Veterans Affairs: Status of Achieving Key Outcomes and Addressing
Major Management Challenges (15-JUN-01, GAO-01-752).
This report reviews the Department of Veterans Affairs (VA)
fiscal year 2000 performance report and fiscal year 2002
performance plan required by the Government Performance and
Results Act of 1993 to assess VA's process in achieving selected
key outcomes that are important to its mission. VA reported
making mixed progress towards achieving its key outcomes. For
example, VA reported that it made good progress in providing
high-quality care to patients, but it did not achieve its goal of
processing veterans' benefits claims in a timely manner. GAO
found out that VA made several improvements to its fiscal year
2000 performance report and 2002 performance plan. These
improvements resulted in clearer discussions of VA's management
challenges and additional performance measures for assessing
program achievement. Furthermore, VA addressed all six of the
major management challenges previously identified by GAO, and
generally described goals or actions that VA is taking or plans
to take in response to them. VA has established strategies for
achieving strategic goals and objectives for two of these
challenges: human capital management and information security. VA
has established a performance goal and identified milestones for
implementing certain strategies to address information security.
However, VA has not identified performance goals and measures for
human capital management linked to achieving programmatic
results.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-01-752
ACCNO: A01230
TITLE: Veterans Affairs: Status of Achieving Key Outcomes and
Addressing Major Management Challenges
DATE: 06/15/2001
SUBJECT: Information systems
Performance measures
Veterans benefits
Personnel management
Strategic planning
Information resources management
Reporting requirements
Program evaluation
VA Compensation and Pension Benefits
Replacement System
VA Vocational Rehabilitation and
Employment Program
GPRA
Government Performance and Results Act
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GAO-01-752
GAO United States General Accounting Office
Report to the Ranking Minority Member, Committee on Governmental Affairs, U.
S. Senate
June 2001 VETERANS AFFAIRS Status of Achieving Key Outcomes and Addressing
Major Management Challenges
GAO- 01- 752
Page i GAO- 01- 752 VA: Status of Achieving Key Outcomes Letter 1
Appendix I Observations on the Department of Veterans Affairs? Efforts to
Address Its Major Management Challenges 18
Appendix II Comments From the Department of Veterans Affairs 24
Tables
Table 1: Comparison of VA?s Performance to Its Key Goals Pertaining to
Quality and Cost of Veterans? Health Care (Fiscal Years 1999 and 2000) 5
Table 2: Comparison of VA?s Performance to Its Key Goals
Pertaining to Processing of Veterans? Benefits Claims (Fiscal Years 1999 and
2000) 8 Table I- 1: Major Management Challenges 18 Contents
Page 1 GAO- 01- 752 VA: Status of Achieving Key Outcomes
June 15, 2001 The Honorable Fred Thompson Ranking Minority Member Committee
on Governmental Affairs United States Senate
Dear Senator Thompson: As you requested, we reviewed the Department of
Veterans Affairs (VA) fiscal year 2000 performance report and fiscal year
2002 performance plan required by the Government Performance and Results Act
of 1993 (GPRA) to assess VA?s progress in achieving selected key outcomes
that you identified as important mission areas. 1 These are generally the
same outcomes we addressed in our June 2000 review of VA?s fiscal year 1999
performance report and fiscal year 2001 performance plan to provide a
baseline by which to measure VA?s performance from year to year. 2 These
selected key outcomes are:
veterans are provided high- quality health care at a reasonable cost to
the government,
veterans? benefit claims are processed timely and accurately, and
disabled veterans acquire and maintain suitable employment. As agreed,
using the selected key outcomes for VA as a framework, we (1) assessed the
progress VA has made in achieving these outcomes and the strategies the
agency has in place to achieve them; and (2) compared VA?s fiscal year 2000
performance report and fiscal year 2002 performance plan with its prior year
performance report and plan for these outcomes. Additionally, we agreed to
analyze how VA addressed its major management challenges, including the
governmentwide high- risk areas of strategic human capital management and
information security, that we and VA?s Inspector General (IG) identified.
Appendix I provides information on how VA addressed these challenges.
1 This report is one of a series of reports on the 24 Chief Financial
Officers (CFO) Act agencies? fiscal year 2000 performance reports and fiscal
year 2002 performance plans. 2 Observations on the Department of Veterans
Affairs? Fiscal Year 1999 Performance Report and Fiscal Year 2001
Performance Report (GAO/ HEHS- 00- 124R, June 30, 2000).
United States General Accounting Office Washington, DC 20548
Page 2 GAO- 01- 752 VA: Status of Achieving Key Outcomes
Overall, VA reported making mixed progress towards achieving its key
outcomes. VA?s strategies for achieving these outcomes appear to be clear
and reasonable. Specifically,
Planned outcome: Veterans are provided high- quality health care at a
reasonable cost to the government. VA reported making good progress towards
achieving this key outcome. For example, VA reported that its average cost
per patient was 2 percent less than last year. Also, VA reported that
performance improved for most of its key measures, including quality
indicators, compared to last year. VA provided clear and reasonable
descriptions of its strategies for meeting its fiscal year 2002 goals. For
example, VA reported it plans to expand veterans? access to health care
through the increased use of community- based outpatient clinics and the use
of short- term contracts with non- VA specialists.
Planned outcome: Veterans? benefit claims are processed timely and
accurately. VA reported making little progress towards achieving this key
outcome. VA reported that it has decreased the number of days required to
resolve appeals of claims. However, VA reported that performance declined
with respect to its rating- related claims- processing timeliness and
national accuracy rate. Among the reasons VA cited for the decline in
performance was its underestimating how long it would take to realize the
positive impact of initiatives such as increased staffing, improved quality
reviews, and training directed at specific deficiencies. VA provided clear
and reasonable discussions of strategies for meeting its future goals. For
example, VA strategies for improving the timeliness and accuracy of VA?s
initial decisions on disability compensation and pension claims include (1)
processing claims from active- duty service members awaiting discharge from
military service, (2) allowing veterans to submit claims on- line, and (3)
continuing to develop computer- assisted training modules and other training
materials for claims- processing staff.
Planned outcome: Disabled veterans acquire and maintain suitable
employment. VA reported making good progress towards achieving this key
outcome. VA reported that 65 percent of the veterans who exited the
Vocational Rehabilitation and Employment (VR& E) program returned to work in
fiscal year 2000- an increase of 12 percentage points over its fiscal year
1999 performance. VA provided clear and reasonable strategies for continuing
to meet its future goal. For example, as part of its strategy, VA is
changing the skill mix of its staff from vocational rehabilitation
specialists to employment specialists, and from counseling psychologists to
vocational rehabilitation counselors. Results in Brief
Page 3 GAO- 01- 752 VA: Status of Achieving Key Outcomes
VA made several changes to improve its performance report and performance
plan. For example, it added a section to its performance report to
specifically address management challenges identified by GAO and VA?s IG. In
addition, VA made significant changes to the way it will assess its progress
toward achieving its key outcome of providing quality health care to
veterans in its fiscal year 2002 performance plan. For fiscal year 2001, VA
replaced some of its key measures with new key performance measures intended
to better assess its progress. For example, VA added a new measure on
patient safety focused on identifying the root causes of medical errors,
which, in turn, could lead to appropriate corrective actions.
VA addressed all of the major management challenges identified by GAO and,
generally described goals or actions that VA is taking or plans to take in
response to them. In addition, VA has established strategies for achieving
strategic goals and objectives for human capital management and information
security. VA has established a performance goal and identified milestones
for implementing certain strategies to address information security.
However, VA?s performance plan has not identified performance goals and
measures for human capital management that are linked to program results.
VA generally agrees with the information presented in our report. However,
VA was concerned that our report suggested that the Department?s performance
plan was inadequate because, in some cases, it does not have performance
goals and measures linked to each of the major management challenges. In
certain cases, VA believes that it is appropriate and sufficient to have a
mitigation plan including milestones for completing remedial actions.
As we reported, VA?s performance plan identified actions for resolving each
of its major management challenges, even when quantifiable goals and
measures were not included. However, OMB guidance states that performance
goals for management problems should be included in the annual plan.
GPRA is intended to shift the focus of government decisionmaking,
management, and accountability from activities and processes to the results
and outcomes achieved by federal programs. New and valuable information on
the plans, goals, and strategies of federal agencies has been provided since
federal agencies began implementing GPRA. Under GPRA, annual performance
plans are to clearly inform the Congress and the Background
Page 4 GAO- 01- 752 VA: Status of Achieving Key Outcomes
public of (1) the annual performance goals for agencies? major programs and
activities, (2) the measures that will be used to gauge performance, (3) the
strategies and resources required to achieve the performance goals, and (4)
the procedures that will be used to verify and validate performance
information. These annual plans, issued soon after transmittal of the
president?s budget, provide a direct linkage between an agency?s longer-
term goals and mission and day- to- day activities. 3 Annual performance
reports are to subsequently report on the degree to which performance goals
were met. The issuance of the agencies? performance reports, due by March
31, represents a new and potentially more substantive phase in the
implementation of GPRA- the opportunity to assess federal agencies? actual
performance for the prior fiscal year and to consider what steps are needed
to improve performance, and reduce costs in the future. 4
VA?s mission reflects the nation?s historic commitment to care for veterans,
their families, and their survivors. VA administers a variety of programs,
including one of the world?s largest health care systems. VA estimates that,
in fiscal year 2000, it spent about $42 billion- more than 80 percent of its
total budget- to provide health care services to 3.6 million veterans and to
pay disability compensation and pensions to over 3.2 million veterans and
their families and survivors.
This section discusses our analysis of VA?s performance in achieving its
selected key outcomes and the strategies VA has in place, including
strategic human capital management 5 and information technology, for
accomplishing these outcomes. In discussing these outcomes, we have also
provided information drawn from our prior work on the extent to which VA
provided assurance that the performance information it is reporting is
credible.
3 The fiscal year 2002 performance plan is the fourth of these annual plans
under GPRA. 4 The fiscal year 2000 performance report is the second of these
annual reports under GPRA. 5 Key elements of modern human capital management
include strategic human capital
planning and organizational alignment; leadership continuity and succession
planning; acquiring and developing staffs whose size, skills, and deployment
meet agency needs; and creating results- oriented organizational cultures.
Assessment of VA?s
Progress and Strategies in Accomplishing Selected Key Outcomes
Page 5 GAO- 01- 752 VA: Status of Achieving Key Outcomes
Overall, VA reported making good progress towards achieving its key outcome
of providing quality health care to veterans at a reasonable cost to the
government in fiscal year 2000. For example, VA reported that its average
cost per patient was 2 percent less than last year. VA also reported that
performance improved for most of its key measures compared to last year?s
performance. However, VA reported a decline in performance for two key
measures (see table 1).
Table 1: Comparison of VA?s Performance to Its Key Goals Pertaining to
Quality and Cost of Veterans? Health Care (Fiscal Years 1999 and 2000)
Performance measure 1999
Performance 2000 Performance 2000
Goal Performance improved
Chronic Disease Care Index 89% 90% 89% Percent reduction in average cost per
patient, from fiscal year 1997 baseline -16% -18% -16% Percent increase in
unique patients treated, from fiscal year 1997 baseline 15% 21.5% 21%
Percent of residents trained in primary care 46% 48% 47% Percent of patients
who rate VA inpatient care as very good or excellent 65% 66% 67% Percent of
patients seen within 20 minutes of scheduled appointment at VA health care
facilities 68% 70% 75%
Performance unchanged or declined
Prevention Index 81% 81% 89% Percent of patients who rate VA outpatient care
very good or excellent 65% 64% 67% Percent of medical care operating budget
derived from alternative revenue streams 3.8% 3.4% 3.7%
Performance goals not established
Percent of patients who are able to obtain a non- urgent appointment with a
specialist within 30 days of referral N/ A N/ A N/ A Percent of patients who
were able to obtain a primary care appointment within 30 days N/ A N/ A N/ A
Source: Department of Veterans Affairs, Fiscal Year 2000 Performance Report.
VA?s performance report, in general, demonstrated progress toward achieving
its key performance goals. The key goals- the goals VA?s senior management
consider most important- show how well VA is doing in providing quality
health care to veterans at a reasonable cost. For each key measure, VA
provided a discussion of the extent to which it met its fiscal year 2000
goal. In addition, VA provided baseline and performance data, where
available, to show the extent to which performance has changed over several
fiscal years.
For most of the key goals that VA did not achieve, it explained why the
goals were not achieved. Also, VA provided supplementary information to
Quality and Cost of
Veterans? Health Care
Page 6 GAO- 01- 752 VA: Status of Achieving Key Outcomes
show that the performance deficiency was either not significant or that VA?s
performance improved in fiscal year 2000. For example, VA reported that
while it did not meet its patient satisfaction goals, its performance on
other patient satisfaction surveys showed that VA patients were more
satisfied than patients of private- sector health care providers. Also, VA
noted that the differences between its planned and actual performance on the
patient satisfaction measures were not significant, because they were within
the margin of error for its annual patient satisfaction survey.
VA could have done a better job, however, of explaining in its performance
report why some key performance goals were not met. For example, VA did not
explain why it did not meet its goal to have at least 75 percent of patients
with scheduled appointments see a provider within 20 minutes of their
scheduled appointment time. It provided a partial explanation of why it did
not obtain at least 3.7 percent of its medical care funding from alternative
revenue streams. 6 However, VA?s performance plan cited factors contributing
to the decline in collections. For example, the plan noted that more
veterans are enrolling in managed care organizations from which VA cannot
typically collect because it is not a participating provider.
In addition, VA?s performance report included two key health care
performance measures that VA has not yet quantified. These measures, based
in part on previous GAO reports and recommendations, 7 are for the
percentages of patients who are able to obtain initial appointments within
30 days for primary or specialty care. Also, VA is in the process of
improving its ability to collect the necessary data to measure its
performance. It plans to use fiscal year 2001 data as its baseline for
setting future annual performance goals.
VA?s performance report shows VA?s continuing efforts to address
deficiencies in the quality of its performance data. For most- though not
all- of its key health care performance measures, VA identified the sources
of performance data, and how data quality is assured. VA?s data quality
initiatives include, for example, hiring a full- time Data Quality
6 Alternative revenue sources include veterans? copayments, collections from
third- party insurers, and receipts from services shared with the Department
of Defense (DOD). 7 Veterans? Health Care: VA Needs Better Data on Extent
and Causes of Waiting Times (GAO/ HEHS- 00- 90, May 31, 2000) and VA Health
Care: Restructuring Ambulatory Care System Would Improve Services to
Veterans (GAO/ HRD- 94- 4, Oct. 15, 1993).
Page 7 GAO- 01- 752 VA: Status of Achieving Key Outcomes
Coordinator, and revising coding procedures and training to help improve the
collection of clinical data. Also, due in part to the IG?s recommendations,
VA implemented edit checks of its system data to improve the quality of the
data used to report the number of unique VA patients.
In addition to health care performance data, VA also needs quality financial
data. VA received an unqualified opinion on its fiscal year 2000 financial
audit report. However, VA continues to experience problems with its
financial management systems, including information security and integrated
financial management systems weaknesses. Further, VA is unable to accumulate
cost data at the activity level. Reliable cost information is needed for VA
to assess its operating performance.
VA?s performance report generally provides clear and reasonable descriptions
of its strategies for correcting performance deficiencies and improving
future performance on its key performance measures, even in those areas
where VA met its fiscal year 2000 performance goal. For example, while VA
met its goal for the Chronic Disease Care Index, which is a significant
quality indicator, it provided strategies to continue to improve its
performance in the future, including initiatives to improve patient safety
and provide clinical training to medical staff. VA also identified numerous
strategies and initiatives for improving performance in areas where
performance goals were not met, such as
enhancing provider/ patient communications,
expanding access to VA health care through increased use of communitybased
outpatient clinics and use of short- term contracts with non- VA
specialists,
expanding the use of clinical guidelines, and
educating patients and staff on prevention programs. VA identified human
capital strategies to improve patient access and appointment timeliness. For
example, VA plans to
hire additional clinical staff to improve access and appointment
timeliness, and
add specialists to its primary care teams to provide veterans with a
greater variety of services, even at some community- based clinics.
VA?s discussions included some information technology strategies regarding
health care. For example, VA is integrating telemedicine technologies into
ambulatory care delivery systems to increase patient
Page 8 GAO- 01- 752 VA: Status of Achieving Key Outcomes
access and efficiency of health care delivery. VA noted that its facilities
are equipped with compatible video- conferencing technology for facilitating
geographically remote clinical consultations and patient examinations.
VA reported making little progress toward achieving its key outcome of
processing compensation and pension benefit claims timely and accurately in
fiscal year 2000. Although VA did not meet any of its fiscal year 2000 key
performance goals for this outcome, VA reported some improvement in the time
required to resolve appeals of claims. However, VA reported that performance
declined from fiscal year 1999 to 2000 with respect to the other key
measures (see table 2).
Table 2: Comparison of VA?s Performance to Its Key Goals Pertaining to
Processing of Veterans? Benefits Claims (Fiscal Years 1999 and 2000)
Performance measure 1999
Performance 2000
Performance 2000
Goal Performance improved
Decrease the average time required to resolve appeals of VA compensation and
pension claims decisions to the Board of Veterans Appeals 745 days 682 days
670 days
Performance declined
Decrease the average time from receipt of claim to VA?s decision for
disability rating- related claims 166 days 173 days 160 days Increase the
national accuracy rate for core rating work 68% 59% 81%
Source: Department of Veterans Affairs, Fiscal Year 2000 Performance Report.
In its performance report, VA provided a clear discussion of the extent to
which it met each of its key performance goals for fiscal year 2000. 8 In
addition, VA provided baseline and performance data where available, to show
the performance over several fiscal years. In the discussion of its
performance, VA noted that it expected timeliness to worsen in fiscal year
2001 because of the effect additional legislative and regulatory
requirements will likely have on claims- processing time.
For two of the key goals, VA explained why the goals were not achieved. Some
of the reasons VA cited for the shortfall in the claims- processing
timeliness and/ or the national accuracy rate included VA (1)
8 The key goals are not outcome oriented and therefore do not measure the
results VA wants the compensation and pension programs to have for disabled
veterans and their families. VA is developing such goals and measures.
Processing Veterans?
Benefit Claims
Page 9 GAO- 01- 752 VA: Status of Achieving Key Outcomes
underestimating how long it would take to realize the positive impact of
initiatives such as increased staffing, improved quality reviews, and
training directed at specific deficiencies; (2) using a more rigorous
quality review system than in the past; and (3) having to address complex
regulatory changes affecting the manner in which claims are processed.
Based, in part, on previous GAO reports and recommendations on claims
processing, 9 VA is strengthening its system for reviewing claims accuracy-
the Statistical Technical Accuracy Review- by collecting more specific data
on deficiencies concerning incorrect decisions in those regional offices
that have accuracy problems. In addition, VA is evaluating and disseminating
information on regional office practices that hold promise for improving
performance nationwide, according to VA officials. While VA explained why it
did not achieve its accuracy and timeliness goals for disability rating-
related claims, it did not explain why it did not meet the timeliness goal
for appeals resolution. VA noted improvement in its appeals resolution
timeliness although it did not meet its established goal.
VA?s performance report provides an increasing assurance that its
performance information is credible. For example, VA is conducting
independent reviews of a sample of claims to assess accuracy rates and
weekly assessments of transactions to identify questionable timeliness data
from regional offices.
VA provided clear and reasonable discussions of strategies, including
information technology initiatives, for improving future performance on key
claims- processing goals. 10 For example, VA is rewriting claimsprocessing
manuals in an easy- to- understand format to enable employees to find
information quickly. In addition, VA has implemented the Veterans On- Line
APPlications (VONAPP) that allows veterans to electronically complete and
submit applications for compensation, pension, and other benefits. However,
we recently testified that VONAPP faces potential security vulnerabilities
as a result of weaknesses in general support systems and operating
subsystems access controls that affect the
9 Veterans? Benefits Claims: Further Improvements Needed in Claims
Processing Accuracy (GAO/ HEHS- 99- 35, Mar. 1, 1999) and Veterans?
Benefits: Promising Claims- Processing Practices Need to Be Evaluated (GAO/
HEHS- 00- 65, Apr. 7, 2000). 10 In April 2001, the Secretary of VA
established the Claims Processing Task Force to make recommendations to
improve timeliness and accuracy of compensation and pension decisions.
Page 10 GAO- 01- 752 VA: Status of Achieving Key Outcomes
department?s overall computer operation. 11 Also, VA is developing the
Veterans Service Network?s Compensation and Pension Benefits Replacement
System, which is expected to provide greater access to claimant information
through a state- of- the- art automated environment. We testified 12 that
this project has suffered from numerous problems and schedule delays, which
threaten the overall success of the initiative. In addition, VA is piloting,
testing, or enhancing the operational capability for (1) the Compensation
and Pension Record Interchange to provide enhanced accessibility to VHA
records, (2) the Personnel Information Exchange System to allow for
electronic exchange of military personnel records with DOD, and (3) the
Virtual VA, to create a work environment for electronic claims processing.
VA?s performance report discusses human capital strategies for dealing with
the fact that one- fourth of its claims- processing staff will become
eligible to retire over the next 5 years. VA?s succession planning strategy
includes recruiting new staff, redirecting staff from other offices, and
providing training. VA hired over 450 new claims- processing staff during
fiscal year 2000. In addition, VA plans to redirect 200 existing staff to
claims- processing positions and hire nearly 250 new staff during fiscal
year 2001. Although VA identified human capital strategies for hiring,
redirecting, and training staff, its performance plan does not identify
performance goals and measures that are linked to the program improvement
planned. VA is continuing to develop computer- assisted training modules and
other materials on claims processing under the Training and Performance
Support System to train the large wave of new hires and current employees
who will replace prospective retirees.
VA reported making good progress toward achieving its key outcome of
assisting disabled veterans in acquiring and maintaining suitable
employment. For the second year in a row, VA reported exceeding its key
performance goal for this outcome. VA reported that 65 percent of the
veterans who exited the VR& E program returned to work in fiscal year 2000-
more than its goal of 60 percent. Also, VA reported its performance improved
by 12 percentage points over its fiscal year 1999 performance.
11 VA Information Technology: Important Initiatives Begun, Yet Serious
Vulnerabilities Persist (GAO- 01- 550T, Apr. 4, 2001). 12 VA Information
Technology: Progress Continues Although Vulnerabilities Remain (GAO/ T-
AIMD- 00- 321, Sept. 21, 2000). Disabled Veterans
Employment
Page 11 GAO- 01- 752 VA: Status of Achieving Key Outcomes
VA?s performance report clearly explains the initiatives it believes were
responsible for exceeding the goal. For example, VA refocused the program to
make the primary goal obtaining suitable employment, improved the assessment
of veterans? work skills transferable to the civilian labor market, and
increased the number of placements in suitable jobs.
To improve the credibility of VR& E?s performance information, VA continues
to have regional office staff regularly review a sample of cases for quality
and VA headquarters staff evaluate data for validity and reliability.
VA provides reasonable and clear discussions of strategies to continue to
place veterans in suitable employment. As part of these strategies, VA is
changing the skill mix of its staff from vocational rehabilitation
specialists to employment specialists, and from counseling psychologists to
vocational rehabilitation counselors. In addition, VA has established a Blue
Ribbon Panel to review the program?s policies and practices and evaluate
them against best practices of other organizations.
Although VA is responsible for VR& E, it partners with the Department of
Labor?s (DOL) Veterans? Employment and Training Service (VETS), that also
helps veterans obtain training and employment. VA conducts joint training
with DOL for VETS- funded state and local training and job placement staff.
We have reported that VETS does not have clear goals and strategies for
targeting veterans for employment assistance 13 . We have made several
recommendations to improve VETS, including that DOL clearly define the
program?s target populations so that staff know where to place their
priorities.
13 Veterans? Employment and Training Service: Better Planning Needed to
Address Future Needs (GAO/ T- 00- 206, Sept. 27, 2000) and Veterans?
Employment and Training Service: Proposed Performance Measurement System
Improved, But Further Changes Needed (GAO- 01- 580, May 15, 2001).
Page 12 GAO- 01- 752 VA: Status of Achieving Key Outcomes
For the selected key outcomes, this section describes improvements or
remaining weaknesses in VA?s (1) fiscal year 2000 performance report in
comparison with its fiscal year 1999 report, and (2) fiscal year 2002
performance plan in comparison with its fiscal year 2001 plan. It also
discusses the degree to which VA?s fiscal year 2000 report and fiscal year
2002 plan address concerns and recommendations by the Congress, GAO, the
Inspectors General, and others.
VA made improvements to its performance report. For example, VA improved its
discussion of major management challenges identified by GAO and VA?s IG. VA
added a section describing its efforts to address major management
challenges identified by GAO and VA?s IG. The Office of Inspector General,
for each management challenge it identified, described the challenge and
identified recommendations that VA has, and has not, implemented. For
example, regarding inappropriate benefit payments, the IG noted that VA has
implemented its recommendation to enter into a matching agreement with the
Social Security Administration for prison records. However, the IG noted
that VA has not yet implemented recommendations to identify and adjust the
benefits of incarcerated veterans and dependents, recover overpayments to
veterans who have been released from prison, and establish a method to
ensure that regional offices properly adjust benefits for incarcerated
veterans and dependents in a timely manner. Another improvement made by VA
included reporting, for the first time, obligations by strategic goal.
In addition, VA?s fiscal year 2000 performance report continues to provide
reasonable discussions of its (1) progress in meeting key performance goals,
(2) strategies for improving performance in the future, and (3) efforts to
improve quality of performance data. We discussed these items previously
under the key outcomes.
Finally, VA provided a clearer understanding of the compensation and pension
claims- processing timeliness in its fiscal year 2000 performance report
compared to last year?s report. Although VA continued to report the combined
performance of compensation and pension, in this year?s report VA also
presented the performance data separately for each. Comparison of VA?s
Fiscal Year 2000 Performance Report and Fiscal Year 2002 Performance Plan
With the Prior Year Report and Plan for Selected Key Outcomes
Comparison of Performance Reports for Fiscal Years 1999 and 2000
Page 13 GAO- 01- 752 VA: Status of Achieving Key Outcomes
VA made several improvements to its fiscal year 2002 performance plan. For
example, VA has identified additional key measures it believes are important
to assessing how well it is meeting the needs of veterans and their
families. These include additional measures of patient safety, health care
cost- effectiveness, and customer satisfaction with VA services. In general,
VA continues to provide adequate discussions of strategies for improving
future performance and update performance goals based on past performance.
Also, VA provides additional information on (1) costs associated with
meeting strategic goals and objectives, (2) efforts to improve data quality,
and (3) ways to address major management challenges.
VA?s fiscal year 2002 performance plan represents a significant change in
the way VA measures its performance toward achieving its key outcome of
providing quality health care to veterans at a reasonable cost. Starting
with fiscal year 2001, VA will no longer have key measures for the
percentage increase in the number of unique patients; the percentage
decrease in perpatient costs; the decrease in the percentage of health care
funding from alternative revenue streams; and the percentage of medical
residents trained in primary care. VA is adding several new key performance
measures to better assess progress toward achieving this outcome. For
example, VA has designated the following as key measures:
A measure related to patient safety- the percentage of root- cause
analyses not correctly completed within 45 days of an adverse patient event.
This is a quality measure, based on VA?s system for continuously improving
patient safety at its medical facilities. When medical errors occur, VA
medical staffs are required to prepare root- cause analyses to identify the
reasons for these errors. This information, in turn, can be used to identify
corrective actions.
Two indexes of overall VA medical care that include elements of quality,
patient access, customer satisfaction, and cost. According to VA, these
measures represent more sophisticated ways to measure the efficiency of its
medical care than the former key measure of cost per patient, because they
measure not just efficiency in providing care, but efficiency in providing
high- quality and accessible care that meets patients? needs. These indexes
include six other key goals in the fiscal year 2002 performance plan- the
revised Chronic Disease Care and Prevention Indexes; the three appointment
timeliness measures; and the inpatient and outpatient customer satisfaction
measures- plus per- patient costs.
VA reported that it, in general, makes changes to key measures (1) when
actual performance has met or exceeded original strategic goals, (2) when
Comparison of
Performance Plans for Fiscal Years 2001 and 2002
Page 14 GAO- 01- 752 VA: Status of Achieving Key Outcomes
further performance improvements are unlikely or unreasonable, (3) to ensure
that measures are consistent with its strategic plan, and (4) when it
develops better ways to measure its performance.
VA continues to provide clear and reasonable discussions of strategies for
improving performance and continues to revise its performance goals based on
past performance. As previously discussed for each key outcome, VA provided
strategies for how it expects to achieve its goals. VA described additional
strategies in its plan that do not appear in the performance report. For
example, VA will expand its initiative to process claims from active- duty
service members awaiting discharge from military service. In addition, VA
adjusted performance goals based on its fiscal year 2000 performance as well
as external factors, such as new duty- to- assist legislation. For example,
VA increased its fiscal year 2001 timeliness goal for processing of
disability rating- related claims from 142 days to 202 days and established
a goal of 273 days for fiscal year 2002. VA also revised its fiscal year
2001 claims- processing accuracy goal from 85 percent to 72 percent, and
established a goal of 75 percent for fiscal year 2002.
In its fiscal year 2002 performance plan, VA provides additional information
on the estimated costs of meeting its fiscal year 2002 performance goals.
The fiscal year 2001 performance plan included VA?s estimates of obligations
needed to meet each of its strategic goals. VA?s fiscal year 2002
performance plan also provided estimated obligations by strategic objective.
Because each of VA?s four main strategic goals covers multiple objectives
related to different VA programs, presenting cost data by objective provides
a clearer linkage of funding to achievement of performance goals. Meanwhile,
VA continues to work with the Office of Management and Budget (OMB) on a
plan to restructure its budget accounts, so VA?s budget presentations to the
Congress can better link proposed funding with specific levels of
performance.
VA?s fiscal year 2002 performance plan includes a more detailed discussion
of its efforts to improve the quality of its performance data. For example,
the Veterans Health Administration identifies in more detail its initiatives
to improve the quality of its data on patient care developed by its health
care facilities. It has initiatives to improve the quality of coding at
facilities to ensure that the care provided to veterans is being correctly
recorded. The Veteran Benefits Administration also provided more detailed
information on its data quality efforts. It created a Data Management Office
to work with its program offices to identify strategies and initiatives to
address the collection, processing, and storage of quality data.
Page 15 GAO- 01- 752 VA: Status of Achieving Key Outcomes
In the fiscal year 2002 performance plan, VA restructured its discussion of
major management challenges to mirror the challenges identified by GAO in
our January 2001 Performance and Accountability Series report on VA, and the
challenges identified by VA?s IG in November 2000. For each of these
challenges, VA provided information on the nature of the challenge, and the
status of its efforts to resolve it. However, VA could have provided more
specific discussions of its plans to address its major management
challenges. For example, in it discussion of the challenges we identified
for VA?s health care program, VA generally restated findings from our
January 2001 report to describe its current status and future plans.
VA addressed all six of the major management challenges identified by GAO,
and generally described goals or actions that VA is taking or plans to take
in response to them. GAO has identified two governmentwide highrisk areas:
strategic human capital management and information security. VA has
established strategies for achieving strategic goals and objectives for
human capital management and information security. VA has established a
performance goal and identified milestones for implementing certain
strategies to address information security. However, VA has not identified
performance goals and measures for human capital management linked to
achieving programmatic results.
In addition, GAO has identified four major management challenges facing VA.
We found that VA?s performance report discussed the agency?s progress in
resolving all of its challenges. Of the six major management challenges
identified by GAO, its performance plan had (1) goals and measures that were
directly related to four of the challenges, (2) goals and measures that were
indirectly related to one of the challenges and (3) had no goals and
measures related to one of the challenges, but discussed strategies to
address it. Appendix I provides information on how VA addressed these
challenges.
As agreed, our evaluation was generally based on the requirements of GPRA,
the Reports Consolidation Act of 2000, guidance to agencies from OMB for
developing performance plans and reports (OMB Circular A- 11, Part 2),
previous reports and evaluations by us and others, our knowledge of VA?s
operations and programs, GAO identification of best practices concerning
performance planning and reporting, and our observations on VA?s other GPRA-
related efforts. We also discussed our review with agency officials in the
Office of Assistant Secretary for Management and with the VA Office of
Inspector General. The agency outcomes that were VA?s Efforts to
Address Major Management Challenges Identified by GAO
Scope and Methodology
Page 16 GAO- 01- 752 VA: Status of Achieving Key Outcomes
used as the basis for our review were identified by the Ranking Minority
Member of the Senate Governmental Affairs Committee as important mission
areas for the agency and generally reflect the outcomes for all of VA?s
programs or activities. The major management challenges confronting VA,
including the governmentwide high- risk areas of strategic human capital
management and information security, were identified by GAO in our January
2001 performance and accountability series and highrisk update, and were
identified by VA?s IG in December 2000. We did not independently verify the
information contained in the performance report and plan, although we did
draw from other GAO work in assessing the validity, reliability, and
timeliness of VA?s performance data. We conducted our review from April 2001
through June 2001 in accordance with generally accepted government auditing
standards.
VA generally agrees with the information presented in our report. However,
VA was concerned that our report suggested that the Department?s performance
plan was inadequate because, in some cases, it does not have performance
goals and measures linked to each of the major management challenges
contained in appendix I. For example, VA cited our statement that it has not
identified performance goals and measures for human capital management
linked to achieving programmatic results. VA believes that it is not
necessary to develop and track quantifiable performance goals and measures
for management challenges that are not strategic in nature. In these cases,
VA believes that it is appropriate and sufficient to have a mitigation plan
including milestones for completing remedial actions. (App. II contains VA?s
written comments.)
As we reported, VA?s performance plan identified actions for resolving each
of its major management challenges, even when quantifiable goals and
measures were not included. However, OMB Circular No. A- 11 states,
?Performance goals for management problems should be included in the annual
plan, particularly for problems whose resolution is missioncritical?.? In
particular, the annual plan should include a performance goal( s) covering
the major human resources strategies, such as recruitment, retention, and
skill development and training, according to OMB guidance.
As arranged with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days after
the date of this letter. At that time, we will send copies to appropriate
congressional committees; the Secretary of Veterans Affairs; and the Agency
Comments
Page 17 GAO- 01- 752 VA: Status of Achieving Key Outcomes
Director, Office of Management and Budget. We will also make copies
available to others upon request.
If you or your staff have any questions, please call me at (202) 512- 7101.
Key contributors to this report were Shelia Drake, Paul Wright, Walter
Gembacz, Greg Whitney, John Borrelli, Valerie Melvin, J. Michael Resser,
Mary J. Dorsey, Alana Stanfield, Steve Morris, and Bonnie McEwan.
Sincerely yours, Cynthia A. Bascetta Director, Health Care- Veterans?
Health and Benefits Issues Enclosures- 2
Appendix I: Observations on the Department of Veterans Affairs? Efforts to
Address Its Major Management Challenges
Page 18 GAO- 01- 752 VA: Status of Achieving Key Outcomes
The following table identifies the major management challenges confronting
the Department of Veterans Affairs (VA), which includes the governmentwide
high- risk areas of strategic human capital management and information
security. The first column lists the challenges identified by our office
and/ or VA?s Inspector General (IG). The second column discusses what
progress, as discussed in its fiscal year 2000 performance report, VA made
in resolving its challenges. The third column discusses the extent to which
VA?s fiscal year 2002 performance plan includes performance goals and
measures to address the challenges that we and the VA?s IG identified. We
found that VA?s performance report discussed the agency?s progress in
resolving all its challenges. Of the 16 major management challenges, its
performance plan had (1) goals and measures that were directly related to 7
of the challenges, (2) goals and measures that were indirectly related to 2
of the challenges and (3) had no goals and measures related to 7 of the
challenges, but discussed strategies to address them.
Table I- 1: Major Management Challenges Major management challenge
Progress in resolving major management challenge as discussed in the fiscal
year 2000 performance report Applicable goals and measures in the
fiscal year 2002 performance GAO- designated governmentwide high risk
Strategic human capital management: GAO has identified shortcomings at
multiple agencies involving key elements of modern human capital management,
including strategic human capital planning and organizational alignment;
leadership continuity and succession planning; acquiring and developing
staffs whose size, skills, and deployment meet agency needs; and creating
results- oriented organizational cultures.
In its report, VA recognizes that a comprehensive workforce planning
initiative is essential for VA to remain as a provider of quality services
to America?s veterans. An anticipated upswing in retirements, rapid changes
in technology, an increasingly diverse labor and beneficiary pool, and
different expectations of younger workers are forces that strongly suggest
the need for new recruitment and retention practices to meet program goals.
VA states it has established a workforce planning process, and is in the
beginning stages of developing and implementing a workforce forecasting
system.
VA has a strategic goal, strategic objectives, and strategies to address
human capital. However, they are not directly linked to program performance.
The plan identifies improved workforce planning and enhancing accountability
for performance as initiatives that will permit the agency to deliver
?world- class? service to veterans and their families. VA has developed a
workforce planning model, secured VA senior leadership approval of the
model, and worked with its administrations to pilot the model.
VA?s performance report noted that its succession planning strategy includes
recruiting new staff, redirecting staff from other offices, and providing
training. For example, VA hired over 450 new claimsprocessing staff during
fiscal year 2000. In addition, VA plans to redirect 200 existing staff to
claims- processing positions and hire nearly 250 new staff during fiscal
year 2001.
Appendix I: Observations on the Department of Veterans Affairs? Efforts to
Address Its Major Management Challenges
Appendix I: Observations on the Department of Veterans Affairs? Efforts to
Address Its Major Management Challenges
Page 19 GAO- 01- 752 VA: Status of Achieving Key Outcomes
Major management challenge Progress in resolving major
management challenge as discussed in the fiscal year 2000 performance report
Applicable goals and measures in the
fiscal year 2002 performance
Information security: Our January 2001 high- risk update noted that
agencies? and governmentwide efforts to strengthen information security have
gained momentum and expanded. Nevertheless, recent audits continue to show
federal computer systems are riddled with weaknesses that make them highly
vulnerable to computer- based attacks and place a broad range of critical
operations and assets at risk of fraud, misuse, and disruption.
VA has acknowledged the security weakness in its systems and data and
reported information security controls as a material weakness in its Federal
Managers Financial Integrity Act report for 2000. To address the
department?s information security control issues, VA noted in its
performance report that it had established a centrally managed agency- wide
security program. In addition, the department issued a revised information
security plan in October 2000 that identified a number of security
enhancements that were being accelerated to improve agency- wide information
security. These included enhancements to: (1) security awareness, (2) risk
assessments, (3) security policies, (4) security officer training, and (5)
system certification.
As we have previously reported, 1 the VA information security management
plan generally includes the key elements of an effective security management
program. However, the success of VA?s efforts to improve the department?s
computer security will depend largely on adequate program resources and
commitment throughout the department.
Yes. VA has developed corrective action plans to address the information
security weaknesses. These plans were in various stages of implementation.
VA?s performance plan noted that VA established a performance indicator to
measure progress in implementing its information security program. The
department targeted this program to be 20 percent complete by fiscal year
2001 and 80 percent complete by fiscal year 2002. However, this measurement
does not assess the effectiveness of VA?s security, a more effective measure
of program success.
The Chief Information Officers Council, in coordination with the National
Institute of Standards and Technology and the Office of Management and
Budget, has developed a framework for agencies to use in determining the
current status of information systems controls and, where necessary, to
establish a target for improvement. VA could use this framework as a means
for measuring progress in improving its information security program.
GAO- designated major management challenge
Ensure timely and equitable access to quality VA health care Discussed under
outcomes in the report. Yes. Discussed under outcomes in the
report. Maximize VA?s ability to provide health care within available
resources Discussed under outcomes in the report. Yes. Discussed under
outcomes and
comparison of performance plans in the report. VA?s plan has measures for
alternative revenues and for conducting studies to assess and realign its
health care system. Process veterans? disability claims promptly and
accurately Discussed under outcomes in the report. Yes. Discussed under
outcomes in the
report.
1 Information Systems: The Status of Computer Security at the Department of
Veterans Affairs (GAO/ AIMD- 00- 5, Oct. 4, 1999).
Appendix I: Observations on the Department of Veterans Affairs? Efforts to
Address Its Major Management Challenges
Page 20 GAO- 01- 752 VA: Status of Achieving Key Outcomes
Major management challenge Progress in resolving major
management challenge as discussed in the fiscal year 2000 performance report
Applicable goals and measures in the
fiscal year 2002 performance
Develop sound agencywide management strategies to build a high- performance
organization:
VA?s budget systems need to be aligned to link funding to performance.
VA?s efforts to use information technology to help serve veterans need
improvement.
Many financial management weaknesses remain despite unqualified audit
opinion.
Budget: Not addressed in report. Information technology (IT): VA implemented
a capital investment process that the department uses to select, control,
and evaluate IT investments. The department reviews IT projects that exceed
planned expenditures by 10 percent to determine whether to change the scope
of funding or terminate the project. The report did not address progress VA
made in developing a departmentwide IT architecture, business process
reengineering, or the need to obtain a fulltime chief information officer.
Financial management: VA described a number of information security
enhancements as described under Information Security challenge.
None. Performance- based budgeting: VA and OMB staff jointly developed a
proposal to restructure VA?s budget accounts to facilitate charging each
program?s budget account for all of the significant resources used to
operate and produce its outcomes and outputs. VA is continuing to work with
major stakeholders on implementation issues.
Information technology: VA has many initiatives planned or in progress. For
example, VA is taking steps to develop an architecture that will promote
departmentwide interoperability and data sharing. VA stated that it has
completed the technical component of this architecture and is in the process
of developing the logical component. In addition, VA stated that efforts are
underway to improve its capital investment process in response to GAO
recommendations. Also, VA stated that it is reevaluating its previous
decision to leave business process reengineering at the administration
level. However, VA provided little information on its effort to obtain a
fulltime chief information officer or when one would be appointed.
Financial management: VA has developed corrective action plans to address
information security weaknesses, which are in various stages of
implementation.
IG- designated major management challenges
Health care quality management and patient safety Discussed under outcomes
in the report. Yes. Discussed under outcomes in the
report. Resource allocation VA has initiated changes to its resource
allocation method to correct resource and infrastructure imbalances, has
given VA managers authority to reduce physician levels in overstaffed
specialties, and is implementing a cost- based data system to provide more
useful performance measurement information on resources and clinical and
administrative workloads.
None. Resource allocation continues to be a major public policy issue. VA
management is addressing staffing and other resource allocation disparities
as part of various initiatives to restructure its health care system. VA is
implementing IG recommendations regarding Decision Support System
standardization.
Appendix I: Observations on the Department of Veterans Affairs? Efforts to
Address Its Major Management Challenges
Page 21 GAO- 01- 752 VA: Status of Achieving Key Outcomes
Major management challenge Progress in resolving major
management challenge as discussed in the fiscal year 2000 performance report
Applicable goals and measures in the
fiscal year 2002 performance
Claims processing, appeals processing, and timeliness and quality of
compensation and pension medical examinations
Claims processing and appeals processing discussed under outcomes in the
report.
VA has implemented VA?s IG recommendations aimed at ensuring VHA performs
complete medical examinations. VA is also evaluating the use of contract
examinations.
Yes for claims processing and appeals processing: Discussed under outcomes
in the report.
None for timeliness and quality of medical examinations. However, VA has
established standards of performance for reducing the number of incomplete
examination for its field offices. Inappropriate benefits payments VA has
several initiatives in various stages
of implementation that address inappropriate benefit payments. For example,
VA asked the IG to identify internal control weaknesses that might
facilitate or contribute to fraud in the compensation and pension program.
The IG found vulnerabilities involving numerous technical, procedural, and
policy issues; VA has agreed to initiate corrective actions.
None. The plan discusses initiatives to identify and adjust payments to,
among others, veterans who receive dual compensation, underreport income, or
are incarcerated or deceased. For example, VA is starting or continuing a
variety of computer matches with other agencies? records to identify
inappropriate payments. However, VA still has been unable to offset
disability compensation against military reserve pay for all persons who
receive both payments. Procedures established between DOD and VA have not
been effective or fully implemented. DOD is having difficulties obtaining
the accurate data from military services that VA needs to carry out the
offsets. Government performance and results act- data validity VA reports
that it has completed audits of
the quality of data used to compute three of the current key performance
measures including, among others, rating- related claims- processing
timeliness. Audits are underway regarding the measures for the Prevention
Index and the Chronic Disease Care Index. VA reports taking corrective
actions on deficiencies identified. However, VA notes that it continues to
find significant problems with data input and weaknesses in information
security, which limit VA?s confidence in the quality of the data.
None. VA began taking action to correct deficiencies in its data. Management
officials continue to refine procedures for compiling performance data.
Performance data are receiving greater scrutiny within the department, and
procedures are being developed to enhance data validation.
Appendix I: Observations on the Department of Veterans Affairs? Efforts to
Address Its Major Management Challenges
Page 22 GAO- 01- 752 VA: Status of Achieving Key Outcomes
Major management challenge Progress in resolving major
management challenge as discussed in the fiscal year 2000 performance report
Applicable goals and measures in the
fiscal year 2002 performance
Security of systems and data VA reported that it has developed corrective
action plans for the information security control weaknesses, with
corrective actions to be completed by 2002. While VA established a system to
track the resolution of security weaknesses identified, as we have
previously reported, 2
the department does not have a process to ensure that corrective actions
were effective.
Also discussed under Information Security challenge.
Yes. Discussed under Information Security challenge.
VA consolidated financial statements: Material internal control weaknesses
exist related to information security, housing credit assistance, and fund
balances with Treasury reconciliations.
VA resolved two of the three weaknesses. However, the information security
weakness remains unresolved. For additional actions, see Information
Security above.
VA does not have goals or measures directly applicable to resolving material
weaknesses reported in its financial statement audit report. However, the
plan has a performance measure that indirectly addresses the information
security material weakness. VA has developed corrective action plans for the
information security and control issues and expects to complete corrective
actions in 2002. Debt management None. The report acknowledges the debt
management weakness. None. VA identified actions that it expects will result
in a significant improvement in collections, such as installing computer
software to facilitate referral of debt to the Department of Treasury Offset
Program. Workers compensation VA has initiated actions, such as a onetime
review of all open/ active cases, to
correct fraud and abuse but the report did not identify the extent to which
improvements have been made.
None. VA recently completed a one- time review of all open/ active cases. VA
identified 255 cases as potentially fraudulent. VA is implementing other
programs to prevent or identify fraud in the future, such as identifying
workers compensation claimants who are also receiving VA compensation and
pension benefits to prevent dual payments.
2 VA Information Technology: Important Initiatives Begun, Yet Serious
Vulnerabilities Persist (GAO- 01- 550T, Apr. 4, 2001).
Appendix I: Observations on the Department of Veterans Affairs? Efforts to
Address Its Major Management Challenges
Page 23 GAO- 01- 752 VA: Status of Achieving Key Outcomes
Major management challenge Progress in resolving major
management challenge as discussed in the fiscal year 2000 performance report
Applicable goals and measures in the
fiscal year 2002 performance
Procurement practices The report identified savings of $13 million in fiscal
year 2000 attributed to aggressive use of the governmentwide purchase card.
However, the IG identified significant vulnerabilities regarding its use,
including circumventing competition requirements and payment of excessive
prices.
None. VA is conducting business reviews of all acquisition and materiel
management functions at VA facilities to resolve problems in this area.
Appendix II: Comments From the Department of Veterans Affairs
Page 24 GAO- 01- 752 VA: Status of Achieving Key Outcomes
Appendix II: Comments From the Department of Veterans Affairs
Appendix II: Comments From the Department of Veterans Affairs
Page 25 GAO- 01- 752 VA: Status of Achieving Key Outcomes (290045)
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