[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]



 
          VA MAIL MANAGEMENT: THE CASE OF THE $11,257 PACKAGE

=======================================================================

                                HEARING

                               before the

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                      TUESDAY, SEPTEMBER 12, 2017

                               __________

                           Serial No. 115-28

                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
       
       
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         Available via the World Wide Web: http://www.fdsys.gov
         
         
         
         
                                _________ 

                    U.S. GOVERNMENT PUBLISHING OFFICE
                   
 30-374                      WASHINGTON : 2018              
         
         
         
         
                     COMMITTEE ON VETERANS' AFFAIRS

                   DAVID P. ROE, Tennessee, Chairman

GUS M. BILIRAKIS, Florida, Vice-     TIM WALZ, Minnesota, Ranking 
    Chairman                             Member
MIKE COFFMAN, Colorado               MARK TAKANO, California
BRAD R. WENSTRUP, Ohio               JULIA BROWNLEY, California
AMATA COLEMAN RADEWAGEN, American    ANN M. KUSTER, New Hampshire
    Samoa                            BETO O'ROURKE, Texas
MIKE BOST, Illinois                  KATHLEEN RICE, New York
BRUCE POLIQUIN, Maine                J. LUIS CORREA, California
NEAL DUNN, Florida                   KILILI SABLAN, Northern Mariana 
JODEY ARRINGTON, Texas                   Islands
JOHN RUTHERFORD, Florida             ELIZABETH ESTY, Connecticut
CLAY HIGGINS, Louisiana              SCOTT PETERS, California
JACK BERGMAN, Michigan
JIM BANKS, Indiana
JENNIFFER GONZALEZ-COLON, Puerto 
    Rico
                       Jon Towers, Staff Director
                 Ray Kelley, Democratic Staff Director

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                    JACK BERGMAN, Michigan, Chairman

MIKE BOST, Illinois                  ANN MCLANE KUSTER, New Hampshire, 
BRUCE POLIQUIN, Maine                    Ranking Member
NEAL DUNN, Florida                   KATHLEEN RICE, New York
JODEY ARRINGTON, Texas               SCOTT PETERS, California
JENNIFER GONZALEZ-COLON, Puerto      KILILI SABLAN, Northern Mariana 
    Rico                                 Islands

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
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                            C O N T E N T S

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                      Tuesday, September 12, 2017

                                                                   Page

VA Mail Management: The Case of The $11,257 Package..............     1

                           OPENING STATEMENTS

Honorable Jack Bergman, Chairman.................................     1
Honorable Ann Kuster, Ranking Member.............................     3

                               WITNESSES

Mr. John Oswalt, Executive Director for Privacy, Office of 
  Information and Technology, U.S. Department of Veterans Affairs     4
    Prepared Statement...........................................    24

Ms. Lori Rectanus, Director, Physical Infrastructure Issues, U.S. 
  Government Accountability Office...............................     5
    Prepared Statement...........................................    25


          VA MAIL MANAGEMENT: THE CASE OF THE $11,257 PACKAGE

                              ----------                              


                      Tuesday, September 12, 2017

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                      Subcommittee on Disability Assistance
                                      and Memorial Affairs,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to notice, at 10:34 a.m., in 
Room 334, Cannon House Office Building, Hon. Jack Bergman 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Bergman, Poliquin, Arrington, 
Kuster, and Sablan.
    Also Present: Representative Roe.

          OPENING STATEMENT OF JACK BERGMAN, CHAIRMAN

    Mr. Bergman. Good morning. This hearing will come to order.
    I want to welcome everyone to today's hearing examinating--
``examinating,'' that is a new word. We come up with one every 
time here. We are not going to examinate. We will just examine 
today VA's management of its mail operations.
    VA reports spending by far the most in the Federal 
Government on mail, $355 million in fiscal year 2016. That is 
more than the Social Security Administration or the Treasury 
Department, including the IRS.
    Considering the magnitude of spending, the Subcommittee 
looked into where the money goes. What we found surprised us.
    Every large agency reports its mail spending to the General 
Services Administration in great detail through what is called 
the SMART database. GSA posts the numbers on its public Web 
site. The general idea is transparency drives efficiency and 
savings. Let me repeat that. The general idea is that 
transparency drives efficiency and savings.
    In reality, after a look at the facility-by-facility data 
VA reported, bizarre and anomalous numbers immediately jumped 
out. It begged the question of whether anyone had ever reviewed 
and questioned the information.
    Here are some of the highlights:
    The VBA office in Huntington, West Virginia, reported 
sending Priority Mail for 3 cents each, while the Memphis 
medical center reported spending $39 per piece of Priority 
Mail.
    The Alexandria, Louisiana, medical center reported sending 
First-Class letters for 8 cents each, while the Decatur, 
Georgia, medical center reported sending the same letters for 
$58.29 each.
    The Denver medical center reported sending nearly 10,000 
airmail packages and nearly 65,000 UPS Ground packages at no 
cost.
    The VHA facilities in Temple and Waco, Texas, reported 
spending $40,000 to mail just 16 business reply letters.
    And, finally, the Decatur, Georgia, medical center also 
reported sending one FedEx Ground package at a cost of $11,257.
    These numbers are hard to believe. In a letter to former 
Chairman Miller, VA explained them as data entry errors by 
mailroom employees. For example, VA wrote that Priority Mail in 
Memphis actually cost $3.90 each. The business reply letters in 
Temple and Waco cost a total of $40. The FedEx package in 
Decatur was really $112. And the First-Class letters in Decatur 
never existed.
    These explanations were not very reassuring. More on that a 
little later.
    Recognizing the scope of the problem in the mail operation, 
we turned to GAO to conduct a wide-ranging review, and it 
released its report last month.
    VA seems to have a circular problem on its hands. The mail 
operation is bureaucratically fractured and governed by a 20-
year-old policy. Hundreds of VA facilities are mailing using a 
hodgepodge of different meters, software, and other equipment. 
No one seems to be firmly in charge, and the extensive data 
collected every year is completely unreliable. The data is 
supposed to inform managerial improvements, but the managerial 
shortcomings seem to be corrupting the data.
    It is not clear to me that anyone truly knows how much VA 
really spends on mail. As big as the reported $355 million 
total is, it apparently does not include over 1,000 clinics, 
300 vet centers, and the entire National Cemetery 
Administration, among others. Some facilities report nothing, 
while other facilities inflated their spending by a factor of 
10 or 100, as VA explained.
    Patterns in VA's reported spending are just as perplexing. 
After being roughly in line with Social Security and Treasury's 
mail spending for a number of years, VA's reported spending 
abruptly spiked by over $100 million in fiscal year 2014 and 
has stayed at that level. In some years, expenditures crept up 
while the number of mailings dropped. In other years, the 
number of mailings climbed but the expenditures barely budged. 
Notably, despite the spending spike beginning in 2014, the 
number of mailings is actually down.
    Perhaps what is most concerning is, from the outside, 
before scrutiny, this all appears to be a model of efficiency 
and open government--a Federal management regulation, detailed 
policy, and interactive data available to the public in an 
online dashboard. In reality, it is an intractable mess, a 
classic case of garbage in, garbage out.
    We are here today to shine a light on the problem and begin 
charting a course to fix it. While mail may not be the most 
exciting issue, these inefficiencies are clearly wasting real 
money. Veterans all over the country have pressing needs, and 
we simply cannot afford to operate this way anymore.
    I now yield to Ranking Member Kuster for her opening 
statement.

        OPENING STATEMENT OF ANN KUSTER, RANKING MEMBER

    Ms. Kuster. Thank you, Chairman Bergman.
    And thank you to our witnesses and to all of you who have 
joined us today.
    While ``The Case of the $11,257 Package'' is a catchy 
title, it is actually one example of inaccurate data reporting 
by the VA. In this case, a decimal was forgotten during manual 
data entry, so a package costing $112.57 was reported 
incorrectly to the General Services Administration.
    Unfortunately, we observe this all too often. VA struggles 
with cost accounting and the management of its finances in part 
due to outdated systems requiring manual data entry, increasing 
the risk of human error. Inconsistent procedures, policy, and 
oversight lead to a lack of accountability and increased cost 
to the taxpayer.
    Employees lack the training and resources they need and 
modern IT systems to ensure directives and policies are 
followed. Programs lack goals and measures of performance to 
gauge their effectiveness and efficiency. And data are 
inaccurately reported, this time to the GSA.
    These are the same root causes that resulted in the 
Veterans Health Administration's placement on the GAO High Risk 
List. These issues place VA's mail program at risk and cause me 
to question whether the physical security and accurate tracking 
of packages, some of those packages containing opioids and 
controlled substances, are at higher risk of diversion.
    In comparison to VA's other challenges, like addressing the 
opioid epidemic or ending veteran suicide, management of VA's 
mail expenditures and volume should be the least of its 
worries. However, I believe this is indicative of a larger 
problem.
    Military leaders often say that when troops are failing to 
do simple, routine tasks, such as keeping their uniforms in 
order or maintaining clean barracks--and I think General 
Bergman would agree--that this is a sign of a larger problem. 
In the same way, I think failure to manage mail is one sign of 
a larger problem at the VA.
    The VA must thoroughly examine the root causes of GAO 
studies and IG investigations and take serious steps to address 
them so that it can transform itself into the world-class 
veteran-centric organization that we have all come to expect.
    I hope this hearing will give us a chance to have a broader 
discussion on some of these challenges that the VA faces and 
the solutions and resources that are needed to ensure that our 
veterans receive the health care and benefits they deserve.
    Thank you, General Bergman. I yield back.
    Mr. Bergman. Thank you, Ranking Member Kuster.
    I would now like to welcome our panel, who is seated at the 
witness table.
    On the panel, we have Mr. John Oswalt, Executive Director 
for Privacy in the VA Office of Information and Technology. We 
also have Ms. Lori Rectanus, Director for Physical 
Infrastructure Issues at GAO.
    Mr. Oswalt, you are now recognized for 5 minutes.

                    STATEMENT OF JOHN OSWALT

    Mr. Oswalt. Good morning, Chairman Bergman, Ranking Member 
Kuster, and distinguished Members of the Subcommittee. Thank 
you for this opportunity to participate in your hearing on 
GAO's mail management report entitled ``Actions Needed to More 
Effectively Manage Outgoing Mail'' and discuss what actions VA 
is taking to implement the resulting recommendations and 
improve VA's mail management program.
    Before addressing the GAO findings, I would like to 
emphasize again what was said in your opening statements, that 
VA has not paid the exorbitant amounts previously reported to 
mail individual packages and letters. For example, the $11,257 
package reported to GSA was never translated into an actual 
purchase or expense for VA. The actual cost, as indicated, was 
$112.57. In this case and others, human error, such as omitting 
a decimal point, resulted in widely inaccurate reporting on our 
part.
    Mail operations in VA are largely decentralized, with each 
administration executing their program to meet their unique and 
diverse needs. While these unique requirements require some 
degree of customization, there is a strong need for a robust 
enterprise-wide strategy.
    VA accepts and understands the need for immediate and 
decisive action, and we are acting accordingly. We have 
developed and undertaken a comprehensive remediation plan that 
addresses GAO's recommendations and to make VA a best practice 
across government in mail management. To better meet our 
mission, we must eliminate inefficiency that impedes serving 
our veterans that--the inefficiency siphons off valuable 
resources.
    As an organization that is primarily field-based, VA mail 
operations have evolved to meet the unique needs of our various 
components with limited central oversight. In the past, this 
homegrown approach may have worked to meet mailing 
requirements. However, the growth in mail volume over the past 
two decades, such as the shift to mail-out prescriptions, have 
rendered these homegrown mailing practices obsolete. VA has not 
kept up with new technologies and business practices.
    VA is working to create a more effective and efficient 
program and is using the GAO recommendations as our starting 
point. VA has established a department-wide integrated project 
team, or IPT, sponsored by the VA's Deputy Chief of Staff, with 
membership from all relevant stakeholders. The IPT is charged 
with formulating plans and actions that address and satisfy the 
GAO recommendations and to build the administrative 
infrastructure to govern the mail management program at an 
enterprise level.
    Actions include but are not limited to: the comprehensive 
assessment and inventory of existing mail equipment and 
supporting software; conducting market research to determine 
what approach is best for VA, whether it is new capital 
investment, leasing, or obtaining mail operations as a managed 
service; conducting a cost-benefit analysis of all of these 
options identified, and we will make a determination on what 
approach best meets the needs of VA.
    VA has updated and has published a revised VA Directive 
6340 that incorporates all new regulations and requirements. VA 
is currently updating VA Handbook 6340 that contains 
enterprise-wide operating specifications on how to implement 
the now-revised policy.
    Individual administrations will write their own standard 
operating procedures, SOPs that incorporate the unique mission 
requirements specific to their mailing operations. VA will 
report on a semiannual basis the results of established goals 
and performance measures.
    VA is currently writing and classifying position 
descriptions for a dedicated VA mail manager position at an 
enterprise level and one supporting staff position.
    All mail managers will have to take annual mandatory 
training in accordance with Directive and Handbook 6340 and 
individual SOPs for their respective office.
    VA faces many challenges in meeting these goals, but we are 
up to the challenge. The men and woman of VA are unique in 
government in their commitment and dedication to fulfilling the 
mission of VA: serving veterans and their beneficiaries. It is 
this dedication that will make our efforts here successful.
    There is a great deal of work to be done, and we are 
already making progress toward addressing GAO's concerns and 
are implementing their recommendations.
    This concludes my testimony, and I am prepared to answer 
any questions you or other Members of the Committee may have. 
Thank you.

    [The prepared statement of John Oswalt appears in the 
Appendix]

    Mr. Bergman. Thank you, Mr. Oswalt.
    Ms. Rectanus, you are now recognized for 5 minutes.

                   STATEMENT OF LORI RECTANUS

    Ms. Rectanus. Thank you.
    Chairman Bergman, Ranking Member Kuster, and Members of the 
Subcommittee, thank you for the invitation to be here today to 
discuss VA's mail program.
    VA reports that it sends more than 200 million pieces of 
mail per year to veterans and their dependents, and it reported 
that it spent over $350 million to do that, nearly double what 
it did in 2009.
    In July, we reported that VA needs to take actions to more 
effectively manage this program. Specifically, we found 
improvements were needed in how it tracks mail data, how it 
measures program performance, and how it provides authority for 
key program officials. We are pleased that VA agreed to take 
action in response to our recommendations.
    The biggest issue is that, currently, VA cannot reliably 
demonstrate what it spends on mail or what volume it handles. 
This is because it does not consistently track mail volume and 
costs across its facilities and administrations. Instead, every 
facility essentially does its own thing. For example, some 
facilities use manual spreadsheets to track mail activity, 
while others have purchased equipment, such as postage meters, 
that track the volume and costs.
    However, even when the facilities had equipment, because 
the equipment had varying capabilities, the type of information 
provided by the equipment varied. This occurs because VA's 
administrations and facilities procure mailroom equipment 
independently. For example, each of VBA's 56 regional benefit 
offices negotiates their own contracts, and VHA reported that 
the contracts can be established either by the VISN or at the 
medical centers themselves. As a result, what you get is a 
department-wide rollup that has little meaning.
    This is before you even consider the unreported, 
incomplete, or questionable data. While there are about 200 
individual entities who report data to SMART, some key entities 
are not accounted for. We found the National Cemetery 
Administration hasn't reported its mail volume or costs, and, 
when questioned, these officials did not know they were 
supposed to report. Additionally, VA's 1,000-plus community-
based outpatient clinics do not report, and officials did not 
know if they were accounted for in others' reports.
    In other cases, those who did report missed critical items, 
such as volume, expenditures, or undeliverable mail. Others 
reported data that were clearly inaccurate, as you have 
referred to--as another example, spending $9,000 to mail 29 
pieces of mail.
    If VA strategically sourced equipment that consistently 
obtained and tracked mail activity, it would have complete, 
accurate, and reliable data, and it would likely save money by 
negotiating fewer contracts at higher levels of the Department.
    While VBA is trying to establish a blanket purchase 
agreement, these efforts have not included other 
administrations in a way that would maximize cost savings as 
well as help ensure a valid understanding of mail costs and 
volume.
    Regarding performance measures, VA cannot show that its 
mail operations are efficient and effective because it has not 
established department-wide goals and performance measures for 
operations. Instead, we found facilities, again, were doing 
their own thing for measures. Some facilities judged their 
performance based on customer service, while others reported 
using efficiency, cost, volume handled, or timeliness as 
measures.
    In the absence of department-wide measures that everyone 
works towards, VA can't assess how administrations or 
facilities are doing. Only through having performance measures 
and holding facilities accountable to those measures can VA 
show that it is effectively carrying out the program.
    Finally, we found that the officials responsible for 
managing VA's program likely have insufficient authority to do 
their jobs. We found a lack of clarity for who was responsible 
for carrying out the requirements in the mail policy. Mail 
managers also told us they do not believe they had the 
authority to even require basic operations, such as complying 
with requirements or ensuring accurate reporting. VA needs to 
clarify the authority and responsibilities of the agency and 
administration-level mail managers if it is to improve 
management and oversight of mail operations.
    In conclusion, VA has many critical responsibilities when 
it comes to serving our Nation's veterans and their families 
and must allocate its resources appropriately and efficiently 
and know that its efforts are achieving the intended outcomes. 
That includes mail.
    We look forward to working with VA as it implements our 
recommendations to enhance the effectiveness of its mail 
program.
    Chairman Bergman, Ranking Member Kuster, and Members of the 
Subcommittee, that concludes my statement, and I would be 
pleased to answer your questions.

    [The prepared statement of Lori Rectanus appears in the 
Appendix]

    Mr. Bergman. Thank you, Ms. Rectanus.
    The written statements of those who have just provided oral 
testimony will be entered into the hearing record. We will now 
proceed to questioning.
    Ranking Member Kuster, you are recognized for 5 minutes.
    Ms. Kuster. Thank you.
    So this is a question about the GAO investigation. I am 
wondering if you found evidence of fraud or waste in the mail 
mismanagement.
    Ms. Rectanus. Thank you, Ranking Member.
    This review was not designed specifically to look for 
fraud, waste, or abuse, but, certainly, we did identify that 
when every facility orders their own equipment and does things 
differently you probably are losing opportunities for cost 
savings from more strategic sourcing.
    In terms of fraud and abuse, anytime you have self-reported 
information and there is no oversight of that, you run the risk 
of that potentially happening. However, we did not specifically 
find any examples of that.
    Ms. Kuster. And it is my understanding that the mail 
procedures are based on a directive, 6340, that is at least 20 
years old. It might be older than that. Did you get into that 
level in your investigation?
    Ms. Rectanus. The policy directive that we had at the time 
of our review was from 1996, yes. There is a directive, and 
then there is a handbook that supports the directive.
    Ms. Kuster. Do you know--or maybe for our witness from the 
VA: Is there anything underway to revisit the mail directive 
and this issue about each of the facilities making their own 
decisions about what equipment to purchase without attention to 
cost savings?
    This is to the VA witness.
    Mr. Oswalt. Oh, I am sorry.
    Ms. Kuster. Yes.
    Mr. Oswalt. Well, as I indicated in my testimony, we have a 
cross-VA team now that is--the first step is to do the data 
gathering of what we actually have and get our arms around 
that, the goal being that we will have a centralized oversight 
of this but still allow the field-based operations to tailor 
their individual programs to meet those needs.
    It is worth mentioning--
    Ms. Kuster. But something as basic as mail, why would that 
vary? I mean, why would it vary from VISN to VISN or region to 
region?
    We are just talking about--like, for example, you could 
have a volume discount contract with these carriers that would 
benefit everyone across the country and certainly benefit the 
taxpayers. You are never going to get that if you insist on 
doing this region by region in a different way.
    Mr. Oswalt. I am sorry if I was confusing. The 
Administration, the Veterans Health Administration, the VBA, 
Veterans Benefits Administration, they each have their own 
programs. But within VHA it is uniform, the way they execute 
it, and the same for VBA. So there is--
    Ms. Kuster. I would just suggest--
    Mr. Oswalt. VHA--excuse me?
    Ms. Kuster. I would just suggest we try to go up another 
level and, for the entire Veterans Administration, all across 
the country, try to use the same equipment, get the same data, 
because you could negotiate an even larger discount.
    Mr. Oswalt. Right. And that is one of the goals we are 
striving for, is VBA currently is--as indicated in the 
testimony of my colleague, is that VBA is now implementing a 
consolidation of their operations using commercially cloud-
based software that rolls together all the disparate parts of 
information that is needed to report to GSA. And it does it for 
each carrier, and it puts it all into one place.
    Ms. Kuster. I mean, that is the irony; the carriers 
certainly know how much you spend.
    Mr. Oswalt. Right.
    Ms. Kuster. That we have to go the other direction.
    So I am just suggesting that, as you are looking into that, 
you know, looking for ways of cost saving by getting a handle, 
you also have to deal with this issue of manual entry. The more 
you are using digital entry, the better off you will be.
    Mr. Oswalt. Well--
    Ms. Kuster. Because the way the package, let the machine, 
you know, enter the information--because you are always going 
to have problems with manual entry. You are always going to 
have human error.
    So my time is short, but I do want to get a question out 
there. And you may not be prepared to respond, but I would like 
to hear back from the VA.
    This goes to a much bigger issue, but my understanding is 
that 80 percent of the VA's prescriptions are handled by 
Consolidated Mail Outpatient Pharmacy. And I would assume that 
is a pretty large part of this $355 million if 80 percent of 
the packages--now, I would also assume that that is being done 
because people feel that mail-order pharmacy is a way to--for 
convenience, but primarily to save money.
    And I am wondering two questions: One, has the VA taken 
into account the cost of the mailing back and forth to 
determine if indeed there are cost savings through having this 
high a percentage--this seems like an incredibly high 
percentage for mail-order pharmacy.
    But, secondly, I am much more focused, with the opioid 
crisis, on managing controlled substances. We have spoken with 
the United States Postal Service, the issues that they are 
having with diversion. Do you have any kind of quality control 
around diversion?
    And my time is up, so I will have to take that--
    Mr. Oswalt. I will have to take that for the record--
    Ms. Kuster. Thank you.
    Mr. Oswalt [continued].--and will get back to the Committee 
with that.
    Ms. Kuster. Thank you.
    Mr. Bergman. Thank you, Ranking Member Kuster.
    Dr. Roe, you are recognized for 5 minutes, sir.
    Mr. Roe. Thank you, Mr. Chairman.
    I thank Chairman Bergman for holding a hearing on this 
issue. I also would like to express my appreciation to our 
predecessor, Chairman Miller, who is keeping an eye on us from 
over my shoulder here, for beginning the investigation.
    The mail spending figure we have, $355 million last year, 
is enormous. And I understand that there are major 
irregularities in the reported numbers, and the real amount 
could be even more or it could be less.
    First of all, we need to figure out what the accurate total 
is. VA should be able to do that. Most businesses can. Maybe 
you clean up the SMART data, or maybe the CFO counts 
expenditures, or maybe devise another solution.
    Then, VA needs to look at waste and inefficiencies. The 
Social Security Administrations communicates with 60 million 
beneficiaries, most of them seniors who still receive 
information via U.S. mail, for about $207 million. The IRS 
communicates with 140 million taxpayers by letter for about 
$188 million.
    I find it hard to believe that all the mail VA sends is 
absolutely necessary, which is why I have worked on the RETIRE 
Act legislation to encourage electronic delivery of retirement 
data for ERISA employees. I am interested if there are barriers 
to VA taking a similar approach.
    Even given the number of letters and packages that VA now 
sends, it appears that potential savings are being left on the 
table. Using hundreds of different meters; sorting facilities 
are incredibly inefficient. Imagine how much VA could reduce 
cost by leveraging economies of scale, as Ms. Kuster just 
mentioned. Imagine how much easier it would be if all the 
equipment was compatible. Presumably, modern equipment, 
software equipment, can track all expenditures that pass 
through the meters and interface with the post office and 
shipping companies.
    As Chairman Bergman said, this problem does have a familiar 
theme. There is not enough oversight--there is not an oversight 
hearing yet in which IT or contracts do not come up.
    With that, just a couple of questions.
    Mr. Oswalt, you first. I understand that last year all the 
VBA regional offices started working on getting a common 
contract in place to buy all their mailing equipment and 
software together. It was supposed to be done at the end of 
this year. Now VA is telling GAO it will take several more 
years. Can you explain why it is taking so long?
    And I also like the new strategy that you laid out to 
update the mail management. But why did it take a GAO report to 
get this done?
    Mr. Oswalt. Well, I will answer your first question first, 
sir, that VBA has instituted or begun this process. And I was 
informed by their officials that in a 3- to 9-month timeframe 
this software that they are purchasing and using on all the 
compatible equipment will be complete.
    And that will, as I indicated earlier, put all the 
information in one place. It will interface with GSA SMART and 
remove that human interface. It will interface with VA's own 
accounting system for more accurate data there.
    Mr. Roe. Let me editorialize for just a second. Being in 
government space for a long time, in medicine, we billed 
Medicaid and Medicare. If we had been this sloppy in reporting 
to Medicaid and Medicare, I can promise you, you would be doing 
a perp walk somewhere. You would not be able to put this kind 
of sloppy data in front of Medicaid and Medicare and expect to 
get reimbursed and then expect not to explain this to the 
auditors when they came to your practice and looked at this. I 
mean, there is no way on this earth it would stand up to 
scrutiny, just to editorialize.
    Ms. Rectanus, what would a world-class mail operation look 
like? And are there any other Federal agencies that stand out 
that are doing this very well?
    Ms. Rectanus. Thank you, sir.
    We did not do a comparative analysis for this review. 
Obviously, we did talk to GSA about which entities and 
organizations they thought were doing a better job. They were a 
little hesitant to identify key ones, but they did say that 
some of the challenges VA faces, in terms of having good data 
and ensuring accuracy, they struggle with.
    But they did identify, again, sort of the best practices 
that you would want to see--things like leveraging technology, 
things like seeking out the best discounts you can find, things 
like training, making sure all your folks have the training, 
and having a written policy that clearly lays out who is 
responsible and what your goals are. Again, one of the key 
requirements is having measures and targets and objectives to 
say, this is what we are holding ourselves accountable to.
    I can provide you some information for the record in terms 
of if there are some agencies we think are really role models 
in this area.
    Mr. Roe. Thank you.
    Thank you, Mr. Chairman. My time has expired, but I have a 
couple of questions I would like to submit for the record.
    Mr. Bergman. Thank you, Dr. Roe.
    Mr. Arrington, you are recognized for 5 minutes.
    Mr. Arrington. Mr. Chairman, thank you and Ranking Member 
Kuster for holding this hearing. I think, while it may not be 
exciting to some people, I think it is incredibly important 
that we have effective and efficient operations for the Federal 
Government, especially when you are a service organization, 
especially when you are serving our heroes.
    And I am incredibly discouraged by the consistent feedback 
on IT, on union time, disability claim disputes, and the list 
goes on and on, with a pattern of lack of management, who is 
responsible, do they have the authority, do they have the 
resources, are there goals, are there performance measures, are 
there reviews to see if we are doing a good job. I feel like 
the taxpayer is being fleeced over and over because of the lack 
of this not-so-exciting issue of operations and management.
    The core issue--and I agree with Ms. Kuster, this is just a 
symptom of the root problem, and that is lack of 
accountability. Now, I hope and pray to God that this 
accountability act that we all passed and was signed by the 
President will give the tools to this administration and to 
you, Mr. Oswalt, and your colleagues to actually do the job you 
were hired to do on behalf of the taxpayer and the veteran, 
okay?
    So I hope--but, you know, once somebody has the tools and 
they are empowered, I think now you can hold them accountable 
with a good conscience. That is how I feel about this.
    Mr. Oswalt, when did we know about this problem of either 
inconsistent, unreliable data collection and data outcome and 
just the mismanagement of the mailing operation in general?
    Mr. Oswalt. Sir, I don't believe there was any one moment 
where there was an a-ha moment. As I indicated, the mail 
program has been in place for a long time. I think Chairman 
Miller's letter to VA a couple years ago was when it really 
started to roll and we really started to gain traction. And 
there are individuals within VA who have tried to raise this as 
an issue, but the course of events has just overtaken--but 
Chairman Miller's letter--
    Mr. Arrington. Yeah. So a year ago, when he wrote the 
letter. But it seems like this has been going on for many 
years. And so I am concerned when it takes the Chairman of a 
Congressional Committee to inquire about mailing operations 
before somebody wakes up and says, ``We are not managing this 
very well. We are wasting a bunch of money.'' So that is number 
one.
    I assume, Ms. Rectanus, that there are best practices. I 
read something about GSA rolling out some best practice 
government-wide. Did that best practice initiative have any 
effect government-wide? And why didn't VA join that initiative 
to make their mailing operations more effective, cost-
effective?
    Ms. Rectanus. GSA has put out regulations in the FMR that 
are sort of at the fundamental minimum, if you will, of what a 
government mail management program should be. However, there is 
lots of information out there about best practices.
    GSA cannot compel agencies to do more than what is in the 
management regulation. And yet they try--they try to encourage. 
They provide training. They do some education. They provide 
bulletins. But they do not have oversight or enforcement 
authority to force agencies to do anything more than kind of 
what is the basic information.
    Mr. Arrington. Well, because if they are--you know, I think 
the school of thought by most folks who have run anything would 
be, if you at least compare yourself to others and you are that 
far out of whack, somebody ought to probably lose their job, 
and then they ought to implement some reforms in that process. 
But, clearly, that hasn't happened.
    You know, we were talking about improper payments the last 
time I sat at this table in an oversight hearing. And my 
question was, who is responsible, ultimately, for improper 
payments? And they said, seven CFOs. If there is more than one 
person, then nobody is responsible. And I asked, when is the 
last time somebody lost their job over improper payments? And I 
said, get back to the Committee on it. Nobody has lost their 
job on that.
    Here is my question, and I will leave you some time to 
answer it, Mr. Oswalt. Who is responsible for the mailing 
operation? Who reports to the Secretary? And then who reports 
to that person? Give me that org chart flow.
    And then I would ask you to submit to the Committee the 
last time somebody was fired on account of not managing the 
mailing operation.
    Mr. Oswalt. Okay. I will take that for--
    Mr. Arrington. Would you respond to the org chart flow? I 
want to know--
    Mr. Oswalt. Well, as indicated, it is a decentralized 
program. So each administration head, each undersecretary has 
the authority for their program--or staff office head. And then 
there is the need to have a VA enterprise-wide mail manager, 
which currently is under the CIO's position. And that is a 
coordinating policy role.
    Mr. Arrington. I have gone over my time. I yield back.
    And if there is time for further questions, Mr. Chairman, I 
would be happy to continue down this line of thinking.
    Mr. Bergman. Thank you, Mr. Arrington.
    Mr. Poliquin, you are recognized for 5 minutes.
    Mr. Poliquin. Thank you, Mr. Chairman. I appreciate it very 
much.
    Thank you, Mr. Oswalt, for being here.
    And thank you also to the folks from the GAO.
    Mr. Oswalt, how long have you been at the VA?
    Mr. Oswalt. Thirty-one years.
    Mr. Poliquin. I am sorry?
    Mr. Oswalt. Thirty-one years.
    Mr. Poliquin. Thirty-one years. Okay. Have you been 
involved in this part of the VA for 31 years?
    Mr. Oswalt. No, sir.
    Mr. Poliquin. Okay. How long have you been in this 
position?
    Mr. Oswalt. I have been in my current position for just 
over 2 years.
    Mr. Poliquin. Okay. And to follow up with what Mr. 
Arrington was saying, does all of the mail operations report to 
you?
    Mr. Oswalt. No, sir.
    Mr. Poliquin. Okay. So what is your relationship with the 
mail operations around the country?
    Mr. Oswalt. I am an executive in the organization Quality, 
Privacy, and Risk, which has responsibility for the enterprise 
mail function.
    Mr. Poliquin. Okay. So you are supposed to make sure that 
the taxpayers aren't getting ripped off when it comes to the 
cost of the mail programs around the country, right?
    Mr. Oswalt. As a VA employee in general, yes, sir.
    Mr. Poliquin. Okay, great. So if I understand you 
correctly, all the VA facilities around the country operate 
autonomously when it comes to mail programs, right?
    Mr. Oswalt. They operate within their own administrations.
    Mr. Poliquin. Okay, great.
    Now, to send a First-Class letter anywhere in the country, 
what does it cost? Well, it is your job, right? You should 
know. It is 49 cents, isn't it?
    Mr. Oswalt. That is--yes, sir.
    Mr. Poliquin. Okay. Well, I am surprised you didn't know 
that. Okay. It is 49 cents to send a letter from me to Jodey, 
from me to the Chairman, or from me to you. Okay.
    Now, would someone explain this to me? In Alexandria, 
Virginia, they sent 3,713,070 First-Class letters for a cost of 
8 cents each. How is that possible?
    Oh, wait a minute. In Decatur, Alabama, they sent 712,695 
First-Class letters, costing $58.29 each. What is going on 
here?
    Mr. Oswalt. As I indicated in my testimony, that is 
probably, most likely, I would say, due to errors in the manual 
entry into the GSA SMART database.
    Mr. Poliquin. Okay. Who is responsible for overseeing that? 
Is that you?
    Mr. Oswalt. No, sir.
    Mr. Poliquin. Okay. Who is it?
    Mr. Oswalt. The individual mail managers within the 
administration.
    Mr. Poliquin. Does this make any sense to you over at the 
GAO?
    Ms. Rectanus. Yes. And I would appreciate if I could get a 
chance to comment.
    Mr. Poliquin. Please.
    Ms. Rectanus. Obviously, if you start to dissect the data 
too much, you really don't have a lot of faith, because it is 
not just--the rate per piece is a derived figure based on what 
has been put in for expenditures and volume. So, if any of 
those numbers are wrong in any respect, then the rate per piece 
is inaccurate.
    Mr. Poliquin. So you are telling us--
    Ms. Rectanus. It is important--
    Mr. Poliquin [continued].--So you are telling us, ma'am, 
that the data that the VA submitted to us in our oversight to 
make sure the taxpayers and our veterans aren't getting ripped 
off is wrong.
    Ms. Rectanus. It is self-reported data.
    Mr. Poliquin. It is self-reported data.
    Ms. Rectanus. But that doesn't--
    Mr. Poliquin. So it doesn't come through you; it comes 
through these folks.
    Ms. Rectanus. I am sorry?
    Mr. Poliquin. It comes not from you but from these folks, 
right?
    Ms. Rectanus. I am sorry, I still couldn't hear you.
    Mr. Poliquin. It does not come through. The data we have 
comes through Mr. Oswalt.
    Ms. Rectanus. It is directly reported by VA through the GSA 
SMART tool.
    Mr. Poliquin. Okay.
    So, with the data all over the map here--for example, you 
folks over at the VA sent out 200---what the heck is it? It 
doesn't matter--200,000, 225,000 pieces of mail, 220,000 pieces 
of mail, and it cost the taxpayers $355 million a couple years 
ago, whereas Treasury and Social Security sends out more mail 
but costs a lot less.
    So, right off, as a former State treasurer up in Maine and 
standing up for our veterans so we make sure we have every 
dollar they deserve to take care of them when they come back 
from the battlefield, I am looking at this and I am saying, how 
could this possibly be? And you are just confirming that. This 
is self-reported data. And there is nobody at the top that is 
watching this.
    Is that right?
    Ms. Rectanus. Are you asking--
    Mr. Poliquin. Yeah, I am. Well, I will ask Mr. Oswalt.
    Mr. Oswalt--
    Ms. Rectanus. This self-reported data are made in such a 
way that it is impossible for anyone to confirm the accuracy of 
that data.
    That being said, however, it is possible to have different 
prices, because each location works discounts with its service 
providers.
    Mr. Poliquin. You mean like this price. In Waco, Texas, 
$40,000 spent on 16 pieces of business reply mail, or $2,500 
per letter. That is what you mean, right?
    Ms. Rectanus. That seems a little extreme. Correct.
    Mr. Poliquin. So that is 2,500 bucks. Supposed to cost 49 
cents. This is 25.
    So how in the heck, Mr. Oswalt--you have been there 31 
years, 2 years in this job. How in the world can we trust the 
data? What in the world is going on there?
    Mr. Oswalt. Well, that is the reason we are undertaking 
this top-to-bottom reform, sir, because of these problems that 
have been identified.
    Mr. Poliquin. How long have these problems been identified? 
Is this the first you have heard of it?
    Mr. Oswalt. When Chairman Miller's letter arrived, that was 
the first exposure I had to this issue, yes, sir.
    Mr. Poliquin. Well, who had the job before you?
    Mr. Oswalt. The job didn't exist.
    Mr. Poliquin. The job didn't exist before 2 years ago.
    So we are spending $355 million a year on mail throughout 
the VA system, and nobody thought that it would be a good idea 
to make sure people are looking out for the taxpayer and for 
our veterans. Is that what you are saying?
    Mr. Oswalt. No, sir that is not what I am saying.
    Mr. Poliquin. Tell me what you are saying.
    Mr. Oswalt. I am saying that each individual administration 
has their own appropriation, and they have the stewardship over 
those funds, and they, in turn, manage the mail program.
    From an enterprise-wide standpoint, the oversight was 
lacking. And that is what we are trying to correct now through 
various types of actions we are taking.
    Mr. Poliquin. Now we are getting somewhere, Mr. Chairman. 
Finally, someone who is responsible for this mess and this lack 
of information, this inconsistency, and this waste admits that 
there has been no oversight. Good. Too bad it took this long to 
do it.
    I yield back my time.
    Mr. Bergman. Thank you, Mr. Poliquin.
    Ms. Rectanus, you have been very clear that the mail data 
is still unreliable. In January 2016, the Committee asked VA to 
fix some of the most egregious problems with the reported data, 
and in March 2016 VA committed to do so. Yet it seems like some 
of the problems the Committee staff found continue to exist to 
this day.
    Can you explain what is going on here, what is still wrong?
    Ms. Rectanus. We confirmed for some of the commitments that 
VA made in its letter that they carried through on those. They 
did provide training to their folks on how to submit data. We 
did look at some of the numbers that the Chairman had 
identified and saw that they had changed.
    Our bigger question was, just because they had changed, it 
doesn't mean that they are necessarily correct. Some had not 
changed.
    So I think what is the problem is that, when every facility 
is doing their own thing, they are not operating under 
consistent definitions, they have different input data, it is 
very difficult for them to go in and fix it, because they don't 
even necessarily know whether the new data they are putting in 
is any good.
    Mr. Bergman. Okay. Do we know, are all the facilities 
reporting?
    Ms. Rectanus. At this point, we know that there are 200 
entities who report. There are 400 authorized users throughout 
VA. And if you just start doing the math, you know that there 
are 1,000 CBOCs that we can't find in there. There are 170 
medical centers, and less than 170 report. So we know that 
there are some that are not reporting. What we don't know is 
whether they are reporting through some other means.
    The CMOPs started to report in 2014. We have some sense 
that most of them report. What was happening with them before 
2014 and all those prescriptions we don't know?
    Mr. Bergman. Okay.
    Mr. Oswalt, you have stated that this was--not my words--a 
decentralized program.
    Mr. Oswalt. Yes, sir.
    Mr. Bergman. Is it time for a centralized program?
    Mr. Oswalt. It is time for more central oversight, yes, 
sir.
    Mr. Bergman. That is not what I asked.
    Mr. Oswalt. I would say that, given the disparity in what 
each administration handles, you know, mailing prescriptions 
versus mailing--
    Mr. Bergman. Let me repeat my question. We have seen that 
the decentralization has not worked, even from the standpoint 
of reporting, regardless of the expenditures. Is it time for a 
centralized program?
    Because mail is mail. Shipping costs, if you will, through 
the mail are pretty much whether you mail it from your house or 
mail it from your business or mail it from your government 
office.
    Is it time for a centralized look?
    By the way, I am a big fan of decentralization of 
operations. As a Marine, when I am in the field, I don't want 
higher headquarters getting in my decision loop because they 
are not boots on the ground. But I guarantee you, there are 
times that they need to be in the loop because they have the 
bigger picture and are going to make sure that I have the 
supplies and my Marines have the supplies they need to do the 
fight.
    So I am going to ask one more time. Is it time for a 
centralized approach from the VA?
    Mr. Oswalt. I will answer, sir, by saying that, in meeting 
the recommendations of GAO, where they are asking us to examine 
different ways of procuring information, yes, it is time to 
centralize activities like procurement and reporting.
    The individual operations, I don't think, as you indicated, 
a centralized authority is best for day-to-day operations. But 
for procurement--
    Mr. Bergman. Well, you mentioned in your statement about 
going to a cloud-based approach.
    Mr. Oswalt. Yes, sir.
    Mr. Bergman. Is there any entity that you know of at 
whatever reporting level within your system that doesn't 
understand what the cloud is?
    Mr. Oswalt. I think that is fairly well understood.
    Mr. Bergman. Okay. So we take the tools that we have today, 
as opposed to the tools we had 10 years ago or 20 years ago or 
even 5 years ago, and utilize them to decide at what level of 
centralization, you know, operations should occur.
    This is probably leading the witness, but, Mr. Oswalt, do 
you truly believe that the mail operations in the VA are 
effective and efficient at this point?
    Mr. Oswalt. No, sir, they are not.
    Mr. Bergman. Okay. So what is it going to take?
    Mr. Oswalt. I think it is going to take a centralization of 
oversight and reporting, as we indicated.
    Plus, it is also going to take redoing our business 
processes and our practices. As I indicated in my testimony, we 
let it go to seed. We were asleep at the switch and let this 
behemoth just kind of go where it went. But now, you know, we 
have seen the light, and, working with our GAO partners and 
GSA, we are bringing it back under a centralized authority for 
that.
    And it is going to take technology. As I indicated, VBA is 
currently implementing a 3- to 9-month plan to centralize under 
the undersecretary there all of their mail operations and not 
have 56 regional offices doing their own thing.
    Mr. Bergman. Well, again, there is a difference between 
centralized oversight and centralized authority and centralized 
execution--centralized execution. And I can't even say that 
right.
    But, you know, I see my time has expired. I have talked to 
the Ranking Member here; I know she does not have any more 
questions.
    But, Mr. Arrington, you said--and anyone else who would 
like to do a second round.
    Mr. Arrington. I will defer to the Chairman, because he may 
have to go and I have to the time to stay, so--okay.
    Mr. Chairman, if I may?
    Mr. Bergman. You are recognized for 5 minutes.
    Mr. Arrington. Again, I appreciate you guys being here.
    Wasn't there supposed to be an IT person on this panel 
today?
    Mr. Oswalt. I work in the Office of Information Technology, 
sir.
    Mr. Arrington. Okay. I thought there was a third panelist, 
but maybe I misread that.
    So you said that it has been decentralized, the mailing 
operations, over the years, and that the enterprise-wide point 
of accountability and oversight prior to whatever new plan we 
are going to come up with was the IT officer, the CIO?
    Mr. Oswalt. The CIO is the ultimate accountable official, 
senior agency official.
    Mr. Arrington. And how long has the CIO been in his or her 
position?
    Mr. Oswalt. There is an acting CIO who has been in place 
since January.
    Mr. Arrington. And prior to that?
    Mr. Oswalt. The former CIO, she was in place, I think, 
approximately 2 years before the change of administration.
    Mr. Arrington. And is that a political position?
    Mr. Oswalt. Yes, sir.
    Mr. Arrington. And what about the career deputy to the 
political? How long has that person been in there, the senior-
most career person?
    Mr. Oswalt. The incumbent of that position now, she has 
been in that position probably, I would say, for 4 months. 
Prior to that, it was--the acting CIO now is technically in 
that position.
    Mr. Arrington. So how long was the current acting--
    Mr. Oswalt. He was in that position for a year. And before 
that, the other principal deputy assistant secretary was in the 
position for, I think, approximately 8 years.
    Mr. Arrington. You know, there is not a lot of continuity. 
That is a problem, obviously. Because you would assume somebody 
with the pay that they receive as a CIO, career or political, 
and their tremendous responsibility to oversee the many aspects 
of that job, including in this case the mail operations, that 
they would have run some report or asked that question prior to 
the Chairman of a Congressional Committee sending a letter and 
then uncovering that we have had years of mismanagement or no 
management of the mailing operation. So that is extremely 
disconcerting to me.
    I appreciate what you said, Mr. Oswalt. Sometimes I just 
need to hear that the folks at that table are hearing us and 
that they agree and that they own it. And to say that you all 
have been asleep at the switch is refreshing to me. And I want 
to commend you for saying that. We need to hear more people 
sort of fess up to the dysfunction at this department.
    And, again, I sure hope that our current Secretary will 
roll up his sleeves and begin fixing these things.
    What is the plan? Do you have a plan?
    Mr. Oswalt. As I indicated, right now, we are gathering 
what we have--we don't know what we have--in a top-to-bottom 
listing of hardware and other assets. We are in the midst of 
that right now.
    Mr. Arrington. So I think it is wise to gather information 
and all that. It has been 2 years. I wouldn't even come to that 
table without saying, ``Here is the plan. We are going to 
centralize this oversight. We are going to restructure this. We 
are going to put controls in place. We are going to have 
authority where it didn't exist. We are having performance 
measures.'' I wouldn't come to this table without a plan if I 
were showing up at an oversight hearing. I wouldn't.
    And if I were the Secretary, I would be so embarrassed by 
this, I probably would show up and say, ``Guys, I just want you 
to know, this preceded me, and I am going to come with a plan, 
and let me articulate the framework of that plan.''
    Two years, we ought to have a plan. I understand you have 
to gather information--
    Mr. Oswalt. Well, that is just one aspect of the plan, sir.
    Mr. Arrington. Okay. So you feel like you do have a plan.
    Mr. Oswalt. Right. We are bound to report back to GSA in 60 
days from the issuance of the report, and we will have a 
project plan in place with dates at that time.
    Mr. Arrington. Okay. And who is going to be accountable to 
the Secretary on this?
    Mr. Oswalt. The direction or the creation of this 
integrated project team came from the VA Chief of Staff 
herself, under the sponsorship of the Deputy Chief of Staff. I 
am kind of the point person on gathering--
    Mr. Arrington. Is the CIO going to continue to be 
responsible--
    Mr. Oswalt. For the time being--
    Mr. Arrington [continued].--to report to the Secretary on 
this issue?
    Mr. Oswalt. Yes, sir. As indicated, we just updated our 20-
year-old policy, and that contains that the CIO position, the 
Assistant Secretary for IT, is the responsible official.
    Mr. Arrington. I love what Peter Drucker says: What gets 
measured gets done. And, obviously, the converse is true. If 
you are not measuring it, it is not getting done. Too much is 
not getting done at the VA, and the taxpayers are being 
fleeced, and the veterans aren't being served by that.
    I hope the next time we meet the plan is being implemented 
and executed, adjustments are being made, and the outcomes are 
provable, that we are providing cost-effective mailing 
operations.
    Thank you.
    Mr. Oswalt. Yes, sir.
    Mr. Bergman. Thanks.
    Mr. Poliquin, you are recognized for 5 minutes.
    Mr. Poliquin. Thank you very much, Mr. Chairman.
    Thank you again, Mr. Oswalt, for being so candid. And I 
want to follow up with some of what Mr. Arrington said. He is 
spot-on.
    If I heard you correctly, the CIO is the head banana that 
is responsible for reporting to Mr. Shulkin when it comes to 
this issue, and that is likely to continue to be the case, from 
what I heard a moment ago. Is that correct?
    Mr. Oswalt. That is my current understanding of the policy 
direction, yes.
    Mr. Poliquin. Okay. And you named two or three different 
individuals--not their names, but two or three individuals who 
have been acting CIOs for a period of time.
    Mr. Oswalt. Correct.
    Mr. Poliquin. Okay. What are the names of those people?
    Mr. Oswalt. The current acting CIO is Mr. Rob Thomas.
    Mr. Poliquin. Okay. And before that?
    Mr. Oswalt. It was in a political position. Ms. LaVerne 
Council.
    Mr. Poliquin. And before that?
    Mr. Oswalt. The confirmed CIO was Roger Baker. But then, 
after he left, there was an interim of Stephen Warren.
    Mr. Poliquin. Okay. So there are four people you mentioned. 
It probably goes back 10 years, roughly.
    Mr. Oswalt. Yes.
    Mr. Poliquin. Okay. And are those political appointees? I 
didn't---
    Mr. Oswalt. It is a political position.
    Mr. Poliquin. Okay.
    Mr. Oswalt. Two of the individuals were political 
appointees, and the other two were career.
    Mr. Poliquin. Are those four people that have overseen this 
mess still at the VA? Any of them?
    Mr. Oswalt. Mr. Thomas is still a VA employee, yes, sir.
    Mr. Poliquin. And he is the acting CIO now, correct?
    Mr. Oswalt. Correct.
    Mr. Poliquin. Okay. So he was involved in this, and he is 
still at the VA.
    Mr. Oswalt. I don't know to what level he was involved in 
it, sir. He--
    Mr. Poliquin. But he was responsible because he was the 
acting CIO, right? And he reports to the Secretary about this 
issue. So he was the head person involved in this when nothing 
was happening, and he is still at the VA.
    Mr. Oswalt. He is currently the official, sir. He has been 
in the position since January.
    Mr. Poliquin. Okay. His name again is?
    Mr. Oswalt. Rob Thomas.
    Mr. Poliquin. Okay. Thank you.
    Let me ask you a couple questions, if I can, Mr. Oswalt.
    Out of Decatur, Georgia, the VA reported that there was a 
package shipped for $11,257, but later the VA explained to us 
that it was actually $112. Okay? Is that your understanding?
    Mr. Oswalt. Yes, sir.
    Mr. Poliquin. Okay. What was in that package? What cost 112 
bucks?
    Mr. Oswalt. Sir, I do not know. We could try and find 
that--
    Mr. Poliquin. Would Mr. Thompson know?
    Mr. Oswalt. No, sir, he would not know.
    Mr. Poliquin. Okay. But he is responsible.
    Mr. Oswalt. He is not responsible for the contents of the 
package.
    Mr. Poliquin. Are you?
    Mr. Oswalt. No, sir.
    Mr. Poliquin. Okay. But if we wrote to Mr. Thompson or to 
you, you could find out what was in that package for us.
    Mr. Oswalt. I will work with the Veterans Health 
Administration to find out, sir.
    Mr. Poliquin. In other words, you will get an answer for 
us. ``Work with'' means you will get an answer for us, right?
    Mr. Oswalt. I will try and find out the contents, yes, sir.
    Mr. Poliquin. Good. Thank you.
    How did you make a mistake from $11,257 to 112 bucks? How 
is that possible?
    Mr. Oswalt. In the SMART database, it does not 
automatically put in the decimal point.
    Mr. Poliquin. So it is not that smart, is it?
    Mr. Oswalt. That is--
    Mr. Poliquin. Okay. So you have a system that is supposed 
to track all this stuff that doesn't use decimal points.
    Mr. Oswalt. It is not like with an ATM, where you are 
getting out $400 and at first it is 40 cents, $4--it does not 
go--
    Mr. Poliquin. Wow. Okay. So is that in your plan to fix?
    Mr. Oswalt. With the--oh, sorry.
    Mr. Poliquin. Yes?
    Ms. Rectanus. Well, I was going to say, that is the GSA 
tool. The GSA tool, in the instructions, it says, ``Do not put 
in decimal points.''
    Mr. Poliquin. Yeah. Are you going to fix this?
    Ms. Rectanus. If you put in 1-1-2-4-6, it is going to show 
up as a whole number, not--
    Mr. Poliquin. Yeah. Are you going to fix this? Who is going 
to fix this?
    Ms. Rectanus. GSA has provided instructions to people to 
not put in decimal points and to round.
    Mr. Poliquin. Who is ``people''? At your shop or your shop?
    Mr. Oswalt. At GSA.
    Ms. Rectanus. GSA.
    Mr. Poliquin. At GSA.
    Mr. Oswalt. And my understanding, too, is there is a new 
version of SMART being--
    Mr. Poliquin. I hope it is smarter than the current version 
of SMART.
    Are you going to fix this or not? GAO, are you going to fix 
this or not?
    Ms. Rectanus. GSA is--
    Mr. Poliquin. GSA.
    Ms. Rectanus.--on deck to fix this, yes.
    Mr. Poliquin. You are going to fix it. Okay, good. So we 
are on the record, you are going to fix it. Good. We are 
getting someplace.
    All right. Mr. Oswalt, I mentioned this to you earlier 
before. In Alexandria, Louisiana, they were sending out First-
Class mail for 8 cents each, but a stamp costs 49 cents. Is 
there any bulk mail operation in the country you know about 
that can send stuff out for 8 cents?
    Mr. Oswalt. I do not know of any right now, sir, but I--
    Mr. Poliquin. Okay. So how do you explain this?
    Mr. Oswalt. Either it was the result of a negotiated 
pricing schedule due to volume or, again, it could have been an 
error in the SMART database. I do not know, but I will try and 
find out for the record, sir.
    Mr. Poliquin. Yeah, okay. Good.
    Kate, we are going to be in touch with Mr. Oswalt's office. 
Make sure we get that answer too.
    It sounds like there is a real lack of not only 
accountability but the ability to track these issues 
accurately. And then you come to us and ask for $186 billion to 
fund the VA. You come to us for taxpayer money, when the VA is 
supposed to be responsible for taking care of our kids that 
come back from the battlefield, and you can't tell us where 
this money is going, how it is spent, and who is keeping track 
of it. And it took us a half-hour to find out who is 
responsible.
    Let me ask you one more. Denver reported thousands of 
airmail and ground packages at no cost. And then I got a letter 
here later explaining that--no, actually, confirming this.
    Who is Bob Snyder, Chief of Staff?
    Mr. Oswalt. He was the former VA Chief of--
    Mr. Poliquin. Is he working at the VA now?
    Mr. Oswalt. He is retired.
    Mr. Poliquin. He is retired. How long was he there?
    Mr. Oswalt. In various positions at VA for approximately 7 
or 8 years.
    Mr. Poliquin. Okay, 7 or 8 years. The Chief of Staff, Bob 
Snyder, who is now retired, sent a letter to this Committee 
saying that sending out thousands of airmail packages cost 
zero. Is that possible?
    Mr. Oswalt. No, sir.
    Mr. Poliquin. Okay. So there is another problem with your 
SMART problem.
    Mr. Oswalt. It is obviously an error.
    Mr. Poliquin. Okay.
    I mean, this Committee hearing, Mr. Chairman, is very 
important for all of America to see that we have 265,000 people 
at the VA that the taxpayers are funding at the cost of $180 
billion, and we have our kids coming back from the battlefield 
that need help, and we have no sense of control that I can see 
at the VA, confirmed by you folks at the GSA, of spending $355 
million per year on mail. So I think this has been very 
helpful.
    And I appreciate--Mr. Oswalt, I am not picking on you 
personally, but you are in the hot seat. And so are you. And so 
we appreciate you being here very much. I know you are going to 
fix this, and I will be watching and the rest of the people on 
this Committee will be watching.
    Thank you very much, Mr. Chairman. I yield back my time.
    Mr. Bergman. Thank you, Mr. Poliquin.
    ``VA Mail Management: The Case of the $11,257 Package,'' 
that was the title of this hearing. You know, it kind of sounds 
like a sleuthing show you would see on TV. When you peeled the 
onion back, it just appeared as though nobody had peeled the 
onion back from a management and oversight perspective along to 
see what was happening. We didn't spend $11,257 on a package, 
but that is a symptom of a root cause, that nobody thought to 
see, to check, to wonder. That is unnerving, at best.
    Thank you, witnesses, for being with us today and sharing 
your testimony. The panel is now excused.
    The mail management problems that we have discussed this 
morning seem to be symptoms, as I mentioned earlier, of deep-
seated organizational challenges within the VA. We hear about 
them all the time: VBA and VHA do not cooperate. Facilities 
throughout the country operate dramatically different. The 
central office does not know what the field is doing and, I 
would suggest to you, vice versa. The contracts, to say the 
least, are in disarray but certainly don't represent some kind 
of a standard operating procedure and implementation that 
allows for best pricing across the spectrum. Policy is 
outdated. IT is inadequate.
    We are all familiar with the saying that if you have seen 
one VA hospital, you have seen one VA hospital. Apparently, it 
is also true that if you have seen one VA mailroom, have seen 
one VA mailroom.
    You know, my background in flying and in Marine Corps 
operations--standardized, monitored operations are paramount to 
the success of the organization. Standardized starts from 
communications from the top down, input from the bottom up, and 
then the higher headquarters, in this case those higher levels 
of the VA, coming out with standardized operations that can be 
executed locally to the best effort and the best outcome. We 
don't have that.
    If anything should be predictable and efficient, it is a 
mailroom. This is not a changing environment every day. The 
mailroom workers and the mail managers should know that what 
they do is important, that they do serve a purpose of, number 
one, literally delivering the mail, but, number two, being 
accountable for doing it right. It is one of the building 
blocks that the rest of the VA operations rely on.
    I expect the Department to devote sufficient talent and 
energy to implementing GAO's recommendations and not only 
fixing the abysmal situation but looking forward to see how we 
create it for the future, because mail delivered today is not 
going to be delivered the same way 5 or 10 years from now. We 
need to be on the leading edge of the curve, not on the tail 
end that is getting whipsawed around by the inefficiencies of a 
detached bureaucracy.
    Further, I would ask that the VA clean up the SMART data 
when it reports this year. I hope the next time someone reports 
an $11,257 package or any other bizarre entries mentioned 
today, it sends red flags, it sends whatever you want to call 
it out, and people start to question it at the lowest level and 
say, ``Hey, does this seem right?'' Because if you don't, you 
are not making progress.
    And as we have talked about in various Oversight and 
Investigation hearings here, it is that sense of urgency. I am 
still, after this hearing this morning, not feeling that sense 
of urgency and--I will add one more turn to it--skin in the 
game at all levels of those who draw a paycheck in support of 
operations for our veterans and their care and their well-
being.
    I want to see the sense of urgency, and I know the whole 
panel does, because when you look at all the Committee work we 
do here on the Hill, this Committee is absolutely one of the 
most bipartisan, singularly focused on doing what is right for 
the veterans, of any Committee that exists.
    I ask unanimous consent that all Members have 5 legislative 
days to revise and extend their remarks and to include 
extraneous material.
    Without objection, so ordered.
    I would like to once again thank our witnesses and audience 
members for joining us here this morning.
    This hearing is now adjourned.

    [Whereupon, at 11:41 a.m., the Subcommittee was adjourned.]




                            A P P E N D I X

                              ----------                              

                  Prepared Statement of John D. Oswalt
    Good morning, Chairman Bergman, Ranking Member Kuster, and 
distinguished members of the Subcommittee. Thank you for this 
opportunity to participate in your hearing on the Government 
Accountability Office (GAO) mail management report entitled, ``Actions 
Needed to More Effectively Manage Outgoing Mail,'' and to discuss the 
actions and efforts underway at VA to address those recommendations, 
issues, and concerns.

Overview

    Before I address directly the GAO findings, I want to provide you 
with an overview of VA's Mail Management Program and discuss VA's 
commitment to improving the program.
    In accordance with Federal regulations and VA policy, VA has an 
established policy for Department-wide Mail Management Program. 
Although VA does have such a program; it is not what it should be. The 
Mail Management Program for VA is in need of an overhaul as evidenced 
by the GAO's findings. Mail operations in VA are largely decentralized 
programs with each administration and their various sub-components 
adapting the execution of these programs to their own unique and 
diverse needs. While these unique requirements dictate a great deal of 
how VA outgoing mail is managed, there is a need for an enterprise-wide 
over-arching strategy to eliminate outdated practices and improve the 
program with the goal being better service to Veterans and their 
families and a better return on investment for the American taxpayer. 
VA accepts and understands the need for action and we have developed 
and undertaken a comprehensive remediation plan that not only addresses 
the recommendations of GAO but also will make VA a leader across 
government in mail management. Our mission is too important and too 
critical to allow inefficiency to impede serving our Veterans and 
siphon off valuable resources supporting outdated practices.
    On an annual basis, VA mails millions of letters and parcels to 
Veterans and their families. These range from medications, to documents 
on benefits and compensation, to memorial certificates to surviving 
family members. Just as every Veteran's needs are unique, so too are 
the mailing requirements for the VA offices that serve these Veterans. 
As an organization that is primarily field based, VA mail operations 
have often evolved to meet these unique needs with limited central 
oversite. While in the past this may have worked to meet mailing 
requirements, the growth in mail volume over the past two decades, as 
evidenced by the shift towards pharmaceutical mailings instead of in-
house pick-up, and the increase in the Veteran population with more 
complex benefit and compensation issues, has resulted in making many of 
these ``homegrown'' mailing practices obsolete. VA must now take 
advantage of new technologies and new business models to effectively 
and efficiently manage such a diverse and sprawling mailing 
requirement. VA has plans in place that we believe will accomplish this 
and we are using the GAO recommendations as our starting point. We will 
institute a continuous improvement model to ensure we do not rest on 
our accomplishments or allow the program to fall behind again.

GAO Report

    To achieve this goal, VA has established a department-wide 
Integrated Project Team (IPT) sponsored by the VA Deputy Chief of Staff 
and whose membership is comprised of all relevant and appropriate 
stakeholders. The IPT is charged with formulating plans and actions 
that address GAO recommendations and to put in place the administrative 
infrastructure to govern the mail program at an enterprise level. 
Specifically, actions to address the recommendations include but are 
not limited to:

    Recommendation 1: Develop and document a plan to source contracts 
for mailing equipment in a more strategic manner. Such strategic 
contract sourcing should enable facilities to obtain equipment to track 
mail volume and expenditure data more consistently and to maximize cost 
savings.
    VA is conducting a comprehensive assessment and inventory of 
existing mail equipment and supporting software. This includes 
identifying end of useful life-cycle for capital equipment, estimates 
of sunk costs for equipment still in use, estimating replacement costs 
and gathering industry best practices and conducting market research. 
We are exploring several options including new capital investment, 
leasing equipment/software options and obtaining mail operations as a 
managed service. Our future plans include, conducting a cost-benefit 
analysis of all options identified and making a determination on what 
approach best meets the needs of VA's mission delivery. Following a 
selection of a new strategy, we will develop cost estimates, coordinate 
this need with the appropriation process, develop an acquisition 
strategy, and set up a project management team. We will conduct several 
pilot projects and take lessons learned and apply to the enterprise-
wide phase-in and deployment schedule.

    Recommendation 2: Update VA Directive 6340 to incorporate agency-
wide goals and performance measures for mail operations.
    VA has updated and published a revised VA Directive 6340 that 
incorporates all new regulations and requirements. We are currently 
updating VA Handbook 6340 that contains enterprise operating 
specifications on how to implement the revised policy. The Handbook 
will include requirements for agency-wide goals and performance 
measures. To account for any specific needs of the administrations, we 
are requiring individual administrations to write and publish Standard 
Operating Procedures (SOPS) that incorporate the unique mission 
requirements specific to their mailing operations. VA is planning to 
gather and report on a semi-annual basis the results of established 
goals and performance measures and creating protocols for routine 
review and updating of Directive, Handbook, and SOPs.

    Recommendation 3: Determine and document the authority and 
responsibilities of the agency and administration-level mail managers 
to enable them to better manage and oversee mail operations.
    VA is currently writing and classifying Position Descriptions for a 
dedicated Mail Manager position and one supporting staff position. We 
will allocate funding for these positions and then advertise, and make 
selections to fill them. We will have each facility director with a 
mail program identify by name a mail manager with a written assignment 
to that facility level person, maintain a database with those names, 
and conduct an annual review to ensure assignments are current. Each 
SOP will contain clear and unambiguous internal reporting structures 
consistent with GSA SMART requirements and all mail managers will take 
mandatory training on an annual basis in accordance with Directive and 
Handbook 6340 and individual SOPs for the respective office.

Conclusion

    VA faces many challenges in meeting these goals (resources, 
staffing, acquisitions, and competing priorities) but I believe we are 
up to the challenge. The men and women of VA are unique in government 
in their commitment and dedication to fulfilling the mission of VA; 
serving Veterans and their beneficiaries. It is this dedication that 
will make our efforts here successful.
    While we acknowledge there is a great deal of work to be done, we 
are already making considerable progress towards addressing GAO's 
concerns associated with mail management and are in the process of 
implementing their recommendations to centralize VA's mail management 
operation creating a more efficient and effective program.
    Mr. Chairman, this concludes my testimony. Thank you for the 
opportunity to testify before the Committee today. I am prepared to 
respond to any questions you and Members of the Committee may have.

                                 
                  Prepared Statement of Lori Rectanus
     Management and Oversight of Mail Operations Could Be Improved
    Chairman Bergman, Ranking Member Kuster, and Members of the 
Subcommittee:

    I am pleased to be here today to discuss our recent report on the 
Department of Veterans Affairs' (VA) mail management program. VA sends 
more than 200 million pieces of mail per year to veterans and their 
dependents who rely on this mail for medications and critical 
information about medical appointments, disability compensation, 
pension benefits, and more. VA's reported mail costs-approximately $355 
million in 2016-are among the highest in the federal government. 
Moreover, VA's reported costs have nearly doubled since 2009. In prior 
work, GAO has raised concerns about how VA identifies its resource 
needs and ensures that resources are efficiently used across the 
agency. \1\
---------------------------------------------------------------------------
    \1\ GAO, High-Risk Series: An Update, GAO 15 290 (Washington, D.C.: 
Feb. 11, 2015); and GAO, High-Risk Series: Progress on Many High-Risk 
Areas, While Substantial Efforts Needed on Others, GAO 17 317 
(Washington, D.C.: Feb. 15, 2017).
---------------------------------------------------------------------------
    My testimony today summarizes key findings from our July 2017 
report on VA's mail management. \2\ Our objective was to examine the 
extent to which VA manages its outgoing mail effectively. In that work, 
we reported that VA cannot provide assurance that facilities are 
managing their mail effectively because VA lacks key elements of an 
effective mail management program-namely reliable mail cost and volume 
data, agency-wide performance measures, and agency officials with 
appropriate authority to manage the program. We made three 
recommendations for VA to manage its mail program more effectively. VA 
agreed with our recommendations but has not yet provided any 
information on what steps it will take to implement them.
---------------------------------------------------------------------------
    \2\ GAO, Veterans Affairs: Actions Needed to More Effectively 
Manage Outgoing Mail, GAO 17 581 (Washington, D.C.: August 31, 2017).
---------------------------------------------------------------------------
    To perform this work, we identified federal mail management 
requirements in the Federal Management Regulation, which governs 
mailing activities in federal agencies, \3\ and applicable federal 
internal control standards. \4\ We interviewed management officials 
from VA Central Office, the Veterans Benefits Administration (VBA), the 
Veterans Health Administration (VHA), and the Consolidated Mail 
Outpatient Pharmacy (CMOP) program on mail management practices across 
the agency. \5\ We also interviewed officials from the U.S. Postal 
Service (USPS) and VA's two primary mailing equipment providers. We 
reviewed the reliability of the mail expenditure and volume data VA 
reported to the General Services Administration's (GSA) Simplified Mail 
Accountability Reporting Tool (SMART) in fiscal years 2015 and 2016. 
\6\ In an effort to assess the validity of VA's reported mail volume 
and costs, we reviewed VA's reported fiscal year 2015 and 2016 
expenditure and volume data with its service providers, USPS, United 
Parcel Service (UPS), and FedEx. \7\ We collected information on the 
mail practices in place at the 10 VA facilities with the highest mail 
volume reported in SMART in fiscal year 2015. \8\ Findings from these 
facilities provide examples of VA's mailing practices but are not 
generalizable to all VA facilities. Our July 2017 report includes 
further details on the scope and methodology of our work, which was 
conducted in accordance with generally accepted government auditing 
standards.
---------------------------------------------------------------------------
    \3\ 41 C.F.R. pt. 102-192.
    \4\ GAO, Standards for Internal Control in the Federal Government, 
GAO 14 704G (Washington, D.C.: Sept. 10, 2014).
    \5\ We did not interview officials from the National Cemetery 
Administration based on the administration's low mail volume relative 
to VHA and VBA.
    \6\ SMART data are reported annually for the entire fiscal year, 
and therefore fiscal year 2016 data are the most current available.
    \7\ USPS noted that its revenue and volume data were not comparable 
to VA's SMART data for validation purposes.
    \8\ Although we found VA's SMART data to be generally unreliable, 
we used the data to select VA facilities because VA has no other 
centralized data that include mail expenditures and volume. The 
reliability of the mail expenditure and volume data is not material to 
our findings for the 10 facilities.

---------------------------------------------------------------------------
Background

    In carrying out its mail program, each VA administration-VHA, VBA, 
and the National Cemetery Administration-and local facility has 
discretion regarding how to handle outgoing mail. For example, 
facilities can choose which service provider they use to send the mail, 
such as USPS, FedEx, or UPS. In addition to choosing service providers, 
VA facilities may enter into contracts to purchase or lease mailing 
equipment such as postage meters. See figure 1 for a description of the 
services each administration and their associated facilities provide, 
and examples of outgoing mail.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    VA, like other federal agencies, is required to follow certain 
provisions regulating mail management in the FMR to ensure they have 
the policies, procedures, and data to manage their mail operations 
efficiently and effectively. \9\ Specifically, large federal agencies 
like VA must provide annual mail management reports to GSA using the 
web-based SMART application, \10\ which include data on expenditures 
paid to mail service providers, mail volume, and volume and 
expenditures for mail that was undeliverable as addressed. \11\ 
Additionally, all federal agencies must have performance measures for 
mail operations at the agency level and in all mail facilities and 
program levels, \12\ and an agency mail manager who should be at a 
managerial level to enable the official to speak for the agency on mail 
management. \13\
---------------------------------------------------------------------------
    \9\ 41 C.F.R. pt. 102-192. The FMR also includes requirements for 
agency mail programs related to payment processes and finance systems 
and written mail security policies and plans. Financial and security 
requirements are not included in the scope of this review.
    \10\ Large agencies are those whose collective total payments to 
all mail service providers equal or exceed $1 million per fiscal year. 
41 C.F.R. Sec. Sec.  102-192.35, 102-192.85.
    \11\ 41 C.F.R. Sec.  102-192.95.
    \12\ 41 C.F.R. Sec. Sec.  102-192.110, 102-192.115.
    \13\ 41 C.F.R. Sec. Sec.  102-192.120, 102-192.125.

---------------------------------------------------------------------------
VA is Not Managing Its Mail Program Effectively

Fragmented Process for Procuring Mailing Equipment Has Contributed to 
    VA's Inability to Track and Report Reliable Mail Cost and Volume 
    Data

    We found that the mail data-including volume as well as costs-VA 
reports to GSA are unreliable. Specifically, we found problems in VA's 
fiscal year 2015 and 2016 SMART data related to unreported, incomplete, 
or questionable data. For example, mail data for many facilities-
including VA's 1,055 community-based outpatient clinics and 300 vet 
centers-were not accounted for, while other facilities submitted mail 
expenditure data without mail volume, or volume data without 
expenditures. Facilities also did not consistently report data on mail 
that was undeliverable as addressed. Still other facilities submitted 
data that were inaccurate due to typographical errors by VA personnel.
    VA's mail data are unreliable because individual facilities, which 
the department relies on to track mail volume and cost data, use 
inconsistent processes to do so. For example, facilities may use 
different mailing equipment to track volume and costs, some of which 
has the capability to track mail data by service provider and class of 
mail, while other facilities' equipment may not be configured or may be 
too old to accept the software. Some facilities also rely on manual-
entry methods such as spreadsheets to track mail data, or bills and 
receipts. Given the range of tracking methods and capabilities, VA has 
no agency-wide system to track mail expenditure and volume data, and 
mail managers have limited ability to validate the data before it is 
submitted to GSA.
    Inconsistent methods and capabilities for tracking mail volume and 
cost data exist because VA's procurement of mailing equipment is 
fragmented. Different components of VHA and VBA make contracting 
decisions for mail room equipment independent of one another; for 
example, each of VBA's 56 regional benefit offices negotiates and 
purchases its own contract with authorized vendors. VHA reported that 
the contracts for mailing equipment at its 170 medical centers are 
established at various levels-in some cases, medical centers may 
establish their own contracts, while in others, a Veterans Integrated 
Service Network (VISN) establishes a contract for all the medical 
centers within a region. \14\ VA facilities or other units individually 
negotiating contracts is likely not cost effective because this 
practice would not benefit from price discounts that might be available 
under procurement contracts covering much larger segments of the 
agency. \15\ In fact, representatives from one of VA's two primary 
mailing equipment providers estimated that it has about 3,000 contracts 
with VA facilities and said that VA would almost certainly reap cost 
savings if it negotiated fewer contracts at higher levels of the 
department.
---------------------------------------------------------------------------
    \14\ Each of VHA's VISNs is responsible for overseeing medical 
centers within a specified geographic area.
    \15\ We have found in the past that the agency has not consistently 
taken advantage of its large size in its purchases. See GAO, Veterans 
Affairs Contracting: Improvements in Policies and Processes Could Yield 
Cost Savings and Efficiency, GAO 16 810 (Washington, D.C.: Sept. 16, 
2016). In this report, we recommended that VA conduct a review of VISN-
level strategic sourcing efforts, identify best practices, and, if 
needed, issue guidance to facilitate consolidation of similar 
requirements and leverage buying power across medical centers within 
VISNs. VA agreed with this recommendation, but has not yet implemented 
it.
---------------------------------------------------------------------------
    VBA has taken preliminary steps to source its mailing equipment 
strategically, but VA lacks an overall plan to guide mail equipment 
procurement. In July 2016, VBA officials told us that its 
administration and field operations offices were collaborating to 
establish a blanket purchase agreement for mailing equipment in 56 
regional benefit offices, targeting the end of fiscal year 2017 to 
finalize the contract. According to VBA, the contract is intended to 
provide opportunities to negotiate improved discounts and leverage 
buying power through volume purchasing, among other things. Officials 
stated that they intend to include software in the contract that would 
consolidate data across the regional benefit offices and allow 
centralized reporting to SMART. However, in February 2017, officials 
told us that it will take several years to establish the blanket 
purchase agreement because of current contracts in place at regional 
benefit offices. VBA officials stated that they were interested in 
including VHA in the contract in order to obtain better prices, but 
have not had any detailed discussions with VHA about the contract.
    We recommended that VA develop and document a plan to source 
contracts for mailing equipment in a more strategic manner. Such 
strategic contract sourcing should enable facilities to obtain 
equipment to track mail volume and expenditure data more consistently 
and to maximize cost savings. VA agreed with this recommendation.

VA's Mail Policy Does Not Include Agency-Wide Goals and Performance 
    Measures

    VA's mail policy does not include agency-wide goals and performance 
measures for mail operations; as a result, VA is unable to determine 
the extent to which its mail operations are efficient and effective. 
The FMR requires that federal facilities have performance measures for 
mail operations at the agency level and in all mail facilities and 
program levels, \16\ and we have previously found that measuring 
performance allows organizations to track progress toward goals and 
provides managers with performance data to make management decisions. 
\17\ While VA lacks agency-wide goals and performance measures for mail 
operations, we found that the 10 facilities we reviewed had developed 
performance measures. However, these measures were not consistent 
across facilities. For example, the facilities reported using 
inconsistent measures of customer service, efficiency, volume, cost, 
accuracy, and staff performance. Officials from two regional benefit 
offices indicated that they have implemented timeliness standards for 
their mail. In addition, VHA's CMOP program has established performance 
measures for delivery of prescription medications but these metrics 
apply to the program's offsite vendor, rather than a VA facility mail 
operation.
---------------------------------------------------------------------------
    \16\ 41 C.F.R. Sec.  102-192.110.
    \17\ GAO, Federal Protective Service: Preliminary Results on 
Efforts to Assess Facility Risks and Oversee Contract Guards, GAO 12 
943T (Washington, D.C.: July 24, 2002).
---------------------------------------------------------------------------
    VA's mail management policy-Directive 6340-does not address the 
performance measurement requirement that is in regulation because it 
predates the current FMR and has not been updated. Internal control 
standards call for agencies to update their policies to be consistent 
with changes in federal law and regulation. \18\ VA officials told us 
that efforts involving GSA, the Centers for Medicare & Medicaid 
Services, and USPS were underway to update the policy, but did not 
provide documentation of these efforts.
---------------------------------------------------------------------------
    \18\ GAO 14 704G.
---------------------------------------------------------------------------
    We recommended that VA update VA Directive 6340 to incorporate 
agency-wide goals and performance measures for mail operations, and VA 
agreed with this recommendation.

VA Has Not Provided Mail Managers with Appropriate Authority and 
    Responsibilities

    The mail managers VA has designated at the agency and 
administration levels have limited ability to oversee mail operations 
across the agency because VA has not provided them with appropriate 
authority and responsibilities. The FMR requires agencies to have an 
agency mail manager and outlines the individual's recommended 
responsibilities, which include, among others, establishing written 
policies and procedures to provide timely and cost-effective dispatch 
and delivery of mail and materials, and ensuring that all facility and 
program-level mail personnel receive appropriate training and 
certifications to successfully perform their assigned duties. According 
to VA officials, the responsibilities of the agency mail manager are 
limited to oversight of Directive 6340, and do not include operational 
mail management responsibilities.
    Additionally, according to the agency mail manager, mail operations 
in VHA and VBA facilities are the responsibility of the administration-
level mail managers. However, the VHA and VBA mail managers told us 
that although they may advise individual facilities on mail management, 
they lack authority to direct mail operations at facilities. Further, 
while the FMR recommends that the agency mail manager ensure that all 
facility and mail program-level personnel receive appropriate training 
and certifications, \19\ VHA's mail manager said he has never been 
encouraged to attend any training, and both the VHA and VBA mail 
managers said that they do not have the authority to require mail 
management employees to attend training. Individual facilities are 
generally responsible for their own mail operations with limited 
direction or guidance. Officials from the 10 facilities we reviewed 
stated that they have personnel who are responsible for their 
respective mail operations, but most of them had other 
responsibilities, such as logistics, warehouse operations, and mailroom 
machine maintenance.
---------------------------------------------------------------------------
    \19\ 41 C.F.R. Sec.  102-192.130.
---------------------------------------------------------------------------
    We recommended that VA determine and document the authority and 
responsibilities of the agency and administration-level mail managers 
to enable them to improve management and oversight of mail operations. 
VA agreed with this recommendation.
    Chairman Bergman, Ranking Member Kuster, and Members of the 
Subcommittee, this concludes my prepared statement. I would be pleased 
to respond to any questions that you may have at this time.

GAO Contact and Staff Acknowledgments

    For questions about this statement, please contact Lori Rectanus at 
(202) 512-2834 or [email protected]. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this statement. GAO staff who made key contributions to this 
testimony are Samer Abbas and Faye Morrison (Assistant Directors), 
Justin Reed (Analyst in Charge), Amy Abramowitz, Bonnie Pignatiello 
Leer, Malika Rice, Amy Rosewarne, Crystal Wesco, and Elizabeth Wood.

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    Katherine Siggerud, Managing Director, [email protected], (202) 
512-4400, U.S. Government Accountability Office, 441 G Street NW, Room 
7125, Washington, DC 20548

Public Affairs

    Chuck Young, Managing Director, [email protected], (202) 512-4800, 
U.S. Government Accountability Office, 441 G Street NW, Room 7149, 
Washington, DC 20548

Strategic Planning and External Liaison

    James-Christian Blockwood, Managing Director, [email protected], (202) 
512-4707, U.S. Government Accountability Office, 441 G Street NW, Room 
7814, Washington, DC 20548