United States General Accounting Office
GAO
September 1997
GAO/HEHS-97-174R
United States
GAO General Accounting Office
Washington, D.C. 20548
Health, Education, and
Human Services Division
B-277393
July 11, 1997
The Honorable Richard K. Armey
Majority Leader
House of Representatives
The Honorable John Kasich
Chairman, Committee on the Budget
House of Representatives
The Honorable Dan Burton
Chairman, Committee on Government
Reform and Oversight
House of Representatives
The Honorable Bob Livingston
Chairman, Committee on Appropriations
House of Representatives
Subject: The Results Act: Observations on VA’s June 1997 Draft Strategic
Plan
On June 12, 1997, you asked us to review the draft strategic plans
submitted by federal agencies to facilitate the consultations between the
Congress and the agencies required by the Government Performance and
Results Act of 1993 (the Results Act). This letter provides our observations
on the draft plan the Department of Veterans Affairs (VA) submitted to the
Congress on June 9, 1997. Under the Results Act, VA and other departments
and agencies are required to submit strategic plans by September 30, 1997.
On the basis of the guidance provided in your June 12, 1997, letter, we
Objectives, Scope, focused our review of VA’s June 9, 1997, draft strategic plan on
and Methodology
• VA’s compliance with the Results Act’s requirements and the draft plan’s
overall quality,
• how well the draft plan addresses VA’s statutory responsibilities,
• how well the draft plan identifies crosscutting functions and plans for
coordination with other departments and agencies,
• the extent to which the plan addresses major VA management challenges
we have identified in our reviews of VA programs, and
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• VA’s capacity to provide reliable performance and cost information to
support its strategic plan.
To evaluate VA’s draft plan, we used our May 1997 guidance for
congressional review of strategic plans;1 Office of Management and Budget
(OMB) guidance on strategic planning (Circular A-11, part 2); and our
numerous reports and testimonies on VA programs and departmental
management. (See Related GAO Products at the end of this
correspondence.) In addition, we have participated in consultations
between VA officials and the staffs of the House and Senate Committees on
Veterans’ Affairs. Some of our preliminary comments on VA’s draft
strategic plan were discussed at these meetings.
In passing the Results Act, the Congress anticipated that several planning
cycles might be needed to perfect the process of developing a strategic
plan and that the plan would be continually refined. Thus, our comments
reflect a “snapshot” of the status of the plan at a particular point. We
recognize that developing a strategic plan is a dynamic process and that VA
is continuing to work to revise the draft with input from OMB,
congressional staff, and other stakeholders.
In fiscal year 1996, VA spent over $38 billion to provide a wide array of
Background benefits and services to its customers—veterans and their families. VA’s
programs are administered by three major components:
• The Veterans Health Administration (VHA) administers VA’s health care
system, including its 173 hospitals.
• The Veterans Benefits Administration (VBA) administers nonmedical
benefits for veterans, such as compensation for disabled veterans;
Montgomery G.I. Bill educational assistance; home loan guarantees;
vocational rehabilitation and counseling; and life insurance for veterans.
• The National Cemetery System (NCS) operates VA’s system of national
cemeteries, provides headstones and markers for the graves of eligible
veterans, and provides certificates to the families of deceased veterans
recognizing the veterans’ service to the nation.
VA began its strategic planning process about 2 years ago. VA established a
Strategic Management Group, consisting of senior VA officials, to develop a
1
Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate Congressional Review
(GAO/GGD-10.1.16, Version 1, May 1997).
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departmentwide strategic planning process, and to coordinate planning
among VA’s components.
VA incorporated the strategic planning documents of VHA, VBA, and NCS into
its fiscal year 1998 budget, which was submitted to the Congress in
February 1997. NCS and the loan guaranty “business line” in VBA are Results
Act pilot programs.2
Overall, we found VA’s June 9 draft strategic plan to be incomplete in terms
Results in Brief of the elements of a strategic plan as required under the Results Act. In
addition, the plan generally lacks a focus on the results of VA programs.
Also, the draft plan is somewhat confusing and difficult to follow, mainly
because it has several different levels of goals, objectives, and strategies.
VA officials and congressional staff have consulted extensively about VA’s
June 9 draft, and VA officials have acknowledged that their plan needs
improvement. VA has indicated that it intends to make significant changes
to its draft strategic plan by mid-July to ensure that it is more results
oriented and complete, and less confusing.
More specifically, we found that VA’s draft plan represents an inconsistent
and incomplete application of the six key components of a strategic plan
under the Results Act. One of the six—a comprehensive agency mission
statement—is present. Other elements are not consistently represented in
the plan. For example:
• Most of VA’s goals are focused on the process of providing benefits and
services, but not on the results of VA programs for veterans and their
families, such as assisting veterans in their readjustment to civilian life.
• Some major strategic goals are unsupported by objectives and strategies
for achieving them. The draft plan includes placeholders indicating that
these elements will be added later. The most significant gap is in the
discussion of goals and objectives for most of VBA’s programs.
• Discussions of external factors beyond the control of VA that could affect
achievement of goals are limited and omit some important external
factors, such as trends in the demographics of the veteran population.
• VA’s draft plan is not based on formal program evaluations. Although the
draft plan includes a schedule of program evaluations, these evaluations
will not be complete for several years.
2
The Results Act required OMB to select at least 10 agencies to pilot the act’s performance planning
and reporting requirements for one or more of each agency’s major functions, during fiscal years 1994
through 1996. VBA’s New York Regional Office also participated in this pilot phase.
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While we found that VA’s draft strategic plan is generally based on VA’s
statutory responsibilities, we noted that VA states part of its mission as
serving as “principal advocate” for veterans. This mission is not stated in
VA’s statutory authority and may not be an accurate characterization of VA’s
role under the law. VA does not necessarily speak for all veterans at all
times and may on occasion take positions that veterans may regard as not
in their best interests.
The plan acknowledges that VA needs to systematically identify areas
where coordination is required. The plan includes a strategic goal to
improve the coordination of veterans’ services among multiple agencies,
because some veterans receive services from agencies other than VA. For
example, some veterans receive employment training services from the
Department of Labor. Also, VA sometimes relies on other agencies for the
information it needs to administer programs—for example, military
service records from the Department of Defense (DOD). On the other hand,
VA’s draft strategic plan either does not address major management
challenges for VA that we have previously identified or addresses them in
little detail. Examples of such challenges are major delays in resolving
compensation and pension claims, challenges created by the “year-2000”
computer problem, and recent legislation expanding eligibility for VA
medical care and expanding VA’s authority to contract with non-VA
providers for medical services.
Finally, while VA has made progress in developing the financial and
information systems needed to provide accurate and timely cost and
performance data to support its strategic planning, much work remains to
be done. VA’s draft plan reflects VA’s need to develop both cost accounting
systems and an information technology infrastructure that will provide the
data VA needs to develop results-oriented goals and objectives, measure
progress, and manage its programs. However, the plan does not address
such issues as correcting internal control weaknesses in VA’s financial
systems and developing an information technology framework based on
“best practices” of leading public and private organizations.
Strategic planning under the Results Act is a long-term challenge for
federal agencies. We recently reported that, while agencies are likely to
meet the September 30, 1997, deadline for producing initial strategic plans,
these plans will not be as useful for congressional and agency
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decision-making as they could have been.3 This conclusion applies to VA.
The draft strategic plan acknowledges many of its own deficiencies and
recognizes that much work remains to be done before VA can produce a
strategic plan meeting the Results Act’s requirements. VA also recognizes
that it will not overcome all of the deficiencies in its draft strategic plan by
the Results Act’s deadline.
The Results Act requires that agency strategic plans contain the following
VA’s Draft Strategic key elements: (1) a comprehensive mission statement; (2) general goals
Plan Does Not Fully and objectives, including outcome-related goals and objectives; (3) a
Address Key Results description of how the goals and objectives are to be achieved; (4) a
description of how performance goals in annual agency performance plans
Act Elements will be related to the general goals and objectives; (5) identification of key
external factors that could affect achievement of the general goals and
objectives; and (6) a description of program evaluations used in
establishing or revising the general goals and objectives, as well as a
schedule for future program evaluations. VA’s draft strategic plan contains
a comprehensive mission statement but is deficient in addressing the other
five key elements. For two of the key elements (development of
results-oriented goals and use of program evaluations), the draft plan
contains plans to help correct the deficiencies.
VA’s Mission Statement VA’s draft strategic plan contains a basic mission statement, followed by a
more detailed discussion of the purposes of its major program areas. A
mission statement should focus on an agency’s purpose and how it will
achieve that purpose. VA’s mission statement does this by stating that part
of its mission is to help promote the health, welfare, and dignity of
veterans, in recognition of their service to the nation. The more detailed
discussions of VA’s major program areas support the basic mission
statement by describing how each major program assists veterans and
their families. For example, the plan states that
• through NCS, VA ensures that veterans’ service is honored by providing
dignified burials and lasting memorials, as well as by maintaining veterans’
cemeteries as national shrines, and
• VBA’s educational assistance program has several purposes, such as
assisting service members in readjusting to civilian life; extending
opportunities for higher education to people who might not otherwise be
3
The Government Performance and Results Act: 1997 Governmentwide Implementation Will Be
Uneven (GAO/GGD-97-109, June 2, 1997).
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able to afford it; and aiding in the recruitment and retention of members of
the Armed Forces, Selected Reserve, and National Guard.
Corporate and Strategic VA’s draft strategic plan contains multiple layers of goals, along with
Goals, Objectives, and objectives, strategies, and performance goals to support them. This is a
Strategies and major source of confusion in attempting to evaluate the plan. Most of the
plan’s strategic goals are accompanied by objectives, strategies, and
Performance Goals measurable performance goals. However, some corporate and strategic
goals are not explained at all; instead, the plan states that explanations
will be provided at a later date. Also, most of the plan’s goals are oriented
toward VA’s operations and processes, rather than toward the results of
VA’s programs for veterans and their families. VA officials agree that their
goals need to be more results oriented and focused and told us they intend
to make such changes in their mid-July revision of the draft strategic plan.
VA’s draft strategic plan is organized around two levels of goals: four
corporate goals, which are subdivided into 34 strategic goals. A complete
list of these goals appears in enclosure I. The four corporate goals are to
• honor, compensate, and care for veterans in recognition of their sacrifices
for America;
• provide “One-VA” world class customer service;
• create and maintain a high performing workforce to serve veterans; and
• provide the taxpayer maximum return on investment.
Under the first corporate goal, which reflects program purposes set forth
in various VA statutes, VA lists strategic goals for all of its major programs.
The other three corporate goals are not based on specific requirements in
VA’s statutes but reflect the need to provide quality, efficient service to
veterans. In addition, the last three corporate goals lack a focus on the
results of VA programs for veterans and their families; instead, they focus
on VA’s processes for providing benefits and services.
Each corporate goal has up to 10 strategic goals. This additional layer of
goals is one of the factors that makes the plan confusing and difficult to
evaluate. Also, almost all of the strategic goals are process oriented, rather
than results oriented. For example, two strategic goals are geared toward
the implementation of the Results Act:
• A strategic goal stating that “VA programs are effective in meeting the
needs of veterans and their beneficiaries” is very broad. However, the
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explanation of this goal describes a process for meeting some of the key
requirements of the Results Act. Under this strategic goal, VA plans to
identify the purpose of each program, establish results-oriented
performance measures, identify the data needed for strategic planning
purposes, and initiate formal program evaluations.
• The strategic goal to “improve the continuity and coordination of delivery
of veteran services and benefits from multiple federal agencies” describes
VA’s intention to establish a process for identifying overlaps and linkages
between VA and other agencies, enhancing and improving communications
links with other agencies, and improving communications with state
veterans’ offices and other state officials.
Wide differences also exist in the scopes of strategic goals. For example,
compare the strategic goal to “improve the overall health care of veterans”
with the strategic goal to “establish an ongoing process of collecting
employee information about the workforce and integrate priority concerns
into the strategic management process.” The former goal is very broad,
covering VHA’s statutory responsibility to provide health care to veterans;
the latter appears to be an objective or strategy for achieving a larger
strategic goal.
In general, VA’s strategic goals are supported by statements of objectives,
strategies to implement the objectives, and performance goals against
which VA’s progress in meeting strategic goals can be measured. However,
not all of the strategic goals are supported by objectives, strategies, and
performance goals. The most significant gap is in the strategic goal to
“improve benefit programs.” This goal covers all five of VBA’s business
lines, but supporting details are provided for only one business line: loan
guaranty. Thus, the plan lacks any discussion of objectives, strategies, or
performance goals for several major VBA program areas, including
compensation and pension—one of VA’s two largest program areas (the
other being medical care). VBA has done strategic planning for these
programs, as reflected in its fiscal year 1998 budget submission. However,
VA is still working to incorporate VBA’s strategic planning into the
Department’s strategic plan, including the development of results-oriented
goals and objectives. Other gaps in VA’s draft strategic plan are in the
strategic goals related to VHA’s medical education and emergency medical
back-up functions.
One of the necessary features of a strategic plan is a discussion of how an
agency plans to ensure accountability for achieving strategic goals. VA’s
draft plan contains such a discussion, in the form of a strategic goal to
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ensure that VA employees are accountable for their performance in
achieving VA’s goals. VA’s strategy is to establish a performance
management system to emphasize achievement by individual employees,
or groups of employees, of specific organizational goals; emphasize
accountability for outcomes; and promote innovation. Executive rewards
are to be made consistent with this new performance management system.
Some of the statements of strategies do not address how they will
contribute to achieving strategic goals, or how the strategies will be
implemented. For example, under the strategic goal to “improve the
overall health care of veterans,” one of the strategies is to increase the
proportion of VA residents trained in primary care to 50 percent. The
strategy does not explain how increasing the proportion of residents
trained in primary care will help improve veterans’ health care, nor does it
describe how VA will increase the proportion of medical residents trained
in primary care.
Most of the plan’s strategic goals are accompanied by measurable
performance goals. Many of VA’s performance goals meet the definition of
an annual performance goal because they have (1) a performance measure
used to track progress in achieving the performance goal (for example, the
average number of days required to process a claim for educational
assistance) and (2) a target level to be achieved during a given fiscal year
(for example, reducing the average number of days to process an
educational assistance claim to 23 days by fiscal year 2002).
The strategic goal to provide “prompt delivery of services and benefits” is
accompanied by 15 measurable performance goals covering promptness of
service for most of VA’s major program areas, such as to
• provide veterans with decisions on vocational rehabilitation claims within
60 days, by fiscal year 2002;
• set headstones and grave markers in national cemeteries within 60 days of
interment, by fiscal year 2002; and
• schedule primary care appointments for VA patients within 7 days of their
contacting VA, by fiscal year 2003.
Reflection of External Most of the strategic goals in VA’s draft plan are accompanied by
Factors discussions of external factors affecting achievement of the strategic goal.
External factors can be economic, demographic, social, technological, or
environmental. Assessments of such external factors can be valuable to
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agencies in setting goals and can assist the Congress and agencies in
determining the likelihood of achieving strategic goals. Further, such
assessments can explain why agencies did not meet their strategic goals.
In many cases, the draft plan’s discussion of external factors supporting
strategic goals is limited to whether the Congress will appropriate
sufficient funds, or make substantive legislative changes, to allow VA to
meet its goals. This is particularly true for VA’s discretionary programs,
such as health care and NCS. Also, discussions omit external factors that
are beyond the control of both VA and the Congress. For example, while
the plan includes some data on demographic trends in the veteran
population, it does not explain how these were used in setting strategic
goals, or how they will be used to measure progress in achieving these
goals. Also, larger trends, such as in the overall workforce and health care
system, are not tied to strategic goals.
One of the major strategic goals of NCS is to ensure that a burial option is
available to all eligible veterans. The plan defines a burial option as burial
in a VA national cemetery or a state veterans’ cemetery within 75 miles of
the veteran’s place of residence. NCS’ performance goals, in turn, are
geared toward constructing new VA national cemeteries; expanding
existing VA cemeteries; and assisting, through the State Cemetery Grants
Program, the construction of new state veterans’ cemeteries. The plan lists
specific VA cemeteries to be constructed or expanded, with specific target
fiscal years for each. The plan’s discussion of external factors consists of a
statement that resource constraints could delay achievement of the plan’s
performance goals. However, the plan does not tie the strategic and
performance goals to external factors, such as the mortality rate for
veterans and veterans’ relative preferences for VA, state, and private
cemeteries, which will affect the need for additional VA and state cemetery
capacity.
The first strategic goal specific to VHA—to improve the overall health care
of veterans—is defined, in part, in terms of increasing the number of users
of VA’s health care system. The plan’s discussion of external factors
indicates that its objective to increase VA health care system users is
dependent on enactment of legislation to allow VA to keep reimbursements
from third-party insurers, and to obtain Medicare reimbursements, for
some of the medical care VA provides.4 However, the plan does not address
the effects of major external factors on future use of VA’s health care
4
In general, VA can collect the costs of providing care not related to veterans’ service-connected
disabilities from private insurers but cannot collect from Medicare. Third-party collections not needed
to cover VA’s collection costs are deposited in the Treasury.
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system, notably, changes in the overall health care market (such as the
trend toward managed care in the private sector) and veterans’
demographics (such as the decline in numbers and aging of the veteran
population). These factors could potentially limit the increase in health
care that VA is attempting to achieve.
Program Evaluations The goals in VA’s draft strategic plan are not supported by formal program
evaluations. Program evaluations are objective, formal assessments of the
results, impact, or effects of a program or policy. Program evaluations can
be an important source of information in helping the Congress and others
ensure that agency goals and strategies are valid and reasonable, providing
baselines for agencies to use in developing performance measures and
developing performance goals, and identifying factors likely to affect
agency performance.
VA’splan acknowledges that VA has not performed such evaluations. To
prepare for evaluations, VA programs are conducting “strategic program
scans.” These are general reviews of VA’s current programs, including
identification of each program’s purpose, outcomes, existing performance
measures, and data needed to measure program outcomes and impact.
VA’sdraft strategic plan includes a plan for beginning a formal evaluation
process for its programs. VA’s strategy is to identify and prioritize, in
consultation with congressional oversight committees and stakeholders,
programs to be evaluated. VA plans to establish its prioritization in fiscal
year 1998 and begin conducting evaluations in fiscal year 1999. VA also
plans to begin performing more focused reevaluations of the first
programs evaluated, starting in fiscal year 2001.
OMB guidance suggests that agencies include a schedule for program
evaluations in their strategic plans. These schedules should communicate
the general scope and methodology of evaluations, key issues to be
addressed, and when evaluations will occur. VA’s strategic plan does not
contain this information; its schedule is general, stating that two
evaluations will be initiated in fiscal year 1999, and four will be initiated
every fiscal year thereafter until all VA programs have been evaluated.
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VA’s draft plan addresses its major statutory responsibilities and is
Key Statutory generally consistent with them. The mission statement includes a
Responsibilities Are reference to VA’s general authority to administer laws providing benefits to
Addressed in VA’s veterans and their beneficiaries. The basic mission statement is supported
by more specific references to the statutory authorities for VA’s major
Strategic Plan programs. VA’s major statutory responsibilities are to provide
• health care (38 U.S.C. 1701);
• burial services (38 U.S.C. 2400);
• vocational rehabilitation (38 U.S.C. 3100);
• educational assistance (38 U.S.C. 3001, 3201, and 3451);
• compensation for disabilities (38 U.S.C. 1101 and 1301);
• pensions (38 U.S.C. 1501);
• insurance (38 U.S.C. 1901); and
• home loan guarantees (38 U.S.C. 3701).
The mission statement also includes an element that is not dictated by law.
In particular, VA describes part of its basic mission as serving as the
“principal advocate” for veterans and their families in “ensuring that they
receive medical care, benefits, social support, and lasting memorials
promoting the health, welfare, and dignity of all veterans.” This role is not
directly linked to anything in the laws governing VA and may not be an
accurate characterization of its role under the law. A senior VA official
stated that VA has a responsibility to determine whether its programs are
adequate to meet the needs of veterans and, from time to time, to
recommend changes in statutory authority to the Congress. While it is
reasonable for VA to review its programs and recommend changes, serving
as a principal advocate for veterans and their families is not an accurate
description of that role. VA does not necessarily speak for all veterans at all
times and—because of factors such as its statutory duties, the policies of
the executive branch, and the availability of funds—may on occasion take
positions that veterans may regard as not in their best interests.
VA has not clearly identified the areas where its programs overlap with
VA Has Not Fully those of other federal agencies, nor has it coordinated its strategic
Identified and planning efforts with those agencies. Instead, one of VA’s strategic goals is
Coordinated to identify areas of overlap and coordinate with other federal agencies.
According to the draft plan, this will involve (1) identifying programmatic
Crosscutting overlaps and linkages with other federal agencies, (2) enhancing and
Functions improving communication links with other federal agencies, and
(3) keeping state directors of veterans affairs and other state officials
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apprised of VA benefits and programs and of opportunities for
collaboration and coordination.
In some areas, VA provides benefits and services to veterans that are
similar to those provided by other federal agencies to nonveterans or
exclusively to veterans. Examples of areas where VA needs to coordinate
with other departments and agencies follow.
Employment Training We have identified 163 separate employment training programs in the
federal government.5 VA administers 11 of these programs, including its
largest education program—the Montgomery G.I. Bill—and VA’s vocational
rehabilitation program.
Substance Abuse In October 1996, we reported that VA was one of 16 federal agencies
providing substance abuse treatment and prevention programs.6 VA’s focus
is on treatment programs for veterans, provided through VHA’s medical
centers, outpatient clinics, and domiciliaries. Treatment services can
include diagnostic assessment; detoxification; and medical, psychiatric,
and psychological counseling. VA’s draft strategic plan does not indicate
whether VA plans to coordinate with other agencies providing substance
abuse treatment and prevention services, notably the Departments of
Health and Human Services, Education, and Housing and Urban
Development.
Telemedicine VA is one of nine federal agencies developing telemedicine systems.
Telemedicine, in its broadest sense, refers to the use of communications
technology to help deliver medical care without regard to the distance
separating the participants. VA examples include the following:
• The Baltimore VA Medical Center stores X rays and magnetic resonance
images electronically, rather than on film. This provides better images and
allows several users at distant sites to view them at the same time.
• The Washington and San Francisco Medical Centers routinely review, via
telephone lines, the status of cardiac pacemakers worn by VA patients. This
reduces the number of unnecessary operations to replace pacemakers.
5
Multiple Employment Training Programs: Information Crosswalk on 163 Employment Training
Programs (GAO/HEHS-95-85FS, Feb. 14, 1995).
6
Drug and Alcohol Abuse: Billions Spent Annually for Treatment and Prevention Activities
(GAO/HEHS-97-12, Oct. 8, 1996).
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• The Atlanta Medical Center uses its telemedicine system to provide
continuing medical education and training to residents, including classes
conducted by the Centers for Disease Control and Prevention.
VA participates in the Joint Working Group on Telemedicine (JWGT), which
was established in 1995 to coordinate federal agencies’ telemedicine
efforts. We reported in February 1997 that JWGT is having difficulty
developing an inventory of telemedicine programs and that agencies do
not have strategic plans to guide their telemedicine investments.7 VA’s draft
strategic plan addresses VA’s efforts to implement telemedicine systems
under the strategic goal of reducing medical care costs and improving VHA’s
revenue stream. VA’s main performance goals include developing a
telemedicine strategic plan in fiscal year 1998 and developing and
implementing standards for such projects. The plan does not, however,
mention JWGT or any efforts to coordinate telemedicine development with
other agencies—for example, with the DOD health care system.
Also, VA relies on other agencies for information and must coordinate with
these agencies. VA relies heavily on DOD to provide records of veterans’
military service. For example, VA needs military records
• as part of the evidence required to determine whether veterans have
service-connected disabilities, which affects veterans’ eligibility and
entitlement for many VA programs, including disability compensation and
medical care, and
• to determine whether veterans and Selected Reserve and National Guard
members meet the military service requirements for eligibility for
Montgomery G.I. Bill educational assistance.
Our work at VA has identified a number of major management challenges
VA’s Strategic Plan that VA faces, some of which are not addressed in VA’s draft strategic plan.
Does Not Address
Some Major We have reported that VA’s vocational rehabilitation program should be
more focused on whether it helps disabled veterans find jobs than on
Management whether veterans complete the program.8 As we have noted above, VA’s
Challenges draft strategic plan is silent on the goals and objectives of most of its
programs, including the vocational rehabilitation program. A
7
Telemedicine: Federal Strategy Is Needed to Guide Investments (GAO/NSIAD/HEHS-97-67, Feb. 14,
1997).
8
Vocational Rehabilitation: VA Continues to Place Few Disabled Veterans in Jobs (GAO/HEHS-96-155,
Sept. 3, 1996).
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results-oriented goal for this program would focus on issues such as how
well it assisted disabled veterans in overcoming their employment
handicaps to obtain and maintain employment consistent with their
abilities, aptitudes, and interests.
Veterans face major delays in the resolution of their compensation and
pension claims by the time the appeals process has been completed. VA’s
draft plan includes a strategic goal to “do it right the first time.” This
strategic goal includes performance goals related to reducing delays in
claims processing, including (1) providing correct entitlement decisions on
claims 97 percent of the time by fiscal year 2002 and (2) reducing the
proportion of veterans’ appeals that are remanded by the Board of
Veterans Appeals back to VBA benefits offices from 43.7 percent to
20 percent by fiscal year 2002. Also, under the strategic goal of “prompt
delivery of services and benefits,” VA has set a performance goal to reduce
appeal processing time by 64 percent (from 1,000 days to 365 days) or
more by fiscal year 2003.
VBAmay not be able to make accurate and timely benefit payments to
veterans at the beginning of the year 2000 unless it is able to reprogram its
computers to recognize the next century. Most computer software in use
today is limited to a two-digit date field, such as “97” for 1997. Thus, this
software will not be able to distinguish between the years 1900 and 2000
because both will be designated “00.” We recently reported and testified
that VBA could do more to address its year-2000 problems and
recommended a number of actions VBA should take to address the serious
risks associated with its year-2000 activities.9 The discussion in VA’s draft
strategic plan on developing a departmentwide information technology
infrastructure addresses the year-2000 issue. The plan states that VA’s
objective is to ensure that its information systems will provide
uninterrupted service to support VA benefits delivery and medical care in
the year 2000. The plan also includes a performance goal that full
implementation and testing of compliant software (that is, software
capable of processing dates beyond 1999) will be completed by
December 1999.
VBAalso needs to strengthen its ability to prevent overpayments of
compensation and pension benefits. At the end of 1996, VA’s outstanding
overpayments exceeded $500 million. VA has the capability to prevent
millions of dollars in overpayments but has not done so because it has not
9
Veterans Benefits Computer Systems: Risks of VBA’s Year-2000 Efforts (GAO/AIMD-97-79, May 30,
1997) and Veterans Benefits Computer Systems: Uninterrupted Delivery of Benefits Depends on
Timely Correction of Year-2000 Problems (GAO/T-AIMD-97-114, June 26, 1997).
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focused on this area. VA’s draft strategic plan states that, through efforts
within VA and with other agencies, VA will work to ensure that data used in
making decisions are correct and up to date. Among the decisions that
should be improved with better data are VBA’s determinations of
compensation and pension payment amounts. However, the plan does not
establish a strategy or performance goal for reducing overpayments.
VHA faces challenges in implementing the Veterans’ Health Care Eligibility
Reform Act of 1996 (P.L. 104-262). This law expanded eligibility for VA
health care services and required VHA to establish an enrollment system for
veterans using VA’s health care system. VHA’s challenge is to develop an
enrollment system that accurately reflects the law’s priorities. The
Eligibility Reform Act also expanded VHA’s authority to procure health care
services from other providers and sell its services to other providers. VHA’s
challenge is to determine when it should provide services in its own
facilities and when it should contract for services. VA’s draft strategic plan
sets out a performance goal to increase the number of enrolled veterans
that is based on VA’s objective to preserve its existing health care system
for all veterans by increasing the number of veterans using the system. The
plan does not address how the enrollment system will be developed to
support its strategic goal of improving veterans’ health care, nor does it
address contracting out care as an option for meeting the health care
needs of veterans.
In addition to the Results Act, the Congress in recent years has enacted
VA’s Capacity to other legislation designed to help federal agencies meet their needs for
Provide Reliable accurate and reliable information to support executive branch and
Information on congressional decision-making.
Achievement of • The Chief Financial Officers’ (CFO) Act of 1990, as expanded by the
Strategic Goals Is Still Government Management Reform Act of 1994 and the Federal Financial
Management Improvement Act of 1996, was designed to improve the
Limited timeliness, reliability, usefulness, and consistency of agencies’ financial
information and requires, among other things, cost accounting.
• The Paperwork Reduction Act of 1995 and the Clinger-Cohen Act of 1996
are intended to improve agencies’ ability to use information technology to
support their mission and improve performance.
VA has begun to implement these acts and has made progress in financial
management and information technology. But VA still has financial
management and information technology issues that it needs to address
Page 15 GAO/HEHS-97-174R VA’s Draft Strategic Plan
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before it can be assured that it has the performance and cost information
needed to measure its progress in achieving results-oriented goals.
VA has established a sound financial management structure, a goal of the
CFO Act of 1990. The Assistant Secretary for Management serves as VA’s
Chief Financial Officer, and CFO positions have been established in VHA,
VBA, and NCS. Also, VHA plans to establish a CFO position in each of its 22
veterans integrated service networks. Further, VA participated in a pilot for
annual accountability reports beginning with fiscal year 1995.
Accountability reports are designed to consolidate reporting of
performance and financial data under various laws and provide a
comprehensive picture of an agency’s program performance and financial
condition.
A good financial management system is important to help VA ensure that it
has reliable and timely information on the costs of its programs. For
example, VHA needs accurate and timely information on its costs for
providing medical care in order to determine whether providing health
care in a VA facility is more or less costly than contracting it out. The
installation of its Financial Management System gives VA, for the first time,
an integrated financial management system. This system has led to
improvements in reporting of receivables and property management,
which resulted in the first issuance by VA’s Inspector General of an
unqualified opinion on VA’s Statement of Financial Position for the fiscal
year ending September 30, 1996.10
However, the Inspector General identified six areas where VA still needs to
correct internal control weaknesses:
• continuing efforts are needed to refine property, plant, and equipment
records;
• continuing action is needed to improve estimates used in valuing accounts
receivable;
• aggressive efforts are needed to cancel unneeded obligations;
• continuing progress is needed in correcting problems of the antiquated VA
Life Insurance system;
• information system security controls need improvement; and
• the Housing Credit Assistance program financial accounting process needs
strengthening.
10
VA has been preparing audited annual financial statements since fiscal year 1986.
Page 16 GAO/HEHS-97-174R VA’s Draft Strategic Plan
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In addition, VA’s fiscal year 1996 Accountability Report mentioned 12
material weaknesses, reported under the Federal Managers’ Financial
Integrity Act (FMFIA), dealing with such issues as compliance with credit
reform requirements, loan sale program management, controls over
prescription drugs, and antiquated computer hardware and software. The
strategic plan does not discuss any planned corrective actions with regard
to the six reportable conditions or the 12 FMFIA material weaknesses.
VA’s draft strategic plan includes a strategic goal to establish an effective
departmentwide cost accounting system. According to the plan, this
system would include two cost accounting systems already in
development: VHA’s Decision Support System (DSS) and VBA’s Activity
Based Costing (ABC) system.
Using DSS to combine clinical and financial information, VA can compare
the costs of surgery performed by different physicians at different medical
facilities; evaluate patient outcomes; and analyze ways to increase service
quality, reduce costs, and appropriately price excess services for sale to
the private sector or other federal agencies. We previously reported,
however, that some of the clinical and cost data DSS requires are
incomplete, inaccurate, or inconsistent.11 VHA plans to achieve universal
usage of DSS for its management and budgeting by fiscal year 2000.
In general, the ABC model involves (1) developing cost information,
(2) identifying specific program activities to be costed, and (3) allocating
costs to the specific activities. The ABC model has been pilot tested at VBA’s
St. Louis and Philadelphia Regional Offices to capture these offices’ costs
that were attributable to VBA’s educational assistance and insurance
business lines, respectively. Three other pilots were completed in
May 1997—at VBA’s St. Paul Debt Management Center; its Benefits Delivery
Center and Finance Office in Hines, Illinois; and VBA’s Central Office
operations.
The Paperwork Reduction Act of 1995 provides basic guidance to federal
agencies on acquiring and managing information resources. Based on the
concept that information resources should support agency missions and
performance, the act requires that information resources management
plans (1) delineate the resources that are needed and (2) explain how the
agency plans to minimize the paperwork burden on the public and the cost
11
VA Health Care Delivery: Top Management Leadership Critical to Success of Decision Support
System (GAO/AIMD-95-182, Sept. 29, 1995).
Page 17 GAO/HEHS-97-174R VA’s Draft Strategic Plan
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to the government of collecting information. The Clinger-Cohen Act of
1996 reinforces this guidance and adds requirements designed to promote
the use of information technology to better support agencies’ missions and
performance. This act is primarily concerned with ensuring that agencies
have systems to prioritize information technology investments.
VBA’s information technology efforts have yielded some improvements in
its hardware and software capabilities. Our work on VA’s information
technology development, focusing on VBA, identified areas where
improvements are needed before VBA can provide accurate performance
data to support its strategic planning and program management.
One such problem is the need for VBA to develop credible strategic
business and information resources management plans. VBA has
undertaken several initiatives to improve claims processing efficiency and
reduce its large backlog of unprocessed claims. But it has done so without
an overall business strategy clearly setting forth how it would achieve its
goals. Instead, VBA has used stopgap measures to deal with its claims
processing problems. While these measures have improved processing
times and reduced the claims backlog, VA needs to find other solutions. VBA
plans to use business process reengineering (BPR) methods to develop new
strategic goals and resource requirements for each of its business lines.
Three of these business lines, including compensation and pension, have
begun BPR projects, but only the compensation and pension BPR project has
progressed sufficiently to produce formal goals and detailed plans.
Another challenge for VBA is to do a better job of managing its information
technology development projects as investments. Our reviews of VBA’s
information technology initiatives show that VBA lacks the critical cost,
benefit, and risk information it needs to determine whether it has made
worthwhile investments—a first step in determining what it needs to meet
its information resource management priorities.12 For example, VBA’s
January 1997 information resource management support plan identified
the year-2000 problem discussed earlier as VBA’s top priority, but neither
these plans nor VBA’s year-2000 plan adequately discusses the resources
required to deal with the problem. VBA needs to develop the tools needed
to follow a three-phased management approach for selecting, controlling,
and evaluating information technology-related projects. It also needs to
develop a process to rank and prioritize information technology
investments as a consolidated portfolio.
12
VBA Information Technology Investment (GAO/AIMD-97-10R, Oct. 18, 1996).
Page 18 GAO/HEHS-97-174R VA’s Draft Strategic Plan
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A third challenge for VBA is to improve its software development
capability. Once agencies have identified their top priority information
technology projects, they must be able to determine whether the projects
should be developed in house or contracted out. Our review of VBA’s
software development capabilities found that, on a scale of software
development maturity, VBA was in the “least mature” category.13 Thus, VBA
cannot reliably develop and maintain high-quality software within existing
cost and schedule constraints. This, in turn, places VBA’s information
technology modernization efforts at significant risk. We made several
recommendations to the Secretary of Veterans Affairs. These
recommendations and VBA’s responses follow:
• Obtain expert advice on developing high-quality software. VBA is working
with the Air Force, under an interagency agreement, to implement this
recommendation.
• Develop a plan to achieve a higher level of software development maturity.
VBA has developed such a plan and has taken other actions to improve
software development maturity.
• Require that future software development contracts specify that services
be obtained from contractors with at least a level 2 (on a scale of 1 to 5,
with 5 being the highest level) rating. According to VBA, it has awarded a
general software contract that requires contractors to have knowledge of
the software capability evaluation methodology and use it where
applicable.
VA’s draft strategic plan identifies several actions it will take to address
VA-wide information technology planning, including the following:
• Development of a VA-wide Capital Asset Plan and establishment of a VA
Capital Investment Board to generate policies for capital investments,
including investments in information technology, and review proposed
capital investments.
• Development of a VA-wide information technology strategic plan and a
portfolio of information technology capital investments.
The draft plan’s discussion of information technology does not address
VA’s need to address its information security weaknesses—an issue we
have identified as high-risk throughout the federal government.14 Also, the
Paperwork Reduction Act of 1995 and the Clinger-Cohen Act of 1996 call
13
Software Capability Evaluation: VA’s Software Development Process Is Immature (GAO/AIMD-96-90,
June 19, 1996).
14
Information Management and Technology (GAO/HR-97-9, Feb. 1997).
Page 19 GAO/HEHS-97-174R VA’s Draft Strategic Plan
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for agencies to implement a framework of modern technology
management based on the “best practices” followed by leading private-
and public-sector organizations that have successfully used technology to
dramatically improve performance and meet strategic goals. VA’s draft plan
does not include these “best practices.”
We met with VA officials on July 9, 1997, to discuss their comments on a
Agency Comments draft of this letter. At that time, the Assistant Secretary for Policy and
Planning provided a letter stating VA’s general comments (see enc. II).
VA officials agreed that VA’s strategic plan needs to focus more on results
but noted that congressional oversight of VA has focused on program
delivery (such as expanding benefits to more veterans and increasing
benefit amounts) and not, for the most part, on program outcomes or
results.
In addition, VA officials said that VA will continue to place “appropriate
emphasis” on customer service, workforce development, and management
issues. They noted that VA is in the business of providing services and
benefits; thus, they believe that VA’s processes are important to serving its
customers. Also, these officials believe that the Results Act does not
preclude focusing on VA’s processes. We agree that process-oriented goals
and measures are important and can support results-oriented goals and
measures.
VA officials also believe that our letter should reflect the “extensive and
constructive” consultations that have already taken place on VA’s draft
strategic plan. As we have noted, we participated in the consultations
between VA officials and staffs of the House and Senate Committees on
Veterans’ Affairs and discussed many of the observations in this letter at
these meetings.
As arranged with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this correspondence until 30
days after its issue date. At that time, we will send copies to the Minority
Leader of the House of Representatives; the Ranking Minority Members of
the House Committees on Budget, Government Reform and Oversight, and
Appropriations; the Chairmen and Ranking Minority Members of the
Senate Committees on Budget, Government Reform and Oversight, and
Appropriations; the Chairmen and Ranking Minority Members of the
Page 20 GAO/HEHS-97-174R VA’s Draft Strategic Plan
B-277393
House and Senate Committees on Veterans’ Affairs; the Secretary of
Veterans Affairs; and the Director, Office of Management and Budget. We
will also send copies to others on request.
Please contact me on (202) 512-7202 if you have any questions. Greg
Whitney also contributed to this correspondence.
Cynthia M. Fagnoni
Acting Associate Director
Veterans’ Affairs and
Military Health Care Issues
Enclosures - 2
Page 21 GAO/HEHS-97-174R VA’s Draft Strategic Plan
Enclosure I
Corporate and Strategic Goals in the
Department of Veterans Affairs’ Draft
Strategic Plan
Corporate goal Strategic goals
1. Honor, compensate, and care for 1.1: VA programs are effective in meeting the needs of veterans and their beneficiaries
veterans in recognition of their sacrifices for and contribute to improving the quality of their lives.
America.
1.2: Improve the overall health care of veterans.
1.3: 100 percent of the VA medical research projects are demonstrably related to the
health care of veterans or to other departmental missions.
1.4: VA will collaborate with the Department of Health and Human Services and affiliated
medical schools to regulate the number of physicians trained to ensure there are a
sufficient number in each subspecialty and avoid creating a surplus in particular
subspecialties.
1.5: Provide back-up medical care for the Department of Defense in times of emergency.
1.6: Improve benefit programs.
1.7: Ensure that a burial option is available to all eligible veterans.
1.8: Improve minority veterans’ awareness and utilization of VA programs, services, and
benefits.
1.9: Improve women veterans’ utilization of VA programs, services, and benefits.
1.10: Improve the continuity and coordination of delivery of veteran services and benefits
from multiple federal agencies.
2. Provide “One-VA” world class customer 2.1: Ease of access: A veteran, beneficiary, or representative will be able and
service. encouraged to access VA in the fastest possible time; by the easiest possible means;
and, where possible, receive one-stop assistance.
2.2: Customer satisfaction: Service will meet or exceed customer expectations.
2.3: Courtesy: Service will be delivered with respect, dignity, and compassion.
2.4: Do it right the first time: Accurate and complete benefits and services will be
delivered with zero defects. If it is not done right the first time, there will be candid
acknowledgment of mistakes and priority assignment to correction of mistakes.
2.5: Prompt delivery of services and benefits: Timeliness of service delivery will meet or
exceed customer expectations and will be analyzed against the best-in-business.
2.6: Effective outreach: Veterans, dependents, and beneficiaries will know and
understand the available benefits and services.
(continued)
Page 22 GAO/HEHS-97-174R VA’s Draft Strategic Plan
Enclosure I
Corporate and Strategic Goals in the
Department of Veterans Affairs’ Draft
Strategic Plan
Corporate goal Strategic goals
3. Create and maintain a high-performing 3.1: Establish an ongoing process of collecting employee information about the
workforce to serve veterans. workplace and integrate priority concerns into the strategic management process.
3.2: Support VA’s ability to create and maintain a high- performing workforce to serve
veterans today and tomorrow.
3.3: Promote VA’s mission to train future health care providers in service to veterans and
all Americans.
3.4: Ensure that VA’s future workforce is well prepared to carry out its responsibilities.
3.5: Ensure that VA employees are accountable for their performance.
3.6: Promote efforts to ensure that VA’s workforce reflects the diversity of the customers
we serve: the nation’s veterans and their dependents.
3.7: VA’s work environment is recognized by employees as conducive to productivity,
achievement, and fostering respect among all.
3.8: Advance innovative work and employment practices.
4. Provide the taxpayer maximum return on 4.1: Establish an effective departmental cost accounting system.
investment.
4.2: Reduce costs and improve the revenue stream for the health care system.
4.3: Reduce benefit delivery costs and improve productivity.
4.4: Manage the national cemeteries in the most efficient and effective manner.
4.5: Develop and implement a departmental Capital Asset Plan that addresses the
construction and information technology needs of medical facilities, cemeteries, and
veterans’ benefits offices.
4.6: Implement an overarching departmental information technology infrastructure to
integrate information resources management within the Department.
4.7: Enhance the departmental Procurement System.
4.8: Ensure that corporate data and information are timely maintained; accurate; used
consistently throughout VA; and readily available within the Department, to external
stakeholders, and to the general public, as appropriate.
4.9: Provide fast, efficient, and cost-competitive delivery of human resource and payroll
services.
4.10: Increase the use of alternate dispute resolution to conserve time, money, and
resources.
Note: Not all of the strategic goals are numbered in VA’s draft plan; we added numbering for ease
of identification.
Source: VA draft strategic plan dated June 9, 1997.
Page 23 GAO/HEHS-97-174R VA’s Draft Strategic Plan
Enclosure II
Comments From the Department of
Veterans Affairs
Page 24 GAO/HEHS-97-174R VA’s Draft Strategic Plan
Enclosure II
Comments From the Department of
Veterans Affairs
Page 25 GAO/HEHS-97-174R VA’s Draft Strategic Plan
Page 26 GAO/HEHS-97-174R VA’s Draft Strategic Plan
Page 27 GAO/HEHS-97-174R VA’s Draft Strategic Plan
Related GAO Products
Veterans Benefits Administration: Focusing on Results in Vocational
Rehabilitation and Education Programs (GAO/T-HEHS-97-148, June 5, 1997).
The Government Performance and Results Act: 1997 Governmentwide
Implementation Will Be Uneven (GAO/GGD-97-109, June 2, 1997).
Veterans Benefits Computer Systems: Risks of VBA’s Year-2000 Efforts
(GAO/AIMD-97-79, May 30, 1997).
Veterans’ Affairs: Veterans Benefits Administration’s Progress and
Challenges in Implementing GPRA (GAO/T-HEHS-97-131, May 14, 1997).
Veterans’ Employment and Training Service: Focusing on Program Results
to Improve Agency Performance (GAO/T-HEHS-97-129, May 7, 1997).
Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate
Congressional Review (GAO/GGD-10.1.16, Version 1, May 1997).
Department of Veterans Affairs: Programmatic and Management
Challenges Facing the Department (GAO/T-HEHS-97-97, Mar. 18, 1997).
Managing for Results: Using GPRA to Assist Congressional and Executive
Branch Decisionmaking (GAO/T-GGD-97-43, Feb. 12, 1997).
VADisability Compensation: Disability Ratings May Not Reflect Veterans’
Economic Losses (GAO/HEHS-97-9, Jan. 7, 1997).
VAHealth Care: Improving Veterans’ Access Poses Financial and
Mission-Related Challenges (GAO/HEHS-97-7, Oct. 25, 1996).
Vocational Rehabilitation: VA Continues to Place Few Disabled Veterans in
Jobs (GAO/HEHS-96-155, Sept. 3, 1996).
VAHealth Care: Opportunities for Service Delivery Efficiencies Within
Existing Resources (GAO/HEHS-96-121, July 25, 1996).
(105754) Page 28 GAO/HEHS-97-174R VA’s Draft Strategic Plan
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Address Correction Requested
The Results Act: Observations on VA's June 1997 Draft Strategic Plan
Published by the Government Accountability Office on 1997-07-11.
Below is a raw (and likely hideous) rendition of the original report. (PDF)