers into the community,
including five life domains (self-care, mobility skills, communication with
family and friends, participation in society, and acceptance of disability)
and the psychosocial outcomes, including self-esteem and quality of life.
The study will include a survey of participants in VA adaptive sports
activities, with questions focusing on uncovering key life and goal-setting
concerns of participants as well as employment and educational goals
and opportunities. VA and USOC are expecting the contractor to provide
a preliminary report to Model Community Partners by the end of
September 2012. They have also planned for the final results of this study
to be shared with internal and external audiences, including government
agencies, the research community, and the general public. In addition, VA
and USOC have tasked the contractor to conduct an assessment of the
VA Paralympics program that will include identification of issues, trends,
obstacles, and barriers, which will assist USOC and subgrantees with
managing expectations and program performance. VA and USOC have
required the contractor to provide an annual report on this assessment by
November 2012. VA officials told us they have also been assisting the
Paralympic Research and Sport Science Consortium with facilitating
research in Paralympic and adaptive sports. VA officials stated that this
research is focused on activities that would both enhance Paralympic
sports and capabilities to provide rehabilitative opportunities to Veterans
and members of the Armed Forces with disabilities. In addition, VA
officials stated that they are seeking feedback from Paralympic and
adaptive sport communities, academia, research institutions, and other
entities to try to develop metrics to measure effectiveness.

VA officials stated that the goals of its adaptive sports programming have
changed in the past few years with the establishment of the Paralympics


Page 23                                 GAO-12-703 Veterans Paralympics Program
              program. Prior to the Paralympics program and its current leadership, the
              Office of Public and Intergovernmental Affairs focused on engaging
              veterans and servicemembers with disabilities in a few Paralympic sport
              competitions it sponsored once a year. However, with the Paralympics
              program and the Office of National Veterans Sports Programs and
              Special Events in place, VA has expanded its goals to include veteran
              participation in local and community adaptive sports programs throughout
              the year and for on-going sports participation to have an impact on the
              veterans’ overall physical and emotional well-being. Further, VA is
              working with other VA entities to incorporate Paralympic and adaptive
              sports into rehabilitative whole-life programs for Veterans and members
              of the Armed Forces with disabilities. For example, VA officials stated that
              they worked with some of their subgrantees to develop adaptive sports
              program-related training webinars and other support materials for VA
              entities such as recreation therapists, centers for blind and visually
              impaired, and Community Living Centers.

              After veterans and servicemembers face life altering disabilities resulting
Conclusions   from their service in the Armed Forces, the VA Paralympics program
              works to empower them to move forward in their next phase of life. In
              partnership with USOC and its subgrantees, VA has been able to
              introduce numerous participants to a variety of sports adapted for their
              physical conditions. Beyond providing access to recreational
              opportunities, veteran participants told us that adaptive sports have
              changed the way they think about their disabilities and provided them with
              opportunities to improve their physical health. As this program matures, it
              has the potential to provide greater access to adaptive sports and garner
              a wider range of benefits for participants. VA must, however, improve the
              program’s oversight and reporting to help ensure program funds are
              efficiently and effectively used. Although USOC is planning various
              oversight initiatives and is implementing an electronic reporting system for
              subgrantees, we found that USOC’s past efforts at financial accounting,
              subgrantee oversight, and reporting on participation and activities were
              weak, resulting in gaps in program knowledge about how program funds
              were actually spent, whether or not all promised activities occurred, and
              how many people benefitted from the activities. Moving forward, without
              this information, VA and policymakers will struggle to make informed
              decisions about the program’s future. VA officials report that they are
              building a stronger oversight structure, but to the extent USOC’s
              weaknesses remain, VA may miss opportunities to better use program
              resources to motivate, encourage, and sustain participation and
              competition in adaptive sports among veterans and servicemembers with
              disabilities.


              Page 24                                 GAO-12-703 Veterans Paralympics Program
                     To improve oversight within the VA Paralympics grant program, we
Recommendations      recommend the Secretary of VA direct the National Director of the Office
                     of National Veterans Sports Programs and Special Events to take the
                     following three actions:

                         1. Require USOC to modify reporting requirements that will:

                               a. Direct subgrantees to only include VA Paralympics program
                                  funds in expenditure reports; and

                               b. Provide a consistent methodology for how subgrantees should
                                  count their program activities and participants, including
                                  explicit instruction on what should and should not be counted
                                  as an activity or participant.
                         2. Ensure USOC adds controls to its electronic reporting system that
                            will require subgrantees to identify how VA grant funds were used
                            separate from other funding sources subgrantees use to support
                            adaptive sports activities.

                         3. Review the implementation of USOC’s monitoring plan after a
                            reasonable period to ensure planned efforts were conducted.


                     VA provided us with comments on a draft of this report, which we have
Agency Comments      reprinted in appendix III. In its comments, VA agreed with our
and Our Evaluation   recommendations and reported that efforts were underway to address
                     each of them. Specifically, VA reported that USOC has already agreed to
                     direct subgrantees to only include information on VA Paralympics
                     program funds in expenditure reports. Furthermore, USOC has agreed to
                     send its grant management staff to training in an effort to improve its data
                     reporting. Regarding USOC’s electronic reporting system, VA reported
                     that USOC has included the requirement that subgrantees identify how
                     VA funds were used separately from other funding sources, and VA will
                     review the system before it goes on-line during the fourth quarter of 2012.
                     VA indicated that USOC also plans to provide training to subgrantees on
                     how to appropriately report on grant funds during this quarter. In
                     response to our recommendation on following up on USOC’s monitoring
                     plan, VA reported that, in April 2012, it began meeting with USOC to
                     improve USOC’s subgrant monitoring program, which now includes
                     weekly conference calls with VA. VA also provided technical comments,
                     which were incorporated into the report as appropriate.




                     Page 25                                 GAO-12-703 Veterans Paralympics Program
We are sending copies of this report to relevant congressional
committees, the Secretary of the Department of Veterans Affairs, the
Chief of Paralympics, USOC, and other interested parties. The report will
also be available at no charge on the GAO Web site at
http://www.gao.gov.

If you or your staffs have any questions about this report, please contact
me at (202) 512-7215 or bertonid@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made key contributions to this
report are listed in appendix IV.




Daniel Bertoni
Director, Education, Workforce,
   and Income Security Issues




Page 26                                 GAO-12-703 Veterans Paralympics Program
Appendix I: Objectives, Scope and
              Appendix I: Objectives, Scope and
              Methodology



Methodology

              The objectives of this report were to (1) review how VA and its grantee
              and subgrantees used program funds to provide adaptive sports
              opportunities to veterans and servicemembers; (2) assess how VA is
              overseeing grantees’ and subgrantees’ use of funds; and (3) describe
              how veterans and servicemembers have benefited from VA Paralympics
              activities. The mandated requirement to include a description of how the
              United States Paralympics, Inc. (which was superseded by the
              Paralympic Division of the United States Olympic Committee (USOC))
              used grant funds from the Department of Veterans Affairs (VA) is
              provided under the first research objective. The other mandated
              requirements to include the number of veterans with disabilities who
              benefitted from such grants and how such veterans benefitted were
              addressed under the third research objective. To address the three
              objectives, we analyzed both planned and final program budget
              expenditure data; reviewed program reports, guidance, and relevant
              federal laws and regulations; and interviewed VA and USOC officials and
              other program stakeholders about VA’s Paralympics program activities
              funded with fiscal years 2010, 2011, and 2012 appropriations.

              Specifically, to determine how VA and its grantees used program funds,
              we reviewed information on planned and actual program expenditures
              provided by VA and USOC and interviewed VA and USOC officials to
              better understand the purposes for which funds were used. VA started
              spending Paralympic program funds in fiscal year 2010, but did not have
              complete final expenditure information for that first program year. As a
              result, we discuss this incomplete expenditure data in our report findings.
              We obtained VA’s complete planned and final expenditure budget
              information on fiscal year 2011 funds, but could only report planned
              expenditures for fiscal year 2012, as their actual expenditures for that
              year had not yet been finalized at the writing of this report. USOC
              provided data to us on subgrantees’ planned and final expenditures.
              Subgrantees’ planned expenditures were based on subgrant agreements
              made by USOC and the subgrantee, and final expenditures were based
              on data from quarterly reports submitted by each subgrantee to USOC.
              To determine the reliability of VA and USOC data on planned and actual
              program expenditures for that year, we interviewed VA and USOC
              officials about their procedures for collecting and maintaining these data.
              In addition, we reviewed a nonprobability sample of 21 subgrant files to
              verify the accuracy of data reported to USOC and to better understand
              how USOC maintains these data. The sample included all types of USOC
              subgrants mentioned in the background of this report. Specifically, all of
              USOC’s National Partner subgrants were included, and if these National
              Partners were also awarded Olympic Opportunity Fund subgrants, those


              Page 27                                 GAO-12-703 Veterans Paralympics Program
Appendix I: Objectives, Scope and
Methodology




subgrants were also included. The sample also included Model
Community Partners and other Olympic Opportunity Fund subgrantees
which were selected randomly after being stratified according to their
subgrant type and USOC-designated geographic region. Due to errors in
the original list of subgrantees by subgrant type provided by USOC, our
sample also included two Athlete Development subgrants. In total, the
sample files contained information on 56 percent of funds USOC provided
in subgrants using fiscal year 2010 dollars. Due to problems we found
with subgrantee reporting, we did not report information on subgrantees’
actual expenditures. (See the body of the report for more information.)
We reported only those expenditure data we believe were sufficiently
reliable for the purposes of our study.

To determine how VA oversaw grantees’ use of funds, we interviewed VA
and USOC officials and obtained and reviewed quarterly progress reports
from USOC, examples of progress reports from subgrantees, and VA’s
and USOC’s monitoring plans. Furthermore, we reviewed the same non-
probability sample of 21 subgrant files to obtain information on whether
their activities were documented as required under USOC policies—
mentioned in subgrant agreements, subgrant applications, and interviews
with the organization’s officials—and as promoted by GAO’s guidelines
for internal controls and the Domestic Working Group’s Grant
Accountability Project’s promising practices.

To determine how veterans and servicemembers have benefited from VA
Paralympics program activities, we reviewed participant and activity
counts in the same non-probability sample of 21 subgrantee files
maintained by USOC. We found issues with double-counting of activities
and participants, as well as issues of counting non-
veteran/servicemember activities and participants. However, to be
responsive to our mandate, we provided USOC’s total counts of activities
and participants in the report along with a discussion of why these
numbers are not reliable. We reviewed USOC quarterly and annual
program reports to VA. We also interviewed VA and USOC officials as
well as subgrantees, regional stakeholders, and veteran program
participants at a site visit to a VA adaptive sports program event in
Chicago, Illinois in August 2011.




Page 28                               GAO-12-703 Veterans Paralympics Program
Appendix II: United States Olympic
                                         Appendix II: United States Olympic
                                         Committee’s Cost Definitions for Subgrantees’
                                         Use of Funds


Committee’s Cost Definitions for
Subgrantees’ Use of Funds

Type of Cost     Definition
Administrative   Costs associated with the subawardee and the implementation and tracking of the subaward programs
Equipment        Costs of non-construction related purchases for special purpose equipment that is used for the purposes of the
                 grant
Operations       Includes, but is not limited to, costs of: advertising and public relations related to the federal grant; audit and
                 related services; communication (e.g. telephone, postage); meetings and conferences; participant support;
                 publication and printing; rental of building and equipment; and transportation
Personnel        Includes, but is not limited to, costs of: salaries and wages, director and executive committee membership fees,
                 incentive awards, fringe benefits, pension plans, allowances for off-site pay, incentive pay, location allowances,
                 hardship pay, and cost-of-living differentials
Supplies         Costs of materials, supplies, and fabricated parts necessary to carry out the grant
Travel           Costs of expenses for transportation, lodging, subsistence, and related items incurred by employees in travel
                 status on official business
                                         Source: US Olympic Committee




                                         Page 29                                             GAO-12-703 Veterans Paralympics Program
Appendix III: Comments from the
              Appendix III: Comments from the Department
              of Veterans Affairs



Department of Veterans Affairs




              Page 30                                      GAO-12-703 Veterans Paralympics Program
Appendix III: Comments from the Department
of Veterans Affairs




Page 31                                      GAO-12-703 Veterans Paralympics Program
Appendix III: Comments from the Department
of Veterans Affairs




Page 32                                      GAO-12-703 Veterans Paralympics Program
Appendix IV: GAO Contact and Staff
                  Appendix IV: GAO Contact and Staff
                  Acknowledgments



Acknowledgments

                  Daniel Bertoni, 202-512-7215, or bertonid@gao.gov
GAO Contact
                  In addition to the contact named above, the following staff members
Staff             made important contributions to this report: Brett Fallavollita, Assistant
Acknowledgments   Director; Danielle Giese, Analyst-in-Charge; Kristy Kennedy; Nisha
                  Hazra; and Juliann Gorse. Also, Shana Wallace provided guidance on the
                  study’s methodology; Craig Winslow provided legal advice; James
                  Bennett assisted with report graphics; and Susannah Compton provided
                  writing assistance.




                  Page 33                                GAO-12-703 Veterans Paralympics Program
Related GAO Products
             Related GAO Products




             VA Mental Health: Number of Veterans Receiving Care, Barriers Faced,
             and Efforts to Increase Access. GAO-12-12. Washington, D.C.: October
             14, 2011.

             VA Education Benefits: Actions Taken, but Outreach and Oversight Could
             Be Improved. GAO-11-256. Washington, D.C.: February 28, 2011.

             VA Health Care: Spending for and Provision of Prosthetic Items.
             GAO-10-935. Washington, D.C.: September 30, 2010.

             Standards for Internal Control in the Federal Government.
             GAO/AIMD-00-21.3.1 Washington, D.C.: November 1, 1999.




(131100)
             Page 34                               GAO-12-703 Veterans Paralympics Program
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