The Results Act: Observations on VA's August 1997 Draft Strategic Plan

Published by the Government Accountability Office on 1997-09-18.

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

                               United States General Accounting Office

GAO                            Testimony
                               Before the Subcommittee on Oversight and Investigations,
                               Committee on Veterans’ Affairs, House of Representatives

For Release on Delivery
Expected at 9:30 a.m. EST
Thursday, September 18, 1997
                               THE RESULTS ACT

                               Observations on VA’s
                               August 1997 Draft Strategic
                               Statement of Cynthia M. Fagnoni, Associate Director
                               Veterans’ Affairs and Military Health Care Issues
                               Health, Education, and Human Services Division

The Results Act: Observations on VA’s
August 1997 Draft Strategic Plan

               Mr. Chairman and Members of the Subcommittee:

               We are pleased to be here today to provide our views on the draft strategic
               plan developed by the Department of Veterans Affairs (VA), pursuant to the
               Government Performance and Results Act of 1993 (the Results Act). As
               you know, the Results Act was one of the major steps the Congress has
               taken in recent years to fundamentally change the way federal agencies go
               about their work. The Results Act requires agencies to clearly define their
               missions, set goals, measure performance, and report on their
               accomplishments. One of the act’s major milestones—submission to the
               Congress by federal agencies of strategic plans that define their missions
               and set goals—is less than 2 weeks away.

               With fiscal year 1996 spending of over $38 billion, VA is responsible for
               administering laws that provide numerous types of benefits to many of the
               nation’s 26 million veterans and their dependents and survivors. These
               benefits include medical care, disability compensation, pensions,
               rehabilitation assistance, education benefits, home loan benefits,
               insurance coverage, and burial benefits. My statement today will address
               the progress VA has made in developing its strategic plan and the
               challenges VA continues to face in implementing the Results Act. My
               observations are based on our review of VA’s June 1997 draft strategic plan
               and have been updated to reflect revisions VA made between June 1997
               and its latest version, dated August 15, 1997.1

               In summary, VA has made substantial progress in its strategic planning,
               based in part on consultations with the Congress. However, as with many
               other agencies, VA’s process of developing a plan that meets the
               requirements of the Results Act is an evolving one that will continue well
               after the September 30, 1997, deadline for submitting its first strategic plan
               to the Congress and the Office of Management and Budget (OMB). The
               August 15, 1997, draft that VA submitted to OMB for review is an
               improvement over the June 1997 version, because it is easier to follow,
               places more emphasis on results and less on process, and fills in some
               major gaps in the June 1997 draft. However, the latest draft strategic plan
               continues to lack some of the key elements expected under the Results
               Act. As with the June 1997 draft, the August 15, 1997, draft lacks
               results-oriented goals for several major VA programs; lacks a program

                The Results Act: Observations on VA’s June 1997 Draft Strategic Plan (GAO/HEHS-97-174R, July 11,
               1997). On August 1, 1997, VA provided a new draft strategic plan, revised from the June 1997 version.
               On August 15, 1997, VA provided another version that contains some additional material supporting
               the goals stated in the August 1 version. Unless specifically noted, our comments on the August 15
               version also apply to the August 1 version.

               Page 1                                                                          GAO/T-HEHS-97-215
                      The Results Act: Observations on VA’s
                      August 1997 Draft Strategic Plan

                      evaluation schedule; and contains inadequately developed discussions of
                      external factors and the need to coordinate with other federal agencies.

                      VA is aware that it has much work to do to fully implement the Results Act
                      and considers its strategic planning—including conducting program
                      evaluations and developing results-oriented goals—to be a long-term
                      effort. Some of this work is identified in the current draft strategic plan.
                      VA’s success in implementing the Results Act will depend on how
                      successful it is in ensuring that its strategic plan focuses on results and
                      how well it integrates its plan with the plans of other federal agencies. The
                      Congress will continue to play an important role in consulting with VA in
                      developing results-oriented goals and overseeing VA’s efforts to
                      successfully implement the Results Act.

                      The Results Act is the centerpiece of a statutory framework to improve
Purpose and           federal agencies’ management activities.2 The Results Act was designed to
Requirements of the   focus federal agencies’ attention from the amounts of money they spend or
Results Act           the size of their workloads to the results of their programs. Agencies are
                      expected to base goals on their results-oriented missions, develop
                      strategies for achieving their goals, and measure actual performance
                      against the goals.

                      The Results Act requires agencies to consult with the Congress in
                      developing their strategic plans. This gives the Congress the opportunity to
                      help ensure that their missions and goals are focused on results, are
                      consistent with programs’ authorizing laws, and are reasonable in light of
                      fiscal constraints. The products of this consultation should be clearer
                      guidance to agencies on their missions and goals and better information to
                      help the Congress choose among programs, consider alternative ways to
                      achieve results, and assess how well agencies are achieving them.

                      The Results Act requires VA and other agencies to complete their first
                      strategic plans and submit them to the Congress and OMB by September 30,
                      1997. OMB requested that agencies provide it with advance copies of their
                      strategic plans by August 15, 1997, for review and interagency
                      coordination. In addition, the Results Act requires agencies to submit their
                      first annual performance plans to the Congress after the President submits
                      his fiscal year 1999 budget to the Congress. OMB requested that agencies
                      integrate, to the extent possible, their annual performance plans into their

                      Other parts of the framework include the Chief Financial Officers Act of 1990, the Paperwork
                      Reduction Act of 1995, and the Clinger-Cohen Act of 1996.

                      Page 2                                                                        GAO/T-HEHS-97-215
                                The Results Act: Observations on VA’s
                                August 1997 Draft Strategic Plan

                                fiscal year 1999 budget submissions, which were due to OMB by September
                                8, 1997. OMB, in turn, is required to include a governmentwide performance
                                plan in the President’s fiscal year 1999 budget submission to the Congress.
                                As required by the Results Act, GAO reviewed agencies’ progress in
                                implementing the act, including the prospects for agency compliance.3

                                VA’s August 15, 1997, draft strategic plan represents a significant
Improvements and                improvement over the June 1997 draft. The latest version is clearer and
Remaining Challenges            easier to follow, more complete, and better organized to focus more on
in VA’s August 1997             results and less on process. At the same time, VA has still not fully
                                addressed some of the key elements required by the Results Act; the draft
Draft Strategic Plan            plan has

                            •   a lack of goals focused on the results of VA programs for veterans and their
                                families, such as assisting veterans in readjusting to civilian life;
                            •   limited discussions of external factors beyond VA’s control that could
                                affect its achievement of goals;
                            •   a lack of program evaluations to support the development of
                                results-oriented goals; and
                            •   insufficient plans to identify and meet needs to coordinate VA programs
                                with those of other federal agencies.

                                The draft strategic plan, acknowledging that three of these four elements
                                (results-oriented goals, program evaluations, and agency coordination)
                                have not been fully addressed, does plan to address them. VA has indicated
                                that it views strategic planning as a long-term process and intends to
                                continue refining its strategic plan in consultation with the Congress,
                                veterans service organizations, and other stakeholders.

                                Another challenge for VA is to improve its financial and information
                                technology management, so that the agency’s ongoing planning efforts
                                under the Results Act will be based on the best possible information. VA’s
                                draft strategic plan addresses several financial and information technology
                                issues, such as the need for cost accounting systems for VA programs and
                                the need to improve VA’s capital asset planning.

Improvements From the           We found that VA’s June 1997 draft strategic plan was confusing, because
June 1997 Draft Strategic       of numerous layers of goals, objectives, and strategies. Also, it contained
Plan                            significant gaps where goals were missing and lacked a clear focus on

                                The Government Performance and Results Act: 1997 Governmentwide Implementation Will Be
                                Uneven (GAO/GGD-97-109, June 2, 1997).

                                Page 3                                                                  GAO/T-HEHS-97-215
The Results Act: Observations on VA’s
August 1997 Draft Strategic Plan

results. VA officials indicated that, based on consultations with staff from
the House and Senate Veterans’ Affairs committees, which included input
from GAO, the draft strategic plan would be revised to make it clearer,
more complete, and more results-oriented. The August 15, 1997, version
reflects significant progress in these areas.

Instead of presenting four overall goals, three of which were
process-oriented, VA has reorganized its draft strategic plan into two
sections. The first section, entitled “Honor, Care, and Compensate
Veterans in Recognition of Their Sacrifices for America,” is intended to
incorporate VA’s results-oriented strategic goals. The second section,
entitled “Management Strategies,” incorporates the three other general
goals, related to customer service, workforce development, and taxpayer
return on investment. In addition, VA has filled significant gaps in the
discussions of program goals. The largest gap in the June 1997 draft was
the lack of goals for four of the five major veterans benefit programs. The
current plan includes goals for each of these programs, stating them in
terms of ensuring that VA benefit programs meet veterans’ needs. Finally,
the reorganized draft plan increases the emphasis on results. The
June 1997 draft appeared to make such process-oriented goals as
improving customer service and speeding claims processing equivalent to
more results-oriented goals such as improving veterans’ health care. In the
August 1997 version, the process-oriented goals remain but have been
placed in their own process-oriented section supplementing the plan’s
results orientation.

At the same time, VA believes that the process-oriented portions of the plan
are important as a guide to VA’s management. It considers customer
service very important because VA’s focus is on providing services to
veterans and their families. The Assistant Secretary for Policy and
Planning, in written comments on a draft of our July 1997 letter, stated
that VA continues to believe “that processes and operations are important
to serving veterans and [VA] will continue to place appropriate emphasis
on the areas of customer service, workforce development, and
management issues.” VA also contends that the Results Act does not
preclude process-oriented goals from its strategic plan. We agree that
many of the process issues VA raises are important to its efficient and
effective operation and can be included in VA’s strategic plan as long as
they are integrated with the plan’s primary focus on results.

Page 4                                                      GAO/T-HEHS-97-215
                           The Results Act: Observations on VA’s
                           August 1997 Draft Strategic Plan

Lack of Results-Oriented   Perhaps the most significant deficiency in VA’s draft strategic plan, in both
Goals for Major VA         the June 1997 and current versions, is the lack of results-oriented goals for
Programs                   major VA programs, particularly for benefit programs. While discussions of
                           goals for benefit programs have been added to the current version, they
                           are placeholders for results-oriented goals that have not yet been
                           developed. The general goals for 4 of the 5 the major benefit program
                           areas—compensation and pensions, education, vocational rehabilitation,
                           and housing credit assistance—are stated in terms of ensuring that VA is
                           meeting the needs of veterans and their families. The objectives
                           supporting VA’s general goal for its compensation and pension area are to
                           (1) evaluate compensation and pension programs to determine their
                           effectiveness in meeting the needs of veterans and their beneficiaries; and
                           (2) modify these programs, as appropriate. For the three other major
                           benefit program areas, the objectives suggest possible results-oriented
                           goals and are supported by strategies aimed at evaluating and improving
                           programs. For example, the objectives under vocational rehabilitation
                           include increasing the number of disabled veterans who acquire and
                           maintain suitable employment and are considered to be rehabilitated. The
                           strategies under this objective include evaluating the vocational
                           rehabilitation needs of eligible veterans and evaluating the effect of VA’s
                           vocational rehabilitation program on the quality of participants’ lives.

                           VA has noted that developing results-oriented goals will be difficult until
                           program evaluations have been completed. Given the program evaluation
                           time periods stated in the draft strategic plan, which calls for evaluations
                           to continue through fiscal year 2002, results-oriented goals may not be
                           developed for some programs for several years. Another difficulty VA has
                           cited is that, for many VA programs, congressional statements of the
                           program purposes and expected results are vague or nonexistent. VA
                           officials cited VA’s medical research and insurance programs as examples
                           of programs with unclear purposes. This is an area where VA and the
                           Congress can make progress in further consultations.

Incomplete Discussion of   Another observation we made about VA’s June 1997 draft strategic plan
External Factors           was that VA’s discussion of external factors that could affect its strategic
                           planning was incomplete. Discussions of external factors were often
                           limited to whether the Congress would appropriate sufficient funds or
                           make substantive legislative changes. Assessments of factors outside VA’s
                           control, such as economic, social, and demographic changes, are also
                           important in setting VA’s goals and in assessing VA’s progress in meeting
                           them. However, the discussions of external factors related to the plan’s

                           Page 5                                                      GAO/T-HEHS-97-215
                  The Results Act: Observations on VA’s
                  August 1997 Draft Strategic Plan

                  individual goals generally did not link demographic changes in the veteran
                  population to VA’s goals.

                  VA’s current draft has added discussions of the implications of
                  demographic changes on VA programs. For example, VA notes that the
                  death rate for veterans is increasing, which will lead VA to explore various
                  options for meeting increased demands for burials in VA and state veterans’
                  cemeteries. Meanwhile, the goal to ensure that VA’s burial programs meet
                  the needs of veterans and their families is accompanied by a detailed list
                  of specific cemetery construction and land acquisition projects and by a
                  specific target for expanding burials in state veterans’ cemeteries. The
                  discussion of external factors related to this goal focuses on the Congress’
                  willingness to fund VA’s proposed projects and the cooperation of the
                  states in participating in the State Cemetery Grants Program. What is
                  missing in the draft is a link between the projected increase in veteran
                  deaths and the proposed schedule of specific cemetery projects. Similarly,
                  we recently reported that National Cemetery System strategic planning
                  does not tie goals for expanding cemetery capacity to veterans’ mortality
                  rates and their preferences for specific burial options.4

Lack of Program   We noted that the goals in VA’s June 1997 draft strategic plan were not
Evaluations       supported by formal program evaluations. Evaluations can be an
                  important source of information for helping the Congress and others
                  ensure that agency goals are valid and reasonable, providing baselines for
                  agencies to use in developing performance measures and performance
                  goals, and identifying factors likely to affect agency performance. As noted
                  above, VA cites the lack of completed evaluations as a reason for not
                  providing results-oriented goals for many of its programs.

                  The first general goal of VA’s plan is to conduct program evaluations over a
                  period of several years. VA plans to identify distinct programs in each of its
                  10 major program areas and then prioritize evaluations of these programs
                  in consultation with the Congress, veterans’ service organizations, and
                  other stakeholders. VA expects to complete this prioritization sometime in
                  fiscal year 1998, complete the highest-priority evaluations by the end of
                  fiscal year 2000, and complete at least one evaluation in each of the 10
                  major program areas by fiscal year 2003.

                   National Cemetery System: Opportunities to Expand Cemeteries’ Capacities (GAO/HEHS-97-192, Sept.
                  10, 1997).

                  Page 6                                                                     GAO/T-HEHS-97-215
                                The Results Act: Observations on VA’s
                                August 1997 Draft Strategic Plan

Lack of Coordination With       In our comments on the June 1997 draft strategic plan, we noted that VA
Other Federal Agencies          has not clearly identified the areas where its programs overlap with those
                                of other federal agencies, nor has it coordinated its strategic planning
                                efforts with those of other agencies. Three areas where such coordination
                                is needed (and the relevant key federal agencies) are

                            •   employment training (Department of Labor),
                            •   substance abuse (departments of Education, Health and Human Services,
                                and Housing and Urban Development), and
                            •   telemedicine (Department of Defense).

                                In addition, we noted that VA relies on other federal agencies for
                                information; for example, VA needs service records from the Department
                                of Defense to help determine whether veterans have service-connected
                                disabilities and to help establish their eligibility for Montgomery G.I. Bill

                                VA’s current draft strategic plan addresses the need to improve
                                coordination with other federal agencies and state governments. This will
                                involve (1) identifying overlaps and links with other federal agencies,
                                (2) enhancing and improving communications links with other agencies,
                                and (3) keeping state directors of veterans’ affairs and other state officials
                                apprised of VA benefits and programs and of opportunities for
                                collaboration and coordination.

Financial and Information       As we noted in our comments on VA’s June 1997 draft strategic plan, VA has
Technology Improvement          made progress in financial management and information technology. Like
Goals in VA’s Draft             other federal agencies, VA needs accurate and reliable information to
                                support executive branch and congressional decision-making. The
Strategic Plan                  “Management Strategies” section of VA’s current draft strategic plan
                                addresses some financial management and information technology issues.
                                Since VA has identified the need to devote a portion of its strategic plan to
                                process-oriented goals, it is appropriate that some of these goals should
                                focus on improving its management in these areas.

                                VA’s current draft plan includes a goal to establish an effective
                                departmentwide cost accounting system. For example, a cost accounting
                                system could allow a Veterans Health Administration (VHA) medical facility
                                to appropriately price excess services for sale to the private sector or
                                other federal agencies. Also, a cost accounting system could allow a
                                Veterans Benefits Administration (VBA) regional office to determine how

                                Page 7                                                       GAO/T-HEHS-97-215
           The Results Act: Observations on VA’s
           August 1997 Draft Strategic Plan

           much of its costs were attributable to each of the benefit programs it
           administers. 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.

           Another goal in the current draft plan is to establish a VA capital policy that
           ensures that capital investments, including capital information technology
           investments, reflect the most efficient and effective use of VA’s resources.
           Achieving this goal involves developing a VA-wide Agency Capital Plan and
           establishing a VA Capital Investment Board to generate policies for capital
           investments and to review proposed capital investments based on VA’s
           mission and priorities.

           Still another goal is designed to address the need for VA-wide information
           technology management to facilitate VA’s ability to function as a unified
           department. Achieving of this goal involves developing a VA-wide
           information technology strategic plan and a portfolio of prioritized
           information technology capital investments. In addition, the plan calls for
           the promotion of crosscutting VA information technology initiatives in
           order to improve services to veterans.

           The draft plan’s discussion of information technology addresses one of the
           information technology issues we have identified as high-risk throughout
           the federal government—the year-2000 computer problem.5 Unless
           corrections are made by January 1, 2000, VA’s computers may be unable to
           cope with dates in 2000, which could prevent VA from making accurate and
           timely benefit payments to veterans.6 VA’s draft plan includes as a
           performance goal that full implementation and testing of compliant
           software (that is, software capable of processing dates beyond 1999) will
           be completed by October 1999.

           Mr. Chairman, this completes my testimony this morning. I would be
           pleased to respond to any questions you or Members of the Subcommittee
           may have.

            High-Risk Series: Information Management and Technology (GAO/HR-97-9, Feb. 1997).
            Veterans Benefits Computer Systems: Risks of VBA’s Year-2000 Efforts (GAO/AIMD-97-79, May 30,

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